Panama Canal Authority to Increase Tolls

The Cabinet Council of Panama voted to approve a two-phase increase in Panama Canal tolls. The first phase, an average increase of approximately 8 percent, will be implemented on October 1, 2002; the second phase, consisting of an average increase of 4.5 percent, will take effect in July 2003. The Cabinet Council characterized the new pricing structure, which was proposed by the ACP, as an innovative move toward a customized toll system that is based on vessel type and tonnage and will allow for a permanent modernization program for the Canal. In a further effort to address the specific needs of individual Canal customers, the Council approved a locomotive charge of $200.00 per wire. Following today's Cabinet Council vote, Canal Administrator Alberto Aleman Zubieta stated, "We considered the comments and recommendations submitted to the ACP by our customers during the public response period and the July 19th public hearing. In response to their suggestions, we will now implement that increase in two phases. Under the two-phase plan, the ACP will bear a $25 million reduction in expected revenue." Aleman emphasized, "We believe this creative approach will help build a strong foundation for future Canal improvements, as well as ensure fast, safe, efficient and economical transit for all Canal customers." When calculating the average increase for customers, the ACP based the amount on the combined transits in 2001. Based on the new tolls pricing structure, if larger ships use the Canal, then the average toll increase is actually lower than the total average increase. ACP Responds to Concerns Raised During the July 19th Public Hearing Among the major issues raised by customers, shipping associations and Panamanian citizens, during the July 19th public hearing held in Panama City was concern about the timing of the toll increase. Respondents cited the global recession, the size of the proposed increase, and the inability of customers to transfer the cost to their clients on short notice as reasons to appeal the proposal. During the hearings, Panamanians expressed concern about the Panamanian water resources utilized in the operation of the Canal, citing that its value should be integrated into and reflected as a part of the cost of transit for all ships. Currently, about 52 million gallons of water must be used for each transit regardless of a vessel's size or tonnage. "Through the solution approved by the Cabinet Council today, the ACP has creatively addressed the issues raised by customers while, at the same time, ensuring permanent modernization of the Canal and guaranteeing safe, efficient transit for all of our customers," Administrator Aleman concluded.