Shipowners blast Panama toll increases

Shipowners blast Panama toll increases The International Chamber of Shipping has submitted formal comments to the Panama Canal Authority (ACP) expressing concerns about the major toll increases proposed in connection with the planned expansion of the Panama Canal.
   The ICS said it did so with the backing of other organizations representing shipowners, BIMCO, Intercargo and Intertanko.
   ICS Secretary General Tony Mason, who plans to represent shipowners at a public hearing in Panama Wednesday, said: “ICS members have cautiously accepted the concept of sectoral pricing, and the introduction of charges per berth for larger passenger vessels. However, we are very disappointed that our repeated request that increases in tolls should be equitable, transparent and spaced over a sufficient amount of time appear, by and large, to have been ignored.”
   The ICS said the industry is firmly opposed to the rapid rise in proposed toll increases.
   “The official expansion proposals referred to projected increases in tolls of 3.5 percent per annum over a 20-year period,” Mason said. “However, the actual proposals would lead to increases ranging from 26 percent to 34 percent over the first three years (equal to 8 percent to 10 percent per annum) with increases for container carrying vessels and larger passenger ships considerably in excess of 10 percent per annum.”
   ICS argues that in any other industry, changes of this magnitude over such a short period of time would be regarded as being unacceptably large.
   ICS also believes the proposed toll increases have too short an initial notice period and are spread over too short a time period for adequate long term planning or for effective absorption of additional costs.
   “The three months notice for some sectors will cause significant problems. Six months notice of the initial increases, and phasing in the increases over, say, six rather than three years, would be far more reasonable,” he suggested.
   ICS also argues that the canal authority’s proposals do not appear to represent a fair distribution of costs between current and future users.
   “Canal users feel that increases in canal dues should be matched by a tangible improvement in the service provided, and that they should not be expected to provide up-front financing for a major infrastructure project from which they may not individually derive any benefit, ” Mason said.
   ICS has suggested that ACP further explores the extent to which external financing can be used to spread the costs over a larger period of time.
   To avoid undermining industry confidence, and given previous ACP statements about the intention to double tolls over the next 20 years (which would equate to 3.5 percent per annum), ICS is seeking a commitment that the overall result of present and future increases will not exceed the expected annual average of 3.5 percent.