Peru accelerates housing, roads, water projects
Peru is picking up the pace in infrastructure investment in its bid to rebuild the country's north coast, which was devastated by record flooding last year.
The government aims to finish building 20,000 homes for flooding victims by the end of the year, part of a 26bn-sol (US$8bn) flooding reconstruction program, according to the housing and construction ministry.
The ministry has repaired 6,000 damaged homes in Ancash, La Libertad, Lambayeque, Lima and Piura regions to date and in late July plans to call for bids to build 12,000 homes, deputy housing minister Jorge Arévalo said.
Widespread floods, torrential rains and landslides caused by the El Niño phenomenon in 1Q17 left 163 dead and 291,000 homeless and caused billions in damage to roads, railways, power plants, schools and hospitals, mainly along the north coast, according to the central bank.
The government is awarding 22,617-sol credits to families to buy two-bedroom apartments valued at 24,485-83,000 soles, Arévalo told state gazette El Peruano. The apartments, part of the Mivivienda program, are to be built in five months, he said.
In other infrastructure news, housing minister Javier Piqué opened a 12mn-sol project involving 3.2km of street and sidewalk paving, street lighting and upgrades for potable water and sewerage networks in Ica region's Chincha province.
The project, which will benefit 13,000 residents, will include a 10mn-sol second stage, the housing ministry said in a statement. In total, the government has completed 64 urban development projects for 480mn soles since mid-2016, according to the ministry.
The projects are part of a drive by President Martín Vizcarra to modernize the Andean country's infrastructure. About 26% of the 157bn-sol budget set for 2018 will focus on public infrastructure, according to the government.
President Vizcarra, who replaced Pedro Pablo Kuczynski in March, is struggling to accelerate US$25bn in delayed infrastructure projects. Vizcarra in May transferred 6.3bn soles to regional and local governments to finance infrastructure.
Public spending in infrastructure helped spur 5% growth in Q2, marking the highest growth rate in 18 quarters, according to Banco de Crédito del Perú (BCP). The central bank is unlikely to change its benchmark lending rate this week as inflation is running within the central bank's 1-3%/y target range, BCP said.
"Economic activity continues a stronger cyclical recovery than initially expected," BCP analyst Luis Ortega wrote in a report. "We expect the central bank to maintain its reference rate at 2.75% for the rest of the year, and starting in Q4, start discussing the right moment to begin raising rates in 2019."
Elections
Vizcarra, meanwhile, urged local authorities to coordinate public works with their successors after regional and municipal elections on October 7 to avoid delaying infrastructure projects around the country.
"What must not happen is for project execution to halt and state investment to be shelved. These projects must continue," Vizcarra said during a meeting with the country's 25 regional governors in Lima. "Authorities come and go, but institutions remain."
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