Alberto Aleman Zubieta
Veteran hand steers canal through expansion
PANAMA CITY, Panama — Just before December 31, 1999 — the day the United States handed Panama control of one of the world’s main arteries of maritime trade — a reporter asked Panama Canal CEO Alberto Aleman what came next. “January 1, 2000,” he said, confidently trying to calm global concerns that a tiny country a decade removed from military dictatorship could be a worthy steward of the strategic waterway.
Those were nervous times. Although the canal’s transfer proudly made Panama a sovereign, contiguous country — the 50-mile waterway and a 10-mile-wide buffer zone around it belonged to the United States — most bets were that Panama’s government would bungle the famous shortcut between the Pacific and Atlantic oceans.
“In those days there was a lot of doubt externally, as well as internally, about the capacity of Panama running this very important waterway,” Aleman says in an interview with Latin Trade.
“[It] was being transferred from the most powerful nation in the world to a very small country in Latin America.
“People thought we were going to run this very badly,” he says.
Time and Aleman proved the skeptics wrong. The Panama Canal transformed from a break-even U.S. military installation to the highly profitable bedrock of one of the most dynamic economies in Latin America. It is now undergoing a $5.25-billion expansion that Aleman says will be a “game changer” for maritime trade when completed in 2014. The massive infrastructure project already is sending ripples through the shipping industry as U.S. ports prepare to handle post-Panamax ships, vessels nearly three times the capacity of the largest that now transit the canal.
Aleman, 60, is about one year removed from the end of his tenure as head of the Panama Canal Authority, or ACP for its initials in Spanish, and he looks back proudly on how far the canal has come.
The Texas A&M-educated civil engineer first became involved with the canal in 1995 as the U.S. Army Corps of Engineers was preparing the Panama Canal modernization before the handover. As the CEO of Panama’s top engineering firm, Constructora Urbana, Aleman handled Panama’s review of the Corps’ evaluation. Aside from a $700 million renovation of the waterway, the joint studies also showed that the canal was near capacity and needed to expand to avoid becoming obsolete, Aleman says.
Soon after the review, Panama’s then-president, Ernesto Pérez Balladares, asked Aleman to make a serious career change: Relinquish the reins of his successful family business and run the sovereign canal. He would have to secure the canal’s much-needed expansion and turn the waterway into a service-oriented and competitive trade route — all while keeping Panama’s notoriously weak government institutions at arm’s length.
Before the handover, the Panamanian government amended its constitution to guarantee the canal’s autonomy, and successive presidencies haven’t pressed the canal’s healthy finances. Last fiscal year, the Panama Canal produced almost $2 billion in revenue and generated $964 million in net income.
“The separation [of the canal and central government] is very clear in the law itself,” Aleman says. “Part of the mandate … is that the canal should be separated from party politics.”
Aleman’s biggest challenge as canal boss —other than running a successful campaign for the referendum to permit the canal’s expansion — was turning the canal into a service-oriented and for-profit business, much to the chagrin of many in the shipping industry.
“The mindset was important to change,” says Aleman, referring to clients and also to the canal’s employees, who now are 10,000 strong.
Aleman’s office in the administration building offers a view of the Pacific entrance to the Panama Canal, and he uses it to illustrate how radically Panama has changed since taking charge of the waterway. An increasing number of airplanes buzz past the ACP building to land at Panama City’s expanding domestic airport, soaring over ever-higher mountains of containers, the port of Balboa and the Pacific terminus of the rail line that crosses Panama adjacent to the canal.
One of his favorite statistics is that in 1990, Panama’s ports moved fewer than 200,000 containers. Last year, Panama’s Atlantic and Pacific ports — Colón and Balboa — became the top two in the Latin America and Caribbean, handling about 5.56 million containers. The expanded canal should drive the upward trend even higher as maritime traders use Panama’s ports for increased regional hub activity, Alemán says.
“[The expanded canal] will cement Panama as the most important transshipment and logistics hub of the Americas, and that creates jobs and that brings companies to use Panama as a platform,” Aleman says. “The success of the Panama Canal is actually a success of the Panamanian people.”
As Aleman prepares to end this chapter in the almost-two-decade relationship with the Panama Canal, he reflects on a career of bold choices. Almost four decades ago, he left a well-paying job at a cement company for a lesser-paid position as an assistant in the family construction firm’s inventory department. En route to becoming CEO there, he worked seven years in camps while building roads in Panama’s interior. He cites the advice of his mother for the career path he has taken. His next steps could include starting a new company, doing consultation work or writing a memoir of his place in Panama Canal history.
“The only thing that no one can take away from you is what you know, so you should study and you should always be learning,” he says, recalling his mother’s advice to her children. “Every single day you should learn something new because no one is going to take that away from you.”
As for the canal, a successful on-time and within-budget expansion is not enough.
“The last thing you can do is be complacent,” Aleman says, adding that he hopes the canal eventually can begin exporting its knowledge and expertise. “The canal will need to continue to change in order to be successful.”
Filed Under: BRAVO 2011
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