Announcement of World Bank Lends Twenty-Three Million Dollars for Tenth Irrigation Project in Mexico on October 16, 1980

• • 1 .,. FOR IMMEDIA 1 E RELEASE q • -VVorld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 81/20 October 16, 1980 WORLD BANK LENDS $23 MILLION FOR TENTH IRRIGATION PROJECT IN MEXICO A $23 million World Bank loan will help finance an irrigation project in Mexico. The project aims at increasing agricultural production in the Ocoroni Valley, in the State of Sinaloa, by bringing 10,000 hectares (ha) of new lands under irrigation. With a total cost of $54.6 mill ion, this is the tenth irrigation proj- ect to be assisted by the World Bank in Mlxico since 1961. The project will directly benefit about 2,000 farm families, members of ejidos or communal land tenure groups. The project includes the construction of the El Sabinai dam, located 40 kilometers upstream on the Ocoroni River, a diversion dam at San Miguel, and related distribution nnd drainage canal systems. Land clearing and • leveling, intensive agricultural support services,and financing of studies for further development of irrigation and drainage in the Ocoroni, Sinaloa, and Fuerte River Basins will also be provided under the project. The establishment of the new Ocoroni Irrigation District will have an important land distribution impact and will allow the settlement of 1,240 new landless families. Irrigated land will be equally divided among the 2,000 beneficiary fam- ilies, each receiving 5 ha. About 90% of the beneficiaries will be organized in communal groups of 20 to 40 families each, while the remaining 10% will cultivate the land individually, also within the ejido system. After 11 years, annual family incomes of the beneficiaries are expected to increase from about $1,000 to between $3,000 to $3,900 per family. The total gross cropped area will increase from 2,400 ha to about 14,700 ha, while the total volume of production will expand from 3,100 metric tons to 55,000 metric tons, mainly of maize, soya, sorghum, vegetables, and cotton. The project will prevent increasing erosion from progressive deteriora- tion of soil structures under current rainfed cultivation practices. Farmers will also have access to educational, health, marketing, and credit facilities and related services. The $23 million Bank loan to Nacional Financiera, So Ao has the guarantee of the United Mexican States. The loan is repayable in 15 years, including ~ three years of grace, with interest at 9.25% per annum. NOTE: Money figures are expressed in UoS. dollar equivalents. FORM NO. 1121 (5-76) T ECHN I CAL D A T A PROJECT: COUNTRY: TOTAL COST: Ocoron i Irrigation M{xico $54.6 million • BANK FINANCING: $23 mill ion for a term of 15 years, including three years of grace, with interest at 9.25% per annum OTHER FINANCING: Government of M{xico, $31.6 mill ion IMPLEMENTING ORGANIZATION: Secretarfa de Agricultura y Recurses Hidr~ul icos (SARH) lnsurgentes Sur 476 Mexico, D.F., Mexico PROJECT DESCRIPTION: It provides for: (a) an earth fill dam with impervious core at El Sabinal, 40 kilometers (km) upstream on the Ocoroni River; (b) a diversion dam at San Miguel, 245 meters wide; (c) a distribution and drainage canal network, including service roads and control structures; (d) a program of intensive agricultural support services (extension, research, equipment, demonstrati~ and training); (e) land clearing on about 6,000 hectares (ha), leveling of about 3,500 ha, and removal of rocks from about 2,100 ha of land; (f) equipment and machinery for operation and maintenance of project facilities; and (g) studies for further development of irrigation and drainage in the Ocoroni, Sinaloa, and Fuerte River Basins. PROCUREMENT: About 85% of the contracts for the principal irrigation and drainage works will be procured by international competitive bidding (ICB) in accordance with Bank guidelines. Civil works will be grouped into con- tracts having a minimum value of $2 million. Small jobs will be contracted following ordinary government procedures. The maximum value of a contrac.t for local c0mpetitive bidding (LCB) will be $220,000, with the total of all such contracts not exceeding $4.5 million. Small or dispersed contracts for on-farm development works will also be let under LCB, or through negotiations under the guarantor's ordinary procedures, A 15% margin of preference or the prevaling custom duties, whichever is lower, will be allowed for equip- ment and vehicles produced in Mexico. ECONOMIC RATE OF RETURN: 15% ESTIMATED COMPLETION DATE: 1985 - 0 - •