Announcement of World Bank will Help Rehabilitate Argentina's Bahia Blanca Port on May 7, 1987

FOR IMMEDIATE RELEASE 4WorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 87/61 Contact: Ciro Gamarra (202) 477-5320 WORLD BANK WILL HELP REHABILITATE ARGENTINA'S BAHIA BLANCA PORT WASHINGTON, May 7 -- The World Bank has approved a $50 million loan to Argentina to help finance the rehabilitation of the port of Bahia Blanca, which plays a fundamental role in the traffic of the country's grain exports. The project will rehabilitate the existing infrastructure of the port, including reconstruction of a grain elevator severely damaged in 1985. An accidental fire put the elevator out of service, reducing considerably the grain terminal export capabilities. Most of Argentina's foreign trade and about 50 million tons of domestic traffic are handled by the port system, whose efficiency is crucial to the competitiveness of Argentina's exports. Grain exports constitute a major component of Argentina's trade, averaging about 22 ( million tons in 1983-1985. This is the first involvement of the World Bank in the port subsector in Argentina. The project will provide grain export capacity for the medium term, until 1993. A proposed follow-up project would address the long term grain export needs at Bahia Blanca later on. The project will contribute to the government's efforts to enhance the competitiveness of its grain exports by the rehabilitation of existing infrastructure of the Bahia Blanca grain terminal and the strengthening of port management, administration and operational systems. The project includes technical assistance to the General Port Administration (AGP) and to the National Directorate of Ports and Navigable Waterway Construction (DNCPVN) for cost accounting, planning and management information systems; and to DNCPVN and the National Grain Board (JNG) for maintenance services. The project will help reduce shipping costs, rationalize port tariffs, improve the operation of export corridors, and promote efficient operations. Bank assistance is of high priority, given the current unsatisfactory conditions of the port of Bahia Blanca, its importance in the national system, and the vital role it plays in handling cargo onto large vessels unable to get full load in other Argentina ports due to draft limitations. NOTE: Money figures are expressed in U.S. dollar equivalents. • - 2 - The total cost of the project is estimated at $66.7 million, excluding taxes. Counterpart resources to the Bank loan amounting to $16.7 million will be provided by government, AGP and JNG contributions. The $50 million World Bank loan is for 15 years, including three years of grace, with a variable interest rate, currently 7.92 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balances. - 0 - )