Panama has changed how it pays for rebuilding after the October 9 earthquake, and the money now reaches contractors earlier. The government amended an emergency trust fund so it can finance builders directly and advance capital while the work is still under way.
The change rewrites Article 5 of Cabinet Resolution No. 108, issued October 10 to declare a national state of emergency. Under the original terms, the trust paid only for finished works, and each payment had to clear the full bureaucratic process. Javier Carrizo Esquivel, general manager of the National Bank of Panama, said the President of the Cabinet Council instructed the change. The trust can now make loans, and an inter-institutional committee will be set up to run the mechanism.
Why it matters for housing
The aim is to get housing projects started faster. Companies no longer have to wait until a contract closes to reach the funds. Minister of the Presidency Juan Carlos Orillac confirmed that the amendment responds to the need for a financing method for the firms doing the work. The first cabinet decree did not allow the trust to finance a contractor.
Who signs, and what comes back
The Ministry of Economy and Finance, the National Bank of Panama and the Comptroller General are authorized to sign the trust documents. That is meant to secure timely execution of contracts for works, goods and services tied to the emergency. When the emergency, the contracting period and the payment of approved obligations have ended, any balance left in the trust goes back to the National Treasury.
Open questions
Several terms are not public. Officials have not said what conditions the loans will carry, what guarantees companies must put up, how resources will be allocated, or what oversight will apply before and after each disbursement. It is also unknown what recovery mechanisms would apply if a contractor fails to deliver a project.
Sources
- The Government Will Lend Money to Contractors to Build Homes and Other Infrastructure After the Earthquake. – Newsroom Panama
- Balen must put the Himalayas on the table in Delhi
Photo: Pangalau (CC BY-SA 4.0)
