The toponym “Panama” has its origin in an indigenous term that referred to abundance and it is no coincidence that the Republic of Panama is one of the most prosperous states in Latin America. It is also a reference in international trade thanks to its Canal, which accounts for 7.7% of GDP and 2.9% of the country’s employment. But, despite the importance of this fundamental transoceanic communication route that Donald Trump has now put in his sights, Panama is much more than the Canal. Its financial system is one of the most solid and well-established in the continent, and its GDP per capita adjusted to purchasing power is the highest in Latin America. Tourism is another of Panama’s economic strengths, thanks to its offer as a vacation and business destination. The estimate for 2024 was to reach three million visitors in a country with only 4,453,000 inhabitants. Within this socioeconomic scenario, communication infrastructures have a lot to do with it. Panama has an extensive road network, as well as one of the most modern subways in Latin America, which in 2024 carried 117 million passengers. The “Singapore of Latin America” now faces the challenge of improving its public transport service by adapting to the times and the fight against climate change.
Nighttime image of the Cinta Costera in Panama City.
Despite the economic boom compared to its Central American neighbors, the isthmus has so far lagged behind in sustainable mobility policies. It was not until 2022 that Law 295 was approved, which establishes that the Transit and Land Transportation Authority (ATTT) will be responsible for the progressive replacement process of transportation fleets. The norm determines the substitution of vehicles that run on fossil fuels for electric fleets. The objective of the Law is that by 2027 20% and by 2030 30% of the buses operated by Mibus will be electric. This is why the purchase of the first 60 electric buses for the public company Mibus has recently been approved. The company currently has about 1,400 vehicles, all combustion vehicles, 400 of which were pending repair due to air conditioning system failures. The dispute between the company and the concessionaire for the air conditioning maintenance of the buses has led to a reduction in the number of vehicles in service despite the increase in passengers. MiBus management expects to repair at least 250 units, which would be added to the purchase of 200 diesel buses and 60 electric buses to expand routes and services. This is intended to increase the number of users, which in the second half of 2024 was already 10.80 million monthly passengers.
Press conference with President Mulino and project delegate Henry Faarup.
Press conference with President Mulino and project delegate Henry Faarup.Another recent milestone in Panama’s sustainable mobility will be the construction of the first high-speed rail line in Central America. In the words of President José Raúl Mulino: “The David-Panama train is definitely an ambitious project to connect the country and bring prosperity to all Panamanians”. At the signing ceremony of the contract with AECOM to update the Panama-David-Frontera Train Master Plan, he added, “Our priority is to ensure that it is an example of sustainable and environmentally friendly infrastructure”. The work, with a total estimated cost of close to US$5 billion and which would directly or indirectly employ some 6,000 people, could begin by the end of 2025. The project envisages covering the 450 kilometers that separate David, capital of the province of Chiriqui, and Panama City in just two and a half hours, reducing the current journey time by 70%. Recently, the Mulino government has decided to extend the line to the Costa Rican border, thus leaving the door open for it to become a transcontinental route. The struggle for the contracts for the construction and equipment of the line has not been long in coming, both in business and geopolitical spheres. In 2019 the ambassador of the People’s Republic of China donated to the Panamanian government a study of the line carried out by the public company China Railway Design Corporation. It is the same one that now the American AECOM will have to review after winning a public tender that gives it a period of 7 months to complete the reports. Recently the new Chinese ambassador has already made clear the interest of the large consortiums of the Asian giant in the project, fueling misgivings in view of the growing commercial relationship between China and Panama.
Image of Panama’s iconic logo in reference to its diversity and landscape.
Image of Panama’s iconic logo in reference to its diversity and landscape.The Beijing government wants to sign a Free Trade Agreement with the state that owns the second busiest shipping lane. The Canal generated 2,470 million dollars of profit in the last profit and accounted for 5% of world trade. The presence of a subsidiary company of Hong Kong’s Hutchinson Holdings in the management of two Canal ports or the increase in rates due to the drought problems in 2024 and the need to amortize the 5.25 billion of the 2026 expansion are other aspects to be taken into account. Although most of the traffic is still represented by U.S. vessels and that the management is still entirely Panamanian, Trump waves the threat of Chinese presence to demand the annulment of the Carter-Torrijos agreement of 1977. Behind all this, possibly there is only an economic interest to benefit American companies and shipping companies that are increasingly suffering to compete with their Chinese counterparts.
Sunset in the Bay of Panama City with the skyline in the background.
Sunset in the Bay of Panama City with the skyline in the background.But if the investment in high-speed rail promises to be important, no less important is another of the projects that the new Panamanian administration has set as a priority: the construction of the new Metro line 3. The 24.5 kilometers that will connect in the first phase the new stations of Albrook and Ciudad del Futuro will improve the mobility of half a million people in West Panama. The work, which involves Japan’s Hitachi, Korea’s Huyndai and Germany’s Bauer, among other multinationals, will have an estimated cost of more than 4 billion dollars. The first phase of this new line could be operational by 2026 as only the 6 kilometers of the tunnel under the Canal will be subway, thus shortening construction times. Thanks to this construction project, the largest since the Canal expansion, traffic congestion in the city should be significantly reduced. At the same time, the population will have access to fast, efficient and sustainable public transportation that will offer considerably shorter travel times. Both factors mean enormous gains in the quality of life for residents of a region that has not stopped growing demographically. The population of Panama City has increased sixfold in the last decades, from a mere 370,000 inhabitants in 1969 to two million today. From Vectio | Traffic & transport planning we have always had a special relationship with the country where we have a delegation and we have participated in important mobility projects such as the Technical Advice for the Traffic Management of Panama City. Like other Spanish companies, we are still present in a country that continues to look to the future, being a reference in international trade and boasting its toponym of abundance.
Traffic simulation of Panama City’s Cinta Costera. Source: Vectio.
Traffic simulation of Panama City’s Cinta Costera. Source: Vectio.Links:
https://www.midiario.com/nacionales/panama-avanza-hacia-la-movilidad-electrica-con-la-ley-295/
https://mobilityportal.lat/mibus-licitacion-buses-electricos/