Announcement of Twenty Million US Dollars Loan for Port Development in Mexico on May 4, 1972

INTERNAl-lONAL BANK FOR • RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 72/24 Subject: $20.0 million loan for port May 4, 1972 developm9nt in Mexicc The World Banlc announced today a $20.0 million loan to Mexico to help finance the foreign exchange cost of a project to improve operations mainly in five major ports. Total cost of th9 project has been estimated at $27 .6 million equivalent. This is the first Bank loan for port development in Mexico. The project was based on the recommendations of a 1970 Bank survey of the Mexican transport sector. Port services have grown less dynamically than the road and railway networks, as traditionally transport in Mexico has been land oriented. The development of coastal areas and the policy to promote commerce with other countries besides the United States have now given emphasis to port improvement. This development program is part of the Mexican Government I s efforts to improve efficiency of the transport sectar as a whole and supports its policy of promoting exports. The project includes the provision of urgently needed installations and equipnent of the ports of Guaymas, Manzanilla and Mazatlan on the Pacific coast, and Tampico and Veracruz in the Gulf of Mexico. There are 36 ports in the country. In 1970 they • handled about 27 million tons, of which 15 million accounted for coastal trade, mainly oil. The five project ports handled 80% of total traffic, excluding oil. Under the project, Veracruz will be provided with a grain-handling installation, a tanker pier and a transit shed; warehouses will be b.Iilt in Manzanillo, Tampico and Veracruz; and mobile cargo-handling equipment and port fire-fighting and communication equipment will ba provided for each project port. The project also includes the purchase of two dredgers and dredging equipment, as well as assistance for staff training and conAulting services. In order to establish an institutional basis for efficient port operation, a Department of Port Operations is being set up in the Secretariat of the Navy. In each major port, a single adninistration will be responsible for day-to-day operations. Construction and improvement work in the ports will be carried out by the Secretariat of the Navy. A Trust Fund attached to Nacional Financiera, s.A. will administer the mobile cargo-handling equipment to be leased or oold to port operators. The National Ports Coordinating Commission, in charge of coordinating the various port operations and developing a long-term port program., will be responsible for supervising the consulting services for operations am accounting and for a national port development study. All equipment procurement and construction contracts will be awarded on the basis of international competitive bidding. · The Bank loan has bea1 made to Nacional Financiera for a term of 25 years, includ- ing a four-year grace period, at 7t% interest per annum. • Eight financial institutions are participating in the Bank loan for a total amount of $1.,650,000. They are: Republic National Bank ot Dallas; Western Pennsylvania National Bank, Pittsburgh; LaSalle National Bank, Chicago; American National Bank & Trust Co., Morristown, N.J.; Banca Nazional del Lavoro Holding, Luxembourg; First Union National Bank of North Ca?\olina., Charlotte; Beverl~ Bank, Chicago and North Carolina National Bank, Charlotte.  • I May 4, 1972 TECHNICAL DATA PROJECT: Mexico Ports COUNTRY: United Mexican States TOTAL COST: Estimated at $27.6 million BANK FINANCING: $20.0 million loan, 25 years, 4 years of grace, 7~% interest per annum. OTHER FINANCING: Federal Government Budget $7 .6 million. IMPLEMENTING ORG&~IZATIONS: The Secretariat of the Navy, Jose Azueta 9, }~xico D.F.; The Ports Coordinating Commission, Avenida Juarez, 92, 7th Floor, Mexico D. F.; The Ports Equipment Trust Fwd, Nacional Financier a, Avenida Isabel la Catolica, 61, Nexico 1, D.F. • PROCUREMENr: Construction, improvenent and provision of port installations and eq uip~nt. All equipment will be procured and construction contracts awarded on the basis of international competitive bidding. CONSULTANTS: Will be retained for operations and accotmting; national port study; and dredging study. ESTIMA'l'ED COMPLETION DATE: llid-19 75. - 0 - •