Panama Investor Blog

$2 billion investment includes 4 lane to Boquete

The Ministry of Economy came out with its spending plan for the next several years which includes the funding for the four lane road to Boquete from David. The last administration also promised this road and nothing came of it except some public meetings to tell us it was going to be done. Most people agree that this would be a benefit as the road is usually very busy and until recently had a great deal of construction traffic to contend with. Another important project they mention that has been talked about a great deal is the lengthening of the airport in David to accommodate large jets.

There are a number of other projects including the metro, but not a lot of detail. In any case here is a translation of the article that appeared in La Prensa today.

The government wants to implement in 2010 a public investment program of at least 2 billion dollars, reported yesterday by Minister of Economy and Finance, Alberto Vallarino.

 "The initiatives for next year are fairly clear: the subway, the city government, the expansion of the Canal, the sanitation of the bay.  And among the new ones, eg, Civil Aeronautics will include in its budget the size of airports in Columbus and David, "he said.  Also provide funds for the first phase of the road, Divisa-Las Tablas, the four-way road to Boquete, the new channel transísmico dry, the expansion of the David-way stretch and Veraguas Santiago-La Mesa.

  Moreover, said the comptroller Carlos Vallarino, is referred to the expansion of Tocumen Airport, with the north pier for $ 70 million.  This work was supported by the Comptroller.

Bocas-Chiriquí highway in the works-Say it ain't so!

This came out in the paper today and based upon my knowledge of this area they are barking up the wrong tree. First of all there is a road that goes from the inter American highway to Almarante and Bocas. Yes, it is constantly being washed out, but it is functional and an investment in making it better and safer makes a lot more sense than trying to build another one that goes through Boquete. I have hiked up to the top of the range and looked over at Bocas and I can tell you a road through there would be impossible. It would also be an environmental disaster. This is all pristine forest and should be left alone. I don't believe it will ever happen.

Excerpt:

A proposed highway linking the provinces of Chiriquí and Bocas del Toro would have a dramatic impact on the shipping of goods throughout the country, according to a report by the Ministry of Public Works.

The highway would be like a "dry canal," ministry officials said, because it would link several important port facilities.

The highway would start in Puerto Armuelles on the Pacific Coast, and then wind through David and Boquete before crossing the province and connecting to a port in Bocas.

Read the rest of the story

Free Internet for Panamanians

Source: pa-digital.com.pa
Thursday, July 23, 2009

Panama's main cities will enjoy free wireless internet access, within the first 100 days of the new government.

With the goal of having "border to border" coverage, Martinelli's government will initially invest $250.000 to service 10 cities, with coverage in parks, touristic sites, schools, libraries, universities, hospitals and health centers.

"Panama is currently the most advanced Central American country in Information and Communication Technologies, and, in accordance to the road-map developed by the Panamanian Chamber of Technology, in 2018 it will become the first Information and Communications Technology Hub of the region", said Eduardo E. Jaén, head of the Secretary for Governmental Innovation.

Technical designs and public purchasing processes are being prepared, to implement this project within the first 100 days of Ricardo Martinelli's administration.

Cinta Costera photo's

These recent photo's sent to me by Tomas clearly show a lot of progress being made on this important infrastructure project. When you consider that this was water and mud just a year ago it is an amazing testimony to the ability of men to move dirt. there has been a lot of controversy surrounding the project but at least it is nearly completed and will soon help to alleviate driving pressures in the city.

Panama pedestrian unfriendly

If you have ever tried to walk in Panama city, crossing the streets or just walking on a sidewalk can be hazardous to your health. Panama is a city where pedestrians receive no special protection and it even appears that every effort has been made to make walking prohibitive. This, in a country where most do not have cars is hard to believe, but it comes down to planning and that is in short supply in Panama. It is interesting that master planned projects out in the hinterlands and beaches must make all allowances for pedestrians even though there are few people walking around there.

Excerpt from La Prensa;

Some cities are known for being a walker’s paradise. Take for example London, Amsterdam and Savannah, Georgia. Panama City is not one of those. Those unfortunate enough to have to hoof it often encounter a sort of obstacle course of vehicles, crumbling sidewalks, and holes that plunge into an abyss. Other walkways are blocked by food vendors, piles of garbage and seemingly interminable construction work.

The few sidewalks or shoulders of roads that exist are usually used as parking spots. And crossing signals remain luxury items.

This is what happens when urban public policies have been geared to building a city around cars and not pedestrians, explained Arturo González, a civil engineer and former director of Operations at the country’s transportation authority, ATTT.

Ministry cancels 65 public works contracts

I understand the challenges the MOP has to deal with when it comes to contractors, especially for major works such as roads and bridges. There have been a number of projects  canceled during the construction process due to failure on the part of the contractor.

Adriano Ferrer, head of the ministry's Department of Inspections, said the canceled contracts are for works in various parts of the country and they have levied fines amounting to about $400,000 against companies that failed to finish projects or used materials that were not adequate.

The official said this action is considered a last resort by the ministry, after all other attempts to rectify the situation have failed.

The ministry requires companies to post performance bonds to ensure that the work will meet the contract specifications.

Planned hi-way for the Atlantic coast needs careful evaluation

There have been rumors of this road project now for the last 5 years and according to this article in LA Prensa today, the road along the Atlantic coast from Colon heading north to the province of Bocas Del Toro is under serious consideration. The only justification given is increased tourism. There is no doubt that the areas beauty and history would justify responsible eco-development. A number of small projects have been built between Porta Bello and Nombre De Dios and considerable land speculation has taken place as well.

My concern is that the government continues to make grandios plans, but is not taking care of the roads in areas where there is significant tourism development already such as in Boquete. Here we have the road to David in some places needing serious repairs. Construction traffic has caused some areas of the road between the Caldera turnoff and Dolega to nearly disintegrate. This, in a high traffic area where thousands of vehicles must pass each day. In the town of Boquete itslef, we have potholes that get ever larger, with the excuse from the ministry of public works that there is no asphalt available. We just repaired major potholes on the short 300 meter road from Valle Escondido to town and were able to buy asphalt at $550 for a 55 gallon drum. Obviously it is available if you are willing to pay an inflated price for it.

My other concern is the amount of money that will be required to build the road at a tme when the country has high debt and is adding to it almost daily wiht the announcements of new projects or cost overruns of existing ones. There are many development projects that have been underway all over Panama that are now having difficulty in sales due to the economic meltdown. As much as I would like to see responsible development along the Atlantic coast, I believe a $350 million is ill-conceived at this time.

Excerpts: The 230-kilometer highway would link the towns of Miguel de la Borda, in Colón, and Rambala, in Bocas del Toro. The $350 million project would take three years to complete.

This road, christened by the MOP as “The Gran Costanera,” is the largest of 10 major highway projects that the agency has scheduled to take place between 2009 and 2014. These projects have been identified as “priorities” in improving the capacity and effectiveness of the transportation system.

Ho said the total cost of all 10 projects is expected to be about $1 billion.

The Autoridad de Turismo de Panamá (ATP) has come out in favor of the project, saying that it has been unable to develop tourism-related projects in the area because of a lack of accessibility.

“The northern area of the country has great potential for tourism development,” said Ricardo Ledezma, of the ATP.

Read the rest of the story

Government underestimates road cost by nearly 80%

An article from La Prensa demonstrates governments ability to get realistic quotes and control costs of large infrastructure projects. The road from Panama City to Colon is now expected to cost $164.2 million more than its initial price tag of $215.8 million. I was on this "road" last week and I would wonder now how they can be sure of this new revised cost estimate. There are trucks and machines everywhere but little actual new road has been laid. They now claim it will be ready in April of 2009, but from what I saw last week, I would bet they are a year off on this estimate and a number of millions short as well.

Excerpt;

Benjamin Colamarco, the ministro de obras públicas, said yesterday that the project's final cost had spiraled to $380 million. The new price includes extra money being spent on building an additional access road to the highway near Colón.

While the minister waited until yesterday to announce the project's inflated cost, an independent group had been warning for months that the price was vastly underestimated by the government.

A committee formed by the Sociedad Panameña de Ingenieros y Arquitectos (SPIA), announced in September that it had studied the project and estimated that the actual price was going to be much higher than the government's estimate.

In announcing that finding, Nicolás Real, the committee chairman, said the ministry did not follow its own procedures in estimating the cost.

The committee also said the government had based its price on a faulty estimate of how close the project was to completion.

While the government's estimate was 70 percent, the committee said the project was actually only about halfway done.

Read the complete story

GDF SUEZ Builds Hydro Plant in Panama

Panama is getting more hydro electric plants and this press release says they will be in our province of Chiriqui and I believe near the town of Boquete. I have heard there are some locals and environmentalists who are protesting these projects, so I am not certain of their legal status at this time. This press release from Marketwatch about GDF Suez and its plans for the projects shed some additional light.

Excerpt;

            PARIS, September 29, 2008 /PRNewswire-FirstCall via COMTEX/ -- A subsidiary of GDF SUEZ will start the construction of a 115 MW run-of-the river hydro project following an auction for energy companies which took place on 9 September 2008.        

           

            As a result of this auction, 100 MW have been sold to distribution companies for a period of 10 years, between 2013 and 2022. GDF SUEZ will provide 6,000 GWh for the length of this period.        

                   

            The hydro power plant will consist of 3 units to be built in sequence down the Chiriqui river.        

           

            This hydro development enlarges the Group's local offer of energy sources. It will lead to more stable energy prices, reducing the dependency on fluctuating fuel prices which in the end will be beneficial for the end-consumer in Panama.

Read more about this here...

Panama, best for ease of import/export

According to a Latin Business Chronicle analysis of new data from The World Bank, Panama replaces El Salvador as the least-expensive country in Latin America to export from while Venezuela is the worst.

Excerpt: Panama remains Latin America's leader when it comes to the overall environment for exporting and importing containerized goods, while Venezuela is the worst country, according to our analysis of the bank's Doing business survey for 2009. >Exporting a container typically costs $729 in Panama, the lowest price anywhere in Latin America. Other countries with the lowest prices include Chile ($745),  ($875), El Salvador ($880) and Paraguay($915).

"On the opposite end is Venezuela where it now costs a whopping $2,590 to export a typical container.; It's also 53.3 percent more expensive than in neighboring Colombia which has the second-highest price in Latin America per container ($1,690). Other expensive countries include Argentina ($1,480), Mexico ($1,472) and Bolivia ($1,425).