28 July 2005
Read about the Inter-Oceanic Highway: a transcontinental roadway and key IIRSA project that will cross the Amazon Basin and link the Pacific and Atlantic coasts of South America.
Written by Lyra Spang, July 2005
También disponible: [español]
Description of the Project
The Inter-Oceanic Highway consists of three roads that link the port cities of Ilo, Matarani and San Juan de Marcona on the southern coast of Peru with the Amazonian state of Acre, Brazil. The roads will connect with the highways BR-317 and BR-364 in Brazil, that will link the Peruvian roads with the Brazilian cities of Río Branco and Cuiabá, and with the commercial ports on the Atlantic coast. The Brazilian half (BR-317 and BR-364) of the Inter-Oceanic Highway have already been partially constructed, with BR-317 being paved all the way to the border with Peru in Iñapari, Acre.
What is the Objective?
The construction of the Inter-Oceanic Highway will facilitate the transfer of Brazilian goods to the Pacific coast (and the markets of Asia) and by the same means will move Asian products to the Atlantic coast (and the markets of the United States, Europe and Brazil). President Toledo of Peru and other promoters of the project state that the road will expand access for Peruvian goods in Brazilian markets, and additionally claims that the project will be directly responsible for a 1.5% rise in the GDP of Peru.
Financing
The project consists of the construction and rehabilitation of 2603 kilometers of road divided into 5 sections, with a total cost of 892 million US dollars. The principal sources of financing are the National Development Bank of Brazil (BNDES) and the Andean Finance Corporation (CAF). The 8th of December last year (2004), BNDES approved a 400 million dollar US loan to construct the section of the highway between Cuzco and Acre. BNDES and CAF promised to finance the other two roads from Assis in Acre to the Peruvian coast- one to the port of Ilo and another to Port Matarani. It is not clear if this has been done yet or not.
Public-Private Partnerships
The bank loans finance a public-private partnership between the Peruvian government and various companies contracted to handle the construction, rehabilitation, operation and maintenance of the roadways. ProInversión, Peru's government entity in charge of the promotion and concession of the country's public services and infrastructure, already has given three of the five road sections in concession and is in the process of promoting the last two.
The Five Sections of the Inter-Oceanic Highway
| Number | Sections | Conceded/ Not conceded |
| 1 | SAN JUAN DE MARCONA - URCOS | no |
| 2 | URCOS - INAMBARI | yes |
| 3 | INAMBARI - IÑAPARI | yes |
| 4 | INAMBARI - AZÁNGARO | yes |
| 5 | MATARANI - AZÁNGARO; ILO - JULIACA | no |
The 23rd of June, 2005, sections 2,3, and 4 were allocated: sections two and three to the "Inter-Oceanic Concessionary Consortium" or Consorcio Concesionario Interoceánico, which is formed by the Brazilian and Peruvian firms Odebrecht, G and M, JJC, Ingenieros Civiles (Civil Engineers) and Contratistas Generales (General Contractors). Section 4 of the highway was given to the Intersur Consortium (Consorcio Intersur), formed by the Brazilian companies Andrades Gutierrez S.A. and Queiroz Galvao. The concessions are for 25 years, and the companies will receive payments from the Peruvian government to operate and maintain the roads after construction.
Social and Environmental Impacts
Marc Dougojeanni, regional environmental advisor for the Inter-American Development Bank (IDB), wrote a report on the projected social and environmental impacts of the Peruvian half of the Inter-Oceanic Highway. His conclusions are based on observations of the institutional capacity of the Peruvian government to avoid and/or mitigate these impacts, and of the impacts of highway BR-364 on the Brazilian side of the project.
In his report, Mr. Dourojeanni claims that the social and environmental impacts of the entire Inter-Oceanic Highway will be enormous, but he emphasizes that the environmental impacts will be even worse in Peru. The financiers of the Peruvian portion of the project, BNDES and the CAF, either do not have social and environmental policies and regulations at all (the BNDES) or, like the CAF, depend on a country systems approach, where the government is in charge of implementing measures to avoid and mitigate project impacts. Dourojeanni compares the institutional capacity of Brazil with that of Peru, and determines that the Peruvian government does not even have the capacity to ensure compliance with its own weak social and environmental laws.
The Peruvian sections of the project pass through various reserves and natural parks in areas of enormous ecological diversity. According to Mr. Dourojeanni, the direct and indirect impacts of the roads would extend at least 50 kilometers on each side.
Some of the environmental impacts of the roadways would include:
- Deforestation and degradation of forests in the region (especially close to the roads)
- Erosion of soils, caused by the deforestation of slopes and bad land management.
- The invasion of protected areas (ie, National Parks)
- Reduction in value of the countryside and parklands as a tourist attraction.
- Loss of biodiversity and extinction of species.
Social impacts of the Inter-Oceanic highway include:
- Invasion of indigenous territories by farmers, loggers and miners and the eventual death of isolated indigenous groups by disease or land related skirmishes.
- Land speculation and illegal appropriation of land.
- The facilitation of trafficking in drugs, arms, endangered species and general contraband.
- The stimulation of migration to urban areas, degradation of social services and the environment in local villages and towns.
- The promotion of underemployment and slave like labor (ie in mining or garimpo, and in the extraction of timber).
Despite the better level of institutional capacity in Brazil, many of these impacts are already found along the completed sections of the Inter-Oceanic Highway.
Resources
Official SourcesCivil Society Resources
Contacts
- PROINVERSION Contact (in charge of concessions)
Guillermo Rebagliati Escala
Telephone: (511) 612-1200 (ext 1295)
Fax: (511) 221-2935
Email: - Bank Information Center Contact (Civil Society) Eric Holt-Giménez
Director, Latin America Program
Telephone:202-624-0624 (ext 113)
Email: