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CENTRAL
AMERICA |
Panama Canal Sees Slow
Revenue Rebound As Sea Trade Lags
By Inti Landauro, Down Jones Newswires
PANAMA (Dow Jones)--After weathering the
financial and economic crisis that crippled
global trade, the Panama Canal expects to
see a modest rise in revenue this year as
the recovery takes time to filter through to
the shipping industry.
"This year will be flat, it will be very
similar in terms of volume," Alberto Aleman,
the chief executive of the Panama Canal
Authority said in an interview. "We are
seeing the same tonnage."
The Canal's revenues fell to $1.96 billion
in the fiscal year 2009--which ran from
October 2008 to September 2009--down from
$2.01 billion in 2008. The forecast for this
year is $2.02 billion, Aleman said.
The canal's net profit will probably fall to
around $960 million from $1.01 billion in
2009 and $1.03 billion in 2008.
Despite the world economy's recovery, the
canal's business will take time to pick up,
Aleman said. The shipping industry always
lags the rest of the economy as orders take
several weeks to reach ports, and it takes
companies time to get enough confidence to
increase inventories, Aleman said.
The canal's fiscal year also includes the
fourth quarter of 2009, when a recovery
wasn't obvious in countries trading through
the canal.
Although the global crisis caused a sharp
drop in overall trade, the Panama Canal
suffered only modestly. About the same
number of ships moved through the waterway
in 2009 as in 2008, but tonnage fell 3%.
Transportation of bulk loads has already
improved, while shipping of containers and
vehicles is still low, Aleman said.
Canal revenue last year was affected by
rebates the canal gave to its customers,
included considering as empty container
ships that were less than 30% full.
The rebate is scheduled to end in May, when
a new fee structure is expected to be
announced following discussions between the
Canal Authority and industry players.
About 5% of all the world's seaborne goods
pass through the Panama Canal, which joins
the Atlantic and Pacific oceans.
The canal is expanding its capacity to allow
more and wider ships to cross the Central
American isthmus. The project includes the
construction of two new sets of locks and
two new short stretches of canal parallel to
the existing one.
The expansion was initially estimated to
cost $5.25 billion, but it's now likely to
be about $380 million less than that because
of competitive bids by private contractors,
Aleman said.
Just over $1 billion of the investment is
earmarked for unforeseen events, so it's
likely at least a portion of this figure
won't be spent.
The official said the expansion will be
ready in 2014, as scheduled.
The Canal Authority has secured $2.3 billion
in loans for the expansion from the European
Investment Bank, the Japan Bank for
International Cooperation, the
Inter-American Development Bank, the Andean
Development Corp. and the World Bank's
International Finance Corp.
The rest of the money will come from the
canal's own cash flow. In 2012, the most
active year, the Canal Authority will
transfer around $1 billion to the expansion
contractors.
The largest of them is the group formed by
Spanish construction firm Sacyr Vallehermoso
(SYV.MC), Italian firm Impregilo (IPG.MI),
Belgium's Jan de Nul Group NV and Panama's
Constructura Urbana SA. The group has
started construction of the new sets of
locks, which will cost $3.12 billion. |
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