Plan for Infrastructure Investments in the Canal Area, 2002–06
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Plan for Infrastructure Investments in the Canal Area, 2002–06 March 2002 Task Order No. 831 Contract No. PCE-I-00-96-00002-00 Plan for Infrastructure Investments in the Canal Area, 2002–06 Submitted for USAID/Panama Submitted by International Resources Group March 2002 Environmental Policy and Institutional Strengthening Indefinite Quantity Contract (EPIQ) Partners: International Resources Group, Winrock International, and Harvard Institute for International Development Subcontractors: PADCO; Management Systems International; and Development Alternatives, Inc. Collaborating Institutions: Center for Naval Analysis Corporation; Conservation International; KNB Engineering and Applied Sciences, Inc.; Keller-Bliesner Engineering; Resource Management International, Inc.; Tellus Institute; Urban Institute; and World Resources Institute Contents Executive Summary.................................................................................................................... iii 1. Introduction and Objectives..................................................................................................1 2. Definition of the Area...........................................................................................................3 3. Legal and Regulatory Framework.........................................................................................5 3.1 Planning and Control of Urban Development...............................................................5 3.2 Provision of Infrastructure.........................................................................................10 4. Guidelines for Identifying and Prioritizing Projects .............................................................15 4.1 General Guidelines ....................................................................................................15 4.2 Analysis of Current Economic Investment Tendencies...............................................16 4.3 Additional Conclusions Related to Urban Planning and Development ........................20 5. Analysis of Infrastructure Requirements in the Canal Area, 2002–06 ..................................21 5.1 Scenario 1: Spatial Planning Framework....................................................................21 5.2 Scenario 2: Employment-Generating Market .............................................................23 5.3 Scenario 3: Market + Governmental City ..................................................................24 5.4 Analysis of Infrastructure Requirements ....................................................................25 6. Evaluation of Infrastructure Financing ................................................................................43 6.1 Valorization..............................................................................................................43 6.2 Trust.........................................................................................................................46 6.3 Concession................................................................................................................48 6.4 Privatization..............................................................................................................50 6.5 Bonds .......................................................................................................................51 6.6 Private Development .................................................................................................53 6.7 National Budgeting through the Andean Development Corporation...........................54 6.8 National Budgeting with the IDAAN.........................................................................55 6.9 Development through Leasing or Concession (Impact Fee) .......................................56 6.10 Annual Budgeting of the ARI....................................................................................56 7. Technical Profiles by Infrastructure Sector .........................................................................59 7.1 Potable Water ...........................................................................................................59 7.2 Sanitary Sewer Systems ............................................................................................67 7.3 Storm Sewer Systems ...............................................................................................69 7.4 Solid Waste Management..........................................................................................71 7.5 Road Network ..........................................................................................................73 7.6 Electric Energy .........................................................................................................78 7.7 Telecommunications..................................................................................................83 7.8 Infrastructure Analysis Conclusions...........................................................................83 i 8. Infrastructure Investment Plan for the Canal Area, 2002–06 ...............................................89 8.1 East Pacific ...............................................................................................................89 8.2 West Pacific ..............................................................................................................91 8.3 East Atlantic .............................................................................................................92 8.4 West Atlantic ............................................................................................................94 8.5 Regional....................................................................................................................95 8.6 Other Measures Critical to Future Development of the Canal Area............................96 8.7 Preliminary Analysis of Environmental Impact...........................................................97 9. Financing and Execution Strategy..................................................................................... 103 9.1 Institutional Management of the Financing Strategy................................................. 103 9.2 Project Priority........................................................................................................ 104 9.3 Potential Financing Sources..................................................................................... 104 9.4 Financing Mechanisms ............................................................................................ 107 Annex A. Projections .............................................................................................................. 121 ii Executive Summary The Authority of the Interoceanic Region (ARI) is the entity responsible for integration of the reverted properties of the Panama Canal Area into the national economy and territory. For ARI to achieve its institutional objectives to promote economic development will require considerable investment in urban and environmental infrastructure. In spite of the general plan’s US$700 million in programmed improvements, investment during 1997–2000 was a modest US$45 million. The objective of the present draft of the Plan for Infrastructure Investments in the Canal Area, 2002–06 is to assist ARI in identifying 1) the infrastructure investments most crucial to the promotion of economic development and environmental protection, and 2) the institutional and financial framework most appropriate for successfully carrying out these investments. Sectors included in the plan are: roads, potable water, sanitary sewers, storm sewers, solid waste management, electricity, and telecommunications. The Panamanian legal and regulatory framework facilitates infrastructure investments in the Canal Area. Development plans and regulations define areas of future development, permitted soil uses, and the rhythm and character of future urbanization. The institutional framework establishes an appropriate division of labor between regulatory entities and infrastructure providers, while the laws and regulations define in sufficient detail an ample range of financing mechanisms, including the direct provision of infrastructure and public services on the part of private enterprise. The brief duration of the investment plan emphasizes the need to identify priority investments that could motivate others in turn to undertake important economic investments. To maximize the impact of these investments, focus was placed on zones of current or potential economic development. After a quick evaluation of developmental tendencies in the different communities and subregions of the interoceanic area, the following areas were identified as priorities: North Coco Solo/Francia Field, Telfers, Espinar, Balboa Industrial, Balboa, Albrook, Rodman, and Amador. The analysis of infrastructure requirements in the Canal Area produced three development scenarios. Scenario 1, which estimated the occupancy possible within the framework of existing spatial planning, projected a daytime population of around 277,000 people in 2006, divided by type of soil use. Scenario 2 evaluated these conclusions in the context of current employment tendencies in key economic sectors—tourism, commerce, industry, maritime development—and concluded that there will be less growth than predicted by the planning framework: a daytime population of approximately 177,000 people in 2006. Scenario 3 takes the conclusions from Scenario 2 and adds the additional