Peru faces up to US$9bn El Niño bill

Peru may have to invest up to US$9bn in reconstruction of infrastructure damaged by the El Niño phenomenon and long-term relocation of vulnerable communities, President Pedro Pablo Kuczynski said.

Rain-swollen rivers and landslides have left 106 dead and 155,000 homeless and caused US$3.1bn in damage to schools, hospitals, housing, bridges, railroads and 6,000km of roads since January, according to the central bank.

"One needs to divide the process into two parts: US$2-3bn in immediate reconstruction, and then public works to make Peru a modern country, which will take five years and cost another US$5-6bn," Kuczynski told Radioprogramas.

As part of the ongoing efforts, the northern Pan-American highway will be fully reopened within 2-3 weeks after flooding and landslides blocked the road and washed away bridges, Kuczynski said in a statement posted on the presidential website.

The government plans to expand the route to four lanes in the future, while rivers like La Leche in Lambayeque region will have to be channeled away from communities, he said.

Kuczynski's government has pledged to rebuild villages and towns, but only if residents agree to move away from areas prone to flooding such as low-lying valleys and gullies, which are often the country's most impoverished zones.

The housing and construction ministry will allocate 150mn soles (US$50mn) to installing pre-fabricated housing for those left homeless, largely on the north coast, deputy housing minister Cecilia Lecaros said. The first homes will be installed by the end of the month, she said.

At least 33,560 homes have been declared uninhabitable, according to the ministry, which has set aside another 300mn soles for housing aid for homeless families as part of the Techo Propio program.

"We'll be able to award definitive spots to families in 10-12 months and put together a design with citizen participation of what will be their community," Lecaros said in a statement. "These lands will have to be verified on a risk map, because no subsidies will be given in high risk areas."

The education ministry, meanwhile, is installing pre-fabricated schools including large tents in some of the hardest hit areas such as Piura to ensure the school year will be able to start on April 17, education minister Marilú Martens told official paper El Peruano.

The government is also reinforcing dykes and rock-reinforced river embankments along the Rímac river on Lima's outskirts following alerts of rising water levels, energy and mines minister Gonzalo Tamayo said. The Lima districts of Chaclacayo, Chosica and Santa Eulalia were all flooded last month.

The transport and communications ministry has also provided earth-moving machinery to repair the flood-damaged Santa Eulalia-Casta road, Tamayo said in a statement.

The Andean region was recovering from the effects of the La Niña phenomenon, when cooler ocean temperatures caused drought in the highlands.