Marine Director

Autoridad de Canal de Panama

22 February, 2001

Dear Mr. Quijano,

In review of the following notice from El Universal,

**************** El Universal *****************************

Panama Canal’s pilotage rates are subject of discord

 

An additional charge will have to be borne by all ships, including passenger ships that dock at ports located at the entrance to the waterway after the Panama Canal Authority (PCA) implements new rates.

The PCA’s Marine Operations director, Jorge Quijano, confirmed this new charge to Mundo Maritimo, but indicated that the effective date had not yet been determined. Additionally, he indicated that the cost would not be more than $200. The range under study is between $100 and $200 per dockage.

Quijano said that the PCA has under study a special rate for the cruise ship industry in order not to adversely affect this activity promoted by the Panamanian government.

Sources from the industry consulted by this section indicated that this new increase is rejected by users because, according to them, the pilotage charges at Balboa and Cristobal are up to 100 percent higher than those at Manzanillo, Colon Container Terminal (CCT) and neighboring countries such as Colombia and Costa Rica.

The sources indicated to Mundo Maritimo that the new tariff would have an impact of about $1.0 million on users of ports operating along the canal banks.

As to the exact date of the entry into effect of this new pilotage tariff, the canal official pointed out that nothing has been defined. In the first place, they expect a proposal from the Panama Shipping Chamber on the tariff increase, which will be submitted prior to March 15 this year.

Quijano justified the increase, indicating that pilotage services are a port activity that ship transits cannot subsidize and for that reason it is necessary to balance this out. The local shipping industry, however, believes that it would be better for the country to have the port pilotage service privatized. This would allow Panamanian ports and auxiliary industries to be more competitive.

The PCA Marine Operations director also indicated that in the next few days they will meet with the shipping organization to discuss other rates that have a minor impact–for example, the increase in a surcharge over delays caused by the shipping industry to pilotage services. Currently, the surcharge does not even cover 10 percent of the delay cost, he said.

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I realized that no one from the Autoridad de Canal de Panama (Panama Canal Authority -ACP) is including representatives from the national yacht clubs/activities, nor from the international yachting world, in the discussions of the pending rates increases for small vessels that transit the Panama Canal.

In light of the attempt of the Panama Canal Commission to increase the yacht minimum rates to $1500 per yacht transit in 1998, and the new policy of the ACP to charge commercial ship rates to yachts for items like "mooring fees", etc., I am wondering what the current plans are for increases in rates that affect the small vessels. Since the small vessels constitute some 800+ transits a year, I suggest that we should have some direct input into the rate increase planning as we did in the public hearings held by the Panama Canal Commission in 1998.

I am particularly concerned about the treatment of yachts by the ACP in light of the stated purpose of the Panama Canal Commission to minimize the use of the Panama Canal by yachts .... this being stated in the records of the public hearings of 1998, and restated in a recent interview with the Director of Transit Operation by a representative of Cruising World Magazine. Recent treatment of yachts that have broken down in transit, with application of excessive mooring fees for services NOT rendered by the ACP, reflects this concern also. The same folks are in charge of the ACP as were in charge of the Panama Canal Commission in 1998, so I do not believe that the intend of eliminating, or minimizing, the use of the Canal by small vessels via economic strangulation has changed.

As we, in Panama's yachting/tourism industry, try to increase the number of yachts visiting Panama and increase their use of the many tourist attractions in Panama, it seems that the ACP is doing its best to make yachts not come to Panama, specially to transit the Panama Canal. In the 1998 hearings, the speakers from yachting and tourism presented figures on the financial impact of yacht visits to Panama. While this may not directly affect the Panama Canal, it does affect the Republic and our efforts to promote tourism. We all must do our part to bring tourism to Panama, and in some cases, organizations like the ACP need to re-evaluate their treatment of those issues that affect the greater good of the Republic. Contrary to your statement in the above article, one cannot run the Panama Canal on a completely pay for service basis by each service user .... one must consider the ability to pay when one operates a world utility and reallocate the received fees within the ACP to pay for the whole operation and to turn a profit. In the consideration of the profit, a value must be assigned to the tourism dollars that are received from the small vessels that visit Panama.

I comment strongly that we of the yachting associations in Panama, and the world, be included in the tariff talks that affect small vessels. We restate our desire to work with the ACP to alleviate the "burden" that yachts place upon the operation of the Panama Canal. This same offer was made by myself and others in 1998 ... to date we have been excluded from the decision making process and have been ignored in our offer of assistance to develop methods of transiting small vessels in a cost effective manner. As the same folks are in change now that were in charge in 1998 ...... why are we being ignored and financially abused?

Respectfully,

Craig Owings

Commodore, PMBC

commodore@pmbc.ws

"The Voice of World Cruisers at the Panama Canal"