business & economy

Business & Economy Briefs

Odebrecht buys Colon - Panama concession only

Brazil-based Constructora Odebrecht has purchased the concession to build and run a Colon to Panama toll road from the insolvent PYCSA consortium. However, it is neither purchasing nor assuming any debts for PYCSA's Corredor Norte concession, which is broken down into three parts for business purposes. This means that the potentially profitable asset that PYCSA had is gone and creditors, including the families of three boys crushed under a collapsed elevated roadway and the Metropolitan Nature Park, will receive nothing from the sale. PYCSA's contracts, which date back to the Pérez Balladares administration, allow it to sell its concessions subject to government approval. The Torrijos administration has approved the sale Colon - Panama autopista concession. Odebrecht's publicist, when queried by The Panama News about widespread rumors that the president's cousin Hugo Torrijos Richa has a stake in Odebrecht's Panamanian subsidiary, replied "I don't think that's true." Odebrecht is South America's largest construction company and unlike PYCSA has the assets to build the road that people in Colon have been demanding for many years.

Trade next on the Torrijos agenda

Now that he has a blank check on the canal expansion, President Torrijos is set to restart long-stalled talks with the United States about a free trade agreement. The main sticking points before had been agricultural issues and most Panamanian farmers will still object to competition with US government-subsidized farm products. The odds are that if new talks wait until January the United States will have a Congress that's more skeptical about the Bush administration's trade policies than is the current one and that might force some changes in bargaining positions on the American side. But previous administrations faced with similar problems have jammed trade legislation through lame duck congressional sessions. The previous rounds of US-Panamanian free trade talks have taken place behind closed doors, with official statements from the two sides leaving out many details of what has apparently already been agreed.

16,000 government jobs to be cut

They told you that they'd be creating more jobs? Well, that was then. Now that the election is over the National Assembly is taking up a Torrijos administration 2007 budget that lays off 16,000 public employees. The government also announced, two days after the vote, that it had signed an agreement with the World Bank to cut the public payroll even more over the next three years.

Tax hustler who lives here indicted along with Snipes

Eddie Ray Kahn, an erstwhile "Christian tax resistance" leader in the USA who has been touted by the far-right fringe of the American community here as some sort of expatriate leader, can't go home again. He's named as a co-defendant with actor Wesley Snipes in a $10 million tax fraud. Kahn's American Rights Litigators outfit helped Snipes file millions of dollars in fraudulent tax refund claims, the indictment alleges. After coming down here a step ahead of the feds, Kahn ran the Panama City expat socials until a sermon he gave in a casino led to a religious argument and Kahn's well publicized screed against all non-Christians led to an investigation by Dutch journalist Okke Ornstein that made the connection between Kahn and his past in the United States. Kahn was then asked to leave the organization, and said at the time that he would organize a rival group. That has not happened. Panama will not extradite people over foreign tax-related criminal charges, but the government occasionally expels non-citizens whom it finds annoying, regardless of any claim to "tax refugee" status.

Gas explorations off of Kuna Yala

Geologists for US oil and gas firms Harken and for Circle Oil (the former company historically tied to the Bush family) are in Panama, conducting seismic tests in Caribbean waters off of Kuna Yala in search of natural gas. The area in which they are searching is traditional Kuna fishing territory near the Colombian marine border. If commercially viable deposits are found it could lead to some political confrontations, because the national government considers itself to be the owner of all of the nation's mineral resources but the Kuna authorities have long claimed ownership of minerals in their territory. Because there have been substantial finds in nearby Colombian waters it's very possible that the explorations will find something valuable. This country has some peat deposits on the north shore of Veraguas but few other known fossil fuel resources.

RP to get its first windmill farm

Panama will soon get its first windmill farm. Cerro Tute, in Veraguas province's Santa Fe district, will get an 80-megawatt array of wind generators financed in part by a $140 million loan from the Inter-American Development Bank. The promoter, Roberto Moreno, told La Estrella that he hopes to replace some $40 million in fuel imports with the energy he'll be generating.

Masferrer ordered to pay $17.2 million

Former Panama City banker Eduardo Masferrer, a Cuban who obtained Panamanian citizenship but was recently stripped of it, will most likely spend the rest of his days behind US federal bars. The 60-something former banker is serving a 30-year sentence for fraud connected with the collapse of the Hamilton Bank in Miami, which greatly disrupted his plans to retire in Boquete, where he owns property. Now Uncle Sam wants that property and everything else Masferrer has: the federal district court has ordered him to pay $17.2 million in restitution to the Federal Deposit Insurance Corporation and a private insurance company, which bailed out depositors when the Hamilton Bank went under. Collection of foreign court judgments is usually a problem in Panama, but when the defendant is in prison and the government with the judgment against him can threaten to block any chance of parole that is sometimes effective in making the convict cough up assets squirreled away in another jurisdiction.

Sora farm co-op's land taken

The Agricultural Development Bank (BDA), a state-owned institution, has expropriated 148 hectares from a 22-family farm co-op in the Largartija community of Veraguas's Sora district. The bank says that it's for unpaid loans, but lawyers for the farmers say that the balance of the loan was paid some time ago by the delivery to the bank of 245 cattle. The bank, which appears to have been heavily looted during the Moscoso administration, has very messy records so it's quite possible that the cattle were sold and the proceeds pocketed by crooked public officials, with the bank's records altered to show that the in-kind payment never happened. Based on the farmers' receipts, however, lawyers have filed a criminal complaint against the bank's director and several other government officials, the latter accused of selling the land that was allegedly stolen to a third party. The BDA's director, Belisario Castillo, told La Prensa that the expropriation was done in accordance with the law.

ACP changes story the day after the vote

After months of relentless state-funded propaganda in which the Torrijos administration and the Panama Canal Authority  (ACP) told the Panamanian people that shippers supported the Torrijos - Alemán Zubieta Plan to expand the Panama Canal, the ACP announced that now the task is to convince shippers to go along with the higher tolls that are one of the cornerstones of that plan. The announcement was made one day after the referendum.

School subsidy promise denied

It seems that on the campaign trail PRD campaigners in Panama City told voters that the city had decided to dedicate 20 percent of its revenues to subsidies for the public primary schools. That is, of course, ridiculous when one considers what the city government needs to do and what resources it has to do these things, but enough people believed it so that two days after the election PRD Mayor Juan Carlos Navarro and PRD representantes held a meeting with teachers and parents to tell them that the promise that the wardheelers their party sent out into the neighborhoods was bogus.

UK embassy picketed over company's abuses

On October 19 the city saw that rarest of events, a demonstration in front of an embassy other than that of the United States. In this event a security guards' union picketed the British Embassy because a UK-based multinational, Group 4 Securicorp, fired 30 workers who refused to accept a transfer to another subsidiary of the company that would take away their union contract, pension fund and seniority rights.

RP-CR free trade signing imminent

As these briefs were written a Costa Rican trade negotiating delegation was in Panama and it was expected that a bilateral free trade agreement would be signed before it left town. Costa Rican ambassador to Panama Ekhart Peters met with the National Assembly's Foreign Relations Committee on October 24 to talk about the agreement.

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