Panama Canal Customer newsletter

cust-news-200109 ( .pdf )

Spanrama0Canal AC

September 2001 s kQO


Brazil Trip Spurs Great Interest in Future Canal Plans


In late August, top Panama Canal
Authority (ACP) officials accompanied a
Government delegation led by President
Mireya Moscoso and high-ranking
representatives to Brazil, to discuss
various issues including the Panama
Canal. Conversations between Canal
Administrator Alberto Alemin Zubieta,
and Brazilian President Fernando
Henrique Cardoso, generated high
expectations regarding future expansion
plans for the waterway. Local
government representatives and
businessmen expressed special interest
in the areas of planning and
communication channels regarding the
Canal's infrastructures, as they foresee
major developments in cargo activity for
northeastern Brazil.
Alem~n Zubieta indicated that an
expanded Canal would be of strategic
importance to Brazil and advantageous
as the nation's future gateway to Far East
markets. Furthermore, Alemin Zubieta
met with businessmen in Sao Paulo and
later in Brasilia, who expressed their
interest in the Canal's modernization
and expansion projects. He mentioned
the possibility of the Brazilian
Government's interest in contributing
financially towards the expansion and
modernization work. During his visit to
Brazil, Alemin Zubieta also held
important meetings with the Brazilian
Ministers of Planning and Defense.
Rodolfo R. Sabonge, ACP Director of
Corporate Planning and Marketing,
stated that with Brazil contemplating the
development of its northeastern territory,
the possibility of utilizing the waterway
would greatly increase within the next
decade. According to Sabonge, the
Asian continent and the west coast of the
United States are important markets for
Brazilian products, and Brazilians are
aware that their competitiveness will
depend on lower production and
transportation costs, thus turning the
Canal into a fundamental component.
Brazil, "the Latin American giant"


During an official visit to Brazil, Alberto Aleman Zubieta, far right, meets Brazilian President
Fernando Cardoso, center, while Mireya Moscoso, Panamanian President, looks on.


exports iron ore, soybeans, minerals,
and finished products, but is planning
to develop the export industry in
northeastern Brazil, where products
are received and shipped to North
America and the Asian markets via the
Panama Canal. Sabonge added that
the principal grain production of
Brazil is located in its central region,
and transportation costs to U.S. east
coast main ports remain high.
Traditionally, Brazilians had little
interest in the Panama Canal, since
their big industries are located in the
South; however, "facing the possibility
of an expanded waterway, they are
planning to increase port activities in
the northeast."




ACPM,
AATA W,~e RdAI K MMU 'Tim?


Positive Notes on the
Panama Canal
Canal safety under Panamanian
administration nearly reached a
historical record during the first nine
months of fiscal year 2001, with
only 14 vessel accident
investigations conducted. This
figure represents 0.12 percent ofthe
11,660 transits recorded over the
same nine-month period. In
contrast, 26 vessel accident
investigations were conducted
during the same period last year.
Canal Waters Time (CWT) was
reduced to 22 hours, or 20 percent
below the record set the previous
year. The ACP has aimed to
consistently offer average CWT of
no more than 24 hours. Overall, the
aforementioned positive indicators
reflect the efficiency of Canal
operations under Panamanian
administration.









World Economic Performance to Affect Year-end Canal Cargo results


The world economy, which grew at a
robust pace last year, has slowed
considerably as the United States,
Europe, Japan and some major
developing countries experience a
simultaneous slowdown. In the United
States, industrial production fell 0.7
percent during the second quarter of
2001, while capital investments dropped
by 13.6 percent. The impact of the U.S.
economic deceleration has spread
throughout other regions, given that the
U.S. is the world's largest consumer.
Japan, the second economy of
importance to the Canal in terms of
cargo, has experienced declining growth
rates while near-zero interest rates have
not stimulated economic activity.
Disappointing economic results from
other important world regions such as
Europe and Latin America, have further
contributed to an aggravation of an
already vulnerable world economy for
2001.
Weak economic growth in the United
States, the principal importing and
exporting market for Panama Canal
trade, has contributed significantly to the
slowdown in tonnage activity through
the waterway, particularly during the last
six months. According to the U.S.
Census Bureau, June 2001 exports
decreased to $86.0 billion from $87.7
billion in May. Likewise, June imports
decreased $115.4 billion from $116.2
billion in May.


For the
Panama
Canal, total
fiscal year
2001 cargo
tonnage is
forecasted at
1 9 4 4
million long
tons, a flat
performance
of 0.4
percent


compared to
the actual
ca r g o
tonnage for fiscal year 2000*. An
estimated increase of approximately
700 thousand long tons over last year,
will be mainly attributed to growth in
containerized cargo, petroleum and
petroleum products, refrigerated
foods, and ores and metals.
Despite maintaining its traditional
position as the leading Canal
commodity group, grains are expected
to experience a 2.0 percent downturn
from fiscal year 2000. A factor
contributing to this result has been a
slow pace of U.S. exports due to
stringent certification procedures
imposed by Japan and China on
imports of genetically modified grains.
On the other hand, overall
containerized cargo trade should
maintain a positive pace with an


I nousand Long Ions
SFY2000 FY 2001

estimated 6.8 percent increase to 35.7
million long tons. The principal two-way
trade route of Asia the East Coast U.S.
will likely represent nearly 50.0 percent
of total cargo volume by containerships
through the waterway. The petroleum
and petroleum products category will
hold at third place, while registering a
13.7 percent boost from the 27.1 million
long tons recorded last year. For
comparative purposes, the enclosed
graph illustrates commodity flows for
fiscal years 2000 and 2001.


* Includes cargo long ton projections by
commodity groups for August and
September2001.


Positive Trend Forecasted for Panamax Vessel Transits

Preliminary estimates for fiscal year
2001 reflect a 0.4 percent decrease to
12,254 oceangoing transits from the
previous fiscal year*. Despite the
overall slowdown in world economic
trade, Panamax-size vessels, the largest
that can fit Canal locks, are estimated at
4,461 transits for the twelve-month
period of fiscal year 2001, a steady
growth of 2.3 percent over 2000. Tolls
revenue collection is estimated at
$581.9 million, a 1.3 percent rise over

Jan. Feb. March Apr. May June July Aug. Sept. the year2000.
*Transit figures for the months of August
-- FY 2000 FY 2001 and September 2001 were estimated.


Major Canal Cargo Flows October-September


Containerized Cargo
Petroleum and Petroleum Products
Chemicals and Petroleum Chemicals
Manufactures of Iron and Steel
Nitrates, Phosphates and Potash
Lumber and Products
Ores and Metals
Coal and Coke
Refrigerated Foods
0 5000 10.000 15000 20000 25.000 30.000 35000 40000 45000








Visits by Clients and Users


Maersk Sealand Officials
Maersk Sealand officials visited the
Panama Canal on August 22 to see
Panama Canal operations and its
ongoing improvement programs first
hand. The Customer Relations Unit
offered the visitors a tour of Miraflores
Locks and the locks' control house,
where they had the opportunity to
observe lockage operations and turn the
levers that activate locks valves and
miter gates. They also observed the
Canal topographical model and
received a briefing on Canal operations
and the various trade routes served by


the waterway. Mr. Bo Sonnichsen,
Vice President of Maersk Gulf, Ltd.,
and Mrs. Gina Batista, Finance
Manager, Maersk Panama, S.A
represented Maersk Sealand
executives.




President Vicente Fox
On June 16, the Panama Canal
welcomed President of Mexico
Vicente Fox. Ricardo Martinelli,
Minister for Canal Affairs; Alberto
Alem~n Zubieta, Panama Canal
Administrator; and Ricaurte Vasquez,
Deputy Administrator, greeted him.
Upon his arrival at Miraflores Locks,
he had the opportunity to see lockage
operations first hand and turn the
levers that activate the locks valves
and miter gates. Mr. Fox was pleased
to witness the commitment of the
Canal's workforce, the waterway's


high-quality transit service, and the
magnitude of the Canal's ongoing
maintenance programs. The purpose of
his visit was to promote the Plan Puebla
Panama. Fox stated that Mexico is the
second most important economy in Latin
America. He also mentioned that among
the commodities transported through the
Canal are petroleum products, fertilizers,
and manufactures of iron and steel.
During fiscal year 2000, Mexico
occupied the seventh place of
importance among Canal users, with a
total 11.1 million long tons of cargo
transported.


Homologation conferences held at ACP


On August 6 and 7, 2001, the ACP held
homologation conferences at its
premises, regarding Solicitations Nos.
CDO-103407 and 103984, related to
transportation and market segment
analyses, and SAA-103983, related to an
economic impact study. These analyses
are part of a series of studiesto determine
the most important elements of a
business plan for each particular client
segment served by the Canal. The
segments covered by the market studies
are liquid bulk cargo, grains and other
dry bulk cargo, and liners. The studies
are part of the Panama Canal Expansion
Project, currently in its pre-feasibility
phase. The purpose of this project is to
examine the possibility of expanding the
waterway's capacity in the near future, to
allow the transit of Post-Panamax
vessels.
Eventually, to seek project financing, the
ACP would develop a single business
plan, aimed at optimizing its capacity, in
proportion to the potential revenue that
each segment would generate.


The economic impact study will
identify and analyze the past, present,
and future direct and indirect
economic impact and benefits
brought about by the Panama Canal,
worldwide, by individual countries,
relevant regions, country blocks, and
entities, including the Republic of
Panama. This study will enable the
ACP to determine the financial value
of the Canal for individual countries
and regions, as well as the opportunity
costs and benefit tradeoffs for Canal
clients, as part of the project's
financial plan and pricing policies.
The study will also help the ACP to
develop its corporate and expansion
project communications strategy and
policies.
Representatives of some of the most
reputable consulting firms of the
world in each field of expertise, who
had the opportunity to clarify ACP
requirements and share their concerns
and comments, enthusiastically
attended the conferences. Receipt of


proposals for all solicitations is
scheduled for mid-September, and
awarding of the projects are expected by
mid-October2001.

Upcoming Events
Panama Canal Adninisraor to address the
following events:
Lecture at the Massachusetts Institute of
Technology (MIT)
Date: September 27, 2001
Sponsored by: Massachusetts Institute of
Technology (MIT)
Location: MIT- Boston, MA

Annual Conference of the American Society
of Civil Engineers (ASCE)
Date: October 10-13, 2001
Sponsored by: The American Society of Civil
Engineers (ASCE)
Location: George R. Brown Convention
Center Houston, TX

Panama Week 2001
Date: October 25-26, 2001
Sponsored by: United States Panama
Business Council (USPA)
Location: Ronald Reagan Building &
International Trade Center -Washington, D.C.








Canal Welcomes New Locks Locomotives


As part of the Canal's multimillion-dollar
modernization and improvement
program, eight new locks towing
locomotives arrived at Miraflores Locks
on August 30th, 2001. Mitsubishi
Corporation of Japan manufactured the
locomotives at an average cost of 2.1
million dollars each. The first eight units
arrived at the Panama Canal in August
1 999. In 1997, the former Panama Canal
Commission awarded a contract to
Mitsubishi Corporation for the
construction of 26 new units, to augment
the locomotive fleet. The new
locomotives weigh approximately 50 tons
each and operate with two 290
horsepower traction units with a
maximum towing power of 70 thousand
pounds, at a speed of 4.8 kilometers per
hour and a maximum running free speed


of 16 kilometers per hour. Ten
additional units are expected for
delivery in February 2002.
In addition to the purchase of new
locomotives, the modernization and
improvement program also includes


the widening of the 8-mile long
Gaillard Cut, increasing the towboat
fleet by 41%, modernizing the marine
traffic management and locks control
systems, converting original electro-
mechanical locks machinery to modern
hydraulic systems, and replacing 16
kilometers of locks tow track. The
Gaillard Cut widening and
straightening project, to be completed
ahead of schedule by December 2001,
is divided into two phases: dryand wet
excavation. The dry excavation phase
is already 100% complete, while the
wet excavation phase is 90% complete.
By the time the project ends, the ACP
will be able to provide safe two-way
traffic service to Panamax vessels
through the Cut.


Information Channel to Open Across the Isthmus


The Panama Canal Authority (ACP) is
constructing a new information channel
through its Information and Technology
Department's (IM) Electronics and
Telecommunications Division. Scheduled
for completion in October 2001, this
channel will help strengthen and
modernize the Authority's operations, as
well as increase its communication
capabilities. The 67-kilometer long
information channel will link the agency's
main telecommunications center in Balboa
with Gatun Locks facilities on the Atlantic
side.
In 1990, the former Panama Canal
Commission installed fiber optic cables
in the electrical wiring along the
Transisthmian railroad tracks, with the
purpose of creating a backup for the
microwave system, while satisfying new
communication needs. This design was
more economical than the option of
repairing the original duct. Today, ten
years later, communication needs atthe


Canal have increased, making it
necessary to expand the system and
increase its dependability. Therefore,
the rehabilitation of the Transisthmian
duct proved the best option. Since
much cable routing follows the path of
the railroad tracks, the ACP has
coordinated the work with NEOSHO
Central America Inc., the company
that is currently building the new
Panama Canal Railway Company
(PCRC) Transisthmian railroad.
Future plans include the extension of the
system to provide coast-to-coast
connection to local telecommunications
companies and the expansion to the
Atlantic Ocean shore, to provide global
telecommunications companies with
the opportunity to land their undersea
fiber optic cables and connect with their
Pacific networks via the Canal's duct
system.
This information channel will
contribute to position Panama as a


We want your comments
We welcome your comments and suggestions regarding this newsletter. We want to
convey important news for you and your business. Please let us know your views
about this media (format, content, topics) and what you would liketo see in our next
edition. 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 or
copies mailed to other officials within your corporation, please contact us (see box
at right for address, fax, and telephone numbers).


vital link for the expansion of the
telecommunications market worldwide.


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 ofour work force.


Corporate Planning and Marketing
Panama Canal Authority
ACP-CP P.O. BOX 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")


I~

PAGE 1

Customer Newsletter Customer Newsletter September 2001 Positive Notes on the Panama Canal In late August, top Panama Canal Authority (ACP) officials accompanied a Government delegation led by President Mireya Moscoso and high-ranking representatives to Brazil, to discuss various issues including the Panama Canal. Conversations between Canal Administrator Alberto Alemán Zubieta, and Brazilian President Fernando Henrique Cardoso, generated high expectations regarding future expansion plans for the waterway. Local government representatives and businessmen expressed special interest in the areas of planning and communication channels regarding the Canal's infrastructures, as they foresee major developments in cargo activity for northeastern Brazil. Alemán Zubieta indicated that an expanded Canal would be of strategic importance to Brazil and advantageous as the nation's future gateway to Far East markets. Furthermore, Alemán Zubieta met with businessmen in Sao Paulo and later in Brasilia, who expressed their interest in the Canal's modernization and expansion projects. He mentioned the possibility of the Brazilian Government's interest in contributing financially towards the expansion and modernization work. During his visit to Brazil, Alemán Zubieta also held important meetings with the Brazilian Ministers of Planning and Defense. Rodolfo R. Sabonge, ACP Director of Corporate Planning and Marketing, stated that with Brazil contemplating the development of its northeastern territory, the possibility of utilizing the waterway would greatly increase within the next decade. According to Sabonge, the Asian continent and the west coast of the United States are important markets for Brazilian products, and Brazilians are aware that their competitiveness will depend on lower production and transportation costs, thus turning the Canal into a fundamental component. Brazil, “the Latin American giant” exports iron ore, soybeans, minerals, and finished products, but is planning to develop the export industry in northeastern Brazil, where products are received and shipped to North America and the Asian markets via the Panama Canal. Sabonge added that the principal grain production of Brazil is located in its central region, and transportation costs to U.S. east coast main ports remain high. T raditionally, Brazilians had little interest in the Panama Canal, since their big industries are located in the South; however, "facing the possibility of an expanded waterway, they are planning to increase port activities in the northeast." Brazil Trip Spurs Great Interest in F uture Canal Plans Canal safety under Panamanian administration nearly reached a historical record during the first nine months of fiscal year 2001, with only 14 vessel accident investigations conducted. This figure represents 0.12 percent of the 11,660 transits recorded over the same nine-month period. In contrast, 26 vessel accident investigations were conducted during the same period last year. Canal Waters T ime (CWT) was reduced to 22 hours, or 20 percent below the record set the previous year. The ACP has aimed to consistently offer average CWT of no more than 24 hours. Overall, the aforementioned positive indicators reflect the efficiency of Canal operations under Panamanian administration. During an official visit to Brazil, Alberto Alemán Zubieta, far right, meets Brazilian President Fernando Cardoso, center, while Mireya Moscoso, Panamanian President, looks on.

PAGE 2

The world economy, which grew at a robust pace last year, has slowed considerably as the United States, Europe, Japan and some major developing countries experience a simultaneous slowdown. In the United States, industrial production fell 0.7 percent during the second quarter of 2001, while capital investments dropped by 13.6 percent. The impact of the U.S. economic deceleration has spread throughout other regions, given that the U.S. is the world's largest consumer . Japan, the second economy of importance to the Canal in terms of cargo, has experienced declining growth rates while near-zero interest rates have not stimulated economic activity. Disappointing economic results from other important world regions such as Europe and Latin America, have further contributed to an aggravation of an already vulnerable world economy for 2001. Weak economic growth in the United States, the principal importing and exporting market for Panama Canal trade, has contributed significantly to the slowdown in tonnage activity through the waterway, particularly during the last six months. According to the U.S. Census Bureau, June 2001 exports decreased to $86.0 billion from $87.7 billion in May. Likewise, June imports decreased $115.4 billion from $1 16.2 billion in May. For the Panama Canal, total fiscal year 2001 cargo tonnage is forecasted at 194.4 million long tons, a flat performance of 0.4 percent compared to the actual cargo tonnage for fiscal year 2000*. An estimated increase of approximately 700 thousand long tons over last year, will be mainly attributed to growth in containerized cargo, petroleum and petroleum products, refrigerated foods, and ores and metals. Despite maintaining its traditional position as the leading Canal commodity group, grains are expected to experience a 2.0 percent downturn from fiscal year 2000. A factor contributing to this result has been a slow pace of U.S. exports due to stringent certification procedures imposed by Japan and China on imports of genetically modified grains. On the other hand, overall containerized cargo trade should maintain a positive pace with an estimated 6.8 percent increase to 35.7 million long tons. The principal two-way trade route of Asia the East Coast U.S. will likely represent nearly 50.0 percent of total cargo volume by containerships through the waterway. The petroleum and petroleum products category will hold at third place, while registering a 13.7 percent boost from the 27.1 million long tons recorded last year. For comparative purposes, the enclosed graph illustrates commodity flows for fiscal years 2000 and 2001. * Includes cargo long ton projections by commodity groups for August and September 2001. M a jo r C a n a l C a rg o F lo w s O c to b e rS e p te m b e r 0 5, 00 0 10 ,0 00 15 ,0 00 20 ,0 00 25 ,0 00 30 ,0 00 35 ,0 00 40 ,0 00 45 ,0 00 R ef rig er at ed F oo ds C oa l a nd C ok e O re s an d M et al s Lu m be r a nd P ro du ct s N itr at es , P ho sp ha te s an d P ot as h M an uf ac tu re s of Ir on a nd S te el C he m ic al s an d P et ro le um C he m ic al s P et ro le um a nd P et ro le um P ro du ct s C on ta in er iz ed C ar go G ra in s Th ou sa nd L on g T on s FY 2 00 0 FY 2 00 1 World Economic Performance to Affect Y ear-end Canal Cargo results Preliminary estimates for fiscal year 2001 reflect a 0.4 percent decrease to 12,254 oceangoing transits from the previous fiscal year*. Despite the overall slowdown in world economic trade, Panamax-size vessels, the largest that can fit Canal locks, are estimated at 4,461 transits for the twelve-month period of fiscal year 2001, a steady growth of 2.3 percent over 2000. T olls revenue collection is estimated at $581.9 million, a 1.3 percent rise over the year 2000. *Transit figures for the months of August and September 2001 were estimated. Pos itive T rend Fo recas ted f or P anam ax V essel T ransi ts P an am ax T ra n si ts 1 00 ' B ea m & O ve r 30 0 32 0 34 0 36 0 38 0 40 0 42 0 44 0 Oc t. No v . De c. Ja n. Fe b. Ma rc h Ap r. Ma y Ju ne Ju ly Au g. Se pt . Mo nt h FY 20 00 FY 20 01

PAGE 3

Visits by Clients and Users Homologation conferences held at ACP Maersk Sealand officials visited the Panama Canal on August 22 to see Panama Canal operations and its ongoing improvement programs first hand. The Customer Relations Unit offered the visitors a tour of Miraflores Locks and the locks' control house, where they had the opportunity to observe lockage operations and turn the levers that activate locks valves and miter gates. They also observed the Canal topographical model and received a briefing on Canal operations and the various trade routes served by On June 16, the Panama Canal welcomed President of Mexico Vicente Fox. Ricardo Martinelli, Minister for Canal Affairs; Alberto Alemán Zubieta, Panama Canal Administrator; and Ricaurte Vásquez, Deputy Administrator, greeted him. Upon his arrival at Miraflores Locks, he had the opportunity to see lockage operations first hand and turn the levers that activate the locks valves and miter gates. Mr. Fox was pleased to witness the commitment of the Canal's workforce, the waterway' s the waterway. Mr. Bo Sonnichsen, Vice President of Maersk Gulf, Ltd., and Mrs. Gina Batista, Finance Manager, Maersk Panama, S.A represented Maersk Sealand executives. Pre side nt V icen te F ox Mae rsk Sea land Off icia ls high-quality transit service, and the magnitude of the Canal's ongoing maintenance programs. The purpose of his visit was to promote the Plan Puebla Panamá. Fox stated that Mexico is the second most important economy in Latin America. He also mentioned that among the commodities transported through the Canal are petroleum products, fertilizers, and manufactures of iron and steel. During fiscal year 2000, Mexico occupied the seventh place of importance among Canal users, with a total 11.1 million long tons of cargo transported. On August 6 and 7, 2001, the ACP held homologation conferences at its premises, regarding Solicitations Nos. CDO-103407 and 103984, related to transportation and market segment analyses, and SAA-103983, related to an economic impact study. These analyses are part of a series of studies to determine the most important elements of a business plan for each particular client segment served by the Canal. The segments covered by the market studies are liquid bulk cargo, grains and other dry bulk cargo, and liners. The studies are part of the Panama Canal Expansion Project, currently in its pre-feasibility phase. The purpose of this project is to examine the possibility of expanding the waterway's capacity in the near future, to allow the transit of Post-Panamax vessels. Eventually, to seek project financing, the ACP would develop a single business plan, aimed at optimizing its capacity, in proportion to the potential revenue that each segment would generate. The economic impact study will identify and analyze the past, present, and future direct and indirect economic impact and benefits brought about by the Panama Canal, worldwide, by individual countries, relevant regions, country blocks, and entities, including the Republic of Panama. This study will enable the ACP to determine the financial value of the Canal for individual countries and regions, as well as the opportunity costs and benefit tradeoffs for Canal clients, as part of the project's financial plan and pricing policies. The study will also help the ACP to develop its corporate and expansion project communications strategy and policies. Representatives of some of the most reputable consulting firms of the world in each field of expertise, who had the opportunity to clarify ACP requirements and share their concerns and comments, enthusiastically attended the conferences. Receipt of proposals for all solicitations is scheduled for mid-September, and awarding of the projects are expected by mid-October 2001. Lecture at the Massachusetts Institute of Technology (MIT) Annual Conference of the American Society of Civil Engineers (ASCE) Panama Week 2001 Date: September 27, 2001 Sponsored by: Massachusetts Institute of Technology (MIT)Location: MIT Boston, MA Date: October 10-13, 2001 Sponsored by: The American Society of Civil Engineers (ASCE)Location: George R. Brown Convention Center Houston, TX Date: October 25-26, 2001Sponsored by: United States Panama Business Council (USPA)Location: Ronald Reagan Building & International Trade Center W ashington, D.C. Panama Canal Ad mi ni st ra to r to address the following events: Upcoming Events

PAGE 4

A meeting was held with Richardson Lawrie & Associates, after they were awarded a contract to develop a forecast of Canal traffic to be used for the Canal expansion studies. This forecast will be independent to those performed infor more information Corporate Planning and Marketing Panama Canal Authority ACP-CP P.O. BOX 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”) Canal Welcomes New Locks Locomotives We welcome your comments and suggestions regarding this newsletter . We want to convey important news for you and your business. Please let us know your views about this media (format, content, topics) and what you would like to see in our next edition. 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 or copies mailed to other officials within your corporation, please contact us (see box at right for address, fax, and telephone numbers). We want your comments As part of the Canal's multimillion-dollar modernization and improvement program, eight new locks towing locomotives arrived at Miraflores Locks on August 30th, 2001. Mitsubishi Corporation of Japan manufactured the locomotives at an average cost of 2.1 million dollars each. The first eight units arrived at the Panama Canal in August 1999. In 1997, the former Panama Canal Commission awarded a contract to Mitsubishi Corporation for the construction of 26 new units, to augment the locomotive fleet. The new locomotives weigh approximately 50 tons each and operate with two 290 horsepower traction units with a maximum towing power of 70 thousand pounds, at a speed of 4.8 kilometers per hour and a maximum running free speed of 16 kilometers per hour. Ten additional units are expected for delivery in February 2002. In addition to the purchase of new locomotives, the modernization and improvement program also includes the widening of the 8-mile long Gaillard Cut, increasing the towboat fleet by 41%, modernizing the marine traffic management and locks control systems, converting original electro-mechanical locks machinery to modern hydraulic systems, and replacing 16 kilometers of locks tow track. The Gaillard Cut widening and straightening project, to be completed ahead of schedule by December 2001, is divided into two phases: dry and wet excavation. The dry excavation phase is already 100% complete, while the wet excavation phase is 90% complete. By the time the project ends, the ACP will be able to provide safe two-way traffic service to Panamax vessels through the Cut. The Panama Canal Authority (ACP) is constructing a new information channel through its Information and T echnology Department's (IM) Electronics and T elecommunications Division. Scheduled for completion in October 2001, this channel will help strengthen and modernize the Authority's operations, as well as increase its communication capabilities. The 67-kilometer long information channel will link the agency's main telecommunications center in Balboa with Gatun Locks facilities on the Atlantic side.In 1990, the former Panama Canal Commission installed fiber optic cables in the electrical wiring along the T ransisthmian railroad tracks, with the purpose of creating a backup for the microwave system, while satisfying new communication needs. This design was more economical than the option of repairing the original duct. T oday, ten years later, communication needs at the Information Channel to Open Across the Isthmus Canal have increased, making it necessary to expand the system and increase its dependability. Therefore, the rehabilitation of the T ransisthmian duct proved the best option. Since much cable routing follows the path of the railroad tracks, the ACP has coordinated the work with NEOSHO Central America Inc., the company that is currently building the new Panama Canal Railway Company (PCRC) T ransisthmian railroad. Future plans include the extension of the system to provide coast-to-coast connection to local telecommunications companies and the expansion to the Atlantic Ocean shore, to provide global telecommunications companies with the opportunity to land their undersea fiber optic cables and connect with their Pacific networks via the Canal's duct system. This information channel will contribute to position Panama as a vital link for the expansion of the telecommunications market worldwide. WORLD LEADER CORNERSTONEMODEL in services to the maritime industry and in the sustainable development for the conservation of the Canal watershed; of the global transportation system and driving force of Panama's progress and growth; of excellence, integrity, and transparency, committed to the full development of our work force. VISION OF THE ACP