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World Bank Document Report No. 43494-PE Public Disclosure Authorized Peru Recent Economic Development in Infrastructure (REDI) (vol. 2) Investing in Infrastructure as an Engine for Growth: Spending More, Faster, and Spending Better December 1, 2010 Sustainable Development Department Public Disclosure Authorized Latin America and Caribbean Region Public Disclosure Authorized Public Disclosure Authorized ANEPSSA Asociación de Empresas Prestadoras de Ministerio de Vivienda, Construcción y Servicio de Saneamiento del Perú (Peru Saneamiento (Ministry of Housing, Association of Enterprises Providers of MVCS Construction and Sanitation) Sanitation Services) BUMs Barrios Urbanos Marginales (Marginalized PCM Presidency of the Council of Ministers Urban Areas) CEPRI Special Privatization Commission (Comision SNIP Sistema Nacional de Inversión Pública Especial de Privatization) (National Public Investment System) CONAM Consejo Nacional del Ambiente (National SUNASS Superintendencia Nacional de Servicios de Environment Council) Saneamiento (National Agency of Sanitation Services) DGPMSP Dirección General de Programación TRASS Tribunal Administrativo de Solución Multianual del Sector Público (General Reclamos de Usuarios de Servicios de Directorate of Multi-anual Planning for the Saneamiento (Administrative Court for Public Sector) Claims from Users of Water and Sanitation Services) DGPP Dirección General de Presupuesto Público VMCS Vice Ministerio de Construcción y (General Directorate for Public Budget) Saneamiento (Vice Ministry of Construction and Sanitation) DIGESA Dirección General de Salud Ambiental vpd vehicles per day (General Directorate for Environmental Health) DNS Dirección Nacional de Saneamiento (National WEF World Economic Forum. Directorate for Sanitation) DSR Dirección de Saneamiento Rural (Rural Sanitation Directorate) DSU Dirección de Saneamiento Urbano (Urban Sanitation Directorate) ECLAC Economic Commission for Latin America and the Caribbean EPS Empresas Prestadoras de Servicios de Saneamiento (Providers of Water and Sanitation Services) FONAFE Fondo Nacional de Financiamiento de la Actividad Empresarial del Estado (National Fund for the Financing of State Entrepreneurial Activity) FRA United States Federal Railroad Administration ICT Information and Communication Technologies JASS Juntas Administradoras de Servicios de Saneamiento (Sanitation Services’ Administration Committes)) LAC Latin America and Caribbean LPI Logistics Performance Index MEF Ministry of Economy and Finance MINSA Ministerio de Salud (Health Ministry) MTC Ministry of Transport and Communications Vice President: Pamela Cox Country Director: Carlos Felipe Jaramillo Sector Director: Laura Tuck Sector Manager: Aurelio Menendez Task Team Leader: Nicolas Peltier-Thiberge - 2 - TABLE OF CONTENTS Chapter 7 : Sector perspectives: Transport ................................................................................................... 6 Chapter 8 : Sector perspectives: Water and Sanitation ............................................................................... 49 Chapter 9 : Sector perspectives: Electricity ................................................................................................ 98 Chapter 10 : Summary of policy recommendations .................................................................................. 141 LIST OF FIGURES Figure 7-1: Quality of South American ports (2003) ................................................................................... 7 Figure 7-2: Port activity in Latin America (2003-2006) ............................................................................... 8 Figure 7-3: Logistics costs (Percent Product Value), 2004 ........................................................................ 11 Figure 7-4: Number of deaths caused by car accidents per 100,000 people ............................................... 16 Figure 7-5: Evolution of transport investments ......................................................................................... 33 Figure 7-6: Transport expenditures in Peru and other LAC countries ........................................................ 34 Figure 7-7: Evolution of national road expenditures .................................................................................. 36 Figure 8-1: Water and sanitation coverage (broad definition) .................................................................... 49 Figure 8-2: Annual investment per capita in water supply and sanitation .................................................. 50 Figure 8-3: Water coverage evolution in areas under EPS management .................................................... 56 Figure 8-4: Sewerage coverage evolution in areas under EPS management .............................................. 56 Figure 8-5: Access to water services (public connection) .......................................................................... 57 Figure 8-6: Access to sanitation services (public connection) .................................................................... 58 Figure 8-7: Water sources for poor and non-poor (2006) ........................................................................... 58 Figure 8-8: Access to drinking water in peri-urban areas ........................................................................... 59 Figure 8-9: Access to sewerage in peri-urban areas .................................................................................... 60 Figure 8-10: Continuity of water services provided by EPSs by size (2007) ............................................. 61 Figure 8-11: Evolution of water and sanitation investments ...................................................................... 72 Figure 8-12: Percentage of investments in Water for All Program............................................................. 73 Figure 8-13: Glacier in the Peruvian Andes ................................................................................................ 83 Figure 8-14: Water and urban sanitation coverage in Peru and LAC ......................................................... 85 Figure 9-1: Overall investments in the electricity sector 1995-2007 (in millions of US$) ......................... 99 Figure 9-2: Correlation of electrification coverage and rural population ................................................. 100 Figure 9-3: Structure of the 2007 total tariff to regulated final users ....................................................... 103 Figure 9-4: Curve of generation energy price vs. power demand for dry season ..................................... 105 Figure 9-5: Evolution of distribution losses 1995-2007 ........................................................................... 108 Figure 9-6: Frequency of power cuts in Lima and the rest of Peru ........................................................... 109 Figure 9-7: Average duration of power cuts in Lima and the rest of Peru ................................................ 109 Figure 9-8: Electricity market framework ................................................................................................ 110 Figure 9-9: Overall energy generation in 2007 (GWh) ............................................................................. 111 Figure 9-10: Consumption by “free” market users in 2007 ...................................................................... 112 Figure 9-11: Number of users in the regulated market in 2007 ................................................................ 114 Figure 9-12: Regulated market energy sales by distribution companies in 2007 ..................................... 114 Figure 9-13: Public approval of privatization policy ................................................................................ 116 Figure 9-14: Electricity sector institutional framework ............................................................................ 120 Figure 9-15: Regional electrification coverage ......................................................................................... 125 - 3 - Figure 9-16: Correlation of electrification coverage and rural population ............................................... 125 Figure 9-17: Overall investments in the electricity sector 1995-2007 (in millions of US$) ..................... 129 Figure.9-18: Private sector investments in the electricity sector 1995-2007 (in millions of US$) ........... 130 LIST OF TABLES Table 7-1: Peruvian road network (2008) ..................................................................................................... 6 Table 7-2: Logistics performance indicators of South American countries ................................................ 10 Table 7-3: Port fees in Peru and other LAC countries ............................................................................... 11 Table 7-4: Airport fees in Peru and other LAC countries ........................................................................... 12 Table 7-5: Estimated annual over-costs of the Callao port ......................................................................... 13 Table 7-6: Peruvian road concessions ......................................................................................................... 18 Table 7-7: Transport investments flagged as priorities in Peru’s stimulus package ................................... 22 Table 7-8: Budgeted resources in MTC’s strategic and institutional plan for 2007-2011 .......................... 35 Table 8-1: Water service providers in Peru (2004) ....................................................................................
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