September 17, 2002

PUEBLA-PANAMA PLAN COUNTRIES DISCUSS FINANCING FOR ROAD INTEGRATION PROJECTS

At a meeting organized by the IDB in Washington DC, with multilateral lending institutions and cooperation agencies

Officials from Belize, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua and Panama met today with delegates from multilateral lending institutions and bilateral cooperation agencies to discuss their needs of financing to carry out highway integration projects under the Puebla-Panama Plan.

The plan, which was launched last year to promote economic and social development and regional integration, includes an initiative to create a Mesoamerican network of highways known as RICAM. The network, which is largely based on existing roads, comprises two main corridors on the Atlantic and the Pacific and a series of complementary routes.

At the opening of the meeting held at the Inter-American Development Bank’s headquarters in Washington, D.C., IDB President Enrique V. Iglesias said that one of the major challenges Mesoamerican nations face in consolidating integration and raising productivity is their historic deficit in infrastructure investment. According to recent studies, more than half of the region’s roads are in poor shape.

“That is why the Puebla-Panama Plan includes an initiative to improve the region’s overland transportation system,” he said. “Its goal is quite simple: to have reliable roads that will help reduce the costs of transporting goods and increase safety for travelers.”

These investments in infrastructure must be carried out along with other economic and social development programs under the Mesoamerican plan, such as the natural disaster prevention and mitigation initiative, Iglesias added.

Costa Rica’s Commissioner for the Puebla-Panama Plan, Alvaro Trejos, said that with the international community’s support the Mesoamerican countries expect to finish work on the regional highways network by the end of 2006.

“This highway network will serve as a catalyst for new investments in the region,” Trejos said. “High-capacity, high-speed and safe corridors will open the doors to other projects, such as the improvement and expansion of ports, airports and cargo services. Its impact will be felt in other areas of the economy, such as tourism and agro-industry.”

According to a progress report on the Puebla-Panama Plan issued in June, the necessary investments to upgrade the 9,000-Km RICAM network were estimated at $3.548 billion.

Some $672 million of that total are already being financed in projects underway in several countries. Nearly $997 million more would come from private sector investment in highways offered under concession. The remaining $1.879 billion would come from a variety of sources, including national budgets, multilateral loans and bilateral grants.

Officials from the IDB, the World Bank, the Central American Bank for Economic Integration (BCIE), the Andean Development Corporation (CAF), the Japan Bank for International Cooperation, the Japanese International Cooperation Agency and the United States Agency for International Development attended today’s meeting. Delegates from the governments of France, Italy, Korea, Spain and Taipei, China also attended.

Officials from the U.N. Economic Commission on Latin America and the Caribbean, the Central American Integration System (SICA), the Central American Economic Integration System and the INCAE business school also attended as members of the Plan’s advisory group.

This group has helped the Mesoamerican countries reach agreements on the legal, regulatory and operational frameworks for the regional highways network. As part of the Puebla-Panama Plan, the countries will also carry out projects to foster intra-regional trade and customs modernization.

Road Concessions

On Monday, the IDB hosted a meeting of the Puebla-Panama Plan’s subcommittee on road concessions, which includes officials from the region’s Transportation and Public Works ministries. The delegates met to analyze the possibility of adopting common criteria for offering roads under concession. The meeting was also attended by specialists from the IDB, the World Bank, BCIE, CAF and SIECA.

During the meeting, former Chilean public works minister Carlos Cruz, an international expert on concessions, outlined the various steps Mesoamerican countries would have to take in order to have uniform rules for public works concessions.