Peru - Aguaytia - Pucallpa Highway Project

R E S T R I C T E D FILE corY Repo rt N o. P-239 This report was prepared for use within the Bank. It may not be published nor may it be quoted as representing the Bank's views. The Bank accepts no responsibility for the accuracy or completeness of the contents of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATIONS OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF PERU December 9, 1960  REPORT AND RECOI1ENDATIONS OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON THE PROPOSED LOAN TO THE REPUBLIC OF PERU 1. I submit the following report and recommendations on a proposed loan in various currencies equivalent to 45.5 million to the Republic of Peru', to help finance the reconstruction of certain sections of the Central Highway. PART I: HISTORICAL 2. In 1955 the Bank made a loan of 55 million to finance the foreign exchange cost of a highway maintenance program in Peru'. This loan also financed the preliminary studies for the reconstruction of the Aguaytia-Pucallpa section of the Central Highway. In February 1959 the Government requested the Bank to finance this project. A Bank mission visited Peru in March 1959 to review the project, and preliminary negotiations for the loan took place in W4ashington in February 1960. The completion of the negotiations was postponed to await passage of enabling legislation. The Government of Peru was represented by Mr. Enrique Duthurburu, Director of the Highway Department of the Ministry of Development and Public Works, and Mr. Carlos Gibson, Commercial Counselor of the Peruvian Embassy in Washington, at the preliminary negotiations, and after the passage of enabling legislation in November 1960, by Dr. Jorge Grieve, Minister of Development and Public W,4orks and Ambassador Fernando Berckemeyer. 3. The proposed loan would increase the Bank's lending (including participations) to Peru, net of cancellations and refund- ings, from $76.5 million to $82.0 million equivalent. The Bank has made the following loans to Peru':  -2- Year Loan No. Borrower Purpose Am.ount 1952 57 PE Republic of Peru' Port development $ 2,410,528 (Callao) 1952 67 PRE Republic of Peru Agricuiltural develop- 1,300,000 ment 1954 98 PE Republic of Pel' Agricultural develop- 1,700,000 ment 1954 105 FE Banco de Fomento Agricultural develop- 4,999,771 Agropecuario ment 1955 114 PFE Republic of Peru' Irrigation project 18,000,000 1955 116 PE Cemento Pacasmayo Construction of cement 2,497,082 plant 1Q55 127 PE Republic of Peru' Highway maintenance 4,994,887 1957 162 PE Banco de Fomento Aqricultural develop- 5,000,000 Agropecuario ment 1958 208 PE Autoridad Portua- Port development 6,575,000 ria del Callao 1960 25 7 PE Banco de Fomento Agricultural develop- 5,000,000 Agropecuario ment 1960 260 PE Lima Light and Power development 24,000,000 Power Company Total (net of cancellations and refundings) 1 76,147,268 of which has been repaid 10,594,381 Total now outstanding ; 65,882,887 A Amount sold 7,258)h82 of wlhich has been repaid 4,779,250 2,479,232 i\et amount now held by Bank , 63,403,655 A Includes ?33,231,8L2 not yet disbursed.  PART II: DESCRIPTION OF THE PROPOSED LOAN 4. Porrower: The Republic of Peru'. Amount: The equivalent in various currencies of i,45.5 million. Purpose: To finance the foreign exchange cost of the reconstruction to all-weather standards of the easternmost section, from Aguaytia to Pucallpa, of the Central Highway; and preliminary studies for the improvement of the adjacent section from Aguaytia to M'orococha. Amortization: 23 semi-annual installments from January 1, 1