business

Actually, it wasn’t another pointless junket. The Panama Canal Authority board of directors held its September 11 meeting in Copenhagen, Denmark, but that wasn’t the first time that the body had met outside Panama. Also participating in the gathering was the authority’s advisory board, which is mainly composed of foreign shipping executives. Denmark is home to the Maersk shipping line, one of the Panama Canal’s biggest customers, and a central place for leaders of the Scandinavian countries’ important maritime industries to gather. There are various alternatives to the Panama Canal for companies that want to send their merchandise from the Atlantic to the Pacific, and lately that has the canal management traveling around North America, the Far East and now Europe to promote the waterway and meet with important customers.

Maintaining that the US government has already invested quite a bit in the Panama Canal, US Undersecretary of State for Hemispheric Affairs Roger Noriega says that the American government won’t finance the construction of a larger third set of locks for the waterway. He did leave open the possibility of private American financing. The governments of Taiwan and China have both offered to finance the project, which would allow ships that are too large to pass through the present locks to use the canal. The project, which is controversial on financial, technical and environmental grounds and opposed by residents of areas that would be flooded to create a lake to provide the water needed to run the new locks, is likely to be presented to Panamanian voters in a referendum next year.

The Panama Canal’s “mules” are of course related to neither donkeys nor horses, but they are more or less sterile. They are the 55-ton locomotives that pull ships through the locks, crucial machines that get a lot of work. The Panama Canal Authority has ordered 34 new mules from Japan’s Mitsubishi Corporation. The canal’s business relationship with Mitsubishi has been well established over the years, but what’s different about this deal is that 16 of the engines will be assembled in Panama.

The Public Services Regulating Board (Ente Regulador) has ordered audits of the Cable & Wireless Panama phone company and the local subsidiary of the Union Fenosa electric company. The companies are accused by attorney Silvio Guerra, on behalf of a number of clients, of retaining deposits made by customers either to the companies or to their public predecessors. A customer has a right to both the deposit and the interest earned on the money while it was on deposit, minus anything owed to the utitlity, when service is disconnected. Cable & Wireless, however, has invented various dodges like refusing to stop charging for a phone line that has been disconnected until some extra fee is charged and using that as an excuse to retain the deposit. Guerra alleges that the companies’ illegal deposit retention scams are on the order of some $50 million and the audits are designed to investigate the claim.

Cable & Wireless Panama has announced that at the end of the year it will eliminate its basic residential telephone service, which costs $6.27 per month plus 3¢ per minute for local phone calls, and only offer higher-priced services. The company effectively, despite laws mandating competition, maintains a monopoly on fixed line residential phone services. This has been done by way of a sweetheart “contract” between C&W and a shadowy company headed by a relative of a C&W exec which called for unprofitably high fees to connect with the Cable & Wireless phone system, and by the Ente Regulador’s acceptance of that sham as the baseline price for legitimate companies to enter the market. C&W Panama’s board of directors counts among its members President Moscoso’s sister-in-law and Minister of the Presidency Ivonne Young, Minister of Economy and Finance Norberto Delgado and Vice-Minister of Economy and Finance Domingo Latorraca.

Costa Rica has broken off negotiations with Panama for a free trade pact. During the two-year talks the Ticos resisted Panamanian aspirations to open their services sector to competitors from this country and Panama wouldn’t agree to increased agricultural imports from Costa Rica.

The oft-delayed process of privatizing the ATLAPA convention center has been put off again, after the Moscoso administration objected to the apparently Brazilian-based Grupo Arenas that had been negotiating for the concession. It is alleged that the investment group has ties with a shadowy Tempus Bank, which had allegedly been conducting banking operations in Panama without a license. The bank denies violating our banking laws, and Grupo Arenas denies any connection with Tempus Bank. Apparently, however, there is at least an interlocking directorate. In any case, the rock upon which past attempts to privatize ATLAPA have always foundered has been the fate of the political patronage appointees who work there, under the auspices of the government’s IPAT tourism bureau.

You can no longer grab an empanada or watermelon slice while waiting for the bus in front of the El Dorado shopping mall. The kiosks on the site were unlicensed, the shopping center’s management complained, and city crews moved in to demolish the structures and send their proprietors elsewhere to seek a living.

The Mexican-based Optica Devlyn optometry shop chain is expanding its operations in Panama. Currently they do business out of two PriceSmart stores, and now they intend to open three new branches, which will represent a seven-figure investment.

On September 18 the show went on, with Alanis Morissette showing off a new style in her concert at the Figali Convention Center. However, Jean Figali wasn’t the one collecting the rent. The building contractors whose crews put up the center at the former Fort Amador in record time to host the Miss Universe pageant haven’t been paid, and one of them, Construcciones Civiles Generales SA, has obtained a court order sequestering the building to ensure payment of a $147,000 debt. Figali is counterclaiming for allegedly shoddy work.



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Business & Economy Briefs
General strike called over Social Security crisis
US, EU don't get their way at Cancun WTO summit
AMCHAM tourism forum

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