Peru to raise emergency infra spending to counter floods

Friday, March 17, 2017

Peru's government announced emergency measures aimed at rebuilding infrastructure along the country's northern coast, which has been devastated by the worst flooding in half a century.

The 2.5bn-sol (US$800mn) reconstruction program is fully financed, President Pedro Pablo Kuczynski said. The government last week announced a 5.5bn-sol economic stimulus program which will involve infrastructure nationwide.

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Peru and much of Latin America are facing the effects of a severe El Niño phenomenon that has sparked torrential rains, flooding and landslides. In Peru alone, floods have claimed at least 50 lives and left 60,000 people homeless in 776 districts around the country this year, Kuczynski said.

"It's fundamental to be prepared to tackle the reconstruction that has to be done and prevent these disasters in the future. We can face this situation, and if the reconstruction costs more, we have the funds to do so," Kuczynski said in a press conference at the presidential palace in Lima. "The phenomenon isn't over and will continue for a while longer."

The emergency measures include adding 4.4bn soles to the 2017 budget; a 1.1bn-sol fund for local and regional government investment in infrastructure; allocating 100,000 soles for each local municipality in areas under a state of emergency; 200mn soles each for the health and education ministries' reconstruction of schools and hospitals; aid for the housing ministry to rebuild homes; the relocation of the homeless in higher altitude areas; and 56.5mn soles for the fishing industry.

Kuczynbski also declared a state of emergency for Peru's central Andean highway linking Lima to Junín and Pasco regions, including financing for construction of alternative routes. The central highlands are home to Peru's largest zinc-lead mines and a key food supplier to the capital.

Meanwhile, mining company Antamina said it has provided earth-moving machinery to repair the northern Pativilca-Huaraz highway, while local bank Banco de Crédito del Perú said it will invest 100mn soles in road construction in northern Piura region as part of a system of tax swaps for infrastructure.

Tax agency Sunat announced a 60-day moratorium on tax payments in emergency zones, while business confederation Confiep announced that its members will provide heavy machinery, free flights to Piura, storage space for donations in malls and fishing boats to ferry the donations to disaster areas.

At the same time, state water company Sedapal implemented water rationing for a third day in Lima after heavy rains forced it to close its La Atarjea water treatment plant.

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