Panama Economic Expansion Projects

Introduction – If you are reading this you are probably thinking of moving to Panama or investing money in Panama, perhaps both. This is a recent (8/2007) summary of some of the major economic expansion projects either underway or in the planning stages for Panama. As you will soon see it is vast.

Panama Canal Expansion – This is a 5.2 Billion dollar project that is currently underway although in the very early stages. The project will create a third set of locks allowing ships too large to pass through the canal now to have access through the larger set of locks. This will open the canal up to about 300 additional ships. Please bear in mind that tolls charged to the ships to pass through the canal are based on ship size, tonnage and value of the cargo. Tolls approaching $200,000 for one passage are far from unusual at the present time. The larger ships that will be able to pass through the canal after the expansion will be paying larger tolls.

Oil Pipeline – Most of you probably had no idea Panama was building an oil pipeline. A 56-mile long pipeline is to be laid under the Panama Canal connecting the Pacific and Atlantic. This pipeline will also be connected to the three energy parks as well. Taboga Island, Fort Howard and Colon have been selected as sites for energy parks to include oil refineries, petrochemical plants and hydrocarbon storage facilities. This will create over 6000 jobs. Spain’s Tecnicas Reunidas is presenting a 20-year plan that will involve $40,000,000,000 turning Panama into a petrochemical and refinery hub for Latin America. The project will occupy 3,700 acres on the Atlantic Coast and will have a refining capacity of 2,000,000 barrels per day. The pipeline will of course have it’s own new set of ship docks suited to such an operation that could accommodate 6 ships a day (think large ships please).

Occidental Petroleum Refinery – Currently Occidental Petroleum has a feasibility study costing $20,000,000 to consider the construction of an oil refinery project in Panama that will be located at Puerto Armuellas on Panamas Pacific Coast near Costa Rica. Are you real estate speculators listening? This refinery will produce oil for Panama (think low fuel costs in Panama, again are you investors listening), Latin America and the USA too. Panamas deputy minister for trade, Manuel Jose Paredes felt confident the project would pan out and go into construction. This deal also involves Qatar Petroleum. When this project is completed in 2012 it will generate over 300,000 barrels of refined petroleum a day. Best part. The project is scheduled to be built on an old Chiquita Banana Plantation. So we can soon sing: Hey Mr. Tallyman, tally me petroleum.

Enter Carlos Slim – He is the world richest man with wealth estimated at over $60 billion mostly made in telecommunications, and he is getting interested in Panama. He is looking into energy, and telecommunications. Impulsora del Empleo, a Slim infrastructure company, will invest $16.6 billion into 57 projects, with almost half of them being in Panama. Cicsa Panama, also a Slim entity, has won the contract for hydroelectric projects in Bajo Mina and Baitun located in Chiriqui. Another one of his entities Cilsa Panama-Minera Maria won the bid to excavate the first phase of the Panama Canal expansion. Does Slim know something we should know or should we just follow his lead and invest in Panama?

Fort Howard – The old military base Fort Howard is going to be converted into a housing project of community proportions. The Panama government has signed a contract with London & Regional a British firm that is going to undertake this massive project with $400,000,000 going into it initially with another $300,000,000 scheduled for some years down the road. There will be homes, stores, a cargo storage depot for the Panama Canal, hotels, golf course and a science park. Will the sun never set on the British Empire again?

COSCO (China) – COSCO is competing to build a second mega-port in Panama on the Pacific side.

Copa Airlines – Is constantly expanding along with the recent substantial expansion of Tocumen International Airport. Copa is trying to be the next hub in Latin America for those who do not wish to travel to the USA for a variety of reasons including visa difficulties and security hassles. Copa keeps expanding their routes and they look like they are well on their way, Go Copa. If you would like to try being treated like a human being try using Copa on your next trip, you’ll be presently surprised.

Residential Real Estate Boom – There are 170 building projects underway in Panama. Can anyone say raw material, equipment and labor shortages. There are over 100 additional projects with construction permits approved but not yet starting construction. There are almost 100 applications in for new building permits. How many presale billboards on vacant lots are real projects is a study someone should undertake for sure. So can anyone tell me what a parking spot on Balboa Avenue is going to be worth in two years? Is Panama going to see people in condos renting their garage spots out from 8AM to 6PM for the workers commuting in? Are we going to see condominium garage spots? How about condominium boat slips? Why do we only have one stocking large boat dealer here in Panama – are you boat dealers listening? I keep wondering why the Rolls Royce and Bentley dealers are not here yet? There is still no place in Panama to buy an Audemars Piaget, a Phillipe Patek, or even an IWC (these are high end watches if you are wondering). We can buy Cartier, Rolex, Omega and Breitling so no need to not know if you are late for your next appointment. You can get all the Cuban cigars you want but go try and find a good Dominican Cigar. You can get a 60 inch plasma TV but not a 103 inch model. Real antique furniture is hard to come by. Art dealers are extremely rare. That being said the doctors still make house calls for $40 and you can get a great one-hour massage in the home for $30.

Panama Economy Expansion Forecast - According to a forecast by Latin Source the Panama economy will expand by 9% this year (2007) and by at least 9% during 2008 and again by at least 9% in 2009. This is more growth projected than anywhere else in Latin America. Wow. Our malls do so well you cannot get a parking spot at the massive Allbrook Mall on the weekends. People are dragging all sorts of packages around in the malls, not just looking. Louis Vuitton opened up recently in Multiplaza Mall and is full of people buying not just looking. The mall restaurants are packed. All the signs of a strong economy are in place (not just malls).