Editorial: Regrettable incident at the Colón railway

An incident occurred in Colon on January 16, 2017, typical of a fourth-world country, which should never be repeated: The Municipal Council of Colón, headed by Mayor Federico Policani, decided to sit on the Panama-Colon railroad tracks at the Colon station to protest against the Panama Canal Railway Company (PCRC) administration because this company “does not contribute municipal taxes, nor does it support it in its social works.”

The transisthmian railroad provides a vital service to the logistics center of Panama and its operation by the US consortium PCRC is governed by Law 15 of 1998. Payments to the State are contemplated in clause 8 of its contract law, a commitment that, according to official reports, the company has been complying with rigorously.

Panama Canal Railway Company (PCRC)

Panama Canal Railway Company (PCRC)

PCRC, a consortium of prestigious US companies, Kansas City Southern Railway and Mi-Jack Products, has as its central business the transport of containers between the ports of Panama and Colón, but its contract includes the provision of passenger transport services. Both services have been providing the country in an efficient and reliable manner, contributing to the consolidation of the country as a logistics center, cargo transshipment and tourism.

Under the contract, the railway company is committed to invest $30 million, but to date has invested more than $200 million. Aside from paying the State 10% of its gross income, which amounts to about $10 million annually, it pays to the treasury the amounts corresponding to the income tax and workers’ and employers’ contributions of Social Security.

Regarding its indirect contributions, PCRC spends about $25 million annually on purchases of goods and services, most of them – more than $12 million – in the city of Colón. Its economic activity benefits buses, taxi drivers, truck drivers, parts suppliers, repair shops, tour operators, heavy equipment rentals, security equipment, private security, vegetation control, quarries, restaurants and individual food suppliers. In addition, the company has its own social responsibility program, which it manages according to the parameters of its shareholders.

PCRC also announced that once the construction of the Port of Corozal is formalized, the company will begin the procedures to invest more than $75 million in expansion works and improvements, in order to adapt the system to future demand. This expansion will certainly bring additional benefits to the city of Colon.

What the world-projecting companies require, such as the consortium that operates the centennial Panama-Colón railroad, is the support of the authorities and those sectors that benefit from their operation. Its efficient and reliable service is essential in the plan to turn Panama into a logistics center of the Americas.

Before pushing irresponsible actions, such as that which motivated this comment, the municipal authorities of Colon must understand that Panama’s logistics future depends on the reliability of all the links in the chain that operates in the country. This is particularly true with fixed-route services.

In the logistics business there is a fundamental maxim: the chain is as strong as its weakest link. Rather than hinder the operation of one or several links in the logistics chain, the authorities are there to support and strengthen them.

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