Announcement of 14.5 Million Dollars Loan to Ecuador on September 20, 1957

!. " l 0 WORLD , (::) ,, CO\) · , , INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W.1 WASHINGTON 251 D. C. TELEPHONE: EXECUTIVE3-6360 C> PRESS RELEASE NO. 500 $JBJECT: $14. 5 million loan September 20, 1957. to Ecuador The World Bank today made a loan of $14.5 million to Ecuador for the conE1tructi6n o:f' four key roads and__)a four-year road maintenance program. ~ /> Improved tra.nsportatio~ is a prerequisite to iduador's further economic growth, ''J {, ,.:I \ '\ and-measures now being taken by the Government to improve the national road network can be expected to have :f'ar-reaching'~ffects. At present the national highway.network totals 2,000 miles of primary and secondary roads, of.which only 200 miles are asphalted, 430 miles are cobblestone, and the rest are gravel rq,r\ds in poor cond.ition because of lack \) of maintenance. Under the program now being undertaken maintenence operations ,._: will be completely reorganized to provide Ecuador with an organization~steffed and equipped to ca:rry out effective maintenance of these roads. District maintenance centers will be set up, workshops and warehouse~ will be es~6.blisherl, new equipment will be purchased, and a training progr~ for the operation a.nd maintenance of the equipment ~11-be carried out. The program will improve the condition of most of the national network and save the Government the costly alternative of r~build.ing roads. The four new roads to be built Will open up large areas of Ecuador's fertile but unexploited coa.stland and one of them will make possible all-weathte!' motor transpori' bewe:; the populous mountain area arou:.r1d Qui to' the capital' •. ·,.__ '\ ·' _' and the tropical""coastal region. The roads will have a total lengtli of 330 miles. The longest of them, 145 miles, will provida a vital link in an all- weather road between Quito and Guayaquil, Ecuador's , largest city and chief  rr . ' d 0 - 2 - port,. The stretch from Guayaquil ~and Quevedo, where the new road will start, has already been put in good condition partly with the help of a Bank loan of $8. 5 ?Q.illion ma.de in 1954 .};or road improvements in the Pr6vinc,e of Gua,.ya.s. q The new road will run from.Quevedo to,Quito via St. Domingo a.nd~~oa.g. It wll.l traverse flat rolling country at a lqw altitude over most of1\ its length I • \\ ,, 0 • (/ 'I Ji I I' and will then climb 10,500 feet through the lowest pass; in the Andes on do'Wn ,, to Quito at about 9,000 feet. It Will open up presently inacce!sible fertile 0 land between Quevedo and St. DJmingo, suitable for tlie cultivation of bana.tias and cacao. The second road runs from Duran, a town opposite Guayaquil on the Guayas , ,- .. River, ''to Cochancay at~ the foothills of the ~des. It forms part of the highway connection between G'".l.B.yaquil and Cuenca, Ecuador's third largest town. The work to be undertaken on this road is mainly reconstruction. all-weather road in this area will reduce the losses in spoilage now incurred in transporting agricu1tural crops, particularly banan~, to Guayaquil for ·A paved • export and reduce motor-vehicle operating costs. It will be the main ~ery for branch roads n.ow being built in other parts of Gue.ya.a Province, among the.m, Bank-financed roads. A third road, of 30 miles, will be built ,,from Chane to Bahia de Ca.raquez, a port town on the Pacific. When this road is cODlpleted, ag:r/icultural export products from the Chane area ca.n be transported directly to the port of Bahia in all seasons of the yeax. The fourth road, of 100 miles, from Chone to st. 'IX>mingo, will be con- structed "When work on the others and on the maintenance prqgram has progressed satisfactorily. It would pass through fertile but for the most part uncultiva- ted land and through its connection with the Chone-Bahia road would provide ·• the coastal hinterla..11d with an access to the sea.  ,_, n II \\ \1 - 3- (l \ .> \) (J Both 11\he road con.structiqp and maintenance programs nWi.ll be carried out l:1 ''-' by .1the Department or· Public Workst With the assistance of engineering consul'tants who will be retained by the Government. ,,The execution of the Ba.nk-tinanced maintenan~e program Will extend over a period of four ,. years; ' C t:: . . '=-'---= c, the road construction is al.so scheduled fQr · completion in that time. The total cost of . the construction work :l,s estimated at the equivalent of ~ 373.3 . <~ million sucres ( $24. 7 m:f.llion) • An amount of $11 million from tYie. Bank loan will pay for the necessary imported goods and services. The total cost of the maintenance program' is estlma.ted at about 112 md.llion SJJ.cres ($7.4 mil- ~' ::.. , lion) • An allocati~ of $3. 5 cmill:,ion from the Bank's loan will pay for the import ot. new equipment with spare parts for reconditioning existing equipment-, tools and materials f'or repair shops, warehouses and offices, as well as • engineering t:aes and a small pa.rt of the cost of the training program. '2he ' ~1 \,./ local currency cost of the programs will be met by the Government; i-t is est~ted that about wfa of the local cost of the construction program will r1 be met from an existing gasoline tax. The loan is for a term of 20 years and bears interest of 5-3/41, including the 1~ commission which is allocated to the Bank's Special Reserve. Amortiza- tion :Will begin on March 15, 1962. The Chemical Corn Exchange Bank of New York is participating in the loan, Without the World Bank's guarantee, taking pa.rt ot the first tna.turity. After having been approved .by the Bank's Executive Directors, the loan (> ~ documents were. signed today by His Excellency Dr. Jose R. Chiriboga V., Ambassador of Ecuador in Washington, on ~ of the Government of Ecuador, and by Eugene B. Black., President, on behalf of the World Bank • •  ··~ I) C;. C 0 t Ii l !J c:) ___ _.... _.... _.. _....--· --·-· MAIN HIGHWAYS PLANNED ROADS EXISTING ROADS ROADS TO BE FINANCED BY THE IBRD LOAN 0 AUGUST 1957 IBRD-371 •