ANNUAL REVIEW AND EVALUATION - TARAPOTO-RIO NIEVA ROAD

EVALUATION COVERS THE PERIOD 4/76-3/77 AND WAS CONDUCTED BY USAID/PERU, OFFICE OF ENGINEERING. THIS PROJECT WAS ORIGINALLY AUTHORIZED IN 1964, BUT LOAN DISBURSEMENTS WERE HALTED IN 1968 DUE TO PROJECT-RELATED PROBLEMS AND AN UNCERTAIN POLITICAL ENVIRONMENT. DURING THIS PERIOD, 135 KM OF HIGHWAY BETWEEN TARAPOTO AND RIOJA WAS CONSTRUCTED. IN 1974 THE LOAN WAS REACTIVATED, ALLOWING THE MINISTRY OF TRANSPORTATION AND COMMUNICATIONS (MTC) OF THE GOVERNMENT OF PERU (GOP) TO CONTINUE CONSTRUCTION ON THE REMAINING HIGHWAY BETWEEN RIOJA AND RIO NIEVA. THE FIRST SECTION OF HIGHWAY FELL INTO DISREPAIR DUE TO MTC NEGLECT ANDFOUL WEATHER CONDITIONS DURING 1968-1974. UPON LOAN REACTIVATION, IT WAS DETERMINED THAT RESURFACING AND GENERAL REHABILITATION OF THIS 135 KM OF HIGHWAY WOULD BE NECESSARY; HOWEVER, THE DAMAGE WAS MORE EXTENSIVE THAN ANTICIPATED. AS A RESULT, THIS SECTION WILL NOT BE COMPLETED BY THE TERMINAL LOAN DISTRIBUTION DATE (TDD) OF 12/31/77 AS PLANNED, BUT BY 6/78 INSTEAD. ALL OTHER ROAD CONSTRUCTION ACTIVITIES WILL BE COMPLETED ACCORDING TO PLANS AND SPECIFICATIONS, AND WILL BE FULLY SERVICEABLE FOR LIMITED LOADING BY THE TDD. IT IS PROJECTED THAT ALL LOAN FUNDS WILL BE DISBURSED BY 12/77. A BALANCE OF NEARLY $370,000 WILL EXIST IN A REVOLVING FUND, CREATED FOR THE PURCHASE OF SPARE PARTS AND NEW EQUIPMENT, BECAUSE OF GOP BUREAUCRATIC DELAYS IN PROCUREMENT ACTIVITIES. THE EVALUATOR RECOMMENDS THAT THE TDD SHOULD NOT BE EXTENDED, BUT THAT A REVIEW BE MADE IN SEPTEMBER 1977 OF THE DISBURSEMENT RATE. FURTHER, THE GOP SHOULD BE ADVISED TO APPLY AS MANY FUNDS AS POSSIBLE IN THE 1977 BUDGET FOR THE REHABILITATION OF THE TARAPOTO-RIOJA SECTION OF HIGHWAY, AND TO INCLUDE OTHER FUNDS AS NECESSARY FOR HIGHWAY COMPLETION IN THE 1978 BUDGET. TO ASSIST THE GOP IN MEETING CONSTRUCTION COSTS IN 1978, THE UNEXPENDED REVOLVING FUNDS SHOULD BE REALLOCATED FOR CONSTRUCTION. LASTLY, USAID SHOULD DISBURSE NO MORE MONEY TO REPLENISH THE REVOLVING LOAN FUND THAN THE GOP CAN LIQUIDATE IN THREE MONTHS AFTER THE TDD.