A new era for the Panama Canal Railway

In 1977, under the terms of the Carter-Torrijos Treaty, the Panama Railroad was turned over to the Government of Panama. At this time, the railroad and its infrastructures were already in decay and antiquated.

By 1986, the U.S. Military Traffic Management Command presented a Railroad Safety Study listing a series of recommendations for rehabilitation of the railway costing close to $6 million in materials alone. Until the condition of the track was improved to meet the minimum standards of the FRA, any transportation of U.S. civilians and troops was to be deferred.

Up until 1997, minimum maintenance was performed on the railway and the Government of Panama did not allocate a significant budget for its operation, thus fueling its rapid decline. It is estimated that the railroad was losing approximately $4 million/year.

Nonetheless, just when it seemed that this historic railroad had reached its finale, a new opportunity for its resurrection was envisioned when the Government of Panama undertook an aggressive process of privatizing most of the state-run facilities. The railroad was included in this initiative

A concession was granted to the Panama Canal Railway Company on February 18, 1998 through the approval of Contract-Law No. 15 by the National Assembly and published in the Official Gazette of the Republic of Panama (No. 23,485). The Panama Canal Railway Company was granted “with the exclusive right to develop, construct, operate, administrate, renovate, reconstruct, modify and manage a railroad and its infrastructure, properties, intermodal terminals, installations, equipment and physical areas”.