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ORIGIN ARA-10
INFO OCT-01 ISO-00 SAB-01 CIAE-00 COME-00 DODE-00 DOTE-00
EB-07 FMC-01 INR-07 NSAE-00 SAL-01 CG-00 DLOS-04
OES-06 NSC-05 SS-15 NSCE-00 SSO-00 USIE-00 INRE-00
PA-01 PRS-01 H-02 L-03 TRSE-00 /065 R
DRAFTED BY ARA/PAN:DGWAGNER:ZC
APPROVED BY ARA/PAN:EJNADEAU
--------------------- 107802
O 062101Z MAY 76
FM SECSTATE WASHDC
TO AMEMBASSY PANAMA IMMEDIATE
C O N F I D E N T I A L STATE 110029
E.O. 11652: GDS-3 DECLASSIFY AFTER 5/8/76
TAGS: EWWT, ETRN, ETRD, BGEN, PN
SUBJECT: PANAMA CANAL TOLL RATE INCREASE
FOR AMBASSADOR JORDEN AND MINISTER BELL
1. THE FOLLOWING IS A PRESS RELEASE WHICH THE PANAMA
CANAL COMPANY WILL RELEASE THIS AFTERNOON AFTER THE PAN-
AMANIANS ARE NOTIFIED BY THE NEGOTIATORS. WE WILL CALL
YOU THIS AFTERNOON TO FILL IN THE BLANKS WHEN WE FIND OUT
THAT INFORMATION.
2. BEGIN QUOTE PRESS RELEASE MAY 6, 1976
THE BOARD OF DIRECTORS OF THE PANAMA CANAL COMPANY VOTED
ON THURSDAY TO SEEK A PERCENT INCREASE IN CANAL
TOLLS.
CITING INFLATION AS A CAUSE OF PROJECTED OPERATING DEFICITS
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TOTALING 35.4 MILLION DOLLARS DURING FISCAL YEARS 1976,
THE TRANSITION QUARTER, AND 1977, THE BOARD, AT A SPECIAL
MEEDING IN MIAMI, FLA. PASSED A RESOLUTION APPROVING THE
PROPOSING TOLLS INCREASE.
THE PROPOSAL MUST NOW BE PUBLISHED IN THE FEDERAL
REGISTER INVITING ALL INTERESTED PARTIES TO SUBMIT COM-
MENTS OR ARGUMENTS AT A PUBLIC HEARING IN BLANK,
WHICH HAS BEEN SET FOR BLANK. AFTER THE HEARING, THE
PROPOSAL MUST AGAIN BE REVIEWED AND, IF APPROPRIATE, RE-
VISED BEFORE SUBMISSION TO THE PRESIDENT OF THE UNITED
STATES, WHO MUST APPROVE IT BEFORE IT IS IMPLEMENTED.
THE BOARD RESOLUTION POINTS OUT THAT DESPITE ECONOMY
MEASURES DESIGNED TO CUT CANAL COSTS TO A MINIMUM CON-
SISTENT WITH EFFICIENT OPERATION OF THE WATERWAY, EX-
PENSES ARE STILL EXPECTED TO EXCEED REVENUES.
THE DEFICIT FOR FISCAL YEAR 1975 IS ESTIMATED AT 12.1
MILLION DOLLARS. DURING THE TRANSITION QUARTER (JULY 1
TO SEPTEMBER 30) LEADING TO THE CHANGEOVER TO A FISCAL
YEAR BEGINNING OCTOBER 1, AN ADDITIONAL DEFICIT OF 4.3
MILLION DOLLARS IS EXPECTED AND FOR THE FULL FISCAL YEAR
1977, IT IS ESTIMATED AT 20 MILLION DOLLARS.
DESPITE SIGNIFICANT REDUCTIONS IN MANPOWER, THE LARGEST
INCREASE IN OPERATING COSTS HAS BEEN FOR WAGES, AN AREA
IN WHICH THE NET INCREASE IN FISCAL YEAR 1977 OVER 1975
IS ESTIMATED AT 17.3 MILLION DOLLARS.
INCREASES CALLED FOR IN THE PROPOSAL WOULD BRING THE RATE
PER PANAMA CANAL TON (EQUIVALENT TO 100 CUBIC FEET OF
REVENUE CARGO OR PASSENGER CAPACITY FROM ONE DOLLAR AND
EIGHT CENTS TO BLANK. SHIPS IN BALLAST WOULD PAY AT THE
RATE OF BLANK PANAMA CANAL TON INSTEAD OF THE FORMER 88
CENTS AND THE TOLLS FOR VESSELS SUCH AS WARSHIPS AND
HOSPITAL SHIPS, WHICH PAY ON A DISPLACEMENT TON BASIS,
WOULD BE INCREASED FROM THE PRESENT 60 CENTS
TO BLANK CENTS A TON.
THE FIRST TIME CANAL TOLLS WERE INCREASED SINCE IT OPENED
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IN 1914 WAS ON JULY 8, 1974, WHEN THE PRESENT RATES WERE
ESTABLISHED. THAT INCREASE AMOUNTED TO 19.7 PERCENT.
IN ADDITION, THE PRESIDENT RECENTLY AUTHORIZED A CHANGE
IN CERTAIN ADMEASUREMENT RULES WHICH WILL INCREASE TOLLS
REVENUE BY AN ESTIMATED 4.5 PERCENT. END QUOTE SISCO
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