Announcement of World Bank Lends Two Hundred Sixty-Five Million Dollars to Mexico for Pider Rural Development and for Technical Training on July 23, 1981

. . . FOR" IMMEDIA Tf RELEASE . . • 0 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 " BANK NEWS RELEASE NO. 82/ 10 July 23, 1981 WORLD ijANK LENDS $265 MILLION TO MEXICO FOR PIDER RURAL DEVELOPMENT AND FOR TECHNICAL TRAINING The World Bank has made''two loans to Mexico, tot~ling $265 million. One Joan will assist Mexico's efforts to increase the producti~i~y, incomes,and living standards of 250,000 poor rural families; the other will he1~ to expand the number of skilled workers and technicians. ', The first loan, for $175 million, will help finance the third project under the PIDER integrated rural development program. The project will provide a package of pro- ductive investments and infrastructure services to benefit poor farmers in 17 small regions in the states of Guerrero, Sinaloa, Yucatan, and Zacatecas. The second loan, for $90 million, will support the National Agency for Professional and Technical Education (CONALEP) in expanding the output of skilled workers and tech- nicians and in improving the quality, relevance, and efficiency of technical training. C) Both loans were made to Nacional Financiera, S.A. (NAFINSA), the financial agency the Mexican government, with the guarantee of the United Mexican States. They are term of 15 years, including 3 years of grace, with interest at 9.6% per annum. PIDE8 Rural Development The project is the third Bank-assisted operation supporting the PIDER integrated rural development program. Established in 1973, the PIDER program provides public invest- ment for well-defined, small regions with widespread poverty and with underutilized productive potential. To date, some $1.6 bi11ion have already been invested by the government in 130 such0regions established under the PIDER program, where about half of the nation's rural poor live. The World Bank has made two previous loans, totaling $230 million, to assist the PIDER program in 1975· and 1977, financing the program in 50 regions. \\ The project has an estimated total cost of $506 million, of which the government will finance $268 miUion. The beneficiaries will contribute about $63 million. The $175 million Bank loan will be disbursed o~er. . . a four-year period • .,;,~,,~ About 61% of the project funds will?be channeled into productive investments in livestock, irrigation, rural industries, forestry, crop development, fisheries, soil and water conservation, and associated farm development credit. 0 NOTE: Money figures are expressed in U.S. dollar equivalents.  ( ,) - 2 - • The development of feeder roads, market facilities, extension services, electrification, farmer organization, and feasibility studies for productive investment wtll receive 26% of the project funds. About 10% will be for invest- ments in social infrastructure, such as construction of primary schools and drink- ing water facilities, and materials for self-help projects. Two new important features of the PIDER project are a component to deve•op productive programs benefitting women and a pilot nutrition program to be implemented in selected communities in Zacatecas, Guerrero, and Yucatan where problems of mal- nutrition are most pressing. The proj~ct is expected to benefit about 250,000 poor fantilies. Some 46,000 fami 1ies wi 11 benefit from directly productive investment; their average incomes are expected to increase from $450 to $2,500 as a result of the project. The project will increase production of bas;c crops, oil crops, feedgrains, cacao, coconut, coffee, citrus, vegetables, fruitss cashew,livestock, milk, and honey. Most of this production will be consumed domeetically. The project is also expected to have beneficial effects on the environment. Soil and water conservation and forestry programs will help reduce erosion losses in the project regions. The improved farm practices promoted under the project will ensure development appropriate to the capacity of the land and safe application of agro-chemicals. Technical Training The $90 million loan will support CONALEP (National Agency for Professional • and Technical Education) in strengthening and completing i~s first phase (1979-83) technical training program for skilled workers and technicians. The project has an estimated cost of $214.8 million, the balance being financed by the government. It will include the construction of CONALEP's instruc- tional and administrative headquarters in Mexico City; construction and expansion of 99 technical training centers in 31 states and in the Federal District of Mexico , City; and the preparation of CONALEP 1 s 1984-38 operations plan. The technical training project will increase CONALEP 1 s enrollment capacity by 50,000 places and will provide equipment necessary for 70,000 trainees. At full development, by 1985-86, the project is expected to add annually about 20,000 skilled workers to the labor force. It will also train annually 800 technical teachers, and upgrade specialized skills for 1,000 employed workers and technicians. This will almost double the 1978 output of 23,000 technical school graduates who entered the labor force. The project wi 11 make an important contribution to reducing the shortage of such skilled workers. - 0 - •  ,j! T E GH N t C A,J! . D A T.. A Integrated Rural Development ,:!f (PIDER 111) COUNTRY: Mexico ·TOTAL COST,: $505 ~ 7 mi 11 ion · BANK FINANCING: $175 million for a term of 15 years, including 3 years of grace, with interest at 9.6% per annum OTHER FINANCING: Government of Mexico, $267.7 million; . Beneficiaries, $63 million IMPLEMENTING ORGANIZATION: Secretariat of P·rogramming and Budget General" Directorate of Integrated Rural Development lzazaga 38 Mexico, D. F. ·\ .PROJECT DESCRIPTION: It includes: a) directly productive components: small-scale irrigation; soil and water conservation; crop, livestock, and , beekeeping development programs; reforestation and afforestation; fisheries; rural indus- tries; and medium-term development credit; b) productive support components: extension services applied researth; rura1 marketing facilities; organization of farmer groups and support of land titling programs; construction,. rehabi 1 itation and maintenance of rural roads; rural electrification; a program to generate productive employment opportunities for rural women; and feasibility studies for productive investment; c) social infrastructure; and d) management: monitoring and evaluation,and staff training. PROCU.REMENT: Civil works contracts wi 11 be procured fol lowing the govern- ment's normal procedures. In most cases, these contracts will be subject to local competitive biddinge Force account will Ce used in some cases. Where .feasible, contracts for the purchase of materials and equipment will be grouped and pro- cured. through international competitive bidding. Contracts for less than $350,000 could be procured through local competitive bidding or local shopping in accordance with the government's normal procedures. Equipment for on-:farm· devleopment, financed through loans to farmers, will be purchased directly by the farmers from local suppliers. (l CONSULTANTS: Twelve man-months of consultant services will also be provided to assist in program development ECONOMIC RATE OF RETURN: Aggregate rate of return for the 8 micro-regions already appraised estimated at 27%. ESTIMATED COMPLETION DATE: 1985 - 0 - PR()J'ECT~1 COU-MTRY: TOTAL COST: Technical Training M~fiCO $214. 8 min ion • BANK FINANCING: " ( $90 mi 11 ion for a term of 15 years, including 3 years df grac@, with interest at 9.6% per annum OTHER FINANCING: Government of Mexic;o, $124.8 million IMPLEMENTING ORGANIZATION: Colegio Nacional de Educacion Profesional Tecnica (CONALEP) Vi to A 1es s i o"''Rob 1es 380 A Mexico 2, D.F. PROJECT OESiRIPTION: It includes: a) construction and equipping a center for CONALEP I s administrative offices, inst ruct:o:.~ training faci 1i tv., · traini6g materials production center, and an information and documentation center; b) con- strucdhn and equipping of 37 new training centers; expansion or remodelling and equipping o.f . 52 centers, and equipping of 10 completed .c.en.ters; and c;:) preparation of CONALEP's • 19a4,.:.aa plan, and a follow-on development project. ., " PROCU.REMENT: Contracts for the construction of the 99 training centers wi 11 be awarded through local competitive bidding under the govern- ment's normal procedures. The contract for the i~structional and administrative support ;omplex will be awarded through international competitive bidding (ICB). Where feasible, contracts for equipment will be in packages of at least $300,000 and will be procured through ICB. However, up to $13 million of equipment will be procured in packages of . $25,000-$300;000 through regular government procurement procedures, which generally require lotfal competitive bidding. Equipment in packages smaller than $25,000 will be procured through local shopping. CONSULTANTS: None ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 'Not quant i (i ab le 1983 - 0 - •