Country Report Panama March 1998 Main report

Services: Draught restrictions at the Panama Canal

As El Nino has brought the driest season in the canal's 83 years of operation, with rainfall 35% below the annual average, the Panama Canal Commission has been forced to impose draught restrictions from mid-March. They are expected to last until July, after which it is hoped they can be lifted gradually. During normal conditions, the average level of water in a lock during the transit of a vessel (the vessel's draught) is 39.5 feet. Because the dry weather has reduced the water which feeds the canal, and in order to conserve supply until the rains begin again, the draught is to be reduced to 39 ft on March 12th, with further six-inch cuts scheduled for the following weeks, to bring the limit to 37.5 feet at the beginning of April. Large vessels will thus have to transit the canal with lighter loads. The Panama Canal Commission estimates that 17% of the approximately 13,500 vessels that transit the canal annually will be affected. Already a number of shipping lines have begun to divert their vessels to other routes. The lower tonnage, combined with slacker growth in shipments to and from Asia as a result of the region's economic crisis, will hit Canal revenues in 1998. Meanwhile the 8.5% increase in tariffs from the beginning of the year has already been allocated to fund the modernisation programme now under way.

© 1998 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information
IMPRINT