To promote trade between Mercosur countries and the Pacific Basin market, the countries of Bolivia, Brazil, and Chile needed to reduce the cost of shipping goods to Pacific Basin countries. Nathan Associates was a member of a consortium of U.S., Bolivian, Brazilian, and Chilean firms selected by the Inter-American Development Bank to study the feasibility of a transport corridor linking Cuiab, Brazil; Santa Cruz, Bolivia; and Arica, Chile. The consortium examined the technical, economic, financial, and environmental feasibility of improving the links among the cities and improving access to the port of Arica.

Nathan Associates developed projections of transport demand in the corridor, conducted an economic evaluation of alternatives for corridor improvement, and conducted a financial and institutional analysis of corridor improvements.

To project transport demand, we analyzed trends in production, consumption, and trade of agricultural and other commodities important to the corridor. We prepared detailed product profiles for soy, corn, sugar, cotton, rice, wheat, livestock, minerals, and timber and wood products. We also identified how improved road access would affect the potential for generated production of soy and other products in the states of Santa Cruz, Bolivia, and Mato Grosso, Brazil. The estimates of generated agricultural production were based largely on an analysis of trends in world trade for these commodities, competition from improved rail access to the area, and expanded use of the Hidrovia water transport system.

For the economic evaluation, we used the HDM-3 model to estimate vehicle operating costs with and without an improved transportation corridor and used other spreadsheet-based models to estimate other benefits. For the financial analysis, we reviewed methods of highway financing in Bolivia, Brazil, and Chile and identified potential sources of financing for road segments in each country.

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