The Panama Metro is urgently seeking millions in additional funding to address critical maintenance needs across its aging rail system. Metro de Panama, S.A. (MPSA) management has formally requested a $4.3 million budget transfer from the National Assembly to cover mounting debts and essential repairs. This request comes as the system’s original Line 1, now twelve years old, requires major rehabilitation to ensure its continued safe operation for nearly 400,000 daily passengers.
Officials revealed that the organization faces a total debt of approximately $11 million from 2024 for maintenance services. Without immediate financial intervention, this liability could balloon to over $30 million by the end of 2025. The financial strain is already manifesting in operational incidents, including recent mechanical failures and signaling problems that have caused service disruptions during peak travel hours.
“Your support is vital for the Panama Metro to continue providing safe and efficient service to nearly 400,000 daily users,” [Translated from Spanish] said César Pinzón, the director general of MPSA, during his budget presentation. He emphasized that current budget limitations are directly impacting the system’s crucial maintenance programs.
The approved funds will be split to address two immediate crises. A portion, $2.7 million, is allocated to settle overdue payments from last year for services already rendered. The remaining $1.3 million is earmarked for urgent waterproofing and structural repairs within the tunnel of the original Panama Metro Line 1.
Mounting Debts Threaten Maintenance Partnerships
Financial documents presented to the Budget Commission detail the precarious situation with key service providers. Eibar Caballero, the finance director for MPSA, explained that the $2.7 million will be directed to the “recognized credit” budget line. From there, payments will be made to settle invoices owed to two primary contractors, Alstom Panama and Telcon Group.
Alstom Panama holds the contract for maintaining the trains, power systems, and the vital railway signalling system. Luis Carlos Díaz, the director of Operations and Maintenance, provided a stark figure to lawmakers. He stated that the debt to Alstom Panama for 2024 alone stands at nearly $7 million. This recent budget transfer is intended to cover four specific accounts and begin amortizing that significant debt.
Telcon Group is also awaiting payment for technical services it performed last year. The accumulation of these unpaid bills risks damaging essential supplier relationships. A failure to pay contractors could potentially lead to a reduction or halt in maintenance services, creating a severe threat to daily operations.
“To the company Alstom Panama, we owe nearly 7 million dollars from 2024, and this transfer is to cover four accounts and be able to amortize that debt,” [Translated from Spanish] Díaz told the commission members during his testimony.
The financial pressure is not new. César Pinzón has appeared before the National Assembly’s Budget Commission on several occasions. He has consistently argued for a larger operational budget to fund comprehensive preventive and corrective maintenance and to manage provider debts. The system’s expanding age and usage make these pleas increasingly urgent.
Aging Infrastructure Demands Major Investment
Beyond the immediate debt crisis, the Metro system faces a looming financial challenge for its core components. The institution estimates that a major investment of approximately $80 million will be required within the next four years. This funding is needed for comprehensive overhauls of both the railway line itself and the rolling stock, the trains that have now traveled over 1.3 million kilometers.
Adding to the list, the system’s escalators will soon reach 15 years of service. They too are scheduled for a full rehabilitation process. MPSA has officially highlighted the systemic risks of deferring these essential activities. The organization warns that delaying maintenance inevitably leads to cascading problems that, if unaddressed, will eventually compromise the operability of critical equipment and systems.
The recent incidents on both Lines 1 and 2 serve as a tangible warning. These have included failures in the railway signaling system and various mechanical issues with the trains. A breakdown of train number 2109 on October 30 caused an 11-minute stoppage during the morning rush. The incident triggered severe overcrowding at key stations including San Miguelito and Cincuentenario.
Another failure occurred more recently on November 6, forcing the evacuation of a train at the Las Mañanitas station. Service on Line 2 was temporarily suspended. The affected unit was moved to the maintenance yards where specialists diagnosed a failed electronic card responsible for managing traction. The train was only returned to commercial service after completing all necessary tests.
Urgent Repairs for Line 1 Tunnel Underway
The second part of the newly approved funding, totaling $1.3 million, targets a critical structural issue. It will finance the waterproofing of the Line 1 tunnel and the repair of the concrete slab that supports the railway tracks. Both have been damaged by persistent water infiltration.
Director of Operations Luis Carlos Díaz provided important context for these repairs. He noted that Line 1, which was inaugurated in 2014, is now outside of its warranty period. The original warranties were extended for four years post-inauguration, meaning the full burden of maintenance now falls entirely on the state-owned entity. The water leaks have already caused damage to the tunnel’s segments and the foundational concrete slab.
“The guarantees were extended four years after the inauguration, so we are now outside the warranty period. These leaks have affected the tunnel’s segments and the slab where the railway track sits,” [Translated from Spanish] Díaz indicated during his presentation to the commission.
Due to the highly specialized nature of the work and its urgency, the Metro plans to use an exceptional procurement procedure. This will allow them to directly hire contractors who have previously performed similar work within the railway system, expediting the repair timeline. The situation has also drawn scrutiny from lawmakers who are concerned about fiscal responsibility and long-term planning.
Independent deputy Janine Prado questioned the management of the Metro’s debts during the budget hearing. She pushed for a stronger emphasis on preventative maintenance to avoid having minor issues escalate into costly emergencies. Her line of questioning reflects a broader concern about ensuring the sustainability of a public transport system that has become a backbone of Panama City’s infrastructure.
The Metro’s director general and his team now face the dual challenge of managing daily operations while securing the substantial long-term investment required for the system’s future. With hundreds of thousands of commuters relying on the service every day, the outcome of these budgetary negotiations will have a direct impact on urban mobility in Panama for years to come.