Announcement of World Bank to Support Second Urban and Regional Development Project in Mexico on May 14, 1981

. FOR IMMEDIATE RELEASE .world Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 81/90 May 14, 198 l WORLD BANK TO SUPPORT SECOND URBAN AND REGIONAL DEVELOPMENT PROJECT IN MEXICO The World Bank announced today that it will lend $164 million to Mexico for a project that will help implement the country's urban and regional planning programs anrl provide better shelter and basic urban services to low-income groups. The $468 million project offers a multi-sectoral approach to the most pressing problems of a section of the Isthmus region extending along the Gulf of Mexico in the three states of Chiapas, Tabasco, and Veracruz. The Isthmus region, while well-endowed with natural resources, is is one of the poorest areas in Mexico in terms of the welfare levels • of its population. Furthermore, the recent growth of petroleum-related industries has attracted migrants who impose a heavy burden on already inadequate urban services, housing and infrastructure, and on the sup- ~ly of goods and services. The region 1 s most important urban centers are Villahermosa (Tabasco), with about 200,000 inhabitants, and Coat- zacoalcos and Minatitlan (Veracruz) with about 150,000 inhabitants each. The project focusses on these cities and on the secondary cit- ies of Cosoleacaque (Veracruz), Reforma (Chiapas), and Ca~denas, Cun- duacan, Para iso, Coma 1ca 1co, and Macus pan a (Tabasco) . The main components of the urban and r~gional development project are: shelter-related programs; prov1s1on of city-wide infrastructure; including water supply and sewage disposal; provision of municipal fa- cilities, such as wholesale and retail markets, refuse collection, and slaughterhouses; support for employment-creating productive activities, in the form of credit to artisans and small enterprises, and vocational training; and studies and support activities for the orderly programming of future growth. A sites and services component will provide about 19,000 new lots in the region's most important cities and towns. An accompanying credit component for construction materials will permit self-help construction of various types of dwellings. The level of services for more than 14,000 families in poor neighbor- hoods will be improved by an urban upgrading program which includes: water • supply,·sewerage networks, and related home connections; paving and storm drainage works; and street lighting. Twenty community water and washing facilities will als~ be provided in areas where upgrading is not yet pos- sible because of the complex land tenure situation. NOTE: Money figures are expressed in U.S. dollar equivalents.  -2- About 10,000 home improvement loans, ranging from $440 to $2,700, will be granted to households in the upgraded areas for improving or expanding their dwellings. Finally, twelve simple community centers will be established to provide a focus for community activities, including the management • of the self-help construction and credit program, training and adult eduction, elementary health programs, a post office, and other public services. The project also provides for support activities to the implement- ing agencies, and for studies related to the urbanization of the region, and its ecological problems. The project,to be implemented over a five-year period,is expected to benefit about 95,000 households (or more than half a million people) by providing secure property rights and improved shelter; access to bet- ter goods and services at more co~1petitive prices; and more employment opportunities and increased incomes. In addition, the project will support the Government's efforts to establish an adequate institutional mechanism for the implementation of economic and demographic decentralization policies. The $164 million World Bank loan was made to the Banco Nacional de Obras y Servicios Publicos, S.A. with the guarantee of the United Mexican States. ft is for 15 years, including 3 years of grace, with interest at 9.6% per annum. -0- • •  - · ~...t.;:.11-· ·.:.. FOAM NO. 1121 (5-76) T EC HN I CAL DA TA • PROJECT: COUNTRY: TOTAL COST: Second Urban and Regional Development M{xico $468 million BANK FINANCING: $164 million, for 15 years, including 3 years of grace) with interest at 9.6% per annum OTHER FINANCING: Government of M~xico, $275 million Project beneficiaries, $29 million IMPLEMENTING ORGANIZATION: Project Unit Banco Nacional de Obras y Servicios Publicos, S.A, lnsurgentes Norte 423 Mexico 3, D.F., Mexico PROJECT DESCRIPTiON: The project will provide, in selecred cities of the states of Tabasco, Veracruz, and Chiapas: (i) shelter- • related facilities, including sites and services, construction material credits, urban upgrading, home improvement loans and community centers; (ii) .city-wide infrastructure, including water supply and sewerage works, and access roads: (iii) municipal facilities and services, such as retail markets~ a wholesale market, slaughterhouses, and refuse collection; (iv) employment-creating activities, ~uch as credits to artisans, and to small-scale enterprises, industrial estates and one training center; (v) studies of urbanization, pollution control, and pro- motion of credit beneficiaries, as well as support activities to the project executing a9encies. PROCUREMEN~ Civil works valued above $2.5 million, and equip- ment and materials valued above $500,000 will be contracted under international competitive bidding (ICB). Local competitive bidding (LCB) will be used for contracts valued over $250,000 but under $2.5 million and for contracts for equipment and materials valued more than $150,000 and less than $500,000. Civil works and equipment, and materials for less than the above amounts wili be procured through shopping on the basis of not less than three quotations from suppliers. CONSULTANTS: About 80 staff-months of consultant services wii~ be required to carry out studies and support activ- ities. ECONOMIC RATE OF RETURN: 14% • ESTIMATED COMPLETION DATE: 1987 - 0 -