MEXICO CITY (Reuters) -Mexico's government on Wednesday unveiled a $3.4 billion recovery plan for the battered coastal resort of Acapulco, including tax breaks, humanitarian aid and reconstruction of infrastructure, and said it could spend more if necessary.
Hurricane Otis slammed into Acapulco last week, devastating homes, hotels and other businesses, severing communications and temporarily leaving the city of 900,000 people incommunicado.
The total investment needed for the recovery plan was estimated at 61.3 billion pesos ($3.4 billion), Finance Minister Rogelio Ramirez de la O told a press conference.
Mexico expects to receive between $30 million and 60 million from a catastrophe bond that insures the country against earthquakes and hurricanes, Deputy Finance Minister Gabriel Yorio said. He added that Mexico has an extra 5 billion pesos in insurance that can be used for reconstruction.
Otis left more than 100 people dead or missing, and the cost of damage could be as high as $15 billion, according to Enki Research, which tracks tropical storms and models the cost of their damage.
Widespread looting broke out in Acapulco after the hurricane. Mexico has sent thousands of armed forces members to keep order and help distribute food and supplies.
President Andres Manuel Lopez Obrador said the government would raise more money for Acapulco if needs be.
"Fortunately, we have healthy public finances and unlimited resources when it comes to benefiting the people," he said.
Many residents are still struggling to get food and water, and some have been reduced to washing in local waterways.
The plan will bring forward social welfare payments by two months, waive electricity charges until February and provide household necessities for families whose houses were flooded.
It also foresees the weekly provision of basic foodstuffs to some 250,000 families for three months, the president said.
Major retailers including Walmart (NYSE:WMT) de Mexico and Soriana were working with the government on the plan, he said.
The plan also included 10 billion pesos for rebuilding the city's shattered infrastructure.
Acapulco and nearby Coyuca de Benitez will be exempt from paying taxes through February 2024, Lopez Obrador said.
($1 = 17.9332 Mexican pesos)