Announcement of Loan for Further Port Improvements in Peru on September 17, 1958

t' ' WORLD • INTERNATlONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE3-6360 PRESS RELEASE NO. 555 SUBJECT: Loan for further port September 17, 1958 improvements in Peru The World Bank today made a loan equivalent to $6,575,ooo for the expansion and :improvement of the Port of Callao, the main port of Peru. Better accommodation and service for ships calling at Callao will improve Peru's competitive position in world markets, particularly for its :important minerals exports, and should result :in increased foreign trade earnings. The Royal Bank of Canada, New Iork Agency, snd The Philadelphia National • Bank are participating in the loan, without the World Bank's guarantee, for a total amount of $395.,ooo. This represents the first three maturities wh...i.ch fall due between March 1., 1963 and March l, 1964. '.rhe loan was made to the Port of Callao Authority., an autonomous agency which operates the port. The Authority was established in 1952 shortly after the Bank had made a loan of $2.5 million. to the Govermnent for ·the construction of grain discharging a.rd storage facilities at Callao and for the purchase or mechanical cargo-handling equipment. Since its inception the Authority has operated the port successfully., .and the f'a.cilities f'inanced by the Bank have contributed to a marked improvement in the efficiency of the port. The Port of Callao serves the mining and agricultural areas of the Central Sierra and Lima, the capital and chief commercial and industrial • center of Peru. About 60/o ot the country• s exports and imports pass through the port and trere is a considerable volume of coastal traffic. In terms of tonnage, the principal exports ·are minerals, refined metals and general cargo  - 2 .... such as cotton., wool., hides, fishmeal, etc.; and the chief imports are petroleum products., wheat and general cargo such as machinery., lumber, newsprint, automobiles, etc. Between 1951 and 1956 traffic rose from 2.4 • million to 3.1 million tons annually., and forecasts indi.cate an additional 25% increase by 1963. The expansion now being 1u1derta1<en by the Port Authority consists of the construction of a new two-berth pier for 1~he h:md'Ll.ng cf petroleum products., a new berth with mechanical equipment for the loading of minerals., two new general cargo berths, three new storage sheds, improved a~commodations for passengers, the purchase of two diesel tugs and a cutte~ suction dredge., new maintenance shops and a gear store. The new petroleum pier will permit tankers discharging inflammable loads to berth away from other ships and thus greatly reduce the ris1"..s of explosion and fire now involved with general cargo ships using the same pier as tankers. • The new installation for ha'ldling bulk minerals will be able to move up to 14.,000 tons of minerals daily., compared with the present loading rate of between 500 and 850 tons. Ships calling at Callao for minerals will thus be able to leave much faster; this will help keep down ocean freight rates to Peru. The addition of two new general cargo berths, together with those released when the petroleum and ~ineral berths are commissioned, will give Callao a total of 12 general cargo berths which will enable it to cope with the long-term growth of general cargo and refined metals traffic. The dredge will be used for work in connection with the new piers and to dredge and maintain the harbor, which has been silting up during recent years. Whe~ it is not in use at Callao the dredge will be ranted out for work at other ports. The new transit sheds and warehouses wil.l reduce transfer costs • t' .. 3 - • between piers and sheds and provid~ long-term storage capaci.._ _ :::./i.·l J. The new maintenance shops, gear store and tugs ~..,J.l replace existing facilities which are inadequate and obsolete. _·.i::kirJg • I The Port Authority will retain the services of con&'J.lting engineers to plan and supervise the project and will award contracts for the work to be undertaken on the basis of international bidso The loan is for a term of 20 years and bears interest at 5-3/L% per annum including the 1% commission which is allocated to the Bank's Special Reserve. Amortization will begin March 1., 1963. The loan is guaranteed by the Government of Peruo After having been approved by the Bank's Executive Directors., the loan documents were signed by the Peruvian Ambassador in Washington., His Excellency Senor Don Fernando Berckemeyer, on behalf of the Government of • Peru, by both Mr. Jorge Char.lot, Vice President of the Board of Directors of the Port Authority, and Mr. Carlos Gibson, Commercial Counselor of the Peruvian Embassy in Washington, on behalf of the Port of Callao Authority., and by Mr. W .A.B. Iliff., Vice President., on behalf of the World Bank • •