About Panama: Privatization

Panama has sold several state entities as part of one of the most dynamic privatization programs in the region. During the period 1994-1999, the following entities were totally or partially sold:

Cemento Bayano: Sale of 100% of cement company to Mexican
cement group CEMEX in 1994.

National Institute of Telecommunications (INTEL): Sale of 49% of INTEL was completed in June, 1997. UK company Cable & Wireless won the bid with an offer of $652 million.

Institute of Hydraulic Resources and Electricity (IRHE): Sale of 51% of IRHE was completed in Oct. 1998. The entity was divided into several private distribution and generation companies. Distribution was awarded to foreign companies such as Constellation Power (US) and Union Fenosa (Spain). Generation was awarded to Enron, AES, El Paso, and Hydro Quebec. Most projects contain local equity.

Cellular Telephone: BellSouth won the concession for use of cellular band A in 1996 and band B was granted to Cable & Wireless as part of their acquisition of the INTEL, the telephone company.

National Casinos: Gaming and Services de Panama, S.A. won a 20-year contract to administer slot machine areas inside state casinos in Dec. 1997. In 1998, two other concessions were awarded the administration of the government's eight casinos, Thunderbird Gaming and Antonio Martínez Segui. These companies offered a total of $6.5 million.

Balboa and Cristobal Ports: Hong Kong-UK company, Hutchinson Whampoa won the concession for these important ports for a period of 25 years. The company pays the government $22.2 million yearly and committed to $400 million in port improvements.

Other Ports: Taiwanese shipping company Evergreen won the concession to build the Colon Container Terminal in North Coco Solo. The company has invested $150 million. Prior to Evergreen's project, Stevedoring Services of America acquired a concession and is operating Manzanillo International Terminal; now the No. 1 container port in Latin America.

Panama Canal Railway: US companies Mi-Jack and Kansas City Southern Railways joined together to win the bid for the national railroad concession in Feb. 1998. The entity will pay the government five percent of profits and has invested $90 million.

North and South Highways: Mexican company PYCSA operates the North Corridor, a toll highway linking Panama and Colon, an investment of $325 million. ICA, another Mexican construction company, operates the South Corridor, a second toll highway connecting Panama City with the international airport. This project represents an investment of $222 million.

President Remon Racecourse: Equus Gaming of Puerto Rico won the bid for this public entity in late 1997 with an offer of $2 million.

Since 2001, the water utility, IDAAN has been granting BOT concessions and turn-key contracts for the construction and operation of water infrastructure and water treatment facilities. Also the projected $450MM Panama Bay Remediation should attract foreign companies.

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