By Adam Thomson
Think of Panama City and one of the first images is the crescent-shaped bay, defined on one cusp by the growing sky-rise residential area of Punta Paitilla and the picturesque old centre of 19th century pastel-shaded waterfront buildings on the other.
But if London and Regional, a UK-based construction company, gets its way, the city could soon outgrow its traditional boundaries to occupy a huge area of land just across the Bridge of the Americas spanning the Panama Canal: Howard, the former US Air Force base.
This month, the company, together with Jaime Gilinski, the Colombian banker and entrepreneur, signed an agreement with the Panamanian government to build what it hopes will become a new business and residential hub within just a few miles of the existing capital.
The company has three months to present its master plan for the 1,400ha site and, as yet, few details are known. But London and Regional has pledged a minimum investment of $405m during the first eight years of the 40-year concession. A further $300m will follow during the remaining years.
This month, after paying the government a one-off fee of $20m to seal the contract, Ian Livingstone, who heads the company said: "We hope to exceed the spending limits established with the government quite dramatically."
Indeed, Mr Livingstone and Mr Gilinski believe the value of the finished project could top $10bn, equivalent to more than half Panama's gross domestic product. The idea, they say, is to construct a large industrial park, a media village, a downtown area with plaza, restaurants and shops, a showcase building to mark the nearby entrance of the canal and a swathe of residential buildings – for both the wealthy and low-income segments of the population.
"Our intention is to create a community, and that won't work unless you have a representative mix of society and a critical mass to achieve a stable and permanent population," says Mr Livingstone.
That is a far cry from how the area looks today. Large white houses adorned with red-tiled roofs and built up on stilts line grassy streets named to make the US soldiers to feel right at home.
On one side of the area lie a 3.2km runway and four huge hangars which served as centres of aviation maintenance and storage up to 1999 when the US packed its bags and went home.
Economists and town planners say that one of the measures of success will be the amount of interest and the number of firm offers from companies looking to use Panama as its centre of regional operations.
Mr Livingstone says he has already initiated detailed talks with many multinationals. "We have had between 20 and 30 serious approaches from companies whose names everyone is very familiar with," he says.
If they end up moving to the site, it is likely to be for two main reasons. The first is Panama's increasing emergence as a logistics hub for the wider region. Since the government of Martín Torrijos came to power in 2004, it has set in motion a plan to encourage shipping and transport companies to use its strategic position as a centre of distribution.
The second could be a series of tax benefits. Officials say companies involved in industries such as aviation and related activities, and information technology, will not have to pay any taxes or import and export duties.
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