Peru on track to build new Cusco airport

CUSCO, Peru, Aug. 22 (UPI) -- Peru is going ahead with the construction of a high-volume airport at Cusco in southeastern Peru despite controversies over potential risks to the ecological treasures of Chinchero.

The existing airport's limited capacity has cost Peru key international airline links, including some with the United States.


Officials say the new airport will be bigger and better, able to handle high volumes of traffic in an area rich with tourist sites and a major foreign exchange earner for the country.

However, environmentalist groups warn the airport project will damage the Pampas of Chinchero, an ecological monument that is part of Peru's Incan heritage.

Chinchero Mayor Juan Carlos Gomez indicated the government was on track to begin construction of the airport next July. Current work includes acquisition of farm land required for the planned expansion of the facility.


Security concerns over the current airport operations have been voiced frequently since a Lineas Aereas Nacionales Lockheed L-188A Electra turboprop crashed shortly after takeoff from Cusco, killing 99 of the 100 people on board and two people on the ground. Victims of the crash on Aug. 9, 1970, included 49 high school exchange students from Buffalo, N.Y.

Pilot error and hazardous facilities were blamed for the accident.

Several airlines cut services to Cusco because of risks to urban areas nearby.

The government says it plans to shut down the Velasco Astete Airport once the new facility becomes operational in four to five years.

Construction of the new airport is likely to cost more than $400 million but officials say tourism revenues are predicted to make up for the expenditure over the coming years.

Tourism is booming in Peru because of its diverse attractions for different age groups, from archaeological and cultural Inca sites to mountain biking and surfing.

Peruvian officials say they are encouraged by the latest expert outlook on the country's economic prospects. The Inter-American Development Bank in published comments announced Peru is set to become one of the largest high-growth economies in Latin America.

The bank recently signed three agreements with Peru for $140 million of finance to fund improvements in education and environment and sanitation.


Peru could become one of Latin America's major economies if it maintains the momentum of economic growth it posted during the past decade, IDB President Luis Alberto Moreno said in comments reported by the Andean Air Mail and Peruvian Times.

Peru's economy posted strong growth in response to private-sector investments coupled with stable fiscal management. In 2010, the country's gross domestic product increased 8.8 percent, and in 2011 it grew 6.9 percent.

From January to June this year, Peru's GDP increased more than 6 percent, driven by domestic demand that offset a slowdown in the global economy and a resulting drop in mineral exports.

Scotiabank Peru, the third largest bank in the country, estimates the country's GDP will expand 6.5 percent in the third quarter of 2012. The bank warned, however, that forecast may be affected by a further global downturn or domestic developments.

Moreno said current indications suggested that at current levels of growth Peru could emerge as one of the biggest economies in the Latin American region.

"There is no country in Latin America that shows the kind of growth Peru has had in the last 10 years. It even achieved growth of 7.5 percent, which is more like an Asian country," Moreno said in comments quoted by The Wall Street Journal.


The economic growth has prompted the government of President Ollanta Humala to focus on modernization of defense and security services, at least partly in response to miners' protests in support of wage hikes.

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