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What Democrats are saying: the Fusion Brown & Black Forum

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Democrats address Latino and African-American concerns in a forum at Drake

Check out host Fusion’s website coverage:

Hillary on extremists with guns

Bernie on living in public housing

Martin on Democrats as the party of diversity

Des Moines Register: The best, worst and silliness at Iowa Democrats’ forum

The New York Times: Hillary races to close enthusiasm gap with Sanders

The Guardian: Clinton and Sanders go on the attack

CNN: Sanders talks about sex, Clinton about deportations

 

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Editorial, The Day of the Martyrs

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la bandera
The Day of the Martyrs and
how people’s minds work

In another place, at a different time, a martyr for a different aspect of what’s really a universal human cause, South African Black Consciousness Movement leader Steve Biko, observed that “The most potent weapon of the oppressor is the mind of the oppressed.” So it was then and there, so it was on The Day of the Martyrs and so it is now, in Panama and elsewhere.

On January 9, 1964 the Panamanian mind didn’t function the way it was “supposed to.” Resignation in the face of nothing ever changing, ignoring banal insults in order to avoid making things worse, the narrow concern for self and family — for a moment these things dissolved under a tidal wave of fury, and things would never be the same again. That fury was not a perfect storm but the accumulated actions of imperfect people. Most of the people who were hurt on both sides didn’t deserve to be hurt, but a point was made.

Usually such fury can be heard coming, but usually the sounds and signs are ignored until Hell has broken loose. In 1947 and 1958 the alarm was sounded in some unmistakable ways. In a ceaseless procession of movements, statements, gestures and resolutions from the end of World War II to the Day of the Martyrs, Panamanians of all social classes had been saying that they were fed up. If some of those whose lives were profoundly changed never knew what hit them, it’s because they weren’t paying attention, by and large because they were taught not to pay attention.

The past should illuminate our present and provide a set of warnings as we move into the future. Mostly, however, it gets trivialized, mythologized and spun for partisan advantage. Those who object to the distortions tend to get their motives and their credentials as human beings questioned by those who would privatize the nation’s history. But the momentous acts of individuals and groups don’t belong to any party, faction, social segment or would-be leader. Some person or group might gain control over what the history books are allowed to say, but they don’t own history.

The Day of the Martyrs was then. The Canal Zone is over. Panama lives on, its fate in the hands of new generations. Today’s Panamanians face some new situations, but the basic questions that all ought to ask are the perennial ones. Which insults and injustices will you tolerate, and for how long? For what are you willing to die? Much harder: For what are you willing to work and to dedicate your life?

Yadda yadda yadda — nothing ever changes. And if the head of the Colegio de Abogados, Panama’s principal bar association, files criminal charges for fraud in the Panama Canal expansion, many will be accustomed to tuning that stuff out, many because they have been advised to do so. It’s a good way to miss the sound before the fury of those who are oppressed.

Panama is oppressed by a parasitic, amoral and arrogant political caste that does everything it can to avoid accountability and every five years appeals to the baser instincts in the pubic mind to get its grip on power renewed. Panama is oppressed by a predatory and generally incompetent domestic social elite that has convinced many Panamanians that its own genealogy and its highly fictionalized history are the only subjects worth knowing, to the exclusion of the skills and wisdom that society’s individual members need to amount to a self-reliant, prosperous and well-ordered nation. These political and economic elites have put us at the mercy of a multinational corporate oligarchy that stifles our development, cheats us on a daily basis and has too many of us believing that it is too big to fail and thus that there is no viable alternative to putting up with its abuses.

Are we to explode in a hot fury that leaves us with a new generation of martyrs — to add to those already blinded in Changuinola, shot down at the edges of the comarca, burned alive in Tocumen, killed by anti-union company goons and otherwise fallen at the hands of Panama’s now-reigning oppressors? Are we to relentlessly drive those now in control from power and strip them of prestige in an irresistible cold fury that forever changes who and what Panamanians are? Only when we, like the martyrs of 1964, stop letting our minds be used as weapons against us.

 

Bear in mind…

 

Seriousness is the only refuge of the shallow.
Oscar Wilde

 

Never go to bed mad. Stay up and fight.
Phyllis Diller

 

Anti-Semitism is the socialism of the stupid man.
August Bebel

 

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¿Wappin? Free form as the Jazz Festival draws near

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Randy Weston
Randy Weston. Photo by William Droops.

¿Wappin? Before the Jazz Festival free form

Bonnie Raitt – Storm Warning
https://youtu.be/qAGXPKNPK_M

Zoé – Sombras
https://youtu.be/K3BOW3Y0hyQ

Lee Oskar – Before the Rain
https://youtu.be/9g6gfIbzQAs

The Doors – Riders on the Storm
https://youtu.be/k9o78-f2mIM

Alejandro Sanz & The Corrs – Un Noche
https://youtu.be/u2gcjLaBLvA

Danny Rivera – Madrigal
https://youtu.be/Dl3REvj2xf4

John Coltrane – A Love Supreme
https://youtu.be/_qt435yF2Qg

Randy Weston & Billy Harper – Blues To Senegal
https://youtu.be/DDkjkqPOb_4

Youssou Ndour – Yaakar
https://youtu.be/HzsQfjnOfro

Joss Stone – The Answer
https://youtu.be/Te50aSDIByM

Prince Royce – Handcuffs
https://youtu.be/944GwSiPVH4

Hello Seahorse! – Me He Convertido
https://youtu.be/GWQd-xzfXL4

Carlos Garnett – Mystery of Ages
https://youtu.be/v2hbLGEryRA

Janis Joplin – Summertime
https://youtu.be/guKoNCQFAFk

Airto & Flora Purim – Live In São Paulo 1988
https://youtu.be/wY7gRdx7Ctg

 

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The Panama News blog links, January 7, 2016

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The Panama News blog links, January 7, 2016

AFP, Panama canal expansion to be complete ‘around May’

Ship & Bunker, ACP and GUPC trade shots over delays

ANP, Panamá cierra con modesto crecimiento en carga marítima

The Maritime Executive, Reassessing prospects for the proposed Nicaragua Canal

CNN, Copa among the most punctual airlines

Illinois State University News, Illinois State welcomes Panamá Bilingüe

ANP, Gobierno impulsa mejoramiento genético de ganado

Fruitnet, Chiquita introduces new banana brand

Fresh Plaza, Chiriqui incorporates drones in agriculture

Total Telecom: C&W, Huawei trial G.fast in Panama

LatinOne, Dubai targets Panama and Mexico for investment

CONCACAF, Panama prepares for Cuba in Costa Rica

SoundersFC.com, Torres not rushing his recovery

Cayman Compass, Third indicted CONCACAF chief faces US extradition

Reuters, US judge ties Martinelli to SAP bribe case

InSight Crime, Panama court case highlights challenges of political immunity

El Tiempo, María del Pilar Hurtado quiere que Panamá la indemnice

Newsroom Panama, Homicides down 28% in 2015

La Estrella, La familia Pujol invirtió en Panamá $92 millones

TeleSur, Panama moves to prevent spread of swine flu after migrant dies

EFE, Panamá suma 24 casos de virus zika en mes y medio

Prensa Latina, Death toll rises to 17 due to AH1N1 in Costa Rica

TakePart, Farming frogs can save them from extinction

Science Advances, Entering the sixth mass extinction

Archaeology, Were Panamanian islanders dolphin hunters?

Reporters Without Borders, 110 journalists slain in 2015

Bird, 18 former Guatemalan military officers arrested for crimes against humanity

AP, Egipto arresta a tres administradores de Facebook

The New York Times, Turkey says Erdogan’s Hitler comment ‘distorted’

Amnesty International, Shia cleric among 47 executed by Saudi Arabia in one day

The New York Times, United States curbs psychologists at Guantanamo

The Gleaner, Obama gun controls could help Jamaica

WOLA, Obama limits gun running loopholes

Stiglitz, The Great Malaise continues

Ornstein, The eight causes of Trumpism

Paxton, Is fascism back?

Rosenberg, Is Hillary Clinton a neoconservative hawk?

Moore, Dear Governor Snyder: you have to go to jail

López Alba, El PSOE corre al galope hacia la irrelevancia

Ben-Ami, Exit Latin America’s left

Sader, ¿Cuáles son los límites de la derecha en América Latina?

Arkonada, From the burial of FTAA to the birth of Chinese soft power

Breznitz, TPP is a wonderful idea — for China

Gustafson, Bleak prospects for Latin America under TPP

Prieto & Gammage, Aiding Central America’s “women on the run”

Gandásegui, La corrupción siguió asomando la cabeza en 2015

 

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CD legislators defy Martinelli

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Ricky complains
Here Martinelli, who made a public pronouncement designating Alma Cortés as the Cambio Democratico party’s acting president, who in turn issued a public ultimatum demanding that all CD deputies swear an oath of personal loyalty to the former president, complains about a Panameñista legislator making a public statement after the CD legislative caucus refused to recognize Cortés as party president or sign the demanded oath.

CD anti-Martinelli revolt

by Eric Jackson

On January 5 the Cambio Democratico (CD) legislative caucus met, with the party’s secretary general Rómulo Roux present. When former President Ricardo Martinelli fled the country nearly a year ago, he designated Roux as acting president of the party, which Martinelli founded and always led. In December the fugitive Martinelli designated sub-secretary Alma Cortés as acting president instead, and she in turn issued an ultimatum that by December 31 all CD deputies must sign an oath to follow the party line as ordered by Martinelli. Otherwise, Martinelli and Cortés threatened, they would be removed from their seats in the National Assembly. At the January 5 meeting the CD legislative rejected both that oath and Cortés’s legitimacy as acting party president.

To remove a legislator for failing to observe party discipline is a party boss’s prerogative as provided in Panama’s constitution, but courts have thrown obstacles in the way of that procedure and it has rarely been actually done. For starters, to remove a legislator one has to get the Electoral Tribunal to accept the validity of the charge and the procedure, but the tribunal has yet to recognize Cortés as acting party president. That Martinelli has a warrant out for his arrest does not help his efforts to purge most of his party’s legislative caucus. The Electoral Tribunal might, for example, say that if Martinelli wants to designate Cortés as acting party president, he must do so in person at the tribunal’s headquarters in Curundu.

Roux did not take a position Cortés’s legitimacy and said that he only went to the caucus meeting because he was asked to do so. He did, however, oppose a purge of the party’s legislators. “This isn’t the moment to be asking then to leave the party,” he said.

Meanwhile, Central American Parliament (PARLACEN) deputy Rafael Espada, the body’s former vice president, told TVN news that the regional legislature is awaiting a copy of the Panamanian Supreme Court’s order for Martinelli’s arrest and might on that ground expel Martinelli from its ranks. Generally PARLACEN has needed a final conviction to oust a member in the past, but a number of drug busts of PARLACEN deputies in which those arrested asserted parliamentary immunity has changed the ways that the body operates. Under Panamanian law PARLACEN membership may create immunity from criminal investigation or arrest, but as far as PARLACEN is concerned it no longer does. The Martinelli case could test how far the recent trend will go.

Also pending before Panama’s high court is a motion that was made but not ruled upon in the proceedings to get the arrest warrant against Martinelli on illegal eavesdropping charges. In those court sessions Ángel Alvarez, the attorney for several of Martinelli’s victims, moved for the court to order Martinelli’s passport revoked. Perhaps the matter was not addressed because the Passport Authority was neither a party to nor represented at the hearings. However, the court could call in the authority to make any representations it wishes and take up the passport issue again. A revoked passport would make it hard for Ricardo Martinelli to flee from the United States to a third country.

 

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Swine flu cases aggravate Cuban migrant crisis

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The President has been shot!!!
The US government takes influenza seriously. A White House nurse gives President Obama a flu shot at the White House in 2009. White House photo by Pete Souza.

Swine flu among Cuban migrants in Panama: one dead, two ill, governments concerned

by Eric Jackson

Panama’s Cuban migrant crisis just becaame a bit more complicated. A 53-year-old Cuban died of severe respiratory symptoms at the Rafael Estevez Hospital in David, and diagnosis is the AH1N1 strain of swine flu. Two other ailing Cuban migrants have been diagnosed with AH1N1 infections.

Across the border, Costa Rica reports at least nine deaths from this virus. Tico health authorities are scrambling to import vaccine and begin a mass vaccination program, for which it seems they had little in the way of contingency plans.

The mass Cuban migration that began in mid-December by way of South America and then to Panama, Costa Rica and onwards toward the United States, has left about 1,000 Cubans stranded in Panama and nearly 8,000 in Costa Rica. A proposed plan to ship those in Costa Rica directly to the United States has stalled.

The influenza strain, also described as type A of H1N1 human influenza, has been out and about in the world for a number of years. There was a major worldwide outbreak in 2009, which caused more than 18,000 deaths. As best as can be determined, that outbreak began either in the United States or Mexico, with the first confirmed diagnosis in California and the first deaths in Mexico. The strain is believed similar to the so-called Spanish flu of World War I, which probably actually originated in the United States and caused the Pandemic of 1918 that killed 20 to 40 million people and did much to end the war — troops were getting sick in the trenches of both sides, but in Germany the flu shut down war materiel production — and was probably the infection that led to US President Woodrow Wilson’s stroke.

The big problem with flu strains is that they are all highly contagious and can mutate from mild to deadly, or vice versa, in the course of an epidemic. Another problem is that vaccines for one strain may not be effective for another.

Panamanian epidemiologists are reportedly concerned. The Ministry of Health has yet to issue a health alert about the flu outbreak, which is likely a sign that the government is not prepared to advise at least the most vulnerable residents to go to its clinics for flu shots. For now the standard recommendations are being issued — maintain sanitary standards, wash your hands, stay at home if you have flu symptoms and so on. But El Niño has given us an aggravated problem in many parts of Panama, where the water is off and ordinary cleaning is made more difficult. It might be a good idea for tourists headed this way to get flu shots before they come.

Regardless of the actual magnitude of the health risks, the death of one Cuban migrant in Panama is likely to have political repercussions in the United States during an election year characterized by venomous tirades against Latin American immigrants. Don’t look for the Obama administration to take in any unvaccinated Cuban migrants from Panama.

swine flu

 

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Change and continuity on the high court

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judicial organ
José Ayú Prado (left) remains the president of the Supreme Court. Photo by the Supreme Court.

New magistrates, same leadership

by Eric Jackson

Early on January 4 at the Palacio de las Garzas, President Varela swore in Ángela Russo and Cecilio Cedalice as Supreme Court magistrates and gave a brief speech about how the country needs judges who put loyalty to the nation ahead of private interests. After year of turmoil and unprecedented events, the nine-member court is getting some new faces at least. Not only Cedalise and Russo, but it’s expected that Varela will soon appoint their suplentes (alternates) who will end up acting as magistrates in many cases.

That afternoon at the Supreme Court the magistrates got together to select the presiding magistrate for the next two years. By a 5-4 vote, including those of Russo and Cedalice, they re-elected José Ayú Prado to lead the court. It was a surprising, and to many annoying, choice.

Ayú Prado started his public sector career as one of the dictatorship’s prosecutors, was one of Ricardo Martinelli’s attorneys general and was raised to that position by Martinelli. Five of the nine magistrates — one an acting magistrate — are still Martinelli appointees but the ex-president commands even less loyalty from the judges he appointed than from his party’s rebellious legislative caucus. (Aren’t judges supposed to be above all that, non-responsive to orders and independent of party loyalties? That is the stated norm, which was crassly violated by Martinelli, who used his tourism minister, Salomón Shamah, to relay orders to the courts. But the presiding magistrate of those times, Alejandro Moncada Luna, is now an inmate at El Renacer Penitentiary near Gamboa.) The Supreme Court has long had an odious reputation and it’s unclear if last year’s removal of one magistrate and forced resignation of another on charges of amassing wealth that they could not explain as coming from a legitimate source while holding public office meant the end of that institution’s culture of bribery. In any case, two of Martinelli’s five appointees — Harry Díaz and Abel Zamorano, the latter Moncada Luna’s suplente and now acting magistrate — voted against Ayú Prado.

There are eight criminal complaints about Ayú Prado pending before the National Assembly’s Credentials Committee. In one of them he is accused of pressuring a witness against Ricardo Martinelli in the Financial Pacific affair to change her testimony when he was attorney general.

Most of the country’s judicial reform activists were taken by surprise when Varela’s two appointees voted to re-elect Ayú Prado. Speaking independently of anyone else but in her judicially restrained way, former high court magistrate and current member of the Inter-American Human Rights Commission Esmeralda de Troitiño summed up the mood when she told La Prensa that the choice was “hardly fortunate.”

 

Cedalice
Cedalice takes the oath. Photo by the Presidencia.

 

Russo
Russo signs the register. Photo by the Presidencia.

 

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Panama, Cubans and our neighbors

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Cubans
Some of about 1,000 Cuban migrants stuck in Panama. Photo by the Presidencia.

Cuban migrants have Panama doing a balancing act

by Eric Jackson

There are about 1,000 Cuban migrants stuck in Panama, about three-quarters of them near the Costa Rican border in Chiriqui province, and it’s causing more complications with our foreign policy than domestic criticism. Part of the ho-hum reaction here is that these people do not intend to stay in Panama to occupy economic niches that some laws and some people say should be reserved for Panamanians. Part of the typical Panamanian reaction is a sense that the problem is external to us, a combination of poverty in Cuba and a US law, the Cuban Adjustment Act, that encourages Cubans — and nobody else — to get into the United States any way that they can. Under that law if a Cuban and a Panamanian, each with no visa and each without a reasonable claim for refugee status, land on a US shore together on the same raft only to be met by the Border Patrol, the Cuban gets to stay and the Panamanian gets sent back. (That would be kind of a rare case, as Panamanians are relatively happy to stay here, especially as compared to Mexicans who are driven from time to time to leave their country and illegally cross the US border in great numbers.)

Panama, however, has a generally tolerant attitude about illegal migrants. People without visas from all over — Asia, Africa, Latin America, the Caribbean — make their way here on jungle paths from Colombia or by sea with the intention of moving up through Central America and Mexico to get into the United States. The official attitude has been that this is not our problem, so long as these people keep moving and don’t make it our problem. That attitude gets Panama criticized in the annual US reports on human smuggling and is commented upon with disapproval by that part of the far right in the United States that gets incensed about immigration in general, or by the immigration of nonwhites. But also under the tent of the Republican right there are many very conservative Cuban-Americans who like the idea of Cubans fleeing the island to the United States, by way of Panama or any other way. That’s the basic political reason for the Cuban Readjustment Act, which has historically enjoyed a lot of Democratic support as well. With the moves to normalize US-Cuban relations there is an expectation in Cuba that this law may soon be repealed and thus that the special door for undocumented Cuban immigrants will close. Thus the current rush to get to the United States while it is still possible.

Attitudes change the closer one gets to the Rio Grande. Under pressure from Republicans Barack Obama has been deporting record numbers of Central Americans and Mexicans, which makes the people and governments of these countries a bit less understanding about Cubans passing through en route to a legal chance to stay in the USA. First Costa Rica put its foot down about letting Cubans cross their border from Panama, then Nicaragua barred Cubans in Costa Rica from crossing into their country. All of a sudden there was this regional crisis, brought on, as Cuban strongman Raúl Castro insists, by an anomaly in US law. South American countries adopted policies to keep Cubans likely to head north from flying to their countries. With respect to Panama, Ecuador’s restrictions are particularly noteworthy. The Central American countries, of which Panama is formally if not historically or culturally a member, met to figure out what to do.

Panama has taken a moderate, or it might be called contradictory, position with the Central American neighbors. Amidst some angry calls for a regional crackdown, the Panamanian government resisted calls to criminalize illegal immigration. Vice President and Foreign Minister said that Panama was trying to give humanitarian support to the Cubans and to find a way around Central America to get them to Mexico and on their way. But over the holidays Panama moved the Cubans away from the border crossing with Costa Rica at Paso Canoas — and also out of temporary shelters in David — surely at Costa Rica’s request to avoid any mob scenes at the border.

Will some demagogue seek to make a US presidential campaign issue of Panama’s role as a stepping stone for illegal migrants? Probably. Little Panama is a tempting target for would-be American bullies, but usually we are too obscure to excite US passions. But if our neighbors get sufficiently annoyed, the “you can come and go, but you can’t stay” policy becomes untenable for us. The current crisis may blow over, but Panama will probably have to reconsider its migration policies.

 

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The new locks’ opening will be delayed again, for more than the stated reasons

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Sacyr
Sacyr’s stock share prices over 2015 on Spain’s IBEX index. We can argue causes and effects, but the numbers suggest that the company can’t afford to eat the consequences of its share of a lowball bid.

It’s not just the bad concrete

by Eric Jackson
The canal expansion project is a disaster. In two or three years it will be obvious this was all a failure.
Juan Carlos Varela
December 2009, quoted in a US embassy cable
released by WikiLeaks

 

You don’t mess around with something as important as the canal. When one of the bidders makes a bid that is a billion dollars below the next competitor, then something is seriously wrong.
Juan Carlos Varela
January 2010, quoted in a US embassy cable
released by WikiLeaks

 

I am calling on the contractors for the expansion project to talk with the Panama Canal Authority, to allow work to be completed, to leave legal disputes in the hands of the competent authorities and to avoid media publicity about differences that in no way helps the images of the contractors, the Panama Canal Authority or the Republic of Panama.
Juan Carlos Varela
January 2016 address at the start of the new National Assembly session

 

Yes, there is the celebrated “crack,” the cause and nature of which neither Panama Canal administrator Jorge Quijano nor the canal minister, Roberto Roy, have forthrightly discussed before the press or public. But things get out, and even if Quijano ducked the questions at a December 18 shipping industry meeting, three days later the Panama Canal Authority (ACP) sent out an update to those media to which it will release information. That note said that the testing of the new Atlantic Side locks will not begin before April. The gCaptain shipping website put two and two together and figured that this means that the previously announced April opening date will be missed. It will be another delay for a project that was supposed to be up and running in August of 2014. The website attributed the delay to a “crack” in a Pacific Side locks sill.

However, three other matters, two alluded to in some of Panama’s Spanish-language media and another not, are also driving the delay. Perhaps the closest thing to an official estimate of how long the delay will be came from President Juan Carlos Varela in his January 2 address at the opening of the current legislative session. He told the deputies and the nation of a job to be completed “around the month of May,” and immediately cast doubt on that by pleading with the contractors to “allow the job to be completed” and fight their legal battles before the designated panels rather than in the press. The president didn’t get into much detail beyond that.

The bad concrete pour — and it was that, rather than insufficient rebar that the GUPC consortium alleges and the ACP won’t dispute in public — may have contributed to the delay but the fix that is being accepted, such as it is, will be finished this month at a reported cost of about $40 million to the contractors. Whether the companies involved can all afford their shares of that expense, and the further costs of finishing the job, are questions hinted at in the Spanish-language press. But the possiblity that the formerly leading partner in the consortium, Spain’s Sacyr, simply can’t afford to go on is a taboo subject both in Panamanian and Spansh corporate mainstream media.

Can Sacyr take the hit?

Has there been insider trading? The sharp decline in Sacyr prices began weeks before the world saw water pouring through an immense sill that was supposed to be watertight in the middle of August. Sacyr prices rallied for a time on reports that the problem was known not to be serious, and then slid again when it became clear that things were worse than initially represented. Of course, share prices may not reflect underlying value. With a company like Sacyr that’s traded on public markets, however, look at share prices as something akin to bettors’ odds, with a herd mentality behind those thought to have done their homework.

Sacyr and the other major partner in the GUPC consortium, Italian construction giant Salini Impregilo, may have dodged a bullet when the ACP accepted cheaper substandard repairs on a bad concrete pour — inserting steel reinforcing bars and cement instead of tearing out and redoing the improper work — but their shares of that repair are on the order of $20 million each. It may be little more than a trifle to Impregilo, but the Italian company is a lot healthier than Sacyr.

Is Sacyr a conglomerate, with other businesses on which it can fall back? Yes it is, but that’s part of its problem. In the heady days before the 2008 finance, real estate and construction crash, Sacyr diversified into the oil industry. As a big player in road construction in Spain and several Latin American countries, this seemed like, among other things, a good way to secure its asphalt supply. But the oil bust has taken that part of Sacyr’s business down along with the economies of places like Venezuela. Is Sacyr politically connected, protected and subsidized, a “too big to fail” company whose collapse could bring the entire economy of Spain down with it? Yes, it’s one of those and neither of the parties that have sustained it for many years, the conservative Partido Popular or the nominally socialist PSOE, won a majority or a reasonable shot at putting together a stable ruling coalition in the December 20 Spanish elections. In the last trading session of 2015, Sacyr shares continued in free fall with a 2.06 percent retreat on the day. On one day in December, Sacyr stock lost more than €1 billion in value.

Sacyr was known to be a sick company when in 2009 it parlayed a lowball bid and a piece of the action to former canal administrator Alberto Alemán Zubieta’s family into new-found prestige as the head of the consortium with the most important of the Panama Canal expansion contracts. In the Spanish media little was published to diminish that prestige, even when the government bailed the company out over bad oil investments, and when later it came out during the late 2013 and early 2014 canal expansion shutdown and corporate shakedown that the performance bond that was paid out by Swiss insurers had been bought by the Spanish government. Even when the new Cocoli Locks sprang a leak Spain’s corporate mainstream didn’t draw any connection with Sacyr’s health. But investors apparently did notice, and the ACP’s information control games about the situation were cause for further alarm. Maybe they also noticed that now it’s executives from Impregilo, not Sacyr, who are making public statements for GUPC.

In late December it was Sacyr CEO Manuel Manrique who sent a letter to the ACP asking for a $190 million loan. That request was rejected.

So why didn’t the ACP demand the usual thing for a concrete construcion error of the sort we have seen, the removal of the faulty work and its reconstruction? Did they know that had they stuck to construction industry norms it could have led to Sacyr’s collapse? And is a potential Sacyr failure — this time without the Spanish government in a position to prop the company up again — the backdrop to the new delays?

Delays in training as well as construction

From the start PanCanal pilots had doubts about the physics of the new locks, through which ships are to be pulled through the chambers by tugs that are also in the chambers rather than by locomotive mules running alongside. The concerns expressed during the canal referendum campaign were cross currents from gates that open and close from the side and the turbulence of prop wash from the tugs inside the chamber. Later questions were raised about high winds, the angles of the lines between the tugs and the ships and the massive inertia that must be overcome to move or stop a huge post-Panamax ship. Pilots complained that the video simulators on which the ACP was training them for the new locks had unrealistic settings.

To address such concerns, the ACP announced that it would obtain a post-Panamax ship on which pilots and tug captains could practice. However, they found that post-Panamax container ships for this purpose are unavailable on the market. Belatedly the authority was able to strike a deal to rent a tanker of the right size for training to begin at the Atlantic Side locks. Plus the ACP has built a 1/25 scale model of the new locks, with working model ships and tugs for the pilots’ and tug captains’ training. While there are doubts about the new simulators as well, pilots and tug captains are generally satisfied that they create a better practice model that can be tweaked to more realistically simulate conditions in the new locks. Training all of the pilots and tug captains on a single tanker rented for a reported $16,000 a day creates time and money issues that lead some to believe that there won’t be enough time to practice under real conditions.

The training issue for pilots is not just the locks. They will have to learn to navigate the channels of Gatun Lake and the Culebra Cut in massive new ships that handle differently from those to which they are accustomed, and a tanker may present some important differences from a container ship when guided through canal waters.

In any case, both the working scale model and the tanker rental come late in the game. Was the April 2016 opening date for the expanded canal was something that the ACP did not believe even as that date was still being given to the international press?

The end game in a lowball bid scheme

The lowball bid strategy is banal in the construction industry. A company or consortium gets the contract by bidding lower than can reasonably be expected to cover the costs of doing the job, let alone making a profit on it. Once the job starts, there are all sorts of extra costs that were not contemplated in the contract, or arguably were not. In any major project there actually are unforeseen contingencies that drive costs up. Usually these are in the budget and the contract includes streamlined methods to resolve disputes about these. A contingency fund and dispute resolution mechanisms are parts of the ACP’s relationship with the GUPC.

The contract for the new locks was awarded on a lowball bid to GUPC, which includes as one of its minor partners Constructora Urbana SA (CUSA). It may have only a modest stake in the GUPC, but CUSA is primarily owned by then canal administrator Alberto Alemán Zubieta’s cousin Rogelio. Alberto Alemán Zubieta had been CEO of that company before he came to work for the canal and claims that he had sold his shares in that company a few months before the bidding process on the locks. Thus, by the ACP’s definition in a nation that has no criminal laws about such things with respect to public officials in general, there was no conflict of interest. But by any ordinary international definition there was a conflict of interest and the GUPC bid, a billion dollars below the next bidder, US-based Bechtel, was widely recognized as a lowball.

This is a $3.12 billion contract, for which the ACP has already paid the GUPC $4.235 billion, some $860 million of that in advances. The ACP has acceded to paying some cost overruns running into the hundreds of millions of dollars, but in various phases of adjudication or arbitration the GUPC is asserting more than 30 claims that total more than $3.4 billion. Many of these claims were to have gone before international arbitrators in Miami in December, but at the GUPC’s request the ACP agreed to put the arbitration off until July.

Will the delay serve to shield Panamanian government officials or mostly European company managers from the wrath to come after the public, or the shareholders, perceive that their side has been rooked out of billions of dollars? Perhaps. But polls suggest that the Panama Canal Authority is the nation’s most popular public institution, with the possible exception of the Bomberos. And how can any mere cost overrun disaster further tarnish any business executive’s reputation in jaded European eyes?

Appearances do mean things to each side, however. See how a relatively tiny part of the payment dispute was recently resolved, and how the sides spun it. Three contingencies beyond the GUPC’s control caused costly lost working days. In 201l and 2012 two former Panamanian presidents died and national days of mourning were declared. In 2012 Ricardo Martinelli’s attempts to blackmail Colon into selling the Colon Free Zone’s land led to disturbances and a state of emergency that kept construction crews from coming to work. The GUPC demand for compensation was $16,434,944 but the ACP only agreed to pay $495,417. The Dispute Adjudication Board awarded $6,207,200. Similarly, the GUPC wanted $28,694,480 in compensation for a two-week construction strike in 2014 and the panel awarded it $11, 271,945. Both of these awards were discounted by the amounts to which the ACP had agreed and already paid. But the consortium, which had submitted grossly inflated claims that were mostly rejected, went on a public relations campaign to declare victory.

In that sort of atmosphere the GUPC is threatening that it won’t finish the job unless it gets more money, while the ACP is saying that if the contractors walk off the job — again — it will put its own engineers to work, hire the construction crews and finish the job by itself. That could be done, but it would probably involve some new labor negotiations with the militant SUNTRACS construction workers’ union and other procedures that would add up to new delays.

 

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Harrington, Nada en dos platos

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¿chiquishow?
Juan Carlos Varela intentando imbuir “fe y confianza” en su gobierno. Foto por la Asamblea Nacional.

Nada en dos platos

por Kevin Harrington-Shelton
No se nos ha creado para sentarnos y saber, sino para actuar.
Woodrow Wilson

 

El chiquishow en la Asamblea ilustra cómo el gobierno piensa que nosotros no pensamos: todo lo reducen a un rejuego de jingles e imágenes mediáticas. El HD-presidente –que hoy no tenía nada que hacer más que verificar el cuórum– se aprovechó de las televisoras convocadas para el Mensaje Presidencial, para meter una cuña que intentara cambiar la percepción de un Órgano Legislativo indolente y por corrupto.

El mandatario Juan Carlos Varela hizo otro tanto, intentando imbuir “fe y confianza” en un gobierno que hace más agua que la Ampliación. Pero ni en Narnia lo lograría un discurso como este –el que omitió los principales problemas que preocupan a la Nación. ¿Qué se esconde?

Es más, continuando su acostumbrada falta de la transparencia que nunca deja de predicar, el Señor Presidente no permitió que se le formularan preguntas ni a su entrada, ni a su salida, de la Asamblea. Esto no es transparencia. Habitualmente, cuando no está leyendo de lo escrito preparado su personal de “Comunicaciones”, es que –sin quererlo– suelta prenda y así de ñapa nos enteramos lo que pasa en Panamá. Fue en la salida de otro acto la semana antepasada que los jubilados preocupados se enteraron que él pensaba atender el asunto del resquebrajado Fondo de Pensiones del Seguro Social –“DESPUÉS que termine la Ampliación”… Pero hoy –cuando debió tocar sobre ambos temas– no tuvo el valor de hacerlo. Como tampoco se atrevió a explicar la minería a cielo-abierto en Petaquilla –cosa que (también) “olvidó” en la Conferencia en París que citó varias veces en éste Mensaje.

 

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