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An overhaul of Panama’s antiquated “Diablo rojo” bus system has been put off again. Panama’s Supreme Court ruled to temporarily suspend the Transmovil project which was to have replaced the private bus system with a comprehensive citywide system with modern buses. For the time being the old US school buses with the colorful paint will continue to carry passengers and pollute the air and offend the ears.

What’s Next?

Both of the major presidential candidates are proposing a light rail system which, they say, will take four years to accomplish. However, even with a light rail system people will need a bus system to connect between rail stops.

An estimated 150,000 use the Panama City bus system every day and it is getting increasingly stressed. One problem is that there are no designated bus lanes. Panama has had a great run of prosperity and there are many more cars on the roads. As of last year reports were that 4,000 new cars joined the traffic melee every month in a city that is not building a lot of new roads. Panama’s road campaign is primarily rural and mean to connect isolated areas with the main road network.

The current, Torrijos, administration has pushed the Transmovil, modern bus, solution but it appears as though with the elections two months away that solution will die.

Why?

Panama has had a great run of prosperity and, even now, when the world is in a recession Panama expects to grow its GDP by five percent or more in 2009. Panama’s middle class is growing and prospering.

People are buying cars and new homes. Many of the home purchases are in the suburbs adding previous city dwellers to the morning and evening traffic jams. Basically this is the price Panama is paying for rapid, sustained growth.

How Does the Transportation Issue Affect Panama Real Estate Investment?

It is the success of the real estate and business investment market that has caused the traffic jams. The money being generated by a successful Panama will eventually fix the public transportation issue, hopefully with a system less dependent on more cars on the roads. Panama certainly needs modern buses so we hope that whatever system comes into place that the Diablos Rojos get phased out along with their bad mufflers and smoke-spewing motors.

Looking down the road Panama will probably have a light rail system. These systems have nodes where tracks meet and people get on and off and wait. These locations typically become commercial centers. ABPanama has continually promoted commercial real estate investment in Panama. These commercial hubs will become great targeted commercial real estate investments where successful businesses pay rent to the wise real estate investor.

If you are interested in how the transportation issue will affect real estate investment in Panama come to see us at ABPanama where we have over 23 years experience managing real estate portfolios.