Country Report Panama March 1998 Main report

Services: Land dispute with Hutchison is settled

A land dispute between the government and the port operator, Hutchison Whampoa, has been settled. Last September it had emerged that 43 ha of the land assigned to Hutchison to expand its docks had been pledged for several other projects as well (4th quarter 1997, page 18). The government has agreed to pay Hutchison restitution of $40m, to be paid by annual instalments of $10m deducted from the annual fee ($22.2m) and share of revenues that Hutchison is contracted to pay the government. Hutchison had sought $60m over six years. The compensation will allow Hutchison to move forward with its expansion plans, by building an 18-ha landfill. With the settlement agreed, Panama was able to finalise the contract with Kansas City Southern Railroad (KCSR) for the rehabilitation of the trans- isthmian railway (one third of the land under dispute had been allocated for this purpose) and move forward to relocate the airport from Paitilla to Albrook, which in turn allows the construction of the southern corridor toll-road to continue and the Atlapa Convention Centre to be sold.

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