Announcement of Seventy-Six Million Five Hundred Thousand US Dollars World Bank Loan for Roads and River Ports in Peru on December 31, 1975

eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 75/106 December 31, 1975 $76.5 MILLION WORLD BANK LOAN FOR ROADS AND RIVEK PORTS IN PERU The World Bank has approved a $76.5 million loan to help finance a transport corridor linking Peru's Pacific coast and its hinterland. The project includes the completion of an all-weather road across the Andean range and improvement of other roads, and the construction or expansion of important river ports in the Amazon River system. Through better access the project will benefit existing and potentially rich forest, cattle and agricultural areas, and foster further growth of the incipient industry of the region. It will serve the area of Peru's northeast, in which oil fields are being explored. The road component of the project is the continuation of a series of earlier projects also supported by the Bank. Works under the project will be for improve- ment, resurfacing or paving of 375 km of roads, including the roads from San Mateo to Morococha (35 km), from La Oroya to Huanuco (2.34 km) and from Aguaytia to Neshuya • (106 km) • Another 110 km of feeder· roads, and an access road to Pu~-allpa and its river port will also be improved or built • To help ililprove the upper Amazon River port system, two new ports will be constructed at Pucallpa and Yurimaguas, and the existing port at Iquitos will be expanded. At all three ports cargo-handling equipment will be provided. The project is expected to have an important effect in the future development of the Amazon Selva region as well as of the areas to be served by the roads. It is also expected that once the road component is completed by 1980, there wil 1 • be minimal closure risks in extreme weather conditions. Transport costs will be reduced at the transfer points to the Amazon River system. !.n addition to improving the link between the Pacific coast and the Selva region, there will be better access to other underdeveloped areas with rich agricultural potential, where spontaneous settlements of peasants already exist. Part of the loan funds will assist in covering costs of consulting services for road engineering studies, updating of economic and financial studies for the Pucallpa, Yurimaguas and Iquitos river ports, a feasibility study of regional airports and a regional development plan for the Selva Central area. The execution of the proj~ct with a total cost estimated at $12d.7 million, will be the responsibility of the General Directorate of Land Transport for the road component~ and the General Directorate of Water Transport for the river ports component. Both Directorates are und~r the Ministry of Transport and Communications. • The World Bank $76.5 million loan is being made to the Republic of Peru for a term of 25 years, including 5 years of grace, with annual interest at 8-1/2%. Note: Money figures are expressed in US dollar equivalents. Form No. 1121 (9-75) PROJECT: T E CHN I CAL DAT A Transandean Transport Corridor • COUNTRY: Peru TOTAL COST:: $128.7 BANK FINANCING : $76.5 million, 25 years including five years of grace at 8-1/2% per annum. OTHER FINANCING: Government will cover balance of project costs. IMPLEMENTING ORGANIZATIONS: Dir~ccion General de Transporte Ter) !stre, Ministerio de Transportes y Comunic,aciones, Av. Wilson y 28 de Julio, Lima, Peru, and Direccion General de Transporte Acuatico, Ministerio de rransportes y Comunicaciones 3 Av. Wilson y 28 de Julio, Lima, Peru. PROJECT DESCRIPTION: Improvement of 375 kilometers of road between Lima and Pucallpa! and access road to Pucallpa and its river • port; improvement of 110 km of feeder roads; construction of river ports at Yurimaguas and Pucallpa, and expansion of the river port of Iquitos; road main- tenance equipment and installations, and of hydrological equipment. PROCUREMENT: International competitive bidding for all civil works, except for expansion of Iquitos port, and possibly for feeder roads. International competitive bidding for equipment, with local manu- facturers having a margin of preference of 15% or the level customs duties, which- ever is less. CONSULTANTS: Consultant services for supe.,:-vision of civil works, procurement and utilization of equipment, for feasibility studies of priority sections of roads and a number of regional airports, and for the establishment of a regional development plan for the Selva Central area. ECONOMIC RATE OF RETURN: 22.5% for the whole pcoject. ESTIMATED COMPLETION DATE: 1980. -0- •