Announcement of Fifteen Million Seven Hundred Thousand US Dollars Road Loan to Costa Rica on April 1, 1970

.INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENl- 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bunk Press R~l~ase No. 70/17 Subject: $15.7 million road loan April 1, 1970 to Costa Rica The World Bank today announced a loan of $15.7 million to Costa Rica for a rrad project which will provide the first all-weather highway connection between San Jose, the capital, and the country's main port, Limon, on the Atlantic Coast. The new road will extend from Siquirres to Limon, connecting with an existing road between San Jose and Siquirres. The new road connection is particularly important for Costa Rican exports to the United States and Europe and will stimulate development in the areas it serves. It will also form part of the • basic trunk highway system of the Central American Common Market • The loan will be made to the Republic of Costa Rica for a term of 30 years, including 6 years of grace, with interest at 7%. Efficient transport is of particular importance to the economy of Costa Rica because of its heavy reliance on foreign tradef but the country's topography makes the provision of an adeq~ate transport system both difficult and costly. However, road construction has progressed rapidly since 1962. Most of Costa Rica's all-weather roads have been built since then, partly with the assistance of some $10 million from the World Bank Group. There are now 805 miles of paved roads and 3,220 miles of improved roads. Road transport accounts for 83% of freight and 97% of passenger traffic. Railways serve primarily traffic needs of the banana and cocoa plantations. The project being assisted by the Bank loan announced today will remedy • an important deficiency in the road system -- lack of a highway connection /more Bank P.R. No. 70/17 - Costa Rica-Highway - 2 - between the capital, San Jose, and the main port. San Jose is located in the Central Valley which contains the other main cities, most industrial activity • and nearly half the population. The new road will extend 35 miles from r~lquirres to the port of Limon, traversing very difficult terrain crossed by nuffierous rivers. Consequently the project includes the construction of 19 bridges, river defense works, and about 150 drainage structures. A feasibility study will also be made of the existing San Jose-Siquirres road as this is in need of improvement and will reach capacity shortly after the Siquirres-Limon sec- tion has been built. The project is scheduled for completion by the end of 1974 at a total esti- mated cost equivalent to $19.4 million. The Bank loan will cover the foreign exchange requirements, and the remaining costs will be met by the Government of Costa Rica. The project will be executed by the Ministry of Transportation through the Direccion General de Vialidad. The United States Bureau of Public Roads has • provided technical assistance for preparing the project and will help to super• vise construction. All construction work will be carried out by contracts let on the hasis of international competitive bidding. The project will be divided into two road contracts and one bridge contract. - 0 - •