Announcement of Twenty-Six Million US Dollars Loan for a Road Project in Peru on April 25, 1974

IN I"\ i ! \i t,·OR • 1818 H STREET, N.W., WASHINGTON D [)EVELO PM ENT D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 74/24 Subject: $26 million loan for a road April 25, 1974 project in Peru The World Bank has approved a loan of $26 million to assist in improving road transport in Peru. The Andes, the world's second highest mountain range, divide Peru in three markedly different physical regions: the coast, where most of the industrial and modern agricultural development has taken place; the Andean highlands, with most of the mining activities; and the sparsely populated but po~entially rich Amazon jungle region. The absence of adequate transportation infrastructure linking the three areas has largely contributed to this division which has influenced the economic • development of the country. On the whole, the present transport sy.e'::em satisfies the minimum requirements of the coastal area, but is inadequate to the development needs of the mountainous and amazonic jungle regions. The project being assisted by the Bank loan will help to open up Peru's hinterland by significantly reducing transport costs. It will not only improve the link between the coast and the Amazon jungle but also provide access to a number of other economically underdeveloped areas in the country. The $40 million project consists of the construction and improvement of the 219-kilometer Huanuco-Aguaytia road; the improvement of 200 kilometers of feeder roads; financing of equipment for a road maintenance program and consultants for technical and pre-investment studies. The project is scheduled for completion in 1978. The Bank loan to the Goven1ment of Peru is for a term of 25 years, including 5 years of grace. The loan will carry interest at 7-1/4% per annum • • Note: - 0 - Money figures are expressed in U.S. dollar equivalents.  TECHNICAL DAT A • PROJECT: Road COUNTRY: Peru TOTAL COST: $40 million BANK FINANCING: $26 million OTHER FINANCING: Government of Peru IMPLEMENTING ORGANIZATION: General Directorate of Land Transport, Ministry of Transport and Comnn.mications, Lima, Peru PROJECT DESCRIPTION: 1) Construction works in the Huanuco-Aguaytia road 2)_ im- provement of 200 kilometers of feeder roads; 3) a maintenance program for the La Oroya-Pucallpa road (including the Huanuco-Aguaytia section); and 4) consultant services to assist in the supervision of the project and to carry out technical and pre-investment studies. PROCUREMENT: Civil works -- International competitive bidding except • for feeder roads, which may b£ locally advertised or, at Peru's option, carried out by force account. Maintenance equipment -- International competitive bidding, with local manufacturers having a margin of preference of 15% or the level of customs duties, whichever is less. CONSULTANTS : Consultants will be employed to assist in (1) superv1s1on of civil works, procurement and utilization of maintenance equipment, and (2) carrying out geotechnical studies of the La Oroya-Aguaytia road, detailed engineering of the Tarma-Oxapampa road, a road user charges and other pre-investment studies. ESTIMATED COMPLETION DATE: 1978 •