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Panama 2018 | LOGISTICS & MARITIME | REVIEW

With Panama recognizing Beijing's primacy over Taipei in 2017, China has started investing heavily in Panamanian transport infrastructure, with plans for a huge port modernization at the canal and a possible new railway from Panama City to Chiriquí.

In step with the country's gradual march toward greater density and urbanization, the government and a series of private players, most notably from China and Japan, have been clearing the way for modern, mass, and rapid transport to penetrate ever further into Panama's infrastructure network. In Panama City the progress has been the most visible, with Line 1 of the metro up and running since 2014 and planned extensions fast in the making. Line 2, which broke ground in late 2015, is set to be completed in the first trimester of 2019. At a cost of USD1.87 billion, its 21km of track will serve 16,000 passengers an hour at peak times to and from the city's rapidly growing east, whose inhabitants already suffer from acute congestion yet are expected to grow from 500,000 inhabitants today to 750,000 by 2035.

The government is also moving rapidly to begin construction of Line 3 in the second trimester of 2018. After preapproving seven firms for the project, three of which were Chinese, Panama chose Japanese firm Nippon Koei as project manager for the USD2.6 billion project funded by the Japanese government, its first transfer of such technology to the Americas. President Juan Carlos Varela has invited Japanese PM Shinzo Abe to visit Panama to commemorate its launch later this year. An aboveground monorail, its first phase will begin at Albrook station downtown and pass through Arraiján, Nuevo Chorrillo, and Ciudad del Futuro before extending to La Chorrera by 2023. Spanning 34km by the time the second phase is complete, it will cover 14 total stations and transport 20,000 people an hour at peak times.

Though Line 3 was a special coup for the Japanese, China still came out the better in 2017. After recognizing Beijing's “One-China” primacy over Taipei, Panama joined Costa Rica as the second Central American country to leave the Cold War mold behind and cut ties with Taiwan. Rewarding its diplomatic fealty, Beijing is now investing heavily in Panamanian port and rail infrastructure. Not only did Varela inaugurate Panama's first embassy in the PRC on his “dream of a lifetime” visit to China in late 2017, he also left Beijing with an MoU signed by Xi Jinping in the Great Hall of the People for a joint Chinese-funded feasibility study to build a railway from the province of Panama to Chiriquí on the border with Costa Rica. And that is but the beginning.

Now extending its Belt and Road Initiative to both sides of the Pacific, Panama figures extremely highly in China's efforts to consolidate its transport infrastructure presence in the Americas' most critical passage. For this reason a private firm, China Landbridge, is also investing USD1 billion to build Panama a new high-speed, deepwater port and container terminal to be known as the Panama Colón Container Port. Situated on Margarita Island, China Landbridge is hoping to cash in on the 2016 expansion of the Panama Canal and its newfound ability to handle New Panamax container ships with transport cargos up to 14,500TEU (20-foot equivalent units). The first stage will add a liquefied natural gas terminal and increase the port's handling capacity to 2.5 million TEU and have 1.2km of quay length and a depth of 18m when completed by the second quarter of 2019. China is already the second-largest user of the Panama Canal with over 1,000 vessels a year. It conducted USD6.38 billion in trade with the Central American country, its largest trading partner in the region, in 2016.
Back on land, the government is beginning to regulate ride-sharing as part of its efforts to ease urban congestion. Finally legalizing Uber and Cabify in 2017, it also established a minimum driving age (21) and declared that all drivers obtain an E1 driver's license, be Panamanian citizens, obtain a police record, drive a car no more than seven years old, and eliminate all cash payments with customers. Brought out of legal obscurity, the state is hoping these measures, along with the construction of Lines 2 and 3, will ameliorate Panama City's increasingly notorious commute.