In the past several weeks, Peruvian President Alan Garcia has been very busy cutting ribbons on highway projects across the country.

While the smiling panjandrums have been good pr, the truth is most of these projects were initiated during the administration of his predecessor. Yet the fact remains, Peru has been very aggressive ugrading its road system over the past several years and Garcia's administration seems committed to keeping the ball rolling.

The country's highway infrastructure is a serious impediment for economic growth. There are almost 79,000 kilometers of roadways in the country, but less than 11,000 kilometers are paved. The Ministry of Transportation and Communications (MTC) estimates that only a quarter of the road system is in 'good' shape, a percentage they would like to increase to 45 percent.

In an interview with ENR last year, Minister of Transportation Veronica Zavala Lombardi said one reason for the disparity was the past between construction of new roads and maintaining existing highways. She said the emphasis of the current government will improving existing roads while only undertaking specific major projects that are of the utmost importance.

The centerpiece of this effort is the $1.3- billion Interoceanic highway now under construction across Southern Peru. This is a massive project that includes the pavement of more than 1,000 kilometers of road and the upgrade of 1,500 kilometers more. When it is finished by the end of the decade, it will create the first paved road link across the breadth of the South American continent but, also, the first major highway artery into the interior of Southern Peru.

In addition to this job, there are two other major road projects whose goal is to connect the interior of the country to the more prosperous coast. This includes the so-called North Interoceanic highway being constructed near the Peruvian border with Ecuador.

When completed in 2009 the $226 million effort will create a 955 kilometer paved road between Peru's second-largest ocean port, Paita, and the jungle river port, Yurimaguas, on the Amazon River. The project, like the Interoceanic Highway in Southern Peru, is part of the South American Infrastructure Integration Initiative known as IIRSA.

This road is not a true 'interoceanic highway' in the sense that it will not connect to another roadway crossing the continent. But the plan is for it to connect to a major river port in Northern Peru allowing access to the Atlantic.

In 2005 the project was awarded to Concesionaria IIRSA Norte S.A. led by Brazilian construction company Odebrecht in association with another Brazilian firm, Andrade Gutierrez and Graña y Montero Peru's largest contractor. After just more than a year of work, more than 330 kilometers have been completed.

President Garcia was on hand in the jungle town of Tarapoto last month to cut the ribbon on the first sections of the highway that have been completed – about 60 kilometers of the 115 kilometer stretch between the city and Yurimaguas.

The third transversal route, the "Central Highway" is expected to move into the bidding stage this summer with six consortiums pre-qualifying for the effort, officials with MTC said recently. The $88.5-million project will include the construction and upgrade of almost 870 kilometers of roadway between Lima and the jungle city of Pucallpa.

Another road program, to create a 550 kilometer long thoroughfare to run lengthwise through the Andes is also under discussion. The $320 million project would.

A key reason for the progress on these works has been the success of a new Public Private Partnership financing system. Although the various consortiums will be collecting tolls on the roads once they are opened for traffic, the use on the roads is not expected to be sufficient in the first years to pay for the investment. Peru has promised a constant annual payment as compensation for investment works, provided that such works have been completed according to contract.

In addition, the Inter-American Development Bank and the Andean Development Corp. have both provided mo These highway projects have created 15,000 jobs, the ministry insists and another 20,000 will be employed as other major projects come on line in the next three years.