Update on Panama's Ambitious Investment Plan
By Juan Carlos Martinez
It is now a year after the Martinelli administration took office and all newspapers and TV stations have interviews with President Ricardo Martinelli himself. Most of the articles are a recap of the year in office and what has been accomplished and what is still pending. One of the most common comments made to this administration is a lower execution rate than had been hoped on all the budgets, specially the investment budget.
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The ambitious investment plan this administration has proposed is one of the most interesting issues as many of the investments are tied to campaign promises made to every Panamanian. The investment plan for the five years of this administration requires a budget of $13 billion. There are now four years remaining and the to date, six months into 2010 the government has only executed approximately 42.7% of the budget for 2010. The government ministers have indicated that they have been slower than anticipated in the execution of the 2010 budgets in general. As for the investment budget they expect to reach 80% by the end of this fiscal year.
Government officials explain that one of the reasons for a low execution rate is the public procurement system which is an open bidding system through the e-procurement portal PanamaCompra. Within these past two months several major projects have been opened up for bidding simultaneously in order to achieve the expected execution rate for the end of this fiscal year.
The $13 billion investment plan submitted by President Ricardo Martinelli's administration is the most ambitious investment plan in the country's history. Of this $13 billion the allocation is: 47% are assigned to education, health, housing, water, sanitation and social security; 29% are assigned to infrastructure; 12% to administration and justice; 11% to the production sectors and 1% to environmental issues.
The World Bank, the Interamerican Bank for Development (BID acronym in Spanish) and the Andean Corporation for Development (CAF acronym in Spanish) have already expressed interest in financing the various projects.
Some of the projects included in this ambitious investment plan are:
· The first line of the Metro for $1.2 billion
· The Government City and the Financial Tower for $600 million
· Major improvements to the existing road network system including new highways $2 billion
· New airports $200 million
· Continuation of the Panama Bay Sanitation Project $350 million
· The Cold Chain $100 million
· Continued investment in the Water and Sewerage systems to improve and cover more areas with clean drinking water $500 million
· Convention Center $150 million
· Five new turnkey hospitals $386 million
Some of the projects listed in the investment plan have been daubed as “unforgivable” by President Martinelli, meaning that his administration will not be forgiven for not delivering on those projects. Among the “unforgivable” are the Metro, the coastal road from Colon to Bocas, the continuation of the Panama Bay Sanitation project, improving and extending the penitentiary system, as well as the Cold Chain.
Many of these projects have already started. The fact is that going from paper to reality with projects of this magnitude is not easy. The Metro has already received offers and the commission is reviewing the offers from the three companies but this is such a huge project that nothing more than the adjudication to the winning company is expected for this year. The Government City, the Financial Tower and the Convention Center are in the planning stages and no real information on time frames is available in the press. The improvements to the existing road networks involve multiple different bids and some of the major ones such as the improvement and extension of the David to Boquete road and the Los Santos to Las Tablas are in varying stages the acquisition process. As far as new airports: Tocumen Airport is already being expanded and the David airport bid was adjudicated already. New airports are being planned. This is just a brief sample of the projects and their status.
The important thing to mention is that overall most people were of the opinion that if given a chance the government would accomplish many of its projects. This administration has accomplished so far more than other administrations.
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