Announcement of Seventeen Million Dollars for a Port Development Project in Honduras on April 7, 1977

.World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 ~NEWS REL.EASE NO. 77/78 April 7, 1977 IDA NEWS RELEASE NO. 77/44 $17 M~LLION FOR A PORT DEVELOPMENT PROJECT tN HONDURAS The World Bank and its afffliate, the International Dev~lopment Association (IDA), announced today they are granting $17 milliun to help finance a port de- velopment project in Honduras aimed at providing suitable outlets for export commodities. The third port project supported by the Bank in Honduras wi 11 have an estimated cost of $29.9 million and will include the construction of new port facilities at Puerto Castilla and at San Lorenzo. The project w111 provide the most economic means of transport for the output from several important agricultural and industrial projects in the northeastern and southern regions of the country. The project wi 11 comprise the construction of a 450 m wharf and lumber, palm oil and petroleum storage and cargo, and woodchip handling facilities at Puerto Castilla, on the Atlantic coast,to serve the Olancho-forest industries and Aquan- • Valley agricultural projects. Also it will include the extension of the pier with an additional berth 145 m long and storage facilities for sugar exports at San Lorenzo, on the Pacific coast. The Third Port Project includes provision of general cargo and handling equipment for both ports; consultant services for engineering and supervision con$truction; and technical assistance for a channel depth study at San Lorenzo, and for staff training at Puerto Cortes. The operation will consist of two Bank loans amounting $12 million (including $5 mil lion in Third Window terms) and one IDA credit of $5 million. The $7-mi llion Bank loan to the Empresa Nacional Portuaria (ENP), the national port authority, with the guarantee of the Republic of Honduras will have a term of 20 years including 4 1/2 years of grace, with interest at 8.5 percent per annum. The Bank's Third Window loan of $5 million to the Republic of Honduras will carry interest at 4.5%. The difference between the Bank's current interest rate of 8.5% and the charge to Honduras will be paid by an Interest Subsidy Fund supplied by the Bank's richest members. The $5-mi llion IDA credit to the Republic of Honduras is {or 50 years, in- cluding ten years of grace. It is interest free except for a service charge of 0.75% to cover IDA's administrative costs. • Two Bank loans approved in 1966 and 1971, and a supplemental loan in 1975, have provided almost all the external financing for port expansion in Honduras, with a total of $13.6 million. The ENP has carried out these two previous port projects for improvement of Puerto Cortes and the construction of San Lorenzo. Note: Money figures are expressed in US dollar equivalents. FORM NO. 1 'i21 • (5-76) T E C HN I CA L DAT A PROJECT: COUNTRY: TOTAL COST: Third Port Honduras $29.9 mi 11 ion • BANK FINANCING: $7 million at 20 years including 4 1/2 years grace and 8.5% interest per annum. $5 million on Third Window terms. IDA FINANCING: $5 mlll ion on standard IDA terms. OTHER FINANCING: Empresa Nacional Portuaria and local resources $ 12 • 9 mi 11 i on • IMPLEMENTING ORGANIZATION: Empresa Nacional Portuaria4 Apartado 18, Puerto Cortes, Honduras PROJECT DESCRIPTION: a) Civil Works. At Puerto Castilla: Construction of a 4so m wharf, one transit shed, one warehouse, two lumber sheds, storage tanks for palm oil and petroleum, office building, and miscella- neous services. At San Lorenzo: Extension of the pier (presently under construction) to provide an additional berth 145m long, and construction of a sugar storage shed and two • molasses tanks. b) Equipment. At Puerto Castilla: Provision of general cargo and lumber ridridling equipment, chip-loading equipment, a used tugboat and a launch. At San Lorenzo: Provision of (1) equipment for handling sugar, lumber and general cargo and for pumping molasses; and (2) navigational aids. c) Consultant Services for detailed engineering and supervision of construction; and, d) Technical Assistance for (i) Channel depth study at San Lorenzo; and, (ii) Training of ENP staff in container operations at Puerto Cortes. PROCUREMENT: Contracts for civil works at Puerto Castilla and for the equipment for both Puerto Castilla and San Lorenzo will be awarded on international competitive bidding in accordance with Bank guide- lines. Civil works at San Lorenzo will be executed under an extension to the on-going contract awarded in 1975 to Columbus Latinoamericana under the Second Port Project. Appli- cable prices in this contract will provide a basis for negotiating prices for the additional work. ECONOMIC RATE OF RETURN: 25 percent. ESTIMATED COMPLETION DATE: 1979 - 0 - •