Announcement of Eight Million Six Hundred Thousand US Dollars Loan for Highway Project in Honduras on May 23, 1967

• 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 67/24 Subject: $8.6 million loan for highway May 23, 1967 project in Honduras The World Bank has approved a loan equivalent to $8.6 million to Honduras for further improvement of the highway system. Moat of the funds will be used for paving the 154-mile Western Highway which is the chief channel for trade between Hoi.lduras and El Salvador and serves the most heavily populated region in Hc;nduras. The project will make posaible better and lesa costly road transport on the Honduran section of one of the principal Central American Inter-Regional Highways, and will stimulate int.emational trade as well as the further economic development of the potentially rich 'WHtern Region of Honduras. • Bank of America National Trust and Savings Association, San Francisco, and Detroit Bank and Trust Company have agreed to participate in the loan for a total amount of $215,000 representing the first maturity and part c,f the second which fall due between February 1, 1972 and August 1, 1972. One of the major ob&tacles to economic development !.11 Bondura,,, second large1t of the Central American countries, has been lack of adequate transportatio1\,: In the mid-1'950s the Government began construct!~·'. .. ,,~f a modern highway networ~ i:o c.:obr.;•1ect the mdn Jproducing and consuming centers and to open new areas to culti~ation. Aa a reault, the total length of the road network has more than doubled t.~ 10 years, from 976 miles to about 2,237 miles. Thia will be the fifth road project in Hon~uras as1isted by the Bank or its affiliate, the International Development Aa•ociation, and brings the total amount they have lent for highways t,~.ere ,:,~ $l6~4 million. One of the earlier projects ~ was the exten1lon of the Weatern Highway t• t~• El Salvador border by the conatruc- tion of 60 milea of road, and the improvement of part of the exiatina HighwAy --  - 2 - all to gravel standards. fits. This has already had important economic and social bene- 'l'he zone of influence of the Highway has become more closely integrated with national as well aa Central American markets and is developing into an important • center for trade and product ion. More than 401 of !.~he country's tobacco, sugar, coffee and rice is grown in this area; it produces nearly half the industrial output and a fourth of the forest products. Trade with El Salvador, previously carried over primitive traila, has increased; the Western Region is now a major supplier of exports to El Salvador. The Western Highway and its feeder roads have also made it possible to provide improved education,medical and administrative facilities. Paving the Western Highway will further stimulate both the exploitation of the region's resources and the process of national and interregional integration. With the assistance of the current loan five short sections of the highway totaling 23 miles will be reconstructed and the highway will be paved over its entire length. This will reduce transport costs and avoid a rapid rise in the cost of road and ~ vehicle maintenance ~hich would otherwise occur in the near future. The project also includes feasibility studies for additional feeder roads to li~k with the Westet'n Highway and for the reconstruction of the 80-mile North Eastern Highway between Teguci'galpa, the capital, c.nd Juticalpa, which earries a heavy volume of traffic connected with the exploitation of forest resources. The project is scheduled for completion by mid-1971 at a total estimated cost equivalent to $12.6 million. The Bank loan of $8.6 million will cover the estimate~ foreign exchange requirements; the 'f.eni!tining c~sts will be covered by the Govern- ment. Construction work will be c~rried out by contracts let on the basis of inter- national competitive bidding. The loan will be for a term of 20 years and bear interest at the rate of 6% per annum. Amortization will begin February 1, 1972. •  • • • • .J -;. of Honduras SEA '' '\ \ 0 EI Dorado \"' \:,> \0 \";, ,,..,, In '<'-to~ I t'I ~ 1"" :~ ,,. C, ''';~'\ It:, I ! Dulce Nombre '"' ''?. \"" Cotocomos I c> \ 07 I "'-· t r.,-\ ."\_ 'll \.._ I .r ·'-· 0 i \'.>- "\ \. / ·'\oi-~i;e son Morcos i C, \) ) \.'""' Guolcince (_,......_, \'.>- Tejct:o . o '-"· ~ ~ \ cf1raera ~ "' · , .""' . Colomogc~2!!Jl.""" I > . \..... . r/ C, \'.>- HONDURAS E, ~ L...-._. / ." "-"\ r:--/ ....) \ WESTERN HIGHWAY PAVING PROJECT SALVADOR ~ ROAiJS: Asphalt paved Other Roads previously .d by Bank I Western Highway Pavlhg Project _ _ _ _ Feasibility study and preliminary engineering, Tegl!cigalpa-Juticalpa Road CA 4 Central American Interregional Highway No CA ~ Central American Interregional Highway No PACIFIC 0 CE AN 20 40 60 80 IOO 1" Maj 01• Airports SCALE: KILOMETERS NOVEMBER 1966 ItlRD-1833R