Title: News from ... the Panama Canal
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Title: News from ... the Panama Canal
Physical Description: Serial
Language: English
Publisher: Autoridad del Canal de Panama
Place of Publication: Balboa, Panama
Publication Date: June 2002
Copyright Date: 2010
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Bibliographic ID: UF00099414
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
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111111 cP1

II IIM MI P4Na



The New ACP Market Approach *
Message from the Administrator
At noon o n transparency and the compliance with the
December 31, governing laws and regulations under
1999, a new which this corporation operates,
chapter opened particularly as they pertain to changes in
for the Panama tolls. Such transparency implies
Canal. On that consulting and informing our users and
historical date, customers in a timely manner on any
the Republic of proposed changes to our pricing structure
Panama took full that may affect their business.
responsibility for On May 30, 2002, the Board of Directors
the safe and of the Panama Canal Authority approved
e f f i c ie n t the submittal of a proposal to change the
operation of the Canal. After carrying Canal's tolls structure. On June 7, the
on a smooth and seamless transition, ACP published the proposal; initiating the
the new Canal administration shifted consultation process, and inviting all ,
from a nonprofit utility focus to interested parties to participate.
operating the waterway as a corporate We are aware that the best way to serve
and competitive enterprise, which
oda icomperatied inteapbsineshike our customers is to know the realities of -
modannisoper.aWhilethed Cnal sspimy their business. Therefore, it is important
manner. While the Canal's primary that our customers express their *
mission is to provide the highest
quality of service to world trade, it is sould be thsoi subt conaed nd
mi srtant to rbe nsoli shat th.. Cana.
II g'J* L L L IiEL..L iA L L ..I 11


proudly serves as a national symbol,
which makes a vital contribution to the
development of our country.
During the last two and one-half years
we have continued working diligently
to modernize and improve the physical
plant and equipment of the waterway,
as well as its infrastructure and
operating systems. These efforts
have contributed to a 54 percent
reduction in the accident rate,
declining from 37 in fiscal year 1996 to
17 for fiscal year 2001. Additionally,
Canal Waters Time has been reduced
from 32.9 hours in 1999 to 23.9 hours
in 2001.
The Panama Canal Authority has
evolved into a market oriented
corporation to meet the needs of it
clients. Within the corporate values of
the entity, we emphasize our



'S, \


documented in order for them to be duly
considered when making a final decision
on this matter.
The success of the Canal will always
depend on the success of our customers.
Only a steadily growing stream of
satisfied customers can guarantee the
future viability of the Panama Canal. This
is our commitment to global trade and the
international maritime industry. The
structure proposed will allow us to design
products and services that are tailored to
your needs and which respond to your
expectations.
By reaffirming our goal to offer world
class service, -while anticipating changes
within the maritime transportation-, we
do so convinced that we are honoring
Panama's historical commitment to bring
the people of the world closer together
and contribute to the growth of all
nations.


ALIM


On June 6, Panama's Legislative
Assembly passed law No. 150, approving
the Panama Canal Authority's budget for
fiscal year 2003.
The budget contemplates total revenues
for $807.3 million and provides for an
investment program in the amount of
$136.1 million. The funds from the
investment program will be assigned to
the maintenance of the Canal's
infrastructure; implement a
communications strategy consistent
with a world class business; strengthen
the waterway's safety and security
through the acquisition of modern
equipment; and development of human
resources.
The approved budget does not include
changes in revenues in the event that
the proposed new tolls structure is later
approved.












Canal Transits and Cargo Information


Preliminary cargo statistics for the first
eight months (October-May) of fiscal
year 2002 reflect a 4.9 percent shortfall
to 125.7 million commercial long tons
relative to the 132.2 million long tons
recorded during the same period last
year. Although there have been some
signs of economic growth in the United
States and Asia, Canal cargo tonnage
levels have yet to recuperate. Some
commodities such as grains, lumber and
products, coal and coke, nitrates,
phosphates and potash, chemicals and
petrochemicals, and petroleum and
petroleum products, continue to reflect
lethargic performance. On the other
hand, favorable trends are evident for
containerized cargo, ores and metals,
manufactures of iron and steel,
refrigerated foods, and autos,
accessories and parts. Grains continue
to be the leading commodity moving
through the Panama Canal, followed by
Containerized Cargo which is clearly
surging ahead of last year's levels. This
trend can be seen in the adjoining
comparative chart which illustrates


commodity flows for the first eight
months of fiscal years 2002 and 2001.
It should be noted that with four
months remaining in the fiscal year


these figures can change dramatically
due to the volatile performance of
some commodities.


Major Canal Cargo Flows October-May


Conlaneuzea


Petroleum ana
Pp roI#.drm Prnd.c.ls


FY 2002


OesAn MeLa 5FY 2001
Nirates Phpr.o3165
Nana Potash~


,enica. 3 no
Pc ioieum C nE in...

Fo Ai
Lumber and
PI ViucIS
Coal
ani COk'.
0 5,000 10,000 15,000 20,000 25,000 30,0
Thousand Long Tons
This chart illustrates commodity flows for the first eight months of fiscal years
2002 and 2001.


00


I PaaaCna rficUdt


Preliminary traffic statistics for the first
eight months (October May) of fiscal
year 2002, show 8,094 oceangoing
transits, a decrease of 4.4 percent from
the 8,465 transits recorded during the
same period in fiscal year 2001.
Although Panamax vessels, those of
100-foot beam and over, declined 1.1
percent from the previous year with


3,004 transits, vessels in this category
represented 37.1 percent of total
oceangoing transits. This data
demonstrates that larger vessels
continue to comprise an important
share of total oceangoing transits. In
terms of Canal transit operations,
these larger vessels require greater
use of Canal resources.


Month FY 2001 FY 2002 % Change
Oct. 419 355 -15.3
Nov. 379 389 2.6
Dec. 395 370 -6.3
Jan. 376 395 5.1
Feb. 346 346 0.0
Mar. 401 383 -4.5
Apr. 371 383 3.2
May 349 383 9.7
Total 3,036 3,004 -1.1


Security Upgrades


The Panama Canal Authority is in the
process of making major upgrades and
improvements to increase security,
reduce risks, and minimize the
vulnerability of its facilities. The
program includes:
* Installation of new computerized
systems to identify and track all
vessels before they enter Canal
waters, and during their transit.


* Establishment of a 24-hour Security
Control Center for incident and
emergency management.
* Purchase of new equipment,
including launches and specialized
patrol vehicles, alarm systems, and
additional closed-circuit television
for existing Canal areas.
* Contracting of expert advice on
security matters, to evaluate risks
and provide recommendations.


To cover these major investments, the
ACP has established a new security fee
for each transit, based on net tonnage.
For vessels weighing up to 3,000
PC/UMS tons, or 5,392 displacement
tons, the fee is $50. For vessels
weighing more than 3,000 PC/UMS tons,
or 5,392 displacement tons, the fee is
$400. The security fee became
effective on June 1, 2002.













THE PANAMA CANAL AUTHORITY PROPOSED
NEW PRICING STRUCTURE
On June 7, the Panama Canal Authority released a


formal proposal to change its pricing structure to
move toward a market-oriented business model
that allows for greater customer service and
continual improvements to the Canal.
As global trade continues to expand, the shipping
industry has evolved significantly and the Canal's
90-year-old pricing structure needs to be changed
to meet the increasing demands of a dynamic
market place.
"This historic shift in our business model is the
first step toward changing the long-standing,
one-size-fits-all pricing structure and replacing it
with a system that is more tailored to individual
customer needs," said Alberto Aleman Zubieta,
the Canal Administrator. "The new system
provides a strong foundation for continual
improvements to the Canal, ensuring fast, safe I
and efficient transit."
"To continue the type of efficiency and safety -
improvements our customers deserve, we must
maintain a permanent modernization program and v
change our pricing structure," Mr. Aleman Zubieta said.
Under the new pricing structure, average Canal toll ri
increase by 13 percent, and an additional $200-per-wire
be charged for ancillary locomotive services.
"The Panama Canal is still the best Canal deal in the
world by far," said Mr. Aleman Zubieta. "This price
change is reasonable and fair for all, and will have
minimal impact on trade and consumers. It
amounts to less than two percent of total
transportation costs for goods transported through
the Canal."
Under the proposal:
* Prices will continue to use the same Panama
Canal measurement system, which is based on
the volumetric capacity of each ship.
* The locomotive services will be rated as an
additional ancillary service. All ships pay for
ancillary services they require such as use of
tugboats, line handlers and extra pilots.
* The pricing structure will continue to be the
same for all Canal transiting vessels, regardless
of the type of cargo or its point of origin.
* The proposal segments vessels by recognized
industry standards: container ships, passenger -
ships, general cargo ships, dry bulk carriers,
liquid bulk carriers, reefers and car carriers. Market stL
underway for each segment. -
* The new pricing structure is consistent with the prini
international law and the practices of other international
such as Suez.
"The ACP is committed to permanent modernization an
enhancements," Mr. Aleman Zubieta said. "Today's move
us continue to improve our service to Canal customers."


Table No. 1
PROPOSED TOLL STRUCTURE


Type of vessel


General cargo
Refrgeraied cargo
Dry bulk
rankers
Container ships
/ehi cle carners
Passenger ships
otherss


Laden I Ballast


rrs 1u,uu I Next 1U,UUU tons
tons (PC/UMS I (PCIUMS)


4 4. .r + _____ I


$2.04
$2.04
$2.04
$2.04
$2.04
$2.04
$2.04
$2.04


Laden Ballast


$2.96
$2.96
$2.96
$2.96
$2.96
$2.96
$2.96
$2.96


$2.35
$2.35
$2.35
$2.35
$2.35
$2.35
$2.35
$2.35


Laden Ballast


Remaining tons
(PC/UMS)


Laden


.. I 4


$2.85
$2.85
$2.85
$2.85
$2.85
$2.85
$2.85
$2.85


Ballast


$2.26
$2.26
$2.26
$2.26
$2.26
$2.26
$2.26
$2.26


it $1.43/displacement ton $1.64/displacement ton
oills will remain the same

A tariff for the use of towing locomotives is proposed based on the
number of wires required by the vessels to transit through the
locks, at $200.00 per wire used. For the purpose of making
estimates and calculations, the tariff structure per
wire/locomotive is shown in the following table:


Table No. 2
TARIFFS FOR THE USE OF LOCOMOTIVES


(1) More than 38.10 meters (125.00 feet) in length, and up to 152.40 meters
(500.00 feet), with less than 12,000 displacement tons
(2) More than 38.10 meters (125.00 feet) in length, and up to 173.74
meters (570.00 feet), with displacement from 12,000 up to less than
22,000 tons

(3) More than 52.40 meters (500.00 feet) in length, and up to 182.88
meters (600.00 feet), with displacement from 22,000 up to less than
30,000 tons
(4) More than 182.88 meters (600.00 feet) in length, or 30,000 displacement
tons or more
(5) From 274.33 meters (900.00 feet) in length, or dry bulk carriers and
tankers with more than 259.08 meters (850.00 feet) in length, and more than
10.97 meters (36.00 feet) in draft


4x 4


4x 6



4x 8

6 x 12


8 x 16


$1,200


$1,600

$2,400


$3,200


A. INVITATION TO PARTICIPATE IN THE PUBLIC
CONSULTATION AND HEARING.
Interested parties are invited to participate in the consultation
process and public hearing so that those interested have an
opportunity to participate in the process to change the tolls, and
the establishment of a new locomotives tariff for vessels that
transit the Panama Canal. The following dates are established:
A.1 Public consultation: There will be a public
consultation period that begins on June seven (7), 2002 and














A. INVITATION TO PARTICIPATE IN THE PUBLIC
CONSULTATION AND HEARING.
Interested parties are invited to participate in the consultation
process and public hearing so that those interested have an
opportunity to participate in the process to change the tolls, and
the establishment of a new locomotives tariff for vessels that
transit the Panama Canal. The following dates are established:
A.1 Public consultation: There will be a public
consultation period that begins on June seven (7), 2002 and
continues for a thirty-five (35) calendar-day period that will
expire on July twelve (12), 2002.
A.2 Public hearing: A public hearing will be held on July
nineteen (19), 2002 in the place indicated below in paragraph D.

B. FORM OF PARTICIPATION OF THE INTERESTED
PARTIES.
The interested parties may participate in the consultation and
public hearing in accordance with the following rules:
B.1 As of June seven (7), 2002, the publication date of this
notification, the consultation period is open, and the interested
parties may present data, opinions, or statements in writing, in
English or Spanish, which must be received within thirty-five (35)
calendar days. The deadline is July twelve (12), 2002.
B.2 All who have participated in the consultation period
described above in paragraph (B.1) may participate in the public
hearing, to be held on the date indicated in paragraph A.2,
directly, or through their duly accredited representatives,
provided they have announced in writing, during the consultation
period, their intent to participate in the hearing. This notification
must be sent to the addresses indicated below, and shall contain
the name and address of the interested party and the capacity
under which he/she shall present himself/herself. The
announcement of participation in the public hearing must be
received in writing, in English or Spanish, no later than July
twelve (12), 2002, and the recorded date and time of receipt of
the notification shall determine the order in which the interested
party shall participate in the public hearing.

C. REQUEST AND FORWARDING OF INFORMATION.
C.1 Persons interested in participating in the consultation
process and public hearing may access an electronic copy of the
proposal, both in Spanish and English, in the Canal Authority
website (www.pancanal.com), or request a copy in person from
the Department of Corporate Planning and Marketing, located in
the Canal Administration Building, Balboa, or by fax at (507) 272-
3077, or by mail, to any of the addresses indicated in paragraph
C.4.
C.2 Those interested in expressing their comments,
opinions, information, or arguments during the consultation
period shall submit them in writing, in English or Spanish, in
person, or by sending them via courier or mail, so that they are
received no later than the date established in paragraph B.1. No
communications shall be accepted by fax or electronic mail.
C.3 Those interested in participating in the public hearing
must announce their interest in writing, in English or Spanish, in
any of the ways established in the above paragraph, and within
the period established in paragraph B.2. The date and time of
receipt of the notification shall be recorded in the receiving office,
to determine the order in which the interested parties shall make
their respective presentations on the day of the hearing. No
communications shall be accepted by fax or electronic mail.


C.4 Addresses to send the above-mentioned documentation:

Personal or via Courier in Panama:
Autoridad del Canal de Panama
Propuesta de Incremento de Peajes 2002
Edificio de la Administraci6n
Departamento de Planificaci6n Corporativa y Mercadeo
Unidad de Relaciones con los Clientes
Balboa, Anc6n, Rep6blica de Panama
or
By mail in the United States of America:
Panama Canal Authority
Tolls increase Proposal 2002
ACP-CP P.O. BOX 025513
Miami, FL 33102-5513

D. PLACE AND TIME OF THE HEARING. The public hearing
shall be held in the auditorium of the Ascanio Arosemena Training
Center, Balboa, Republic of Panama, and shall begin at 9:00 a.m.

E. PUBLIC HEARING PROCEDURE. A Committee of members
of the Panama Canal Authority Board of Directors has been
designated to conduct the public consultation and hearing:
Ricardo Martinelli President
Emanuel Gonzalez-Revilla Vice-President
Eloy Alfaro
Moises Mizrachi
Guillermo Elias Quijano Jr.
Abel Rodrfguez

The Secretary designated by the Committee shall be the
Administrator, Alberto Aleman Zubieta.

E.1 The Committee shall examine all the information that has
been properly and timely presented, relative to the comments,
data, and information provided by the interested parties during
the consultation process.
E.2 The Committee shall commence the public hearing in the
established place, and on the established time, date and place.
The President of the Committee shall inform the participants that
the purpose of the hearing is to hear the arguments in favor or
against the proposal.
E.3 The President of the Committee shall announce the order
of each participant's presentation, in accordance with the
provisions of paragraph B.2 of this document, and each one shall
begin his/her participation in that order.
E.4 Participants in the public hearing shall be called upon
individually to make their statements and express their points of
view on the proposal, for a maximum of five minutes. The
Committee shall analyze and decide on the appropriateness of
extending this period of time as they deem convenient, on a case-
by-case basis, and shall inform the participants of their decision.
E.5 The committee shall dispense with any irrelevant,
immaterial, or excessively repetitive material expounded by the
parties; or with any participant whose behavior interferes with the
process of the hearing.
E.6 The purpose of individual participation is merely
expository; therefore, no debates or questions and answers shall
be admitted between the members of the Committee and the
participants, or between participants.
E.7 The members of the Committee shall receive the
testimony or statements of the interested parties in relation to the
proposed modification.












MODERNIZATION PROGRAM ACP Awards


New Locomotives and Tow Track Rehabilitation


Ten new electric towing locomotives
were recently delivered to the Panama
Canal. Miraflores Locks is the first to
have a full fleet made up of these new
locomotive which are manufactured in
Japan and equipped with cutting-edge
technology.
The new locomotives weigh 50 tons
each, have a maximum towing
capacity of 70,000 pounds and can
reach maximum towing speeds of 5
mph and return speeds of up to 10
mph. The entire Panama Canal
locomotive fleet will eventually be
upgraded to meet the increased traffic
demand. The primary function of the


locomotives is to provide for the safe
alignment of vessels in the lock chambers
to avoid contact with walls or gates.
The track upon which the electric towing
locomotives ride is also undergoing
rehabilitation. This project began at
Miraflores Locks in 1997, and presently
25,100 feet of a total of 53,100 feet have
been rehabilitated within the three locks.
The rehabilitation of locomotive tow
tracks and the newly arrived locomotives
are critical components of the Canal's
efforts to improve transit service. These
programs also serve to reiterate the
Canal's commitment to provide world
class service to its customers.


Scheduled Locks Outages


The following information indicating
lane outages at the locks is being
provided to keep customers informed
of important lane outages at the locks.
This information may be useful to
some customers who have the
flexibility of modifying their vessel's
arrival date at the Canal.


The first locks outages of the year 2002,
associated with overhaul programs, were
successfully completed with the
replacement of 610 feet of locomotive tow
tracks in Miraflores Locks and 538 feet in
Pedro Miguel Locks, from June 3 to 13.
Upcoming maintenance programs can be
seen in the adjoining table.


Dates No. of Lane No. of Miraflores Pedro Gatun Transit Status
Outage Culvert Miguel Capacity
Days Outage
Days
Jul 8 18, 2002 11 Outage11d) Outae (10d) 28 -30 Confirmed
11 Lane
Aug 12 -22, 2002 Outage (11d) 26 28 Tentative

Sept 16- 26, 2002 11 uLane Lane Outage 26 28 Tentative
Outage
Oct 21- 31, 2002 11 Lane 30 -32 Tentative
Outage


Important Contracts
The ACP awarded a contract for
program management advisory
services to Parsons Brinkerhoff
International, in association with
Montgomery Watson-Harza, to
support the series of studies that will
shape the Canal master plan and
provide independent reviews of the
conceptual framework, methodologies
and results of the different social,
environmental, technical, risk,
economic and financial studies being
contracted.
As part of the master plan and in line
with the Canal's market orientation,
the ACP also awarded three market
segments studies with the purpose of
obtaining greater knowledge on the
dry bulk, liquid bulk and liner shipping
segments. The contracts were
awarded to Nathan Associates Inc. and
its subcontractors Richardson Lawrie
Associates, experts from North Dakota
University and Commodities Research
Unit International (dry bulk);
Fearnleys Consultants A/S (liquid
bulk); and Louis Berger Group, Inc. in
association with the National Ports &
Waterways Institute University of
New Orleans, The Tioga Group and the
Journal of Commerce/Piers (JOC)
(liner service)
The market segment contractors and
ACP officials are visiting customers in
Asia, Europe, North America, South
America and the Caribbean to obtain
insight on their operations. Feedback
is been obtained from shipping lines,
such as Maersk Sealand, Hamburg
Sud, P&O Nedlloyd, Hapag Lloyd,
PDVESA, Odjfel Tankers,
PetroEcuador, Bitor; classification
societies (i.e., Lloyd Register,
Germanishcer Lloyd); consulting
companies and publications (i.e. Louis
Berger Group, National Ports &
Waterways and Piers, Delft University
of Technology, Drewry, Clarkson
Research, American/ShipperComPair
Data, Containerisation International);
and port authorities (i.e., Port
Authority of New York and New Jersey,
Europe Combined Terminals, Ceres
Paragon Terminals, Hutchison Port
Holdings, Port Authority of Jamaica,
Freeport Container Port, APM
Terminals).











Paris, France: Panama Canal
Administrator Alberto Aleman Zubieta
traveled to Paris to brief participants of
the "Latin America 2002 Colloquium" on
the status of ongoing studies to
determine the feasibility of expanding
the waterway.
During his visit to Paris, Administrator
Alem6n Zubieta also met with Christian
Pierret, French Secretary of State and
Industry, and the presidents of important
consortium, including Areva, Suez, and
Coyne et Bellier. The latter group is
currently working on the conceptual
design for the third set of locks at the
Panama Canal.
Denmark: Mr. Aleman also traveled to
Denmark with members of his staff to
meet with Maersk McKenney Moller,
Senior Partner and Chairman of A.P.
Moller, to strengthen ties with users and
clients, as well as to stay abreast of
changes within the shipping industry.
Their visit to Denmark included a
meeting with members of the Danish
Shipowners Association. Canal officials
took the opportunity to present an
overall description of the modernization
program, which included the signaling of
the Gaillard Cut, acquisition of new
tugboats, rehabilitation of locomotive
tow tracks and the deepening of Gatun
Lake.
London: Panama Canal delegation met
with Protection and Indemnity (P & I)
clubs to discuss Canal improvement
issues, insurance coverage, and other
related matters.
The delegation met with members of the


International Chamber of Shipping
(ICS). Canal officials provided
updates on traffic levels and tolls
revenues, highlighting the effects of
the global economic slowdown. The
briefing also included transit safety
issues and the new proposal for a tolls
increase.
While in London, Mr. Aleman Zubieta
attended Seatrade's 2002 Annual
Awards Ceremony.
South America: The Panama Canal
Administrator, together with Mr.
Rodolfo Sabonge, Corporate Planning
and Marketing Director, met with
officials, associations, and
businessmen from Ecuador, Peru, and
Chile with the purpose of presenting, in
conceptual terms, the changes
proposed to waterway's pricing and
tolls system.
In Ecuador they met with members of
the Ecuador Chamber of Shipping, Mr.
Richard Moss, Minister of Foreign
Commerce and Mr. Byron Morejon,
Subsecretary of Bilateral Relations. In
Peru, with Mr. Francisco Vetancourt,
Chairman of the Maritime Association
of Peru, and Mr. Luis Chang Reyes,
Minister of Transportation and
Communications. In Chile, with Mr.
Andronico Luksic, ACP Advisory Board
Member; Mr. Patricio Tombolini,
Subsecretary of Transportation;
members of the Maritime and Ports
Chamber of Chile; members of the
National Corporation of Exporters; and
Mr. Patricio Morales, Subsecretary of
the Navy, Ministry of Defense.


Polto Coto Agremen


The Panama Canal Authority (ACP)
signed a technical agreement with
member agencies of the U.S. National


Response Team (NRT), enabling the
waterway to obtain assistance in the
event of significant pollution incidents
affecting the Canal area. The
agreement was signed by Panama
Canal Authority Administrator Alberto
Aleman Zubieta; U.S. Embassy Charge
d'Affaires Frederick A. Becker; and
Rear Admiral Paul J. Pluta, Assistant
Commander for Marine Safety and
Environment Protection.
Under the agreement, the ACP may
call upon NRT's support to complement
its contingency activities during
environmental emergencies.


Aomniisraror Ateman &uoiera anao r. aoounge
with members of Ecuador Chamber of Shipping


Mr. AlemAn Zubieta and Mr. Sabonge with
members of the Navy, Ministry of Defense, Chile.

VISION OF THE ACP
WORLD LEADER in services to the
maritime industry and in the
sustainable development for the
conservation of the Canal watershed;
CORNERSTONE of the global
transportation system and driving
force of Panama's progress and
growth;
MODEL of excellence, integrity, and
transparency, committed to the full
development of our work force.


We want your comments
Your comments and suggestions are very
important to us. If you would rather
receive it electronically, please send us a
note with your correct email address to:
cpxc@pancanal.com If you need
additional copies mailed to other
officials within your corporation, please
contact us (see box below for address,
fax, and telephone numbers).


Corporate Planning and Marketing
Panama Canal Authority
ACP-CP P.O. BX 025513
Miami FL 33102-5513
Tel.: (507) 272-7961 Fax: (507) 272-5916
e-mail: cpxc@pancanal.com
web site: www.pancanal.com

SEE THIS NEWSLETTER ON THE ACP WEB SITE AT:
www.pancanal.com
(then click on "Canal News")




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