ANNUAL REVIEW AND EVALUATION AID LOAN NO. 527-L-005. MARCH 1976

EVALUATION COVERS THE PERIOD FROM 8/75 TO 3/23/76. NO METHODOLOGY IS INDICATED. PROJECT CONSISTED OF A LOAN TO FINANCE SUB-LOANS FOR HOUSING (INCLUDING SELF-HELP), ELECTRICAL, WATER, AND SEWAGE FACILITIES, BASIC INFRASTRUCTURE, AND TECHNICAL ASSISTANCE FOR PROJECT PROMOTION AND DEVELOPMENT. TO DATE, 61 PROJECTS IN THE EARTHQUAKE ZONE AND 10 IN THE FIELD AREA HAVE BEEN SUBMITTED FOR APPROVAL. OF THESE, 51 HAVE BEEN APPROVED, 26 ARE UNDER CONSTRUCTION, AND 14 ARE NEARING CONSTRUCTION. SEVERAL PROJECTS SHOULD BE FINISHED WITHIN THE NEXT FEW MONTHS. CONSTRUCTION OF ALL APPROVED PROJECTS IS EXPECTED TO BEGIN THIS YEAR. DISBURSEMENTS STILL LAG BEHIND PROJECTIONS BUT HAVE ACCELERATED APPRECIABLY AND NOW TOTAL $4.67 MILLION -- -31% OF THE LOAN. THE HOUSING BANK OF PERU (BVP) IS THE GOP ADMINISTRATOR OF THE LOAN AND THE REGIONAL ORGANISM FOR DEVELOPMENT OF THE AFFECTED ZONE (ORDEZ) IS IMPLEMENTING THE PROGRAM FOR THE EARTHQUAKE ZONE. BOTH HAVE CARRIED OUT THE PROGRAM IN A SATISFACTORY AND EFFICIENT MANNER AND HAVE RESPONDED RAPIDLY AND APPROPRIATELY TO EMERGING PROBLEMS. SEVERAL IMPROVEMENTS ARE NEEDED, HOWEVER. (1) PROJECT DEVELOPMENT IN THE FLOOD AREA HAS BEEN DELAYED AND REVISED PLANS SHOULD BE SUBMITTED AS SOON AS POSSIBLE. (2) SINCE BVP, ORDEZ AND OTHER GOP PROJECT AGENCIES SEEM TO BE AT AN IMPASSE REGARDING FINANCING PROJECTS IN CHIMBOTE, IT IS RECOMMENDED THAT THE MINISTRY OF HOUSING AND RECONSTRUCTION REVIEW THE MATTER AND MAKE A BINDING DECISION. (3) TO MEET THE DIFFICULTY OF IMPORTING ELECTRICAL MATERIALS, ORDEZ SHOULD EARMARK FUNDS FOR PURCHASE AND SEEK APPROVAL FROM THE MININSTY OF ECONOMY AND FINANCE. (4) MONTHLY "VALORIZATION" SHOULD BE PROMPT AND MORE DETAILED AND A REPORT ON CONSTRUCTION PROGRESS SHOULD BE ON TIME AND INCLUDE THE INSPECTOR"S SUMMARY. (5) THE AVAILABILITY OF FUNDS TO MEET COST INCREASES SHOULD BE DETERMINED AND, IF REQUIRED, FUNDS SHOULD BE RAISED OR THE NUMBER OF PROJECTS REDUCED.