Canal will generate less income
The financial contribution of the Panama Canal to the State for the period 2017-2021 will be 45.3 percent lower than the initial estimate on the enlargement, according to official figures analyzed by the Panamanian press.
The latest projections of the Ministry of Economy and Finance (MEF) for the years indicated were $15,303 million, but in a last adjustment that figure dropped to $8,533 million, said the newspaper La Estrella de Panama.
Such a statement coincides with findings put forward recently by economist Juan Jované, who said that the expansion, considered the key assumption to ensure the growth of the national economy, will occur at a moment that is not optimal, because there is a clear slowdown in trade in the real world. The reasons cited by the newspaper are the new global macroeconomic scene, the wage increases demanded by workers and competition from the Suez Canal administered by Egypt, together with the potential climate change, the opening of the North West Passage route and the Nicaragua Canal.
Low oil prices will incentivize avoiding the Panama Canal, and together with other factors reduce by $50 million the proceeds from the route this year, reported the Panama Canal Authority (ACP) in March.
“That has an impact on the competitiveness of the waterway, because we charge the toll and some shipping companies tell their customers that they can carry the cargo around Cape Horn at a lower price, although it would take 15 days longer to reach the destination”, said the ACP administrator, Jorge Quijano.
Another element contributing to the decline in revenue for Panama, will be the draft reduction by 15 centimeters (distance from the waterline to the bottom of the hull) for ships that make transisthmian voyage, caused by the severe drought and high evaporation from high temperatures.