Announcement of World Bank Approves One Hundred Twenty-Five Million Dollars Loan to Mexico for Urban Water Supply and Sewerage Project on November 6, 1980

. . . FOR IMMEDIATE RELEASE aA/orld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 81/22 November 6, 1980 WORLD BANK APPROVES $125 MILLION LOAN TO MEXICO FOR URBAN WATER SUPPLY AND SEWERAGE PROJECT Over a million people in several cities in Mexico will benefit by 1984 from a second medium-size cities water supply and sewerage project to be supported with a World Bank loan of $125 million announced today. The project, which is estimated to cost $318 mill ion, includes the provision of potable water and sewerage facilities. Under the project, sewage treatment plants will be constructed, where necessary, to keep the pollution leve, of effluents with- in acceptable standards. The project will promote metering of house connections and will include leak detection and control programs. A technical assistance pro- gramfor local water and sewerage companies will help improve the operational and service capabilities of those institutions. By 1984 some 1 .2 million people wi 11 benefit from the extended water supply • services and 1 .3 million from sewerage services to be provided under the project . It is estimated that, as a result of the project, about 2.4 mil 1 ion and 2.5 mill ion additional inhabitants will be connected to the water supply and sewerage systems respectively by 1990. About one third of the beneficiaries are expected to be poor urban dwellers, whose incomes are lower than one third of the national per capita income. The medium-size cities included in the project are: Monclova, Coahuila; No- gales, Sonora; Tepic, Nayarit; Toluca, Mexico; Ciudad Juarez, Chihuahua; Matamoros, Tamaulipas; and Queretaro, Queretaro. Up to three other cities to be named will also benefit from the project. The project will be carried out by SAHOP (Secretar,a de Asentamientos Humanos y Obras Publicas) through the Financial Coordinating Unit under the General Directorate of Construction for Water and Sewerage Works. The World Bank loan will be made to BANOBRAS (Banco Nacional de Obras y Servi- cios Publicos) with the guarantee of the United Mexican States. BANOBRAS is a na- tional development bank specializing on loans for public and social works such as sanitation, housing, and urban development. The loan is for 15 years, including 3 years of grace, with interest at 9.25% per annum. The proceeds of the World Bank loan will be made available to FIFAPA (Fonda de lnversiones Financieras para Agua Potable y Alcantarillado), set up as a trust fund within BANOBRAS to finance water and sewerage investment in medium-size cities. • The project is the World Bank's third operation in the sector and the second opera- tion through BANOBRAS/FIFAPA aimed at helping to develop water supply and sewerage services in medium-size cities throughout Mexico. NOTE: Money figures are expressed in UoS. dollar equivalents. FORM NO. 1121 (5-76) T E C HN I CA L DA T A PROJECT: COUNTRY: TOTAL COST: Second Medium Size Cities Water Supply and Sewerage Mexico $318 mi 11 ion • BANK FINANCING: $125 million, for a term of 15 years, including three years of grace, at 9.25 percent interest per annum OTHER FINANCING: Government of Mexico, $193 million IMPLEMENTING ORGANIZATION: .Secretar(a de Asentamientos Humanos y Obras Publicas (SAHOP) Reforma 70, Mexico, D.F., Mexico PROJECT DESCRIPTION: It includes: the provision of potable water and sewerage facilities in 10 medium-size cities. Sewage treatment plants will be constructed, where necessary, to keep the pollution level of effluents within acceptable standards. The project will promote metering of house connections and will include leak detection and control programs. A technical assistance program to local. water and sewerage companies will help improve the operational and service capabilitie of those institutions. PROCUREMENT: Contracts in excess of $2.5 million for civil works and $500,000 for the purchase of equipment and materials will be awarded on the basis of international competitive bidding (ICB). Contracts for less than $2.5 million but over $250,000 for civil works, or less than $500,000 but over $150,000 for equipment, will be awarded on the basi.s of local competitive bidding, following pro- cedures which are satisfactory to the Bank. Contracts for less than $250,000 for civil works and $150,000 for equipment could be procured directly on the basis of at least three quotations and subject to a maximum aggregate of $12.5 million. Given the advanced degree of development of the constructfon industry in Mexico, all civil works contracts are ex- pected to be won by local contractors; however, foreign firms will be eligible to bid. CONSULTANTS: 4,450 man-months of consultant services for final engineering designs, supervision of construction, and management assis- tance to the water supply and sewerage comp~nies, ECONOMIC RATE OF RETURN: ESTIMATED COM?LETION DATE: 13% 1984 - 0 - •