CUENCA DIGESTNew funding advances city plans for light rail system

The federal government has announced that Cuenca will recieve $4.1 million to draw up final engineering plans for the city´s proposed light rail system.

Carla Herman, working with a group of French engineers who have completed preliminary work on the project, said the funding represents a major milestone. “We are excited with the news. It means we can move forward with the street car system and that nothing will stop us now.”

Herman said that the engineering studies are complete in the first quarter of 2012, pre-construction can begin.

The engineering work will determine the exact route of the first rail line, to be called Cuatro Rios, but the general design calls for it to run from the Av. de las Americas at the southern control interchange into the historic district and run along Calle Gran Colombia. Other routes will include Av. Huayna Capac and Espana to connect the main bus terminal, airport and industrial park.

NEW TAXES ON LIQUOR, CIGARETTES AND CARS WILL GENERATE $400 MILLION

The administration of President Rafael Correa could collect an extra $400 million per year under a new tax reform proposal that would increase taxes for alcoholic beverages and cigarettes and create a 'greet tax' for vehicles, the head of Ecuador's internal revenue service said Tuesday.

Carlos Carrasco, head of the SRI, as the agency is known in Spanish, said the proposal was sent to Correa two weeks ago.

In an television interview, Carrasco said that the "green tax" will be calculated according to the market value and size of a vehicle.

By increasing cigarette taxes, the SRI hopes to raise an extra $80 million per year. With the tax increases for alcoholic beverages, including beer, it expects to collect $20 million annually, he said.

Carrasco said the extra revenue would go to cover costs in the public-health sector, which was declared in emergency early this year, especially for eight major hospitals in Ecuador.

Correa will send the tax reform package to the National Assembly in the coming months, Carrasco said.

Ecuador has said its tax collections rose 16% to $3.4 billion between January and April from $2.93 billion a year earlier.

Ecuador has said it expects to collect $8.33 billion in taxes in all of 2011.
 

ECUADOR ECONOMY EXPANDS AT A 7% ANNUAL RATE

Ecuador’s economic growth probably accelerated in the first quarter of 2011 after expanding 6.98 percent year-on-year in the previous three months, the Economic Policy Ministry said in a report last week.

“There are strong indications to affirm that the economy may have continued growing,” the report, which was shown to Bloomberg before its release later today, said, citing higheroil prices, an expansion in consumer credit and a decline in unemployment.

Ecuador, the smallest member of the Organization of Petroleum Exporting Countries, is using rising oil revenue to boost public spending and fuel expansion, which reached 3.6 percent last year. The Finance Ministry forecasts 2011 gross domestic product growth of 5.06 percent this year and 5.17 percent in 2012, according to the 2011 budget.

Growth on a quarter-to-quarter basis may have slowed in the first three months because of declines in public spending, retail sales and agricultural output, according to the report. In the final quarter of last year, the economy expanded 2.64 percent from the June to September period.