|
|
Published Wednesday, May 6, 2020
The government needs $550 million-loan for electric train
By the A.M. Costa Rica staff
On Monday, the Government presented to Congress, for its approval or rejection, a $550 million loan contract with the Central American Bank for Economic Integration, CABEI, to finance the construction of the infrastructure for the first electric train in the country.
The loan is for a 25-year term, with no commitment fee, a 5-years grace, and a counterpart for $1 billion of foreign investment as it is a concession project.
The concession is a legal figure that allows the government to contract private companies to develop infrastructure, health, and education projects, among others.
According to President Carlos Alvarado, "this (referring to the electric train) and the other infrastructure projects will be essential and irreplaceable for the recovery and employment that our country needs."
According to the government, the train infrastructure construction and maintenance project will generate about 2,670 jobs.
The train has been budgeted at more than $1.5 billion. Part of this budget is the $550 million loan that is pending approval by the deputies. However, in a statement provided by the bank in November, "the project's investment in infrastructure and equipment represents $1.3 billion."
The loan, if approved, will be used to build the required infrastructure of the train terminal.
The loan has an indicative annual interest rate of 4.95 percent. Due to the positive impacts of this operation, the bank is making significant efforts with other sources of cooperation to maximize these conditions with the expectation of extending the term to up to 40 years and lowering the annual interest rate to 1.55%, said CABEI in its statement.
"The project involves the construction, equipment and startup of an electric rail passenger system in the greater metropolitan area," said the bank.
The greater metro area, mainly the Central Valley, consists of parts of the provinces of San José, Cartago, Alajuela, and Heredia.
"The main expected impacts include direct benefits for 4.5 million inhabitants of GAM; hiring of 1,000 temporary employees for construction; generation of 461 fixed jobs for the project's operational stage, generation of 189 direct temporary jobs, reduction of carbon dioxide emission, alleviation of road congestion and reduction of road accidents," said the bank in its statement.
"The Electric Passenger Train in the Greater Metropolitan Area is a transformative project that will change the lives of thousands of people in Costa Rica, providing benefits in terms of transportation times, reduction of costs to people and the country, improvements in health and air quality and a reduction in the country's carbon emissions in order to decarbonize the economy," said Alvarado. "In addition, the project is a milestone that lets us dream about other initiatives, such as a Central American train. It is one of the best investments that the country can make and we are pleased that the Central American Bank for Economic Integration is a key part of this significant project.”
Train motors now run on diesel and this train would be different. It would be an eco-friendly train.
Bank executive president, Dante Mossi, said "this project marks the beginning of environmentally-friendly railway projects in the region since it is being carried out in a country where most of the electric power is renewable. Likewise, it will serve as a benchmark for the other similar regional projects. "
----------------------
Should the government continue to get more loans with international banks? We would like
to know your thoughts on this story. Send your
comments to news@amcostarica.com
|
