Peru plans to accelerate Lima metro lines

Monday, December 5, 2016

Peru's government plans to speed up work on two lines of the Lima metro simultaneously, part of President Pedro Pablo Kuczynski's plan to reactivate the country's economy, a senior official said.

The plan is to bring forward a bidding process for line No. 3 of the metro to ensure work starts in two years' time after line No. 2 was delayed by bureaucratic obstacles, transport and communications minister Martín Vizcarra said.

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The government and the concessionaire for line No. 2 are scheduled to sign a contract addendum in the first quarter of 2017 that will re-establish a timetable after delays in land expropriation set the project back by two years, he said.

"There are many projects, large, medium or small, all of them important, which had been held up and which are now moving forward," Vizcarra said at a business conference in the south coastal town of Paracas. "We're going to start 2017 with a much better outlook than that of end-2016."

Line No. 2 will run from the industrial district of Ate to Lima's Jorge Chávez airport, while line No. 3 will link Lima's outlying Puente Piedra and San Juan de Miraflores districts. Peru's Graña y Montero and Brazil's Odebrecht completed the second stretch of line No. 1 in May 2014.

The government is on track to eliminate bureaucratic snags for at least US$3bn of delayed infrastructure investments by the end of the month, including the US$1.2bn Jorge Chávez and US$596mn Chinchero airports, the port of Pisco and the Autopista del Sol and Red Vial No. 6 highways, Vizcarra said.

Kuczynski, who took office July 28, has pledged to fast-track US$25bn in infrastructure projects to push annual economic growth to 4.8% in 2017 from an estimated 4% this year. Congress in late November approved a 2017 transport infrastructure budget of 10.7bn soles (US$3.2bn),


A package of 13 tax reforms will come into effect in January, in addition to the new state contracting law and the investment project clearance system Invierte, finance minister Alfredo Thorne said. The reforms aim to spur 5% growth in both private and public investment next year, he said.

Direct foreign investment totaled US$2bn in the third quarter, the highest quarterly figure this year, due to low-interest financing and Peru's stable exchange rate, Thorne said, adding state investment agency ProInversión has a US$15bn investment project portfolio.

"Between the start of an auspicious government and when people start to feel the effect in their pockets, that's where we're feeling the pressure," Thorne said at the same conference. "We have to ensure that the private sector is what really drives the economy."