business & economy

Also in this section:
Odebrecht gets Brazilian government backing for work in Panama
Recognizing an attack
The Panama News readership figures
Panama's bond rating still below investment grade
Globalization in the labor movement
Business & Economy Briefs

 

Lula's government eyes Panama Canal expansion work for Brazilian company as well

Brazil gives Odebrecht line of credit for Colon - Panama toll road

by Eric Jackson

On October 31 the Brazilian government announced that its state-owned BNDES bank had granted Constructora Norberto Odebrecht a $152.8 million line of credit for the Colon to Panama autopista project. Earlier this year Odebrecht bought the concession to build and operate that toll road from Máximo Haddad's insolvent PYCSA construction company, which built what exists of the Corredor Norte toll road. The Corredor Norte is divided into three separate concessions, each of them encumbered or in receivership, while the Colon - Panama autopista concession is separate and was acquired with Odebrecht taking any responsibility for Corredor Norte debts.

The Brazilian loan requires that at least half of the money be spent on Brazilian goods or services, which is a fairly standard requirement in foreign aid. Look for Brazilian-made trucks and construction machinery, reinforcing steel, bridge parts and traffic signs and lights to be incorporated into the $180 million highway project.

Odebrecht, one of South America's largest construction companies and increasingly a global concern, has like most other corporations of its size and type risen to prominence in part through skills at political intrigue. Formerly a major contributor to candidates who beat Brazil's President Lula da Silva in earlier campaigns, it was a major contributor to Lula's recent re-election and in turn the Brazilian government has used its influence to help Odebrecht land big contracts in the Middle East, and now Panama. The company's first venture in this country is an irrigation project in Alanje, Chiriqui, which its publicists say was not backed by Brazilian government loans or subsidies.

The Brazilian government's press release about the autopista line of credit noted that success in this project could enhance Odebrecht's chances at getting far larger and more lucrative Panama Canal expansion contracts.

Brazil's growth as a world economic and regional political power may well hold the key to the success or failure of the Panama Canal expansion project. The canal usage predictions used to sell the project to Panamanian voters are based on the assumption that the recent rate of increase in US imports from China will be maintained for at least two decades, a prospect that few disinterested economists take seriously. The rise of Brazil as an economic power and its use of the Panama Canal for trade with Asia could make up for some of that predicted canal usage that doesn't happen on the US-China route. However, as a symbol of its regional importance Brazil might also finance the construction of a South American multimodal container system, with ports on the Pacific connecting by rail or road to the rest of the continent. Such a development would become a competitor with our canal on some trade routes.

 

 

 

 

 

 

Also in this section:
Odebrecht gets Brazilian government backing for work in Panama
Recognizing an attack
The Panama News readership figures
Panama's bond rating still below investment grade
Globalization in the labor movement
Business & Economy Briefs

 

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