The New Public-Private Partnership Regime in Panama: Promoting Sustainable Development

Panama has taken a significant step towards promoting sustainable development and infrastructure modernization through the implementation of a new Public Private Partnership (PPP) regime. This type of public-private partnership has become, in other latitudes, an effective mechanism for the execution of large-scale projects, allowing for greater efficiency in the investment of resources and an improvement in the quality of life of citizens. In this article, we will explore the key features of Panama’s new PPP regime and its impact on the country’s economic and social development.

The New Law of Public-Private Partnerships:

In 2022, the Government of Panama enacted Law 93 on Public-Private Partnerships, establishing a modern and clear legal framework for the implementation of projects under this scheme. The law seeks to attract private investment, promote innovation and efficiency in the provision of public services, and encourage private sector participation in the development of infrastructure and essential services for the country.

Key Characteristics of the New Regime:

  • Definition of Public Private Partnership: The law clearly defines what is considered a Public Private Partnership in Panama. This includes infrastructure projects, public services, or any other type of work or service that involves collaboration between the State and private companies.
  • Creation of the Panamanian Agency for Public-Private Partnerships: The new law establishes the creation of a specialized agency in charge of planning, structuring and promoting projects under the APP regime. This agency will act as a regulator and facilitator in the process of selecting and executing the partnerships.
  • Transparency and Competition: The law establishes mechanisms to ensure transparency in the bidding and project selection processes, guaranteeing fair competition among bidders and the participation of different private sector actors.
  • Flexibility in APP Modalities: Panama’s APP regime allows for different collaboration modalities, such as concessions, service contracts, strategic alliances, among others, which facilitates adaptation to the particularities of each project.
  • Legal Stability and Investor Protection: The new law establishes mechanisms to provide legal stability to private investors, ensuring the protection of their rights and guaranteeing the security of their investments.

In countries where this type of collaboration has been in place for years, a positive impact on the country’s economic and social development has been continuously noted. Some of the most notable benefits include:

  • Quality Infrastructure: Projects executed under this regime tend to have higher quality standards, as the participation of the private sector drives efficiency and innovation in the design and construction of infrastructure.
  • Job Creation: The execution of large-scale projects generates direct and indirect employment, contributing to the reduction of unemployment and the improvement of the quality of life of citizens.
  • Improvement of Public Services: Public-private partnerships make it possible to improve the provision of public services, increasing their efficiency and accessibility for the population.
  • Investment Attraction: The new PPP regime has aroused the interest of national and international investors, boosting the attraction of capital for the development of strategic projects for the country.
  • Regional Development: The execution of infrastructure projects in different regions of Panama contributes to a more equitable and balanced development of the country, avoiding the concentration of resources in urban areas.

However, for the success of the new APP regime in Panama, challenges such as training public officials in project structuring, risk management and the appropriate selection of priority projects for the country must be addressed. In addition, it is essential to maintain transparency and accountability throughout the project selection and implementation process to ensure the confidence of citizens and investors.

In conclusion, the implementation of the new PPP regime in Panama may prove to be an effective approach to promote the country’s sustainable development. Through the collaboration between the public and private sectors, opportunities for economic growth, modernization of infrastructure and improvement of public services will be generated, which will allow Panama to successfully face the challenges of the future and consolidate itself as a competitive and prosperous country in the region; therefore, our lawyers specialized in public procurement are already trained to assist anyone who intends to face the challenges of this new business and development scheme.

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