9 FOR IMMEDIATE RELEASE • WORLD INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPfVlEN'T· 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE 3-6360 PRESS RELEASE NO. 657 SUBJECT: $25 million loan for October 18, 1960 Mexican highways The World Bank today made a loan equivalent to $25 million to assist in the development of Mexico's highway network. The loan will finance the foreign exchange cost of building or improving 13 roads having a total length of approximately 2,000 miles in central and southern Mexico. The roads are among the most important in a five-year program being undertaken by the Mexican Government to develop the Federal Highway System. • The First Pennsylvania Banking and Trust Company (Philadelphia) a.nd the Grace National Bank of New York are participating in the loan, without the World Bank's guarantee, for a total amount of $150,000 representing part of the first maturity which falls due May 1, 1965. The loan was made to the Nacional Financiera, s.A., an agency through which the Government borrows abroad. The work to be financed by the loan is the responsibility of the Federal Highway Administration of the Ministry of Public Works. The rapid growth of the Mexican economy has required a large expansion of the country's transport systems, particularly of the road network. Mexico has carried out successive road improvement programs and tod~ the, country has about 28,000 miles of asphalt and gravel highways. Further expansion and im- • provement is however essential. The number of vehicles and the consumption of gaso- line have more than doubled in the past ten years and many roads are no longer - 2 - • adequate for the volume of traffic they have to carry. Furthermore, because of the size of the country and the difficult mountainous terrain, many areas are still relatively isolated; road communication between important industrial and commercial centers is circuitous and slow; and some potentially rich agri- cultural areas are not readily accessible. To help overcome these deficiencies in the road system, the Government is carrying out, over the period 1960-1964, a program to construct or recon- struct about 8,900 miles of highways. The roads for which the Bank's loan was made are part of this program.. Six of the roads (Rio Verde - Valles; Arriaga - Tapachula; Saltillo - Guadalajara; Amayuca - Izucar de Matamoros; San Luis Potosi - Torreon; and Ciudad Victoria - Huisache) will provide shorter and. faster lines of communication between important cities and areas of the country; two of the roads (Monterrey - Nuevo Laredo; Monterrey - • Reynosa) will be reconstructed to higher standards to carry greater volumes of traffic; and five of the roads (Acapulco - Pinotepa Nacional; Villa Hermosa - Escarcega - Champoton; San Juan del Rio - Xilitla; Pinotepa - Puerto Escondido; and Compostela - Puerto Vallarta) will either provide access to populated areas now largely isolated from the rest of the country or will qpen up to settlement underdeveloped regions with a substantial agricultural potential. BY improving transport conditions, the roads will contribute to the development of agricul- ture, cattle production, industry and mining, and will facilitate internal as well as international trade. The total cost of these roads is estimated at the equivalent of $68.6 million. The Bank loan will cover the foreign exchange cost of the projects, and the Mexican Government will finance the local currency costs. By far • the largest part of the work will be done by contractors selected on the - 3 - • basis of competitive bidding open to local and foreign firms. The roads are scheduled for completion by the end of 1964. The Bank loan is for a term of 19 years and bears interest of 5-3/4% per annum in~luding the l°/o commission which is allocated. to the Bank's Special Reserve. Amortization will begj_n. May 1, 1965. Including today's loan, the Ban..~ has made nine loans totaling $211.3 million in Mexico. The earlier loans were made for the expansion of electric power facilities, railway rehabilitation and industry. After having been ~~roved by the Bank rs Executive Dj.rectors, the loan documents were signed by Mr. Raul Martinez Ostros, Deputy Director General of Nacional Fina.nciera, on behalf of the Government of Mexico and of Nacion.al Financiera • • • UNITED • STATES • ~ Mexico of Gulf NORTHERN ~ "? 0 - ~ ~ MEXICO MAIN HIGHWAY NETWORK 0 0 MAIN EXISTING HIGHWAYS, ~ "'P t -z_ PROPOSED BANK-FINANCED PROJECT CONSTRUCTION OF NEW ROADS •••• •••••••• •••••••••• RECONSTRUCTION OF EXISTING ROADS N MAIN RAILROADS CONSTRUCTION RECONSTRUCTION 1. R(o Verde-Valles 12. Monterrey-Nuevo Laredo 2. Arriaga-Tapachula 13. Monterrey-Reynosa 3. Acapulco-Pinotepa Nacional 4. San Iuan del R(o-Xilitla 5, Saltillo-Guadalajara 6. Pinotepa- Puerto EscorAido 7. Compostela-Puerto Vallarta a. Amayuca-Izitc:>.r de Matamoros 9. San Luis Potosf-Torreon 10. Ciudad Victoria-Huizache 11. Villa Hermosa-Esc:trcega-Champoton 0 100 200 300 400 500KM SEPTEMBER 1960 1BRD-683RJ234