The Panama-David Train

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The Panama-David Train Gets Closer to Reality

Posted 17/05/2024

Chinese Government Willing to Cooperate in the Construction of the Panama-David Train

The Chinese ambassador to Panama, Xu Xueyan, announced that the government of the Asian country is willing to resume the Panama-David train project, if the next administration of the elected president, José Raúl Mulino, decides so.  “I want to highlight that the desire to build this railway is not a cry from this government, but rather a cry from the previous administrations of Panama… The president-elect says that he is going to organize a public tender… We hope that Chinese companies will also join in and be able to have an opportunity to compete equally,” said the ambassador during her first meeting with the media.  In turn, Xueyan praised the seventh anniversary of diplomatic relations between Panama and China that were established on June 13, 2017 and the 66 cooperation agreements that have been achieved, on issues of trade, technology and culture. “These agreements have not only laid a solid foundation for bilateral cooperation, but have also fostered unprecedented cultural and economic exchange,” he said.  Likewise, the diplomat let it be known that the Chinese government would be available to resume negotiations for the signing of a free trade agreement (FTA) between China and Panama, if the local authorities make the respective requests.  “The experiences of other Latin American countries that have signed FTAs with China show significant benefits in terms of employment and economic growth.”  Regarding imports, the ambassador stated that although national agricultural production does not completely meet the needs of the Chinese market, there is significant potential to diversify and increase exports of seafood, pineapple, beef and papaya.

José Ramón Icaza, Minister of the Canal and also appointed to head the Goals Secretariat, by the elected president José Raúl Mulino, will have among his priorities to follow up on the construction of the railway that connects the province of Panama with David, Chiriquí.  This is one of the most important infrastructure projects for the Mulino administration, which begins July 1.

https://www.newsroompanama.com/news/the-panama-david-train-gets-closer-to-reality-1

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More News on the Train from Panama City to David

Posted 19/05/2024

A feasibility study on the potential for building a train route from Panama City to David was already completed years ago and was presented to former President Juan Carlos Varela.  You may remember that in his previous administration 2009-2014, Varela was the vice president of Ricardo Alberto Martinelli Berrocal when this idea was first released to the public.  The study, which was prepared by engineers, was the first step in making the railway a reality.  The proposal was to build a passenger rail line for eight cars with a capacity of 750 passengers, with 21 stops in a stretch of 391.3 kilometers, connecting the provinces of Panama, Coclé, Herrera, Veraguas and Chiriqui. Cargo would be emphasized.  The rail line would be a major project for Panama, in many ways.  For one, it would connect Panama City to the west, giving Panama the type of transportation infrastructure found only in developed countries.  It would also represent another massive project for Panama, infusing jobs and capital into the country.  The train would reach 160 kilometers per hour resulting in an estimated travel time between Panama and the city of David of 2.5 hours express without stops.

The report consisted of three phases.  The construction was expected to take six years and generate 6,000 direct and indirect jobs to mostly Panamanians, during its execution, as well as 2,900 jobs for operation and maintenance, again, mostly jobs to be filled by Panamanians.  The preliminary guidelines for the study included linking urban areas, developing strategic points of cargo management, minimizing the ecological impact and enhancing the logistics activity.  The proposed train route would include 22 stations starting in Panama Pacifico and including stops in Panama West (La Chorrera, Capira, Chame, San Carlos), the provinces of Coclé and Veraguas (Santiago, Soná, Puerto Vidal cargo only) and later Tolé, Cerrillos, and San Lorenzo before arriving at the city of David. The trip from Panama City to David could take up to 3.5 hours, depending on the number of stops.  The system would provide a much more efficient passenger mobility system and unprecedented integration in the country and would enhance the country’s logistics platform by strengthening our logistical, air, maritime and financial connectivity with the region.  The study contemplated a possible expansion to Costa Rica in the future, which would complement the Central American economies and facilitate the commercialization of products among our countries, which have great logistical challenges.

https://www.newsroompanama.com/news/more-news-on-the-train-from-panama-city-to-david

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Panama to David Railway: What We Know

Posted 23/05/2024

After the founding of the Republic of Panama in 1903, the Panamanian government promoted the idea of a Panama to David railway, however the original idea dates back to at least 1893.

What We Know

○  There is a proposal to build an 8-car passenger and freight train with a capacity for about 750 passengers.

○   There will be 21 stops on a 391.3 km stretch, which would cross by land, tunnels and bridges.

○  Travel time between  Panama City and David approximately 2.5 hours.

○  Construction would last at least six years.

○  Further expansion into Costa Rica would be considered.  

○  Up to 9,000 direct and indirect jobs would be created.

○  The project could become a reality during the Jose Raul Mulino government.

○  It has been said that its ecological impact would be significantly lower than that produced by automobile traffic, however many hectares of forest will need to be removed for this to happen, thus displacing flora and fauna throughout the country.  

Challenges that the government is facing include reducing debt levels and promoting economic growth to generate greater tax revenues.  It is clear, then, that the terms agreed upon for the construction of the railway must be determined with great care.  In the past, Panamanians have suffered the negative consequences of unequal agreements for the construction of megaprojects and the exploitation of natural resources.

Let's not repeat these mistakes.

https://www.newsroompanama.com/news/panama-to-david-railway-what-we-know

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Chiriquí-Panama Pro Train Committee Created

 Posted 31/05/2024

The Chiriquí-Panama Pro Train Committee was created this Thursday, May 30, during a discussion organized by the Competitiveness Center of the Western Region (CECOMRO) in the province of Chiriquí.

The event began with a presentation by Carlos Ernesto González de la Lastra, who spoke about the background, potential and characteristics of railway connectivity in our country, highlighting its positive impact.  Subsequently, businessman, Felipe Ariel Rodríguez, president of CECOMRO, placed the Chiriquí-Panama train project within the Western Region Vision 2050.

This important step led to the formation of the Committee composed of businessmen and members of civil society at the national level and was coordinated by the Territorial Management Commission directed by Jorge Alberto Nasta.  In addition, support was approved for the celebration of the Chiriquí-Panama International Railway Congress. 

https://www.newsroompanama.com/news/chiriqui-panama-pro-train-committee-created

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Train From Panama to Chiriquí

Posted 04/06/2024

According to the estimates presented at Cecomro, the estimated load on the train would be 40 thousand tons on long trips, but it is estimated that it could reach 2 million tons in the medium term. The train would help increase production, assuming lower costs and increase trade towards Central America.  President-elect José Raúl Mulino, who was born in David, included the construction of a Panama-Chiriquí train as one of his campaign pillars. It is not yet known how much it will cost or how it will be financed. But business organizations and logistics experts anticipate that this is the project that the country needs to take advantage of its geographical position, which has not resulted in economic improvement for the provinces, precisely due to the lack of connectivity.

During a discussion organized by the Competitiveness Center of the Western Region (Cecomro), the Chiriquí-Panama Pro Train Committee was established, which will be in charge of promoting the plan so that the investment can be made, indicated Felipe Rodríguez, a member of the group.  Rodríguez recalled that the first feasibility studies to build the railway section, which would be used to transport passengers and cargo, were carried out in 2018, in cooperation with the People's Republic of China.  However, they have had partial access to the analysis, despite having requested the previous government (2014-2019) to “deliver it to us, and they never formally delivered all the studies that contemplate the participation of many national companies.” This is what is needed at the highest level.  It is estimated that the speed of the train will be between 160 and 200 kilometers per hour. The alignment should link urban areas or areas with growth potential, in addition to connecting strategic loading points.  The route that would be chosen must also accommodate the sites with the least environmental impact and must provide future connections for the branches.

“One of the things that the committee is going to start asking for, immediately, is access to all the studies that have already been done,” Rodríguez emphasized.  The conversation with Rodríguez takes place after several members of Cecomro met in Chiriquí in person, to get in touch - through an online meeting - with Carlos Ernesto González De La Lastra, logistics advisor of the organization.  González is convinced that a train to the producing province of Chiriquí, with several branches in the central provinces, will bring important economic and social benefits, and will overthrow the model of concentration of wealth in the capital city.  "We have spent 10,000 million dollars on Metro lines, in Panama City, on the beach corridor and a bridge over the Canal... It is time to think about the integration of the entire country and take advantage of the advantages it offers our connectivity,” said González, in the face of possible criticism regarding the cost that the work could reach. 

In economic terms, feasibility studies indicate that the cost of transporting a container from Chiriquí to Cristóbal (Colón) is about 1,500 dollars, while with the train this would represent 300 dollars, for the same route. “It means that there are 1,200 dollars left for the producer, who can use them to increase, double and multiply his production.”  These new costs, according to González, will allow producers, instead of planning shipments in just one container, to agree and send 30 containers to their final destination, after achieving a lower logistical cost for that production.  “There is nothing more to see than our neighbors in Puerto Rico; They export about 800,000 containers of refrigerated products a year and Panama 8,000, having all the connectivity we have. So, we must understand that the infrastructure of a train is absolutely essential to use advanced logistics and competitiveness in costs and speed of delivery,” González mentioned.  In the middle of the conversation of about two hours, he said that the investments to be made, both in new infrastructure and in the improvement of existing ones, will only be possible through the active participation of the Government. However, the desired transformations cannot be carried out with the sole participation of the state sector.

“The participation of the private sector, as an operator and in turn as a dependent of services, is essential to guarantee the full use of the viability of these investments.”  At the Cecomro meeting it was indicated that at least 5,000 employees would be needed in the construction period and regular workers in the operation period.  From an economic point of view, González said that a table of multilateral entities must be achieved to be clear about the cost of the work and obtain long-term financing, with good financial conditions.  He considered that one of the objectives should be to “invite multilaterals to finance the emblematic project of the new government in the long term, 30 or 40 years, with interest rates appropriate to the risk of Panama and with a grace period.”  Panama must present a law that creates a railway company, I emphasize, because to obtain financing not only will the technical factors of construction have to be taken into account, but also everything related to the organizational structure, personnel training and financial controls.  The typical financial model must take into account traffic and then the revenue from that traffic, operating subsidies, if any, operating costs based on the cost structure, capital investments, debt and their payment over time.

https://www.newsroompanama.com/news/train-from-panama-to-chiriqui