Wednesday, September 26, 2007

Cuba secures US$100mloan from Venezuela - To restore its railways

Cuba secures US$100mloan from Venezuela - To restore its railways
published: Wednesday | September 26, 2007

Venezuela granted Cuba a US$100-million loan to improve its railways,
Cuban media said on Tuesday, as the island nation moves to rebuild its
dilapidated infrastructure after years of economic crisis.

Cuba's Communist Party newspaper Granma said Venezuela's Economic and
Social Development Bank signed a credit agreement with Cuba's Banco
Exterior to upgrade tracks, signals and communications.

"With this credit, the rails will be completely restored to their
original condition to carry freight and passengers," Cuban
Transportation Minister Jorge Luis Sierra was quoted as saying in Caracas.

Sierra said Cuba's recovering economy required better railways and that
trains would be able to travel at 100 kilometres per hour (62 mph) from
the current 40 kph.

Exports boost economy

Service exports to Venezuela and other countries, a guaranteed oil
supply from the oil-rich South American ally, soft Chinese trade credits
and high nickel prices have buoyed Cuba's import-dependent economy after
a decade-long crisis that followed the demise of its benefactor, the
Soviet Union.

After spending more than US$2 billion since 2005 to modernise its
electrical grid and eliminate power blackouts, Cuba has set about
overhauling its transport system, government officials say.

Few Cubans own cars, so they must wait hours for buses and trains, or
else hitch-hike to get around. Many still use bicycles and horse-drawn

The number of passengers moved by public transport in Cuba last year was
just 21 per cent of the 1989 level, while cargo movement was one-third
of the pre-crisis level, according to official statistics.

Signed contracts

Cuba recently signed contracts to purchase more than 6,000 buses and 100
locomotives from China, civilian passenger and cargo planes from Russia,
100 railway freight cars from Iran, and thousands of motors for
antiquated Soviet-era trucks.

After low wages, the lack of public transportation is the biggest
complaint levelled at the government by Cubans, followed closely by poor
housing and high food prices.

The government announced earlier this month an increase in bus
passengers in Havana for the first time since the early 1990s, and said
people carried per day would double from 500,000 in 2006 to a million by
the end of this year.

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