Chile - Highway Maintenance Project : memorandum and recommendation of the president

RESTRICTED Rep 0 r t No. P-Z54 FlLF. COpy 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 It may not be published nor may it be quoted as representing the Bank's views.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 completene" of the contents of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPM:ENT REPORT AND RECOMMENDATIONS OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF CHILE FOR A MAINTENANCE PROGRAM June 19. 1961  INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPKSNT REPORT AND RECOMMENDATIONS OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PRO~SED LOAN TO THE REPUBUC OF CHILE FOR A YlAINTENANCE PROGRAM 1. I submit the following report and recommendations on a proposed Loan in an amount in various currencies equivalent to $6 million, to the Republic of Chile, to help finance a highway main tenance project. PART I - HISTORICAL 2.> Following the earthquakes of 1960, the Chilean Government a~;kedthe Bank and IDA to assist in financing the improvement of highway facilities in the South-Central region of Chil.e. The achieve ment of this objective requires not only the construction or rehabilita tion of secondary roads in the region, but the establishment of an effective program of highway maintenance as well. A technical mission visited Chile in December 1960 to appraise these two parts of the program. The maintenance project is presented herein as a suitable basis for a loan from the Bank. I am also submitting to the Executive Directors of the International Development Association a recommenda tion that they approve a Development Credit of $19 million for a road construction project. 3. Negotiations began on June 10, 1961, with a Chilean Mission consisting of Mr. Ernesto Pinto, Minister of Public Works, Hr. Ruperto Casanueva, Director of Planning, Ministry of Public Works, and ~~o Jose Zabala, of the Chilean Development Corporation (CORFO). h. The proposed Loan would increase the Bank's lending (including participations) to Chile, net of cancellations and refund ings, from $106.2 million to $112.2 million equivalent. The Bank has mC:ede the following loans to Chile:  - 2 Original amount net of cancella.tions Year Borrower --------------------------- Purpose 1948 Fomento & Endesa Electric power $ 13,500,000 development 1948 Fomento Agricultural develop 2,500,000 ment 1951 Fomento Exploration for and 854,456 use of water 1S53 Fomento & Pape1es Construction of paper 20,000,000 y Cartones and pulp mills 1956 Fomento & Endesa Electric power 15,000,000 development 19S7 Fomento & Schwager Coal expansion and 12,200,000 modernization IS57 Fomento & Lota Coal expansion and 9,600,000 modernization 1959 Fomento & Endesa Electric power 32,500,000 development Total net of cancellations $106,154,456