Argentina - Bahia Blanca Port Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 5 5 2 8-AR STAFF APPRAISAL REPORT ARGENTINA BAHIA BLANCA I PORT PROJECT April 7, 1987 Projects Department Latin America and the Caribbean Regional Office This documenl has a restricted distribution and may be used by reipients only in the perrormance of their official duties. Its contents may not otherwise be disclosed writhout World Bank authorization.  Currency Equivalents Currency Unit = Austral (AW) A$ 1 = US$ .806 (December, 1986) A$ 100 = US 80.64 (December, 1986) System of Weights and Measures 1 meter (m) = 3.28 feet (ft) I kilogramo = 2.205 pounds (lb) I ton = 2,205 pounds (lb) Fiscal Year January 1 to December 31 Abbreviations and Acronyms AGP - General Port Administration CGP - General Port Captaincy DNCPVN - National Directorate of Port Construction and Navigable Waterway DNPPT - National Directorate for Transport Policies and Programming DNV - Directorate of National Highways FA - Argentine Railways JNG - National Grain Board NIOSP - Ministry of Public Works and Services PC - Project Committee PCU - Project Coordination Unit PNT - National Transport Plan SMM - Secretariat of Merchant Marine SNA - National Architectural Services SPW - Secretariat of Public Works SSD - Safety Services Department SMtI - Secretariat of Merchant Marine SSPT - Sub-Secretariat of Transport Planning SST - Sub-Secretariat of Transport ST - Secretariat of Transport  FOR OMcIAL USE ONLY STAFF APPRAISAL REPORT ARGENTINA BAHIA BLANCA I PORT PROJECT TABLE OF CONTENTS Page No. I. PROJECT SUMMARY ................................. ...... 1 II. THE TRANSPORT SECTOR AND THE PORT SUBSECTOR ............ 3 A. The Transport Sector 3 (i) General ........................ 3 (ii) Institutional Organization and Planning .......... 4 B. The Port Subsector ...............*.*. .. ... * ............ 5 i) General ........ 5 (ii) Traffic and Physical Environment ................... 5 (iii) Organization and Planning .......................... 6 (iv) AGP's Administrative System, Accounts and Audit..... 8 (v) DNCPVN's Organization and Accounting *.......... 9 (vi) Pricing Policy and Tariffs 9 (vii) Tugboat Services . 10 (viii) Past and Projected Financial Results of AGP ....-.. 11 C. Bank Involvement in the Transport Sector and Lending Strategy ..* .... , 12 D. Experience with Past Lending ............................. 13 =II. THE PROJECT ................ ...............................o 13 A. Project Origin and Objectives ......... ................... 13 B. Rationale for Bank Involvemeat ..oe.e..... 14 C. Description .............................................. 15 D. Costs and Financing ...... * ... *..*..... *................. 15 E. Economic Evaluation ...... . ...... e*eo. &o O*9*eeo 18 F. Project Risks ........... .........................*........ 19 This report is based on the findings of the appraisal mission that took place in December 1984, as revised during a post appraisal mission which visited Argentina in June 1986 comprising Messrs. G. Unda (Senior Port Engineer), T. Markus (Senior Financial Analyst), and R. Auzmendi (Senior Transport Economist). Messrs. F. Adams and L. Garcia (Consultants) assisted the mission in the technical and financial evaluation, respectively. This document has a restrked distribution and may be used by recipients only in the performance of their official duties Its contents may not otherwise be discksed without World Bank authoriztonL  TABLE OF CONTENTS (continued) Page No. TV. PROJECT INFTLE NTATION DETAILS ............................... 19 A. Project Execution .. ........ ........... ..... 19 B. Procurenent and Consultancy Services ..... ................ 23 Co Disbursements Os.................. ...................... 24 D. Special Account and Auditing.............................. 25 V. RECOMMENDATIONS .............. .. ......... 26 TABLES 2.1 Modal Composition of Domestic Traffic ........................ 29 2.2 Traffic through Argentine Ports .............................. 30 2.3 Grain Exports by Major Ports ....s............s ............. 31 2.4 Grain Exports at Bahia Blanca (1978-1985) ...... ............... 32 3.1 Detailed Cost Table - Emergency Works ........................ 33 3.2 Detailed Cost Table - Maritime ....e....ee .. .*ss*..* ..S.... 34 3.3 Detailed Cost Table - Grain Handling Reconstruction and Modernization ...*......... ........................... 35 3.4 Detailed Cost Table - Silo Safety Program .................... 36 3.5 Detailed Cost Table - Railway Works .......................... 37 3.6 Detailed Cost Table - Technical Assistance ................... 38 3.7 Detailed Cost Table - Engineering Studies ........ ............ 39 3.8 Project Components by Year ................................... 40 3.9 Financing Plan by Summary Accounts ........................... 41 3.10 Financing Plan by Project Components ......................... 42 3.11 Financing Plan by Foreign Exchange .......................... 43 4.1 Estimated Schedule of Disbursements .......................... 44 ANNEXES 1. Main Characteristics of the Transport Sector 45 2. Past and Future Port Traffic 53 3. Financial Analysis .............. 62 4. Bank Assistance to the Transport Sector 74 5. Project Description and Implementation Details 78 6. Economic Evaluation 96 7. The Technical Assistance Program .... 114 8. Related Documents and Data Available in the Project File 121  - iii - TABLE OF CONTENTS (continued) Page No. CBARTS 1. - Organization of the Secretariat of Transport (ST) ......... 122 2. - Organization of the Secretariat of Merchant Marine (SMff) and Fluvial Transport ............................... 123 3. - Organization of General Port Administration (AGP) .......... 124 4. - Organization of National Directorate of Port and Navigable Waterways Construction (DNCPVN) ............. 125 5. - Project Implementation Schedule ........................... 126 MAPS 1. IBRD 18829 - Argentina Transport Systeu 2. IBRD 20383 - Proposed Facilities at Bahia Blanca  ARGENTINA BAHIA BLANCA I PORT PROJECT I. PROJECT SUMMARY Borrower: The Government of the Republic of Argentina. Beneficiaries: The General Port Administration (AGP), the National Directorate of Port and Navigable Waterway Construction (DNCPVN) and Argentine Railways (PA) of the Ministry of Public Works and Services (MOSP), and the National Grain Board (JNG) of the Secretariat of Agriculture, Livestock and Fisheries (SAG) would be responsible for utilization of the proposed loan proceeds. Amount: US$50.0 million Terms: Repayment in 15 years, including 3 years of grace, with interest at the Bank's standard variable rate. On-Lending US$12.3 million, US$0.8 million and US$1.1 million from the Terms: Government to the National Grain Board (JNG), the Argentine Railways (FA) and the General Port Administration (AGP), respectively, under the same terms and conditions as the Bank loan. Project Description: This would be the first Bank involvement in the port sub- sector. The main project objective is to facilitate grain exports at the Bahia Blanca Port. More specifically, the proposed project comprises: (i) civil works and equipment for the rehabilitation of existing infrastructure and the replacement of a damaged grain elevator by a modern installation; (ii) civil works and equipment for a silo safety system at selected grain terminals; (iii) technical assistance for the strengthening of port management and administration, the development and implementation of a cost accounting system, the introduction of cost-based port tariffs, and the improvement of maintenance services of JNG and DNCPVN at selected terminals and repair facilities, respectively; and (iv) completion of engineering studies for a proposed expansion of the Bahia Blanca grain terminal, initiated under the Loan 1521-At. Benefits: The economic benefits should be realized by Argentina through improved net income from its grain trade with major importing regions of the world. The domestic market is highly competitive and thus it is expected that a substantial portion o,f the economic benefits of the project will be passed on to the farmers.  -2- Risks: Since this is the first Bank operation in the subsector and it would be implemented by several government agencies, there is some risk of delays. Cost overruns and delays have been experienced iu other transport projects financed by the Bank in Argentina. Possible project delays will be minimized by intenslve supervision early in the project cycle and by the establishment of a Project Committee and a Project Coordination Unit which would coordinate the participation of the various government agencies responsible for project implementation. Estimated Project Costs: -US Million-- Local Foreign Total Civil Works 14.7 9.8 24.5 Equipment 1.9 29.5 31.4 Project Supervision 0.4 1.7 2.1 Technical Assistance and Engineering Studies 0.6 2.4 3.0 Total Base Cost (December 1986 prices) 17.6 43.4 61.0 Physical Contingencies 2.3 5.9 8.2 Price Contingencies 0.4 1.4 1.8 Total Project Cost 20.3 50.7 71.0 m Financing Plan: - UU$ Million Foreign Local Total 1, Proposed IBRD Loan 50.0 - 50.0 Government 0.5 9.7 10.2 AGP - 1.5 1.5 JNG 0.2 3.5 3.7 FA - 1.3 1.3 Total Financing: 50.7 16.0 66.7 Estimated Disbursements: Bank FY 1988 2/ 1989 1990 1991 1992 1993 1994 -US$ Million Annual 5.1 3/ 5.3 12.0 12.0 10.3 4.5 0.8 Cumulative 5.1 - 10.4 22.4 34.4 44.7 49.2 50.0 Rate of Return: 45% average (from 20% to over 1OOZ for individual project components). 1/ Taxes and duties amounting to US$4.3 million equivalent, to be borne and collected by the Government, are excluded. 2/ Includes retroactive financing. 3/ Includes initial deposit of US$3.0 million into Special Account.  -3- II. THE TRANSPORT SECTOR AND THE PORT SUBSECTOR A. The Transport Sector (1) General 2.01 The transport sector plays a crucial role in the economic development of Argentina. It has been estimated 1/ that transport costs represent on the average about I0Z of total produetion costs of major industrial products, and between 10 and 18X of FOB prices for export of grains, which In 1985 amounted to about US$2 billion. Moreover, the transport sector represents about 6-8Z of GDP, and around 18-20% of public sector investment. Consequently, the Government places high priority cn improving the operation, coordination and efficiency of the sector, to avoid and/or eliminate bottlenecks that could severely damage the country's economy. 2.02 The transport sector in Argentina is influenced by the fact that In such a large country (2,767,000 sq km), the bulk of the total population (about 30 million people) is concentrated in a few large cities but the rest is dispersed in a large number of small urban centers. About 70S of the country's population and 85X of the country's GDP are located and generated within a 600 km radius from Buenos Aires; the joint result of concentration and dispersion imply long-distance hauls between supply and demand centers of agricultural production, raw materials, and manufactured products; furthermore, a large volume of exports and imports require long haullng distances to ports. In addition, severe draught limitations of navigable waterways and ports impose high ocean freight rates. 2.03 To meet the transport demand, the country has developed an extensive transport network consisting of 36,500 km of national roads and about 380,000 km of provincial roads, of which 57,000 km are paved (27,000 km national and 30,000 km. provincial); 34,000 km of railways; 17,000 km of pipelines; over 100 ports, of which 13 account for over 902 of the overall throughput; and 90 commercial airports. The transport system is operated by a large privately owned fleet of trucks and buees; a publicly owned railway that carries freight, and Intercity and suburban passenger traffic; a mix of public and private maritime and river shipping companies; and five public airlines, two major (one serving also international traffic) and three regional. Background information on the transport sector is presented in Annex 1. 2.04 Transport demand has kept pace with economic development in the country. Table 2.1 shows the evolution of freight and passenger traffic during the last two decades. The general trend has been a moderate growth of about 1-1.5% per year for freight, and 3-3.5% per year for passenger. In line with worldwide trends, highways represent the dominant mode for Internal transport, with ports handling most of the foreign trade andialrlines handling most of the international passenger traffic. Each mode's share for passenger and freight traffic has remained approximately constant in the last decade. During the next decade, little change is expected in the highways' and railroads' shares (56% and 10% respectively) of freight traffic. The pipelines' share (13%) may slightly increase with the exploitation of gas 1, National Transport Plan (PNT), 1982  - 4 - reserves, and water cabotage's (20%) may slightly decrease; as for domestic passenger traffic, airlines (6%) can be expected to increase slowly while railways (8%) to decrease and the share of road transport (86%) to remain constant. (ii) Institutional Organization and Planning 2.05 Historically, planning and coordination in the transport sector have been weak. The considerable tndependence of the Government's modal transport agencies under different ministries obstructed the integration and consistency of transport plans and policies. To offset this lack of coordination, the National Directorate for Transport Policies and Programming (DNPPT) was established in 1977 in the Ministry of Public Works and Services (MOSP) and became responsible for preparing the National Transport Plan (PNT). The Bank, under the Fourth Highway Project (Loan 1384-AR) and the Highway Sector Project (Loan 2296-AR), and UNDP have provided technical assistance and funding for the PNT. One of the main recommendations of the PNT, implemented by the present Government (para 2.06), was that the various principal agencies dealing with transport should be reorganized under the same ministry. 2.06 The present government which took office in December 1983, introduced changes in the institutional structure designed to consolidate the authority of the MOSP, which includes now the agencies responsible for public sector transport operations which were previously within the jurisdiction of other ministries. The MOSP has now seven Secretariats of State: Transport, Merchant Marine, Energy, Communications, Hydraulic Resources, Public Works, and Coordination of Public Works and Services. There are two secretariats specifically handling transport matters, namely: (a) the Secretariat of Transport (ST) (Chart 1); and (b) the Secretariat of Merchant Marine (SMM) (Chart 2). The ST is responsible for the development of national transport policies, for the definition of plans and programs for all modes of transport, including water, and for program implementation of land and air transport. It comprist-s two Su!P-Secretariats: (i) Transport Planning (SSPT) which is responsible for the development and definition of transport policies, coordination and planning of work carried out by the various transport entities, and central investment and budget planning; 3nd (ii) Land Transport (SST) which is responsible for all metropolitan, highway and railway transport matters, including the State-owned entities Directorate of National Highways (DNV) and Argentine Railways (FA). There is also a National Directorate of Commercial Air Transport responsible for all commercial air trau.sport matters, including state-owned commercial airlines. The SMM is responsible, in coordination with ST, for the preparation of national policies, plans and programs for water transport. It has also responsibility for program implementation of water transport. The SMM is responsible for all commercial navigation, shipping and port activities, including the State-owned shipping lines and the port administration. The system seems to be working well: the general planning for water transport is conducted predominantly at ST, in conjunction with all other transport mDdes, and the role of SMM becomes more relevant at the planning and implementation stages of specific water projects. MOSP's Secretariat of Public Works (SPW) is Indirectly related to transport matters as it is responsible for the construction of public grain elevators through the National Architectural Services (SNA).  -5- B. The Port Subsector (i) General 2.07 Most of the existing operational port facilities in Argentina were built before 1920, and although there are some modern installations, the system, in general, is old and some facilities obsolete. There are four types of ports: (i) public, administered by the General Port Administration (AGP); (ii) public, administered by public enterprises, such as Yacimientos Petroliferos Fiscales (YPF), Somisa, Acindar, etc.; (iii) private; and (iv) regional, administered by provinces or municipalities. The first group form the backbone of the port system in the country, while the private group, mainly involved in grain business, has lately been gaining importance as a result of the privatization policy supported by the Government. The group of regional ports only fulfills a localized function, and it is of little relevance to the overall port system. During the period 1980-85, the total traffic volume through the port system has been about 85-90 million tons per year, and the participation of the above mentioned four groups has been, respectively: AGP ports 55-60%, non-AGP public ports 35-40Z, and private ports 6-8% in 1983-85 and 1-2% in 1980-82. The traffic of regional ports has been insignificant. 2.08 Geographically, Argentina's ports can be classified into three zones (Map IBRD 18829): (a) the Atlantic, whose main ports are Bahia Blanca, Comodoro Rivadavia, Rosales and Quequen; (b) the Rio de la Plata, whose main ports are Buenos Aires and La Plata; and (c) the Parana River, whose main ports are San Nicolas, Villa Constitucion, Rosario, San Lorenzo and Santa Fe. In 1985, these eleven ports handled 89 percent of the total international and domestic traffic, with Buenos Aires accounting for the largest share (17%). The main ports are somewhat specialized: most of the general cargo is handled at Buenos Aires, mineral and petroleum products at Buenos Aires, Comodoro Rivadavia, La Plata, San Nicolas, San Martin, Santa Fe and Rosales, and grain products at Buenos Aires, Bahia Blanca, Quequen, Rosario, Santa Fe, San Nicolas and Villa Constitucion. (ii) Traffic and Physical Environment 2.09 In 1985, port traffic in the country was 86.5 million tons, and preliminary figures for the first half of 1986 indicate a volume of traffic of about 85 million tons (Annex 2, footnote 1). In 1985, exports represented 44% of total traffic, imports 7% and the remaining 49% domestic cabotage, (Table 2.2). Import volumes have been affected by restrictions imposed by Government in 1982, declining from 15% in the early 1980s to the above-mentioned 7% in 1985; however, a recovery to similar levels is expected in the near future. Exports are dominated by grain (Table 2.3) which in 1985 represented 54% of total exports. Iron and steel products are the most important import products. Domestic cabotage consists basically of petroleum products (82% in 1985). 2.10 Grain exports averaged about 22 million tons in 1983-85 (Table 2.3 and Annex 2). The main grain production regions of the country are located adjacent to the Parana and Rio de la Plata rivers; 1985 grain exports through Rosario and other Parana River ports accounted for about 60% of total, while 4.9 million, or 21% was exported through Bahia Blanca. However, the role of this port in the Argentine grain trade is more significant than what those  - 6 - percentages reflect. First, due to an exploslon In one of the grain silos In Harch 1985, traffic that year encountered great difficulties at Bahia Blanca and cannot be condidered norul (In 1984, bahIa blnca handled 22X of total grain exports and 252 In 1983). Second, due to draft limitations of river ports, 25'-28' (Annex 1), and the fact that even under present conditions Sahl& Blance can operate at 38W6 draft, about two thirds of the number of vessels calling at Bahia Blanca In 1985 had been partially loaded at other Argentino ports beforo. 2/ As a result, In that year 8.7 million tons of grain exports, or 372 of total, were carrled by vessels having bahia Blanca as the lest Argentine port of call: 4.9 million tons were loaded at Sahia Blanca (Table 2.4) and 3.8 mllilon tons had been prevIously loaded at river porte. 2.11 Private ports have gained Importance in recent years. In grain export trade alone, private facilitles handled 152 of exports ln 1982, 182 in 1983, 24% ln 1984 and 272 In 1985. Additional details are given In Annex 2. Specifically, negotlations to bulld a private grain terminal in Rosales, close to Bahia Blanca, are reaching the final stages. If finally built, this termlnal ls expected to handle about 2 million tons of grain to be exported by the same cooperatives that are negotlating Its construction. The construction of this terminal will not affect the economic vlability of the proposed project. A comprehensive grain traffic assignment model [Annex 1, Appendix A, paras. 2 and 31 developed by the Government etimatem a potential demand for port capacity In the Bahia Blanca area of about 8.5 million tons of grain by 1990. In the economic justification of the proposed project, It was assumed that only 6 lllion tone [Annex 6, pare. 4 (a)] would be handled at the Bahia Blenca Port after completlon of the project, while the balance, without Puerto Rnoales, would go through the river ports, which are more expensive to the economy due to draft lilitatIons. The terminal at Rosales vould provide the extra capacity to the Bahia Blanca region to be able to handle the potential traffic demand, but without affecting the 6 mIllion tons assigned to the Bahia Blanca port. (iii) Organization and Planalng 2.12 With the recent ministerlal reorganizatlon, the main agencles in the port subsector have been placed under the SMM (Chart 2), which oversees: (a) the financially autonomous enterprIse AGP (pare 2.16 and Chart 3) which is responsible for the construction, aainteno-ce cad administration of shore facilities for general cargo, the collection of port charges, and the provision of some shore services and equipment, although most cargo handling operations are, In fact, performed by private stevedoring companles on shore and aboard ship; (b) General Port Captaincy (CGP) which is responsible for coordinatlon of port regulatIons, assistance to the subsector's entities ln drafting operating standards, studle and projects, and supervislon of port operations performed by private stevedoring and tugboat companies; and (c) the national Directorate of Port and Navigable Waterway Construction (DNCPVN) (Chart 4), an agency funded by the national budget, originally responsible for construction and malntenance of dock facilities, but which at present is only responsible for planning and carrying out waterway and port 2/ An alternative, but of restricted capacity, is the privately operated transhipeent facillty at Punta Alfa in the Rio de lo Plata in front of Montevideo, Uruguay, where existing depth permits a 40' draft in protected water. 1.2 million tons were loaded at Punta Alfa in 1984 and 1.9 million In 1985.  _ 7 _ dredging, both capital and maintenance. Grain sllos construction Is the responslbility of the RNA under the Secretariat of Public Works in MOSP. Another Important agency for the wovement of grain at the ports, Is the Natlonal Grain board (JNG) under the Minltry of Agriculture (Annex 3). 2.13 SuperfLcially, the responolbilltlos of the varioua agancies appear clear, but port planning, operatlonal responslbilltieo and control are sometmes divided in a amblguous manner among these agencles. In addition, the Internal efficiency and staff capacity, partlcularly of DNCPVN, are weak. These matters were extenslvely dlcussed between the Co-rernment and succelive bank mlccIons. The Government is aware of these probloem, and Is actively purouing the achievemnt of the Logal and adminiltrative condiltons to permit the lmprovement of the efficiency of the port system. 2.14 In late November 1986, a Public Enterprise board was created wlth the specifIc purpose of Improving the efficiency of all Public Enterprlses In the country. The Governmnt's main policy objective for the port subsector is to lmprove overall efficiency through its reorganization tnto maaningful units, from the operational and financial viwpoints, which will (i) oparate wlth autonomy and a clearly identified decision-making process, (ii) function as commercial enterprlse., and (iI) be accountable for the operations. This objective Is reflected in a draft port low which has been prepared by SNM, and submltted to the Parliament. The general framework of the draft port law to to decentralize port administration, to give more operational and financial autonomy to the main pnrwt of the system, to consolidate In one authority the functions performed at present by AGP and CG?, and to define the legal status of private and lndustrlal ports. In the same draft law, complete autonomy as a commercially oriented enterprise is given to DNCPVN, at the present part of the Central Government. This draft law Is an important step forward In the reorganizatlon of the port subsector and further improvements will be discussed In the context of the preparation of the proposed Bahia Blanca II Port Project (FY89) (para. 3.03). There are, however, some areas that need imediate improvement for the Institutional reforms to achieve their full benefits. These are: costing, cost-based tariff system, planning, port operation Improvements and investment evaluation criteria. The technical assistance component Included in the proposed project (paras. 4.06 and 4.07) Is addressed to strengthen these areas in a manner that would ensure full implementatlon and therefore the achievement of the established objectives. 2.15 The investment program for AMP in the five-year period 1986-1990 averages about US$35 mllilon equivalent per year, wlth the highest values planned for 1987 (USS57 million) and for 1988 (US$46 million). The program is aimed to reconstructlon and rehabilitation of existing port facilltles and it does not include major uneconomic Investments. During the 1986-1990 period, investments proposed in the port of Buenos Aires consisting basically of rehabilitatlon of berths to handle containers and hazardous cargoes represent about 402 of AGP's total investment program. Other Investments consist of relatively minor rehabilitation and Improvement works in varlous ports throughout the country. The Investment program for DNCPVN averages about US$50 million per year out of which about US$39 million per year correspond to malitenance dredging and the rest to varlous capital dredging projects, wlth lictle or no economic analysis of each project. The technical assistance component of the proposed project asis to improve the planning capability of DNCPVN and AGP. The Government has developed a comprehensive multimodal computer model (Annex 1, Appendix A, paras. 2 and 3) which simulates the operation of the grain movement from the production zones to  - 8 - the final destination abroad. This model represents a powerful planning tool to assess port and dredging improvements, and although developed for the movement of grains its principles are applicable to any type of traffic. The model is handled by SST but its main characteristics are not known in detail by staff of AGP and DNCPVN. To strengthen the planning capabilities of ACP and DNCPVN, the two agencies will each assign one engineer and one economist to be trained for a period of four months by SST in the principles, use and application of the model. The same professionals will be assigned as counterparts for the planning component of the proposed technical assistance. During negotiations, agreement was reached whereby on December 31 of each year, the Government would review the annual investment programs of AGP and DNCPVN with the Bank, and specifically, before budget finalization, it would consult with the Bank on any ACr and DNCPVN proposed new investment projects which are greater than US$10.0 million. The investment criteria to be used in the preparation of the investment plans, (Annex 1, Appendix A) was also agreed during negotiations. (iv) ASP's Administrative System, Accounts and Audit 2.16 AGP, established in 1956, is responsible for the operation of some 32 Government-owned ports. As most of the cargo handling operations are performed by private firms employed by port users, AGP's role is to ensure the timely availability of port facilities and equipment, and through coordination, orderly operations. Owned by the Government, AGP operates as a commercial enterprise and it is to generate sufficient revenues to cover operating costs and to finance investments in equipment. Civil works are generally financed by the Government through capital contributions. The General Port Administrator is the Chief Executive of the Authority and he is assisted by a Board consisting of the Deputy Administrator and the heads of the Technical, Commercial, Administrative and Control Departments. A Consultative Committee, made up of representatives from various port users, (representatives of shipping lines, cargo handling firms, enterprises, etc.) and a Coordination Committee with representatives from AGP, Customs, and Prefectura assist in facilitating cargo movements and safeguarding the users' interest. The indivldual ports, headed by Administrators directly accountable to the General Port Administrator, are organized basically in the same administrative structure as the one that exists in the Head Office. 2.17 In general, AGP's financial accounting procedures are sound and the books are kept in accordance with commercial accounting practices. Corrective measures attempting to overcome the distorting effects of the past years pronounced inflation have been consistently applied. AGP has started to develop cost accounting for its entire operation; parts of the system are already implemented in the port of Buenos Aires. The basic problem in this respect is that data base and data collection are poor. The technical assistance component of the project [para. 3.05 (f)(i) and Annex 7, Section BI is designed to assist the Authority in overcoming these deficiencies, and to implement an entity-wide costing system, responding to the needs of AGP. The upgraded system would produce and disseminate information for operational and investment decisions, tariff assessment, budgetary and general management control and is expected to be implemented by December 31, 1989 (para 4.06). 2.18 AGP's fixed assets are kept on historical value basis and, although indexed for inflation, provide a low basis for the depreciation calculations. Also the depreciation rates employed are too low. Therefore to establish appropriate costs, including depreciation, that should be  -9- recovered from the port users, AGP's fixed assets should be revalued on a technical basis. During loan negotiations, agreement was reached that the revaluation should be completed by December 31, 1989, and the results incorporated to AGP's books from January 1, 1991. (v) DNCPVN's Organization and Accounting 2.19 The National Directorate of Port and Navigable Waterway Construction (DNCPVN), under the MOSP, is responsible for the maintenance dredging of all navigable waterways in Argentina and for contracting and supervising dredging carried out by contractors. DNCPVN has no financial autonomy; for operational and budgetary purposes, it is organized as a Government department, practically without operating revenues, as by and large it does not charge the users to recover dredging costs; expenditures are financed from MOSP's budget. The organization is headed by the Director General and has six departments (Studies, Public Works Construction, Planning, Equipment Maintenance, Accounting and Administration) at its headquarters in Buenos Aires and in six operational districts. The organization is somewhat archaic; the rather complicated administrative procedures impose serious difficulties for effective management. Operational, statistical and financial information are limited and even when available, are difficult to retrieve for timely management decisions. Accounting is based on single entry system, and there is no cost-accounting. The Government is aware of these problems and has decided to overhaul DNCPVN's administrative practices and establish financial and cost accounting systems with a view to introduce appropriate operational controls on the short run and with the longer term aim to recover dredging costs from the users. The technical assistance component of tne project [para 3.05 (f)(ii) and Annex 7, Section B] would support this initiative and would aim to: Xi) upgrade DNCPVN's general accounting system to a level in accordance with commercial accounting practices; and (ii) implement a costing system suitable for appropriate management control and to provide a basis for establishing dredging charges to be recovered from port users (para 4.06). (vi) Pricing Policy and Tariffs 2.20 In Argentina, port charges are basically collected by AGP. The charges for port services nave essent'ally been set to serve general economic and political objectives being pursued by the Government while still recovering on an overall basis the cost of port operations. However, as tariffs have not been correlated to the recovery of the costs of individual services, there is substantial cross subsidJzation within AGP, between the various ports and especially between import and export operation. For instance, the Government export promotion policy is reflected by having lower charges for export cargo than for impe-ts. Similarly, port dues are classified (theoretically) according to the quality of services performed by the various ports; actually their aim is to charge more the ships carrying imported goods to Buenos Aires. In the absence of cost accounting, neither the direction nor the extent of cross subsidization, even if warranted, could be appropriately determined and/or monitored. 2.21 The major pricing issue, however, is related to the non-recovery of dredging costs. The cost of dredging services is financed out of general budget funds, and DNCPVN which performs this service, does not charge the  - 10 - users (neither directly nor through AGP) for it. As a result, the Argentine economy has to absorb the overwhelming bulk of the dredging costs, subsidizing the shipping industry, which is mostly foreign owned. Also, as the result of this policy, the perceived cost of the river ports to the users, in the case of larger vessels, is less than the actual economic cost since they are not paying for the dredging of navigational channels. Therefore, in addition to the subsidization, the absence of users charge for dredging introduces a factor which may distort traffic allocation between ports. 2.22 The proposed project would through action program oriented technical assistance address the above-mentioned issues, by establishing appropriate costing systems both in DNCPVN and AGP to develop a base for revising and upgrading both the structure and the level of the port tariffs with a view to appropriately recover from users all the cost of the services provided, including dredging costs applicable to AGP's operations (para 3.05 (f) (i) and (ii) and 4.06 (b) and (c)). The action programs would assist AGP to reach the ultimate financial target, full cost recovery (including depreciation based on revalued assets, interest and dredging costs) by 1995, and interim financial targets (recovering working costs including dredging, interest and about 50% of the depreciation based on revalued assets) by 1991. Based on the forecasted traffic, revenues and costs, the achievement of these targets would involve gradual tariff adjustments (or cost savings) of about 25% up to 1991 and another 25% from there up to 1995 (para. 2.27). (vii) Tugboat Services 2.23 Tugboats services in Argentina are provided by private companies and tariffs (approved by the Government) are based on operating costs and on contractually guaranteed returns until November, 1991, when the present concessionary contracts will expire. To ensure that the fleet remains in line with the demand for these type of services, the Government recently introduced a freeze on issuing new licenses and on replacements of tugboats when they reach the end of their useful life. 2.24 Tugboat tariffs are regularly reviewed and adjusted by MOSP, as warranted, based on the operating costs. During the last two years, three adjustments reduced tariffs by about 23% in real terms in Buenos Aires, and 18% in other ports. Current tugboat rates in Argentina are the lowest since 1980, representing on the average about 2.5% of the export freight cost. While the current tariffs are not expected to materially influence Argentine export possibilities or hinder normal port operations, improved operational practices are desirable. In recognizing this, the OSP has recently established a Tugboat Rationalization Committee to define measures and actions required to improve the efficiency of the tug services in a manner that is translated into tangible benefits to the users. in supporting this objective, during loan negotiations agreement was reached whereby 1OSP: (i) would continue to monitor the cost and tariff performances of the tugboat operations and forward to the Bank the relevant studies and improvement recommendations for comments at least once a year starting in 1987; and (ii) would forward by June 30, 1991 for the Bank's comments, the proposed arrangements with private tugboat operators when the current contracts expire in November, 1991.  - 11 - (viii) Past and ProJected Financial Results of AGP 2.25 With the exception of 1985, during the past few years, despite the reduction of the port traffic, the financial results of AGP's operation were positive. Port tariffs have been largely protected from inflation as ship dues have been set in US dollar terms and other port charges have been indexed often above inflation rates. In addition, costs were not sensitive to traffic, as AGP p,erforms neither stevedoring nor cargo handling functions. Between 1982 and 1985, revenues steadily increased (by some 22Z in constant terms), while total operating expenses increased by 26%, and working costs (cash expenses) increased by about 32%. AGP's- 1986 operating income dropped by about 25% due to reduced traffic and because tariffs were not adjusted to compensate for the marked inflation. However, AGP's operation was still profitable; compared to the 1982-1985 average annual profit of A$ 2.2 million; a profit of A$ 1.1 million is expected in 1986. The working ratios during the same period were reasonable varying between .68 and .82, but the operating ratio in 1985 was 1.03. Cash surpluses have been invested in short term deposits and bonds earning market rates of interest, and AGP's 1986 (preliminary) balance sheet indicates a sound financial position with a current ratio of 3.5. Details of the financial evaluation of AGP are included in Annex 3. 2.26 The reported past financial results, however, are somewhat distorted. Firstly, the low depreciation costs resulted in unduly low operating costs. This problem would be rectified through the asset revaluation exercise (para. 2.18). Secondly, AGP has never been charged for dredging and consequently, its tariffs do not include any element for recovering this cost from the port users. In case AGP would have to pay for the full cost of dredging, its existing profit margin would almost certainly be adversely affected as market conditions would not permit to introduce a substantial, corresponding tariff adjustments instantaneously. The problem of the extent of, and the mechanism for, the dredging cost recovery is addressed through the technical assistance component of the project [para. 3.05 (f)(i) and (ii)J. 2.27 Based upon the projected traffic and other assumptions included in Annex 3, AGP's financial forecast indicates that operating revenues are expected to increase by about 24Z between 1986-1991. About half of the revenues would be generated by cargo dues, over 35% of which would be grain traffic related. Working costs are forecast to increase by about 60% mainly due to AGP taking responsibility from 1991 for the dredging costs. Salaries (the most important single cost item), material and administration costs, would increase by about 13Z, 10% and 122 respectively. AGP's cash generating capacity would improve until 1990, however, in 1991, the working ratio is expected to be 1.05 as a result of assuming the responsibility for maintenance dredging costs. During the next five years, internally generated funds would equal about 25Z of the next five-year investment program and apart from the Bank loan (representing about 4% of the program) the Government, through capital contributions, is expected to finance about two-thirds of the planned investment. While cash generation would be reasonable, even before assuming responsibilities for dredging costs, AGP would incur operating losses at an increasing scale (about A$ 25 million by 1991) due to higher depreciation charges basically resulting from asset revaluation. AGP should aim at full cost recovery by 1995 and to gradually  - 12 - improve AGP's financial viability. During loan negotiations it was agreed that the Authority would introduce all the necessary tariff increases (or cost saving actions) to ensure that: (i) working ratios will not be worse than 0.85 in 1987, 0.83 in 1988, 0.82 in 1989 and 0.80 in 1990; (ii) 1991 through 1994 the working and operating ratios will not be worse than .84 and 1.23 respectively; and (iii) in 1995 the total operating revenues would cover all operating costs (including depreciation based upon the revalued assets) plus interest. It is estimated that the achievement of the 1991 interim targets, which would recover all working costs (including maintenance dredging), plus about 50% of depreciation based on revalued assets, would require an overall tariff increase (or cost saving) of about 25% (in real terms) which, depending upon the market conditions, could gradually be introduced from 1988 onward. The achievement of the 1995 tatget would require additional tariff increases of about 25% in the 1991-1995 period. 2.28 For -he Port of Bahia Blanca, which represents about 13% of AGP's business, the projections indicate that during the next five years, operating revenues would increase by some 67%, reaching A$ 6.1 million in 1991. The 1991 working costs would be about A$ 4.2 million, and half of that would be related to (the previously not accounted for) maintenance dredging. Between 1986 and 1991 the port's operation is expected to generate some A$ 15 million cash surplus, which would be availablr to meet Bahia Blanca's share of the Head Office expenses, to finance part of AGP's investment program and debt obligation. Details of the past and forecast financial results are in Annex 3. C. Bank Involvement in the Sector and Sector Strategy 2.29 This would be the first Bank involvement in the ports subsector in Argentina. However, the Bank has been extensively involved in the country's transport sector. Since June 1961, five loans for a total of US$328.5 million have been made in the highway sector and two loans totalling US$152.5 million have been made to help improve the railway system. Another loan for an amount of US$87 million has been made to increase Argentina's grain storage capacity, improve railway facilities at Rosario and modify railway wagons for more efficient transport. A summary of Bank assistance to the transport sector is presented in Annex 4. 2.30 The Bank's strategy for transport emphasizes the timely provision of finance in support of policy reform and institution building objectives, including: (a) development of policies aimed at achieving a better and more rational utilization of existing transport facilities through adequate price signals to users, which should take into account adequate cost-recovery policies; (b) reduction of total transport cost by improving modal interfaces and the efficiency of operations within each mode; (c) improvement of the competitive situation of Argentina in exports to world markets, particularly by improving the efficiency of export corridors; (d) further support to main agricultural exports, continuing the efforts of ongoing operations in silos and railways facilities; (e) improvement of public sector management through better efficiency and commercially-oriented operations of public sector enterprises; (f) further integration of the public planning, budgeting and programming processes and strengthening of the financial and rersonnel management practices of sector agencies; (g) improvement of safety conditions  - 13 - in transport facilities; (h) improvement of statistical data collection and establishment of adequate management information systems to Esupport timely decisions; (i) institution-building of adequate planning capabilities to define high priority projects in an inter-modal transport scenario; and (j) institutional and human resources development, through co'aprehensive training program at the upper and middle management and operating levels. D. Experience with Past Lending 2.31 The results of transport projects in Argentina have been mixed. The projects have assisted with institutional development, as confirmed in the completion and audit reports for the Second and Third Highway projects. The most important contributions have been the improvement of the DNV planning practices and technologies of field surveys of the network, and in improving DNV's organization efficiency and management procedures. Improvements have been less notable with regard to broader policy issues such as pricing. Railway lending, in particular, has not achieved expectations, especially in areas such as pricing and institutional rationalization. Also, in most cases, the projects have experienced delays and, in many cases cost overruns, especially after the economic crisis of the mid-1970s and the more recent budget constraints in the 1980s. These experiences have been taken into account in the design of the proposed project (paras. 4.02 and 4.18). III. THE PROJECT A. Project Origin and Objectives 3.01 The rehabilitation and expansion of the Ing. White grain terminal at Bahia Blanca was identified by the Bank in 1978, and the feasibility of the project was undertaken by the Government in 1980 through the UNDP-financed Bahia Blanca and River Ports Terminal Study, for which the Bank was the executing agency. Discrepancies over investment priorities, the South Atlantic conflict, and other factors delayed further project preparation; funding for engineering studies were allocated in the ongoing Loan 1521-AR in 1983, and in 1984 the Government decided to undertake the Bahia Blanca Port Project in two phases: Phase I addressed to rehabilitate existing port and grain-handling facilities, and Phase II to expand the capacity of the grain terminal. Appraisal of Phase I took place in December 1984 and a Yellow Cover-SAR was issued in February 1985. 3.02 In March 1985, a serious accident, due mainly to design problems with regard to silo safety systems, put elevator 5 out of service, considerably reducing the grain terminal exporting capabilities. All facilities operated by JNG are self-insured. Following the accident the Government undertook an emergency plan to maintain Argentina's grain exports at levels required to fulfill the country's commitments (Annex 5, para. 2). The Government requested Bank financing for an expanded Phase I which would include funds for the construction of an emergency ship loading gallery, and the reconstruction and modernization of the damaged elevator 5. The proposed project would restore the terminal's grain exporting capabilities. More  - 14 - specifically, the main objectives of the Bank support for the proposed Bahia Blanca I Port project are to facilitate grain exports by: (a) rehabilitating existing infrastructure including the reconstruction and modernization of the damaged elevator 5; (b) upgrade the silo safety system and maintenance services at selected grain terminals; (c) strengthen port management and administration systems; (d) develop and implement cost accounting systems which will be the basis for the introduction of cost based tariffs in the port subsector; and Ce) strengthen DNCPVN and JNG maintenance capabilities. 3.03 The proposed project has been designed to respond to the port's emergency and rehabilitation needs and to establish an analytical basis for further improvements which would be sought under Phase II. The overall objectives of the Bahia Blanca II project is to further support the Governmen_'s efforts to facilitate grain exports and to continue the institutional and pricing initiatives started in Phase I. More specifically, the objectives of the Phase II project are to: (a) expand the grain handling capacity of Bahia Blanca and deepen the access channel and basin iu order to reduce ship waitlng time and lower shipping transport costs; (b) improve grain handling safety systems both in Bahia Blanca and throughout the country; (c) implement a commercially oriented port tariff policy which includes the cost recovery of dredging; (d) rationalize the tugboat system in the ports of the country; and (e) implement an institutional development program to strengthen the operation of the main agencies involved in the port subsector. The Government fully supports this second phase, and has already taken actions for its preparation. An Executive National Commission for Bahia Blanca Phase II was established in early 1986, and a consulting firm has been hired in January 1987 for the detailed engineering studies with financing under the Loan 1521-AR. These studies are expected to be completed by mid-1988; the required funds for the completion of the studies are included in the proposed project [para 3.05 Cf)J. The first task of the consultant is to carry out a technical-economic assessment of the Bahia Blanca Phase II Project, taking into consideration new developments in the region [i.e. construction by a private group of a grain terminal in Puerto Rosales [para 2.11)]. B. Rationale for Bank Involvement 3.04 The Bank's strategic objective is to use analytical work and lending operations in support of Government efforts to reactivate the economy through export-led growth, increase the availability of foreign exchange and stabilize the economy. The Bank therefore should support country's efforts to enhance its international competitiveness, to increase domestic resource mobilization and to improve public sector management. The proposed project is in line with the stated general Bank group strategy through reduction of shipping costs for exports, rationalization of port tariffs, improvement of the operation of export corridors, and promotion of efficient operations. The proposed project would be the first loan for the port subsector, more specifically for grain export, an area of vital importance for the Argentine economy. The Bank's assistance is considered appropriate and timely, given the current conditions of the port of Bahia Blanca, its importance in the national system, and the vital role it plays in completing cargo to large vessels unable to get full load in other Argentine ports due to draft limitations.  - 15 - C. Description 3.05 The proposed project would comprise the following components (a detailed description of the proposed project is given in Annex 5): (a) Emergency Works: civil works and equipment for the rehabilitation of the ship-loading gallery at berth 9, including the construction of a temporary truck reception station. This component was carried out by MOSP through the SNA. (b) Maritime Works: (i) partial demolition of an existing iron wharf currently underway and the construction of two nooring dolphins already completed have been carried out by AGP; and (ii) removal of a sunken dredger, carried out by the Prefectura Naval. (c) Grain-Handling Systems' Rehabilitation and Modernization: civil works and equipment for reconstructing and nDdernizing the Elevator 5 complex, including all ancillary facilities, paving and repaving operational areas, including sewerige and lighting, and supervision of construction. This component would be carried out by MOSP through SNA. (d) Silo Safety Systems: upgrading safety systems at Bahia Blanca and at Buenos Aires, Rosario, Villa Constitucion, Necochea, Bahia Blanca, Barranqueras, Diamante and other JNG's port terminals acceptable to the Bank, including civil works, electrical systems, equipment and detection devices. Execution would be the responsibility of JNG. Ce) Railways/Port Interface: rehabilitation of Bahia Blanca's railway's marshalling yard that would be carried out by MOSP with the participation of FA. (f) Technical Assistance and Engineering Studies: consultants/ experts services for: (i) improving AGP's general and cost accounting, and management information Eystems and developing cost-based tariffs; (ii) developing and implementing DNCPVN's general and cost accounting, and management information systems; (iii) assisting JNG in the reorganization of its repair and maintenance facilities at its Rosario grain terminal, and DNCPVN in upgrading its maintenance services; and (iv) carrying out the completion of final engineering studies of the Bahia Blanca II Port Project, initiated under Loan i521-AR. AGP would be responsible for item (i); DNCPVN for item (ii) and the corresponding part of item (iii); and JNG for the corresponding part of item (iiI) and item (iv). D. Costs and Financing 3.06 The total cost of the proposed project, including taxes and duties and provisions for contingencies and reflecting December 1986 prices, is  - 16 - estimated at US$71.0 million, of which US$50.7 million is the foreign exchange cost. The proposed Bank loan of US$50.0 million would finance about 75% of total project cost, net of taxes, equivalent to 100% of the foreign exchange cost of the Bank-financed items. The balance of the project cost will be financed by the Government, AGP and JNG. Further details on the financing plan of the project are in para 3.09. Detailed estimates are given in Tables 3.1 to 3.8 and are sunmarized on the following page. 3.07 Cost estimates are based upon: (a) final cost for emergency ship- jading gallery and mooring dolphins (works completed in 1986. para 4.11); (b) contract values for the partial demolition of the iron wharf and the removal of a sunken dredger; (c) FA estimates for railway works; (d) preliminary estimates based on an analysis of the present conditions of all silo safety-related civil works and equipment for each of JNG's terminals for the silo safety program; (e) engineering for grain-handling systems' reconstruction and modernization (final layout, structural design and equipment specifications); (f) manpower estimates and prevailing consultants' fees for technical assistance; and (g) contract value for engineering studies. 3.08 The following physical contingencies are included in the project costs: 10% for the partial demolition of the iron wharf, railway works. technical assistance, supervision of construction and engineering studies; 15% for grain-handling systems and the silo safety program. Price contingencies for foreign and local cost components were calculated based on projected changes in international prices as the Government intends to maintain the purchasing parity value in line with expected changes in international prices. Price escalation for foreign and local costs components has been estimated at 1% for 1987 through 1990 and 3.5% for 1991-1995. Consultants fees used are US$6,000 to US$9,000 for expatriates and US$3,000 to US$4,000 for local consultants. Estimated manpower for the professional services including supervision of construction and engineering studies, that would be financed through the proposed project, would amount to about 140 and 530 man-months of foreign and local experts, respectively. 3.09 The removal of the sunken dredger included under maritime works project component would be financed by the Government through its national budget. The proposed project including this item would be financed as follows: (a) the foreign exchange costs, amounting to US$50.7 million, by a Bank loan of US$50.0 million, a Government contribution of US$0.5, and a JNG contr._.bution of US$0.2 million; and (b) the local costs, including taxes and duties amounting to US$20.3 million, by Government, AGP, JNG and FA contributions of US$14.0, US$1.5, US$3.5 and and US$1.3 million, respectively. Taxes and duties amounting to US$4.3 million equivalent, will be borne and collected by the Government. Government financing required for the project would be covered through the national budget, and it should include US$1.3 million corresponding to FA local cost contribution. AGP's and JNG's financing could be covered from their internally generated funds as their contributions represent no more than 7% and 3% of their expected respective operating cash surplus over the next five years and both agencies generate foreign exchange revenues. During negotiations, the Government confirmed that they will include in its national budget the necessary  BA SAWEA I POS P1WW' Project (bet amary (A4 '000) (u '000) Z Total - Fo--4g Base Loa 7tLFoign Total ICaI P total e Cats A. &*rgwqy Works 465.0 1,660.0 2,125.0 372.0 1,328.0 1,700.0 78 3 B. !Hriti I*otic 2,550.0 1,700.0 4,250.0 2,040.0 1,360.0 3,400.0 40 6 C, Grain Handlig Rehabiltatiii 11,988.1 35,852.5 47,840.6 9,590.5 2B,682.0 38,272.5 75 63 D. SUlo Safety Progran 4,657.5 11,092.5 15,750.0 3,726.0 8,874.0 12,600.0 70 21 BE. Tedmcal Ass1stanc 250.0 1,000.0 1,250.0 200.0 800.0 1,000.0 80 2 F. RaPlwo works 1,500.0 1,000.0 2,50.0 1,200.0 800.0 2,000.0 40 3 G. ktirkeer1zg Stuz1ies 500.0 2,000.0 2,500.0 400.0 1,600.0 2,000.0 80 3 Total Baeldr Oaets 21,910.6 54,305.0 76,215.6 17,528.5 43,444.0 60,972.5 71 100 Ehyidal GotIrncie 2,844.7 7,458.1 10,302.8 2,275.8 5,966.5 8,242.3 72 14 Price CQ trirersies 488.5 1,695.7 2,184.1 390.8 1,356.5 1,747.3 78 3 Total Project Ooets 25,243.8 63,458.8 88,702.6 2D,195.0 50,767.0 70,962.1 72 117 April 2, 1987  - 18 - local counterpart funds required by PA to carry out the railway works component. Further details of the financing plan are given in Tables 3.9 to 3.11. 3.10 The Government would be the Borrower of the Bank loan; the Government would on-lend funds from the proposed loan to: (a) JNG for the implementation of silo safety systems component, the technical assistance for the reorganization of its Rosario grain terminals' repair and maintenance system and for the completion of the final engineering studies for Bahia Blanca II Port Project; (b) AGP for the technical assistance component addressed to this agency; and (c) FA for the railway component. Terms and conditions of these on-lending agreements would be rhe same as those of the Bank loan; this was confirmed during negotiations. The effectiveness of on-lending agreements satisfactory to the Bank, would be a condition for loan effectiveness. E. Economic Evaluation 3.11 The project is designed to reduce the transport cost of grain exports through the rehabilitation of existing facilities and the rehabilitation and modernization of elevator 5. The economic benefits of the proposed project will be to relieve congestion and reduce costs for hauling grain from inland production regions to final foreign ports. Cost reductions will be due mainly to the lower cost per ton of shipping grain because of the faster ship turnaround time at Bahia Blanca. The silo safety program would reduce the probability of accidents occurring. The institutional development component would make a start toward increasing Government capacity to plan and manage ports in a more efficient manner, thus reducing costs, Improving resource allocation and enhancing the quality of services at ports. 3.12 Significant economic benefits should be realized by Argentina through improved net income for the country in its grain trade with major importing regions such as Northern Europe, the USSR and Japan. The share to be received by Argentina depends on the position of the country in the world market, and the degree of competitiveness of the shipping market, which is high at present and expected to remain so in the foreseeable future. Conservatively, it has been assumed, for the purpose of the analysis, that Argentina would receive only 50% of the project generated international benefits with the rest accruing to foreign sources. 3.13 All components, with the exception of the Technical Assistance component and engineering studies representing about 5% of total project cost, were subjected to full economic evaluation. An analysis was done both for each individual component on a marginal basis and for the project as a whole. Annex 6 gives details of the economic analysis of each project component. The overall economic rate of return for the project is about 45% and the ERR for each project component ranges from about 20% for the reconstruction and modernization of silo 5 to about 100% for the emergency works, the removal of a sunken dredger and the removal of the iron wharf. The silo safety program will substantially reduce the occurrence of accidents. If only ome third of the actual accidents in the last 10 years could be avoided, the ERR of this component would be about 12%. As this is a very conservative estimate of the accidents to be avoided, the most likely ERR for this component will be substantially higher than 12Z.  - 19 - F. Project Risks 3.14 Sensitivity analyses were performed taking into account possible changes in construction costs and benefits. These analyses indlcate that the ERR for the project remaine at levels above 30X (Annex 6). All project components involve proven technology, and therefore technical rlsks connected with the project are minimal. This is the first Bank operatlon in this subsector, and therefore there is no experience concerning the capacity of the Government to Liplement the project properly and In time. Projects in the highway and railway subseccor have been affected by cost overruns and delays; this, together with the several agencies Involved In the proposed project implementation, poses a certain degree of risk. To minimise thle risk, the project provides for the creation of a Project Committee (PC), supported by a Project Coordlnation Unit (PCU) (para 4.02). This, together with intense supervision early in the project cycle, will substantially reduce those risks. IV. PROJECT IMPLEMENTATION DETAILS A. Project Execution 4.01 The proposed project would be completed in about six and a half years by the Government through the MOSP, except for the silo safety program and the completion of the final engineering studies for the Bahia Blanca II Port Project which implementation would be the responsibility of JNG under the Secretariat of Agriculture of the Ministry of Economy, and the removal of a sunken dredger by the Prefectura Naval under the Ministry of Defense. Within the MOSP, the Secretariat of Public Works (SPW) through the National Architectural Services (SNA) would be responsible for the grain-handling system's rehabilitation and the remodelling of the graln terminal inner roads and parking areas; the Secretariat of Merchant Marine (SlM) through two of its agencies, namely, AGP and DNCPVN would be responsible for the technical assistance addressed to them and for the partial demolition of the iron wharf and the construction of two mooring dolphins; MOSP through the Secretariat of Transport (ST) and with the participation of FA would be responsible for the railway works. In addition to the silo safety program, JNG would be responsible for the technical assistance for the reorganization of its repair and maintenance systems at the Rosario grain terminals. 4.02 The execution of the project will be coordinated and mDnitored by a PC headed by MOSP which will include representatives of the various Ministries/Secretariats involved. To enable the PC to appropriately coordinate and monitor the implementation of the project, the PC would establish a PCU headed by a fulltime professional, satisfactory to the Bank, and professionals from all agencies concerned to follow-up on a day-to-day basis all project-related ntters; the PCU would be directly responsible to the PC, and act as direct liaison with the Bank. The PCU should Include technical representatives of all executing agen.ies. Draft term of reference for the PCU are given in Annex 5. The PCU will prepare quarterly reports on the progress in project Implementation according to the format given in Annex 5. The establishment of the PC and the appointment of the  - 20 - full-time head of the PCU would be a condition for loan effectivenese. During negotiatlons, agreements were reached on the functions and responal- bilities of the PCU and on the preparation and contents of the quarterly progress reports. The project implementation schedule for the proposed project is given In Chart 5. 4.03 AGP, the executing agqncy for the damolition of the iron wharf and the mooring dolphins, and Prefectura Naval, the executing agency for the removal of the sunken dredger, have adequate capabilities to carry out the procurement and supervislon of constructlon of Items under its responsibility. FA, the executing agency for tho railway component, has ample experience with Bank-financed projects. 4.04 Consultants/experts with experience in construction of modern silo systems would be require to assist SNA in the supervlsion of the grain handling systems' rehabilitation component (reconstruction and modernization of elevator 5). SNA is a technical department that has been, during the last three decades, responsible for construction of all elevators operated by JNG; SNA, however, would benefit from the experience of the supervision consultants to strengthen its supervisory functions. Agreement to retain consultants for that purpose prior to the award of construction contracts was confirmed during negotiations. 4.05 Implementation of the silo safety program, which general description and contents is given tn Annex 5, would be under the JNG respor-sibility. This program Involves the upgrading of the safety system at the main grain terminals (para 3.05 (d)). A preluminary assessment of the needs (both in equipment and in civil works) has leen carried out by the JNG and reviewed by the Bank (Annex 5, Appendix A). International safety consultants to be financed under Loan 1521-AR will assist the JNG In the preparation of the final design of the system. Supervision of the works will be carried and directly by JNG with Its own personnel. This silo safety program would later be extended to the rest of JNG terminals through the proposed Bahia Blanca II Port Project currently under preparation. An important step for-ard hee been the recent establishment of the Safety Services Department (SSD) within the JNG's organization which would be directly responsible for the implementation of the Silo Safety Program; qualified staff consisting of about a dozen local experts in safety matters, is currently being recruited. A condition for loan effectiveness would be the appointment of the head of SSD and the recruitment of safety experts to make SSD fully operational. During negotiations, agreement was reached with JNG on the following: (a) furnishing to the Bank a plan of action satisfactory to the Bank for the supervision of construction of works related to the improvement of silo safety, prior to the award of contracts for such construction and works; (b) carrying out the recommendations of the safety experts financed by Loan 1521-AR, in respect of the ports of Buenos Aires, Rosario, Villa Constitucion, Necochea, Bahia Blanca, Barranqueras, Diamante and other ports acceptable to the Bank, not later than December 31, 1988;  - 21 - (c) completing the technical specitications for works and equlpment included In the lilo safety program component, not later than June 30, 1988; and td) preparing and lmplementing safoty codoe and regulatloni for the JNC terminals, not later than Decomber 31, 1988. 4.Ob Tho SMM would be romponsible for the coordination and oupervision of the technical assistance componont addresed to DNCPVN and AGP (Annex 7, Sectlons b and C). The objectives of the technical assistance to DNCPVN are to: (1) develop and Implement coot accounting, commercial finoncial accounting, planning and management Information systems to establish a reliable basis for administrAtive controls and tariff structures, Including cost recovery of dredging; and (ii) reorganite the repair and maintenance services. The technical assistance to ACP would be addressed to improve cost accounting, commercial, financial accounting, planning and management Information systems so as to develop the inatitutlonal/administrative framework for the establishment of a cost-based tariff structure. During negotiations agreement was reached on: (a) timing and scope of the technical assistance components under the responsibility of SMM and Its agencies (Annex 7, Sections B and C); (b) retaining consultants for technical assistance to AGP not later than December 31, 1987; implementing an appropriate cost accounting system for AGP satisfactory to the Bank by December 31, 1989; developing a cost based tariff structure in a manner satisfactory to the Bank by June 30, 1990; preparing a plan of action satisfactory to the Bank for the implementation of such tariff strunture not later than December 31, 1990; and starting to implement such plan of action not later thaa June 30, 1991; and (c) retaining consultants for the technical assistance to DNCPVN not later than December 31, 1987; implementing a comercially based general accounting system and a cost accounting system for DNCPVN and developlng a mechanism to recover dredging costs by December 31, 1989; preparing a plan of action satisfactory to the Bank for the implementation of such mechanism not later than December 31, 1990; and starting to implement such plan not later than June 30, 1991. 4.07 JNG would be responsible for the technical assistance to reorganize maintenance services at its Rosario grain terminals. During negotiations agreement was reached with JNG on the following: (a) retaining consultants required to assist JNG in organizing the Rosario grain terminals not lat:r than March 31, 1988; and (b) implementing the recommendrAtions made by the consultants at Rosario in the rest of JN6's grain terminals not later than December 31, 1990.  -22- 4.08 With regard to operational efficiency of JNG's Ingeniero White grain terminal at Bahia Blanca, during negotiations it was agreed that JNG would take all necessary actions to achieve the operational targets shown in the table below, during the period of implementation of the proposed project. Operational Targets Size of shipment per vessel Ship loading rates (ton) (average tonlship/day) 1988 1990 1992 At Berth 9 20,000 or more 11,000 13,000 28,000 between 10,000 and 20,000 10,000 12,000 26,000 10,000 or less 9,000 11,000 24,000 At Berth 5 and 6 20,000 or more 17,000 18,000 19,000 between 10,000 and 20,000 16,000 17,000 18,000 10,000 or less 15,000 16,000 17,000 Mode of transport Reception unloading rates (average ton/day-high season) 1988 1990 1992 Railway 15,00 1 0 1 I0O Truck 10,000 11,000 17,000 An anAlysis of the operation of the Babia Blanca system is given in Annex 5. 4.09 Completion of the engineering studies initiated under Loan 1521-AR that would be included in the project correspond to the final design of the proposed Bahia Blanca II Port Project. Consultants for the execution of the work have been retained by JNG following the Guidelines for the Use of Consultants by the World Bank Borrowers. The contract was signed on January 30, 1987 and the work is scheduiled to be completed in 18 months; the manpower required amounts to about 400 man-monthsb. The total estimated cost of the studies amounts, to about US$4.8 milliow excluding taxes out of which about US$2.6 million will be partially financed under Loan 1521-AR and the balance of US$2.2 million through the proposed project. Monitoring and supervision of the consultants' work will be carried out through the Bahia Blanca Technical Cowmittee established under Loan 1521-AR, supported by at least three experts with wide international experience in this type of project. The cost of these experts is being financed through Loan 1521-AR. 4.10 Upon completion of the proposed project and not later than six mont.hs thereof, NDSP would prepare a Project Completion Report to assess the success in the implementation of the project including the achievement of financial, operational and otber institutional gpals, and general evaluation on the lessons learned from past experience. This has been agreed during negotiations.  - 23 - B. Procurement and Consultancy Services 4.11 All major civil works and equipment to be financed by the Bank under the proposed project would be procured following international competitive bidding procedures in accordance with Bank Guidelines. Local competitive bidding (LCB) procedures acceptable to the Bank would be followed for civil works for items with an estimated cost of US$2.0 million equivalent or less and for procurement of equipment with an estimated cost of US$0.3 million or less. An exception to the above LCB procedures would be the special LCB procedures used for procurement of emergency works and equipment for the rehabilitation of the ship-loading gallery at berth 9, for which restricted LCB procedures limited to Argentine bidders specialized in grain-handling systems, were used. Since more than six bids were submitted and the award was made to the lowest evaluated bidder, the Bank agreed in principle with those procedures and this contract (with an estimated value of US$1.7 million) will be financed retroactively. Procurement of components and spare parts for replacement/upgrading mechanical and electrical systems related to silo safety would be procured through International Competitive Shopping (ICS) procedures, as standardization has to be taken into consideration. Bidding docunents for civil works and procurement of goods with a value of more than US$0.5 million would be subject to prior review and approval by the Bank. 4.12 LCB procedures to be used by the Borrower are, in general, satisfactory to the Bank; however, specific agreement was reached during negotiations on the following: (a) foreign bidders should be allowed, if they so wish, to participate in LCB, and association with local firms should be on a voluntary basis; (F) awards should be evaluated on a CIF basis, taking into account the freight costs quoted freely by each bidder; and (c) no restrictions should be imposed with regard to imported materials. Contracts for civil works for the partial demolition of the iron wharf and the construction of two mooring dolphins amounting to US$1.9 million and US$0.5 million equivalent, respectively, were awarded under LCB procedures satisfactory to the Bank, on December, 1986 and March, 1986 respectively and they would be financed retroactively. 4.13 Prequalification would be required for civil works contractors and equipment suppliers for the reconstruction and modernization of elevator 5. In evaluating bids for equipment procured through ICB, Argentine bidders would be allowed a margin of preference equivalent to 15Z of the CIF costs of competitive imports, or the relevant prevailing customs duty, whichever is lower. Professional services that would be financed ay the Bank (para 3.05 (c), (d) and (f)) would be selected and engaged following the Bank Guidelines for the Use of Consultants. During negotiations, all procurement and related matters were discussed and agreed upon. 4.14 Procurement arrangements for items to be financed under the proposed loan including physical and price contingencies, are summarized as follows:  - 24 - Project Element (US$ million) Total Procurement Procedures Coat LCB ICB IcS Other 1/ 1. Emergency Works 1.7 - - - 1.7 (1.3) (1.3) 2. Maritime Works 2.4 - - - 2.4 (1.0) (1.0) 3. Grain Handling Rehabili- tation and Reconstruction (a) Civil Works - 14.4 - - 14.4 (6.1) (6.1) (b) Equipment - 26.3 - - 26.3 (26.3) (26.3) 4. Silo Safety Works (a) Civil Works 6.1 - - - 6.1 (2.4) (2.4) (b) Equipment - 4.0 3.9 - 7.9 (4.0) (3.9) (7.9) 5. Railway 2.1 - - - 2.1 (0.8) (0.8) 6. Supervision of Construction - - - 1.7 1.7 (1.4) (1.4) 7. Technical Assistance - - - 1.0 1.0 (0.9) (0.9) 8. Engineering Studies - - - 2.1 2.1 (1.7) (1.7) 9. Total: 3/ 12.3 44.7 3.9 4.8 65.7 2, (5.5) (36.4) (3.9) (4.0) (50.0) 1/ Consultants' services would be retained in accordance with Bank Guidelines. 2/ Removal of the sunken dredger financed directly by the Government, amounting to about US$1.0 million, is not included. 3/ Totals may not add up due to rounding. Note: Figures in () correspond to the foreign exchange cgst component that would be financed by the Bank. C. Disbursements 4.15 Disbursements of the loan would be made against: (a) 40% of total expenditures of civil works; (b) 100% of foreign expenditures of imported goods; 100% of the ex-factory cost of locally manufactured goods; and 85Z of local expenditures for imported goods locally procured; (d) 10OZ of foreign expenditures and 80Z of local expenditures for professional services.  - 25 - 4.16 Bank funds are expected to be disbursed over a six-and-a-half year period, in line with the standard profile for port projects in the Region. Retroactive financing in respect of payments made for expenditures prior to the signature of the Bank loan but after November 1, 1985, in an aggregate amount not exceeding US$2.3 million equivalent, would be made in respect to works and equipment for the emergency works, the partial demolition of the iron wharf and the construction of two mooring dolphins at berth 9. All disbursement-related matters and retroactive financing were discussed and agreed at negotiations. The estimated schedule of disbursements is given in Table 4.1. D. Special Account and Auditing 4.17 In order to reduce the time period during which the Government would finance the Bank's share of the project's cost with its own resources, the Bank would make advance payments from the loan account into a Special Account, for an amount, in US$, of 3.0 million, which would be opened in the Banco de la Nacion and would be available for reimbursing the Government for the Bank's share of the project cost. The Government vuMld be entitled to make withdrawals from the Special Account for payments representing the Bank's share of the project cost incurred by the JNG, SMK through its agencies (AGP and DNCPVN), SNA and FA on Bank-approved contracts. Supporting documentation of withdrawals from the Special Account would be examined on a routine basis by regular project supervision missions. To facilitate fund withdrawals and their control, withdrawal requests from SMM through its agencies (AGP and DNCPVN), SNA, JNG and FA would be forwarded to the Banco de la Nacion through the PCU. Disbursements from the loan would be made on the basis of certified statements of expenditures for local expenditures where the contractual values are less than the equivalent of US$2C0,000 and for foreign expenditures where contractual values are less than the equivalent of US$50,000. During negotiations, agreement was reached on the terms and conditions of the special account. 4.18 In addition to the Special Account and in order to ensure consistent availability of counterpart funds, during negotiations it was confirmed that the Government will include in its annual budget appropriate amounts as counterpart funds specifically for the project. It was also agreed that: (i) independent auditors acceptable to the Bank will be retained to audit the accounts of AGP, JNG and DNCPVN, the Special Accounts and the project-relatel accounts in accordance with appropriate auditing principles: (FA's accounts are already being audited under the Second Railway Project, Loan 1677-AR); and (ii) annual audit reports will be forwarded to the Bank not later than six months after the end of each fiscal year.  - 26 - V. RECONMENDATIONS 5.01 The following matters were discussed and agreed with the Government and its agencies: (a) AGP and DNCPVN will prepare their investment plans using Investment criteria satisfactory to the Bank and they will review with the Bank by December 31 of each year their annual investment programs and specifically, before budget finalization, they will consult with the Bank on any new investment projects over US$10.0 million (para 2.15); (b) AGP would revalue its assets not later than December 31, 1989 and incorporate the results to its books starting on January 1, 1991 (para 2.18); (c) MOSP would: (i) monitor the cost and tariff performances of tugboat operations and forward to the Bank the relevant studies and recomeudations at least once a year starting in 1987; and (ii) by June 30, 1991, forward for the Bank's comments the proposed arrangements to be introduced after the expiry (in November, 1991) of the existing concessionary contracts (para 2.24); (d) AGP would: introduce all necessary tariff increases (or cost-saving actions) to ensure that:(i) between 1987-1990 working ratios will be reducing annually from 0.85 to 0.80; (ii) from 1991 through 1994, working and operating ratios will not be more than .84 and 1.23 respectively; and (iii) in 1995 the total operating revenues will cover all operating costs, including depreciation based on revalued assets, plus interest (para. 2.27); (e) the Government confirmed that they would include in the national budget local counterpart funds required by FA to carry out the railway component (para 3.09); (f) terms and conditions of on-lending agreements between the Government, FA, JNG and AGP (para 3.10); (g) terms of reference of the PCU and the contents of quarterly reports to be submitted to the Bank (para 4.02); (h) SNA would retain consultants with experience in construction of modern silos for the supervision of construction of the reconstruction and wodernization of the grain-handling systems, prior to the award of the construction contracts (para 4.04);  - 27 - (i) JNG would carry out the silo safety program cotsisting of Implementation of the recommendstions of the silo safety experts financed by Loan 1521-AR, not later than December 31, 1988; preparation and implementation of silo safety codes and regulations for its terminals not later than December 31, 1988; preparation of final engineering for alU civil works and equipment included in the silo safety program component, not later than June 30, 1988; and furnish to the Bank a plan of action satisfactory to the Bank, for the supervision of the works, prior to the award of construction contracts (pars 4.05); (j) timing and scope of the technical assistance components under the responsibility of SIK and Its executing agencies [para 4.06 (a)]; (k) SKM's agencies would retain consultants for the technical assistance referred to in preceding subparagraph not later than December 31, 1987 [para 4.06 (b) and (c)J; (1) AGP would Implement an appropriate cost-accounting system by December 31, 1989; formulate cost-related tariff structures satisfactory to the Bank, by June 30, 1990; develop an action plan for its Implementation by December 31, 1990; and start to implement such action plan by June 30, 1991 [para 4.06 (b)]; (m) DNCPV! would: implement commercially-based general and cost accounting systems by December 31, 1989; develop an equitable tariff structure and nechanisms to recover dredging cost by fecember 31, 1989, and a plan of action to lntroduce the tariffs by December 31, 1990; and start to implement such plan of action by June 30, 1991 [para 4.06 (c)]; (n) timing and scope of technical assistance components under the responsibility of JNG and retention of consultants not later than March 31, 1988 [para 4.07 (a)J; (o) JNG would take all necessary actions to Implement the consultants' recommendations for the reorganization of maintenance services not later than December 31, 1990 [pars 4.07 (b)]; (p) JNG would take all necessary actions required for the achievement of the operational targets (para 4.08); (q) MOSP would prepare a PCa not later than six montbm after completion of the project (para 4.10); (r) procurement procedures and related mtters, including specific agreements on allowing foreign bidders to participate in LCB having regard that their association with local firms sbould be on a voluntary basis; evaluating bids on a CIF basis taking into account freight costs freely quoted by each bidder; and  - 28 - not imposing restrictions to imported msterials (paras 4.12 and 4.13); (s) disbursement procedures, including retroactive financing for the emergency works and equipment, partial demolition of the iron wharf and construction of two mooring dolphins which contract values amount to the equivalent of about US$1.7 million, US$1.9 million and US$0.5 million, respec- tively, for expenditures incurred after November 1, 1985 (para 4.16); (t) terms and conditions of the Special Account (para 4.17); (u) the Government would include in its annual budget appropriate amounts as counterpart funds to ensure availability of sufficient funds for the implementation of the project (pars. 4.18); and (v) AGP, DNCPVN and JNG would: retain independent auditors acceptable to the Bans, to audit their account and the Special and project-related Accounts in accordance with appropriate auditing principles; and forward to the Bank the corresponding annual audit reports not later than six months after the end of the fiscal year (para 4.18). 5.02 Conditions for loan effectiveness would be: (a) the effectiveness of the on-lending agreements with JNG, FA and AGP for funds from the proposed loan for the implemen- tation of the project components under the responsibility of these agencies (para 3.10); (b) the establishment of the PC and the appointment of the full-time head of the PCU (para 4.02); (c) the appointment of the head of the SSD and the recruitment of safety experts to make the SSD fully operational (para 4.05). 5.03 Subject to the above, the project provides a suitable basis for a Bank loan of US$50.0 million. The terms would be 15 years with a three-year grace period. April 7, 1987  ENTINA *1IA UIIAI I POT OUCT boi l Co ocltle of Oooe1tc Troflic lstwwbee Pesee Tr tfic (bille I sIII s .au0 ME * 190 j 973 L 10 o 1961 j twa L , J. J4 L 9s . Air 0.6 2 I.0 3 2.4 4 3.7 6 3.4 6 3.3 6 5.4 6 3.9 6 3.7 a 6 AS4 22.7 76 30,2 64 45.3 03 53.6 67 50.1 as 45H5 u 50.8 37 53.2 06 S4.1 oso b1li 6.4 22 4.7 IS 6. 13 4.2 7 3.6 6 3.3 6 4.1 7 4.3 a 5.0 a I Tota1 29.7 100 SS.9 100 S4.6 I00 61, tO10 57.1 100 52.1 100 16.3 100 61.9 100 63*.4 I00 Frallit Traffic (b111 IIO t-u bote 24.0 I1 29.9 3I 1.5 2 1 20.6 20 21.0 2 1 I6. ao 20.1 to 3.9 9 17.4 * no" 36.0 47 44.3 49 49.9 56 60.3 S 56.7 56 I2.I 55 57.9 96 57.9 57 56.3 a PipaISFs 2.0 3 5.2 5 9.3 II 13.6 13 13.5 13 12.7 13 12.3 12 2.3 13 *.o bIl 14.2 It 1536 IS 10,7 12 9.5 9 9.2 10 11.4 l2 13.3 13 1i.2 11 9.5. Totel 76.2 100 95.0 100 A.4 100 104.0 too 100.4 I00 "5.l 00 03.2 100 100.7 100 Piglti r Traffi ICme not Irelv0 soteral pes NIP fltrwn Statistics atlasa oUlrectarato for Air T*eacgrt Kce.bw 1e16e  - 30 - TABLE 2.2 ARGENTINA BAHIA BLANCA I PORT PROJECT Traffic Through Argentine Ports (million tons) Ports 1970 1980 1981 1982 1983 1984 1985 Exports 15.0 21.0 29.7 26.0 35.4 32.3 38.3 Buenos Aires 6.6 6.3 7.0 6.2 8.1 7.1 6.8 Rosafe 1/ 4.9 9.3 13.7 12.4 15.9 15.2 18.0 Bahia Blanca 3/ 1.8 2.5 4.0 3.3 6.2 4.9 5.3 Others 1.7 2.9 5.0 4.1 5.2 5.1 8.2 Imports 10.1 12.6 10.1 7.0 5.7 6.4 5.6 Buenos Aires 5.5 5.7 4.1 2.5 2.0 1.9 1.2 Rosafe 1/ 2.8 3.2 2.9 2.8 2.4 2.9 3.2 Bahia Ulanca 3/ - 1.3 1.1 0.4 - - 0.1 Others 1.8 2.4 1.8 1.3 1.3 1.6 1.1 Domestic Traffic 2/ 58.3 48.0 51.3 49.8 47.7 46.4 42.6 Buenos Aires 13.5 11.6 11.2 9.9 9.8 7.3 6.7 Rosafe 1/ 5.6 6.2 6.6 7.1 6.7 6.6 5.6 Bahia ancea 3/ 4.8 5.9 6.1 6.4 6.4 6.8 6.9 Others 34.4 24.3 27.4 26.4 24.8 25.7 23.4 Total 83.4 81.6 91.1 82.8 88.8 85.1 86.5 Note: 1/ Includes the ports of Rosario, Santa Fe, San Martin, San Nicolas and Villa Constitucion 2/ Traffic in and out of each port 3/ Includes Ing. White, Galvan and Rosales Source: NTP and AGP data. December 1986  - 31 - TABLE 2.3 ARGENTINA BAHIA BLANCA I PORT PROJECT Gzain Exports by Major Ports 1978-1985 (million tons) Other Parana San River Buenos Bahia Year Rosario Martin 1/ Ports Aires Queguen Blanca Total 1978 5.0 0.2 3.2 4.2 0.7 2.0 15.3 1979 5.3 0.2 3.9 3.2 1.0 3.7 17.3 1980 4.7 0.4 2.6 2.0 0.6 2.2 12.5 1981 6.5 1.5 4.5 3.1 1.0 3.9 20.5 1982 5.3 1.8 3.2 2.7 0.5 3.1 16.6 1983 6.8 2.1 3.6 3.4 1.7 5.8 23.4 1984 5.8 2.2 3.4 3.0 1.5 4.5 20.4 1985 7.2 2.6 4.1 2.7 1.9 4.9 23.4 1/ Includes private ports in this area. Source: Study on static and dynamic capacity of port facilities for grain and sub-products (SSTP-NOSP) based on information provided by JNG. December 1986  - 32 - TABLE 2.4 ARGENTINA BAHI.A BLANCA I PORT PROJECT Grain Exports at Bahia Blanca 1978-1985 (millions of tons) Year Wheat Corn Sorghum Other Total 1978 0.2 0.3 1.4 0.1 2.0 1979 1.8 0.4 1.5 - 3.7 1980 1.6 0.1 0.4 0.1 2.2 1981 1.2 1.0 1.6 0.1 3.9 1982 1.3 0.4 1.4 - 3.1 1983 4.1 0.4 1.3 - 5.8 1984 2.8 0.4 1.3 - 4.5 1985 4.0 0.2 0.7 - 4.9 Source: Study on static and dynamic capacity of port facillties for grain and sub-products (SSTP-MOSP), based on Information provided by JNG December 1986  AElNTINA BAHIA ILANCA I POR PROJECT Table t. EIEFGENCY VORIS Detailed Cost Table ^ '000) Expenditures bi Fiimanciers (USS '000) WORLD BANK GRWiENT O ARONTINA 1987 1989 1989 1990 1991 1992 Total 1987 1988 1M 1990 199 1M Total szLzZzZ : = .. . .:: =: :: z: :.:: s__ s:2 --==a zzz zZ zz=-=--zZ22 I. INVESIhENT COSTS A. CIVIL VORKS SHIPLOADING GALLERY 201.0 - - - - - 201.0 301.5 - - - - - 301.5 Sub-Total CIVIL WORKS 201.0 - - - - - 201.0 301.5 - - - - - 301.5 D. EQUIPMENT SHIPLOADING EGUIPHENT 1,133.6 - - - - - 1.133,6 72.4 - - - - - 72.4 Sub-Total EQUIPMENT 1,133.6 - - - - - 1133.6 72.4 - - - - - 72.4 Total INVESTIENT COSTS 1334.6 - - - - - 1,334.6 313.9 - - - - - 3.9 :::Z: Z =a--- :::_ v::: 3:: z:zz z__:i-:= - _=: i--- :__:2 =: =zzz XZ=z Total 19334.6 - - - - - 1t334.6 373.9 - - - - - 373.9 ::: _s:::z :::: ::::2 =2== ==:: :ss::: ::::= 2= =--=X - __X iZ -ZZ Z = zZ-e April 2. 1987 12:29 I.' D3 9-  iMerns Table 2. 11ITI1E Mg btiled Cost Tble (A 1oo) Ezleitum by Fiwitr (IBI '000) DOMEN POT WIMINSTNTJIN M bd99mI w w 191 IM IM 1990 Iam 192 1,I 1M1 191 191 1991191199 Total 193 IM 193 1991 199 19M lal ~~~~~~~~~~~~~~~ __............._ ......._____,_ *uui * m mo - ls ol1 " mmo~uznuun =m umur zm7 am sm . t sm i. nuswm cos is CIVIL gS .......... NIEIm INN 0mW 9477 239.3 - - - - 1,137.0 631U 11595 - - - - 791.3 1I1 .5 - - - - 1263 W CSUTlICTI0N ar ontoN DOIPS 233.4 - - MA- 234 181.9 1.9 3-. 2 - - 30.2 ENOVIMML OF UPS 131 - - - - - - - 52 75 - - 1401.0 NO-Total CIVIL NOMS 1231.1 239.3 - - - - 1.470,4 320.3 159.5 - - - - 930.3 35 m33.0 - - - - 1,11U.5 tsu 1W4ESIEN COSTS 1231,1 239.3 1470.4 32. 159.5 - - - - 93.3 $ 1 334 IS - - - - 1,116.5 -SX m= 9muI mm u mu0 1112MI m m muw mu130 mu~ mu20 -0= ama, IMM IM11 u SC10M= Tsu1 1t231#1 239.3 - - - 1.470A4 820,3 159.5 - - - - 91.3 1335 3.0 - - - - 1,166.5 aaina 332*3 u~- -u mu- --- mu-222m m u m mu- Nyul 2# IW 1212 I  wi miau@ n Table 3. WtAlN IWII K SIUVICTIO AO U AIIP htaild Cost Table (A 0002 t"dif firamtis IPdtfle eo Jo mm vE p Now= __. .___. ... _._................. .