824.24/12–2044
Memorandum by the President of the Export-Import
Bank (Pierson) to the Chief, Division
of Financial and Monetary Affairs (Collado)
Washington, December 20,
1944.
Reference is made to the several conferences we have had with members of
the Department regarding the Cochabamba–Santa Cruz highway which the
Bolivian Development Corporation proposes to construct and for which it
has requested our approval for financing.
Although I am in favor of this project if it can be completed with funds
provided by the Corporation and by the Export-Import Bank, it is
difficult to escape the conclusion that available data as to cost is
extremely meager.
However, the Bank has approved the Corporation’s request for financing
upon the terms and conditions stated in the project approval, three
copies of which are attached hereto for your information. You will note
that the Bank has clearly specified that it does not assume any
responsibility for the accuracy of the cost estimates or the ability of
the Corporation to complete the highway with funds now in sight.
It might be a good idea to transmit a copy of our terms of approval to
the Embassy at La Paz with the suggestion that they be brought to the
attention of high officials of the Bolivian Government, who should also
be informed that the Bank takes no responsibility for the selection of
the project, the manner in which it is to be carried out or its
completion.
[Annex]
Memorandum of Project Approval by Export-Import
Bank
Export-Import Bank of Washington hereby approves the application
submitted by Corporación Boliviana de Fomento under date of October
14, 1944, for financing the Cochabamba–Santa Cruz highway project,
subject to the following terms and conditions.
- 1.
- The Bank assumes no responsibility as to the accuracy of the
estimates of cost of the highway or as to the ability of the
Corporación to complete said highway with its own funds or funds
available under the credit, or both.
- 2.
- $10,000,000 is to be allocated under the credit.
- 3.
- The Corporación shall furnish the Bank with assurances,
concurred in by the Bolivian Government, that it will complete
the highway and will provide such funds therefor as may be
needed in addition to those available within the allocation
under the credit.
- 4.
- Before the Corporación shall request the Bank for advances
under the credit, it will expend from its own funds the first
$3,000,000
[Page 542]
which may
be utilized either for the acquisition of equipment or for
direct expenditures on the highway or both.
- 5.
- Should there be a balance remaining undisbursed within the
allocation aforesaid on a date six months prior to the final
date for advances under the credit as provided in Article 15 of
the Loan Agreement of December 29, 1942, the Corporación may on
such date or within five months thereafter request advances
against such undisbursed balance in reimbursement for
expenditures which may have been made by the Corporación from
its own funds in accordance with the provisions of Item 4 above
and for which the Corporación has not received
reimbursement.
- 6.
- If, during the course of construction of the highway, revised
estimates of cost should be submitted showing to the
satisfaction of the Bank that the total cost of the completed
highway will be less than $13,000,000 then in that event the
Corporación, at its option, may request the Bank to make
advances within the allocation aforesaid in reimbursement for
expenditures which have been made by the Corporación from its
own funds in accordance with Item 4 above to the extent of the
difference between $13,000,000 and the amount of the lesser
estimate.
- 7.
- It is understood all advances made to the Corporación within
the allocation aforesaid shall be made in accordance with and
subject to the conditions of the agreement of December 29,
1942.
- 8.
- Corporación is to furnish Eximbank with copies of surveys,
plans and specifications promptly as soon as they are made
available to it.
- 9.
- Corporación is to furnish Eximbank with the following
exhibits69
which are listed in the application and which have not been
received:
- Resolution of the Board of Directors of the
Corporación Boliviana de Fomento, approving the
construction of the Cochabamba–Santa Cruz
Highway.
- Supreme Resolution of the Bolivian Government under
date of April 29, 1943, evidencing the Government’s
compliance with all requirements of Loan Agreement with
respect to right-of-way, easements, etc.
- Copy of completed plans for approximately 37
kilometers of demonstration sections, entitled
“Carretera Cochabamba–Santa Cruz, Sección 1–A–1” and
“Carretera Cochabamba–Santa Cruz Seccion 1–Z–1”.
Export-Import Bank of Washington
