. Canal developments: the approach of a new era These are interesting times for Panama, with the transfer of the Canal from United States to Panamanian ownership on 31 December 1999 only a few months away. The transition has been closely planned over 20 years, and in terms of day-to-day operation the effect should be difficult to detect. Behind the scenes, however, more profound changes seem likely to emerge. The Canal will be a major asset to the Republic of Panama, and although the independence of its activities has been carefully protected by legislation the industry should anticipate a more commercially minded operation than has been the case under United States control ICS has held several discussions with the Panama Canal Commission (PCC) over the past year. The Chairman hosted meetings with the PCC Administrator and his colleagues in London in late 1998, and in March 1999 he led a small delegation to Panama. The delegation was able to see the continuing work on the widening of the Gaillard Cut as well as demonstrations of the enhanced vessel traffic management system due to be implemented later in 1999. A complex study is currently underway on the feasibility of installing a third set of locks for the Canal. By any standards a major project, the concepts under consideration range from an enormously expensive exercise to build locks capable of accommodating today's post Panamax vessels (ships too large to transit the current Canal) to a less ambitious, but still costly, scheme to provide a smaller set of locks, thereby reducing pressure on the existing locks. The new Panama Canal Authority - the body which will succeed the PCC at the handover - is not likely to rush into a decision, given the magnitude of the project and its potential impact on ship design and world trade far into the future. A worrying development during the year has been the proposal to require Canal users to bear the first US$1 million of any vessel damage or injury incurred during transit. The proposal attracted widespread opposition, less on grounds of cost than for the apparent lack of understanding about the potential implications of such a change. ICS, working together with the hull underwriters and the P&I Clubs, submitted detailed comments on the proposal and has since held further discussions with the PCC about possible amendments to the scheme. Meanwhile, the Suez Canal, operating at well below full capacity, has continued to explore ways of attracting new tonnage to use the waterway. It was pleasing to observe that, after a period when tolls were adjusted at annual intervals, they remained unchanged once again in January 1999, with some minor adjustments to remove various inconsistencies. ICS will maintain its contacts with both Canal authorities in the year ahead. .