January 2002 Customer Newsletter

A Message to Canal Customers

Two years have passed since the transfer a successful year in terms of activity the change in the traffic mix now of the Canal to the Republic of and accomplishments. Despite a comprising bigger vessels and while the Panama. During these two years our moderate decline in oceangoing rigorous maintenance program was main efforts have been directed to transits and PC/UMS net tonnage, underway and the modernization maintaining the gates opened to the fiscal year 2001 saw a considerable program continued as scheduled. All shipping community, and ensuring a safe increase in vessels, which major programs were successfully and efficient transit of the waterway to all constituted 35.8 percent of the total fulfilled, while providing improved vessels of the world. number of transits. During this service to our clientele, as demonstrated The Authority has since by a reduction in Canal Waters Time the transfer in December of 1999, from 29.4 hours in FY 2000 to 23.9 hours embraced the challenge of focusing in in FY 2001. fulfilling its new responsibilities, which The modernization program reached a go beyond the efficient operation of the new milestone. Its largest project, the waterway and reach the realm of Gaillard Cut widening, originally becoming the prime driving force of planned to take about 20 years, was Panama's progress and growth. These successfully concluded last November, new responsibilities entail a clear eleven years before it was originally understanding of our role as one of the planned and with significant savings. most important world maritime The widening is now finished and upon commerce waterways and as pillar of our completion of the signaling the widened country's development. Reconciling Cut will be fully operational, probably by both roles is important to enable the March 2002, permitting Panamax design of alternatives that can respond, vessels to pass each other without not only to our customers' expectations, restriction at this narrow portion of the but also to the expectations of the waterway. The other components of the Panamanians who for many decades modernization program are also cherished the dream of becoming the advancing with excellent results. sole administrator of this paramount During the year now ending, the Panama enterprise. Canal Authority received the ISO 9001 We have not lost sight of our supreme Certification in two of its most important responsibility with regard to world trade. areas: the Department of Maritime Through these years we have been Operations and the Training and working towards modernizing the Development Division of the waterway and improving, not only its Department of Human Resources. The plant and equipment, but also its period, 366 transits of vessels ISO 9001 certification is a great infrastructure and operating systems. measuring over 950 feet in length accomplishment resulting from the hard This challenging and extremely complex were reported, as compared to 247 in work and commitment of the men and operation demands a high level of fiscal year 2000. women in our labor force who --aware of maintenance and constant Furthermore, impressive statistics for a the importance of this process-- put all modernization to continue serving its particularly safe year at the Panama their efforts into making this objective a multiple users and customers from all Canal marked the ending of fiscal year reality. We are extremely proud of each over the world, providing a 24-hour 2001. Accidents reported and every employee who played a part service, three hundred and sixty five corresponded to only 0.13 percent of and contributed to the success of this days a year. the overall transits made. The effort. This closing year has been particularly accident rate throughout Canal Looking ahead into the future, we fully challenging for us at the Panama Canal history has never been this low. understand the need to continue Authority, as I am sure it has been for However, more significant are the improving and we are committed to do everyone else in the world. In spite of challenges and critical factors that so in order to remain the route of choice the well-known negative effects of the surrounded this great achievement by of our customers and a cornerstone of the world economic slowdown and the Canal employees. The remarkable global transportation system. horrific events of September 11, we had safety record was reached in spite of continue... continue... We will continue with the process of channel along and closer to its customers. I hope that you certifying the rest of the organization Gaillard Cut by one meter. This now find a Panama Canal workforce under ISO 9001 standards, and expect to deepening will increase water storage willing to listen to and attempt to achieve this goal in the year 2003. We capacity in Gatun Lake and will also understand your concerns, and that - will continue with the studies for the next help the Panama Canal maintain even if you do not always agree with our Canal expansion and considering larger maximum draft during the dry months actions - you view the process as fair and locks to be able to accommodate of the year. the decisions informed and principled. existing Post-Panamax vessels as well as In summary, we are concentrated in We will continue striving to improve the those being ordered and built by the providing significant added value to Canal's competitiveness, safety, maritime industry. our customers while increasing world reliability and profitability through an The is working, trade. We have intensified our efficient utilization of our resources, within its charter, to make Panama a outreaching efforts and periodically while giving greater attention to our destination and the most important meet customers and industry leaders to clients. We at the Panama Canal distribution center in this hemisphere. review tendencies and assess Authority pledge to continue providing We are finalizing the studies to dredge opportunities. We have taken high quality transit service and the Pacific entrance to the Panama advantage of the meetings with the responding adequately to the changes in Canal, allowing Panamax and post- Advisory Board to obtain their expert the maritime transportation business to Panamax vessels to enter Balboa port advice, guidance, and useful fulfill our natural mission to unite the and any other future terminal in the information from the global maritime world by providing passage to vessels of Pacific fully loaded, thus delivering community perspective on how to all countries. greater cargo volumes to Panamanian prepare the Canal to meet future ports. Meanwhile, we proceed with the challenges. project to deepen the navigation The Panama Canal Authority is now

The Financial Perspective

The past two years have been challenging, as we needed to bring about a culture change from the non- profit federal agency of the United States government to a profit-driven corporation of the Republic of Panama. Both fiscal year endings satisfied management expectations as well as the expectations of all Panamanians. In terms of payments to Panama, in fiscal year 2001, the corporation contributed with 150.4 millions in direct payments resulting from tolls collection and 29 millions in payments for public services rendered, thus complying with our vision of becoming the driving force of Panama's progress and growth. In spite of the economic slowdown and a slight decline of our revenues, during fiscal year 2001 we accomplished The year 2002 is somewhat of a It is precisely at this time when our important savings in financial terms and concern as economic growth and corporate effort is geared to further achieved essential operational international trade continue to show strengthening the Canal's financial efficiencies that guided the agency to a weakness, a situation that was position, focus long term towards future year end closure in sync with the worsened by the tragic events of requirements for larger vessels and traffic financial plan. This was the result of a September 11. Yet the Panama Canal volumes, while positioning the company successful financial management as a long term on going concern is to meet the challenges of a global program that enabled the Canal to carry prepared to meet the challenges of the economy driven by market forces. on with its multimillion-modernization business cycle, at all times with a and improvement program, while business attitude toward the long term considering massive investments to commitment of providing safe, increase capacity to satisfy the maritime reliable and efficient transit passage industry demand well into this century. between the oceans. Canal Transits and Cargo Information

A preliminary forecast for the first quarter Major Canal Cargo Flows October-December (Estimated) of fiscal year 2002 (October-December) reflects a 4.0 per cent decline in GRAINS commercial cargo tonnage to 48.3 CONTAINERIZED CARGO million long tons by comparison to the PETROLEUM AND PETROLEUM PRODUCTS ORES AND METALS FY 2001 50.3 million recorded in the same period FY 2002 of fiscal year 2001*, an indicator that the NITRATES, PHOSPHATES AND POTASH MANUFACTURES OF IRON AND STEEL overall world economic slowdown has CHEMICALS AND PETROLEUM CHEMICALS affected Canal traffic performance. REFRIGERATED FOODS Cargo tonnage declines were evident for LUMBER AND PRODUCTS grains, coal and coke, chemicals and COAL AND COKE petroleum chemicals, lumber and 0 2,000 4,000 6,000 8,000 10,000 12,000 lumber products as well as petroleum Thousand Long Tons and petroleum products. By contrast, commodities that showed positive results The enclosed chart compares the major Canal commodity flows for the first quarter of fiscal years 2002 and 2001. * Includes cargo long ton projections by commodity groups for the month of December 2001. included containerized cargo, ores and metals, nitrates, phosphates and potash, manufactures of iron and steel and refrigerated products. Preliminary not been significantly affected by New Toll Record world economic conditions. Cargo estimates indicate that grains, the Upon completion of its maiden voyage tonnage by petroleum and petroleum principal commodity group shipped on December 3rd, the cruise ship products, third commodity group in through the Panama Canal, will drop by Norwegian Star broke the toll record set importance, are estimated to decline 2.4 per cent to nearly 10.5 million long earlier this year by the Radiance of the by 16.7 percent to 6.7 million long tons from the same period last year. Seas. tons. The petroleum and petroleum Grain importers in Japan and Taiwan The Bahamian flag Norwegian Star paid products production has been affected have expressed fears of importing $208,653.16, topping the toll record by the United States economic genetically modified grains from the established in March by the Radiance of slowdown in addition to the tragic United States while the world economic the Seas that was set at $202,176.76. events of September 11. These have slowdown is affecting grain consumption This impressive vessel from the impacted the jet fuel demand with a patterns. Containerized cargo, the Norwegian Cruise Line has a length of significant decrease from the same second most important commodity 294.13 meters (964.99 feet), and its period last year, noticed in the airline group, is expected to register a 1.7 per beam measures 32.31 meters (106 feet); industry. It is expected that U.S. cent increase for the first three months of the volume of this ship is greater than demand of petroleum and petroleum fiscal year 2002 with 8.9 million long that of its predecessor, Radiance of the products will recover through the year tons. Presently, containerized service Seas, and so is its tonnage. It has the 2002. patterns through the Panama Canal have capability to accommodate up to 2,683 passengers, although during its first voyage it carried 2,226 passengers and 1,053 crewmen. Slowdown in Canal Traffic This German-built cruise ship departed from Miami, Florida, on November 19, During the first quarter (October - calling at Cartagena, Colombia, before December) of fiscal year 2002, transiting the Canal en route to its final preliminary estimates indicate a total of destination, Acapulco, Mexico. 2,912 oceangoing transits, a 5.8 per cent Because of its non-stop operation and decrease by comparison to the 3,092 Panamax Transits reputation for safe and dependable total in fiscal year 2001*. The number of 100' Beam & Over transit service, each year an average of transits by Panamax vessels, those of 284 cruise ships transit the Panama 100-foot beam and over, reflected a 4.4 Month FY 2001 FY 2002 Canal carrying on board passengers per cent shortfall from fiscal year 2001 from all over the world. The Panama Oct. 419 355 with 1,141 transits. The chart enclosed Canal offers the unique experience of Nov. 379 389 transiting two oceans in one day. provides the monthly trend by quarter. Dec. 395 397 * Panamax vessels transits represented a Total 1,193 1,141 * During 2001, the standing toll record 39.2 per cent share of total oceangoing * Estimated was broken on three occasions by cruise transits. Presently, dry bulk carriers and ships. On March 8, Celebrity Cruises' containerships hold nearly 60 per cent of * Transit figures for the month of Infinity paid $201,531.69 for its Panama all Panamax-size vessel transits, with December 2001 were estimated. Canal transit, and on April 12, Royal shares of 29.6 and 29.0 per cent, Caribbean's Radiance of the Seas paid respectively. $202,176.76. Three New ACP Board Members Appointed Congratulations to the Panama Canal On December 27, 2001, the members of governmental sector in Panama, Panama's Legislative Assembly unani- including the Ministry of Treasury. Authority Advisory mously approved the appointment of Mr. Guillermo Quijano holds a Civil Board Members three new members to the Panama Engineering degree from the Canal Authority Board of Directors: University of Santa Clara in California. His Excellency, Mr. William Messrs. Mario J. Galindo, Guillermo Mr. Quijano has dedicated his profes- O'Neil, Secretary General of the Quijano and Antonio Domínguez, Jr. In sional career to engineering and International Maritime accordance with the Organic Law of the management positions in the private Organization was elected on Panama Canal Authority, directors are sector in Panama. November 22, 2001, to head the appointed by the President of the Mr. Antonio Domínguez, Jr. holds a IMO for two further years. Republic with the Bachelor of Mr. William O'Neil is also the consent of the Science degree Chairman of the Panama Canal Cabinet Council in Chemical Authority Advisory Board. He was and ratified by an Engineering appointed member on December absolute majority of from the 14, 1999 and has been since the members of the University of Chairman of the board. Legislative Notre Dame, a Mr. Gustavo Cisneros, a new and Assembly. The new Master of valuable addition to the Advisory board members Science in Board, was featured in Forbes replace Messrs. Industrial Global, the English language Raúl Montenegro, Engineering international edition of Forbes in Luis Anderson and from its November 26, 2001 issue. His Samuel Lewis Northwestern Cisneros Group has joint ventures Navarro whose appointment term University, and a Master of Business with AOL Latin America and expired during this year. Messrs. Administration from J.L. Kellogg DirecTV and his Univision is the Galindo, Quijano and Dominguez shall Graduate School of Management at fastest growing television network serve in their posts for a term of 9 years, Northwestern University. Mr. in the United States. The article and may only be removed for the Domínguez has worked in the private highlights the immense potential of reasons set forth in Article 20 of the sector in Panama, Mexico and Puerto Ibero-America, including the Organic Law. Rico. enormous growth of the U.S. Mr. Mario J. Galindo holds an The Canal administration is pleased Hispanic market. The Cisneros Economics degree from Georgetown with the presidential appointments of Group appeared ranked 38th in a University and Law degrees from the Messrs. Galindo, Quijano and list of the 50 largest private Puerto Rico University and Tulane Domínguez to these important companies outside the U.S. and is University. Mr. Galindo has held positions and bids welcome to the new the only Latin American company numerous high posts in the private and Directors. to be included on the list. The Panama Canal Authority Advisory Board serves as a New Marketing Manager consultative body for the Canal enterprise with the main responsi- Mr. Oscar Bazán has Planning and holds Masters Degrees bility to provide guidance and been appointed on Marketing and Maritime Business recommendations to the Board of Manager of the Canal´s from the University of Science and Directors. The members of this Marketing Division. Technology (ULACIT) Panama. Mr. Board are recognized profession- Mr. Bazán brings to the Bazán´s appointment is in line with als with broad experience in the Canal more than 20 the Canal´s efforts to strengthen its business world and the Panama years of experience in management team and knowledge Canal in particular. With the sales and marketing in base of the maritime industry. The assistance of the Advisory Board the shipping and recent reorganization of the the Canal has maintained a much transportation industry. More recently, Department of Corporate Planning closer contact with the representa- he served as Sales Manager of Maersk- and Marketing brought about the tives of the shipping industry. Sealand offices in Panama. Before that creation of a new Strategic Services Through the past two years, the he held similar positions in Sea-Land Division and the consolidation of the Board has provided valuable Service, Inc., and Crowley American Marketing Division which now guidance and recommendations to Transport. Mr. Bazán earned Industrial includes the office of Customer the Panama Canal to assist us in Engineering and Business Relations, Pricing and Tolls, Dry Bulks, our permanent quest for a more Administration degrees from the Liquid Bulks, Liner Services, Other efficient, competitive and safe University of Panama. He completed Specialized Services, and New waterway. post-graduate studies on Strategic Business Development. National Maritime Strategy

On De- maritime sector and ways to increase medium, and long-term. cember its development and economic Panamanian President Mireya Moscoso 10, the importance to the country. The headed the ceremony attended by principal agreement in itself is a major mile- representatives of all institutions and authori- stone because it establishes a coordi- organizations engaged in maritime ties nating committee that will address activities or commercial and industrial repre- common issues that historically had activities or services that complement senting been addressed on individual basis by the maritime sector. The Panama Canal the each organization. Authority, the Panama Maritime maritime competencies of the The development process of the Authority, the Interoceanic Region Panamanian public administration National Maritime Strategy will entail Authority, the National Environmental signed an agreement to complete in a work by consultants, workshops, Authority, and the Panama Institute of six-month period the National Maritime seminars, and the presentation of a Tourism, signed the agreement endorsed Strategy. formal document with strategic by the Panama Chamber of Shipping and The effort will focus on the analysis of the objectives, tasks, and recommenda- the Panama Maritime Law Association. strengths and weaknesses of Panama´s tions to be carried out in the short,

First Cruise Ship Arrives at Amador The MS Amsterdam, the first Pacific liner shops, coffee shops, boutiques, and a of call. As a lure for the cruise industry, to dock at the Resort and marina with moorings for 165 yachts during the month of October two Marina (FARM) cruise ship terminal ranging from 80 to 150 feet in length important cruise terminals were during this cruise season, arrived with and a pier for medium and small inaugurated at the Atlantic entrance of 1,200 passengers on board. The 61,000 cruise ships. the Panama Canal, the Cristobal Cruise grt., 1,380-passenger Amsterdam, is The total investment, according to Terminal - Pier 6 and the Port of Colon. owned by the Holland America Lines Andrés López Piñeiro, FARM Director For a long time Panama has wanted to and will call at Panama five times of Operations, adds up to $30 million, develop tourism as a major source of between now and mid-January, and will and could be finished in two years. revenue. Panama has comparative continue calling at the Pacific port until FARM is also conducting negotiations advantages over other ports in the March. with Royal Caribbean, Celebrity Caribbean, mainly because it is located FARM is building a cruise ship terminal, Cruises, and Princess Cruises, outside the hurricane belt; and because a shopping plaza, and a 120-room hotel, regarding the arrival of new vessels for it provides the unique experience of two with villas and casino, on Flamenco next year's cruise ship season. oceans on one port of call. Most cruise Island, at the Pacific entrance to the Government officials and business lines serving the Alaskan and Caribbean Panama Canal. The complete project leaders in Panama hope cruise ships routes already provide transits through will house more than 50 businesses will soon begin making Panama a port the Panama Canal. including bars, restaurants, handicraft Upcoming Conferences The Panama Canal Administrator, Mr. Maritime Law Association and the scheduled during the second day of the Alberto Alemán Zubieta, has been Panama Chamber of Shipping, and conference. For more information, visit invited to participate in the 2002 World sponsored by the Panama Canal http://www.panamamaritime.org. Economic Forum from January 31 to Authority and Seatrade. Panama From March 18 through 20, 2002, the February 4, 2002, at the Waldorf Astoria, Maritime VI will bring together top Panama Canal Authority will participate New York. Mr. Alemán has been a professionals in the industry to discuss in the Connecticut Maritime Association valuable participant in the Governors and attempt solutions to the most (CMA) Shipping 2002 with exhibit #69 at Meeting for Logistics and Transportation salient issues affecting international the Westin Hotel in Stamford, Industry. For more information regard- maritime affairs. His Excellency Connecticut. The CMA 17th Annual ing the World Economic Forum visit its William O'Neil, Secretary General of Conference and Exhibition, organized website at: http://www/weforum.org. the International Maritime by the Connecticut Maritime Administrator Alemán will be a keynote Organization; Chris Horrocks, Association, is the landmark North speaker at the Panama Maritime VI Secretary General of the International American based event which brings World Conference & Exhibition to be Chamber of Shipping; and Robert together leaders in the shipping industry held in Panama from the 24th through Force, Director of the Admiralty for business networking and industry the 27th of February 2002. The Panama Institute, Tulane University, will be affairs. For information, please visit Maritime World Conference and among the distinguished participants. http://www.cmaconnect.com Exhibition is organized by the Panama A Panama Canal user's forum is Advisories to Shipping

The Maritime Operations Department considered as an integral part of the safeguarding the integrity of the users of has issued clarification regarding vessel. The abnormal situation of bulk the interoceanic waterway, the national calculation of PC/UMS net tonnage of carriers carrying containers on deck community, the Authority, and its passenger vessels. Advisory A-60- has been recently detected. personnel. 2001explains that for the purpose of Customers are advised that The requirements are based on the calculating PC/UMS net tonnage, all admesurers will proceed to calculate Organic Law of the Panama Canal spaces that have been identified and the on deck container capacity and Authority, which establishes in Article certifies for the use or possible use of such tonnage will be added to the 57.4 the Authority's power to regulate the passengers are to be included in the PC/UMS net tonnage and applied to insurance coverage required of vessels calculation of the vessel's total volume; future transits. Dry bulk carriers transiting the Canal, for liabilities therefore, the definition of "Excludable reported as being in a ballast resulting from damages caused by such Spaces" as provided in the ITC 69, condition, but carrying containers on vessels to the Republic of Panama, the Regulation 2, Section 5 does not apply deck, will be assessed the laden toll Canal, its work force, and third parties. to areas such as balconies, rate. To implement the provisions of the above- passageways, swimming pools, or On the basis of the provisions of mentioned law, the Regulation on others designed and certified for the Article 78 of the Panama Canal Navigation in Panama Canal Waters, exclusive use of passengers. Authority Organic Law, and Article Chapter IX, Dangerous Cargo, establishes On November 19, 2001, the Director of 139 of Agreement No. 13 of June 3, that all vessels carrying dangerous cargo Maritime Operations issued an advisory 1999, the Panama Canal Authority, in shall provide current proof of financial on the subject of vessels not designed to Advisory to Shipping No. A-57-2001, responsibility and adequate provision for carry containers on deck that are advised the international maritime indemnity to the Republic of Panama, the transiting carrying containers on deck. community of the requirements Authority, or any agency thereof, covering Advisory A-59-2001 explained that applicable to transiting vessels public liability and loss as a result of containers are considered as cargo, carrying radioactive cargoes. These accidents owing to radioactive cargo. unless the container is permanently requirements respond to the These measures are consistent with welded to the deck and its volume is Authority's policy of maintaining the international insurance practices. included in the total volume of the highest standards of quality and safety vessel, in which case, the container is of transiting vessels, as well as

Scheduled Locks Outages Minor maintenance work (3 days or program is critical to continue providing less) is not depicted, as schedule is safe and reliable Canal operations. The Maritime Operations Director tailored to accommodate short released the tentative schedule of major term customer needs. locks outages for calendar year 2002. In calendar year 2002 the locks Calendar Year 2002 Tentative Schedule To better accommodate our customers' overhaul program includes Lane Transit needs, maintenance lane outages are recondition of miter gates and Dates Outage Miraf lores Pedro Miguel Gatun Capacity scheduled during periods in which other major locks maintenance Days vessel arrival rate is the lowest and and improvements, such as the June 3 to 13 11 Lane Outage Lane Outage Lane Outage* 26-28 which also coincides with the end of the rehabilitation of a total of 2,162 July 7 to 18 12 Lane Outage Lane Outage* 30-32 cruise season. Canal operations m. (7,092 ft) of locomotive tow August 12 to 22 11 Lane Outage Lane Outage* 26-28 Lane Outage* managers evaluate historical traffic track of which 431 m. (1,414 ft.) September 16 to 26 11 Dry chamber Lane Outage 26 28 conditions and maintenance will be in , 547 m. October 21 to 31 11 Lane Outage 30 32 requirements and adjust the schedule as (1,794 ft) in Pedro Miguel and * Identifies the locks requiring a major outage of one of its two necessary to minimize the negative 1,184 m. (3,884 ft.) in Gatun Locks. lanes for maintenance/improvement projects. The Panama Canal Authority may take advantage of these requirements to perform impact of such work on transit service. The overhaul and major maintenance simultaneous single lane outages for additional maintenance at other locks. The The President of Panama, Her Excellency transshipment center in Latin America. expects to be transporting close to a Mrs. Mireya Moscoso, inaugurated the The primary reason for the revival of million containers. The railway is adding new transisthmian railroad on November the railway is freight - a dry canal, a new dimension to the cargo-handling 27, 2001. The Panama Canal Railway capable of moving containers from the potential of the Isthmus of Panama. Of Company, a partnership between the Atlantic to the Pacific in a mere three special interest to some shipping lines is Kansas City Southern Railway and Mi- hours. Initially the target is 300,000 the fact that they may take advantage of Jack products, has the concession to containers a year. By 2003, when the the rail service when the ship's cargo operate the railroad that opens new Port of Balboa completes its second causes its draft to exceed the limits of the horizons to the most important phase of expansion, the railway Canal locks. Visits by Clients and Users

On October 6, 2001, the Panama Canal the Control House and received a full the Panama Canal. The members of the Authority Deputy Administrator, Dr. briefing on Canal operations, the delegation toured the Miraflores Locks Ricaurte Vásquez M., welcomed a various trade routes served by the and were briefed on Canal operations delegation of Central American waterway, and the capacity and the modernization programs. They Magistrates headed by the Honorable enhancement projects and plans for also viewed the topographical model at Antonio Giammattel Avilés, President of future expansion. A group of Canal the Visitors Center and made a partial the Central American Court of Justice. officials took the participants for a transit through Gaillard Cut. The During their visit to Miraflores Locks, the partial transit through Gaillard Cut and OPANAL is an agency that provides members of the delegation enjoyed a Gatun Lake aboard the "Gaviota," thus information on the international efforts luncheon with top management officials providing the members of the towards the prohibition of nuclear of the Panama Canal, representatives of delegation with an excellent weapons and furthers the efforts of the international organizations, and other opportunity to view first-hand the nonproliferation regime, which is the government officials. The delegation had ongoing work being performed as part bedrock for the disarmament of nuclear the opportunity to tour the Miraflores of the Cut Widening Project. and other weapons of mass destruction. Locks and observe the lockage operations while enjoying lunch. In October and November, two groups On December 11, 2001, Canal of college students from Mexico Administrator Alberto Alemán Zubieta The Panama Canal had the honor to visited the Panama Canal and received welcomed the Honorable Mohammed receive the Ministers of Environment of a full briefing on Panama Canal ElBaradei, General Director of the Central America and the Caribbean who operations and its marketing program. International Atomic Energy Agency gathered in Panama in October for the The first group of over 35 students was (IAEA); and Mr. Paulo Barretto, Division from the University of Guanajuato; the Director for Europe, Latin America, and second group was comprised of 40 Asia of the IAEA. Administrator Alemán students majoring in International and Canal officials offered a breakfast Trade at the Monterrey Technological reception in honor of Mr. ElBaradei. University, D.F. Campus. The Later on, the IAEA officials visited the participants were also given the Miraflores Locks, where they had the opportunity to observe the lockage opportunity to operate the miter gates operations and learn about the various from the Control House and observe the trade routes served by the waterway. lockage operations. They also received a full briefing on Panama Canal On December 1, 2001, a delegation operations. The IAEA serves as the from the Agency for the Prohibition of world's central intergovernmental forum 1st Water Fair of Central America. At the Nuclear Weapons in Latin America for scientific and technical cooperation Miraflores Locks, the ministers toured and the Caribbean (OPANAL) visited in the nuclear field.

Outreaching Efforts

As part of its intensified outreaching New York and New Jersey, attended Administrator Alemán Zubieta, Deputy program, the ACP participated in the the conference. Administrator Administrator Dr. Vásquez, and other Florida Caribbean Cruise Association Alemán also addressed participants at top Canal officials met on November 7 Annual Conference in Aruba, from the celebration of Panama Week in with a delegation of the Panama October 2 to 5, 2001. Washington, D.C. Administrator Chamber of Shipping, headed by its In October, Administrator Alberto Alemán offered an overall description President Mr. Carlos Urriola. The Alemán Zubieta served as the keynote of Panama's recent port development President of the Panama Chamber of speaker at the Annual Conference of the efforts, which have resulted in Shipping expressed his satisfaction for American Society of Civil Engineers in growing cargo capabilities. Mr. the excellent sense of teamwork Houston. Administrator Alemán briefed Rodolfo R. Sabonge, Director of achieved by members of the Chamber's participants on "The Panama Canal: A Corporate Planning and Marketing, Canal Affairs Commission and Route at the Service of the International was the guest speaker at the first Department of Maritime Operations Maritime Industry," which included the Terminal Operators Conference (TOC) officials. Administrator Alemán made a history, recent developments, and future of the Americas, held in October in commitment to continue holding of the waterway. Several maritime Miami, Florida. His presentation meetings with the Chamber to jointly authorities, including high-ranking involved the Panama Canal find ways to improve the services executives from the Port of Philadelphia, modernization and expansion provided by the waterway to its the Port of Houston, the Port of programs. customers. Galveston, and the Port Authorities of MODERNIZATION PROGRAM Rehabilitation of New Tugboats Locomotive Tow Track As an important component of the exit to the locks, and during their Another important part of the Panama program, two brand new tugboats were journey through Gaillard Cut, where Canal Modernization and Improvement added to the Canal floating equipment great maneuverability and power are Program is the rehabilitation of the fleet. The units, Colón and Coclé, required. locomotive tow tracks. The entire named after two provinces in Panama, This addition to the floating project calls for the rehabilitation of arrived from Prince Edward Island, equipment complements the recently more than 16,190 meters at the three Canada, on November 14 and were finished widening of Gaillard Cut. locks. The objective of the tow track christened by Panamanian President Once the signaling work is finished rehabilitation project is to remove and Mireya Moscoso on December 4. The somewhere around March, replace the tracks and racks on which incorporation of these tugboats implied simultaneous transit of two Panamax- the locomotives operate with a an investment of 10.6 million dollars. type vessels will be possible along structurally stronger system. This With this new acquisition, the Canal what is known as the narrowest stronger system is required to support tugboat fleet was augmented to 22 units, portion of the waterway. the loads exerted by the new but the goal of the modernization locomotives, in response to demands of program is to reach 24 units by the end of force and tolerance derived from the fiscal year 2002. The expanded fleet will increasing transits of Panamax vessels. also provide more flexibility in Bigger vessels require locomotives to maintenance scheduling and improved have greater power and, in turn, emergency response capability. produce greater wear on the tracks and These new tugboats are made of steel racks. This project began in Miraflores in with a novel azimuth stern drive and 1997, with a 24.38-meter prototype. have a 4,400 horse power Deutz engine, The tracks are being upgraded to which will enable the Panama Canal withstand the greater stress load being Authority to provide a better quality of exerted on the tow tracks. transit services to its customers. More than 7,300 meters of locks Tugboats assist vessels during their Canal locomotive tow track have now been transits, especially at the entrance and rehabilitated, representing a 45.13% execution rate.

Gaillard Cut Widening Completed We want your comments You are very important to us. We want A year ahead of schedule, the Gaillard the final shovelful, at the precise your comments and suggestions Cut Widening Program concluded on historical site that has constituted the regarding this newsletter and the service November 6th. This widening will greatest challenge, first for the we provide. We would like to serve you increase the operating capacity of the construction workers, and then for the best and convey important information operations--the site where the biggest for you and your business through this newsletter. Please let us know your landslides have occurred throughout views about this media (format, content, history. topics) and what you would like to see in The completion of the project widens our next edition. If you would rather the narrowest passage of the Panama receive it electronically, please send us a Canal from 152 meters to 192 meters note with your correct email address to: along straight stretches and up to 222 [email protected] If you need meters on curves. Originally additional copies or copies mailed to scheduled to be concluded in 2012, other officials within your corporation, the Gaillard Cut Widening Project was please contact us (see box at right for address, fax, and telephone numbers). sped up by more than 10 years, to be concluded in December 2002 to meet Panama Canal by 20 percent, enabling increasing traffic demands. for more information the simultaneous transit of two Panamax- Only the signaling work, which is type vessels and allowing for a more Corporate Planning and Marketing scheduled to be ready by the end of flexible traffic scheduling of vessels in Panama Canal Authority next year, is pending as part of the the waterway. ACP-CP P.O. BOX 025513 Gaillard Cut Widening Program. The Miami FL 33102-5513 Fomer Canal administrators, Messrs. widening is part of the Canal's $1- Tel.: (507) 272-7961 Fax: (507) 272-5916 Fernando Manfredo and Gilberto e-mail: [email protected] billion modernization and Guardia, attended the ceremony during web site: www.pancanal.com improvement program. While it was which Administrator Alberto Alemán originally estimated at a cost of more Zubieta conceded Mr. Guardia the honor SEE THIS NEWSLETTER ON THE ACP WEB SITE AT: than $600 million, its final cost was www.pancanal.com of operating the dredge Christensen for kept under $300 million. (then click on “Canal News”)