PANAMA CANAL RAILWAY RIDES AGAIN.

Service on the newly reborn Panama Canal Railway was to be inaugurated June 18, with luxury trains whisking passengers in style between Panama City and Colon, along a 47-mile track that roughly parallels the Panama Canal, reports our correspondent Larry Luxner (Email: larry@luxner.com):

The railway is a three-way venture led by Kansas City Southern Railway and Chicago-based Mi-Jack Products, a manufacturer of intermodal cranes and other lift equipment; each of those partners has a 40% interest in the project. The International Finance Corp., an arm of the World Bank, has the remaining 20% stake;

The US$75 million venture represents the first serious investment since the railroad, originally built in 1855 at the height of the California gold rush -- was more or less abandoned in the late 1980s, says Starling. Things began looking up in 1995, when the Endara Government privatized Panama's two leading ports. "This created the critical mass of transshipment cargo that justifies the railroad's role in the multimodal concept," said Starling;

In February 2000, after defeating Bechtel and several European contenders for the 50-year Government concession to operate the railroad, Kansas Southern and Mi-Jack began actual construction. We will pay the Government a royalty on our gross revenues," said Starling. He predicted that the railroad will begin turning a profit by the end of its second year in operation;

Freight will account for 80% of all revenues, he said, adding that his operation will offer a high-volume, double-stack service between Pacific and Atlantic ports, including the Colon Free Zone. Freight is so important to the project that passenger service was almost an after-thought. For those traveling on a monthly pass, the daily fare will be only US$25 round-trip. Details: Thomas H. Kenna, marketing director, Panama Canal Railway Co., P.O. Box 2669, Balboa, Ancon, Panama. Tel: 507 317-6070, x138. Fax: 507 317-6061. Cellular: +507 612-7050. E-mail: tkenna@panarail.com