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Land
development > Roads
Main Access and Arterial
Roads
 The
“main access road” is typically the “last mile
or so” from a municipally well maintained paved
road such as the road to El Valle or the Lajitas
road. By an “arterial road” we mean any roads
within a development typically to a vantage
point with an ocean vista.
By far the main value to a property is
derived from the “main access” road. The
better this access road, in terms of twists and
turns, width, and length of well-paved surface,
the more value is added. Women, the main
decision maker typically for such a property,
are particularly conscious of well-paved and
well-planned roadways.
The arterial roads within a property are also
useful if the property is of a substantial size
such as 30-40 hectares or more. The most
critical arterial road is of course the one that
transports a prospective client or developer to
the lookout spot with the best vistas.
With the land acquisition strategy being used
currently of purchasing view properties “off the
beaten path”, investors must realize that
they are in the “road construction” business, at
least to a limited degree, if they wish to
optimize their returns.
The main access road must generally be
constructed to certain municipal standards with
crushed stone topping, width and drainage
specifications otherwise the municipality may
not take over long term maintenance.
The quality of the inside “arterial roads” is
more flexible depending on the type of
development being considered (e.g. condo
association, gated community etc) It is common
wisdom that the better the roads, the easier
and faster the sale of individual lots.
Another consideration in terms of roads is that
Panama has a substantial rainy season than can
damage poorly planned and constructed roads.
What may appear to be a great road in March may
become impassable by July.
For this reason, special contingency planning,
strategies and budget, on a property by property
basis, are necessary for roadway maintenance as
the rainy season approaches and does its thing.
The primary component costs of road making are
as follows:
1. The rental of heavy earth moving
equipment such as caterpillars, graders and
backhoes.
2. The purchase of sub-surface, low quality
rock aggregates for the road bed.
3. The purchase of high quality crushed rock
aggregates that meet municipal standards.
4. Well designed “road way gutters” for
drainage including culverts as needed.
5. Construction to municipal standards of
bridges over substantial water flows including
rivers and streams.
Within this range of costs, there appears to
be at least one possibility to save substantial
amounts of money given the number of roads
requiring construction for the 12 properties to
date.
We include a
cost/benefit analysis of purchasing
a new “rock crusher” for about $50-60K. A used
rock crusher may also be appropriate at half
this price and would do the job just a swell if
it is available. Of course a new rock crusher
could also be sold for half the price on
completion for the same result.
Such a purchase would probably have a pay back
period of less than 6 months. It would permit
efficient utilization of “free rocks” on the
various properties that have to be removed and
disposed of in any event.
The main savings available is in the area
transportation costs of crushed stone by truck
from a distant location to the development site.
This transport cost can be as much as 85% of the
total delivered cost of the crushed stone. A
payment of $150 to $175 for a 15 yard load of
crushed stone may only have $20-25 attributable
to the stone itself.
When you own a rock crusher you simply move it
to the next site when you are ready rather than
have 1000 trucks arrive at $100+ per trip! It
could also generate additional income if a
neighboring developer or builder wanted to save
transport costs.
The life of such a machine is generally about 20
years so a resale after say 5 years of constant
crushing should still net at least 50% of the
original cost ($25-30k).
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