business

The Ministry of Economy and Finance (MEF) wants the Interoceanic Regional Authority (ARI) to give it title to five lots on the Atlantic side --- essentially the rest of Coco Solo that's left in ARI's hands, for the purpose of port expansion. It is known the Manzanillo International Terminal (MIT) wants to expand --- $50 million worth, the subsidiary of Seattle-based Stevedoring Services of America says --- but that's apparently for just one of the lots. Meanwhile, former President Ernesto Pérez Balladares says that there's too much secrecy involved in the MEF request, anti-corruption activist Enrique Montenegro alleges that the deal is an underhanded way to put much of the real estate into the hands of presidential advisor Augusto "Onassis" García and ARI is saying that without a formal request from Economy and Finance Minister Norberto Delgado, it's not even considering such a transfer. But Delgado's deputy, Domingo Latorraca, says that the negotiation with MIT is "complex" --- for one thing, the port company claims that it is contractually owed some sort of compensation from the government because of the big tax and rent break given to its competitor Panama Ports (a Hutchison Whampoa subsidiary).

The Panamanian Chamber of Construction (CAPAC) says that in the first trimester of this year projects worth some $139.9 million were begun, as compared to $60 million in the same period last year. The chamber gives some of the credit to changes in the tax law, with developers moving quickly to start projects in time to keep the tax exonerations that will be phased out.

The Baru Free Zone, a recently created duty-free import-export zone along the Costa Rican border that's designed to boost the economy of the hard-pressed Puerto Armuelles area, has its first business. It's a $14 million tuna storage facility on Charco Azul Bay, to be built by a Spanish consortium. Eventually, the investors plan to build a seafood processing plant and create some 600 jobs.

On June 3 the Panama Canal Authority announced a series of joint programs with the US Agency for International Development (USAID) to protect the Chagres River Basin, which forms the canal’s existing eastern watershed that feeds Gatun and Madden lakes, from deforestation. This will add to an existing cooperative effort between the authority and The Nature Conservancy, which has focused its efforts on protecting Chagres National Park at the watershed’s headwaters. The USAID program will try various approaches in small parts of the watershed, which might then provide models for policies to be applied more widely. Canal administrator Alberto Alemán Zubieta called the authority’s agreements with USAID and The Nature Conservancy “great strides on the environmental front.”

It has long been a popular brand in Europe, and now Panama's Cafe Duran has set its sights on the United States and Canada. The company told La Prensa that it has signed a deal with a chain of North American coffee shops, but declined to provide further details pending the chain's announcement.

The oil pipeline between Puerto Armuelles in Chiriqui and Chiriqui Grande in Bocas del Toro will start pumping again in October, after being unused for seven years. The oil flowing through the pipe will be from Ecuador, headed to the east coast of the United States. The Panamanian government owns a 40 percent stake in the pipeline company, Petroterminales de Panama, and the new contract is estimated to be worth about $15 million per year.

Domingo Guardia, a parking lot attendant who claims that he was the real author of Los Rabanes's hit song "Bam Bam," was winning his case with Panama's copyright agency. Now, however, prosecutors have had him jailed. Los Rabanes's lead singer Emilio Regueira filed a complaint against his accuser, alleging that the copyright documents Guardia filed were false. Guardia's lawyer Gonzalo Moncada Luna says that whatever prosecutors, Regueira and the Miami-based Crescent Moon recording company may allege against his client, he can prove that the parking lot attendant wrote the song. Under Attorney General José Antonio Sossa's administration the Public Ministry has been actively hostile to copyright piracy claims by Panamanians, even when the proofs are overwhelming. The Public Ministry has, however, deputized the US-based Business Software Alliance to raid Panamanian offices and cracked down on the distribution of pirated American videos through the Colon Free Zone.

The nation's Social Security Fund says that its receipts from employers was up just seven-tenths of a percent in the first trimester of 2003 as compared to the same period in 2004, and Seguro planning director Even Chi Pardo told La Prensa that this indicates a stagnant employment situation. The Ministry of Economy and Finance, however, says that the figures indicate growing employment. Officially, unemployment is at 13.2 percent, but most economists believe that the true figure is somewhere between 15 and 20 percent. One employment sector that is up is the government. Seguro says that the national government's payroll was up 1.4 percent in the first four months of this year as compared with the same period a year ago.

The Social Security Fund says that it has collected some $57 million in overdue payments owed it by businesses. More than 11,000 businesses, including The Panama News, have gone into arrears with Seguro as the result of Panama's prolonged economic crisis.

The Cabinet Council has sent a special budget appropriation of $6 million for the Ministry of Public Works to the Legislative Assembly, to cover cost overruns on the second bridge across the Panama Canal. The price of the bridge is now up to $103.9 million. The appropriation was approved by the legislature's Budget Committee, but not before strident criticism by opposition deputies.

Tocumen International Airport has passed from the hands of the Civil Aviation Directorate to control by Aeropuerto Internacional de Tocumen SA, (AITSA), a government-owned corporation. The 400 or so workers will for the immediate future keep their jobs, but now they will lose the legal protections that public employees have and instead come under the provisions of the Labor Code. If the promised economic efficiency inherent in the move is to become a reality, that probably means that the work force will be reduced and pay and benefits will be kept down.

The Mexican- based PYCSA construction consortium, already notorious for ignoring its commitments such as the construction of a Colon- Panama autopista and paying and indemnity for damages to the Metropolitan Natural Park, is building the new branch of the Corredor Norte toll road within less than 20 feet of a number of houses --- in some cases within six feet --- and refusing to buy out the affected property owners. In a meeting including members of the Legislative Assembly, representatives of the Housing, Economy and Finance, Health and Public Works ministries and PYCSA execs, the company agreed only to study the matter with respect to some 60 of 267 families who are demanding compensation.

Cable & Wireless Panama's UK-based parent company, whose stock fell through the floor and whose top managers were forced to resign when earlier this year it was discovered that huge debts had been concealed from shareholders, is laying off 1,500 people and closing 23 of its 42 international data centers. However, most of the layoffs are in Britain and the United States, and none of them will be in Panama.

Dell Computers recently held a series of interviews and tests in Panama City, in search of English-speaking people to hire at call centers it plans to open here. The company wants to hire 500 people to start, and may triple this work force if the business grows as planned. According to La Prensa only about one-third of the applicants had English skills on the level that the company is looking for, but Dell still came close to finding all the employees it will need.

At a June 3 auction the government sold $60 million worth of bonds, at 6.75 percent interest and coming due in four years. The government will be paying slightly more in interest than it had expected before the auction.

The Moscoso administration says it's set to sign a free trade agreement with the Central American countries, but Nicaragua's saying "not so fast." Panama wants to exclude beef from the deal, and Nicaragua says it won't sign onto any deal that keeps its meat out of Panama. Ranchers here, however, are determined to keep Central American competitors out of the national market.

Dr. Gustavo García de Paredes, who was recently elected as the University of Panama's next rector, says that there's belt- tightening ahead for the institution. He says it's not going to be a purge, but political sinecures and positions created for relatives will be eliminated, some jobs will be eliminated in an administrative restructuring, and other positions will be downgraded with corresponding salary reductions. Last year the national government cut its support to the university and rector Julio Vallarino did not make corresponding reductions, which led to a budget crisis that included power shutoffs and strikes.

A consortium of Soluziona Ingenieria SA and Cobra Instalaciones y Servicios SA has won the contract to build a power line from the Fortuna Dam in Chiriqui province through Bocas del Toro to the Costa Rican border for $12 million. The project is part of the project to connect the power grids of Panama and the Central American countries.

The extraction of sand and gravel from the Anton River, long a bone of contention between nearby residents and environmentalists on the one hand and the construction industry and people who make a living shoveling sand and gravel on the other, is back in the news. The Ministry of Commerce and Industry's regional office, acknowledging that too much material has been taken and that unacceptable environmental damage has been done, has declared an indefinite moratorium on sand and gravel mining the river. If the experiences of previous stoppages are any indication, there is likely to be a increase in sand mining on the nearby Pacific beaches and big arguments over that.

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