Announcement of World Bank Lends Forty-Two Million Dollars to Mexico for Tourism on May 12, 1977

• World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 77/101 MAY 12, 1977 WORLD BANK LENDS $42 MILLION TO MEXICO FOR TOURISM A World Bank loan of $42 million announced today will help Mexico develop two tourism areas in Baja California. Tourism plays a major role in Mexico's economy by its contribution to foreign exchange earnings and employment generation, and towards a more balanced regional distribution of economic activities. Mexico's foreign exchange earnings from tourism, excluding border traffic earnings, amou~ted to about $820 million in 1976, and currently employs directly some 400,000 people,.mainJy in the hotel and restaurant trade. The Bank-assisted Baja California tourism project (total cost $84 • million) includes the provision, in each of the project sites in Loreto and San Jose deJ Cabo, of roads, electric power, teJec001T1unication facilities, iecreational facilities, buildings and environmental sanitation; the con- struction of a 250-room hotel; the provision of airport facilities and community development activities, conservation studies and programs, and a tourism market and economic study. The project will also provide electric power, teleconwnunication facilities and environmental sanitation for the towns of Loreto and San Jose deJ Cabo. The proJect's net foreign exchange earnings are expected to be about $17 million in 1982, increasing to $89 million in 1990, and create jobs for about 12,000 people directly and for about 13,000 people engaged in handicrafts, food processing and transportation. Unskilled labor will account for more than 60% of the jobs; some 40% of the jobs are expected to be fl 1led by women. The Bank loan is for 17 years, including 3.5 years of grace with interest at 8.2% per annum • • NOTE: Honey figures are expressed in U.S. dollar equivalents. FOAM NO. 1121 (5-71) PROJECT: COUNTRY: T E CHN I CA L Mexico DAT A Baja California Tourism • TOTAL COST: $84 mi 11 ion BANK FI NANC I NG : $42 million for 17 years, including 3-1/2 years'grace with interest at 8.2 percent per annum. OTHER FINANCING: Government: $42 million IMPLEMENTING ORGANIZATION: Fondo Nacional de Fomento al Turismo (FONATUR), Isabel la Catolfca, 24,Mexico 1, D.F. PROJECT DESCRIPTION: The project consists of: 1. For Loreto: (a) infra- structure and other facilities (electric power; tele- • communications; roads; recreational facilities; buildings and environmental sanitation) for the tourist zone at Nopolo, located 7.5 kms. south of Loreto and a trailer park and other facilities at nearby Puerto Escondido; (b) a 250-room hotel at Nopolo; (c) infra- structure and other facilities {roads; electric power; solid waste disposal and urban renewal) for the existing town; and (d) airport facilities. 2. For. San Jose del Cabo: {a) infrastructure and other facilities (similar to those in Loreto) for the town as well as for the adjacent tourism zone; (b) a 250-room hotel; and (c) airport facilities. 3. Promotion, community development activities and conservation programs for both areas. 4. Tourism sector market and economic studies. PROCUREMENT: 1. Major contratts for civil works and equipment will be awarded on the basis of international competitive bidding. 2. Small civil works contracts, each not exceeding $500,000, and equipment contracts, each not exceedi·ng $100,000 will be awarded on the basis of local competitive bidding; the total value of these contracts will not exceed $4 million. 3. Some minor civil works for gardening, landscaping, environmental sanitation and wildlife conservation will be undertaken by force account. The total costs of these civil works shall not exceed $1 million. 4. The navigational aid equipment for the airports, valued at $700,000, will be negotiated directly with the manufacturer. 5. The telecommunica- tions component will be undertaken by TELMEX in accordance with its procurement practices. CONSULTANTS: Provision is made for consulting services to assist in design and superv1s1on work (1,075 man-months over a 3-1/2 year period). ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 20 percent 1980 - 0 - •