Panama Budgeting Thirteen Billion in Public Infrastructure
By Juan Carlos Martinez
President Ricardo Martinelli's administration announced from the beginning of his term a very ambitious infrastructure plan for his five years in office. To date just about a year since this administration took office about 3 billion of the 13 slotted for these projects have been allocated, meaning that the invitation to tender an offer for the work has already been presented and placed in the public portal, Panamacompra.
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Some of the projects already underway are the Metro, Metrobus, 5 turn-key hospitals, several airports and highways. It is interesting to note that not all of these projects have gone through the tendering process. Although Panamanian law indicates that they must, there are some exceptions. An example of such is the $5 million for consulting to the firm Mckensey & Co. Additionally two contracts issued directly to Odebrecht without bidding: one for channeling the Caldera River in Chiriqui valued at $11 million and another for the second phase of the Cinta Costera valued at $52 million.
The fact is most of these multi-million dollar projects undergo a bidding process, even most of the large infrastructure projects coming up, such as the rebuilding and beautification of Curundu valued at $78 million ear marked to Odebrecht. Also adjudicated to Odebrecht is the second phase of the Panama-Colon highway for $218 million. The list also includes the expansion of Tocumen Airport adjudicated to Aerotocumen for $68.8 million, the construction of the road from Divisa to Chitre in the Central Provinces adjudicated to Argentinean company, Benito Roggio for $109.9 million and the expansion of the airport in Chiriqui adjudicated to Argentinean Company Riva, S.A. for $27.4 million. The David to Boquete road expansion remains to still be under evaluation.
These are just the projects that are underway as of right now. Many more are simply in the conceptual stage and the specifications are not even ready therefore the invitation to tender cannot be prepared. This is the case of the new convention center that is planned, a government city, a new penitentiary center, among others.
The process for these projects to get underway is pretty complex. A lot of the time getting a good proposal and a good result depends on how specific, detailed and accurate so a company can make an accurate offer. In Panama the invitation to tender is called a “Pliego de Cargo”. It contains all the legal requirements that must accompany the proposal such as company documents, restoration measure, documents indicating that the company is up to date in its payments to the fiscal authorities, economic authorities and social security, among many other requirements. It also includes details of the project as the purchasing entity wants it, dates for delivery, reference price, payment terms, the number of the budget assignment from which the payment will be made, the date, time and location of the tender, etc. Currently in Panama it is possible to submit an offer on line, through e-tendering however some of the major projects being tendered are so complex that the amount of documentation the companies are submitting as part of their proposals is so huge that it cannot be done by email. This was the case of the Panama Metro tender where companies bidding presented boxes upon boxes of documents.
The process for receiving proposals takes place at a specific time frame, place and day. It does not extend beyond that and only the companies that submit their bids at that time participate. On the next article we will explain further steps of the process.
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