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QUICK TAKES

Panama: Upgrades its Road System and Provides Business Opportunities

By Juan Carlos Martinez

Many of Panama's infrastructure projects are roads which in many towns and areas of the interior of the country are scheduled for expansion or simple repairs such as being recovered and regraded. This is a business that is increasingly becoming more and more profitable for construction companies as well as for associated businesses such as banks which issue bridge loans for construction and insurance companies which issue the compliance bonds for large projects.

road building

Some of the companies bidding on these projects are international companies and more international companies are expected to bid as more projects come up. Companies from Costa Rica, Brazil, Colombia, Argentina, Spain, Italy, France, Mexico and Ecuador have shown interest in upcoming road infrastructure projects.

During the next four years this business is really expected to pick up as the government intends to invest 3.3 billion dollars on road infrastructure on a nation wide scale. A lot of this money is destined for important roads in the interior of the country such as the road that links David to Boquete in Chiriqui. Boquete has in the past few years gained great importance as a tourist spot and as a retirement place for foreigners due to its cooler climate. The David to Boquete road was bid on in early May on the fairgrounds of the Boquete Flower and Coffee Fair. Only two companies, Constructora Urbana S.A. (CUSA) and FCC Construction de Centroamérica S.A. submitted offers. CUSA bid in at 117 million 668 thousand 650 dollars with the corresponding bond for 16 million and FCC bid in at 127 million 150 thousand 970 dollars with a bond of 12.9 million. This project will be evaluated on the basis of best value not lower price. This means that the technical offers made by the companies, their experience, reputation and responsibility will all be taken into account along with the price. The reference price for this project posted on the request for offer issued by the Ministry of Public Works was 118 million dollars.

The work to be undertaken by the winning company shall include the total and complete rehabilitation of the current road between David and Boquete and its expansion into four lanes in some segments. The full segment to be rehabilitated is 45 kilometers long.

Another of the large projects to be built and which already has received offers is the road from La Villa de Los Santos to Las Tablas with a length of 26 kilometers. Las Tablas is the town in the Central Province where the most famous local Carnival celebrations take place. The road in some parts needs to be built in others it will be expanded into four lanes and includes as well four overpasses. The reference price for this project was 77.5 million dollars and again FCC tendered a bid, as did Consorcio Benito Boggio Panama and Condotte Panama S.A.

In addition to these two major roads the culmination of the North Corridor is also included as is a 200 million dollar investment in improving the asphalt road top in many cities throughout the country. The construction of roads as infrastructure projects is always a boon for a country as it generates employment, and gets money flowing plus at a longer terms improves quality of life, roads provide access to markets for cities in the interior. There really seems to be no downside to these investments and the government plans to make use of them.


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