The Panama Canal watershed covers a large tract of land, more than 552,761 hectares. With the current influx of foreign interest in investing in Panama, and moving to Panama as a retirement destination, more often developers are expressing interest and investing money in properties that fall within the Panama Canal watershed. Obviously, this generated some questions, so I sat down with Mr. Javier Guerrero Cortez of the Panama Canal Authority (ACP) to ask him some questions.

 

Mr. Guerrero works for the Panama Canal Authority (ACP) in the Division of Environmental Administration, in the Section for Environmental Programs and Policies as an environmental specialist. In short, he is the guy who receives and reviews all plans for new construction in the Panama Canal watershed.

I’d like to take a moment to thank Mr. Guerrero for his time, and his patience in answering all of my questions. He was exceptionally generous with his knowledge and experience in this subject matter. Thanks again, Javier.

Let’s say for example you represent a large group of investors and you want to develop a residential project in Panama, and you have millions of dollars to invest. You buy a large tract of land within the Panama Canal watershed. Now, what do you need to do in order to be able to develop that land? Is it even possible?

(Note; for additional information regarding the Panama Canal Watershed, please refer to these two earlier articles, which you can link to #1 here and #2 here.)

Of course it’s possible. There are currently more than 36,000 people living in the western portion of the Panama Canal watershed alone, and thousands more on the other side of the canal in the eastern zone. All of those people live in houses, and every one of them needed to go through a process in order to build their house and live within the watershed. Javier explained the process to me.

First of all, in the case of a large development, the lawyers for the development have to submit an environmental impact study to the Panamanian National Authority on the Environment (ANAM). The ANAM acts as the clearing house and filter for all of these kinds of requests, no matter where they are in the country. The first thing they do at ANAM is locate the proposed project on a map, and if the land to be developed falls within the watershed of the Panama Canal, they refer the portion of the request dealing with water use to Javier at the ACP. Yes, Mr. Javier Guerrero is THE GUY who reviews these requests for the ACP.

ANAM will also forward parts of the plan to other agencies for referrals. For example, if the development is large and requires the construction of roads, then they refer that part of the plan to the Ministry of Public Works (MOP.) Since houses are going to be built, they refer that part of the plan to the Ministry of Housing (MIVI). And, if there are any other special circumstances or situations that require consideration that fall outside of the purview of these four agencies (ANAM, ACP, MOP, and MIVI) then they will forward those sections to the appropriate agencies for comment.

But, the process starts with the submission of the environmental impact study to ANAM. ANAM sees that it’s with the watershed, so they forward it to Javier.

The ACP is primarily concerned with water, anything that deals with water in any way, shape, or form. That’s their area of responsibility. They will be checking the environmental impact study plan for the following elements:

    * Potable Water: Where is the potable water is going to come from that will supply the homes and houses in the development? Will the developer be using IDAAN water, extending a mainline into the area, drilling wells, or what? In some cases, developers build their own local purification plant to supply potable water to their developments because it’s cheaper, easier, and faster than trying to get IDAAN to bring it in. The issue of potable water supply must be adequately addressed in the development’s plan and environmental impact study.
    * Black Water (Sewage): Javier needs to see detailed plans about how the developers and residents are going to handle black water (sewage). Are residents going to be using septic tanks? What are the details on that, for each lot or home? They want to see actual detailed construction plans for the septic tanks, to make sure they will work in the area where they are being proposed.
    * Garbage and Waste Management: Javier also takes a hard look at the development’s plans for dealing with and handling solid waste, refuse and garbage. Where is the garbage going to be dumped or landfilled? Who is going to actually do the collecting and land-filling. Is that task going to be sub-contracted or handeled by the developer. Who will remain with the final legal responsibility for executing this plan? Where is it going to be actually, physically located? Is it near a stream or river that is a source of water for the canal or people living downstream? What is the design of the landfill, and is it designed to modern standards to protect the environment against leakage and seeping?
    * Rainfall and Runoff:Finally, they look at the entire project overall and predict how the development, when completed, would efffect the rainfall and runoff in the area. In the case of streets, bridges, and culverts, it is actually the responsibility of the MOP to ensure that roads and drainage is adequately designed to allow for proper runoff. The ACP puts on requirements for silt control and catchment ponds to control silt during the earth-moving phases of construciton. They might require that large tracts of earth moving (such as the building of roads) only be accomplished during dry season. They want to make sure that the construction company and developers are managing the construction in such a way as to protect the waters of the canal, and to reduce as much as possible any silting into the areas rivers and streams.

Now, with all that having been said, Javier told me that “we’re not reinventing the wheel here…” He said there are already several projects that have been reviewed and approved. For example, the “backside” of Altos del Maria, specifically the sections known as “La Rioca” and parts of “Altos de Piamonte” fall within the watershed of the Panama Canal. Development in these areas has been applied for and approved. In addition there are three other projects that have applied for permission to develop and build large tracts of land within the Panama Canal watershed that have been recently approved.

Javier went on to say that, from an environmental point of view, it is quite possible to allow for development within the Panama Canal watershed, as long as there is adequate oversight and planning. He said these developments bring jobs and opportunities into areas of Panama than have been relatively neglected up until now, and that the developers are meeting or exceeding environmental control expectations.

He added that it’s the job of ANAM to look at the project from the point of view of protecting plants, animals, and wildlife, and how finished development would impact on the nature and environment in the region from a overall point of view. ANAM takes a hard look at the trees that will need to be cut, plans to plant more trees to replace them, and things like nature trails, continuous canopy, animal crossings, etc.

The bottom line is that, yes, you can build in the Panama Canal watershed. There’s just some rules you have to follow in order to do so, as there are in every other part of the country.

SOURCE: Don Winner @ Panama-guide.com

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The ports of the Republic of Panama, the merchant marine, the agencies and shipping lines, the Colon Free Zone, the railroad and many other service suppliers connected with the economic activities of the Panama Canal, are complemented mutually and form the Conglomerate of the Canal.

This Conglomerate and the Economic System by-product of the operations of the interoceanic waterway contribute more than 20% of the Gross Domestic Product of the country and generate approximately 293,000 direct and indirect jobs.  
 
The Chamber of Shipping of Panama, as an organization that groups together the great majority of the members of the Maritime Sector, sector, which shows the highest indexes of growth in the domestic economy over the past five-year period, after having studied the proposal of enlargement of the Panama Canal and consulting with all its members and national and international clients, considers that the enlargement of the Canal is necessary for the following reasons:  
 
1. The Panama Canal is operating to almost 85% of its maximum capacity, which signifies that in a relatively short time, it will not be able to continue attending efficiently to the growing demand of traffic, a product of the tendencies of growth of international markets, 
 
2. The Panama Canal requires increasingly more frequent cycles of maintenance due to its 96 years of uninterrupted use in the service of world commerce, which at the same time delays in great measure the traffic of ships that use the waterway, 
 
3. The shipping companies, clients of the Panama Canal, are tending to build larger ships (Post-Panamax) for the scale of economic benefits that the same represent, and which currently cannot use the canal,
 
4. The shipping companies consider that the Panama Canal represents the most dependable and viable route to operate their ships on the Pacific and Atlantic oceans and they understand and accept that the enlargement will involve gradual increases in the anticipated traffic and that the principles of productivity, efficiency, security and cost-benefits that currently exist, will be maintained, 
 
5. We Panamanians have shown great talent and professionalism in administering the canal efficiently since it was transferred back to Panamanian hands. As previously stated, we are convinced that this project, properly executed, will benefit Panama and all Panamanians equally, and we support firmly the proposal of enlargement of the Panama Canal. 

Julio De La Lastra, President, Panama Chamber of Shipping, signed in Panama on the 20th of August 2006

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The Peruvians have had gold as their natural wealth; the Chileans, copper; and the Venezuelans and Mexicans, petroleum. In our case it has been our geographical position and the Panama Canal.

This article has been written by a well-known member of the Panama maritime community, Mr. Ruben Karamñites. He is General Manager of Crowley Liner Transport and a leading member of the Panama Chamber of Shipping.

From the year 2000, the Canal is being handled and administered by Panamanians, with responsibility and transparency, with very well calculated and studied risks, without economically commiting the future of our generations, on the contrary, serving as the basis for our social and economic development.
 
The Panama Canal has a tremendous commitment and a great social and  economic responsibility to the country as much as it has to continue being projected internationally to the vanguard of development in the maritime  world and must walk hand in hand with the demands of the sector.  For this reason, it has to keep investing in maintenance and making the necessary modernization changes to the Canal, that would allow it to provide a good service and timely get an economical benefit, in view of the imminent world cargo growth.
 
The growth of cargo worldwide, the globalization, the consolidation of capitals and the worldwide development of the maritime industry, will keep its dynamics of constant changes and Panama must be ready to offer modern services through the Canal, modern port and Free Zone installations, to satisfy the needs and demands of the users, and the growing demand of the Canal service, otherwise another will offer it. 
 
Consequently, to comply with all this, what is demanded and required is a  constant modernization of our maritime resources and the Panama Canal;  otherwise another will take the lead.
 
The International Maritime Community, the international commercial trade  and the world in general are watching us, they are waiting to see what  will be the position of the Panamanians and they recognize that the Canal  has importance in world development and the movement of cargo.  
 

KEY ARGUMENTS THAT ARE CAUSING CRISIS AND SUPPORT THE URGENT NEED OF  IMMEDIATE ENLARGEMENT OF THE CANAL.

•   The Canal structures are now more than 90 years old, and throughout  their history they have required large investments for their maintenance  and operation.
•   The Panama Canal has maintained for years an average daily transit of 38  ships, and as a result of its structural limitations, it has not been able  to grow more.
•   The Panama Canal continues confronting a problem of service to ships  that have to expect an average of 10 days delay in order to transit the  Canal, especially during the period of locks maintenance. At some periods the Canal has had up to 119 ships waiting to  transit and for this year, the maximum has been 110 ships.
•   There are limitations and lack of expansion in certain critical areas  for transit that permit a safe flowed of adequate traffic.
•   There is a need to improve the lighting in certain areas that help in an  effective way to improve the visibility on the Canal route.
•   Tie-up stations are urgently needed.
•   The Panama Canal at present does not have a real answer in the face of  the growing demand of services to satisfy the new business opportunities  that present themselves, through the development of the Post-panamax  ships.
•    There are various countries of the region that are studying alternatives  to the Panama Canal and they are directing themselves to the International  Community, tending toward improving the offer of the Canal and they are  determined to participate in the movement of international cargo from the  Atlantic to Pacific and vice versa. Among those that can be mentioned are  the United States of America, Mexico and Canada, that are revising their  systems of land transport (highways and railroads).  It is worth adding  that Nicaragua has been promoting the Asian interests that they  explore/revise the idea of a canal through Nicaraguan territory, an idea  that was born during the colonial era and that has remained in the  Nicaraguan mind.  On the other hand, Guatemala plans to modernize its  system of land transportation (highways and railroad).  All these  initiatives and innovative projects compete directly with the Panama Canal. If we do not act swiftly and intelligently to protect our resource  and the Canal business by improving its service, modernizing it and its  installations and developing the project of enlargement of the Canal  and to capture the growth of cargo moved on pos-panamax vessels, to  offer a better service to its users, otherwise we will end up with the  ” star  product “  gradually becoming known as a  ” product in decline ” .
  
Concerning the Plan of  Disclosure of the Panama Canal Enlargement Project, it is important to take  up the subject again in the country, to answer the  great number of doubts that exists on this project in many sectors of the  Panamanian population!!!. This requires immediate work by an able  official:

•   He must adjust the form of the speech to give the Panamanian an adequate and  simple explanation, by knowing and identifying the doubts in the different areas of  the project.
• Invest in a more massive publicity to give to give  more disclosure to the project.
• The project needs to be presented in all the forums and discussions to cover all  the objections, even if they are unfavorable to the project or if they seem insignificant, this must be a 24 hours job.  Here are some of the objections, which from my point of view, does not represent firm arguments and are easy to clarify and explain to the community, but they are points of view and opinions adversed to the project that have been spread out:

A.  ” It is not the moment to carry out the Project of  Enlargement ” . 
B.  ” One must wait (1) a year more ” .   more? 
C.  ” One must wait 10 to 15 years or more ” , and that  ” we only  need to develop the projects of modification of the critical areas and to  give greater expansion to the waterway.
         This is sufficient ” .
D. ” The environmental aspect ” .
E. ” The hydrographic basin will be affected, diminishing  the supply of water for the country ” . 
F. ” How it is established that the project of enlargement  will generate 40,000 jobs? “  and  ” How can they assure that it will give  jobs to so many Panamanians? ” ” How many reigners will be employed for  the work? “ 
G. ” We believe that the project will cost much more than the amount presented by the Canal; the financing of the project will cause debt problems to the country for the oans that will be requested to the banks; these economic resources from the Canal that will be used to develop the project could better be used to make more roads, homes, and schools for the Panamanians ” .
 
This Enlargement Project can not wait, it includes the third set of locks, the modification of the critical areas and the Canal widening.  This is the time to do it, becase it is foreseen that for 2014, present Canal will be reaching its maximum capacity and according to the projections of the studies, we are now just in time to begin the enlargement project. We urgently need to increase our offer capacity to capture the growth of the worldwide cargo and to provide a better service to the Canal users.   The more the project is delayed, the more expensive it will be, the competitive threads increases and the business opportunities are reduced. 
 
The existence of over 23 environmental and archaeological researches; the derogation of Law No. 44, in which finally the creation of damming to increase the volume of water in the Canal; the projects of water administration; the deepen of the route through dredging, to guarantee the way of the vessels of greater draft, were discarded.  The evaluation of this environmental theme is link to the cost benefit of the project for the Panamanian State.
 
The doubt that exists in the labor area related to the quantity of jobs for Panamanians, is directly related to the satisfaction of their needs and the domino effect that the project will have in the national economy.  The expectations could be exceeded, if we do not trained the Panamanian labor force to the future, when the development projects in the construction (hotels, casinos, roads, condominiums, office buildings, etc.) juxtapose with the project of the Canal Enlargement and beware that we are going to end bringing manual or skilled labor to face the job demand (same as it happened during the construction of the Panama Canal in 1904).  We all have to be ready for the great quantity of jobs that will arise in all labor areas, both vocational and professional. The Panama Canal Enlargment Project will resolve the home economical needs of all Panamanians, who will have a job.  Panamanians only want to see that they will really have a job and will directly receive the economic benefit of their effort.  Any other argument exceeds their humble interest.
 
The project financing, as well as its real impact in the national economy, must be fully clarified and discussed.  It is true that the themes have been explained and that we can be sure that the project is self financeable/sustainable, with a projection of conviction to the Panamanians, directed to the human development and to improve the Panamanians quality of life.
 
If you do not understand the range of the role the Panama Canal must play in the 21 Century for a globalized world, then it is time to know it. The changes that Panama will face after the Referendum of October 22, 2006, are deep and will be at other level, directed to the complete development.  This is the most relevant project developed in the Republic of Panama and in all the region, after the construction of the Panama Canal (1904/1914), which will change our future for the benefit of all Panamanians and the International Trade.

” Panama it is your Canal, modernize it ” ” The Enlargement of the Canal  will be for your future development ” ” Be prepared for this development “

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Last year Talleres Industriales started its program to get ready for one of the major mega projects worldwide ever - the expansion of the Panama Canal.

Based in the Atlantic-side port city of Colon, Talleres Industriales is doing this by investing in its main resources - infrastructure, equipment, and the most important, HUMAN RESOURCES.   
 
The company is building a new workshop of 4,000 square meters at Cristobal, fully equipped with heavy duty overhead cranes and machinery to manage up to 100 tons of equipment and gears for the dredging and the marine engineering and construction companies coming to Panama. 
 
Talleres Industriales is also opening a Balboa branch, which will help with logistical aspects and be closer to attend repairs on the Pacific side of the Panama Canal.   
 
Talleres is also investing in heavy-duty machinery such as power packs (all units totaling 10,000  KW), cranes, the latest welding equipment and underwater technology.    
 
Lastly and most importantly, Talleres Industriales is investing in people.  This year the company is investing more than US $100,000.00 in sending personnel to different training courses in Europe, Asia and North America to gain “know-how” on the latest technologies. 
 
To mention just a few, Talleres has send two mechanics to Holland for training on turbochargers, three divers will go to the USA for a course on wet welding, and electricians will go to the USA to train on the latest techniques of motor rewinding, Westfalia oil water separator training courses, welding courses of the American Welding Society and lastly, but very critical, Talleres is sending ship managers to Canada to polish up on their language skills - “English”.
 
Talleres is also making plans to start at the end of the year to prepare the new generation of welders, electricians, machinists and divers that will be needed for the mega projects in the years to come.  By doing so, the company will help develop Panama as a great country.
 
Talleres’  mission and values include:  Quality - service and results.  Leadership - industry, social.  Persistence - Never give up.  Education - Training,  Honesty - Loyalty,  Fair play - Justice, Generosity - devoted to the community and the not so fortunate people– Success - Achieving goals and asking for more.

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Singapore’s Minister for Foreign Affairs, George Yeo, has backed Panama’s ambitious plans for a major expansion of the Panama Canal.

During a recent visit to Panama he said: “The Panama Canal expansion is important not just for Panama but for the entire (maritime) industry - for the global economy.”

Mr. Yeo travelled to Panama as part of an official delegation, which also included Panamanian Ambassador to Singapore Eduardo Real. Earlier this year, Singapore signed a Free Trade Agreement with Panama. 
 
Foreign Minister Yeo told Minister of Panama Canal Affairs, Dr. Ricaurte Vásquez: “Singapore is a maritime hub. We live on trade. And the more open the world is to free movement of ships, the better it is for Singapore. We hope that you widen the Canal because it is good for the overall system.”
 
Panamanians will vote on October 22 in a national referendum on the proposed expansion. The project would build a third lane of traffic along the waterway through the construction of a new set of locks, doubling Canal capacity. 
 
The expansion would help maximize Panama’s strategic location to become the great maritime hub of the Americas.

Singapore’s Minister for Foreign Affairs, George Yeo, has backed Panama’s ambitious plans for a major expansion of the Panama Canal.

During a recent visit to Panama he said: “The Panama Canal expansion is important not just for Panama but for the entire (maritime) industry - for the global economy.”

Mr. Yeo travelled to Panama as part of an official delegation, which also included Panamanian Ambassador to Singapore Eduardo Real. Earlier this year, Singapore signed a Free Trade Agreement with Panama. 
 
Foreign Minister Yeo told Minister of Panama Canal Affairs, Dr. Ricaurte Vásquez: “Singapore is a maritime hub. We live on trade. And the more open the world is to free movement of ships, the better it is for Singapore. We hope that you widen the Canal because it is good for the overall system.”
 
Panamanians will vote on October 22 in a national referendum on the proposed expansion. The project would build a third lane of traffic along the waterway through the construction of a new set of locks, doubling Canal capacity. 
 
The expansion would help maximize Panama’s strategic location to become the great maritime hub of the Americas.

The Panama Canal expansion will be one of the top issues relevant to Caribbean and Latin American port professionals, including navigation dredging, seaport security, expansion and port operating strategies.

All these topics will be featured at the American Association of Port Authorities (AAPA) Executive Management Conference for Latin America and the Caribbean from February 12 to 14.
 
The conference will be held in Miami Marriott Biscayne Bay Hotel and Marina.

source: http://www.bulletinpa.com/index.php?id=802

 

There has been a mixed reaction and warnings on the Panama Canal Authority (ACP) plan to restructure its pricing system. The period of public consultation will end on March 12 while, in the meantime; there have been some cautionary comments from leaders in the maritime world.

ACP Administrator/CEO Alberto Alemán Zubieta said: “This proposal is well thought out and well researched. We recognize the value of the Panama Canal and its service to the shipping and maritime communities, and, indeed, to global trade.
 
“These new prices will allow us to continue providing the industry with the service they want and the service they deserve.
 
“At the same time, they will allow us to make the programmed investments for the Panama Canal Master Plan, which proposes to expand the capacity of the existing Canal through the construction of a third set of locks.
 
“The industry has continually requested price stability and we have included this in our proposal and extended it until 2009, unparalleled in the industry.”
 
International Chamber of Shipping secretary general, Tony Mason told the Panama Maritime VIII conference that the global shipping industry was concerned about the newly announced Panama Canal toll fee increase proposals.
 
He said: “Everything in life has to be paid for, and a US $5.25-billion capital project is certainly no exception.  It is therefore perhaps no surprise that while the majority of shipowners have in principle welcomed the additional capacity and greater lock dimensions that this project will bring, they are somewhat nervous as to how they will be expected to pay for it!”
 
Mr. Mason added: “We have read the basic parameters set out in the ACP’s business plan as to how it is intended to finance the expansion, and we have just seen the detailed proposals from the ACP of their intended toll increases for the next three years.  The quantum of the increases in each of the next three years looks to be a matter of concern.  ICS will be commenting in detail once we have studied the detail, and we will be taking the opportunity to make formal comments on them.  However one question which I am sure we will be asking (of Canal Administrator and CEO Alberto Alemán Zubieta) is what his intentions are beyond the three year horizon, given that the average increases for these three years would appear to be well above what was indicated as an average annual increase in his Business Plan discussed with the industry previously.
 
Mr. Mason went on to make a number of cautionary points:


•  Where there is a move to sectoral pricing, the ability of individual sectors and markets to absorb cost increases must be carefully considered.
•  Increases need to be both manageable and predictable, so that users can build them into their own business plans.
•   Any increases need to be proportionate and not such as to challenge a sector’s ability to compete with other routes with other modes or indeed with other sourcing of cargo.
•   The burden of the cost of financing the expansion should not be too heavily loaded on current users, given that the major proportion of the benefits of expansion will accrue to future users.  Clearly that may involve the ACP in financial mechanisms to carry capital costs until they can generate the additional revenue stream from the expansion.  This is indeed quite normal with capital expansion projects.
 
He concluded: “I make these points not only from the self interest of the industry and indeed of my members, but also with a genuine wish to see this project succeed for the benefit of users, the ACP and the Panamanian people alike.”
 
Proposed changes to the pricing system and Canal regulations include toll increases dependent on vessels type: container vessels, passenger vessels, general cargo, refrigerated cargo, dry bulk, tankers and vehicle carriers. The ACP says: “These adjustments provide Panama Canal price stability for three years. Of note, tolls for non-container segments have not increased in the last four years. “
 
Vessels charged based on their displacement will pay according to the maximum displacement draft instead of the arrival draft.


The ACP is proposing an assessment of tolls based on maximum passenger capacity. In general, under this change, large vessels will be charged tolls on a per berth basis, and smaller ships will continue under the Canal tonnage tolls system. 
 
It says: “These changes are largely due to suggestions from industry representatives and evidence another example of the ACP listening to the industry.” 
 
Some minor administrative changes have also been proposed.


source:www.bulletinpa.com

Figures for the quarter January-March just released by the Panama Canal Authority (ACP) show an increase in net tonnage, total transits and booking slot utilization. There was also an increase in “official accidents”. Canal Waters Time (CWT), the average time it takes a vessel to transit the Canal including waiting time for passage, decreased.

Panama Canal/Universal Measurement System (PC/UMS) tonnage increased 6.30 percent - to 79.7 million PC/UMS tons from 75 million PC/UMS tons.
 
The steady climb in tonnage was complemented by an increase in traffic, including transits of panamax vessels (the largest vessel that can transit the Canal). Total Canal transits increased 4.7 percent - to 4,052 transits from 3,869. Transits of panamax vessels increased 3.90 percent - to 1,559 transits from 1,501.
 
“The Panama Canal remains a vital and economically competitive transit system in the maritime and shipping industry. We are keeping up with heightened levels of demand for the waterway - handling more traffic and tonnage - while keeping transit time consistent, if not reduced,” stated ACP Maritime Operations Director Manuel Benitez.

source: www.bulletinpa.com

 

By Jorge Fernández for La Prensa - The Jamacian flagged bulk cargo vessel Miltiades, which collided with the ship White Mist on 24 July as it was passing through the Panama Canal near Gamboa, is being repaired in the Braswell Shipyards. The repairs will take about 30 days to complete at a cost of $1.5 million dollars, and is being done by some 200 workers, 150 welders and 50 painters.

200 trabajadores reparan buque

LA PRENSA/Jorge Fernández

El buque de carga a granel de bandera jamaiquina Miltiades, que el 24 de julio impactó con la nave White Mist mientras cruzaba el Canal de Panamá, se encuentra en reparación en los Astilleros Braswell. Los trabajos, estimados para 30 días, a un costo de 1.5 millón de dólares, so1 realizados por unos 200 trabajadores, 150 de ellos para labores de soldadura y 50 para pintura.

SOURCE: Don Winner @ Panama-guide.com