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A. Training that will contribute to increased participation by Panamanians in all areas and levels of the Commission as required by the Treaty is receiving added emphasis.
B. Mechanisms have been established to maximize hiring of qualified Panamanian nationals. Already implemented is a system whereby Panamanian applicants who achieve a passing score on the entrance examination are awarded 11 additional points.
C. A five-year rotation policy for off-the-Isthmus recruits has been established, as required by the Treaty, in order to facilitate meeting local recruitment goals.
These are only a few of the policies being included in the proposal that will eventually become the Panama Canal Employment System. Suffice it to say that we are committed to the training and development of Panamanians over the course of twenty years. A key to Panama's ultimate success is their involvement in the employee selection and classification process. They must be able to identify, hire, train and retain the best people available for the Canal operation.
On May 27, the President signed Executive Order 12215 delegating to the Secretary of Defense certain powers and functions derived from Public Law 96-70. The order includes a requirement to exercise specific functions regarding Canal management, operations and maintenance through the Panama Canal Commission by redelegation of authority or other means. This Order replaces the temporary one issued last November. I continue to carry out the Secretary's functions with regard to the Commission.
I am pleased to report that the U.S. and Panama exchanged notes on March 25, 1980 that provided for a payment schedule for annuity, tonnage payments and public service cost reimbursement to Panama, and the repayment by Panama of the previously disputed back debt. The first check to Panama was presented that same day in the amount of approximately $29 million. This covers payment of five months of the annuity, public service charge, and tonnage payment to Panama, less one quarterly payment on the back debt and the whole of the debt accruing to the former Canal Zone Government and the Panama Canal Company from July 1 thru September 30, 1979. Checks of approximately $5 million were presented to Panama in April and May. These checks represent the monthly payments to Panama, less another quarterly payment toward the debt. The entire debt will be recovered by December 1981 thru quarterly offsets to the monthly Treaty payments. With the exchange of notes, any debt not paid by the Central Government of the Republic of Panama within 30 days of invoice will be offset against the next monthly payment.
CANAL TRAFFIC
We had anticipated increased shipments of North Slope Oil at the beginning of this fiscal year and had predicted that shipments would reach 500 thousand barrels per day in December. These shipments were late meeting our expectations, For the first eight months of this fiscal year, the daily average was 394 thousand barrels, with a maximum throughput of just over 500 thousand barrels per day in May.
We have noted a slight overall increase in the total number of oceangoing vessels transiting the Canal over the same period last year. However, principally because the increase in shipments of North Slope oil has failed to materialize, we are approximately $6 million below budget in toll revenues as of the end of May. In light of this, we have applied stringent budget constraints to assure we remain close to a break-even point by years' end, and we are approximately on target.
FISCAL YEAR 1981 REVENUES AND COSTS
Mr. Chairman, I have estimated-and as required by law the General Accounting Office has certified-that the revenues to be deposited by the Panama Canal Commission into the Panama Canal Commission Fund during fiscal year 1981 will amount to $406,363,000, of which $313,940,000 will come from tolls and $92,423,000 from other services. I further estimated that, in addition to those operating revenue receipts, the Panama Canal Commission wiil deposit into the Panama Canal Commission Fund in fiscal year 1981 certain other funds amounting to $3,750,000 comprised of collections from the Government of Panama Canal Company and Canal Zone Government accounts receivable and funds received from various sources. Total deposits for fiscal year 1981 in the Panama Canal Commission Fund are thus projected to be $410,113,000. This, coupled with the unexpended balance of the fund from fiscal year 1980, will far