Announcement of World Bank Assists Rehabilitation of Four Mexican Ports on June 2, 1988

FOR IMMEDIATE RELEASE 'VorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 88/79 Contact: Ciro Gamarra (202) 676-1217 WORLD BANK ASSISTS REHABILITATION OF FOUR MEXICAN PORTS WASHINGTON, _June 2, 1988 -- Mexico's efforts to incrase efficiency and modernize cargo-handling in four important ports will be assisted by a World Bank loan of $50 million. The loan will help finance a port rehabilitation project that will complement efforts directed at stimulating Mexico's international trade. The project will include the rehabilitation of facilities and equipment in the ports of Guaymas and Manzanilla, on the Pacific Coast, and of Tampico- Altamira and Veracruz, on the Gulf of Mexico. These ports handle about 70 percent of the country's non-petroleum sea-borne foreign trade but their effective capacity has been depleted as many facilities are in disrepair and specialized equipment for handling containers or bulk traffic like grain or minerals is inadequate. With an estimated total cost of $90.2 million, the project will help finance the acquisition of specialized equipment for containers and bulk grain, and spare parts. It will also provide technical assistance to the recently formed National Dredging Service (SEDRA) and to the Secretariat of Communications and Transport, which is responsible for the implementation of the project. The project will be implemented during 1988-1994. The balance of the project cost will be provided by the Government of Mexico ($19.6 million) and by the ports service companies ($20.6 million). The project will complement efforts directed at stimulating Mexican foreign trade by reducing transport costs and rationalizing investment decision- making. The World Bank has played an active role in helping develop a transport strategy and pricing policy which should progressively reduce Government subisidies in the transport sector. The World Bank loan is for 15 years, including five years of grace, with a variable interest rate, currently 7.72 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balances. NOTE: Money figures are expressed in U.S. dollar equivalents.