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Business & Economy Briefs

Container cartel passes on PanCanal toll hike

The Westbound Transpacific Stabilization Agreement's (WTSA's) 11 member companies have raised the rates they will charges customers for sending freight through the Panama Canal. The WTSA, which calls itself a "voluntary discussion and research forum" of ship lines that move cargo containers between US inland and coastal ports and destinations in Asia, says that the rate hikes were prompted by the Panama Canal Authority's (ACP's) recent decision to increase canal tolls, but also incorporate other added expenses of operation. The new rate will be $212 per container plus either $11.50 per metric ton or $4.50 per cubic meter or cargo within it.

New competition for the Panama Canal?

The newest and maybe in the long run most threatening competitor to the Panama Canal is in the works. President Lula da Silva of Brazil and Rafael Correa of Ecuador have announced that they're going to build a multimodal freight corridor from port of Manta on the Pacific Coast to the port of Manaus on the Amazon River. A lot of Brazilian soybeans that go to China through the Panama Canal might switch to this route, but the even bigger potential threat is of Brazil taking off as an industrial power and vastly diversifying its exports to and imports from East Asia, with little of this growth passing through the Panama Canal due to a South American multimodal cargo transport system analogous to North America's. However, with this step in that direction there are still some things to be worked out, One of them is that Ecuador and Brazil have no common border, so this corridor would either have to go through a war-torn part of southern Colombia or through Peru, which has sometimes had shaky relations with Ecuador.

S&P raises Panama's bond rating

They're still not investment grade as the government and Panama Canal Authority promised in the canal expansion referendum campaign, but the ratings of commercial paper that the Panamanian government and public entities like the ACP sell have gone up a notch or two. Standard & Poors has upgraded Panama's long-term public bonds to BB with a "positive" qualification from BB "stable," while short term public bonds remain rated B. The bond rating company said that it likes the Torrijos administration's plan to finance the Panama Canal expansion without "undue" support from the government's general funds and notes the growth and diversification of the Panamanian economy as positive trends. However, it also warns of the country's growing public debt, government budget rigidity and vulnerability in case Panama Canal expansion projections are wrong or if there is a downturn in global economic conditions.

Peru says it will sue Panama over plastic wrappers

The Peruvian Ministry of Foreign Trade and Tourism has announced that its country's government intends to sue Panama before the World Trade Organization over protective duties of 59.9 and 79 percent that this country has imposed on plastic food wrappers. The duty is essentially to benefit the one significant Panamanian producer, Celloprint SA, which is owned by the family of José Luis Sosa, the National Police chief under the PRD administration of Ernesto Pérez Balladares. Here in Panama the tariffs have raised the ire of cookie maker Productos Alimeniticios Pascual SA, which had been importing its wrappers from Peru. Some smaller Panamanian companies, and packaging material suppliers in Colombia and China, are also directly affected by the duties.

Canal side condos? Never mind

Environmentalists and others have been quite concerned about the ads in the Internet and elsewhere for PanCanal View, a 43-story high-rise condo development adjacent to Miraflores Locks along the Panama Canal. To allow that would be the developers' foot inside the door to protected canal operating areas, much to the consternation of people concerned about uncontrolled development in inappropriate areas. It would also represent a change of a policy by which the Panama Canal Authority has been trying since the events of September 11, 2001 to reduce the possibility of terrorists getting a good shooting position to launch a missile at a passing vessel. But never mind, a spokesman for Panama City's construction permit department told La Prensa. It seems that the offense here is not ecological rape or a threat to national security --- just a garden variety real estate fraud, for a building for which no permit has been issued nor will one be issued. But promoter Carlos Anguizola, who has been pre-selling apartments, says that all of his papers are in order.

COPA places order with Boeing

COPA Airlines, which is continuing its expansion throughout the Americas by opening new routes this year, is ordering new planes to match its expanded services. Now it has placed an order for four Boeing 737-800 aircraft, valued at an estimated $282 million at current list prices. That's in addition to 30 other planes that the company had previously ordered from Boeing. The 737 series planes are fuel efficient and thus suited to long nonstop flights, such as COPA's services between its hub in Panama and Los Angeles, California; Santiago, Chile and Buenos Aires, Argentina.

Wakeds and Mottas win duty-free concessions

In a process that in an earlier phase had been marred by specifications that would have permitted only one single US-based company to bid, the Waked and Motta families won the three duty-free store concessions for Tocumen Airport. Grupo Waked took two of the concessions and Grupo Motta the other. The duty-free business at Tocumen grossed about $37 million last year and the three blocks of duty-free space went for $57.75 million each for the 10-year concessions, plus $100 per square meter per year rent and eight percent of gross sales.

SPIA joins chorus of Odebrecht critics

How was it that a nine-figure concession to build a toll road between Panama and Colon was transferred from Máximo Haddad's insolvent fly-by-night PYCSA to the Brazilian company Norberto Odebrecht SA without bidding, and without the knowledge of the court-appointed receiver for PYCSA? The Panamanian Society of Engineers and Architects (SPIA), having reviewed all the paperwork that the Torrijos administration has to show, has resolved that the process was improper. The group also has problems with the new design, which ends up several miles short of the ports, Free Zone and city center of Colon, and thinks that from a financial perspective it's a bad deal for the Panamanian people. The Ministry of Public Works responds that all the Odebrecht contract papers are in order and that a 1988 law and 1994 decree make the questioned procedure legal. There are already some preliminary and tangential legal challenges to the process pursuant to the Transparency Law, but the larger issues of a constitutional challenge to the awarding of the contract to Odebrecht and the apparent fraud committed by that company, PYCSA and the Ministry of Public Works against PYCSA's creditors by allowing the transfer of as major PYCSA asset without regard to the receivership have yet to be fully joined in court. Look for that to happen in the near future, possibly in the wake of an anticipated Administrative Prosecutor's report on the legality of the concession transfer.

High court revives Caja de Ahorros case

The Supreme Court has revived the case against Raúl Piad, who was director general of the state-owned Caja de Ahorros savings and loan company during the Moscoso administration. In November of 2004 Piad and several others were accused by Piad's Torrijos administration successors of mishandling some $45 million of the institution's funds by way of favoritism in loans, some of which were unsecured. A criminal investigation was begun, but Piad had been a candidate for public office in the previous May's election and the case was frozen by a preliminary ruling that this gave him immunity from investigation. But the latest decision, by magistrate Aníbal Salas, is that since no charges were brought during the three-month post-election period when Piad had candidate's immunity, the investigation may now proceed.

Fire chief denies allegation

Colonel Mario Ramírez, who is suspended as Panama City's fire chief while an investigation of alleged financial irregularities continues, has denied published reports that he has spent an undue part of the Cuerpo de Bomberos budget for this year. The institution has notoriously operated with insufficient government appropriations for a long time, but Ramírez says that the acute problem this year is that the proceeds of the five percent tax that fire insurance companies to support the fire department have been withheld.

Temple guards trump labor inspector

On May 3 the Ministry of Labor Development received a complaint from a Panamanian photographer that a Venezuelan photographer taking photos at a bar mitzvah at the Shevet Ahim Synagogue on Calle 44 in Bella Vista. Inspector Hernando Velásquez was sent in to check on the claim. However, the synagogue's security guards wouldn't let the inspector in. There has been a big influx of Venezuelans into Panama of late, mostly people disaffected with the government there but without the wealth or connections to get into the preferred destination for such folks, the United States. That has in turn led to a number of complaints about unfair competition in various sectors by Venezuelans who are here on tourist visas working in violation of immigration and labor laws.

Indian motorcycle distribution center coming

No, not those big antique bikes that rival the hog in popularity among certain circles. Bajaj Motors, India's top motorcycle manufacturer and the fourth-largest in that sector in the world, is planning to open a Latin American distribution center here. Although the brand has had some success in a number of South and Central American countries, it's not well known here.

Flight school planes flunk

On May 3 the Civil Aviation Authority made a snap inspection of two aviation schools at Albrook, the Albrook Flight School and the Aviation Training Center, and restricted the use of six planes for not being airworthy. The order was temporary, which probably means that in the scheme of things the faults that were found were relatively minor.

Cost of living up for seventh straight month

In April the "canasta basica," Panama's official measure of the cost of living by reference to the average price of a selection of 50 household staples, rose for the seventh straight month. It up to $207.01, about 5.5 percent more than what it was in April of 2006.

Music royalties in effect

As of April 30 a new decree mandating that radio stations that play music must pay 2.5 percent of gross revenues to the Sociedad Panameña de Productores Fonograficos for its right to play music. There are also fees for buses, bars, television stations and other businesses that use recorded music.

CNP excludes English-language press

The Colegio Nacional de Periodistas, a holdover from the days of Noriega's journalist licensing laws that has long opposed the existence of this country's English-language and Chinese-language press, continues its policy of exclusion. This time it issued a list of journalists facing criminal defamation charges in Panama. It does not include The Panama News editor and publisher Eric Jackson, a Panamanian citizen who faces calumnia e injuria charges brought by erstwhile far-right "Patriot" movement figure Mark Boswell, who is now an "offshore investment" hustler operating in Panama under the alias of Rex Freeman; and those brought against Noriegaville editor and publisher Okke Ornstein, a Dutch citizen married to a Panamanian who is accused by former US Air Force intelligence officer Donald K. Winner. The Colegio, which Noriega tried to force all journalists to join, has survived in the post-invasion world mainly as a lobby trying to prevent foreign journalists from working in Panama. Now, so it seems, the group has joined the Public Ministry and the Torrijos administration in supporting Boswell alias Freeman's "right" not to have anyone report about scams that include an illegal offer of banking services in Panama and not to have any public discussion of his notorious past as the Colorado radio show host who claimed to have proof that Bill Clinton rather than Timothy McVeigh was behind the Oklahoma City federal building bombing.

McDonald's sells out

McDonald's has sold all of its concessions in Latin America and the Caribbean to RestCo Iberoamericana Limited for $700 million. No word yet on what arrangements may have been made for the four Panamanian companies that have held McDonald's concessions for the chain's 34 restaurants in Panama.

Mayday marchers demonstrate trends in Panama's labor movement
Cement wars
The Panama News readership figures

Free Trade Agreement maneuvering in Washington
Business & Economy Briefs