Peru names bank executive to head reconstruction effort

Peru's government appointed former banker Pablo de la Flor to head a multi-billion dollar drive to rebuild infrastructure destroyed by the country's worst floods in half a century.

Rain-swollen rivers and landslides this year left 115 dead and 180,000 homeless, and caused over US$3bn in damage to water and power plants, schools, hospitals, housing, bridges, railroads and roads, according to the central bank. President Pedro Pablo Kuczynski has set a long-term pricetag of US$9bn for the resettlement and reconstruction of communities.

De la Flor will hold the same rank as a minister, while his reconstruction with change authority (RCC) will be under the control of the cabinet chief's office. His appointment guarantees that the process will be carried out efficiently and free of corruption, said Kuczynski.

"He's an official with a great deal of experience who has been successful with infrastructure tax swaps at his most recent post," Kuczynski said in a statement posted on the presidential website. "He provides a guarantee that things will function well."

De la Flor, 56, holds Master's degrees from Harvard and Yale, as well as a PhD in Political Sciences from the University of Chicago and formerly worked at First National Bank of Chicago, copper-zinc miner Antamina and Banco de Crédito del Perú.

He also accumulated experience in government during two terms as deputy trade minister during the governments of Alberto Fujimori and Alejandro Toledo, when he headed a team that negotiated a free trade agreement with the US in 2006.

"I assume with enthusiasm, commitment and humility the challenge of leading the reconstruction program," De la Flor wrote on his Twitter account. "Let's work together for the country's benefit."

De la Flor faces an uphill task.

The record flooding damaged 3,000km of roads, 600 bridges and the homes of more than 1mn Peruvians. Thousands of communities will have to be forcibly relocated away from areas prone to flooding, which has also sparked a dengue epidemic that has already claimed 15 lives in northern Piura region.

President Kuczynski's government is also struggling to extend a 3% fiscal deficit ceiling to be able to finance infrastructure spending at a time when economic growth is sluggish. The El Niño phenomenon has battered construction, transport and agriculture and curbed mining operations throughout the country in the first quarter.

Nor can De la Flor expect much sympathy from political rivals. The opposition-controlled congress, which has already forced two of Kuczynski's ministers to resign, now seeks to oust his ministers of transport and the interior.

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 also caused widespread flooding in Ecuador, Chile, Colombia, Venezuela and Argentina this year.

LAMBAYEQUE

Lambayeque, one of the northern regions hit by the flooding, will receive 1.50bn soles (US$500mn) to repair 321km of roads over the next four years, transport and communications minister Martín Vizcarra said. The ministry plans to invest 103mn soles this year and 289mn soles in 2018, he said.

The investment will include 168mn soles to build 15 bridges in the region, Vizcarra said in a statement. Work is ongoing on repairs on the Tablazaos bridge over the Chancay River to be able to reopen the road to the Olmos irrigation project, according to the ministry.