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The Pedasi Report, Panama

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Written by Matt   
Saturday, 18 April 2009 18:27
Villa CamilaIt's got a great name. Not unlike the parents that named Madonna, generic it's as if her founding fathers knew Pedasi was destined for something special. This coastal region, roughly five hours from Panama City by car, has evolved as something of a oxymoron amidst the great commotion that is Panama hype: the spotlight in an off-Broadway circuit, the most familiar of its uncharted waters. It's attracted both avant-garde travelers in search of something original and cutting-edge investors with a taste for the old-fashioned. Everything moves slowly in Pedasi. Everything. The first thing I did when I got to Pedasi, the first thing I do when I go anywhere I'm really looking to interrogate, was search for a barbershop which, like beacons of truth and gossip, shine as some of the best places to find unbiased information. "Watch out for girl Jimena," a barber in Bocas del Toro told me once. "She the town bicycle. Every man gets a ride. Some say she also got SIDA." SIDA is the Spanish translation for AIDS, but I had stopped listening long before that.

Perhaps a testament to my eventual conclusion, I was told there doesn't exist a barbershop in Pedasi. In fact, the only barber who used to cut hair in Pedasi moved his operation to Panama City. Through my travels, interviews and reflections, I'd discover that Pedasi is ahead of the curve in many regards other than haircuts. Its investment market is hesitantly nascent, its tourism industry is young, and its identity as truly special destination is still largely undefined.


What's it like?

Whether or not any of its celebrity rumors are true, there's a certain anonymity about life in Pedasi, composed of one part geographic isolation and one part nonchalant residents: the kind of people who'd just as quickly label Brad Pitt a backpacker. Outside the passing tractor-trailer or anxious rooster, Pedasi emits the tranquility of a movie set. Downtown, which is an inaccurately urban way of saying "the small network of side streets around the main square", has the one-story feel of an old mining town with elders on porch rocking chairs and most doors propped open to catch a breeze.

A step back in time: it wouldn't be a stretch to envision cowboys and gamblers and brothels in Pedasi, a company town circa 1905 America, born from the fusion of local labor and resources of an industrialized nation. You don't have to be a historian to sense its inherent charm nor do you have to be a visionary to feel there something special going on. Sometimes this tranquility borders boring, a peaceful place to come and relax but not a whole lot more. "A tumbleweed town," one tourist I met called it.

Outside Pedasi proper are several beach destinations like Playa Toro and La Garita, Punta Mala, and several others. On a weekday it's rare to many another people on these stretches of sand. On weekends there's slightly more traffic, but nothing you could vaguely categorize as crowded. The nearest visit-worthy towns are Tonosi (to the South) and Las Tablas (to the North) which supplies Pedasi with stuff like hardware and vegetables (believe it or not, in this, the agricultural center of Panama, it's nearly impossible to find good fresh vegetables unless you grow them yourself). There's a sleepy yet vibrant buzz about the town of Pedasi, there's an "it factor" that's hard to put a finger on.


The Guanacaste Comparison

The Los Santos province and Pedasi often draw comparisons to Costa Rica's Guanacaste region and its hotspot Tamarindo, primarily due to their similar landscapes and natural resources: nice beaches, rolling hills, good surf...etc. Over the past decade, Tamarindo transformed from a beach paradise to an overbuilt beach mess with sewage problems, traffic, and unsightly construction. I asked around if Pedasi was headed in that same direction.

One surfer I met visiting Pedasi on vacation, a forty year old doctor from Los Angeles, used to frequent Tamirindo's famed break roughly eight years ago. He suggested the eco-tourism and outdoor activities in Pedasi would attract similar crowds (fishing, surfing, birding) and hoped this identity would be preserved and not, as he put it, "fucked up" like they have in Costa Rica.

Will locals and the government in Pedasi learn from examples like Tamarindo?

Some indicators say no. Several locals I spoke with reported construction crews backing into mangroves to collect sand for cement, illegally destroying the natural seawall. There've also been reports of mangroves being burned. Because the industry is in its infancy, the construction magnitude has been limited and thus many of the laws haven't yet been tested. "We haven't yet seen many glaring examples of non-compliance (although they do exist)," said Joel Jelderks, five-year enthusiast and developer of several residential projects. "While it may be too early to tell, for the most part there seems to be a heightened sense of responsibility down here."

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Pedasi Then and Now

Depending on who you ask, Pedasi has come a long way over the past five years. It was no exception to the hype that enveloped Panama as a republic: a hunger for the quick buck and lack of foresight for the long term with land flipping the name of the game. Forever, Pedasi was home to cattle-ranchers of Spanish descent, an innocent fishing village with a cool name. But things are certainly changing.

Home to ex-President Mireya Moscoso, Pedasi is blessed with tremendous roads, electricity, and water supply (though much of the same could be said of other rural destinations in the Azuero Peninsula). The maintenance of Pedasi's plazas and streets seems a step up from the Panama norm as if it's always about to be featured in a magazine or photo shoot. Beyond all the elaborate news features, the town remains simple at heart: with one modest grocery store, two gas stations, and no barber shop.

With all the area's development and propaganda, there still remains an old-school tropical chic about its beach areas, one embodied by the sight of giant ocean view farms grazed by cows and horses, one of withered village men sharing beers on an abandoned coast. Farmers that'd owned land for many years began interacting with foreigners somewhere around 5-10 years ago when giant chunks of cash were offered in exchange for sweeping oceanfront lots. While this is still going on to an extent, the locals of the town keep mostly to themselves as they did before the arrival of large SUVs and Blackberry ringtones. Some locals are employed by the areas projects, others by the few establishments in town. Compared to the dramatic angles of new Pedasi developments, locals live simple and unembellished lives but prices and wages have gone up with the arrival of foreigners, so the simple life isn't as cheap as it used to be.

Costa Pedasi No one I spoke with seemed to know exactly what direction Pedasi was going nor how long it would take to get there. There seems to be a disconnect between its residents (both local and foreign) and its investors: all of whom have strong beliefs but none of whom work together as a particularly united front. There are issues to be dealt with: the care for beaches and preservation of national parks for example, both of which tend to go ignored when Pedasi hosts large crowds (such as the recent Semana Santa which left much of the landscape run down). It would be naïve also to overlook the obstacles Pedasi faces with tightened cash flow due to a global credit crunch though some like to refer to Pedasi's lethargic development pace as an unintended benefit: a built-in filter to avoid overdevelopment and unsubstantiated growth.

One could say one of Pedasi's greatest allures, its remoteness, is also its greatest obstacle to development. Retirees leaving the debt-ridden USA are often deterred from investing due to Pedasi's distance from airports, hospitals, and Panama City. Vacationers aren't able to easily work Pedasi into a long weekend visit, mainstream investors tend not to go that far out of their way, and the only people regularly in and out are dedicated surfers who (we know) will drive anywhere for a decent break.


Pedasi.org

Almost all the experts I spoke with referred at least once to a new initiative founded by Connecticut-native Jesse Levin, a Pedasi real estate consultant and contributor here at The Panama Report. The group, after their first meeting several months ago, plans to meet regularly and discuss master concepts for the region, an attempt to connect dots and unite investors on the same page regarding matters not addressed by the state.

Levin, besides driving the initiative, represents a factor that Pedasi as a whole seems to lack: young and energetic entrepreneurs helping to germinate a successful tourism community. It appears that because prices in Pedasi rose so fast, many young professionals were immediately priced out. It's a chicken or egg thing. You need more young people to build tourism establishments and you need tourism establishments to attract young people. The way to attract young people, according to Levin, stems from a private effort: some sort of trade association by investors who realize that sustainable growth is more than skin deep.

Unlike you'd have seen in developing hotspots like Costa Rica or Mexico, relatively few small new businesses inhabit the main town of Pedasi. Manu surf shop, a restaurant called Vibe (cool ambiance, terrible food), and Pedasi Fishing office owned by Jose Goldner, a young Panamanian passionate about the region, just off Pedasi's main square. These are the building blocks for a unique destination, but business can be slow at times. Pedasi's landmark shops like Yely's Dulceria represent more of a traditional mindset than a progressive or innovative one.

With long-proven destinations in the USA offering extremely low prices on property, the Pedasi.org group will also have to devise an identity for Pedasi other than "inexpensive real estate by the beach." Pedasi sits relatively off the beaten path so attracting the right kind of clientelle is crucial. And according to Levin and many of the experts I spoke with, that things move slowly in Pedasi is less an impediment and more an opportunity to do things the right way. Pedasi.org


Pedasi's Tourism Thrust

Feria de Azuero Perhaps Pedasi's most tangible product is its tourism industry that, while still very embryonic, is in a great position to grow. Casey Halloran, a Costa Rica tourism veteran who recently opened a boutique Pedasi hotel and also a contributor on The Panama Report, knows potential when he sees it. From the breezy porch of Casita Margarita, his boutique hotel on Main Street, Casey reiterated that what Pedasi and the area needs is a distinct and united plan.

"This place has everything we had back in Costa Rica - the weather, the surfing, the beaches, the national parks - besides its own echelon of folklore. We just need to band together and decide what Pedasi wants as a long-term vision. What kind of development, brand, image we want to emit." Halloran was inspired by the amount of tourists passing through Pedasi during Holy Week this year, which he claimed was the best tangible sign of potential he'd ever seen in the once-sleepy fishing town. "With more hotels and tour companies to meet that kind of demand, Pedasi could easily evolve into one of Panama's limited edition destinations." It is mostly future tense that Pedasi experts use, as in things are going to happen.

Isla Iguana When it's not a busy weekend, Pedasi offers contrastingly few things to do. One of the only guide groups is Pedasi Fishing who'll take both serious game fishermen and normal tourists minutes out to the Tuna Coast, a region renowned in the industry where we spent the morning reeling in 12lb tuna and red snapper the size of small duffle bags. For the less active, Isla Iguana is a Galapagos-esque island that sits about 15 minutes offshore - inhabited by rare birds, hordes of purple and red crabs, and giant lizards - offers clear water and white sand as nice as any San Blas or Bocas del Toro destination. Tourists pay $10 to hang out on Isla Iguana, stunning in its own right, but void of any kind of guide system.

Bocas del Toro and Boquete, two of Panama's most prominent niche tourism examples, seemed to evolve based not on real estate acquisition but fun and unique vacation opportunities. Halloran believes everyone in Pedasi put real estate first, opting for the quick buck real estate deal as opposed to the slow and methodical track he'd seen work in Costa Rica. "Locals who sat on family farms preferred to sell and get mega-rich. No one was willing to stick their neck out. Had a few of the deep-pocketed developers allocated a portion of their investments on small tourism investments like cabinas and tour desks, rather than purely on glossy marketing schemes, both they and Pedasi would be in a better position."

For the amount of grief Pedasi gets for not having the proper tourism infrastructure, to the undemanding tourist, the areas hotels that do exist are like an oasis in a peninsula extremely low on nice accommodations. Main Street hosts a strip of economical digs: the nightly basics of linens, shower, TV, and in some cases air conditioning for roughly the cost of a Manhattan lunch. These options are counter-balanced with a small handful of high-end options sprinkled outside Pedasi proper such as the quirky and surprising Posada de los Destiladeros, the eco-chic Villa Marina, and the king of beach class Villa Camilla of Azueros.


The Pedasi Real Estate Scene

There's always someone or something that breaks the mold and starts a trend. The guy in bumper-to-bumper traffic who begins driving on the shoulder, for example, or the revolutionary who ignites an uprising. Ballsy, visionary, different. In the world of Pedasi real estate, that guy, unanimously according to experts, is French-born Gilles St. Gilles of the Azueros project.

The project itself is a model for Pedasi ambition, representing the kind of passion people talk about lacking elsewhere in the region: the nerve to "stick their neck out" and do something for the love. Without boring you on the details of Azueros (which you probably already know), it sets precedent in a number of different categories primarily as the most advanced project in a challenging market. "Money can't be the only object in Pedasi," remarked Guillaume St. Gilles, Project Manager at the Azueros project and son of investor Gilles St. Gilles. "This project, as all must be in this region, was a labor of love with many sacrifices and obstacles."

I tried to examine whether there were really things happening on the construction front, whether there were a lot of passionate developers ready and willing to make sacrifices and deal with obstacles? The answer was resoundingly no. Projects are slated and ideas are thrown around, but in terms of actual construction, as in large machines moving things, there was very little visible movement. A house was being built on one project, some fences were being mended on another, one project is indeterminately stalled, and several haven't yet broken ground.

Investors like Roy Sternberger, a Costa Rica veteran and land owner in Pedasi, says identifying development isn't always so obvious to the naked eye. "It's no Coronado," he says, alluding to the fact that we won't be seeing crazed teams of tower builders here anytime soon. "But this isn't an extension of Coronado. It's Pedasi. Things are right on the cusp...but not quite there yet."

This was a common theme that sat well with me: that Pedasi is still in its early stages, in a position to travel down any number of different paths. All the investors I spoke with seemed to be in it for the long haul, which was refreshing, willing to be patient and wait out the natural process of development. Granted, as Sternberger pointed out, the 'make or break' phase is the scariest time in a real estate cycle (and the area's quiet job sites seemed to echo that). He pointed out that Pedasi has indeed come a long way from a place where the options were slim (ie. exclusively large tracts of undeveloped land) to a marketplace with a variety of options to the typical investor. Projects like Andromeda and Costa Pedasi (on Playa La Garita just outside of town) are good examples of projects with small lots for sale as are mountain projects like Rio Oria (10 minutes south), which was just beginning construction on their first model home.

The most active construction site I saw was, of all places, the new airport. It will be replacing the old airport which once hosted three weekly flights into Pedasi (which stopped for no reason known to any of the people I spoke with), but now just hosts occasional charter planes. No one knows who's funding the airport project and it's certainly not the government. There were also two nuggets of construction on Playa Venado, the famous surf spot, one for surfer cabanas and another larger, more impressive house down the beach - don't know what for. Whether a shortage of credit has kept Pedasi construction from moving or a lack of sales, I was unable to figure out: the one real estate agency in town was closed during regular morning hours.


Conclusion:

Pedasi Fishing The general feeling I took away from my trip to Pedasi is this. It has experienced the same plaguing hype that is now strangle holding Panama City life by way of reckless speculation, of over-promises and under-deliveries. It's going to go through a slow period - as slow if not slower than other spots in Panama. But what makes Pedasi different from elsewhere in Panama is its backbone: one of folklore, charm, and visionary investors: one of hyper-unique potential that could draw world-class travelers once it grows. It's not there yet though: there's no mistaking that. To some, its hype may have exceeded its real charm.

Compared to Costa Rica, lots near the beach in Pedasi run about 1/4 the price: a big jump from what they used to be but perhaps rightfully so now that a number of different options are available (many of which represent great values). What Pedasi needs is new small establishments - bars, restaurants, tour guides - catering to the right kind of clientele: the passion-based grassroots efforts one could see in thrown-together pizza shacks on the beaches in Dominical and in handmade ice cream shops of Manuel Antonio, there only because their owners loved the place, not because someone else said it was cool.


Pedasi Accommodations: Stay where I stayed


High-End: My first night was at the famous Villa Camilla, the on-site hotel of the Azueros project: think intricate Tuscan mansion with an almost-syndrome-like attention to detail. Inarguably the nicest place to stay around Pedasi (also the most expensive), what you get for your money is an unusual feeling of royalty: besides being palace-like, the craftsmanship at Villa Camilla (from carved wooden pegs and hand-laid pebbles the size of blueberries) is exceptional. The staff feels more like personal butlers than doormen, and the rooms have a hominess about them (assuming your personal house is a Mediterranean manor). Maids sneak in while you're gone to arrange your pillows, the chef puts out unusually great food for the region, and the surrounding hills and beach are like a private reservoir of calm. Villa Camilla

Casita MargaritaMid-Range: Casita Margarita, a converted home on main street is the most obvious deal you'll find in Pedasi: hot water, cable, internet, and a great breakfast for under $100. Having taken over a year to renovate/build, and operated by a family from Pennsylvania, this place has all the charm of old-time Pedasi with modern amenities like plasma TV. Complimentary cold beers on arrival, a young and talented chef available for giant fish dinners, and walking distance to everything in town: it's like you're visiting someone's home. Casita Margarita

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Interesting Piece, Matt
written by Austin , April 20, 2009
Matt, really good article. I like the straightforwardness of it. I was and am considering investing in Pedasi and it's nice to know the real situation on the ground (as opposed to what you hear and read about online).

One question: what will cause these projects to start construction? Is this a period that is good for Pedasi (investment-wise) or will it be a hindrance?
- Austin
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goodstuff
written by Pedasiman , April 20, 2009
with out one doubt the most fair portrayal of pedasi i have read before - and i live here. with regards to austin above, it's hard to tell what will start construction here but i think it is just time. sales are slow everywhere (in the world/panama). now is a good time to buy because prices are still comparatively low and projects are just getting started. wait too long and you'll be wishing you took my advice smilies/smiley.gif
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Details about the airport:
written by Pedasi Airport Guru , April 21, 2009
The people behind the airport are Pinacle Properties, a group out of Canada. They bought the old airport on the land of Ernesto Canno and part of the deal with the government was that they had to build another air-strip. They are doing a large development around the old air strip. and they only have a few more months to finish the new airport in accordance with the contract.
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Alan
Peda-si!
written by Alan , April 22, 2009
Great piece Matt.

You captured the essence of Pedasi beautifully. Slow develpment is good, sleepy is good, quality before quantity is good. May Pedasi never become a four lane highway to the fast and frivolous.





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Not for all
written by B. Byrd , April 22, 2009
Pedasi is certainly not for everyone - Matt, I think you said it best. If you're interested in malls, big infrastructure, proximity to lots of things, this is NOT the place for you to live or invest. That being said, if you are looking for this kind of special gem, get in while you can. Stuff might be slow, but when it's moving the window to score the current prices will have vanished.
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The Andromeda Country Club
written by Carrot Top , April 25, 2009
The Andromeda is using the New World Realty Group as exclusive realtor??? This does not bode well as Boris Michailov, formerly of Homes Real Estate is the Principal.

http://www.elsiglo.com/siglov2/Opinion.php?idsec=3&fechaz=10-02-2009&idnews=93755
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Good write up
written by Ed Panama connections , April 26, 2009
Good overview Matt. You obviously uncovered more there than my short half day review on my blog. I was probably disappointed because of all the prehype I had heard before going there on my motorcycle. Those real estate projects you mention looked real barren to me and I think it will be 5-10 years before you see any real mass development in that area. But...you have given me a couple reasons to go back and give it a 2nd chance/look. Thanks.
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what about climate change/rising waters?
written by La Mer , April 28, 2009
Since I couldn't find anything about "climate change" on this site, I am taking the liberty to insert some scientific rumors here. They seem to support (albeit indirectly) the idea that Panama's coasts are a better choice when compared to Florida and a few other Central and South American destinations that might fall pray to rising waters and storms by 2100. Take this article with a grain of sea salt.

http://news.bbc.co.uk/2/hi/americas/7977263.stm#map

http://news.bbc.co.uk/2/hi/business/7155494.stm
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Hit it on the head
written by J. Evans , April 28, 2009
matt, you ahve managed to do in this post that which i have not yet seen done on panama websites. that is explain the slowness in pedasi as not necessarily bad things but natural and (maybe even) good things. if pedasi were to expand out of control, it would certainly be no different from the panama city bust. for this, i am greatful .
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what about this other coastal project?
written by La Mer , April 28, 2009
Can someone please post info (rumors and/or facts) about the Bala Beach project on the Caribbean Coast near Portobelo?

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Panama's green gold
written by La Mer , April 28, 2009
Pedasi slow and low-rise, yes. More land for tree reserves, yes.
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Pedasi - overrated
written by Stew , May 03, 2009
Pedasi is nice, but it's not THAT nice and I don't know why you have an entire section on this website dedicated to it. There are plenty of places like this in Panama, with Pedasi being the most expensive of them all. The greedy developers there have ruined it for good as they have many other places in Panama - the 'healthy slow progress' you talk about being nothing more than indecision and financial crisis. Unless you Matt have personal investments in Pedasi I would say you have inaccurately (over optimistically) portrayed a place that, to the layman, amounts to nothing more than a big expensive sandbox with decent views.
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Stew
written by La Mer , May 03, 2009
"The 'healthy slow progress' you talk about being nothing more than indecision and financial crisis."

Possibly, a fair apraisal of the situation in Pedasi and in other new coastal projects in Panama.
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Pedasi, home of too much hype
written by Yoyoma , May 09, 2009
Has anyone been to Pedasi in the summer? Felt similar to Phoenix, except they actually have water in Phoenix. This place will be bust soon, especially when the Corridor Norte is flowing 100%. Why go to Pedasi when you have the beautiful Caribbean only 45 minutes from Panama City and all of Costa Arriba and Abajo to develop. Pedasi may have guayaberas and baile folklorico, but Colon has Cristo Negro y condo dancers, loco. Oh, and there is still forest up there unlike the deforested cattle ranches of the "more cattle, less trees" mentality of the Santenos.
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Costa Arriba y Abajo -- You're loco!
written by DMorgan , May 10, 2009
Yoyoma. You must has a vested interest on selling the Colon coast. Yeah, Pedasi is overrated, but it's nicer than Costa Arriba y Abajo -- unless you favor tons of rain, trash-lined beaches, mold, and a high crime rate.
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competition?
written by La Mer , May 11, 2009
I don't know if Pedasi and Costa Arriba should necessarily be viewed in competition. They're simply very different. They both deserve to be valued and developed according to the features of each area.

Trash-lined beaches and crime-rate... Don't forget, when an area develops, more locals are employed. Conditions slowly but surely improve. Trash is a sign of how local view themselves... and it is often a reflection of how they've beeen constantly viewed by others.
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Yoyoma: Colon?
written by Real Local , June 14, 2009
Please Yoyoma, Colon is "Tierra de nadie", even colombian mafiosos get killed, robed (asaltados)in Colon. When they build that road on the caribean side towards Bocas is just going to extend the criminality that way. In no way, shape or form does it has the small town, folkloric atmosphere feel that the author of this blog talks about. smilies/cool.gif
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permanent resident of Pedasi
written by Bartolo Tumolo , May 05, 2010
cavet emptor, Pedasi has some pluses, but do not ever try to deal with the government or Salud, (Board of Health), they are totally antigringo, in everyway except to take your money. We have had issues with a rental house next door to us for about 1 year now, chikens and roosters positioned under our bedroom window, leaking septic on the property,and onto our's. We file complaints and NADA, they think a 300meter lot is a farm, and it was not like that when we bought the home, we spent much time and money making a comfortable home for what, the locals know no law, they do what they want, they could care less about you. Don't get me wrong we have many locals as freinds, and they have worked and partied with us but a few bad apples can spoil the bushel. As for the development here where are they going to get water and electric, for it is totally not dependable, the adminstrations here saw the dollars and that's the end of the story, come if you want, but beware
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Last Updated on Friday, 20 November 2009 07:19
 
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