Review of the Panama City Metro Project

19 Pages Posted: 26 Sep 2014

Date Written: March 12, 2014


The Metro rail transit system now under construction in Panama City, and planned extensions to that system, are poor investments for Panama. Depending on ridership, the US$1.88 billion construction cost of the first 13.7-kilometer line of the system could cost as much as $15 per rider. The costs of operating the line are likely to be greater than fare revenues, and maintenance costs for the system will grow until, after about 30 years, much of the infrastructure will need to be replaced at a probable cost of more than $1 billion.

The government says Panama City needs a rail system because buses do not have the capacity to move the large numbers of people who enter and leave the center city each day. But the government has designed and is building a low-capacity rail system that will not be able to move more than about 6,400 people per hour. By comparison, transit buses can move more than 10,000 people per hour on city streets and double-decker buses can move at least 17,000 people per hour.

The Panama City Metro will use three-car trains that the manufacturer says have a capacity of 600 people per train. But this is what transit experts call “crush capacity” in which everyone on board is pressed up against other people and/or car walls. Few people are willing to accept such crowding, so the actual capacity of each train is likely to be closer to about 375 people. At peak operation, the wait between trains will be about3.5 minutes, which means the system can move about 6,400 people per hour in each direction.

A single train can hold more people than a transit bus, but buses can safely operate far more frequently than trains. Studies have found that a single bus stop can serve 42 buses per hour. If bus stops are staggered, with four stops every 400 feet, they can serve 168 buses per hour.

Double-decker buses can easily hold more than 100 people, so they can move more 2.5 times as many people per hour as the Panama City Metro.

The one thing rail transit does is create winners and losers. The winners include the companies that design and build the expensive rail lines, owners of property near rail stations, and the few people who will find it convenient to take a train from where most people don’t live to where most people don’t want to go. The losers include the taxpayers who have to support the train, owners of property away from the rail stations, and anyone who wants to travel to the many places the trains don’t go who suffers congestion and poor quality transportation because money that could have helped the entire city was spent on the rail line for an elite few.

Keywords: rail transit system, metro, Panama City, deferred maintenance, bus transit, transit capacities, double-decker buses

JEL Classification: L62, L9, L91, N76, O18, R4, R41, R42

Suggested Citation

O'Toole, Randal, Review of the Panama City Metro Project (March 12, 2014). Available at SSRN: or

Randal O'Toole (Contact Author)

Cato Institute ( email )

1000 Massachusetts Avenue, N.W.
Washington, DC 20001-5403
United States

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