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Answer. Senator, I don't believe I recommended any changes to the Panama Canal Act of 1979. The Act, as you know, requires the President to submit to Congress by October 1, 1981 a request for such legislation. We are considering a number of items that might be developed into specific proposals, but it is much too early to define them as "recommended changes."
Question. What financial problems do you envision in the long term?
Answer. I currently have no basis for identifying any specific financial problems in the long term. The Canal continues to be susceptible to factors beyond its immediate control, such as the world economic picture, world trade patterns, alternative means of transportation, and the advance of technology, that all have significant effects on the Canal traffic and tolls. The Canal has remained financially self-sufficient through traffic growth and recent toll increases. I don't anticipate anything to the contrary.
Question. How important is the guide program to the Canal operation?
Answer. Ti:e importance of the Panama Canal Guide Service as a public relations tool has been readily apparent since its inception in 1962, but it has become even greater under our new relationship with the Republic of Panama.
Question. Why is it needed at all?
Answer. The Guide Service conducts orientation tours and gives briefings on the Canal operation to local civic and educational groups, U.S. and foreign military, and visiting government officials and diplomatic personnel from many nations. At the request of the American Embassy, we recently instituted periodic tours and briefings for newly assigned personnel. These services increase understanding of Canal operations and foster friendly relations between the many diverse groups having an interest in the waterway.
More than 300,000 people from all walks of life visit Canal installations each year. Handling of these visitors in an orderly manner is of the utmost importancenot only from a public relations standpoint but as a matter of their safety. If there were no guide service, these installations would have to be closed to the public, thereby depriving visitors of the opportunity to gain first hand information about the Canal.
Question. Has it ever paid its own way?
Answer. The Guide Service is not a revenue producing operation. It has, however, produced immeasurable returns in good will and understanding of the U.S. presence in Panama. There is no cost to the U.S. taxpayer in providing the service.
Question. What provisions of the 1979 Act do you feel have been ineffective or a hindrance to Canal operations?
Answer. I have not found that any of the provisions were ineffective, nor have any thus far adversely affected the efficiency of the Canal operation in any significant way. There are several provisions that have proven to be very cumbersome to the management of the Canal operations. I particularly would cite applicability of Title VII of the Civil Service Reform Act to the Canal area as difficult at best. The steps to union recognition are still in progress. To date, only one petition for recognition has been finalized. Because of the significant differences between Panamanian labor laws and Title VII, I anticipate considerable effort will be devoted just to the implementation phase.
The changeover from corporate to appropriated form of the agency has led to many difficulties also. This situation was exacerbated by the short time allowed for the transformation.
Finally, we will only know after further experience whether the requirements relating to selection of U.S. Board members, and the lack of a "proxy" device in relation to the quorum requirement, will hinder effective and efficient operation of the Board; that could potentially be a problem.
QUESTIONS SUBMITTED BY SENATOR STROM THURMOND, ANSWERS SUPPLIED BY
DENNIS P. MCAULIFFE, ADMINISTRATOR, PANAMA CANAL COMMISSION
MAINTENANCE COSTS
Senator THURMOND. Mr. McAuliffe, your fiscal year 1981 request shows a sizable increase in funds for maintenance in the areas handled by Panama. Why is this increase necessary?
Mr. McAULIFFE. The 1981 budget request provides for additional funding for maintenance and equipment overhauls in the transit operations area. This additional amount includes maintenance and overhaul of dredging equipment, restoration of spoil dump areas, tugboat maintenance and overhauls, major maintetenance on lock structures and equipment, and on-going maintenance of other