US$80 million for strategic border pass between Argentina and Chile

(Caracas, June 28, 2006).- The Andean Development Corporation (CAF) approved US$80 million for a loan for Argentina to partially finance execution of the Project Rehabilitation and Paving of the El Pehuenche International Pass, under the National Roads Department (DNB), agency attached to the Ministry of Planning, Public Investment and Services.

CAF President & CEO Enrique García explained that the operation was part of the South American Regional Infrastructure Integration Initiative. “The project will develop the road infrastructure of this strategic trans-Andean pass between Argentina and Chile, which is also an integral part of the bi-oceanic corridor (IIRSA Mercosur-Chile and South hubs)," García said. "Since the Argentina-Chile border is one of the longest in the world and considering that CAF’s mission is to support Latin American integration, operations such as this are increasingly important because of their impact on local and regional economic and social development," the CAF chief added.

The paving of this international pass will improve the flow of trade throughout the Mercosur region, by opening an alternative to the Cristo Redentor border pass. During winter the operation of the existing pass is frequently affected by snowstorms and avalanches, which interrupt traffic and cause heavy congestion, which has a negative effect on regional trade and trade with Asian markets.

The total cost of the project is estimated at US$148.9 million. The CAF contribution is US$80 million (54%), while the remaining 46% will come from local contributions. The project consists of the rehabilitation, construction of basic works, asphalting, art works, complementary works and signposting in three sections of the route, and a 68.15-kilometer section from El Pehuenche marker to Bardas Blancas. It also includes the construction of approximately 455 meters of structures, contention walls, third lanes and escape ramps, and the execution of the related Environmental Management Plans.

The project also covers a large amount for execution of pre-investment activities, including studies on the productive potential and generation of services in the Pehuenche Bio-Oceanic Corridor, as well as investment programs and projects to be identified which will contribute to land planning and sustainable development in the areas affected. Lastly, the project also provides support for the institutional strengthening of the Roads Department, particularly in its environmental and social area.

Argentina can count on CAF The project Rehabilitation and Paving of the El Pehuenche International Pass is the fifth operation that CAF has approved for Argentina. Previous approvals for this country were: Integration Road Corridors Program, Phase 1 (US$150 million); La Picasa Railway Viaduct and Strengthening of the Sector (US$35 million); an Export Line of Credit (US$35 million); and lastly US$210 million to upgrade the infrastructure in Posadas and Encarnación on the Argentine-Paraguay border.