Cablegate: Three Presidents Inaugurate Interoceanic Highway

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS LIMA 003923

SIPDIS

SENSITIVE

DEPT FOR WHA/AND, WHA/EPSC, EB/TPP
TREASURY FOR OASIA/INL
COMMERCE FOR 4331/MAC/WH/MCAMERON

E.O. 12958: N/A
TAGS: KTEX ETRD ECON PGOV PREL PE
SUBJECT: THREE PRESIDENTS INAUGURATE INTEROCEANIC HIGHWAY

Ref: 04 Lima 5397

1. (SBU) Summary. The Presidents of Peru, Bolivia and
Brazil met in Madre de Dios, Peru on September 8, to
inaugurate the $810 million Interoceanic Highway project,
which will connect Brazil's Atlantic coast to Peru's Pacific
coast. The governments expect the highway to be completed
by 2010. President Toledo predicted that in addition to
solidifying relations between Peru and Brazil, the highway
would help improve Peru's trade by an estimated $1 billion
annually and help link the poorer jungle and sierra areas to
Peru's more prosperous coast. End Summary.

Groundbreaking Ceremony
-----------------------

2. (U) In November 2004, President Toledo and Brazilian
President Luiz Inacio Lula da Silva signed an agreement to
establish an Atlantic-Pacific highway through the two
countries (Reftel). President Toledo, President Lula and
Bolivian President Eduardo Rodriguez convened in Puerto
Maldonado, Peru (in Peru's southeast Amazon) on September 8
to inaugurate the Interoceanic highway project, making the
dream a reality. The project, estimated at $810 million, is
planned to connect Brazil's Atlantic coast with Peru's
Pacific coast by 2010. According to President Lula, Brazil
will finance $416 million, with the Andean Promotion
Corporation funding the rest.

3. (U) A paved highway currently exists from Brazil's
Atlantic coast to the border town of Assis, on the Brazilian
side of the Rio Acre. The majority of work on the highway
will occur in Peruvian territory, as the planned 682-mile
road will extend through both jungle and mountainous areas
before reaching the Pacific coast. According to
ProInversion (the GOP agency that handles privatizations and
concessions), the highway project will be divided into five
sections. One Peruvian and two Brazilian companies have
already obtained 25-year concessions for three sections.
The GOP is expected to open concessions for the remaining
two stretches of road in November.

Expected Economic Gains
-----------------------

4. (U) During the ceremony, all three presidents highlighted
the potential trade benefits of the highway. President
Toledo commented that the finished highway would enable Peru
to develop its ports of Marcona, Matarani and Ilo in the
southern part of the country. With improved infrastructure
connecting the jungle and sierra regions to the coast,
President Toledo also predicted that Peru's trade should
increase by $1 billion annually once the project is
completed. Brazilian President Lula noted that Brazil would
be able to more easily transport its products to Asia via
Peruvian ports. The highway will also provide landlocked
Bolivia with access to both the Atlantic and Pacific
highways.

Comment
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5. (SBU) The Interoceanic Highway, once completed, will not
only connect the Atlantic and Pacific coasts, but will also
be instrumental in connecting the more remote jungle and
sierra areas of Peru to the more prosperous coastal areas.
We expect Peru to benefit not only from increased trade
through the southern ports, but also in the border regions
of Peru, Bolivia and Brazil. Additionally, the southern
jungle and sierra regions, which are among some of the
poorest areas in Peru, will benefit from improved
infrastructure, as local products, such as fruits and
lumber, can be shipped more easily to other areas in Peru
while eco-tourists may find it easier to travel to these
remote destinations.

STRUBLE

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