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The highway project known as the Corredor Sur (Southern Highway) is designed to connect the Panama City's eastern outskirts to downtown along the southeastern edge of the city, crossing the Bay of Panama between Old Panama and the wealthy Paitilla district. The highway is meant to alleviate Panama City's escalating traffic problem. But the project has generated intense opposition among Panamanian environmental and citizen groups, even as construction crews work 24 hours a day to complete the road.

Residents of several Panama City neighborhoods, directly affected by the contruction, as well as environmental and civil society groups, have organized to demand that the Panamanian government halt all progress on the project until key issues have been addressed.

The contract

In August 1996, the Panamanian government signed a contract with a Mexican transnational, Associated Civil Engineers (ICA, by its Spanish acronym), for the construction of Corredor Sur. In this contract, on top of the estimated construction costs of more than $222 million, both parties agreed on "a reasonable profit" for ICA of $84 million, for a total cost of $306 million.

Part of these costs will be defrayed by toll collections on the Corredor Sur over 30 years, which are estimated at nearly $190 million. Additional payments have been made through the Panamanian government's cession of almost 65 hectares of land and continental shelf area in Paitilla -- thirty of which are currently under water and will be filled in, according to the contract -- which ICA has already begun to sell. Further financing includes a $70 million loan from the International Financial Corporation (IFC) of the World Bank.

Critics point out that the contract significantly underestimates the value of both the total toll collections -- although the tolls themselves are quite high -- and of the ceded lands. In fact, just the sale of the ceded lands at today's market values could eliminate the need for tolls, according to critic Juan Manuel Handal.

Other parts of the contract have also generated criticism. For example, in another section, the Panamanian government grants ICA what amounts to a monopoly by promising not to authorize any other landfills or road construction projects greater than two kilometers in the area. Further, in case of the contract's cancellation anywhere along the way, Panama has commited itself -- among other things -- to pay ICA the expected toll income, while the contract says nothing about ICA returning the ceded lands to Panama.

Finally, according to Panama's national lawyers' association, the Panamanian constitution prohibits the giveaway of properties in territorial ocean or continental shelf, which would make unconstitutional any title from the development project described in the contract. A lawsuit brought before the Supreme Court in August 1996 on this question has yet to receive a response.

"Cleptocrats" and the crisis of public space

Arquitect Kurt Dillon criticizes Corredor Sur along with two other development projects, the Miramar towers and Colon 2000, as prime examples of the crisis of public space currently facing Panama. These projects have involved government cessions of public, oceanfront land to private interests for the construction -- over landfills -- of a parking lot, a business and residential complex, and a toll road.

In each case, blocking public access to the ocean has degraded property values around the ceded properties as well as public space, and contributes to increased concentrations of noise and air pollution in the land-locked areas. The landfills included as part of each project have negative effects on the ocean ecologies by blocking crucial currents and burying coral reefs. Additionally, in both the Colon 2000 and Corredor Sur projects, populations are being displaced to accomodate the new private enterprises.

Environmental and social costs

"According to independent hydrologists, the Punta Pacifica landfills will block the coastal current which cleans the bay, increasing sedimentation and causing terrible odors, serious health risks, and severe environmental damage. The bay will no longer be a body of water, and literally will be converted into a swamp of fecal mud, producing irreversible damage. The supposed Punta Pacifica water treatment plant will not be able to counteract this problem. Panamanians will never be able to heal the bay if the causeway and landfills are constructed according to the proposal." - 15 Most Frequently Asked Questions about Corredor Sur, by Foundation for the Development of Citizen Liberty (box quote?)

The movement organized to confront Corredor Sur, facilitated by the Panama City-based Foundation for the Development of Citizen Liberty (Citizen Liberty), says it does not oppose Corredor Sur as a whole, but rather two specific pieces of it, whose environmental impact has not been adequately addressed by the current plan. Spokespeople say the combined effects of the causeway between Paitilla Airport and Coco del Mar and the landfills planned as part of the private development project meant to offset the costs of Corredor Sur will turn the Bay of Panama into "a gigantic septic tank."

ICA's response to the obstructive effects of the causeway was to design a series of tubes running underneath it between the bay and the Pacific to permit the free flow of sewage beyond the bay. This design has been criticized by the Panamanian Society of Engineers and Architects, who say that such tubes would at the very least need to be pressurized in order to prevent the sewage from returning along the same path. The effects of the landfill were not considered in the environmental impact statement (EIS), although it is an integral part of the contract.

Other environmental effects not considered by the EIS, called inadequate by the California consulting firm Philip Williams & Associates, are the effects of material extraction -- for the landfills -- on the Pacora River, and on migratory birds in the ecosystem.

Some communities are already feeling the effects of the Corredor Sur. A number of families in the San Sebastian and La Playita neighborhoods are being permanently relocated, with inadequate compensation, they say. San Sebastian residents also complained in February that they were receiving water contaminated with sand, shells, and high levels of fecal material through residential water pipes, causing several children in the community to contract diarrhea. Construction on the project, combined with high tides and heavy rains, has caused flooding in Juan Diaz and communities along the Manzanillo River. Residents of San Francisco and Coco del Mar complain of loud noises all through the night due to construction work.

Growing opposition

Faced with the lack of transparency and accessibility on the parts of both the Panamanian government and ICA, Citizen Liberty has taken its complaints to another level. Last October, a technical mission of the IFC requested a meeting with movement representatives to hear their concerns, and promised to examine the scientific evidence they presented.

The movement achieved an important success last November 23, when they were invited to meet with upper management IFC representatives in Washington to express their concerns over the construction of the Corredor Sur. The Panamanian delegation included representatives of affected community groups, non-governmental organizations, and an independent consulting firm.

Delegates called for the suspension of IFC financing for the project pending a satisfactory consideration of citizens' serious environmental and social concerns, and formally delivered more than 2000 signatures, emails, faxes, and letters collected by Citizen Liberty. The delegation also called for the adequate completion of an EIS, which would also take into account the landfills for the development project, and the participation of independent environmental advisors throughout the EIS process. Finally, delegates pointed out the questionable constitutional standing of the lands ceded to ICA by the Panamanian government.

While the IFC was receptive to the delegation's criticisms and concerns, representatives said that the IFC had no legal authority to halt construction work, nor was it able to play a mediating role. In addition, they had to consider their responsibilities to ICA, a client, and Panama, a World Bank member, representatives said.

ICA's response

Meanwhile, ICA has been waging its own campaign for public opinion. On February 17, representatives from the consulting firm hired by ICA to conduct its environmental assessments said a final study would be ready in three or four weeks. Nonetheless, the next day, the transnational bought full-page ads in several Panama City dailies proudly stating, "We are one of the few countries in the region that today has a complete environmental impact study, specifically focused on the Pacific coast of Panama City."

On March 17, another full-page ad appeared to tell "the truth" about Corredor Sur, and "clarify some misunderstandings that threaten to contaminate Panamanian public opinion." (emphasis in original) The ad, in addition to giving company responses to community concerns, asks its own series of questions, including "Where do those who are financing the campaign against the Corredor Sur live?" Many of the most vocal opponents to the project live (or lived, before they were relocated with poor compensation) in neighborhoods already directly affected by it.

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