Panama City has seen radical change since the 1990s due to heavy infrastructure investment

Panama’s new administration says it’s about to wave adios to an inadequate, beleaguered transit system. Says Finance Minister Alberto Vallarino, Panama is ready to usher in a new era.

The government is designating a sizeable hunk of the 2011 budget for Panama City’s streets and sidewalks. Panama has long been known for its excellent roads, but increasing traffic and inadequate public transport are giving its ultra-modern capital a bad transportation reputation.

Panama may be at its most ambitious since 2007, when the nation voted in a referendum to approve the Panama Canal expansion mega-project. In July, the administration presented its projected budget for 2011; at $13 billion, it will be the highest ever approved if the measure passes. Says the minister, the amount is justified thanks to recent cost-cutting measures and sustained economic growth.

The government aims to invest some $2.9 billion of this budget over four years to improve general transit conditions all over the country. Of that amount, more than $1 billion will go toward works in the busy capital.

The nation’s capital has seen radical change since the 1990s due to heavy infrastructure investment. New traffic lights, the North and South Corridor Highways (soon to be expanded) and the new Coastal Belt over the Bay of Panama have improved flows.

The belt or “cinta” that parallels Balboa Avenue was completed last year, but construction is already well underway to extend it past the historical sector of Casco Viejo. In addition, a new metrobus system should begin operations this year; current plans are to phase out old “red devil” buses over a short period.

New projects may include measures to reduce travel time, the construction of bridges on the busy artery Via Brasil, new and better sidewalks, the addition of bike lanes and public parking projects. Vallarino says that these projects will enhance Panama’s position as an emerging tourism destination and improve quality of life for residents.

Panama’s government has already committed to building the city’s first metro line, which should begin operations by December 2013. Now officials say they will begin carrying out feasibility studies to build a second metro line in west Panama City.

Officials expect to complete studies for the second line before President Ricardo Martinelli steps down in 2014. Authorities say once the metro line is functioning, the government will turn its attention to connecting it and the metrobus system to rural networks.

“The objective is to develop a modern, integrated transport system over a long-term period, approximately 20-25 years,” a recent article in Business News Americas states. The government is modeling its efforts after successful public transport systems in Colombia, Chile and Italy.