Announcement of Mexico to Receive World Bank Assistance for Urban Deconcentration Program on August 5, 1982

,·;. '" : FOR IMMEDIATE .... ~.. • RELEASE . ... ,. ~ ., • World· Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 83/ 5 Contact: Sundaram Sankaran August 5, 1982 (202) 477-3962 MEXICO TO RECEIVE WORLD BANK ASSISTANCE FOR URBAN DECONCENTRATION PROORAM A first attempt to deal with the problem of urban growth in the Mexico City region will be assisted with a $9.2 million loan, the World Bank announced today. The uneven pattern of economic and population growth within Mexico's Central Region has been cause for concern by the Mexican government. The Central Conurbation Zone, comprising the Federal District and portions of the five surrounding states of Mexico, Hidalgo, Tlaxcala, Puebla, and Morelos, could have a population of 32 million by the year 2000--a population larger than those of many developing countri~s. Mexico City, with its 14.3 million people, continues to draw the region's economic and human resources. The project will therefore focus on spatial planning, designed to divert development trends away from the metropolitan center to the rest of ~the surrounding zones. With the help of consultants to be provided under the project, the Mexican government will draw up a metropolitan decentralization program which will include projects covering 130 municipalities. The consultants will assist the Planning Commission of the Central Conurbation Zone in preparing studies on the administrative and budgetary aspects of the deconcentration program, transportation patterns, and water resource management. Use of urban land and agricultural development in peripheral areas will also be examined. The Planning Commission has already completed a substantial number of studies and has identified fo:?f!cific investment proposals which will be incorporated in a final report on the metropd.ltan deconcentration program. The project will have a critical impact on the formulation of a policy for the orderly development of Mexico's Central Region. It will also provide opportunities for private sector participation in developing and attracting financing and co-financing from external lending sources. Two other urban projects in Mexico have been financed by the World Bank, both aimed at providing infrastructure, community facilities, and low-cost housing. One i·s around Lazaro-Cardenas in the states of Michoacan and Guerrero; the other is in the oil-producing area~ of the states of Tabasco, Veracruz, and Chiapas. The World Bank loan is being made to the Banco Nacional de Obras y Servicios Publicos (BA.NOBRAS) with the guarantee of the United Mexican States. It is for 15 years, including three years of grace, with interest at 11.6% a year. It carries an annual commitment charge of 0.75% on undisbursed balances and includes a front-end fee ~of 1.5% on the amount of the loan. The Mexican government is providing $6 million for the $15.2 million project. NOTE: Money figures are expressed in U.S. dollar equivalents.