Peru to invest US$240mn in flood-hit coastal infrastructure

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Thursday, March 16, 2017

Peru's government said it will invest 800mn soles (US$240mn) in an infrastructure rebuilding drive on the northern coast as the country grapples with its worst flooding in decades.

President Pedro Pablo Kuczynski will give one of his cabinet ministers the task of overseeing construction efforts in Piura, Tumbes and Lamabayeque regions, which have been hit hardest by record rainfall, cabinet chief Fernando Zavala said.

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"This is an initial amount which will help the reconstruction process. However, we expect at least another two weeks of heavy rains," Zavala said at a broadcast press conference. "Attending to this emergency is our priority."

An additional 15mn soles will be allocated to farmers whose crops have been destroyed and 100,000 soles for local mayors in flooded areas, Zavala said. Piura is home to oil and gas fields, phosphate mines, fishmeal and cement plants and some of the country's biggest agro-industry ventures.

The government will build 21 bridges in Piura and Tumbes, in addition to a 160mn-sol housing project and a 25mn-sol work program for local residents, he said. Funds are also being allocated for fumigation to prevent outbreaks of disease such as dengue, in addition to 120 pumps and two field hospitals, while repairs are ongoing at 500 of the 670 schools damaged in the region.

Transport and communications minister Martín Vizcarra, meanwhile, said a metallic bridge will be implemented on Piura's Sullana-Tambogrande highway and a second bridge will be rebuilt to withstand rain-swollen rivers. The rains have damaged 5% of the country's road network, he said in a statement.

The government last month pledged 5bn soles (US$1.5bn) in infrastructure financing after flooding and landslides left at least 48 dead and washed away roads, bridges, crops and 12,000 homes around the country in what has been dubbed a coastal El Niño phenomenon.

In Lima, state water company Sedapal announced water rationing in 26 districts after heavy rains forced it to close its La Atarjea water treatment plant as the Rímac River is filled with mud, rocks and trees.

In Lambayeque, army helicopters rescued 70 people from floodwaters, while rivers caused flooding in the northern cities of Trujillo and Chimbote and Lima's Chosica district and the government declared a state of emergency in the central Huancavelica region.

Public spending on infrastructure reconstruction will spur economic growth, central bank president Julio Velarde said. The monetary authority does not expect the flooding to have a major impact on inflation, he said.

"It was indispensable to increase public spending," Velarde said at an event at the bank. "The problem isn't just about setting a higher figure, but how to execute it."

PAN-AMERICAN GAMES

Meanwhile, Lima mayor Luis Castañeda and opposition leaders urged the government to call off the Pan-American Games, saying the 4bn-sol budget for the 2019 games would be better allocated to emergency reconstruction. The government has vowed to press ahead with the event, claiming it will spur tourism.

"Faced with such a major emergency, we should say 'that's it," head of congress Luz Salgado told reporters. "We should address these nationwide emergencies first."

The Andean region is recovering from the effects of the La Niña phenomenon, where cooler ocean temperatures cause drought in the highlands. The delayed rainy season has already caused widespread flooding in Peru, Ecuador, Chile, Colombia, Venezuela and Argentina this year.