Profit From Panama Canal Expansion

Earlier today, amid much pomp and fanfare, the Panama Canal Authority (ACP) opened the sealed bids for the canal expansion project. Audience members looked on eagerly like it was the Academy Award for best picture…  The lowest bidder? A consortium led by Italy’s Impregilo, ringing in for a cool $3.12 billion.

Wait, wait, not so fast.  The contract has yet to be awarded and the ACP has a point system that factors both price and technical analysis in determining the ultimate winner.  This is Panama-speak for ‘whoever leaves the most money on the table.’  Naturally, they are capitalists.

Frankly, it doesn’t really matter who ultimately wins the bid– Spain’s ACS, Italy’s Impreglio, or the Bechtel/Mitsubishi joint venture. The important fact is that the project will undoubtedly be
bloated and over budget, and the amount of work involved is far more than the initial survey results suggested.

Entire armies of labor and supervisors will be needed, as well as expat executives, managers, and engineers who will relocate to Panama for the duration of the project. Coupled with the other mega-projects in the area, as well as the number of multinationals setting up a
large presence in the country, I expect there to be a steady inflow of expatriates business people into the country over the next several years.

This is a major opportunity, and in my opinion, low hanging fruit.

Panama already has its fair share of retiree and wanderlust expats, and I certainly expect these segments to grow in the coming years… but the business expat is a different animal altogether.

Unlike retirees and young adventurers, businessmen relocate with their families.  They are in their prime earning years, and as consumers, they spend orders of magnitude more than other demographics.

Expat businessmen are on generous relocation packages, so they have more money than most.  They need schools. Daycare. Parks with silly waterslides. Home healthcare. A greater sense of security.  Right now, these services are generally lacking in Panama, and this spells opportunity for entrepreneurs.

I have personally seen some multinational companies overpaying by thousands of dollars each month for their managers’ accommodations, and I expect this trend to continue because there is presently tight supply of quality, well-located expat housing… and well-located is key.

Panama City is full of empty condominiums.  Developers simply overbuilt their market… and while some of the condos are very luxurious, most are simply unsuitable for expats who relocate with families, and too far from the job sites.

Developers made the mistake of overlooking the professional, family expat. The best way to capitalize on this for an investor, in my opinion, is to look at land and housing located near the Canal and major job sites; prices have fallen since last year and I see demand surging soon.

For entrepreneurs, there are small business opportunities for anything that caters to the family in the aforementioned locations, especially childcare.

On another note, I mentioned about a week ago that I was working on a way to share some of my contacts.  I’ve decided to put together a series of white papers, and the first one will be Panama… except I’m not going to call it a white paper because it won’t contain any of the usual inaccurate drivel and gibberish you find in google.

No, this will be a Black Paper… concise and intelligence-rich, designed for the investor and entrepreneur.  I’ve spent years and tens of thousands of dollars accumulating the right contacts, and I will not only tell you who to work with, but I will spell out specifically who NOT to work with.

There will be a charge for this… I’m not sure how much yet because I don’t know how many I want to sell; I’m planning on keeping it fairly scarce so that I do not overwhelm my contacts.  If you’re interested, I’d like to hear from you specifically what information you would like to see in a Black Paper– I know that bankers, brokers, lawyers are at the top of the list, but what else? Let me know by commenting below.  I’m working on it right now and your feedback will help shape the content.