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landslides and other acts of nature which would require immediate corrective action and the use of capital resources.
The experience of Canal operators over the years demonstrates the need for capital expenditures on projects not anticipated nor included in the capital program at the time of origination. For example, marine accidents were responsible for destruction of the softnose center wall protectors at Pedro Miguel and Gatun Locks; emergency action was necessary to restore the launch landing at Ft. Davis used to transport workers to and from transiting vessels; and a survey at the Locks disclosed that latches for the miter gates, an essential component or our flood control contingency plans, were either deficient or missing. In each instance, immediate remedial action was taken and all work was approved by the Board of Directors of the then Panama Canal Company, in accoi d with policies and procedures in effect at that time. In all of these cases, time was critical and deferral of work to satisfy procedural requirements of the normal budget cycle would have been unwise and in some cases hazardous to safety. The cost of any such project would be absorbed within the fund limitations established for the project category to which it would apply and within the total of the capital appropriation.
LIMITATION ON MAINTENANCE AND ALTERATION OF FACILITIES OF THE GOVERNMENT OF PANAMA
The House Bill limits expenditures to $3,724,000 for maintenance and alteration of facilities of the Government of Panama which are used by the Commission. The agency request was for $5,109,000. Although it is not apparent from the title, this category of expenditure includes the upkeep and improvement of employee housing, and for 198 1, the total amount requested is targeted for this purpose. While ownership of Canal housing resides with Panama, the Commission retains use rights. Accor dingly, the impact of the proposed limitation falls directly on the employee and his family in the form of reductions to his standard of living, and indirectly on the Commission in lower morale of the work force with its productivity consequences. Deteriorating housing facilities would also affect the capability of the Commission to recruit and retain the necessary skilled employees.
Housing is considered by our employees to be second in importance only to their pay. The quality of Canal housing, on the average, is only fair, but it is adequate for the area and our situation. More than 50 percent of the housing inventory is over 30 years in age and quarters here incur an accelerated rate of deterioration due to the tropical environment. The programmed maintenance and improvements contemplated in the $5,109,000 requested are considered to be the minimum amounts required for furnishing a merely acceptable level of quality of accommodations for our work force. The proposed limitation constitutes a substantial reduction resulting in an extremely adverse impact on employee morale and an attendant detrimental effect on recruitment and retention efforts. Furthermore, recognizing that we will not construct any new housing units in the future, it is incumbent on the Commission to maintain those quarters available ini a manner that will extend the useful life of the houses to the maximum term possible. For these reasons I ask that the amount providedin the House Bill be restored to $5,109,000.
HIRE OF PASSENGER CARRYING VEHICLES
The Commission hire of passenger carrying vehicles covers two contracts for shuttle-bus service to transport deckhands and certain locks employees to and from their job sites. The contracts are full-service contracts covering drivers, fuel, vehicle maintenance and repair and other contractor costs. Due to the volatility of the fuel market, the contracts are not fixed-price contracts. There are escalation clauses which allow the contractor to pass on certain costs incurred.
The shuttle bus service is an indispensable component of the Commission's overall transit function. The loss of this service would severely disrupt the movement of vessels through the Canal. With the potential for sharp increases in contractor costs, any estimate of future costs is highly susceptible to change and an operational limitation based thereon is not a prudent action. The shuttle bus service is far too critical to our mission to be exposed to such a risk. Therefore, I request that no limitation be imposed on this essential transit service.
OPERATION OF GUIDE SERVICES
The Commission's guide service activity consists of two principal operations. One is the operation and maintenance of the motor launch, Las Cruces, and the other is the operation of visitor facilities at the Lock sites. Operation of visitor