10 YEAR REPORT

Co,THE

PANAMA CANAL

COMMISSION

MRAFLORES*-

7275s

aU

FY 1980 to FY 1989 A DECADE OF PROGRESS

IN CANAL OPERATIONS AND

TREATY IMPLEMENTATION
I he Panama Canal I reaty entered into force on October 1, 1979. On that historic

date, the Panama Canal Commission assumed the important responsibility of

managing, operating and maintaining the Panama Canal for the beneht ot all nation, of

the wNorld through the end of the center\. After ten years of progress and treat\

implementation, the Canal is in excellent condition and continues to pro\ ide exceptional

transit serNice at competitive cost. The achievements of the past decade are a tribute to

the thousands of Panama Canal employees \0ho. under the leadership of the

Administrator. Mr. 1) P. McAuliffe, and Deputy Administrator. Mr. Fernando

Mantredo, Jr. haxe maintained the sense of purpose. commitment and excellence

which are the tradition of this great enterprise. I he Panama Canal Commission Xwill

continue to build on this legacy and on December 31. 1999. an improved and

well-maintained xkater\wa\ \\ill be transferred to the Republic of Panama as required

by the Panama Canal I reaty

Revied transit regulations no" permit cruise

%e%%els and containerships up to 965' in overall

length, like the "Margrethe M1aersk," to be

approved for transit.
Message from the Administrator

and Deputy Administrator

Mr. 1). 1'. NicAuliffe.

Administrator (left),

and Mr. Fernando

Nlanfredo. Jr.,

DeputN Administrator,

ha'e been serving

the Panama Canal

(ommission since

its establishment

t on October 1, 1979.

The implementation of the Panama Canal Treat v on October 1. 1979. marked a new re/aiinship between

the I tuied States and Panama. I icder the new arrangement, Panama was provided iwith an increasinigli

important role in the operation of the wvaterwvat. One thing that remained ctwiant, however, was the

enduring issiIon of the waterwav to provide reliable, cst-ele ive transit service wh bile operating wi a

sell sustaining basis.

During i/it, past ten ears, nearly 1 15.000 merchant vessels tran.sited the water wa carrying o er wit' am

one-halfbillion tons ofcargo to ports throughout the worl. Notewvorthi imas the inc grease in size of ships sing

the waterwat with the proportion of Panamax vessels. the largest that can transit the Canal. rising cratmtatic c/.
A It ti Iset of t, decade. tls increase in large'c ships severehi tested the (Canal's capacity to provide efficient

transit service. That challenge ie was saccess/id i met through aggressive capital investment. accelerated

Mailteance programs atnd a series% of operational improvements. Toda, tile Canal is in excellent operating

col ditin itn wih sulficient capacity to meet traffi/ demand through the life of the treat i and beyond.

An important aspect of tlit, treaty was the requirement fo0r increased participation hi qualified

Panamanian% at all levels of t Commission. This mandate has beenfldlowiedsuccessfidi' and has resulted in a

steady increa's in the proportion of Panamanian emplo es since the eft'ctive date ofthe treat c. Panamanians

n1o1 comprise over 85 percent of tit work force with much of t, increase oCCurring in the higher skilled

positions vital to the Catal operatil. Consistent with tht requirement to expand the Panamanian component

of tihe Canal work firce. the Panama Canal Commlissin placed major emphasis on training programs to ensure

that emplo ies eire kept up to date it technological and professional area.s. and that well-trained Panamanian

candidates wetre available lor vacancies in their agenl-i.

A great deal has been doie to modernie and improve tit, waterway. These achievements have been

accomplished by Canal emploIves who. witi their pride and special dedication, have been tit' keY element in

preservinig tit' proud tradition and high standards which represent til ltegaci of the Panama Canal. Despite a

decade of sweeping organizatiultal and political changes, and recent civil disturbances iti Panama, which have

caused unprecedented difficulties and personal hardships for all employees, the Canal continues to provide

efficient. saft' transit service to international shipping.

In t he earv part of t he next decade, tlit, demanding requirements itiherent in thef1uture respotsibility of the

Republic of Panama as the next steward of ft, Panama Canal will warrant atention. The Patiamaian

employees Iwill need assuraces as to the tIpe organization that will manage tlit' Canal beginning vith the year

2000. as well as terms and conditions of emplocieit and other person ' policies they can expect. The maritil'

industry must he assured well in advance that the Canal will continue to servt world commerce in a beneficial

manner and at competitive toll rates. Here confident that the waterval wih be operatina//i sound and that a

virtually one huindredl percent, fidli-trained Panatianiai work force will be in place to meet te needs of world

shipping b teit' Year 2000.

It is clear that the ('anal todai exists il a cd enamic and rapidli changing environment. Fundamental

Change\ art' occurritng il int'rtatimnal transportatiiOn that could have a significant inpact on thefiuure role of

the Canal.evertheless. as the volume of international trade expands, the all-water routes through the Panama

Canal should continue to capture an important share of seaborne comilerce. With cotiued efficient,

qualit i iSrvic' at competitive rates, the waterway should remain a preferred transportation alternative well

into the ftlure.

D. P. M( Ai in i i Li RN \ix \ \1 i t J1 r. i 

Ad ministrator Deput\ Adinisijtrator

2
The luxury cruise ship "Star Princess set a neO I

Canal toll record on Nay 18, 1989 paying

$109,653.60.

CONTENTS

Organization 4

Board of Directors 5

Canal Traffic and Tolls Revenue 7

Improvements, Modernization and Maintenance 1 1

Financial 18

Implementation of Panama Canal Treaty 23

Employee and Community Relations 27

Future of the Waterway 32

Historical Calendar 33

3
Organization

PRESIDENT OF THE UNITED STATES

SECRETARY OF DEFENSE

SECRETARY OF THE ARMY

CHAIRMAN OF THE BOARD

BOARD OF DIRECTORS

INSPECTOR GENERAL

ADMINISTRATOR

DEPUTY--------- AD IASST TO THE CHAIRMAN AND SECRETARY

FINANCIAL MANAGEMENT PUBLIC AFFAIRS/INFORMATION

EXECUTIVE ADMINISTRATION INDUSTRIAL RELATIONS

EXECUTIVE PLANNING EQUAL OPPORTUNITY

PERSONNEL ADMINISTRATION OMBUDSMAN

GENERAL COUNSEL

ENGINEERING AND MARINE BUREAU GENERAL SERVICES

CONSTRUCTION BUREAU BUREAU

ENGINEERING BOARD OF LOCAL INSPECTORS LOGISTICAL SUPPORT

INDUSTRIAL PILOT DIVISION MOTOR TRANSPORTATION

MAINTENANCE ADMEASUREMENT FIRE

ELECTRICAL LOCKS CANAL PROTECTION

DREDGING TRAFFIC MANAGEMENT COMMUNITY SERVICES

CONSTRUCTION CANAL SERVICES SANITATION AND GROUNDS

MARINE SAFETY PRINTING OFFICE

CANAL OPERATIONS AREA COORDINATION

MARINE TRAINING

T he Panama Canal Commission is an agency of the Executive Branch of the United States Government, provided for by the

Panama Canal Treaty of 1977, and established by the Panama Canal Act of 1979 (Public Law 96-70). The President of the United

States exercises authority over the Commission through the Secretary of )efense and the Secretary of the Army. The Commission is

superb ised by a nine-member Board of I)irectors; five are nationals of the United States appointed by the President wk ith the advice

and consent of the Senate, and four are Panamanian nationals proposed by the Republic of Panama for appointment by the

President of the U nited States. At the operational level, the Commission is managed by a U.S. Administrator and a Panamanian

I)cputy Administrator. In accordance with the treaty, effective January I, 1990, a Panamanian citizen is scheduled to serve as

Administrator, with a I unitedd States citizen fulfilling the responsibilities of 1)eputy Administrator. The Administrator, regardless of

nationalit\, is appointed by the President of the U1nited States with the advice and consent of the Senate. and the

I)Deputy Administrator is appointed by the President. Panamanian nationals for these top level positions are proposed by the

Republic of Panarma.

I he Commission wkas established on October I, 1979, to carry out the responsibilities of the IJnited States with respect to the

Panama (anal under the treaty. I he agency is tasked with managing. operating and maintaining the ('anal through the expiration of

the treaty at noon, Panama time, on I)ecember 31. 1999, at which time the Republic of Ianama will assume full responsibility for the

(anal. A separate I reat ('oncerning the Permanent Neutrality and Operation of the Panama Canal, which has no expiration date.

provides lotr the peaceful transit by vessels of all nations on terms of equality.

4
Panama Canal Commission

Board of Directors

Present and Past Members

Honorable Michael Blumenfeld Honorable William R. Gianelli Honorable Robert W. Page

Chairman Chairman Chairman

Washington, D.C. Washington, D.C. Washington, D.C.

FY 1980-FY 1981 FY 1981-FY 1989 FY 1989-Present

U.S. MEMBERS PANAMANIAN MEMBERS

Honorable John A. Bushnell Honorable Edwin Fabrega

Washington, D.C. Panama, R.P.

FY 1980-FY 1986 FY 1980-FY 1983

Honorable John W. Clark Honorable Roberto M. Heurtematte

New Orleans, [A Panama, R.P.

FY 1980-FY 1982 FY 1980-FY 1982

Honorable Clifford O'Hara Honorable Tomas Paredes

New York, NY Panama, R.P.

FY 1980-FY 1982 FY 1980-FY 1983

Honorable William Sidell Honorable Ricardo A. Rodriguez

Poway, CA Panama, R.P.

FY 1980-FY 1986 FY 1980-FY 1983

Honorable Andrew E. Gibson Honorable Luis A. Anderson

Short Hills, NJ Panama, R. P.

FY 1982-Present FY 1983-FY 1989

Honorable William W. Watkin, Jr. Honorable Fernando Cardoze

Brevard, NC Panama, R.P.

FY 1982-Present FY 1983-FY 1986

Honorable Richard N. Holwill Honorable Oyden Ortega

Washington, D.C. Panama, R.P.

FY 1986-Present FY 1983-Present

Honorable Walter J. Shea Honorable Carlos Ozores

Annapolis, M D Panama, R.P.

FY 1986-Present FY 1983-Present

Honorable Carlos Velarde

Panama, R.P.

FY 1986-FY 1989

OFFICIALS IN THE REPUBLIC OF PANAMA

. . . . . . . . . . . Honorable 1). P. McAuliffe Administrator . . . . .

Deputy Administrator . . . . . . . . . . Honorable Fernando Manfredo, Jr.

OFFICIAL IN WASHINGTON, D.C.

Assistant to the Chairman and Secretary . . . . . . . . . Michael Rhode, Jr.

5
-' --n x

- P4W_

Special Iessei. like the car carrier "Green Lake"

regularly) tranit the Canal. delis ering fully asembled,

damage-free automobile% along the I . Gulf and

Eastern seaboard.

6
Canal Traffic and

Tolls Revenue

Overview Traffic and Tolls Reienue Highlights TOTAL CARGO TONNAGE MILUONS OF LONG TONS

Canal traffic and tolls revenue ebbed Canal traffic and tolls re enie surged 200- o 

and flowed through the decade of the to record levels in I-Y 1982. In that year.

1980's as world economic and trade 14.142 oceangoing \essels, carr' ing 185.7

patterns shifted and newx developments million long tons of cargo transited the

continued to transform the transporta- Canal. The main factor behind the record

tion industry. At the outset of the period, setting traffic was the ANS oil trade. At 10

huge tiows of Alaskan North Slope its peak in FY 1982, the ANS trade

(ANS) oil combined with spiralling generated more than I .5W tanker transit

shipments of grain and coal to push and about S50 million in annual tolls

Canal business to all time highs in FY revenue. In October 1982. ANS oil

1982. The bubble burst suddenly the xer\ dixeried from the Canal to a newxlv 100

next year with the diversion of ANS to a opened trans-Panama oil pipeline, renewly opened trans-Panama oil pipeline, ducing the Canal's total tolls rexeiue by

plummeting demand for I.S. coal, and a about 15 percent and prompting Comworldwide economic recession. The mission management to raise toll rates by

result was the most severe decline in 9.8 percent in March 1983. 1 he loss of the 50 1 1 1996 1989

Canal traffic since the Great Depression ANS trade also reduced average ship size FISCAL YEAR

and by FY 1984. use of the waterway had through the Canal. For the first time in 20

fallen to the lowest lexel since FY 1977. \ears, the trend toward larger vessels was

A growth pattern re-emerged in mid- interrupted. By 1FY 1984. \essels in the

decade led by sharp increases in 100-ft beam and omer category had

containerized cargo and automobiles, dropped to 2,170 compared with 2,681 in

coupled, in more recent years, with a the peak year FY 1982.

resurgence of the volatile grain trade. The loss of the ANS oil occurred in

The expansion of the container and conjunction with a worldwide recession

automobile trades encouraged the build- and plummeting demand for coal. The

ing of many third generation container- Canal coal trade, xx hich had experienced

ships and larger. specialized vehicle a temporary resurgence in the early

carriers. By FY 1988, these two vessel 1980's, reached 23 million tons by FY

types alone accounted for over one-third 1982. but fell by oxer hall to I I million

of total Panama Canal net tons and tolls tons in FY 1983. By the end of the decade.

revenue. Containerships and vehicle coal shipments through the Canal had

carriers contributed heax ily to the o\ erall dwindled further as the U.S. share of the

increase in large vessel transits during the Far East coal market continued to decline

decade. T:ansits by PANAMAX vessels

(beams of 100 feet or greater) rose from

14 percent of all oceangoing transits in PETROLEUM & PRODUCTS

FY 1979 to almost 23 percentOTAL OCEANGOING TRANSIT MILLIONS O ONG TONS

1989.

In the last year of the decade, a 1,0

slowdown in U.S. and Japanese economic activity and a sharp decline in the 13000

grain trade, precipitated a fall in Canal

traffic from the near record levels reached

in FY 1988. Nevertheless, oxer 12,000 20

oceangoing vessels. carrying almost 152 11.000

million long tons of cargo, passed

through the waterway in FY 1989 and

traffic is anticipated to rise further in the 1980 1983 1986 1989 198013 1 1

ensuing decade. FISCAL YEAR FISCAL YEAR

7
9-

FT4 4>

a -a

I he "Guia, one of the Canal's newest tugs,

aligns the PA N1AMA X-si/e containership "Fer

Glearn., as it prepare% to enter a lock chamber.

8
and bypass movements via the Cape of CONTAINER TONNAGE AUTOMOBILE TONNAGE

Good Hope on ships too large to transit MILLIONS OF LONG TONS MILLIONS OF LONG TONS

increased.

Grain was another commodity that

contributed to the FY 1982 boom in

Canal business. The grain trade, in- 12

fluenced by many factors, is highly

volatile and has fluctuated sharply over

the years. In FY 1982, an all-time high of _on _

37.6 million long tons was recorded.

Almost 80 percent of the grain moved via

the Canal consisted of U.S. exports to the

Far East, with Japan and China as the 1980 1963 1988 1989 1980 1983 1986 1989

main destinations. Chinese imports of FISCAL YEAR FISCAL YEAR

wheat from the U.S. through the Canal in

FY 1982 reached record levels, with the

tonnage at almost 8 million tons. Grains container and automobile trades. The

continued strong in FY 1983, but plunged primary driver behind the increases in

both groups was the expansion of the

U.S. economy, with the strong dollar

GRAIN TONNAGE fueling sharp increases in U.S. imports,

40 MILLIONS OF LONG TONS particularly from the Far East. The

expansion of trade stimulated the

emergence of third generation container30 ships and larger, specialized automobile

carriers.

During the latter part of FY 1984, the

world's largest containerships, deployed

20 -- -- in round-the-world services, began using

the Canal. By the end of fiscal year 1986,

these container operations were in full

10 . gear and total containerized cargo via the 198F SCAL186 1989 Canal had increased to 16.9 million tons

compared with 12.2 million in FY 1983.

The increase in U.S. imports from the Far

over 23 percent to 28.1 million tons the East was of such magnitude that both the

following year, affected by diversions of all-water route via the Canal and the

U.S. corn exports destined for the Far competitive U.S. intermodal system

East from Gulf ports to West Coast ports. experienced container cargo increases of

Grain shipments rebounded sharply in major proportions. As the yen apFY 1987 and FY 1988, rising 41 percent preciated against the dollar, however,

and I I percent, respectively, in the two U.S. imports of container cargo via the

years. This trade was a key factor in the Canal began to decline. U.S. export

post FY 1982 record level achieved by growth began to outpace import growth

Canal traffic in FY 1988. With character- with net container shipments in FY 1987

istic volatility. however, the grain trade and FY 1988 continuing to display

plunged 18 percent in FY 1989, increases, although not at the spectacular

accounting for much of the year's severe rates of the previous three years. In the

downturn in traffic. last years of the decade, although the

The sustained recovery in Canal traffic container trade continued strong, the

that began in the mid-1980's was fueled, Canal experienced a decline in the growth

to a great extent, by sharp increases in the rates of the container movement and

9
PANAMA CANAL NET TONNAGE market share wNas lost to the U.S. The downward trend reflected a shift in

MILLONS OF PC NET TONS iitemlodal system with its rapidly sourcing patterns as production of

expanding double stack trains. Despite Japanese cars in plants established in the

200- the success of intermodalism, the Canal U.S. began to replace imports. The

container trade is anticipated to grow declining dollar against the Japanese yen

190- further in the years ahead. and the need to avoid import restrictions

Japanese exports of automobiles to the were factors that stimulated the transI80 1 J.S. was the leading factor in the Canal's plant of Japanese car manufacturing

recovery from the FY 1983 trough. plants to the U.S. By FY 1989, the loss of 170 Japanese automobile shipments through Japanese vehicle shipments had ac160 the Canal rose 35.3 percent to 1.8 million celerated, contributing to a general falltons in FY 1986 from FY 1985 levels and off in Canal business.

continued strong in FY 1987. The large, The erosion in traffic which began in FISCAL YEAR new vehicle carriers are the highest paving FY 1989 is expected to continue in FY

vessel types at the Canal and the trade 1990 as the pace of economic activity in

accounted for approximately one-fifth of the regions that largely determine Canal

all tolls reventie in the latter half of the trade growth slows further. Over the long

decade. The increasing trade in auto- term, however, use of the waterwav is

mobiles halted in FY 1988 and shipments forecast to rise and the Canal will remain

have been declining throtigh FY 1989. a vital link in world trade. 00

Panama Canal Traffic and Tolls Revenue

Hi'cal Oceangoing Total Total

ear 1 ransit Cargo I olls Re enue

1989 12,075 151,868,548 $329,765,627

1988 12,318 156,780,203 $339,3 19,326

1987 12,313 148.899,425 S329,858.775

1986 12,023 140,125,818 S322,734,202

1985 11,654 138,903,258 $300,807,914

1984 11,384 140,80 1.136 $289, 1 55,035

1983 11,846 145.948,818 $287,79 1,023

1982 14,142 185,738,781 $325,589,097

1981 13,984 171,524,895 $303,080,358

1980 13,614 167,6 12,203 $293,443,943

Parallel lock chambers gise added

transit and maintenance flexibilil 

10
Improvements,

Modernization and

Maintenance

High mast lighting Marine Traffic Control Center Locks overhaul

To meet the challenges and keep pace maritime expositions and conferences, implemented for %essels desiring a

%%ith the grossing demands placed on the personally conducted economic market- guaranteed das of Canal transit.

ssaterwsay in the early sears of the decade, ing sur eys of major (anal customers A number of significant accomplishCommission management intensified and other maritime related organizations. ments to increase the capacity, efficiency

efforts to modernize and improve the and developed closer relationships wNith and safety of the Canal xere achieved

wNatersa\. IThis commitment continued leading port authorities " orldswide. Face- during the decade by building on earlier

throughout the decade with the Com- to-lace meetings between customers aid laid foundations, as swell as by the

mission investing oser one billion dollars Canal management officials pro% ided the initiation of news efforts.

to complete major Canal improvement opportunity\ for candid discussion of

projects already underwsay, implement problems and a more immediate response Capacity Expansion and Channel

news capacity programs and improve to those concerns. Other marketing Improvements:

navigational safety. Major maintenance etforts which produced a positive reprograms were also accelerated swith a sponse %%ere briefings and presentations High Mast Lighting-Completion of

iewk towards minimizing dossntime and by Commission officials locally and the high mast lighting project at all

extending the productive life of Canal abroad to important segments of the locks in the early 1980's effectisely

improvements. The long-term objective maritime industry, representatives of extends the number of hours during

of these actions "as to continue to ensure U.S. and foreign governments, military \\ hich large vessels can transit, as well

safe, efficient and reliable transit serN ice associations, civic organizations and as provides improved visibility at

for world shipping swell into the next private industry. Extensive use of ad- night for smaller \essels. The incentury. danced telecommunications. trade jour- creased capability of the locks to

Recognizing the increasing competi- nals, periodicals and press conferences transit moresesselsat night hasbeena

tise nature of the transportation industry also has kept world shipping abreast of major capacity enhancement.

and the iced to develop a greater nesw Canal technolog\, equipment and Additional Locks Towing Locomoassareness of the advantages offered by improvement programs. These mar- tives-Fifteen tosing locomotives,

the Panama Canal. the Commission keting efforts hase been extremely costing more than SI million each,

established a marketing program in 1983, important in promoting the Canal as a hase been acquired. Expanding the

Primary among the goals of the dedicated service organization shich is fleet to 80. this new equipment

marketing function sas the strengthening responsive to customer needs. provides improved transit capability

of ties sith existing Canal customers. The Canal today is a well engineered, at the locks.

exploring and developing new market efficient facility\ incorporating state-of- Replacement of Locks Towing Locosources, and maintaining a perception in the-art technology includinganextensive, motive Turntables-This is an onthe marketplace that the Canal is an modern communications network. Ships going major project to replace tossing

efficient and economically advantageous arriving at the waterway encounter locomotive turntables at all locks to

transportation alternative e for ssorld minimum delays and, on average, spend allows earlier attachment of locomotrade. Since its inception, top manage- less than 24 hours in Canal waters. An tise wires to vessels to provide greater

ment officials of the Commission, experienced, skilled team of Commission control during blockages. The installaaccompanied by marketing personnel. professionals ensures arriving vessels tions also provide switching and

marine and public relations represen- receive a secure, rapid, around-the-clock parking facilities for additional lotatises, hase participated in selected transit. A transit reservation system was comotises and facilitate relay lock11
- . .I --

All

ilk S IT 

9

x -x

-- xA

-; . ~A." xj~ --- - x---

Channel deepening and maintenance dredging

are critical to the safe and efficient transit of

se%,els.

12
ages conducted during locks overhauls.

Upgraded Tugboat Fleet-This is a

continuing program to acquire new,

more powerful and highly maneuverable tugboats to provide more

efficient service to transiting ships,

particularly wide beam vessels. Contracts for the construction of ten new

tugs were awarded during the decade

at a cost of between S3.0-$4.2 million

each. The Commission transit tug- Controlling lake levels Vessel tie-up station

boat fleet now numbers 17 and

additional replacement tugs are on more efficient utilization of Gatun stabilize slopes along the Canal

order. Locks. Relocation of buoy markers channel were accomplished at La Pita

Acquisition of High Speed Launches- and clearing the anchorage area Hill and Lirio Hill. Widening of the

Five special high speed launches were added 270 additional acres and Pacific entrance channel was begun in

recently acquired to provide rapid, enlarged the anchorage by approxi- FY 1989 with completion scheduled

secure and uninterrupted movement mately 35 percent. The adjoining for FY 1990.

of pilots and other key personnel to Explosives Anchorage provides an Operational and Safety

work stations along the Canal. The area to hold ships carrying hazardous Related Improvements:

launches serve as alternative transpor- cargo at a safe distance from the locks,

tation to the hazardous and deteri- other vessels and townsites. Installation of Major New Computerorated highway across the Isthmus. Deepening of the Ship Channel- ized Traffic Management System in

Vessel Tie-up Station-A multi-million Completion of this major dredging the Marine Traffic Control Centerdollar mooring station constructed program to deepen the Canal channel A major upgrading of the computerjust north of Pedro Miguel locks from south Gatun Locks to north ized traffic management system proincreases the efficiency of the Pacific Miraflores Locks involved the re- vides for more efficient and safe

locks by providing a holding area for moval of 6.3 million cubic yards of coordinated movement of vessels

northbound and southbound vessels earth and rocks. Increased water throughout the Canal. The new

with special Gaillard Cut restrictions. availability for lockages now virtually system features provide an integrated

The station can also accommodate assures a maximum allowable draft of source of data available to key

disabled ships and provide a safe 39.5 feet year-round for transiting operational units along the length of

haven for vessels during periods of vessels. This project has proven to be the Canal. Ongoing improvements

heavy fog. of considerable economic value to the will further expand system capabilExpansion of Gatun Lake Anchor- maritime community by allowing ities in the future.

age-The substantial enlargement of vessels to fully load to maximum Transit Reservation System-A rethe Gatun Lake Anchorage permits Canal draft without restrictions. Since servation system allows customers to

the project was completed in May schedule a guaranteed day of Canal

1984, there has been no requirement transit for a nominal fee. Initially

to reduce draft. implemented on a trial basis at the

Canal Widening Projects-Completion request of Canal customers, the

of Canal widening projects at Mamei system was approved for permanent

Curve, Bohio Curve, Gamboa Reach use following careful analysis and

and south Miraflores Locks approach public hearings. The revenues reNUNS provide for improved maneuver- ceived are used to assist in funding the

ability, navigational safety and visibil- Canal's capital program. The system

ity in the Canal channel. These has been used extensively, particularly

projects involved eight years of major by liners With fixed schedules and

dredging and excavation work cost- ships carrying perishable cargoes.

ing millions of dollars. Other excava- Longer Vessels Approved for TransitNew high speed launch tion projects to improve visibility and Revised transit regulations permit

13
WAD*

*l

Remnor al, rehabilitation and reinstallation of ihe

mnas',i'e 7(10 Ian miter gate Ieases i% one of

'.eseral major maintenance effort% during a ock%

0'. erha u 

14
pability tor overhaul of lock' miter Towing Locomotive Rehabilitation

gates and much of the Canal's loating Program- I )u ring the decade, 57

equipment. Installed in April 1985, it locks towing locomotives anrd three

also series to augment the adjacent electric locomotive cranes wiere reMt. H ope dry dock and launch repair habilitated at the Commission's modfacility. ern, fully-equipped towing locomoNew Locks Firefighting Systems- tive repair facility. 'The locornotixe

A multi-phase program will upgrade repair facilit% significantly increases

and augment firefighting equipment the locks capability to overhaul

and facilities at all locks " ith the latest locomotive traction units and xwindin marine foam protection systems. lasses. Each unit was rehabilitated at

Buoy maintenance When completed, the nexw system, approximately one-fourth the cost of

costing several million dollars, will a new locomotive, while also expassage of most oceangoing vessels provide greater protection against tending its service life by an estimated

whose total length does not exceed major hazardous risks and avoid 20 years.

950 feet. Containerships and pas- potential damage to locks facilities, Locomotive Tow Track Rehabilitasenger vessels up to 965 feet in total machineryequipment. personneland tion-Extensive maintenance and

length are now approved for transit. transiting vessels. rehabilitation of approximately 50,000

Streamlined Vessel Accident Investiga- New Weather Monitoring and Re- linear feet of the locomotive tow

tion Procedures-Streamlined acci- servoir Management Equipment- track's waterside rail was accomdent investigation procedures have An integrated network ofstate-ol-the- plished as well as the critical sections

effectively minimized delays to art computer, radar and electronic of the landside rail, rack sections and

shipping by reducing the response equipment ),ith satellite imagery conductor slot. Waterside rail was

time of key personnel needed to provides accurate, current data on upgraded from 90 to 105 pound rail to

investigate, assess and develop find- weather conditions, lake levels, and handle greater stress loads exerted by

ings in marine accident cases. While potential and actual inflowks to the the increasing number of large \essels.

the Canal has an excellent ship safety watershed. A unique procedure, the "alternate tie

record, marine safety has always been method," was developed which peran important concern. mitted the removal and replacement

New Signal Station-A new modern Maintenance Programs of alternate rail ties together with the

signal station was constructed on top concrete foundations. thus permitting

of Building 1105 at Cristobal. Marine Maintenance is the cornerstone of the the track to be repaired without

type radars are being installed in both day-to-day operation of the Panama interfering with the movement of

the Atlantic and Pacific signal stations Canal and these programs receive top transiting vessels.

to permit earlier vessel identification, priority. Key programs responsible for

provide improved communication maintaining the Canal in prime condition

between Canal transit officials and were:

arriving vessels and to enhance safety. Annual Locks Overhauls- ProgramBuoy Conversion-Modifications to med annual overhauls of selected

Canal buoys, beacons and naviga- locks involve extensive upper and 840

tional markers now conform \kith the lower chamber work and replacement

standards set by the International or repair of underwater equipment.

Association of Lighthouse Author- This work normally includes removal,

ities (IALA). Used by most countries complete rehabilitation and reinstalaround the world, the IALA system lation of several of the massive miter

provides for clearly defined and gates; and inspection and repair of all

uniform navigational markings. electrical systems and components,

Installation of a Synchrolift-A S3.7 valves, seals and culverts. Acmillion elevator-type dry dock with complishment of locks overhauls

net lifting capacity of 1,600 long tons requires more than 1,000 employees

at the Mount Hope Industrial and an annual investment of some S5

Division improves maintenance ca- million. Locomotive to% track work

15
Overhaul of Flood Gates at Dams and tional safety, were progressively determine the feasibility of widenSpillways-Major overhauls of flood- withdrawn until full channel width ing Gaillard Cut to allow ungates at dams and spillways were and normal Canal operations were restricted, two-way passage of all

conducted. The efficient functioning restored on December 23, 1986. vessels, regardless of beam size.

of floodgates is essential to controlling The ready response and effective Technical analysis was required to

maximum lake levels during periods restoration efforts by the Commission establish a theoretical channel

of heavy inflows. team were responsible for main- design, obtain geotechnical inMaintenance of Power and Water Sys- taining the Canal channel open formation, and to determine contems-This is an ongoing project to throughout the crisis. The interna- struction methodology and cost.

improve and maintain the capacity tional maritime community expressed Analytical support was obtained

and reliability of the Canal's power extreme gratitude and appreciation to from the Computer Aided Operaand water systems. the Commission for the rapid restora- tions Research Facility (CAORF)

Replacement of Damaged or Worn tion of the channel to normal at Kings Point. The U.S. Army

Fendering at all Locks-All old conditions and for the manner in Corps of Engineers also assisted

rendering is being replaced with new which the traffic was handled during Commission engineers and techstate-of-the-art high strength, wider the challenging situation. nicians in the geotechnical inload distribution-surface fendering The Commission continued to vestigation and construction methwhich is more durable and resistant to implement landslide control measures odology. Other elements of the

abrasion and deterioration. to improve bank stabilization in the study included an environmental

Overhaul of Floating Equipment-This slide area, including extensive pre- analysis; evaluation of a variety of

is an ongoing program to maintain ventive excavation and drainage financing options: and a long-range

Canal dredges, tugs, launches, barges improvements. Reforestation of the traffic demand forecast of cargo

and other floating equipment in top affected areas was also undertaken to tonnage, revenues, transit levels

condition. control erosion and minimize the and ship size characteristics through

Routine Dredging of the Ship Channel- environmental impact of these pro- the year 2010. Still pending are

Depth survevs and routine dredging jects. A Geotechnical Advisory Board, economic and operational analyses,

are conducted throughout the year to composed of four eminent geotech- based on current long range traffic

ensure maximum allowable channel nical engineers from the United States forecasts, to determine if, and when,

draft for large vessels. and Canada, was established to the widening should be accomplished.

develop findings and make recom- The project, if undertaken, would

LANDSLIDE CONTROL mendations in connection with slide require the removal of approximately

MEASURES-CUCARACHA control efforts. 34 million cubic yards of material at

LANDSLIDE The Board convened on a number an estimated cost of between $300 to

of occasions to recommend ap- S400 million in current dollars.

A major landslide in Gaillard Cut, propriate slide control measures and In addition to the various technical

which dumped approximately one- perform on-site inspections to exam- studies to determine feasibility and

halt million cubic yards of rock, earth me techniques and progress. The need, Canal customers will be given

and debris into Canal watcrs, oc- Board's final report complimented ample opportunity to present views

curred on October 13, 1986. About measures being taken by the Panama on the projects desirability as well as

half of this material caused a Canal Commission and emphasized on the funding implications if it is

narrowing of the navigable channel in the importance of continued main- determined that the project will be

the area of Gold Hill. Commission tenance. necessary in whole or part. Apresources and equipment were im- propriate liaison with all concerned

ruediately dispatched to the slide area parties, including the U.S. Congress, OTHER PROJECTS at

to begin removal of slide material and will be conducted prior to any

to settle Unstable areas resulting from decision on the project. 0E

the slide. lTwo dredges and related Gaillard Cut Widening-In the

equnpuipent %ere simultaneously con- mid 1980's, the possibility of a

tracted from the Vnited States to potential limitation to the transit

assist in the removal effort. Precau- capacity of the Canal led Corntionary transit measures, temporarily mission management to undertake

instituted in the interest of naxiga- a major, iulti-taceted study to

16
MAW

NN 

4'

44

A PANANIAX-siie containership navigates

past the Cucaracha landslide, while dredges

worked around the clock to clean up slide

debris.

0

A partial sieA of Gaillard

Cut looking north.

17
Financial

On October I, 1979, the Panama These changes covered the broad areas of

Canal Commission began operation as management policies and procedures, the

an appropriated-fund agency, assuming agency's budgeting process, and the

all the assets and liabilities of the Panama capabilities of recording all accounting

Canal Company and the Canal Zone transactions under businesslike accrual

Government, its predecessor agencies. accounting methods while maintaining

Although receiving its annual funding financial data as required under governrequirements through the appropriation mental appropriated-fund procedures.

process, all costs associated with oper- Effective with treaty implementation,

ating and maintaining the waterway the Commission increased toll rates by

continued to be borne solely by revenues 29.3 percent. the largest rate jump in the

generated from Canal operations, ex- Canal's history. A rate increase of this

elusive of any U.S. taxpayer monies. To magnitude was required in order to pay,

accomplish this, a special fund was out of Commission earnings, over $70

established in the U.S. Treasury into million dollars annually to the Governwhich Canal receipts would be deposited, rnent of Panama as a result of certain

and from which funds necessary to cover payment formulas agreed to in the treaty,

Commission expenditures would be A major milestone in the financial

appropriated. This funding arrangement history of the Canal was the approval of

separated Commission resources from the Commissions Statement of Acother U.S. Government monies and gave counting Policies and Related Principles

the Congress the means to monitor the and Standards by the Comptroller

Canal's ability to operate on a self- General on September 14, 1982. With this

financing basis as mandated by U.S. law. stamp of approval, the Commission

In order to incorporate the concepts and became one of the few Federal agencies

Computers are commonplace in most requirements of appropriation laws and having in place an approved system of

Commission offices, improving pro- regulations, the Commission made accounting policies and principles upon

dcrnpit\ co d nlaon ang >o pu m >i changes to its system of financial records which the processing and reporting of all

of data, inherited from the former Canalagencies. its accounting transactions are based.

In October 1982, construction of the

trans-Panama oil pipeline was cornpleted, and with its opening, the number

of oil-carrying vessels transiting the canal

from Alaska's North slope to the East

coast of the United States began to

decline dramatically, resulting in an

annual revenue loss of approximately $50

million. As a result of this, the

Commission, after implementing major

cost-reduction rneasu res, wxas again

forced to raise toll rates, effective on

March 12, 1983, by 9.8 percent in order to

maintain revenue levels at or near Canal

operating costs.

As worldwide inflation continued on

the rise, the Commission recognized the

need for more timely reporting of the

Canal's day-to-day financial situation.

Consequently, the Commission, in 1984,

began to upgrade its data-processing

capabilities. Included in this maJor

18
undertaking ssas the installation of commercial insurance protection. Ihis

multiple IBM mainframe computers, insurance has been renewed in each

installation of on-line real-time process- subsequent sear; and based on the

ing in certain critical systems, and data Canal's track record, should be as ailable,

entry and inquiry capability from remote at Panama's option, after the year 1999.

locations. At the same time, personal In Januarv 1988, with enactment of

computers were introduced into the Public Laws 1W-203, the Commission

Commission on a wide-scale basis, both was converted from an appropriatedas stand-alone systems and as on-line fund to a res oh ing-fund agency, thereby

work stations integrated wkith the Com- removing it from the annual governmission's central computer facility. At the mental appropriation process. but reforefront of the agency's computerized taining Congressional oversight of the

applications were the Commission's Commission's annual budget. As a result

Financial Management System (FMS) of this legislation, Congress formally

and Marine Traffic Control System acknowledged the financial indepen-

(MTCS). dence of the Canal free from the use of

The FMS is a state-of-the-art system any U.S. taxpayer monies. The costs of

which fully integrates fund control and operating the waterway, including all

accounting functions as well as providing capital replacements and improvements,

integrated software for processing and are funded solely from income received

producing the Commission's General from Canal customers: and toll rates and

Ledger, Budgetary Control reports, and other sers ice fees are promulgated on a

Accounts Receivable and Payable rec- cost-recovery, break-even basis. As with

ords. Electronically interfaced with the any large commercial enterprise, the e1.000 on-line5orkstations throughout the Commission are monitored bs net~sork control

new system wAere the previously com- management and application of Com- operators in the central computer facilit'. The

puterized systems of payroll processing, mission resources are continuously modi- facltrs and uports major mainfame corinventory management and control, and fied to respond to fluctuations in Canal on-line applications.

project and job reporting. The MTCS

was developed jointly with the Canal's

Traffic Management Disision, and pro- 

\ides centralized scheduling and control

oser %essel transits and their movements

within Canal basin and harbor areas.

Data within the system also pros ides the

basis for pilot assignments, linehandler

schedules, and towboat and launch

requirements. Beginning in FY 1990, the - R'N""--

MTCS data bank xill be the source for

electronically preparing billings for tolls

and other nav igation sers ices.

In late 1985, Congress enacted legislation authorizing the Commission to

purchase insurance which would indemnifv the Canal against a major loss

resulting from an accident or natural

event of severe or catastrophic proportions. Under this authority, the Commission purchased an all-risks catastrophe policy in December 1987, and

became, essentially, the first Federal

agency operating under the umbrella of

19
traffic and work load: and under a standard check-clearance processes, they

rev ol ing-fund structure, management is would exentUaly be presented for

guaranteed the flexibility to meet such payment against closed accounts. To

challenges. In the year 2000, when protect against this occurring, new

stewardship of the Canal is passed to the accounts were opened at the Chase

Government of Panama, the revolving- Manhattan Bank and Citibank in New

fund format will serv e as a good example York, and procedures established wherefor their consideration in determining in all Commission checks flowing

what type of financial structure the through the Federal Reserve system

waterwx ax should operate under. xxould be short-stopped at Nex York for

In March of 1988, the Goxeiernent of final payment. Ihis temporary procedure

Panama ordered all banks operating in effectixelv blocked all Commission

the Republic to close their doors. [his checks from being forwarded to Panama

decree wxas in response to the political for clearance.

upheavals and the deteriorating econ- Another major hurdle overcome in the

omic conditions plaguing the country. As agency's effort to normali/e its check and

Employee check cashing serices continued a result ol this unprecedented action, the cash-handling procedures was the need to

without interruption during a length) banking Commission, overnight, \%as denied provide check-cashing services to the

crisis in Panama.

access to its funds on deposit with the Commission's work force and to Cixi

Chase Manhattan Bank and Citibank Serxice annuitants whose U.S. T reasur

and stripped of all local commercial checks had prex iously been deposited or

banking services and support. Crowning cashed at local banks. Augmentation of

the agency's banking dilemma xwas the the agency's cashier force and significant

attendant loss of its ship-guarantee increases in Commission cash balances

procedures which had been in place since on paydays answered employee checkthe Canal began operations. The corner- cashing requirements, while in response

stone ot these procedures xas the security to the Civil Ser ice annuitant problem, a

deposits held in local banks that served as payday program was implemented, in

collateral, guaranteeing in adx rice, coordination with the U.S. military

payment of all toll and navigation fees for finance offices operating in Panama, to

services provided vessels. pay these individuals each month.

In response to this loss, the Coin- Finally, in order to meet its banking

mission instituted emergency ship-clear- needs, the Commission opened checking

ance procedures to ensure the uninter- accounts at the American Express

rupted flow of Canal traffic, and banking facility located on a United

arranged with its customers to im- States military base in Panama. These

mediatelx establish offshore security accounts currently meet the day-to-day

deposit accounts x\'ith banks located in checking requirements of the agency.

the United States earmarked as Panama In one of many actions designed to

Canal guarantees. Canal invoices pre- facilitate an orderly transfer of the Canal

sented for payment against these ac- to Panama in 1999 free of all liens and

counts were credited to the Commission debts, the Commission changed its

account in the U.S. Treasury via Fedwire. method of accounting for injury claims

I his procedure will remain unchanged under the Federal Employees' Comfor the foreseeable future. pensation Act (IFCA). In view of the

Further exacerbating the seriousness Commission's finite life and because the

of the agency's financial position resulting liability for injury payments would

from the collapse of the Panamanian continue bey ond the year 1999, the past

Banking System was the prospect of all practice of recognizing injury claim costs

outstanding Commission checks be- as a Canal operating expense during the

coming non-negotiable. since through year in which the benefits were paid was

20
inappropriate. Accordingly, in 1989, the During 1989, the Commission suffered

Commission changed to the accrual a falloff in Canal traffic due to changing

accounting method for FECA claims and world trade patterns, and the growing use

began recognizing the full cost of those by Canal customers of alternate means of

claims, including projected future benefit transportation between the East and

payments, at the time accidents occur. West coasts of the United States. Because

Legislation was enacted to establish an of rising costs due to inflation and a

interest-bearing account in the U.S. projected minimal growth in traffic levels,

Treasury, entitled The Panama Canal the Commission announced a toll-rate

Commission Compensation Fund, into increase of 9.8 percent to be effective

which the Commission, based on ac- October 1, 1989.

tuarial formulas, deposits funds monthly During its first 10 years of managing

in amounts adequate to cover the costs of the Canal, the Panama Canal Comall present and future employee FECA mission has met its Congressional

payments. Also, effective with that mandate of operating the waterway as

legislation, the administration of all near a break-even basis as possible,

claims and processing of benefit pay- generating over S4 billion in revenues

ments was turned overto the Department while incurring essentially a like amount

of Labor. in expenditures. an

-NAA

-73

The growing container trade represents an

important segment of (anal cargo movements.

21
P ANA\A CANAL COMMISSION

(ONIPARA TITE OPR IATIN( RES1 ITS

FISCAL NEAR 1980 TH1ROI 1H 1989

(Dollars in Thousands)

4 * \ [9' u s 19 4 N 0 \4 1 \i \4 "M ',)4 19 N44,) 40) 54 14N ) 0 

lt H 11 q' 14 ~ 4H "(1, o"N w ,q 411 W-1 41~' s 4t 1' N4 1 Y 44~ 4,141 2'1,

I he operation of the Panama ('anal is conducted on a sellf-financine basis. This is in accord with the Panama Canal Act of 1979

which established the Panama Canal Commission as an agency of the Executixe Branch of the Inited States Goernment with the

responsihilit\ tor the management, operation and maintenance of the Panama Canal.

The Commission is expected to recox er through tolls and other re\ enues all costs of operating and maintaining the Canal.

including interest. depreciation. capital for plant replacement, expansion and improx events, and payments to the Republic of Panama

for public serx ices and annuities, in accordance w\ith paragraph 5 of Article III and paragraphs 4(a)and (b) of Article XIII, respectively,

of the Panama Canal I reatx of 1977. In addition, paragraph 4(c) of Article XIII of the Treaty provides for a profit payment to the

Republic of Panama. of up to SI million per year. out of Canal rex enues to the extent that operating revenues exceed expenditures in

anx one xear.

During the ten cars since its establishment. the Ianama Canal Commission has generated operating revenues and expenses

totaling S4.1 billion, each. with a nominal S8.9 million paid to the Goxernment of Panama Linder the provisions of paragraph 4(c) of

Article XIII of the I reatx. Throughout this period. the Commission also spent almost SI I billion to maintain the ('anal channels

and its infrastructures. In addition, the Commission has invested some S260 million in capital improvements and plant replacements

during that period.

The cumulatix e financial results for this ten-year period demonstrates that the Commission has operated essentially on a breakexen basis as required b the lax. It has met this statutory requirement while at the same time modernizing the Canal to assure the

efficient. safe and economical transit of vessels for the future. Ibis is an extraordinary accomplishment gixen the complexities inherent

in the Canal operations and the changes xwrought by the Panama Canal 1 reaty of 1977. On October 1. 1979. a toll rate increase of 29.3(7

\\ts Implemented to offset increased payments to Panama out of Canal revenues mandated bx the treats. A later increase of 9.8( was

implemented in March 1983, due primarily to the loss of the North Slope oil traffic follow ing the opening of the trans-Isthmian oil

pipeline A toll increase of 98 x ias approved to be effective at the beginning of FY 1990 due to inflation and the projected minimum

growth in traffic levels.

In less than one dai, tourist% on board luxur

cruise liners can enjo) a transit through the

Canal and a two ocean cruise.

22
Implementation of

The Panama Canal

Treaty

Concurrent with the dramatic increase operating within the former Canal Zone.

in Canal traffic demands in the early All independent activities such as

1980's, the management of the Panama churches, social and fraternal organi/aCanal Commission faced the complex tions, commercial activities and land

task of implementing the Panama Canal leases operated tinder the laws and

Treaty. Prior to entry into force of the regulations of the Canal Zone came

treaty, the Canal organization consisted under the jurisdiction of the Republic of

of two U.S. Government agencies, the Panama.

Canal Zone Government and the The establishment of the new Panama

Panama Canal Company. The Canal Canal Commission, with responsibilities

Zone Government administered the essentially limited to the efficient and safe

various civil functions such as: schools, passage of ships through the waterway,

hospitals, postal services, sanitation, fire, combined with the transfer of some

police protection, and the judicial system. major functions to the U.S. Department

The Panama Canal Company included of Defense and the Republic of Panama

commercial operations such as ports, the resulted in a massive reorganization of

Panama Railroad, and commissaries, as the Canal work force. The total full-time

well as the basic marine and engineering permanent work force of the Canal

functions directly connected with the organization just prior to entry into force

operation of the waterway. The admin- of the treaty exceeded 12,000 employees

istration of both organizations was the including U.S. citizens, Panamanians,

responsibility of the Governor of the and a small number of citizens of other

Canal Zone/ President, Panama Canal nations. With the advent of the treaty, the

Company, who was responsible to a new Panama Canal Commission work

Board of Directors appointed by the force was reduced to about 8,000

Secretary of the Army in his capacity as employees. At the end of the decade,

principal stockholder of the Canal there were approximately 7,600 perCompany. The Secretary also served as manent Commission employees.

the direct representative of the President

of the United States in the supervision of

the Canal Zone Government.

Pursuant to the terms of the treaty, the

Canal Zone Government and Panama

Canal Company were disestablished. The

Republic of Panama assumed jurisdiction over the former Canal Zone,

including all aspects of law enforcement,

the responsibility for operating Canal

area ports and the Panama Railroad, and

for providing many of the public services.

The Canal's former health and educational services were transferred to the in a joint spirit of cooperaU.S. Department of Defense while the To conduct the orderly passage of tion, Panamanian and Commission firefighters have en- primary functions directly associated jurisdiction to Panama, the treaty sured effective deliver of

with the operation of the Panama Canal provided for a 30-month transition fire protection services in the

were retained by the new Panama Canal period during which the criminal and civil Canal area.

Commission. laws of the United States were applied

Implementation of the treaty had an concurrently with those of Panama in

immediate effect on the lives of em- those parts of the former Canal Zone

ployees, their families, other residents of where the U.S. retained installations or

the surrounding communities, and on the had been granted use rights. During the

many service oriented entities or activities transition period, the Panama Canal

23
SiTr

.0-2

VieA of Gatun I ocks looking south-( arefull planned maintenance and

improvement program% ha'e kept the ( anal in e cellent operating condition

throughout the ten ears following entry into force of the Panama (anal Treath

24
Commission was permitted to exercise identified for transfer in the treaty implementation. lo provide ora smooth

police authority and to maintain a police documents. and ettective transition, %arious comforce. Throughout this period, joint In addition, the treaty negotiators mittees and points-of-contact wNerc estabU.S. Panama police patrols provided recognized the need fora formal, effective lished within each agency to address

law enforcement for the Canal area. channel of communication between the specific areas and problems. Periodic

Additionally, the court systems in the United States and Panama. Accordingly, group meetings were held with agency

former Canal Zone were permitted to the treaty established a Coordinating representatives to discuss matters of

handle all pending and most new criminal Committee for that purpose. Sub- mutual interest and the progress of the

cases, but only those civil cases on the sequently, a number of binational transition process. Ihese measures concourts dockets prior to October I, 1979. subcommittees were established by the tributed greatly to a successful transferUnder a Prisoner Transfer Agreement Coordinating Committee to address of-functions as prescribed by the treaty.

concluded in 1980, prisoners serving specific areas of interest such as fire A variety of mechanisms and high level

sentences in the Canal Zone Penitentiary protection, housing, and lands and forums were also utilized, in which a

at Gamboa at entry into force of the facilities matters. The treaty also created a continuum of issues regarding United

treaty were given the option of com- binational Ports and Railroad Coi- States-Panama relations were discussed

pleting their terms in the Panamanian mittee as a subcommittee of the and where problems were resolved.

penal system or requesting transfer to a Coordinating Committee. The long-term and multi-phase chardetention facility within the United States These forums successfully resolved a acteristics of treaty implementation also

operated by the U.S. Bureau of Prisons. wide variety of binational issues in a required constant interaction between all

On March 31, 1982, the Commission's practical, cooperative way. Among its Federal agencies throughout the decade.

transitionary police force and the U.S. accomplishments, the Coordinating These efforts were later intensified by the

judicial system on the Isthmus were Committee developed procedures for presence of serious ongoing political and

disestablished. effecting the transfer of custody of U.S. economic problems in the Republic of

Title to all housing formerly owned by citizen employees of the Commission and Panama from June 1987 forward, which

the Panama Canal Company passed to their dependents who were detained by tended to shift attention toward the safety

Panama at entry into force of the treaty, Panamanian civil authorities. That body and security of Canal area facilities,

with the United States granted the use of also resolved various housing related personnel and dependents to ensure a

those units for housing eligible Com- issues, effected the transfer of excess continuity of efficient Canal operations,

mission employees and their dependents. Commission housing and other property., while moving ahead with the original

The Commission continued to manage, and addressed matters pertaining to land objectives of treaty implementation. E

maintain, improve, rent and assign the and facility utilization. In addition, the

houses during the decade. However, since Coordinating Committee served as the

the treaty provided that housing in excess initial level for receiving and reviewing

of Commission needs would be trans- treaty related complaints and protests,

ferred to Panama, 2,786 housing units, or and passed on to the diplomatic level

nearly 65 percent of Canal agency's pre- those which were not successfully

treaty inventory of 4,300 units, were resolved.

released to Panama. That figure exceeds Although forums were in place to

the treaty mandated requirement for at coordinate pre-treaty actions of U.S.

least 30 percent of all Commission Federal agencies, effective implementaadministered housing to be transferred tion of the treaty also required a high

within 10 years after entry into force. It degree of cooperation and communicaalso exceeds, well ahead of schedule, the tion among the Canal agency, U.S.

requirement to transfer to Panama at Southern Command, U.S. Embassy and

least 60 percent of Commission housing other Federal agencies operating in the

by the end of the 20-year treaty period. Republic of Panama. The massive

The Commission also transferred to overnight transfer of properties, funcPanama a number of other buildings and tions, personnel and associated costs on

structures in addition to housing which October 1, 1979, to other Federal

the Canal agency determined to be agencies presented one of the most

unnecessary to the performance of its significant challenges to the Canal

mission or which were specifically organization in the initial phase of treaty

25
law

Signing ceremony extending the collective

bargaining agreement beIween the Panama

(anal Pilots Branch and the Panama Canal

Commission.

X %killed Panama Canal pilot

guides a large bulk carrier during

uie lockage operations.

26
Employee and

Community

Relations

During the pre-treatv years, when the former Civic Councils. These committees

work force numbered more than 12,000 provided an avenue of continued comnand the administration exercised com- munication between the Canal adplete jurisdiction over the former Canal ministration and the community. The

Zone, the Canal agencies shared an Office of Ombudsman, created by

intimate relationship with Canal area legislation, served as an additional

communities and the thousands of channel for all employees and the

employees and their families residing community to express and resolve issues

there. Practically every aspect of personal of mutual concern; an open-door policy

and social life was touched in one form or within the Canal administration supanother by the activities, services and, plemented other internal agency channels

laws and regulations of the former Canal of communication.

Zone Government and the Panama Another major aspect of the Panama

Canal Company. Commercial activities Canal Treaty was the recognition by the

related to the efficient functioning of the United States and Panama, that Pan- technical personnel receive classroom instrucCanal, fraternal and social organizations, amanians would participate increasingly tion as sell as hands on training.

houses of worship, and public service in all facets of the Canal operation. To

organizations were equally affected. accomplish this objective, preference was

These activities operated in a structured given to the hiring of Panamanians based

and protected environment, heavily on the merits of the candidates and

patronized or actively supported by without establishing hiring quotas. The

employees and the Canal community in following chart reflects the impact of the

general. Treaty on manpower levels and the

Recreational and social activities pro- progression of Panamanian participation

vided diversion for employees and their for selected periods for the first decade of

families and issues of community concern the Panama Canal Commission.

were debated at regular town meetings,

with duly elected representatives bringing Permanent Work Force

issues to the attention of the Canal's Throughout the decade, actions to

administration. Personal, corporate and increase Panamanian participation were

employment related matters requiring accomplished in a manner generally

legal attention could be addressed consistent with the United States federal

through the U.S. judicial system on the merit system principles, the Panama

Isthmus. Employment policies and pro- Canal Treaties and the Panama Canal

grams of the Canal organization were Act of 1979. The Panama Canal

subject to or patterned after the U.S. civil Employment System provided for job

service system. security and the retention of important

While many Canal area activities and employee benefits which were critical to

services were either discontinued or maintaining a skilled and motivated work

transferred in conformity with the

provisions of the treaty, a two and onehalf year transition period allowed Permanent Work Force

employees to adapt gradually to the new

environment. With cooperation and I hrd ( ounlr

dedication on the part of individuals from 09 79 (Pre-TIreal%). . . . 3095 8,432 612 12,119 t), 51 both the Republic of Panama and the 7 . [. I 305 5,421 IS2 7,97o t9 5'

United States, the transition period 8 . . 1865 5,765 377 7.907 12 9

transpired almost flawlessly. 10 83 . 1.651 5,922 228 71 75 9

Resident Advisory Committees were 10 85 .1,353 5.992 181 7.526 7) 6

formed within the communities to 10 87 . 1.169 6.269 141 7579 s2 7

assume some of the functions of the 1t 89. 993 6,513 96 7,602 5, 7

27
force. It also served to attract capable of tree housing, utilities expanded travel

Panamanians who w,,ould be responsible benefits and U.S. diplomatic pouch mail

tor managing and operating the Canal in service xwas granted to eligible employees

the \ears ahead. Personnel policies and whose U.S. military shopping and postal

training programs wNere designed to allow pri\ ileges expired on September 30, 1984,

the Commission to achieve its goal of a in accordance with treaty requirements.

\irtuall\ 100 percent Panamanian work Additionally, with changing world

force by the year 2000, while continuing events and more than two years of

to insure tair and equitable treatment to unresolved political problems in Panall employees for the duration of the ama, personal and industrial security

Ireaty, became increasingly important issues.

Since the first day, Commission policy Security assessment surxevs wkere conestablished training as one of the most ducted to evaluate Commission needs for

important missions of the Canal agency, plant protection and physical security. To

second only to the transiting of vessels provide greater employee safety and

through the waterway. Accordingly, high security, access to Commission worksites

priority was given to training programs to and facilities "as limited. Although the

accelerate Panamanian participation Commission maintained a small trained

throughout the organization. A full scope guard force for the protection of vital

of training programs was designed, Canal installations, the Panama Defense

ranging from clerical, administrative and Forces and, ultimately, the United States

managerial fields to the professional, military forces in Panama were prepared

craft and pilot force. to provide necessary backup security. In

The following table compares Pan- support of this responsibility, U.S. forces

amanian participation in key occupations have conducted a number of readiness

upon entry into force of the treaty with exercises at Canal installations in cothe levels as of September 30, 1989. operation and joint planning with the

Panarma Canal Commission. The Canal's

guard force xwas augmented by expanded

use of closed-circuit television monitoring

Key Occupations systems and more foot patrols and

mobile units were utilized at \ital

installations. Increased use of electronic

(ht,,ber I 97) 9

.pIember 4X9 1979 19X9intrusion and motion detection systems Numr-h of \,-h"r .f

and installation of high intensity lighting

sd Nrn jiI 6 84 Q in many of these areas, including

PAIl(" I"d \1 fldgCi I44 13 s 143 42 6 Commission- managed employee housF 1.n I i fmmn 21 I I7 71 6 ing. were provided to add to the level of

s 6! 26s security. ( nd 4 I 

6 I 1 0 Q In view of the important benefits of

employee fitness, the Commission

I R I I IN( Rt IN K I t ( N( I 1()\'I -' X', strongly encoUraged and supported

employee health and recreation programs. Occupational health clinics wcrc

maintained at major Canal facilities to

Other Employee Programs pros ide a range of health care services.

Recogniing the significant impact of I liese facilities wkere equipped and stated

I reat\ implementation on the lives and to handle Icnew requirements for drug and

morale of employees and the commu nity alcohol testing and counseling. A number

In general. the Cominission took certain of physical fitness facilities wNere also

measures to ameliorate its effects. For established in areas relatikely close to

example, an [q uit\ Package, consisting Commission work sites for use by all

28
employees and dependents. Trained

instructors directed and supervised the

fitness and recreational programs. These

services provided some relief to emplovees and dependents from stresses

brought about by the treaty implementation process, changes in the work

environment, and the political and

economic difficulties in Panama.

Industrial Relations

At the beginning of the decade, the

Panama Canal Commission embarked

on an entirely new direction in labormanagement relations. The Federal

Service Labor-Management Relations Security awareness is emphasized

Statute, included in the Civil Service throughout the Commission. Access to

Reform Act of 1978, was made applicable Canal worksites and facilities is limited.

Engineers IBeneficial Association and to the Panama Canal Commission. In District No. I Pacific Coast 1)istrict, addition, the Panama Canal Act of 1979 AFL-CIO, representing a licensed marine

amended the labor relations statute to engineer unit: and Local No. 13, include all non-U.S. citizen employees of International Association of Firefighters the Commission. This latter action was AFL-CIO, representing a unit of fireunique in the history of U.S. Federal fighters. These four bargaining units, labor-management relations. The Pan- together with the pilots unit, comprised

ama Canal Act also preserved the pre- the organized labor structure of the

treaty practice that permitted employees Panama Canal Commission representing

to be represented by labor organizations over 95 percent of the Commission work

without regard to their supervisory status. force.

With the application of the Statute, the Following the negotiation of the pilots

International Organization of Masters, contract in 1981, successful negotiations

Mates and Pilots, Marine Division, were completed with the remaining

AFL-CIO, pilot membership group, bargaining units. The professional barbecame the first labor union to be gaining unit contract the fifth and last

certified as an exclusive representative in original contract became effective on

the Commission. Contract negotiations April I1, 1984.

with the pilots union began in May 1980 Traditional labor-management relaand the first contract became effective on tions activities during the period between

January 2, 1981. Later in 1981, other mid- 1984 and early 1989 were about

labor organizations were certified to equally divided between routine contract

represent each of the Commission's four administration activity and renegotiation

remaining bargaining units as follows: the of two of the original five collective

Maritime /Metal Trades Council, AFL- bargaining agreements. As a result of

CIO Panama Area (a union coalition efforts to promote more constructive

consisting of the National Maritime labor relations, unions gained greater

Union, the International Organization of access to the Commission's top manageMasters, Mates and Pilots [Atlantic & ment officials. From June 1987 through

Gulf], and the Panama Area Metal the end of the: decade, however, an everTrades Council) representing both a increasing preoccupation with external

professional and non-professional bar- political affairs became the focus of

gaining unit; the National Marine virtually all employees and the unions.

29
Political and Econonic other employees in this action. In some from using their privately owned vehicles

Crisis in Panama cases, private bank accounts were frozen to travel to work because Panama

and personal vehicles seized. authorities refused to issue license plates An unforeseen challenge, over which Other actions contributing to were allowed to claim a $7 per day the Commission had no control, was a heightened tension included a national transportation allowance. High speed political and economic crisis in the strike; suspension of civil liberties; launches were also utilized to shuttle

Republic of Panama, which began in restrictions on free speech and the news employees between work stations along

June 1987. As the crisis continued to media; sporadic closure of public offices, the Canal when safe overland transportaworsen, both U.S. and Panamanian institutions and schools in Panama: tion was not possible. The overall cost of

employees were subjected to increased intermittent use of roadway checkpoints these transportation initiatives exceeded

difficulties and personal hardships. by Panama law enforcement officials to one half million U.S. dollars per month.

Of particular concern was the in- conduct random searches of pedestrians Eligible U.S. employees were also

creasing harassment of Commission and motor vehicles and confiscation of granted special authorization for limited

employees by the regime of General personal effects; imposition of fines for U.S. military shoppette (convenience

Noriega. Following the application of unsubstantiated charges; civil distur- store) privileges, because of the political

U.S. economic sanctions in April 1988, bances; and, an extended bank closure and economic difficulties. Additionally, a Canal payments to Panama required declared by the Panama National voluntary relocation plan was approved

under the Treaty, were placed in escrow Banking Commission, which subse- for dependents of U.S. employees

in the United States rather than being quently issued severe restrictions on desiring to leave Panama to temporarily

transferred to the Noriega regime. withdrawals from checking, savings and reside in the United States.

Included in these sanctions, were the time deposit accounts. Despite high levels of frustration

income, social security and educational Commission housing areas and Canal brought about by the yet unresolved

tax monies deducted from the salaries of operating facilities incurred significantly political and economic crisis, ComPanamanian employees by the Panama increased reports of vandalism and mission employees continued to perform

Canal Commission. On July 5 of that property theft, including many privately admirably. Accident and safety levels

year, based on humanitarian criteria, the owned and some official motor vehicles. were within normal range, the absentee

Commission was authorized to reinstate At various times, diminishing food rate was exceptionally low, and vessels

certain payments to the Panama Social supplies in public markets and a general continued to transit the waterway safely

Security System, perception that the local shopping areas and efficiently. Although Canal operaAs an outgrowth of the sanctions issue were unsafe caused particular concern for tions remain normal, it is imperative that

involving the various payroll tax deduc- many employees forced to live on the the political crisis be resolved to allow the

tions, Noriega regime officials strictly economy. Commission to dedicate itself to the

enforced a decision prohibiting Pan- To ensure the welfare of Commission essential task of providing efficient transit

amanian Commission employees from employees, as well as a continuity of service, and fulfill the treaty commitobtaining national tax-clearance cer- Canal operations, extraordinary meas- ments for the orderly transfer of the

tificates (Pa/ v Salvos). Consequently, ures were undertaken, including im- Canal to Panama on December 31,

Panamanian employees were effectively plementation of a range of contingency 1999. This will also enable Panama to

denied permission to travel abroad, plans. The Commission began providing redirect its attention to the demanding

purchase or sell real estate, engage in food boxes at cost to employees, when requirements inherent in its future

commercial activities, or to receive food supplies in Panama stores were responsibility as the next steward of the

packages through the mail or customs severely depleted or inaccessible due to Panama ('anal. EN

Further complications developed as the civil disturbances. Occasional use of

regime later determined that the Pa/ y temporary emergency lodging and raSalvo was also required for employees to tions became necessary for employees

obtain license plates for personal vehicles, held over at their duty stations. On

thus depriving Pana manian Commission March I, 1989, a costly emergency shuttle

employees use of their automobiles for bus service on both sides of the Isthmus

travel to and from work. In addition, wias made available for employees at

Panama's Ministry of Finance and designated pick-tip points in the terminal

I reasury initiated legal action against 36 cities, whichh the Commission was not

C ommission employees to collect these able to discontinue until the end of

tax monies, and threatened to include August. Employees who were prevented

30
Future of the

Waterway

41

Ten years after the implementation of pendent on the waterway. The Canal the Nital international responsibility to

the Panama Canal treaties, the Panama offers many of those Latin countries the maintain high quality transit service

Canal remains an important interna- only efficient, cost-effective means to beginning in the year 2000, The nature of

tional transportation artery. Over 93 transport large quantities of cargo. the new organization, treaty responsibilpercent of the world's oceangoing ships Future economic growth in those nations ities, quality training, prudent financial

are able to pass through the waterway will continue to be closely linked with the management, tolls policies, application of

and, each year, some 12,000 vessels Panama Canal. modern technology, and personnel protransit the Canal carrying more than 150 Although the Canal provides an cedures are all critical areas which

million tons of cargo over many of the absolute advantage to many countries of Panama must address. Existing Comworld's principal trade routes. Cargo the world, the waterway operates in an mission employment, wage, equal oppassing through the waterway accounts increasingly competitive world. Alterna- portunity and collective bargaining

for some 5 percent of all the world's tives to the Canal abound including the principles and systems are designed to

oceanborne trade. intermodal transport system in the accommodate the special objectives of

Looking ahead, current estimates United States, pipelines, use of larger the Canal operation and they have

forecast modest growth in most Canal vessels to bypass the waterway, and a contributed significantly to a stable,

trades. Cargo through the waterway is variety of trade relationships which could highly motivated work force. Job security

expected to reach more than 220 million change if Canal service deteriorates or and assurances that equitable and welltons by the year 2010. Concurrently, tolls are raised excessively. The emer- defined systems will be continued are

oceangoing transits should rise from 33 gence of these alternatives requires that essential to ensure the retention of a

per day at present to 38 daily. While the Canal continue to provide efficient, highly skilled Panamanian work force, as

Panamax vessels, the largest the Canal low-cost transit service to the maritime well as allow the Canal to continue to

can accommodate, are anticipated to industry, if the waterway is to remain a attract qualified employees from the

reach about 36 percent of Canal transits vital link in the world transportation domestic labor market. With the achievein the next two decades, the average size chain. ment of these goals and orderly, planned

growth rate will tend to slow. Internally, Canal management also maintenance programs, innovative imWith regard to trade patterns, the faces a number of major challenges in the provements and adequate capital investUnited States and Japan are expected to years aheac. While the Panama Canal ment, the Panama Canal should remain a

continue as the most important users of Commission will continue to fulfill its modern, efficient enterprise serving world

the Panama Canal. Some Central and mission in the coming decade, the commerce far into the future. 0 N

West Coast South American countries, Republic of Panama must prepare to

however, are proportionally more de- assume stewardship of the waterway and

31
AL :

The Panama Canal can safely handle

commercial oceangoing %essels with

beams up to 106 feet.

32
Historical Calendar

1979 1982

September 30-Final day of operation of the Panama Canal Companyand January 10-A news wage system replaced the Panama Area Wage Base.

the Canal Zone Government, in accordance with the Panama Canal reducing the growing differences between post and pre-trcaty wagerates,

Treaty signed on September 7, 1977. and improving the Commission's competitive position in recruiting

October I-Entry into force of the Panama Canal Treaty. Panama gains skilled, technical and professional occupations.

jurisdiction over the former Canal Zone. First day of operation of the February 23-Three new locks towing locomotives were delivered to the

Panama Canal Commission, a new agency of the United States Panama Canal.

Government, responsible for managing, operating, maintaining and March 31-End of the 30-month transition period, The Panama Canal

improving the Canal through December 31, 1999. Major organization Commission's transitionarv police force and magistrate's court, as well as

changes took effect, resulting in a substantial transfer of functions and the U.S. District Court were disestablished, Also, the Panama Canal

reduction-in-force. A toll rate increase of 29.3 percent also was Employment System replaced the Canal Zone Merit System and, this was

implemented to offset increased payments to Panama out of Canal the last day that non-U.S. citizen employees of the Commission were

revenues mandated by the treaty. The Federal Service Labor- eligible to use U.S. military health facilities for non-job related medical

Management Relations Statute was amended to include non-U.S. citizen treatment.

employees of the Commission. A new Panama Area Wage Base became April 4-A new signal tower was installed atop the Cristobal Administraeffective for employees hired on or after this date. Panama Social tion Building, to improve traffic control and vessel communication at the

Security System (CSS) coverage became applicable to all non-U.S. Atlantic harbor.

employees hired on or after this date. April 28-The first report of Africanized bees in the Canal area was made at

November 15-Completion of project to install high mast lighting at the Mount Hope Industrial Division drydock. twenty-five years after

Miraflores Locks. their accidental release in Brazil. Special control teams were established

November 30-Gamboa Reach ship channel widening project was to combat the bees.

completed. July 1-The new Alianza-class tugboat AMISTAD was formally accepted

by the Commission.

July 3-Three new locks towing locomotives were delivered to the Panama 1980 Canal.

May 28-The Joint Commission on the Environment, established under September 23-Completion ofproject to install high mast lighting at Gatun

the treaty, held its first binational meeting in Panama. Locks.

June 2-4-The Panama Canal Commission binational Board of Directors October 4-Testing of trans-Panama oil pipeline began. Alaska North

held its first meeting at the Administration Building, Balboa Heights, Slope oil (ANS) started diverting from the Panama Canal.

with Mr. Michael Blumenfeld serving as Chairman. December 8-The Office of Health and Safety was eliminated and the

June 7-The second largest oil spill in Canal waters occurred when the Occupational Health and Safety Divisions were transferred to the Office

TEXACO CONNECTICUT, carrying Alaskan North Slope crude oil, of Personnel Administration. Concurrently, the Personnel Director was

struck the east bank of the Canal north of Gaillard Cut. Of the estimated appointed as the Designated Agency Safety and Health official.

4,000 barrels of oil spilled, 1.361 barrels were recovered. December 15-Mamei Curve Widening Project was completed, improving

June I1-The Coordinating Committee, established under the treaty, held navigational safety and visibility.

its first binational meeting in Panama City.

1983

1981 February 7-A new marketing unit was established within the Office of

January 2-Pilot contract became effective. This was the first-ever Executive Planning to handle the Commission's marketing functions.

collective bargaining agreement between the Canal agency and a labor March 12-A toll rate increase of 9.8 percent was implemented to offset

union. revenue losses stemming primarily from diversion of Alaskan North

April29- By Executive Order, President Ronald Reagan approved the new Slope oil to the trans-Panama oil pipeline.

official seal of the Panama Canal Commission. May 6-Meteorological and Hydrographic Branch installed a WSR-74

May 31-The new tugboat H. R. PARFITT arrived in Cristobal for S-Band severe weather radar system, to supply data for watershed

delivery to the Commission. This was the first tug equipped with a management programs.

cycloidal omnidirectional propulsion system. July 1I-The Pilot Understudy Program, designed to provide

July 17-Mr. William R. Gianelli was appointed Chairman, Board of Panamanians an additional means of entry into the pilot force, accepted

Directors of the Panama Canal Commission, to succeed Michael its first class of nine trainees.

Blumenfeld. December 20-Completion of a project to install pneumatic fender units at

July 22-The new, conventionally propelled tugboat ALIANZA was the wing wall knuckles of all locks to prevent vessel contact with the wall

formally accepted by the Commission. during transit.

July 31-General Omar Torrijos, Panama's signatory of the Panama Canal 1984 Treaty of 1977, died in a plane crash in the interior of Panama.

September 19-The SS CRISTOBAL, the Commission's only remaining January 18-The new labor-management Safety and Health Committee

steamship, made its last Panama to New Orleans voyage. was inaugurated.

October 15-The new Alianza-class tugboat PROGRESO was formally April 4-A transit reservation system was implemented on a permanent

accepted by the Commission. basis for Canal customers desiring a guaranteed transit date.

December 15-Record cargo of 65,299 long tons transits Canal aboard the May 18-Project to deepen Gaillard Cut by three feet was completed.

ARCO TEXAS. July 1-Completion of a project to install and integrate new closed circuit

December 27-Four new locks towing locomotives were delivered to the television cameras and system components at strategic points along the

Panama Canal. Canal. with the Marine Traffic Control Center in La Boca.

33
August I- Ihe Commission upgraded its data processing capabilities bx March 13-The Meteorologic and Hydrographic Branch upgraded its

implemicniring the use of multiple IBM mainframe computers, and on- weather satellite receiving equipment to an independent and fully

ine, real-time, iciote data entry and inquii *y capabilit\ b\ field units. operational Mode AAA Weather Satellite Receiving Station. Ihis

August 3- \ ne\ superS isiry control and data acquisition (SCA DA) equipment allows the Commission to monitor weather patterns on a real

sstem itas stalled to allow power dispatchers to more eftectisely time basis oser a broad geographical area affecting the Canal's

nionitor and control Commission power s\stems, watershed.

August 29-Contpletion of project to install high mast lighting at Pedro June 8-Serious political difficulties in Panama begin to surface front

MiuViiel I ocks accUsatitns against General Manuel Antonio Noriega by the former

October I-[ SI military postal. commissai\ and exchange pr ileges. second in command of the Panama Defense Forces.

ctendced to eligible Commission employees. \%ere terminated in Nosember 4- Record single day's tolls revenue of S .333 million collected.

accordance a itlh the treat\. An "-quitx Package", comprising fece tent. November 20-Pacific entrance dredging project was completed.

clectricity atid travel henetits for eligible employees, was instituted by the December 21-1 he nesw tugboat GUlA. equipped with a cycloidal omniCommission to help compensate for the loss of these prisileges I he directional propulsion system, was delivered to the Commission.

Commission also implemented, state-of-the-art financial management December 24-1 he Commission purchased catastrophe insurance

ss teams sottsxare in order to t Uly integrate fund control and accou nting coverage to protect it against unpredictable revenue losses and expenses

I he new system pro\ ided the Commission's first on-line real-time data arising t rom catastrophic events.

entry and inquiry for financial systems to Commission field units

1985 1988

March 15-I he first class of nine Panamanians in the Pilot Understiidy January I-I he Commiion "as converted from an appropriated fund to a resolving fund agency with the passage of the Panama Canal Revoling

Program aere promtioted to Pilot-in-I raining Fund Act. The agency also began standardizing towboat charges for

April 2-Installation of a tea t iig and miter gate repair facility aas routine transit service

completed at the Mt. Hope Industrial Disision Januars 29-f he Balboa Central Telephone Office changed over to a new July 15-Completion ot project to install a nea loconotise turntable at the itch system, offering improved and broader telephone services to the

south end of Mirallores I ocks. switcy.

Juls 23-The nwa modified AXlianza-class tugboat ESPERANZA aas February 26-General Manuel Antonio Noriega's regime deposed

christened at the Dredging Division Panama's P'resident, Eric Arturo Delsalle. one day following that

August 15-Construction of a vessel tie-tIp station "as completed just President's attempt to dismiss General Noriega.

north of Pedro Miguel I ocks to improve utilization of the Pacific locks March 3-Deteriorating political atid economic situation in Panama

September 26-Agreement signed at the IUnited Nations by the United requires the Panama Banking Commission to declare an extended bank

States. Patania, and Japan to form a tripartite commission to stiid\ holiday closing all banks for an indefinite period. The Panama Canal

alternatives and or modifications to the Panama Canal Commission was compelled to transfer its accounts to the U.S. military

October 15-Gatun Lake Explosive Anchorage Expansion project was banking facility in Corozal.

completed, to provide greater anchorage space for vessels transporting March 12-The new Guia-class tugboat EIDER was delivered to the

dangerous cargoes. Commission.

November 5-Pr-emploment and incident accident alcohol and drug March 28-Due to serious political disturbances in Panama and

testing was implemented in the Commission diminishing food supplies in public markets, Panama Canal Commission

December 20-Project todeepen Gatun I ake ship channel bN three teet was began to issue food packages toemployees, payable by payroll deduction.

completed April 2-Eligible Commission employees were granted limited purchase

December 23-The President of the United States signed into laa the privileges at shoppettes conveniencee stores) operated by the I'.S.

Panama Canal Amendients Act, Public T aa 99-209. amending the military exchange system, with the approval of the U.S. recognized

proisions governing vessel accidents. President of Panama, Eric Arturo Delsalle.

April 8-President Ronald Reagan signed an Executive Order freezing

Canal payments to Pananma and placing them inescrow in the U.S. This

1986 included income tax and Panama Social Security monies deducted from

January 8-Installation of a nets locomotive turntable was completed at the the salaries of Panamanians employed by the Panama Canal

south end of M iraflores I ocks. Commission.

January 30-A project to install new higher capacity telephone trunk lines April 15-The maximum overall length allowable for commercial

and touch tone capability was completed for all locks passenger and container vessels transiting the Canal was increased to 965

May 5-A major tie\ COmputerized traffic management system "as placed feet

Mav 27-Dredging of the Atlantic entrance channel to the Canal aas into ser\ ce im the Marine I raffic C ontrol C'enter inI I a Boca to improve

traffic management and control. completed

June 6-T1 he Federal Implosees' Retirement Svstemn IFTFERSI replaced] the July 5-Based on humanitarian criteria, the Commission was authorized to

reinstate certain pay ments to the Panama Social Security System, which ('I\ul Service Retirement S\ stern(CSRS) for U.S. citizen employee hired "eespndd\thAri8 acre xCII Oe, suspended by the April 8 Executise Order, since 198,

.August l-Recommissioniitg ceremms sas held for the nesl\ rnosated July 13- The Panama Canal Commission Board of Directors suspended

MINDI dredge the regulation pertaining to the number of regular meetings to be held in

August 4-The ness moditifietd Aliata-class tugboat PAZ aas trnall Panama pending resumption of normal relations between the U S. and

accepted bs the Commission Panama.

October 3-1aim I ake Antchtirage I s patisitot Ptolect \\a, completed August 16-Panama notified the Cotnmission that public services in the

Canal area would be proxy ided on a lesser scale, aith the exception o fire October 13- A major landslide occurred in the area of Gotld H ill in Gaillard adptiepttein

Cut, nearly closing the Canal. Ship traffic was limited to one-way n oiertcin

n't tSeptember 15-Dredging awork to lesel the bottom profile of the Pacific

passage in the slide area Normal transit operations "ere restored on T~ecember 23enitrance chattnel wsas begiitt

October 14-Construction work was initiated for the installation o a new

locks tire protection system at NIiraflores T ocks. Completion is

scheduled during VY 1990, 1987 Nosember 18- The Miraflores Locks approach channel radius aas

JanuarN 14-T tc nca locks toeing lotomotises were deliscred it the increased to allots greater maneuserability of wide beam vessels in this

Pa in ia ( anal area.

34
December 23-A long-term project to rehabilitate 57 locks toting May 18-Record toll of 5f109,65360 paid hb passengeci hip SI \P

locomotives and 3 electric locomotive cranes %%as completed. PR INCI SS

December 15-Completion of a project to replace all PCB tspe May 19-Ihe Commission began to aul thOri/c eligible eImpI ees I

transformers at Gatun Locks with new cast coil transformers. A sinilat relocate their dependents at Commnission cS pense undei a rc xed

project is underway at Pedro Miguel and Miraflores Locks. Voluntary I emporar Relocation Progianm, duc to COn 101111

deteriiration of the political and economic sitatIoisx In 'aaiIa 1989 June 1-Mr Robert W. Page was elected as Chaitman. Board of ITiiecirs

January 1-The administration of the Federal Fmployees Comnpensation of the Panama Canal Commission, to succeed William R (anell

Act was transferred to the U.S. Department of Labor, A hich assumed the July 10-A pi oject to install a new locomotise turt able at the noi ti end of

responsibility for adjudicating and processing claims of Commission MI iraflores I ocks "as initiated,

employees under the Act. August 11-Wkidcing of Bohio Curse %%as completed to iiprme

March I-Contracted bus service and transportation alliance were nasigational safet\ and manciiserabilits

provided to eligible Panamanian employees due to problems stemming August 15-I he Panama Canal celebrated its 75th %ear of service t) %torld

from the political crisis in Panama. The bus serve ice was discontinued on shipping, commemorating the first official transit of the SS Ancon on this

August 31, 1989. day in 1914

April 3-A project to install a new locomotive turntable at the north end o August 19- Iwo ne 50-loot high speed passenger launches 'Aere delivered

Gatun Locks was initiated. to the Panama Canal, to serse as trans-Isthmian waterbUse, beginning

April 16-The Office of Inspector General (formerly the Office of General October I

Auditor) was established as required b U. S. law. September 1-1he Noriega regime announced the appointment of a

May 7-Presidential elections were held in the Republic of Panama. pro% isional president and cabinet

Former U.S. Presidents Gerald Ford and Jimmy Carter, several .S. September 30-A long-term program to rehabilitate some 50.000 feet of

Congressmen and international observers were on the Isthmus to witness to"wing locomotive track at the locks. including water and landside rail.

the balloting process. rack sections and conductor slot was completed. I he Panama Canal

May 10-The Noriega regime annulled Panama's May 7 presidential Commission ended the first decade of operations under the Panama

elections. Canal Treaty of 1977

A large automobile carrier passes

under the "Bridge of the A mericas"as

it prepares to leave the Canal for the

open seas following a southbound

transit. Another vessel initiating a

northbound transit is visible in the

foreground.

35
CCL)

GATUN LOCKS -CRISTOBAL

OF

PANAMA

Borro Colorodo Is

'.o MADDEN DAM

GA MBOA

R E P U BL I C

0 F

PAN AM A

GLLARD CUT

\rteomerican Flw

L/

P E D R MIGUEL LOCKS 

MIRAFLORES LAKE

MI/AFLORES LOCKS .-

-6 LBOA

.---. PANA Ma CITY

36
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