IL Postcard

Billion-Dollar-Project Raises Questions About Quality of Life in Panama

Date: 07/19/2007

What's the price of progress? One billion dollars, it seems-that's how much will be spent on Panama's latest mega-project, according to the media-and that's just the estimate for stage one. The project is an "energy highway" encompassing not one, but three oil refineries, as well as petrochemical plants, hydrocarbon storage facilities and, most significantly, a 56-mile oil pipeline under the Panama Canal to connect energy parks in the Atlantic and the Pacific.

But the real price of progress is immeasurable and many people are questioning the cost of a possible environmental catastrophe. How many massive infrastructure projects can one country handle? An enormous expansion of the Panama Canal is underway, and other imminent undertakings include roadworks like the new Cinta Costera, security measures such as "Video Vigilance" and "Project 911", and an $8 billion oil refinery project. Each of these projects, despite any long-term benefits, is expected to take temporary and/or permanent tolls on quality of life in Panama.

The energy highway is no exception. Here's what we know so far:
Proposed by: An international firm called Energy Center of the Americas (ECTA)

Pros: Will create 6,400 jobs. Positive effect on the economy could be greater than that of the Trans-isthmian Oil Pipeline, which was completed in 1982 and generated over $150 million in 1985, accounting for 7.4% of Panama's Gross Domestic Product.

Cons: "Irreversible" environmental damage in and around the pipeline area, affecting water quality in salt- and fresh-water bodies, up to twelve archeological sites, and aquatic plant and animal species (including coral and protected mangroves).

Panama's National Environment Authority (ANAM) is studying the proposal as we speak. But other agencies-including the Panama Canal Authority (ACP), Ministry of Trade (MICI) and Maritime Authority (AMP) must also approve the project in order for work to begin. If approved, construction of the energy highway would begin this year, with the first phase slated for completion in 2009. According to Panama's La Prensa, the current administration and ECTA have already signed a Memorandum of Understanding (MOU) outlining a host of tax breaks and financial incentives.

We'll let you know more about this project as information is released.

Best Regards,

Jessica Ramesch
Editor, Panama Insider
International Living

P.S. We'll offer a more in-depth report about the energy highway and Panama Canal expansion in the next issue of Panama Insider. Not a subscriber? If you're serious about relocating to or investing in Panama, you need all the inside information you can get. Read about it here.