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FEATURE: Red devils do battle with Transmóvil

Bnamericas Published: Monday, April 13, 2009
Panama's supreme court has dealt a serious blow to the government's flagship mass transport project Transmóvil, announced by President Martín Torrijos in May 2008. Currently, Panama City is served by some 1,500 second-hand school buses imported from the US, known as "diablos rojos" (red devils). Transmóvil was set to replace this system by handing the city's entire mass transport system over to two concessionaires, each of which will control 750 buses. The state was planning to purchase 420 buses for the project, which is expected to benefit some 800,000 users. However, the supreme court dashed the government's plans in late March, when it ruled to provisionally suspend an emergency decree aimed at awarding the tender to purchase the buses in less than 40 days. DEADLINE EXTENSION Land transit and cargo authority ATTT had issued the decree on December 6. However, on January 12 the entity extended the January 15 deadline to present technical and economic proposals. "The public contracts law has a clause called homologation of bidders, which consists of meetings between the authority and interested companies to reach agreement on the correct interpretation of the different aspects involved in a contract," ATTT spokesperson José Hernández told BNamericas. These meetings dragged on for longer than expected, forcing ATTT to extend the deadline. "January 15 did not work because it was too close to the minimum legal period required for bidders to present their proposals," Hernández added. At the same time, bidders complained there was not enough time to present adequate proposals and local press reports claimed the authority was seeking to declare the tender void, in order to award the contract directly. THE SUPREME COURT STEPS IN Less than a month later, on February 11, Panama's congressional budget committee approved the allocation of US$40mn for the implementation of Transmóvil. In addition to the purchase of the 420 buses, this budget included US$25,000 per bus to be paid in compensation to the owners of the diablos rojos, which were to be taken off the streets. Then, in late March, the supreme court intervened. The public contracts law establishes that the timeframe to launch and award a tender for US$175,000 or more cannot be less than 40 days, unless the national government draws up an emergency decree. The supreme court ruled that ATTT is not authorized by law to issue such a decree, and added the project design did not include the requirement that the buses be adapted for disabled people. These two situations could constitute a serious breach of the law, according to the supreme court, which suspended the purchase of the 420 buses. THE SECOND BLOW In late March this year, the supreme court issued a second ruling, temporarily suspending the compensation to the owners of the diablos rojos. This irked 1,452 transporters who were processing the compensation from the government. Chaos ensued on April 7, when the population awoke to a 48-hour strike on 14 key bus routes, paralyzing the capital. According to local press, bus owners were using the measure to force ATTT to suspend the project, although the authority has been quick to clarify Transmóvil is not dead. With the project temporarily suspended by the supreme court, the government is in a race against time, as President Torrijos wants to see the project tender completed before his term ends on June 30. In the meantime, the diablos rojos continue to cover Panama City's mass transport needs. The time limit may give these bus owners leverage to negotiate a higher compensation, which will have to be disbursed by the next government.

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