Announcement of Nine Million One Hundred Thousand Dollars Loan for Port of Pisco in Peru on April 29, 1966

• 18.18 H STREET, N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTiVE 3-6360 Bank Press Release No. 66/15 Subject: $9.1 million loan for port April 29, 1966 of Pisco in Peru The World Bank has approved a loan equivalent to ··$9.1 million to Peru for the construction of a modern deep-water port at Pisco, about 170 miles south of Lima, the capital. The new port will replace lighterage facilities which have become inadequate for the present volume of traffic, causing congestion and delays to shipping. Traffic through Pisco is expected to triple by 1975 and the new port will be capable of handling this volume. It will also effect substantial savings • .by reducing cargo handling costs, vessel turn-around time and land transport costs now incurred because of the necessity of shipping cargo from the Pisco area through the port of Callao. Peru's 1,200-mile coastline has few natural harbors and although there are many ports, most of them are lighterage ports which are uneconomic and inadequate for the growing traffic. The Government is carrying out a port development pro- gram focused on the improvement of certain ports selected to serve large sections of the country and where modern, deep~water facilities can be provided. These ports are Paita, Salaverry and Chimbote, all to the north of Lima, Callao adjacent to Lima, and Matarani and Pisco to the south. The Bank has made three loans total- ing $12.2 million for the modernization of Callao and Paita. The poor condition of existing facilities a.t Pisco has severely limited traf- fie through the port. Apart from fertilizers, imports are virtually non-existent; • all general cargo imports for the Pi~co area are landed at Callao. For the 10 years prior t0: 1963 when the rapidly growing and profitable fishmeal indus,try was 1  • - 2 - started, export traffic varied little. The Pisco area is attracting more producers vf fishmeal because of the rich fishing ground for anchovies, from which fishmeal is 1u&de, off the coast of Pisco. There are at present eight factories and 19 firms tave applied for licenses to establish new factories in the Pisco area. Most of j) the mNneral ore mined in the Pisco hinterland is shipped through Callao, where the ore can be loaded in bulk for export; shipment through Pisco at the present ti.me would require expensive bagging and lighterage operations. Mineral produc- tion in the Pisco service area is expected to increase as new roads now being built are completed; lack of roads has been the major impediment to mining development. Irrigation projects and industrial centers also planned for ~he Pisco service area ~ill further increase the movement of exports and imports. Total cargo traffic t~,l'ough the port is expected to rise from 393,000 tons in 1964 to 843,000 tons :b.: 1)70 and to 1,120,000 tons in 1975. The new port will be situated on the west side of Paracas Bay, about 22 miles from the existing port and town of Pisco, where it will be well sheltered from • w:tnds and waves and where a minimum of dr,edging will be needed. The Government io building a new two-lane road to prqvide access to the existing road system. In- ch!d.ed in the Bank-financed project is dredging, a four-berth wharf 700 meters long, a 100-meter small-boat wharf, transit sheds and wareh~i,uses adjoining the ne~i wharf, · \ Ii filling and leveling of the port area, construction of ~ervice roads, utilities, \. . ater supply, administration and other ancillary buildings., the provision of a tug- b·:>at and ·port operating equipment, and engineering and operations consulting ser• vices. Funds from the loan will also finance technical studies and design work f0r improvements at the ocean port of Chimbote and at ti\e river ports of Iquitos, • Yur.imaguas, Pucallpa and Maldonado. • - 3 - At present the Direccion de Administrac::.on Portuaria (DAP), a .Bureau of the I crtn1ian Finance Ministry, has charge of all Peru's public ocean and river ports 1 except Callao and Salaverry. The Peruvian Government plans to establish a National Port Authority with jurisdiction over all the public ports, with the exception of Callao which has its own autonomous port authority, with wide management powers ,).~:td financial autonomy. The present system of earmarking special revenues for port expansion will be phased out and replaced by a unified· syste!m of rates re- ls.ted to the cost of port services. The Peruvian Government will hire consultants to install a modern commercial accounting system for the new Port Authority, pre- pa1.ce initial tariffs, and advise on matters related to the propos«~d reorganization of port administration. Responsibility for execution of the Pisco port project x7i.ll be transferred to the new authority when it is established. ~ The project is scheduled for completion by October 1969 at a total estimated cost equivalent to $14.7 million. The Bank loan will cover the foreign exchange requirements and the remaining costs will be financed by the Govert!ilent of Peru. The constructicn contract and the procurement of equipment will be carried out cndP-r international competitive bidding. The Bank loan will be for a term of 25 years and bear interest at the rate of 6% per annum. Amortization will begin May 15, 1971 • • ····- '"h