Peru starts work on flood-damaged northern infrastructure

Peru has started work on building bridges and promoting infrastructure tax swaps, as its multi-billion dollar post-flood reconstruction drive picks up speed.

President Pedro Pablo Kuczynski and transport and communications minister Martín Vizcarra attended an event to lay the first stone of the 50mn-sol (US$15.5mn) Venados Bridge in Piura region, one of the areas hit by record flooding caused by the El Niño phenomenon in March.

The 350m bridge in Sullana province, which will take eight months to build, will benefit 87,000 inhabitants, especially local farmers who do business with neighboring Ecuador, the ministry said in a statement. Kuczynski and Vizcarra also handed out 1,000-sol subsidies for Piura farmers to replace agricultural machinery and replant flooded lands.

"Venados will be the first of 106 bridges to be built in Piura as part of the reconstruction with change program [RCC]," said Vizcarra, who is scheduled to be questioned by the opposition-controlled congress later this month. "It will mark a technological milestone. During the emergency, this bridge showed it was incorrectly designed, as it was unable to withstand rising river levels."

Rain-swollen rivers and landslides 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 Kuczynski has set a long-term price tag of US$9bn for the resettlement and reconstruction of communities.

"We will carry out well-made public works, bridges that function and will last for years, like the bridges built by our ancestors 200-300 years ago and which are still standing," Kuczynski said in a statement posted on the presidential website

Flooding damaged 3,000km of roads, 600 bridges and the homes of more than 1mn Peruvians this year. Thousands of communities will have to be relocated away from areas prone to flooding, which has also sparked a dengue epidemic that has already claimed 16 lives in Piura region, where health ministry and armed forces officials are fumigating against mosquitoes.

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.

TAX SWAPS

In other infrastructure news, the government presented 142 interior ministry projects totaling 1.045mn soles in investment as part of the tax swap program known as obras por impuestos, said Proinversión, the state agency in charge of promoting private investment.

The projects, which include police stations, emergency units and fire stations, will help to close an estimated 4bn-sol infrastructure gap in the sector, Proinversión said in a statement. The government is seeking as much as 1.5bn soles (US$500mn) this year in tax swaps, a system that has lined up 2.833bn soles in investment since starting in 2009, according to Proinversión.

Peru's financial sector aims to separately invest 1.5bn soles to help build 500 police stations, said Oscar Rivera, head of banking industry group Asbanc. Work is already underway on a 28mn-sol program to build12 police stations after a crime wave targeted banks and other financial institutions around the country this year.