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PANAMA - Real Estate & Construction

Rafael José Sabonge Vilar

Minister, Ministry of Public Works

Bio

Rafael José Sabonge Vilar holds a bachelor’s degree from Colegio La Salle in Panama and graduated in civil engineering from the University of Texas at Austin in the US. He has a postgraduate in metallic structures from the Polytechnic University of Madrid and a master’s in economic analysis and financial economics from the Complutense University of Madrid. He has previously worked with CPV CEP Ibérica, the Panamanian Geotechnical Engineer Company, MDM Inmobiliaria, and the Electoral Tribunal. Since 2008, he has been a founding partner & CEO of Grupo Urbe, a company that manages real estate projects and a partner of Porta Norte.

"After eight months in administration, we faced the pandemic and everything that came with it."
The Ministry of Public Works is working on further developing public construction with new PPP projects that aim to mobilize USD2.5 billion in investment for infrastructure.
How has the public construction sector evolved since you took over the helm of the ministry?

After eight months in administration, we faced the pandemic and everything that came with it. Many of the government’s programs needed to be changed. We basically split our program into three different phases, continuing the pending public works and projects that we inherited from the previous administration. By September 2020, we had successfully completed over 130 different construction projects from the previous administration that had come to a halt during the pandemic. Most of them were medium-sized, reconstruction, or maintenance projects. There were two big projects in the ministry: the fourth bridge over the Panama Canal and Corredor de las Playas, which will restart in 2022. The second phase of our agenda was to start the tender process of about 26 different projects that are designed as build and finance projects. We needed private funding for our public infrastructure program, which we did successfully. In addition, we have tendered over USD1.1 billion over 26 different projects around the country. We seek for these projects to boost local economies around the country.

How do these public projects boost the reactivation of the tourism sector?

We have projects in Bocas del Toro, for example, where we will redo all the streets there. This is an over USD80-million project to overhaul the streets and drainage systems and build 37km of cycle paths. These are also 26 turnkey projects, and we have already tendered them all. We have also tendered another project in the Chiriquí region that goes to Boca Chica, another tourism destination, as well as for the San Blas region. We have tendered another project that will break ground in the coming months. We are talking about USD1.1 billion in 26 different projects that will create around 5,000 direct jobs, 2,000 indirect ones, and others related to the construction industry. This will create around 10,000 jobs in total.

How can the public and the private sector work together to foster the government’s goals, and what role does the PPP program play in this crucial collaboration?

This is our most ambitious part of our administration agenda. We passed a bill in 2019 in Congress for PPPs that we worked on with the International Finance Corporation, IDB, the Inter-American Development Bank, CAF, the World Bank, local unions, and private investors and builders in Panama. It is a well formulated and well thought out law that is focused on best practices in the region. We passed this bill 89 days after we entered office. During the pandemic, we structured several contracts with different multilaterals for projects that are now coming into market. We are talking about USD2.5 billion in private investment for public infrastructures that we mobilized in 2022. With IFC, we structured the first contract for Carretera Panamericana del Este. Private investors put in the money to reconstruct a 247-km road in the eastern part of the country and maintain it for about 15 years. We are also structuring six more such contracts for streets of a total of 2,000km in Panama. The first of these tenders, Carretera Panamericana del Este, is undergoing a pre-qualification process. The second, Carretera Panamericana del Oeste, was recently approved and will be a USD300-million private investment for 207km of highway from La Chorrera to Santiago de Veraguas. We are working on a third project, a large, USD900-million investment for a product called Autopista Costanera, which goes from Panama Pacifico to Sajalices. It is a 52-km toll road that was submitted to the managing institution of PPP in 2021.

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