PANAMA CITY, Panama, September 11, 2006 – At a recent forum in Panama, sponsored by newspaper Capital Financiero, Fitch Ratings analyst Erick Campos said: “If handled appropriately, the Panama Canal expansion project should have a long-term, positive economic impact.” Fitch said that the money needed for the Canal expansion would not affect Panama’s risk rating as long as fiscal consolidation and strong economic growth continues. Moreover, Campos declared that if it were to assign the Panama Canal Authority (ACP) a credit rating, it could be higher than BB+, which is Panama’s present credit rating. At this juncture, the ACP is not obtaining a credit rating and has not hired a credit rating agency. Investment ratings provide investors with a financial picture of a company’s or a sovereign government’s financial health, taking into consideration its management, debt levels, finances, and other similar criteria. It is a metric that measures investment risk. The Panama Canal expansion proposal would build a new lane of traffic along the Panama Canal that would double capacity and allow more traffic. The project is estimated to cost $5.25 billion and would be paid entirely by users of the Canal through a graduated system of toll increases. According to the Panamanian Constitution (Title XVI, Article 320) and Law No. 28 (July 17, 2006) of the National Assembly, the Panamanian government will not guarantee the ACP’s debt for the Panama Canal expansion.
Read the rest of this entry »(By Chris Kraul, Los Angeles Times) PANAMA CITY, Panama - Voters’ support is building for expansion of the Panama Canal, a five-year, $5.2 billion project that could ease crowding at the Los Angeles-Long Beach port complex. Recent polls show that support for the plan, which goes to a nationwide vote Oct. 22, is at nearly two-thirds of those intending to cast ballots. Approval has risen 6 points in the past month, and some say the public has put aside initial fears that graft and indebtedness could swamp the nation’s most important resource and symbol. “It’s our Statue of Liberty and Golden Gate Bridge all in one,” said pollster Leopoldo Neira, whose firm published an opinion survey in the local La Prensa newspaper Sunday that showed yes votes among probable voters outnumbered no 63 percent to 33 percent. The wild card is the generally negative results of past Panamanian votes, Neira said, a reflection of ingrained public distrust of the government. Still, he believes only a major scandal tainting the government of President MartÃn Torrijos could scuttle the vote.
(Source) By WILL WEISSERT, Associated Press Writer PANAMA CITY, Panama - Voters overwhelmingly approved the largest modernization plan in the 92-year history of the Panama Canal on Sunday, backing a multi-billion dollar expansion that will allow the world’s largest ships to squeeze through the shortcut between the seas. About 79 percent of Panamanians voted in favor the canal expansion, with 66 percent of 4,416 polling stations reporting, according to preliminary results released by the country’s electoral tribunal. Early returns pointed to a dismally low turnout with nearly 60 percent of the country’s more than 2.1 million voters abstaining. Thousands of supporters in green “Yes” T-shirts cast ballots endorsing the $5.25 billion overhaul which would allow the canal to handle modern container ships, cruise liners and tankers that are too large for its current 108-foot-wide locks. The plan is to build a third set of locks on the Pacific and Atlantic ends by 2015. The Panama Canal Authority, the autonomous government agency that runs the canal, says the project will double capacity of a waterway already on pace to generate about $1.4 billion this year. Expansion will be paid for by increasing tolls and take in more than $6 billion annually in revenue by 2025.