PANAMA CANAL NEWS

PANAMA CANAL NEWS

Canal Expansion: Full Steam Ahead

The Panama Canal Authority (ACP) continues moving forward with
the expansion project. The excavation work for the creation of the
6.1 kilometer long Pacific locks access channel advances, with three
of four contracts already awarded and in execution. More than 10
million cubic meters of material have already been removed out of a
total of 46 million. Also, the Pacific sea entrance channel dredging is
progressing as scheduled with more than 1.5 million cubic meters of
the 9.1 million cubic meters already dredged.
On February 27, the ACP issued the Request for Proposals (RFP) to
dredge the Canal's Atlantic entrance. The contract includes the
dredging of approximately 15 million underwater cubic meters and
800 thousand cubic meters of dry excavation. It also includes
deepening the Canal's Atlantic entrance to 15.5 meters to allow the
transit of post-panamax vessels through the new set of locks.
The dredging contract will be awarded under the lowest price model.
Proposals are expected to be submitted on July 15, 2009 with the
project completion expected sometime in the second quarter of
2013.
On March 3, the ACP received the proposals for the design and
construction of the new set of locks, the largest contract under the
$5.25 billion Canal expansion program. The proposals were
submitted by three prequalified consortia: Consorcio C.A.N.A.L;
Consortium Bechtel, Taisei, Mitsubishi Corporation, and Consorcio
Grupo Unidos por el Canal, and were separated in two categories
technical and price. The contract will be awarded based on "best
value", with 55 percent of the weight assigned to the technical
aspect and 45 percent to the bid price.
The envelopes containing the price proposals, including the ACP's
owner's price, were signed by the Notary Public, the ACP
Contracting Officer and the Canal's Inspector General and were
placed in a box and moved to Panama's National Bank to be locked
in a vault -in an independent and secure environment. These price
proposals together with the owner's price will not be opened and
reviewed until the technical proposals have been evaluated. Points
for both aspects will be computed in a subsequent public forum.
Currently, the technical proposals are being studied and evaluated
by an evaluation committee comprised of 15 highly qualified ACP
employees, with substantial and diverse technical experience. All
committee members have signed confidentiality and conflict of
interest agreements.

During the process, the committee will receive support from more
than 40 local and international specialists and work in coordination
with the ACP's designated Contracting Officer for this project. The
ACP hired Deloitte to audit the technical review process and to certify
that the committee follows the rigorous analysis process designed to
evaluate the technical proposals.
Upon completion of the technical evaluation, the Contracting Officer
will call for another public forum to examine the price proposed by
each consortium to execute the project. The technical points
awarded to each consortium will be added to the price proposals
and the consortium with the highest number of points will be the
potential winner. The forum will be held in the coming months after
the evaluation is finalized.

ACP officials receive the proposals for the design and
construction of the new set of locks.

The winner of the contract will design and build a new set of locks
along the Canal, capable of handling vessels 366 meters in length
overall, 49 meters in beam, and 15.2 meters of tropical freshwater
draft. The lane's new locks chambers will be 427 meters long, 55
meters wide and 18.3 meters deep. The expansion will double the
waterway's capacity to more than 600 million Panama Canal tons
and allow the transit of present post-Panamax containerships;
Suezmax liquid-bulk tankers; Capesize dry-bulk carriers; and larger
sizes of liquefied natural gas carriers, passenger ships and other
vessel types within these dimensional limits.
Expansion is slated for completion by 2014, when the Panama Canal
celebrates its 100th year of service to world trade.

Marh 00

Memorandum of Understanding with Curagao Ports Authority
On February 4, Administrator Alberto Aleman Zubieta and Curagao
Ports Authority (CPA) General Managing Director Richard Julius
L6pez Ramirez signed a Memorandum of Understanding (MOU) to
jointly foster commercial activity between both entities. Renewable
on a two-year basis, the MOU aims to generate new business in
tourism and trade for each country's continued economic growth.
As part of the MOU, the ACP and CPA will undertake a series of
activities to promote the oceanic exchange of goods including joint
advertisements, data interchange and competitive market analyses
of the shipping industry. In addition, the ACP and CPA will share
information on their latest advancements, such as modernization
efforts and personnel training programs. The agreement
demonstrates each organization's commitment to meet increasing
levels of trade.
The ACP holds similar agreements with ports located in the East
and Gulf Coasts of the United States.

LFrom left to right Richard J. L6pez R., Curazao Ports Authority
General Managing Director, Alberto Alemin Z., ACP Administrator,
and Agustin M. Diaz, Curazao Ports Authority Managing Director.

Canal Performance
For the first quarter of fiscal year 2009 (FY 2009), which covers the
period from October through December 2008, the Canal registered
a total of 3,520 transits, 0.1 percent more than the transits
registered during the same period of FY 2008. Transits of supers,
larger ships that require greater time and navigation skills to transit
the Canal, decreased 1.4 percent -to 1,874 transits from 1,900.
Panama Canal/Universal Measurement System (PC/UMS) tonnage
remained nearly constant with a slight 1.0 percent decrease -to
78.2 million PC/UMS tons from 79.0 million PC/UMS tons.

Average Canal Waters Time (CWT), the average time it takes a vessel
to transit the Canal (including waiting time for passage), increased
15.7 percent to 27.97 hours from 24.18 hours. CWT for booked
vessels (those ships holding reservations) experienced a slight
increase of 0.5 percent -to 16.94 hours from 16.86 hours.
Utilization of the booking system slightly dropped 2.1 percent -to
90.7 percent utilization from 92.8 percent.
The global economic crisis has affected some consumer oriented
segments, especially vehicle carriers and containers; however, other
segments like tankers, dry bulk and passenger remain strong.

Panama Canal Authority CEO briefs U.S. retail industry on Canal
On February 11, Mr. Aleman Zubieta spoke at the 2009 Retail
Industry Leaders Association (RILA) Logistics Conference in Dallas,
Texas. With an attendance of approximately 900 global logistics
leaders, Mr. Aleman Zubieta highlighted the anticipated benefits of
the Canal expansion, which is progressing on time and on budget,
and will help Canal customers to efficiently deliver products to
consumers around the world. He also pointed out the rapid growth of
Panama as the transportation and logistics hub of the Americas.
Located in the narrowest section of the Americas, the Republic of
Panama is a strategic location for carrying out transportation and
transshipment activities. The Panama Canal links 144 routes
worldwide, and the local ports' system gives ready access to
shippers looking to distribute their products to the Caribbean and
Latin American markets. Only 50 miles separate the Pacific and
Atlantic Oceans and interconnections are available through rail, air,
and highway systems.
The Government of Panama is promoting the development of a new
Logistics Center at the Pacific entrance of the Panama Canal.

Meeting with Round Table of International Shipping Associations
On February 17, Mr. Aleman Zubieta and Mr. Rodolfo Sabonge, ACP
Vice President of Market Research and Analysis, met at the
International Chamber of Shipping (ICS) offices in London with
representatives of the shipping industry. The meeting was attended
by ICS Secretary General Tony Mason and delegates from the Cruise
Lines International Association; the German, Japanese, Norwegian,
and Danish Shipowners Associations; and container lines
CMA-CGM, Maersk, APL, and Hapag Lloyd.

Panama Canal Authority Tel. (507) 272-7961
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