Summary.
The draft bill amends and adds provisions to Law 77 of December 28, 2001, concerning IDAAN, to link approval of new developments in the Republic of Panama to their potable water supply capacity. It would apply to new projects and significant expansions of residential developments, condominiums, towers and housing developments with 5 or more units; commercial, service and mixed-use establishments with more than 500 square meters of built area; industrial projects that consume water; and other projects seeking to connect to the network managed by IDAAN. It defines water self-sufficiency, the impact study, acknowledgments and certifications, existing communities, developers and dedicated infrastructure. It identifies the Ministry of Housing and Land Management (Ministerio de Vivienda y Ordenamiento Territorial) and municipalities as planning authorities.
The amendment adds evaluation, certification and approval of hydraulic impact studies to IDAAN’s objectives, with authority to reject, suspend or condition approval and require dedicated infrastructure before connection. It also assigns IDAAN responsibility for inspecting connections and imposing administrative penalties. Another addition allows it to set water compensation components in tariffs applicable to developers whose connections affect the public system, under technical criteria approved by the Public Services Regulatory Authority (Ente Regulador de los Servicios Públicos), and to issue evaluation policies and procedures.
Each developer covered by the draft bill would have to submit a Hydraulic Impact Study to IDAAN, prepared by a duly licensed civil or sanitary engineer. The study would address demand over the project’s useful life, independent water sources, storage, network pressure and flow, effects on connected communities, growth and sustainability over 10 years, proposed infrastructure and a contingency plan. IDAAN would have 30 business days to issue a decision; failure to respond within that period would be deemed a denial.
The text would prohibit approval, construction or connection of projects that could reduce pressure or flow, interrupt service, affect water quality or overload the existing distribution system. The developer would have to demonstrate an independent water supply, a mixed system covering at least 70% of demand, or a prior network expansion funded entirely by the developer. Where applicable, the developer would finance and install dedicated infrastructure, including reserve tanks providing storage for at least 24 hours, authorized wells, pumping, rainwater harvesting, treatment or expansions. IDAAN would verify that the infrastructure works before authorizing connection.
The Water Supply Capacity Certificate would require approval of the study, completion of the required infrastructure and no adverse effect on existing communities. It would be a condition for construction and occupancy permits, approval of hydraulic or sanitary plans, and connection. It would remain valid for 2 years and require renewal if the connection has not been initiated. An Acknowledgment of Study Acceptance would be required for preliminary land use feasibility decisions. Before work begins, the developer would provide a bank or insurance guarantee tied to the cost of the infrastructure and never less than 5% of the project’s total cost. If the guarantee is called, its proceeds would go to the National Treasury (Tesoro Nacional).
The draft bill provides for disconnection, revocation of the certificate and enforcement of the guarantee through a reasoned decision and a procedure allowing a defense, as well as an appeal and judicial review of administrative action. It directs the Executive Branch to issue implementing regulations within 6 months and requires IDAAN to coordinate with the Ministry of Housing and Land Management, the Ministry of Health (Ministerio de Salud), the Ministry of Environment (Ministerio de Ambiente), Community Boards (Juntas Comunales) and municipalities. Projects with approved permits would have 1 year to comply, subject to IDAAN’s assessment. These provisions would be relevant to real estate developers, businesses, industries, banks, insurers and communities that use the service.
What it proposes.
- Water supply capacity for new projects and significant expansions.
- Hydraulic impact studies and IDAAN certifications.
- Dedicated infrastructure, guarantees and conditions for connection to the public network.
- Land use authorizations, oversight and penalties.
Who it would affect.
- Public and private developers of residential, commercial and industrial projects.
- Professionals who prepare hydraulic impact studies.
- Authorities that grant land use feasibility approvals, permits or connections.
- Existing communities connected to the public system.
Key points.
- The draft bill would apply to certain new projects, significant expansions and developments seeking to connect to the public potable water network.Arts. 2-3
- It defines water self-sufficiency, technical and certification documents, developers, existing communities and planning authorities.Art. 4
- It adds evaluation, oversight and enforcement functions to IDAAN, as well as authority to set tariff components subject to regulatory approval.Arts. 5-6
- It requires a prior Hydraulic Impact Study and gives IDAAN 30 business days to issue a decision, with silence deemed a denial.Art. 7
- It prohibits approval, construction or connection of projects that adversely affect the network or existing communities and provides for alternative water supplies or developer-funded expansion.Art. 8
- It requires developers to finance and install dedicated water infrastructure when the network would be affected or full self-sufficiency is lacking, and requires verification before connection.Art. 9
- It makes permits, plan approval, occupancy and connection conditional on a Water Supply Capacity Certificate, which would be valid for 2 years.Art. 10