CHILE: MINISTER OF PUBLIC WORKS SAYS TRILATERAL

UNCLAS SANTIAGO 000812

STATE FOR WHA/BSC, WHA/EPSC, EEB/IFD/ODF
TREASURY FOR DAS MCDONALD, DVONKOCH, BLINDQUIST
COMMERCE FOR KMANN

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EAID ECON EFIN EINV ECIN PGOV PREL CI CR
SUBJECT: CHILE: MINISTER OF PUBLIC WORKS SAYS TRILATERAL
COOPERATION IN COSTA RICA WILL COTINUE

REF: 2008 SANTIAGO 979


1. (SBU) SUMMARY: Chilean Minister of Public Works Sergio Bitar
told the Ambassador August 26 that cooperation with the U.S.
Treasury on an infrastructure project in Costa Rica will continue.
Bitar underlined that this type of trilateral cooperation is "very
important" to the GOC. The Minister noted his budget for the
project was "tight" but he had asked his staff to prioritize their
eforts to find a way to keep working with U.S. Treasury officials
in Costa Rica. Bitar also reiterated his commitment to the
Infrastructure Finance Experts Corps (IFEC) and future projects in
the region. Ministry staff said they would coordinate their efforts
with U.S. Treasury representatives for upcoming project work in
Costa Rica. In addition, they hoped to bring a group of Costa Rican
officials and professionals to Chile to view the concession process
first-hand. END SUMMARY.

Potential Obstacle in Costa Rica IFEC Project
--------------


2. (SBU) The Ambassador met with Minister Bitar August 26 to resolve
a potential obstacle in trilateral cooperation in Costa Rica.
Leonel Vivallos, Head of the Division for Development and Project
Bidding in Concessions Coordination at the Ministry of Public Works
(MOP),John Diaz, Head of Project Financing and Risk in the Division
for Development and Project Bidding in Concessions Coordination at
the MOP, and Econoff also attended the meeting.


3. (SBU) (Background note: The U.S. Treasury had previously
informed the Ambassador that the MOP was unable to fund the
continued participation of its representative (John Diaz) in the
IFEC pilot project due to budget constraints. Treasury and the MOP
have sent experts to help Costa Rica's government improve services
and infrastructure at the Liberia Airport. The project is at a
critical juncture and could face significant problems without a MOP
expert on concessions.)


4. (SBU) The Ambassador had requested Minister Bitar prioritize the
funding necessary to allow the MOP - U.S. Treasury cooperation to
continue. At the August 26 meeting, the Ambassador asked for an
update on the situation. Vivallos reported Minister Bitar had
instructed his staff to find a way to continue MOP participation in
the project.

Bitar Reiterates Support for IFEC
--------------


5. (SBU) Minister Bitar confirmed to the Ambassador his support for
maintaining a MOP representative on the project in Costa Rica. He
admitted his budget was "tight" but he wanted to find a way to
continue cooperating with the U.S. Treasury. Bitar thought it was
wise for the IFEC to start with a smaller, relatively discrete
project (like the Liberia Airport),with which the IFEC could easily
succeed.


6. (SBU) The Minister reiterated his belief that public-private
partnerships were critical to building infrastructure, and
infrastructure was critical to development in the Hemisphere. He
remained committed to the IFEC concept and future projects in the
region. The Ambassador emphasized that Presidents Obama and
Bachelet -- in their meeting in June -- had talked about the
importance of increasing trilateral cooperation across the region,
which was now an increasing focus for the USG and GOC. Bitar agreed
and underlined that such cooperation with the U.S. was "very
important" to the GOC.

Next Steps in Costa Rica
--------------


7. (SBU) Vivallos explained MOP staff will coordinate with their
counterparts at the U.S. Treasury on next steps in the Costa Rica
project. The Liberia Airport will require a 5-month window in which
to effect an upgrade, during which time U.S. and Chilean expertise
will be critical. Three visits (one week each) will be scheduled
with joint MOP and U.S. Treasury participation over the next three
months. The MOP also hopes to host a visit from relevant Costa
Rican officials and professionals to showcase how concessions are
handled in Chile.

SIMONS