Panama Projects Overview
Background Information
There are six realities confronting Panama regardless of which political party prevails in America’s November election:
- The United States with its colossal, dynamic economy and cultural diversity continues to attract immigrants fleeing oppression and deprivation all over the world.
- Panama’s Darien Gap will remain as the busiest corridor for this tide of humanity heading up through Central America to the U.S. border.
- Whatever assistance from the United States will be only a tiny fraction of the cost to Panama and other Central American nations dealing with the flow of refugees.
- Panama’s infrastructure is already seriously under-invested before considering the additional strain placed upon it by over 500,000 refugees annually traveling the length of the country from east to west.
- Additional revenue urgently needs to be raised by the Panamanian government to make long-overdue infrastructure investments in the western provinces including pavement repairs, circumferential expressways for the Interamericana Route 1 around David, Santiago and Penonome, and a train running from the capital to Costa Rica, as well as the enormous land acquisition, relocation and construction expenses for the Rio Indio scheme to expand water supplies to the Canal.
- Tolling the now free bridges over the Canal and earmarking the revenue towards the above-listed projects is the best way to charge those using infrastructure to defray its cost and in the process establish a cordon for tracking the migrants and insuring they do not establish long-term residency in the country without a permit to work or due to other special circumstances.
Nobody likes taxes and fees but something-for-nothing is not a law of this world and Panama needs more money to copy with the multiple challenges if it is to regain its cherished status as Latin America’s most dynamic economy. Motorists and truckers crossing the three existing bridges have been getting a free ride, not contributing anything towards the opportunity cost of the land taken for the highway approaches or the outlays for building and maintaining these facilities. These compete with other essential public services dependent upon Panama’s general treasury. The majority of waterway crossings and expressways around the world are financed by tolls. Toll collection at the bridges would also be a means of monitoring the flow of immigrants entering the Darien Gap, the vast majority of whom are proceeding on to Costa Rica.
Presumably they have not been issued transponders like those in use on Corridors Sur & Norte, and so they would have to register with the authorities, and those with the means or funded by NGO’s would have to pay something to cross the bridge. They would also have to agree to have a tracking device affixed to their vehicle with a deadline for surrendering the device at the Costa Rican border. A toll plaza should be included in plans for the 4th bridge. Special arrangements will be needed for Line 3 of the Panama City Metro to insure that only Panamanian citizens besides tourists and authorized foreign nationals are granted access. Finessing the toll schedule, who is entitled to credits, determining if one-way westbound or bi-directional, and the relative burden placed on citizens and residents versus unauthorized immigrants will take some time. But it will be worthwhile for the Ministry of Public Works to have the funds to embark on advance land acquisition to protect the right-of-way for the train and ring roads.
The continuing flow of migrants and proposed flow of money is illustrated on the two graphics below.
Foreign investors, impressed at Panama’s sacrifice to right its “ship” financially and its unique approach in harnessing infrastructure to get a handle on the migration crisis absent effective leadership by the USA, will be more likely buy to bonds for the train, new expressways – also tolled – as well as ACP’s Rio Indio project.
Negative reaction to the imposition of tolls on what have been “free” bridges is inevitable but can be effectively overcome if the alternatives of cutting vital services, increasing sales, income or property taxes, or neglecting infrastructure to the detriment of commerce are weighed.
The battle for tourist and investment dollars is brutally competitive and must be won if Panama is to regain its status as an effective player in the 21st century.