JOC 11/4/07

Panama Canal publishes revised proposal for toll hikes

The Panama Canal Authority on Wednesday postponed implementation of new, higher charges for cargo ships transiting the waterway in publishing a modified proposal to restructure the Canal’s pricing system.

Under the proposal, tolls on container ships would increase by $9 per TEU in 2008 and another $9 per TEU in 2009 under a set of proposals for restructuring tolls and fees that was approved by the Panama Canal Authority’s board of directors in January.

The authority said it included the delay in the revised proposal following consultations with Canal customers.

If the proposed increases are approved, they will come on top of the third stage of the three increases on containers that is already scheduled to take effect on May 1 of this year. That increase will bring the toll to $54 per TEU.

Under the proposals, the toll on container ships will increase to $63 per TEU on May 1, 2008, and to $72 per TEU on May 1, 2009.

Under the proposals, tolls on general cargo, bulk, breakbulk, refrigerated ships, car carriers and tankers would also increase, with a different increase for each of these segments. Unlike the tolls on container ships, which are now assessed per TEU, the tolls on these ships would continue to be assessed on the basis of the Panama Canal/Universal Measurement System Net Tonnage (PC/UMS).

Tolls on larger passenger ships will be assessed differently under the proposal. Passenger ships that are larger than a certain size under a formula based on tonnage divided by the maximum passenger capacity will be charged per passenger berth rather than on the basis of PC/UMS tonnage.

Smaller vessels will continue to be measured in PC/UMS tonnage.

The canal's proposal for an increase in tolls and fees was expected in light of the approval in a national referendum last October of the canal authority’s $5.25 billion plan to build a third set of locks that can accommodate vessels twice the size of those that can currently transit the canal.

Because of the changes, the agency is re-opening the issue for public comment over the next 15 days.

The authority’s board of directors will review the new public comments and submit its final recommendation to Panama’s Cabinet Council for approval.