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•• 1818 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360
Bank Presa Release 74/11 Subject: Two loans for $124.0 million for
February 21, 1974 irrigation projects in Mexico
The World Bank has approved two loans totaling $124.0 million to help
finance two irrigation projects in Mexico.
One loan of $47.0 million will support the integrated irrigation and
agricultural development of some 247,000 acres along the banks of the Sinaloa
River in the State of Sinaloa. The second loan of $77 .O million is for a
project to develop intensive agriculture and livestock operations in nearly
340,000 acres in the coastal plains of the Panuco River basin.
These are the ninth and tenth World Bank operations in Mexico's agricultural
sector, and the fifth azt<l sixth for irrigation. Both projects seek to increase
production to satisfy domestic and export markets demands, and at the same time
• to help the Government's efforts to alleviate rural poverty and unemployment •
A steady rate of growth, close to 6% a year for nearly three decades, has
made agriculture a dynamic element in Mexico's economic development and the
second most important foreign exchange earner after tourism. But there still
exist pressing problems in the rural areas, mainly unemployment, an uneven
distribution of income, and a hi;~h rate of rural-urban migration. The Govern-
ment has initiated poU.cies designed to overcome those problems, and has adopted
several measures to ensure the improvement of the earning cil~J living conditions
of the rural poor.
One of those measures has been the enactment in 1971 of a new Agrarian
Reform Law to strengthen the legal and institutional bases of the ejido (small
landholders cooperatives) to make it an efficient production unit and to
accelerate the granting of definite land titles,. Another measure is a new
Water Law which reduces the maximum permitted holdings in new irrigation districts
from about 245 acres per owner to about 50 acres. The excess land is to be dis-
tributed to small farmers and landless families.
The Sinaloa irrigation project will mark the first application of the new
Water Law on a large scale. It is expected that about 58,000 acres will be re-
• distributed within the new irrigation district on which 2,375 ejido families will be
settled. The redistribution in the area under new irrigatio1~ will affect private
farmers and existing ejidos.
Note: Money figures are expressed in US dollar equivalents.
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The Sinaloa project will demand investments estimated at $145.6 million
equivalent for a storage and diversion dam, complete irrigation distribution
and drainage systems, wells to supplement surface water supply, and intensive
extension services over a four-year period. The area comprised in the project
includes the old irrigation district of Guasave (54,300 acres), the area on
each bank of the Sinaloa River with limited and irregular water supply
(66,700 acres), and the dryland area (135,000 acres), and will benefit some
75,000 people in total. Use of modern irrigation and farming techniques are
expected to make double cropping possible on an average of nearly 65,000 acres
per year.
The Panuco project represents probably the single most i~ortant public
investment project of the present Mexican administration to increase agricultural
production. Total cost of the project has been estimated at $208.4 million.
Three separate water supply, distribution and drainage systems are included
in three states: Las Animas, in the State of Tamaulipas, using the Guayalejo
River to serve 118,600 acres; Pujal-Coy, in the States of San Luis Potosi,
Tamaulipas and Veracruz, to serve about 178,000 acres; and Chicayan ~tate of
Veracruz) along the Chicayan River to irrigate 42,000 acres.
The Panuco project will make it possible to settle some 5,300 landless
ejidatario families or about 30,000 persons. They will be settled on 197,000
acres of the project area which are being redistributed under the new Water Law.
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In addition, the project will create approximately 15,000 full-time jobs in
agriculture, and it will benefit some 1,500 existing ejidatarios and 1,500 private
farmers -- or about 50,000 persons in total -- besides the 5,300 landless
ejidatarios. At present the entire Panuco basin population is 200,000, of whom
70,000 are considered as rural. The Bank-supported project is the first stage
of a broader effort to promote rapid economic and social progress in the Panuco
basin, with an agricultural potential of close to 1,850,000 acres. It is
expecte.d that indirectly the project will help diversify and expand economic
activities in the basin, which so far have been concentrated in the port city of
Tampico.
All major contracts for civil works in the two projects will be awarded
on the basis of international competitive bidding.
The Bank loans for the Sinaloa and the Panuco projects are being made to
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Nacional Financiera, S.A. with the guarantee of the United Mexican States, both
for a term of 25 years, including five years of grace, with annual interest
at 7~.
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• 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360
February 21, 1974
TECHNICAL DATA
(Panuco Basin Project)
PROJECT: Irrigation
COUNTRY: Mexico
TOTAL COST: $208 .4 million
BANK FINANCING: $77.0 million, 25 years, 5 years of grace,
interest 7-1/4% per annum.
OTHER FINANCING: Govern..'tlent budgetary allocations.
• IMPLEMENTING ORGANIZATIONS: Ministry of Hydraulic Resources, Paseo de la
Reforma, Mexico City, Mexico, and a management commi.ttee comprising
representatives of the Department cf Agrarian Reform, the Ministry
of Agriculture, separate commissions for the three project areas,
participating banks and farmers.
PROJECT DESCRIPTION: Diversion dams, storage reservoirs and pumping plants
at three project areas, separate main canals, laterals and sublaterals
and devices to measure water delivery, separate rlrainage systems, access
roads to reservoirs and along canals and drains, buildings, land
preparation and extension services.
PROCUREMENT: Contracts for major construction works and equipment will be
awarded on the basis of international competitive bidding., Smaller
contracts for land leveling and clearing will he awarded through
negotiated or competitive local bidding.
COMPLETION DATE: 1980
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February 21, 1974
TECHNICAL DATA
(Sinaloa Project)
PROJECT: Irrigation
COUNTRY: Mexico
TOTAL COST: $145. 6 mill ion
BANK FINANCING: $47.0 million, 25 years, 5 years of grace,
interest 7-1/4% per annum.
OTHER FINANCING: Government budgetary allocations
IMPLEMENTING ORGANIZATION: Comision del Rio Fuerte, an agency of the Ministry
of Hydraulic Resources, Paseo de la Reforma, Mexico City, Mexico, and
a committee for agricultural development comprising representatives of the
Comision, the Ministry of Agriculture, the Department of Agrarian Reform •
and Colonization, participating banks and farmers.
PROJECT DESCRIPTION: Construction of a dam and storage reservoir with an
initial capacity of 2,900 Mm3 and provision to .add hydroelectric power
facilities in the future, and access road to the site; diversion dam
to divert water to main canals on each side of the river; wells, a
concrete-lined irrigation distribution system of main canals, laterals
and sublaterals and devices to measure water delivery; roads along
canals and drains, buildings, land clearing, and extension services.
PROCUREMENT: Contracts for major construction works and equipment will be
awarded on the basis of international competitive bidding. Smaller
contracts for land leveling and clearing will be awarded through
negotiated or local competitive bidding.
COMPLETION DA TE : 1 98 0
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