Peru targets 8,000km of paved highways

- Friday, November 25, 2016

Peru targets 8,000km of paved highways

Peru's government aims to have the country's entire 27,000km highway network paved within five years, a senior official said.

The government, which has set a 2017 transport infrastructure budget of 10.7bn soles (US$3.2bn), will focus on the Pan American, highland and jungle longitudinal highways in addition to connecting roads, said transport and communications minister Martín Vizcarra. The country currently has 19,000km of paved roads.

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"The goal is to work gradually so as to end this government having paved the entire national road network," Vizcarra said during a presentation by President Pedro-Pablo Kuczynski's 19-member ministerial cabinet in congress. The government has set a total 2017 budget of 142.5bn soles.

The government, which has set a goal of modernizing all of the country's ports and airports to link up to the highway system, is also working with local and regional governments to pave another 7,000km of roads in the country's interior, Vizcarra said.

The government also aims to start work on line No. 3 of the Lima metro in 2018. Line No. 2 is scheduled for completion in 2021, according to Vizcarra.

In other infrastructure news, the government aims to extend electricity services to 84% of the country's rural population next year and 99% by 2021, energy and mines minister Gonzalo Tamayo told congress. Legislation is pending to speed up allocation of funding for rural electrification, he said.

Another 100,000 homes are also scheduled to be connected to natural gas services by next year, Tamayo added.

GDP

The government plans to push through reforms aimed at simplifying administrative procedures and formalizing the country's informal sector, part of a plan to accelerate GDP growth to 5% from 2018 onwards, finance minister Alfredo Thorne said. The economy is expected to expand 4% this year.

An increase in infrastructure investment and productivity will contribute at least half a percentage point each to GDP growth, Thorne said in congress. Peru is also benefitting from an ongoing recovery in commodities prices.

"The markets are helping and we have favorable expectations of a major rebound," Thorne said in his presentation. "But we need to unblock investment projects, simplify administration, increase public spending and lower taxes. Our strategy involves an infrastructure boom."

Kuczynski, who took office July 28, is striving to eliminate bureaucratic obstacles to US$25bn in delayed infrastructure investment.