Peru's government, which will change hands in two months, plans to allocate an additional 3bn soles (US$900mn) for infrastructure spending in the country's regions, a senior official said.

The money, which will be channeled from an unused El Niño contingency fund, will enable local and regional governments to complete unfinished infrastructure projects this year, finance minister Alonso Segura said, according to state news service Andina.

A more benign than expected El Niño weather phenomenon meant the government has excess funds, Segura said. El Niño, which has unleashed major flooding across Latin America, was originally expected to cause as much as US$3.7bn in damage in Peru this year.

"The situation has normalized," Segura told Radioprogramas. "In case of an extraordinary El Niño, we would have required resources for repairs and reconstruction, but these are no longer needed."

Part of the funds will be assigned to infrastructure for the XVIII Pan American Games to be held in Peru in 2019, Segura added. President Ollanta Humala, whose mandate ends July 28 following a run-off vote on June 5, increased the 2016 budget by 6.6% to 138.491bn soles (US$42bn), including an additional 12.2% in infrastructure spending.

METRO

In other infrastructure news, negotiations between the government and the operators of line No.1 of the Lima metro to increase the number of trains are "pretty advanced," Segura said.

Brazil's Odebrecht and Peruvian engineering company Graña y Montero, which completed the second stretch of the line in May 2014, aim to transport 600,000 passengers per day, double the current number, to ease congestion on trains and at stations. The move would cut waiting time between trains to three minutes from six, according to the transport and communications ministry.

"The demand that line 1 of the metro is handling today was projected to happen in 15 years, which is why we have to bring forward the increase in the number of carriages," Segura said.

At the same time, the government plans to finish work on feasibility studies for line No.3 by the end of July so the next government can award the concession, transport minister José Gallardo said, according to Andina. Humala said last year his government had hoped to award the concession in the first half.

Lines 1, 2, 3 of the metro and trains operating on Lima's outskirts such as the Lurín-Chincha project would be able to handle 2mn passengers a day, Gallardo told reporters in Lima. The finance ministry earlier this year approved funding for the Lurín-Chincha line and upgrades for the central Andean railway.

Required investment on line No. 3 is estimated at US$5bn, while construction on the nearly US$5.7bn line 2 began in late 2014. The line is expected to be completed in August 2020, according to BNamericas' Project Risk Analystics.

 

Source: BNamericas

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