The Final Price of a Road

An analysis of the $50 million cost overrun in the Madden-Colón highway in Panama.

Friday, March 6, 2009

The 45-kilometer road which will link Madden to Cativá in Panama was begun in May, 2007. At that time, the reference cost for the project was $217 million.

According to the latest official information from the Ministry of Public Works, the final cost of the route will be $267 million, which would represent an increase of 23% ($50 million) over the initial price.

In an opinion published in La Estrella de Panama, Engineer Jose Blandon examined the reasons behind the cost increase and discovered that a large percentage was caused by geological problems.

More on this topic

Panama: More Taxes on Building Materials

April 2015

In order to pay for the increase in pension payments, an increase has been made to taxes on extraction of aggregates, which represents an increase of 12 to 25% in the price of housing.

Government officials say that the new tax on the final price of housing only represents an increase of 1%, while the construction industry argues that prices will rise by 25%.

Panama: Prices of Building Materials

September 2013

Price Indexes of Major Retail Construction Materials in the districts of Panama and San Miguelito, up to July 2013.

A statement from the Comptroller General of the Republic of Panama reads:

The Price Index of Major Retail Building Materials (IPMC), available in the districts of Panama and San Miguelito, compiled up to July 2013, showed the following behaviors:

El Salvador: Reconstruction Plan for $21 million

December 2011

The government has presented a reconstruction plan for Bajo Lempa for $21 million and reiterated its commitment to the development of this area of El Salvador.

A press release from the Presidency of the Republic of El Salvador reads:

The President, Mauricio Funes, today announced a reconstruction plan for Bajo Lempa for about $21 million, and reiterated his government's commitment to the development of this important area of El Salvador.

Building in Guatemala is Increasingly More Expensive

July 2011

Prices of materials such as iron rods and cement, among other things, have gone up compared to 2010.

The rise in the price of oil and other raw materials at international level is one of the main reasons for the sharp increase observed in the prices of building materials in Guatemala.

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