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The Inter-American Development Bank (IADB) has announced the approval of a US$37mn loan to Panama to support a programme to rehabilitate and upgrade a highway of the Plan Puebla Panama’s Pacific Corridor, a key route linking Central American countries with Mexico .

The IADB resources will help finance work on a 92km stretch of the Pan American Highway between Divisa, Santiago and El Pajal. The project will bring the highway up to the standards agreed among the eight countries in Plan Puebla Panama: Belize, Costa Rica, El Salvador, Guatemala, Honduras, Mexico Nicaragua and Panama .

The financing will complement the resources appropriated in May 2002 by Panama’s Legislative Assembly, which authorised the investment of resources from the Development Trust Fund in priority projects for economic recovery. This includes US$90mn to finance part of the rehabilitation of the Pacific Corridor from Divisa to Paso Canoas, on the border with Costa Rica .

The 3,159km Pacific Corridor links Panama City with the Mexican city of Puebla . The 1,745km Atlantic Corridor runs from the Mexican port of Coatzacoalcos to the Salvadoran port of Cutuco . The two main corridors and a series of complementary and connector roads make up Plan Puebla Panama’s 9,034-km Network of Mesoamerican Highways (RICAM).

The RICAM is almost entirely based on existing highways and avoids going into the region’s capitals in order to reduce traffic congestion. When the countries in Plan Puebla Panama agreed on the network, they established a number of standards for the highways regarding asphalt quality, minimum width, shoulders, signage and safety features.

In the 39km stretch between Divisa and Santiago , Panama will rehabilitate the highway’s two existing lanes, expand it by two additional lanes, and build three bridges for vehicles and 12 elevated crossings for pedestrians. In the 53km stretch between Santiago and El Pajal, which is severely deteriorated, highway slabs will be replaced and technical specifications will be improved regarding drainage and shoulders. Work will include maintenance for five years.

An environmental and social evaluation of the programme concluded that the project would neither affect protected areas nor involve the resettlement of people. Consultations were held with civil society groups, who made useful proposals for the project.

The programme is expected to help cut transportation costs by reducing travel time, vehicle wear and tear and accident indices.