Costa Rican Government Borrows for $1 Billion National Face-lift

Costa Rican roads, trains, ports and airports will be getting a billion dollar face-lift, government officials said Monday.

President Oscar Arias Sánchez and government ministers said that a regional development bank granted Costa Rica a loan of $850 million to help improve the country's infrastructure. The government will add $200 million to that for a total of $1,050,000.

The bank, the Banco Interamericano de Desarrollo or the Inter-American Development Bank in English, is a principal financier of development projects in Latin America and the Caribbean. Only Brazil and Argentina have ever received such large loans in the bank's entire 50-year history, said Fernando Quevedo, a bank representative at the conference.

President Arias said he was proud of the sum of money Costa Rica had been granted. "Considering how small Costa Rica is, this sincerely speaks well of our country," said Arias. The president, who has received much criticism in recent months, spoke of the end of his term and the upcoming elections. "It's not this government that will benefit, but this project will be fundamental for future governments," said Arias. Arias added with a smile that the future president whether male or female would benefit from the loan and strengthened infrastructure.

The minister of Obras Públicas y Transportes, Karla González, and the minister of Hacienda, Guillermo Zúñiga, also spoke at the conference. Rodrigo Arias Sánchez, minister to the presidency and brother of the president, attended the conference but did not speak.

Arias mentioned the following projects as top priorities:

· The highway in the south of the country that was started 39 years ago during a Figueres Ferrer administration.

· The new San José - Caldera highway that is now under construction.

· The highway from San José to San Ramón.

· The highway from la Uruca to Heredia. Arias said the government wanted to make that a four-lane highway. It is a perpetual bottleneck.

· The highway from Ciudad Quesada to Naranjo

The minister of transportation said the highway in the south should be completed by 2009.  The minister, Ms. Gonzalez said that often times Ministerio de Obras Públicas y Transportes receives criticism for not planning ahead. "Without money it was not possible to plan more than four or five years ahead."

Ms. Gonzales said the ministry would like to use $30 million for urban transport which would include:

· Strengthening and modernizing infrastructure for public transport in the metropolitan area.

· Reconstruction of sidewalks.

· Strengthening and enlargement of bridges.

· Improvement in main intersections.

Also proposed is $100 million for improving the nation's rail system. This likely would include electrifying the system and extending it throughout the Central Valley at least.

$50 million is planned to go to support the transport ministry decree signed by Arias in 2006 for the incorporation of road security. That would include guard rails, bike paths and pedestrian bridges. The transportation ministry plans to begin building bike paths around the country in December, said Ms. González.

Other projects mentioned by Ms. González included:

· Renovation of 60 bridges on the north Interamericana highway. One collapsed last week.

· A third lane on the San Ramón-Barranca road.

· Reconstruction of Paso Real San Vito-Ciudad Neilly.

· Reconstruction of road from Bribri to Limón.

· Reconstruction of the 500 kilometer road network.

The loan is also meant to help airports. Ms. González said that would mainly go to the new international airport in the southern region near Palmar since the airport in Libería already is receiving funds from other sources.

Ports will also be improved, although there were not many specifics given. Several projects are stalled in Caldera, and the government has plans to make dramatic improvements in Limón.

The interest rate on the loan is 5.64 percent and would be adjusted with the local currency rate, explained the minister of Hacienda. The repayment will be 20-year term.

The money will be given out over at least five years, according to Casa Presidencial.  

The loan still needs the approval of the Asamblea Legislativa, said Arias. The president said he hopes the assembly approves the loan as soon as possible.