PANAMA CITY, Panama, March 2, 2005 – The Panama Canal is nearing full capacity and should seriously consider expansion to continue to be a major player in world trade, according to maritime experts and Canal customers at the Panama Maritime VII Conference, held February 20-23. Participating in the event were Panamanian President Martin Torrijos, Secretary General of the International Maritime Organization (IMO) Efthimios Mitropoulos, and several representatives of the Panama Canal Authority (ACP), including Administrator/CEO Alberto Alemán Zubieta.

For the past two years, the ACP has commissioned research and studies related to the Canal’s modernization and the future of the maritime industry, including whether to expand the waterway.

At this time, a final decision on whether to expand the Canal has not been made. An expansion of the Canal could involve the construction of a new set of locks that would create a third lane of traffic, serving to increase current capacity and afford a wider passage for larger vessels. The Panama Canal’s capacity is now approximately 93 percent.

If the ACP determines that expansion is necessary, its Board of Directors will then vote on the plan. If the Board of Directors approves expansion, its recommendation is sent to the Cabinet Council of Panama. If approved by the Cabinet Council, the matter is referred to the Legislative Assembly. The Legislative Assembly will then create a law mandating a referendum, in which the people of Panama will vote on expansion.

Among the maritime experts presenting and speaking at the conference were: Captain Wei Jiafu, President and CEO of COSCO Group and ACP Advisory Board member; Gerhard E. Kurz, President and CEO of Seabulk International and ACP Advisory Board member; Peter G. Drakos, President of Connecticut Maritime Association; Giora Israel, Vice President of Strategic Planning of Carnival Corporation; Christopher Cho, Partner of Lee and Ko; Iria I. Barrancos, Deputy Judge of First Maritime Court of Panama; and Mike Watson, President of the American Pilot Association and Vice President of the International Maritime Pilot Association.

Representing the ACP were: Administrator/CEO Alberto Alemán Zubieta who provided insight and analysis on the potential expansion project; Director of Engineering and Projects Agustin Arias who provided an overview of possible expansion designs; Corporate Planning and Marketing Director Rodolfo Sabonge who discussed the demand forecast of the Canal; and Maritime Operations Director Jorge Quijano who presented the Canal’s current growth, traffic and capacity.

A notable guest speaker at the conference was President and CEO Captain Wei Jiafu of the COSCO Group, one of the Canal’s top customers. In his speech to the Panama Maritime VII audience, Captain Wei Jiafu stressed the Canal’s importance to world trade: “The Canal’s role in international shipping and trade is highly recognized as it saved the distance between the Pacific and the Atlantic by 5,500 nautical miles. The Canal has not only provided efficient services to the shipping industry, but also helped to promote world trade and economic growth.”

Captain Wei Jiafu pointed out that the Canal’s success brings several challenges and is in a crucial period as it nears capacity: “In recent years, the fast growth on international trade has resulted in a fast growth in the cargo volume crossing the Canal, but the Canal is not capable to fulfill the increasing demand…As the container vessels are more sensitive to the time of transit, the Canal is under bigger and bigger pressure to enhance its capacity.”

Captain Wei Jiafu closed by stating that “in order to maintain its competitiveness, the Canal must be expanded.” He also said that COSCO supports the expansion of the Canal.

“As we close in on the decision of whether to expand the Canal, the Panama Maritime VII conference was a great forum for us to hear from the maritime industry’s leaders and gain their valuable insight. It seems that the general consensus is that an expansion would be advantageous not only for the shipping industry, but for the Panamanian economy. As we wrap up the remainder of studies we have commissioned, we will make the best decision for our customers and principal stakeholders – the Panamanian people,” said Administrator/CEO Alberto Alemán Zubieta.

About the Panama Canal Authority (ACP)
The ACP is the autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal. The operation of the ACP is based on its organic law and the regulations approved by its Board of Directors. For more information, please refer to the ACP’s website: http://www.pancanal.com/.

The Authority’s responsibility to the Panamanian people is paramount. The Canal belongs to the people and benefits from the Canal should accrue to as many Panamanians as possible. The Authority will plan its future so that it will continually contribute to the economic development and welfare of the citizens of Panama. For nearly 90 years, the Panama Canal has served as the global gateway – a pathway for the shipment of major world commodities. Since the end of 1999, the ACP assumed the responsibility for the management, operation and modernization of the Canal as well as the protection and conservation of its watershed.