Panama officials aim for calm on toll rises

PUBLISHED : Friday, 15 June, 2012, 12:00am
UPDATED : Friday, 15 June, 2012, 12:00am


Panama Canal Authority officials have been on a two-pronged mission this month - calming mainland and North Asian shipping companies over planned canal fee rises and promoting the massive canal expansion to those same shipowners.

Authority executive vice-president Jorge Quijano confirmed meetings had taken place since early last week between canal executives and shipowners and owner associations in China, South Korea and Japan.

He said the aim was to listen to the owners' concerns about the proposed fee increases and outline the US$5.2 billion canal expansion and associated projects, including the proposed Corozal container terminal and 980 hectare special economic zone. The authority is also targeting Asian shipowners and charterers operating bigger vessels, including ultra-large container ships and dry cargo bulk carriers, and new cargoes such as liquefied natural gas, when the expansion is complete in 2014.

'We will decide what we are going to do [about the fee increases] after listening to customers. We will definitely look at all the facts,' Quijano said. He added the authority's team would meet next week to digest feedback from Asian shipowners ahead of a board meeting to discuss the proposed toll increases.

Arthur Bowring, managing director of the Hong Kong Shipowners Association, said he hoped this marked a change in attitude. 'In the past they have talked to people and then said, 'This is what we're going to do', rather than talk to people and listen to what they had to say,' Bowring said.

Quijano said the toll increase, if any, had still to be agreed, although the authority proposed a 3.5 per cent per year rise for 20 years when it published expansion proposals in 2006.

Quijano also said the Hong Kong Shipowners Association voiced its concern through the Asian Shipowners' Forum. In a letter to the authority, forum secretary general Yuichi Sonoda raised five issues, saying the forum was 'extremely concerned that the proposed Panama Canal increases will have an added adverse burden on the shipping industry'.

The Japanese Shipowners Association said it was 'deeply disappointed' in the authority's last-minute proposals to raise tolls next month and again in July 2013.

About 24 per cent of the canal traffic originated in or was destined for China last year, equivalent to 53.1 million tonnes, making the mainland the second-biggest market behind the US. Japan was fifth, with 10 per cent of the cargo volumes, or 22.6 million tonnes. Japanese shipowners estimated they would have to pay more than US$1 billion in extra toll fees up to 2025 if the plan to raise fees by 3.5 per cent per year was adopted.

Turning to the Corozal terminal and special economic zone, Quijano said: 'We'll probably look at those next year. The idea is to bring in new competition.'

Hutchison Port Holdings already operates container terminals at both ends of the canal, at Balboa on the Pacific coast and at Cristobal, through a 72 per cent stake Hutchison Whampoa holds in Panama Ports.

Quijano said neither Hutchison nor Singapore's PSA International, which operates a single-berth terminal on the Pacific coast, had a right of first refusal to bid to develop the new terminal, although Hutchison 'has potential for additional international areas'. A Hutchison Port spokesman said 'we are not involved in any aspect of the canal, land or associated developments'.


The share of traffic through the Panama Canal that came from or went to China last year