Country Report Panama March 1998 Main report

Economic policy: Pace of privatisation is maintained --

The privatisation of National Casinos, involving six full casinos (split into Group A and Group B with three casinos each) and 14 slot machine operations, was concluded at the end of January. Thunderbird Corporation (Canada) and Martinez Sequi (Chile) won the two 20-year casino operator concessions for $3.55m and $3m respectively; each paid a premium of close to $1m over the minimum bid price set by the government. Gaming and Services of Panama (Spain) won the 20-year concession to operate the 14 slot-machine locations, paying $20m or $13m more than the government's floor price.

Disposals scheduled for the first half of this year include the Atlapa Convention Centre ( in March ) and the La Victoria Sugar Refinery (May), while July is the date set for the beginning of the privatisation of the electricity utility, Instituto Hidraulicos y Electrificacion (IHRE) and December for the water utility, Instituto de Agua y Alcantarillado Nacional (IDAAN). Draft legislation has been approved at cabinet level to privatise IDAAN's operations in Colon and Panama cities. Similar to the IHRE model, the long-term plan is to break the company into eight pieces. Though all the details have yet to be settled, one of the requirements will be the construction of sewage treatment systems for the cities of Panama, Colon, Arraijan, Chorrera and Capira. Meanwhile, in what amounts to a first step in the privatisation of water services, the government has awarded a 30-year concession to build a potable water facility at Laguna Alta for the cities of Arraijan, Chorrera and Capira to the British company, Biwater Supply. Scheduled to start operating in early 1999, Laguna Alta is expected to produce at least 6.5m gallons of potable water daily.

-- with new items coming forward

In addition, discussions are under way to privatise the Agricultural Development Bank, the National Mortgage Bank and the National Savings Institute. A proposal has been made to sell off refuse collection and the government is looking to sell Puerto Vacamonte, a small port near Hutchison's Balboa terminal, which is currently losing $500,000-$1m a year.

© 1998 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information
IMPRINT