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Panama's sponsors could wait in vain for full concessions
26 October 2011
Panama has forgone concessions to self-finance new infrastructure and its biggest infrastructure borrowers are semi-autonomous public bodies. There may be limits to government borrowing capacity, however.
Edward Russell reports from Panama City.
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Panama is witnessing dollars of investment in transport, healthcare and urban renewal projects. The flood of new money is all part of president Ricardo Martinelli’s $13.5 billion, five-year national investment programme.
These turnkey infrastructure projects are everywhere. Transport projects include more than $1 billion in upgrades to the Panama City road network and $360 million for new national highways. Airports are getting more than $200 million and transit projects include the $1.9 billion Panama City Metro as well as the $468.2 million Metrobus concession.
The programme is not limited to transportation, $360 million is going towards five new hospitals, four new prisons are being built and there is talk of a $360 million government city and future financial tower in Panama City. This flurry of activity lacks one thing common in other top-tier Latin American economies – long-term concessions.
Panama has several differences with the surrounding region. It has a services-oriented economy compared...
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