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Home / News / Panama plans $3bn ports upgrade

The Panamanian government is looking to a combination of state funding and private investment to reduce dependence on the Panama Canal. Jacopo Dettoni reports.  

Panama’s maritime authority (AMP) has launched a 20-year, $2.98bn plan to upgrade 47 ports across the country, the majority of which will go to terminals outside the Panama Canal.

“We are betting to diversify our infrastructure,” AMP’s general director Guimara Tuñón said at the Fourth Latin American Ports Forum held in Panama City in early April. “At the moment, we are positioning it built around two ports along the canal, the Balboa and Colon, where we mostly do transhipment of containers. We are good at that, but now we are now looking at other services like imports, exports, we are looking at adding value to the goods we receive and we can do that by upgrading some major port infrastructure around the country.”

State investment is budgeted at $175m, while private operators will contribute the remaining $2.8bn over the next 20 years through concession contracts, or public-private partnerships where the state will retain some equity participation.

Although the AMP plans to carry out upgrade works at most of its 47 ports (21 of which are already operated by a concessionary, while the other 26 are pure state ports), most of them consist of minor terminals catering to the needs of local subsistence economies offering little financial appeal to private operators.

“Four are the main projects investors should have an eye on,” said Ms Tuñón, referring to the upgrade of the Pacific port in Vacamonte, which will then be connected to a new multi-purpose port with a logistics zone attached; Puerto Armuelles and the port in Chiriquí Grande, both in the western part of the country, the former on the Pacific coast, the other on the Atlantic coast; and the development of an existing fishing port in the Pacific Remedios district.

Panama is already home to the busiest ports in the whole of Latin America. The port of Colon, on the Atlantic edge of the canal, is the single most active port in the region, handling 4.3 million 20-foot equivalent unit (TEUs) in 2018, up by 11% from a year earlier, according to figures from the UN’s Economic Comission for Latin America and the Caribbean. The port of Balboa, on the Pacific edge of the canal, was the region’s fifth busiest with 2.53m TEUs handled in 2018, down by 15% from a year earlier. These will continue to outshine any other port development in the country, but the AMP is now committed to making the country’s infrastructure and services more diversified and not exclusively focused on the activity generated by the canal.

This article is sourced from fDi Magazine
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