Argentina - Higher Education Reform Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-6529-AR MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US$165 MILLION TO THE ARGENTINE REPUBLIC FOR A HIGHER EDUCATION REFORM PROJECT JUNE 12, 1995 This document has a restricted distribution and may be used by recipients only in the performance of their ofricial duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit - Argentine Peso (A$) Official Rate: US$1 = A$1 FISCAL YEAR January 1 to December 31 ACADEMIC YEAR March 15 to December 15 ABBREVIATIONS AND ACRONYMS USED AGN Auditorfa General de la Naci6n CIN Consejo Interuniversitario Nacional (National Interuniversity Council) CIS Comite Internacional de Seguimiento (International Supervision Committee) CNA Comisi6n Nacional de Acreditaci6n (National Commision for Accreditation) CONEAU Comisi6n Nacional de Evaluaci6n y Acreditaci6n Universitaria (National Commission of Evaluation and Accreditation) CRUP Consejo de Planificaci6n de Universidades Privadas (Council of Private University Rectors) CSU Consejo Superior de la Universidad FEL Federal Education Law FOMEC Fondo de Mejoramiento de la Calidad (Fund for Enhancement of Educational Quality) ICB International Competitive Bidding IDB Inter-American Development Bank LIB Limited International Bidding MCE Ministerio de Cultura y Educacion (Ministry of Culture and Education) NCB National Competitive Bidding OECD Organization for Economic Cooperation and Development PIU Project Implementation Unit PMSIU Programa de Mejoramiento del Sistema de Informaci6n Universitaria RIU Red de Informaci6n Universitaria (Interuniversity Network) SOE Statement of Expenditures SUP Secretarfa de Poifticas Universitarias (Secretariat of University Policy)  FOR OFFICIAL USE ONLY ARGENTINA HIGHER EDUCATION REFORM PROJECT LOAN AND PROJECT SUMMARY Borrower: Argentine Republic Implementing Agency: Ministry of Culture and Education Beneficiary: Not applicable. Poverty: Not applicable. Amount: US$165 million equivalent Terms: Repayable in 15 years, including five years of grace, at the Bank's standard variable interest rate. Commitment Fee: 0.75% on undisbursed loan balances, beginning 60 days after signing, less any waiver. Financing Plan: See Schedule A. Net Present Value: Not applicable. Staff Appraisal Report: Report No. 13935-AR Project Identification Number: AR-PA-34091 This document has a restricted distribution and may be used by recipients only in the performance of their |official duties. Its contcnts may not otherwisc be disclosed without World Bank authorization.I  i  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE ARGENTINE REPUBLIC FOR A HIGHER EDUCATION REFORM PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed loan to the Republic of Argentina for the equivalent of US$165 million, to help finance a project aimed at establishing a competitive environment for the improvement of higher education and providing incentives for continuous efficiency gains and quality enhancement. The proposed loan would be at the Bank's standard variable interest rate, with a maturity of 15 years including 5 years of grace. 2. Background. Following a severe economic crisis, Argentina has embarked on a comprehensive program of structural reforms aimed at reducing the role of the state, decentralizing the financing and provision of public services, and strengthening the capacity of the state to deliver social services. The Government has subsequently established a base for sustained development, and is now addressing the large social deficits that, if unattended, could slow economic progress. A comprehensive reform of the education sector is underway. Primary and secondary education have been decentralized to the provinces, basic compulsory education has been extended to nine years, and resources will be doubled in the next five years to improve quality. To complete this reform, the Government also realizes the urgent need to: (i) train a highly skilled labor force to compete internationally in the production of high value-added products and services which requires constant technological progress; and (ii) ensure greater efficiency of the university sector in the use of public resources and create financial incentives for improvement. The Government has requested Bank support in designing structural reforms in this sector. 3. The higher education sector consists of about 700,000 students in 73 public universities; 100,000 in private universities; and 150,000 in non- university institutions, representing about 20 percent of the age group 20-25. After the 1984 reform that provided open admission to all secondary school graduates and allowed some disciplines (mainly humanities) to re-open as part of the democratization process, enrollment grew rapidly at an average annual rate of 8.3 percent. During this period, the higher education budget was severely hit by hyperinflation, and public expenditure per student dropped by about 50 percent in real terms. Enrollment in the 36 private universities represents a small share (13 percent) compared with neighboring countries. But since the issuance of a 1993 decree opening higher education to private initiatives, this share is growing while enrollment is now stagnating in the public sector. The public higher education sector absorbs 0.91 percent of GDP or 19 percent of the consolidated budget for education (numbers which are in the lower range of those for OECD countries). 4. Higher Education Issues. Institutional problems of sector management: The capacity of the higher education system to improve is  -2- hampered by four major institutional problems: (i) lack of reliable and transparent information which limits authorities' effectiveness in planning and management, families and students' choice of institutions, and competition among universities; (ii) inefficient allocation of resources, which does not provide incentives for more effective training, investment, and research; (iii) absence of permanent accreditation and evaluation mechanisms which could stimulate curriculum changes, and performance and quality improvement; and (iv) governance mechanisms in universities which lack the flexibility to adapt to a changing environment, promote efficiency, and diversify their resources. 5. Efficiency issues: The efficiency of higher education declined during the 1980s, and is now very low. Despite an increase in the number of entrants and enrollment during the last decade, the number of graduates has nearly stagnated, at 27,000 in 1981 and 32,000 in 1991. Only 18 percent of entrants graduate, and the ratio of graduates to enrollment is below 5 percent. There are several causes of low internal efficiency: (i) a high proportion of graduates from secondary education are unprepared for studies in higher education; (ii) inadequate curriculum and teaching methods which do not meet the expectations of students; (iii) teaching methods that are adversely affected by a lack of complementary resources such as libraries, computers and laboratory equipment; (iv) weak academic management which does not distinguish between active and non-active students or stimulate performance; and (v) lack of incentives to graduate, since most students do not pay fees. 6. Quality issues: The problem of quality has three dimensions. First, the composition and qualifications of faculty are inadequate: (i) only 10 percent of the teaching staff has full-time status and can therefore devote significant time to research or to providing assistance to students outside the classroom; (ii) only 15 percent has a Master's or Ph.D. degree, and 58 percent of teaching is done by teaching assistants; and (iii) there are few salary incentives (a full-time university professor is paid about US$2,000 a month), performance standards or evaluation mechanisms. Second, the present level of investment is insufficient to provide an adequate learning environment. The share of investment in public universities has been as low as 3 percent of total expenditures in recent years (the average is 10 percent in OECD countries). As a result, existing technical equipment in laboratories is obsolete and teaching equipment insufficient. This situation is particularly severe in basic sciences and engineering, which require good maintenance and constant renovation of equipment to keep up with technological change. Third, in an environment in which universities do not have to compete for extemal resources, there is little incentive for them to diversify or introduce new programs according to the needs of the economy. Contracted activities with industry has only recently started. 7. Status of Governmental Reforms. As part of the Govemment's effort to rationalize social spending, the Secretariat of University Policy in the Ministry of Culture and Education (SUP), since its creation in March 1993, has initiated a process of reforms to address quality and efficiency problems in higher education. First, a law reforming higher education was  -3- approved on June 7, 1995, by the Chamber of Deputies and is expected to be enacted shortly after a vote by the Senate. This law would: (i) provide universities with full autonomy for their administration, thus opening the possibility for universities to diversify their resources; (ii) establish a common legal framework for private and public institutions, including evaluation and accreditation; (iii) improve the governance of public universities by allowing stronger participation (a minimum of 50 percent) to teaching staff in elected boards and limiting the students' right to vote to active students; and (iv) for educational planning and policy, define the role of SUP and that of the two consultative bodies: Consejo Interuniversitario Nacional (National Interuniversity Council - CIN) and Consejo de Rectores de Universidades Privadas (Council of Private University Rectors - CRUP). 8. Several measures are already being implemented by SUP. The evaluation and accreditation process was tested in nine universities and five post-graduate programs. An incentive system for teaching staff to undertake research was implemented for the first time in FY94 (11,500 professors have benefitted from a budget of US$42 million). In addition, there is now in effect a new student loan scheme, managed by a commercial bank, with a budget (US$10 million) which was doubled in 1994. Most of the barriers for the creation of private higher education institutions were removed in 1993; this has led to the creation of 15 additional institutions. A reform of the engineering curriculum will reduce the duration of studies from six to five years. A decree raising the requirements for full-time professors has been issued, and the 1995 Budget Law decentralizes to each university the decision of fixing the salary levels of staff. Finally, since FY94 a share of the higher education budget has been allocated for investment through competitive means (US$22 million, representing 1.57 percent of the total budget, or about 40 percent of the universities' investment budgets). 9. Rationale for Bank Involvement. Bank involvement in the proposed project is fully consistent with the overall Country Assistance Strategy, which was discussed at the Board on May 4, 1995. This strategy aims to assist Argentina to sustain economic growth, complete the reform of the state, enhance the competitiveness of the Argentine economy and reduce poverty and improve the quality of human resource investments. The proposed project aims to: (i) improve the quality and efficiency of a sector which is key to maintaining competitiveness in an outward-oriented economy; (ii) complement the reform process of the education sector (supported for primary and secondary education by the Inter-American Development Bank (IDB) and the Bank, respectively) by rationalizing higher education spending and helping channel more resources into basic and secondary education; and (iii) strengthen the institutional base and help the Government to overcome difficulties of introducing reforms in a highly complex sector. This project will assure the consolidation of initiatives and reforms already undertaken by the SUP. Furthermore, it will establish permanent mechanisms which will ensure sustainable improvement of the higher education system.  -4- 10. Project Objectives. The main objective of the project is to establish a more competitive environment for the improvement of higher education and provide, through a transparent funding mechanism, the appropriate incentives for continuous educational efficiency gains, and quality enhancement. The project would support the implementation of legal, management, and administrative reforms recently initiated by SUP in the university system. 11. Project Description. The project consists of two components: (a) institutional strengthening; and (b) a competitive funding mechanism to improve educational quality (Fondo de Mejoramiento de la Calidad -- FOMEC). (a) Institutional Strengthening (13 percent of total project costs). The project would strengthen higher education institutions by: (i) improving the planning and management capacity of SUP; (ii) establishing an evaluation and accreditation mechanism (Comisi6n Nacional de Evaluaci6n y Acreditacion Universitaria -- CONEAU), which in five years aims to process 950 requests for accreditation of graduate programs, evaluate 75 university programs and train 130 evaluators; (iii) developing an information system on university performance at the national level linked with the statistical system of each university, and improving the budget allocation between universities through the introduction of a formula based on efficiency and equity parameters; and (iv) creating a network system between universities for the exchange of scientific, technical and library information. The project would finance technical assistance and studies, training, information equipment, office technology, and the salaries of peer reviewers. (b) FOMEC (87 percent of total project costs) is a policy instrument of SUP that would finance quality and efficiency improvement in universities through a competitive and transparent selection process. FOMEC has two major objectives: (i) in basic sciences and engineering it would provide resources to improve the quality of the academic program as a whole, linking the provision of inputs such as scholarships (1200); visiting professors (376 months); training (2,500 months); laboratory and teaching equipment (1,100 units) and rehabilitation of libraries to curriculum changes and efficiency improvement at undergraduate and graduate levels; and (ii) in humanities, social sciences, and health sciences, it would improve the quality of teaching staff by consolidating graduate programs and creating an environment conducive to research through the provision of scholarships (2,420); rehabilitation of libraries (60); and visiting professors (275 months). The allocation of funds will be based on priorities, selection criteria, and operational indicators incorporated in an Operational Manual. To be eligible for FOMEC funding, graduate programs would need to be accredited by CONEAU. This will help create, in each discipline, a limited number of high-quality programs (about 200 out of 767 existing graduate programs), supported by a critical mass of well-trained staff and state of the art equipment, serving as models for the rest of the system. An International Supervision Committee (Comite Internacional de Seguimiento - CIS) will annually evaluate the results achieved by the subprojects financed and review  -5- the performance of FOMEC and, in particular, the objectivity of selection procedures. Its report would serve as a basis for joint decisions by SUP and the Bank on further courses of action during implementation of the project. 12. Project Cost and Financing. The total cost of the proposed project is estimated at US$273 million equivalent, including contingencies. The foreign exchange costs are estimated at US$97.2 million, or about 36 percent of total project cost. The proposed loan of US$165 million equivalent will finance 60 percent of total project cost. It will cover 80 percent of consultant services, studies, and visiting professors; 60 percent of scholarships and training; 70 percent of equipment, laboratories and libraries; and 50 percent of small infrastructure rehabilitation (see Schedule A). Project operating expenditures of US$19.3 million are fully supported by SUP. For the institutional strengthening component, counterpart funding will come from SUP's budget. For the FOMEC component, counterpart funding will come from the budgets of participating universities set aside on a monthly basis by SUP. Project costs include the refinancing of amounts disbursed under the US$862,000 Project Preparation Facility on January 10, 1994 (P233-0-AR), extended by US$400,000 on May 11, 1995, and any accrued interest thereon. To facilitate timely project implementation, the SUP would establish, maintain, and operate, under terms and conditions satisfactory to the Bank, a Special Account in US dollars in a commercial bank. The Special Account would be established with an initial deposit of US$10 million, equivalent to the average four-month project financing requirement. 13. Project Management and lmplementation. Project implementation would be carried out by a Project Implementation Unit (PIU) consisting of 15 staff within the newly established organizational structure of SUP. The PIU is an extension of the Project Preparation Unit created by Presidential Decree in April 1994 to manage the Project Preparation Facility (PPF). The PIU is under the direct responsibility of the National Director of Finance and University Information, who was appointed in September 1994 for five years. The Project Coordinator has already been selected in consultation with the Bank. Each of the universities selected for participation in the FOMEC program would designate a counterpart to oversee project execution and administration and liaise with the PIU. The PIU would liaise with the Bank and other agencies and universities and would be responsible for procurement, monitoring and oversight, administration, and financing. FOMEC would be managed by 18 permanent staff belonging to SUP; an Operational Manual including the organizational structure and selection process and criteria was reviewed and agreed during negotiations. CONEAU would be managed by 24 permanent staff; evaluation and accreditation procedures have been published and sent to the universities. During negotiations, it was agreed that an annual progress review, Mid-Term Project Implementation Review, and an implementation completion review would be carried out based on key indicators for project monitoring and evaluation. An annual audit of the project, a financial audit of FOMEC accounts, and a physical audit of the subprojects financed through FOMEC would be carried out by a firm acceptable to the Bank no later than six months following the  -6- close of each fiscal year. The Auditorfa General de la Naci6n (AGN) would be responsible for reviewing the audit plan, supervising the audit of project accounts, and audit reporting. The project completion date would be December 31, 2000 and the project closing date would be June 30, 2001. 14. Project Sustainability. Operating costs, which represent only 4.7 percent of total project cost, would be supported by the SUP. Most of the permanent staff who will be involved in the management of the project are part of the new organizational structure of SUP (which includes 192 staff). To ensure the financial sustainability of FOMEC, SUP has allocated to FOMEC US$70 million, representing the FY95 university budget share devoted to the incentive program for teaching staff to undertake research. The objective is to make FOMEC a permanent funding mechanism by progressively increasing the annual share of national funding, from US$70 million in FY95 to US$130 million at the end of the project. The institutional stability of the project has been assured by the formal establishment (by decree) of FOMEC as of March 23, 1995. In addition, by allocating a share of the federal budget to each university on a monthly basis, SUP will be able to link FOMEC financing to the availability of counterpart funding. 15. Lessons From Previous Bank Involvement. The higher education reform process and the proposed project are in line with the World Bank publication Higher Education: The Lessons of Experience.' This report recommends increasing the autonomy and accountability of universities, diversifying institutions and resources, allocating a greater share of public funding through competitive mechanisms and tational criteria, and enhancing the quality of training and research. The design of FOMEC includes the experience of similar higher education projects in Tunisia, Romania, Indonesia and the implementation of two Science Research and Training Projects in Brazil. In addition, the project incorporates lessons learned in recent lending operations in Argentina's social sectors, including the Social Sector Management Technical Assistance Loan (Loan No. 2984-AR), the Maternal and Child Health and Nutrition Project (Loan No. 3643-AR), and the Decentralization and Improvement of Secondary Education Project (Loan No. 3794-AR). To increase ownership and facilitate project implementation and disbursement, much attention has been given in the preparation process to institution building and simplification of project design. More specifically, allocations to FOMEC are fully reflected in SUP funding policy, and the institutional component is designed to support the implementation of FOMEC. 16. Agreed Actions. During negotiations, the Government provided to the Bank: (i) the decision establishing the National Commission for Accreditation (CNA); (ii) confirmation of the methodology and criteria to be used in the accreditation process to classify graduate studies; (iii) the decree establishing FOMEC; (iv) the final version of FOMEC's Operational 1. World Bank Policy Study, 1994.  -7- Manual; (v) the final version of the Policy Letter on Higher Education; (vi) the decision appointing, within SUP, the full-time project coordinator in charge of the PIU; (vii) confirmation that limited international bidding (LIB) and national competitive bidding (NCB) would be carried out using approved standard bidding documents; and (viii) confirmation of the monitoring and evaluation process including selection of key indicators for project performance. 17. The following are conditions of Loan Effectiveness: (i) establishment and staffing of PIU under terms of reference and procedures satisfactory to the Bank (para 2.18); (ii) establishment of CONEAU and nomination of the members of the Executive Council with qualifications and experience satisfactory to the Bank (para. 2.6); (iii) establishment of FOMEC and nomination of the members of the Executive Council with qualifications and experience satisfactory to the Bank (para. 2.11); (iv) submission of a subproject agreement satisfactory to the Bank to be signed between SUP and the universities which would be funded by FOMEC (para. 2.11 ); and (v) adoption of a formula, satisfactory to the Bank, for the allocation of budgetary resources among the national universities and of a plan, also satisfactory to the Bank, for the implementation of such allocation. 18. Environmental Impact. The project does not present environmental risks and has an environmental rating of "C." 19. Poverty Category. The project would have no direct impact on poverty alleviation. However, the resulting efficiency gains from the reform of the financing system could reduce the growth of public higher education expenditures, and therefore contribute to an overall environment in which more resources are available for secondary education -- an area where major inequities between economic classes are encountered. 20. Program Objective Categories. Within the broad category of human resource development, the project's objectives are to improve quality and efficiency in higher education. 21. Participatory Approach. During the preparation process, professors actively participated, through scientific committees, in the studies to identify quality issues and needs in each discipline. In addition, CIN and CRUP, which represent public and private universities, have been fully involved in key decisions at each stage of project design. 22. Expected Benefits. The project would provide significant inputs to consolidate difficult sector reforms. It would improve the efficiency and quality of the university system by: (i) increasing the transparency and accountability of resource allocation and use; (ii) introducing more competition among universities in gaining access to funds for research and teaching activities; (iii) promoting the restructuring of the post-graduate level by strengthening, in each discipline, a limited number of centers of excellence with a critical mass (about 200 out of 767 graduate programs); (iv) training about 3,000 professors (increasing by 50 percent the current  -8- potential with Ph.D. degrees), as well as increasing teaching staff mobility; and (v) providing laboratory and teaching equipment corresponding to 40 percent of potential needs. 23. Risks and Safeguards. The first risk concerns the implementation of the legal framework for reforms which supports the project. Political tensions are traditionally high in the university sector and universities are autonomous institutions that usually resist change. This risk has been minimized recently and should not directly affect the implementation of the project. First, the legal framework as well as the project content has been largely discussed by the Government through an intense public debate. Since 1994, the Government has shown a strong and constant commitment to the reform process, demonstrated by the adoption of the Higher Education Law by the Chamber of Deputies on June 7, 1995. There is also a consensus among rectors on the objectives and major components of the project, and CIN and CRUP, which have been fully involved during the preparation process, will be represented in the institutional structure of CONEAU and FOMEC. Second, this new legal framework confirms and fosters changes which have already taken place in the higher education policy and in some universities: (i) the autonomy of universities was confirmed in the Constitution adopted in August 1994 and the 1995 budget law; (ii) private university development was liberalized by a decree in 1993; (iii) the 1992 financial administration law authorizes universities to diversify resources; (iv) some universities, through foundations or "cooperadoras," are already collecting student fees and contracting with enterprises; these resources represent US$100 million or 6.6 percent of their total income; (v) the evaluation and accreditation system is already being implemented by the CNA; and (vi) about 25 percent of public universities are currently implementing an admissions procedure for entry into undergraduate programs. 24. The second risk concerns the fact that FOMEC is a new institution. In order to minimize the risk of irregularities in the selection of sub-projects and funding procedures of FOMEC: (i) an annual physical and financial external audit would be undertaken; (ii) once a year, CIS would evaluate the results of FOMEC operations and their impact on quality and efficiency improvement in universities; review the institutional performance of FOMEC; verify the transparency and objectivity of the selection procedure; and formulate concrete recommendations; and (iii) a Mid-Term Review would define, if necessary, any changes in financial and institutional arrangements.  -9- 25. Recommendation. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank, and recommend thai tihe Executive Directors approve it. James D. Wolfensohn President Attachments Washington, D.C. June 12, 1995  -10- Schedule A ARGFNTINA HIGHER EDUCATION REFORM PROJECT SUMMARY COST TABLEa (US$ '000) Local Foreign Total % of Total % Foreign COMPONENT Base Cost Exchange A) INSTITUTIONAL STRENGTHENING 1) Planning and Management 1,243 974 2,217 0.8 44 Capacity of SUP 2) National Commission for 8,743 1,531 10,274 3.8 15 University Evaluation and Accreditation 3) Information and University 2,214 4,777 6,991 2.6 68 Budget Allocation System 4) Interuniversity Network (RIU) 492 1,313 1,804 0.7 73 5) FOMEC Management 5,310 135 5,445 2.0 2 6) Project Management (PIU) 4,049 70 4,119 1.5 2 Sub-total 22,050 8,799 30,849 11.5 29 B) FOMEC 1) Basic Sciences and 85,027 79,473 164,500 61.1 48 Engineering 2) Humanities, Social Sciences, 65,677 8,250 73,927 27.5 11 Health Sciences, Graduate Education Sub-total 150,704 87,723 238,427 88.5 37 Total BASE COST 172,755 96,522 269,276 100.0 36 Physical Contingencies 171 348 519 0.2 Price Contingencies 2,820 386 3,205 1.2 Total PROJECT COSTS 175,745 97,256 273,000 /a Figures may not add due to rounding.  -11- Schedule A ARGENTINA HIGHER EDUCATION REFORM PROJECT COST BY CATEGORY (US$ Million) Category Local Foreign Total % of Total % of Cost Foreign Exchange Consultant Services v Technical Assistance & Studies 16.6 2.1 18.7 6.9 11.4 Visiting Professors, Peer 13.3 0.8 14.1 5.2 6.0 Reviewers, and Training Consultants Scholarships and Training 105.8 14.7 120.5 44.1 12.2 Equipment and Furniture 1.7 14.4 16.1 5.9 89.7 Libraries, Laboratories and 13.2 64.7 77.8 28.5 83.1 Materials Small Infrastructure 0.7 0.0 0.7 0.2 0.0 Rehabilitation Incremental Recurrent 11.6 0.6 12.2 4.5 4.4 Expenditures Project Operating Expenditures 12.9 0.0 12.9 4.7 0.0 Total h 175.8 97.2 273.0 100.0 35.6 a/ Includes travel and per diem b/ Figures include contingencies, and may not add due to rounding. FINANCING PLAN (US$million) % Financing Govt (SUP) Govt(SUP) CATEGORY TOTAL Universities Bank Loan Univers. IBRD Loan Consultant Services and Studieseb 18.7 3.7 15.0 20 80 Visiting Professors 14.1 2.8 11.3 20 80 Scholarship / Training 120.5 48.0 72.5 40 60 Equipment and Furniture 16.1 4.8 11.3 30 70 Libraries, Laboratories, and 77.8 23.2 54.6 30 70 Materials Small Infrastructure Rehabilitation 0.7 0.3 0.3 50 50 Incremental Recurrent 12.2 12.2 0.0 100 0 Expenditures Project Operating Expenditures 12.9 12.9 0.0 100 0 Total 273.0 108.0 165.0 40 60 /a Figures include contingencies. /b Includes travel and per diem.  -12- Schedule B ARGENTINA HIGHER EDUCATION REFORM PROJECT SUMMARY OF PROPOSED PROCUREMENT ARRANGEMENTS"' (in US$ million equivalent) Procurement Method Total Project Element ICB NCB Other N.B.F. Cost 1. Technical Assistance Consultant Services and Studieseb 18.7 18.7 (15.0) (15.0) Training and Visiting Professors 14.1 14.1 (11.3) (11.3) 2. Scholarship and Teachers Training 120.5 120.5 (72.5) (72.5) 3. Goods Computers and Office Equipment/ 11.00c 11.0 (7.7) (7.7) Furniture 3.6 1.5 5.1 (2.5) (1.1) (3.6) Libraries 3.1 7.2 10.3 (2.2) (5.1) (7.2) Laboratories and Materials'd 8.1 59.4 67.5 (5.7) (41.7) (47.4) 4. Works: Minor Rehabilitatione 0.7 0.7 (0.3) (0.3) TOTAL 8.1 6.7 233.1 247.9 (5.7) (4.7) (154.6) (165.0) ICB = International Competitive Bidding NCB = National Competitive Biding N.B.F = Amounts not financed by the Bank. /a Total includes taxes and contingencies. Amounts in parentheses represent Bank financing. /b Includes travel and per diem. /c Computers and office equipment for a total amount of US$4.4 million would be procured through Limited International Bidding (LIB) and US$6.6 million through local or international shopping. /d Laboratories and materials for a total amount of US$32.4 million would be procured through LIB and for a total amount of US$27 million through local or international shopping. /e Minor rehabilitation works would be procured through local shopping.  -13- Schedule B ARGENTINA HIGHER EDUCATION REFORM PROJECT ALLOCATION AND DISBURSEMENT OF IBRD LOAN Amount of the Loan Percent of Category Allocated (US Dollar Expenditures Equivalent) to be Financed Consultant Services (Tech. Assistance, Studies, 23,000,000 80 Training and Visiting Professors)' Scholarships and Training Expenditures 67,500,000 60 Office Equipment and Fumiture 9,000,000 70 Libraries, Laboratories, and Materials 49,500,000 70 Minor Works 300,000 50 Refinancing of PPF 1,262,000 100 Unallocated 14,438,000 Total 165,000,000 la Includes travel and per diem. ESTILATED IEBRD LOAN DISBURSEMENTS (US$ million) FY96 FY97 FY98 FY99 FYOO Annual 28.0 42.0 44.0 35.0 16.0 Cumulative 28.0 70.0 114.0 149.0 165.0  -14- Schedule C ARGENTINA HIGHER EDUCATION REFORM PROJECT Timetable of Key Project Processing Events a) Time taken to prepare: 10 months b) Prepared by: Secretaria de Politicas Universitarias c) First Bank Mission: January 1994 d) Appraisal Mission Departure: November 1994 e) Negotiations: March 1995 f) Planned Date of Effectiveness: November 1995 g) List of Relevant PCRs and PPARs: Not applicable  -15- Schedule D THE STATUS OF BANK GROUP OPERATIONS IN ARGENTINA STATEMENT OF BANK LOANS (as of March 31, 19S6) lUSS million) Loan Fiscal AMOUNT ClaBs UNDIS8URSED Number Year Borrower Purpose eancellational Fully disbursed loarn (42) 6,033.3 0.0 of which SAL/SECAL/Debt Reduction loans: 2675 1986 Argentina Agriculture Sector 360.0 2815 1987 Argentina Trade Policy 496.0 2996 1989 Argentina Trade Policy II 300.0 3291 1991 Argentina Public Enterprise Reform 300.0 3394 1992 Argentina Public Sector Reform 326.0 3565 1993 Argentina DOSR Support 460.0 3658 1993 Argentina Financial Sector Adjustment 400.0 2641 1988 Argentina Water Supply 44.8 8.S 2864 1987 Argentina Power Distribution 276.0 84.9 2920 1988 Argentina Municipal Development 120.0 10.1 2984 1 98S Argentina Social Sector 28.0 0.1 3280 1991 Argentina Provincial Development 200.0 141.1 3281 1991 Argentina Water Supply 100.0 92.8 3292 1991 Argentina PEREL 23.0 1.3 3297 1991 Argentina Agricultural Services 33.5 13.9 3362 1991 Argentina Pub Sectr Raform T.A. 23.0 7.9 3460 1992 Argentina Tax Administration II 20.0 4.6 3520 1993 Argentina Yacyreta II 300.0 28.1 3521 1993 Argentina Flood Rehab 170.0 62.7 *3558 1993 Argentm Pub Entrprie Ret II 300.0 0.03 3611 1993 Argentina Road Maintenance & Rehab 340.0 245.8 3643 1994 Argentina Maternal & Child Health 100.0 86.4 3709 1/ 1994 Argentina Capital Markets 500.0 600.0 3710 1994 Argentina Capital Markets TA 8.5 7.8 3794 21 1995 Argentina Secondary Education I 190.0 190.0 *338 1996 Arge9mna Provincial Reform 300.0 240.0 3860 2/ 1995 Argentina Municipal Development II 210.0 210 .Q TOTAL 8,320.0 of which has boen repaid 2,481.8 TOTAL NOW OUTSTANDING 6,838.2 AMOUNT SOLD 12.8 of which has been repaid 12.8 TOTAL NOW HELD BY BANK AND IDA 5,825 .4 TOTAL UNDISBURSED 1,938 0 *Dibursing SECAL, SAL or Debt Reduction Loen 1/ Not yet effective 21 Not yet signed. 10.Apr-95  -16- ARGENTINA STATEMENT OF IFC INVESTMENTS as at M,ch 31. 19C5 (US8 AilSotie) Ongiil Groa Commitmnent Hold Held by Undsbure.d FriJ YeW IFC IFC Pertici- by Partic- Orlduding Cornmittd Oblimgc Type ot Businea Loon Equity pant Toti If C pants Porbcipeits) I940/95 Acin=ar SA. Stool Products 27.94 - 20.73 48.87 25.00 - 15.00 1960 al PaseieraFiaPatanaS.A. Pulp and Paper 3.00 - - 3.00 - - 1941 al Fadosa SA. Mtor Veh. & Acessories 1.23 - 0.28 1.50 - - 1982 al Pasa SAIC Petrochemicais 3.05 - - 3.05 - 1985/72 a/ Ciulosa Argentna Pulp and Papr 8.25 - 4.25 12.50 - 1989 al Editorial Codex SA. Prinrng and Publishrig 5.00 1.80 0.40 7.00 - 1989/75 al Oalmir. Siderc SAIC Iron and Stel 14.75 _ 2.25 17.00 - 1971173 al Calera Avelian.da SA. Cement 5.50 - - 5.50 - 1977/84/88/8a Alpargats SAIC TextilesandShoes 82.93 5.00 38.50 104.43 34.22 29.00 1977/85 al Soyex SA. Food and Food Process 21.00 - - 21.00 - - 1978/81/182J87/93/94 Juan Minetti S.A. Cemnt 44.00 - 87.50 111.50 9.51 9.29 1978185/S718S191 al MassunSA. PulpandPapor 25.85 4.25 3.00 32.90 - - 1979/82/87/92 al Ipako SA. Petochemicals 21.00 1.15 9.00 31.15 - - 1979/43J44 at Alp-sca SA. Food & Food Process 5.20 1.81 - 8.81 - - _ 1984/88 Petrocuimica Cuyo SA. Chemicais & Petrochem. 21.00 4.00 21.09 48.09 3.52 4.25 - 1988 a/ AtanorSA. Chemicals 7.00 1.00 - 8.00 - - 19St Ropas JS dicr Capitl Markets - 0.05 - 0.05 0.05 - 1 9a/87 SadicLr Capitai Markets - 2.00 - 2.00 0.43 - - 198i8 RCB-Cattoini General rmnnuiuturng - - - 0.00 0.18 - 1988 ROB-Benvenuto Food & agribusines - - - 0.00 - - 1988 ROB-Boidt Triber pulp & paper - - - 0.00 - - _ 194O ROB-Clayv Phast General manultactung - - - 000 - - 1988 ROB-Cuyo Generalmanufacurvng - - - 0.00 - - 1988 ROB -Gaverants lndustrl services - - - 0.00 - - 1988 ROB-KLhukol Cement - - - 0.00 - - 1988 ROB-Labelcor Food &agribusinem - - - 0.00 - - 19S5 ROB-Longvi. Generai manufacturing - - - 0.00 0.90 - 1988 ROB-Pilr General marnurfacturig - - 0.00 0.19 - 1t984 ROB-Sudamericana lndustrii equipment - - - 0.00 0.21 - 1988 ROB-SLUrsula Food &agribusenss - - - 0.0W - - _ 19Sti ROB-Stani Food &agribusineu - - - 0.M - - 19Si ROB-T age Industrial swrvic - - - 0.00 - - 1 98 ROS-Di-no Timber. pulp & papt - - - 0.00 0.09 - 1968 ROB-Piedra Mining - - - 0.00 0.06 - 1 988/89/91/95 Banco Robert SA. Capill Mwkott 48.00 - - 48.00 20.00 - _ 1987 ad Garov%glio y Zorraquin General Manufacturing 13.00 - - 13.00 - - 1987/90 Hira Oil Crude Patol. & NaL Gas 80.00 - 27.80 107.e0 0.38 1987190/91 Terminal 8 SA. Port Facilities 12.50 0.00 0.00 12.50 5.00 - 198a al Asta CAPSA Linderao Energy 12.38 - - 12.38 - - 1944 al Bridcas SA.P.I.C. Energy 20.83 - - 20.83 1988 Ajcor SAiC Gnert iManufaciiring 12.00 - - 12.00 1.00 - 1988 SGN-Colortix Txetiits - - - 0.00 0.33 - 1 g98 BGN - Es5ela General Manufacturing - - - 0.00 - - 1948 BGN-Intwrpack Timber,pulp& papr - - - 0.00 0.50 - 1988 BGN-Noro-st- Food &,agibusineus - - - 0.00 0.17 1988 aGN-Cilss Textiles - - - 0.00 0.07 - 1948 BGN-Moldoad 7Timber-pulp & paper - - - 0.00 0.33 - 1998 BGN-OttlImologic Timber-pulp&p per - - - 0.00 - 1984 BGN-San Sebastian Food & agribusines - - - 0.00 0.33 - 1988i BGN-Tovycom Industrial equipment - - - 0.00 0.10 1998 BGN-Valley Food &aribusiness - - - 0.00 0.17 1988 BGN-Vandenfril Textiles - - - 0.00 0.17 19884/9 BGN-Fiichman General Manutacturing - - - 0.00 0.43 1988/89 Banco General de Negocios AL 0ev. Finance 20.00 - - 20.00 - 1988(92 a/ ChireteOil Chemicals&Potochem. - 8.a2 - e.82 - 1988/92 Bano= Rio do La Plati Caprain Mwkets 50.00 - - 50.00 32.00 - 7.53 1948/93/94 Buns y Born Food and Food Process 83.00 - 57.50 120.50 19.00 57.50 - i94Et/93 BGN-Longvie General manutfcturing - - - 0.00 0.13 - 1989 a] Argorone lnvestwnnt Company Securities/Financuillnst. - 2.00 - 2.00 - - 1989 ay Chihuroi Petroleum Energy - 4.98 - 4.98 - - 1989 Banco Frances Dev. Finarce 15.00 - - 15.00 10.91 - 1989 ROB-Carboclor Chemicals & ptrochem - - - 0.00 0.14 - 1989 BGN -Concosud Industul servces - - - 0.00 0.33 - 1989 ROB-Ciervos Food & agribusinea - - - 0.00 - - t949 ROB-Comesi General manuftcturng - - - 0.00 0.75 - 1989 ROB-Maleic Chemicails & peruochem - - - 0.00 - - 1 989 ROB -M41teria Food & agribusinew - - - 0.00 - 1989 Com. General do Inversones Financial Servics - 0.10 - 0.10 0.01 - 1989 RCO- racchia Industrial seces - - - 0.00 0.49 - 1989 ROB -'auril Chemicals & pefrochem - - - 0.00 0.28 - 1989 ROB-Int. Tlxbles - - - 0.00 0.75 - 1989 ROB-Masoprano Timber-pulp& paper - - - 0.00 0.10 - 1989 BGN-Pwrairna Chemicis&p troch-m - - - 0.00 1.25 - 1989 BGN-Pastoril Food & agribusiness - - - 0.00 0.36 - - 1989 BGN-Genaro Food &agribusnem - - - 0.00 1.38 - - 1989/92 A tra CAPSA Energy 50.00 - 43.00 93.00 24.80 28.87  -17- ARGENnNA STATEMENT OF IFC INVESTMENTS ae of March 31. I99 (USS iStiions) OnrgiuJ Gross Commitmnent Held Hold by Undiubased Ftrcj Ye_r IFC IFC Partici- by Partici- (including Committed Obligor Type of Business Lo n Equity pPr Tobi IFC pana Participanl) 1989/93 BGN-Bolhanz Tourisn - - - 0.00 0.40 - - 1990 BGN-Algodonera Textiles - - - 0.00 0.54 - - 1990 Corporacion de Inversiones y Prvatacion SA Financial Services - 0.08 - 0.08 0.08 - - 1990 BGN-Frogotoba Food &a gribusines - - - 0.00 0.25 - - 1990 SGN-Willmor Food & agribuszness - - - 0.00 1.38 - - 1990/95 Petroken Petroquimica Chemicais & Petrochem. 40.00 - 11.00 51.00 35.87 7.33 10.00 1991 Banco oe CreditoArgenbno Financial Services 10.00 - - 10.00 7.14 - 1991 ROB-Guiltord Textiles - - - 0.00 0.47 - - 1991 ROB-Jugos Fod &Aqribusiness - - - 0.00 0.33 - - 1991 ROB-interpack Timber.pulp & paper - - - 0.00 1.00 - - 1991 ROB-Surfacan Chemicals& peiochem - - - 0.00 0.21 - - 1991 BGN-TdR Industral equipment - - - 0.00 0.38 - - 1992 Frigorifto Riopiatense Fod &Agibusiness 12.00 1.00 8.00 19.00 10.33 5.00 2.00 1992 MBASoc:edadde olsaSA CaprilMarkebs - 0.18 - 0.18 0.18 - - 1992 Oleaginoes Cest. Sunflower Seed Agribus. 20.00 - 15.00 35.00 18.93 12.50 1992 Polisur SM Chemicals & Petrochm. - 7.00 - 7.00 7.00 - 1992(93 Petolera Argentna San Jorge Energy 15.00 27.00 35.00 77.00 40.75 32.08 2s.18 1993 Ate Param S.A. 7imber pulpand paper - - - 0.00 19.47 - 1993 Bruics SAPIC Enwrgy 35.00 15.00 60.00 110.00 50.00 55.00 - 1993 CadipsaSA. Energy 15.00 5.00 20.00 40.00 20.00 13.00 9.20 1993 BGN-Capri Food& agribusiness - - - 0.00 1.00 - - 1993 ROB-Emprigas lndustralservices - - - 0.00 1.13 - - 1993 Fertoexpresc Pampeano SAC Industal Equipment 13.00 - 20.00 33.00 13.00 18.53 4.80 1993 ROB-Alimentcia Food & agribusiness - - - 0.00 0.83 - - 1993 Ma-twra Pamma S.A. Food & Agribusiruss 12.00 - 12.00 24.00 12.00 12.00 1993 RO8-M*ndoz General manufacturing - - - 0.00 1.13 - - 1993 Nuevo Cental Argentino SA Railroad Equipment 10.00 3.00 15.00 28.00 13.00 - - 1993/94 Molinos Rio de La Plata Food & Agribusinsa - 3.00 - 3.00 7.2 - - 1994 Banco General de Negocios Dev. Finarce 15.00 - - 15.00 15.00 - 1994 Cerveasy Maiteriwiu Ouiies Food & Agibusiness 15.00 - 15.00 30.00 15.00 15.00 194 CIA Gen Comoustible Crude Petoleum 25.00 15.00 40.00 80.00 40.00 40.00 - 1994 Empresa Distibuidora lndustal Services 45.00 - 1 28.00 173.00 45.00 128.00 - 1994 Quital Chemicals & Petochem. - - - 0.00 - - - 1994 BGN-Fertum Cement&constuemat - - 0.00 1.50 - 19t4 Masisa-Argentna SA. Forest Products 11.00 - - 11.00 11.00 - 1994 Arg.Equity Investnert I Limited Financil Srvices - 4.00 - 4.00 4.00 - 1994 Yacylec Industrl Serfices 20.00 - 45.00 65.00 20.00 45.00 - 1995 Aceitera Food & Agribusiness 15.00 10.00 15.00 40.00 25.00 15.00 15.00 1995 MastelloneHerHmanos SA. Food &Agribusirnss 40.00 - 35.00 75.00 40.00 - - 1995 Mxima S.A. AFJP Financial Srvices - 10i1g - 10.19 10.19 - - 1995 La Buenos Aires Vida Financiai Services - 2.89 - 2.89 2.89 - 0.71 1995 La Buencs Aires Retito Financia Services - 1.17 - 1.17 1.17 - 0.53 1995 Kleoppe/Caldwro Food & agribusiness 800 - - 8.00 8.00 - - 1995 Aguas Infrastucture 38.00 7.00 134.50 179.50 45.00 134.50 52.95 1995 Companua ELaboradora de Produc.os Alimentcies S.A. Food & agribusines 15.00 - 8.00 21.00 15.00 6.00 - 1995 Robens Argentina Investment Capifal Fund (AICF) Financza Sevices - 20.00 - 20.00 20.00 - 17.73 1995 Robwts Argentina lnvestrnert Fund Manager Financal Srvices - 0.15 - 0.15 0.15 - 0.13 1995 Soema Holding Company 24.99 15.00 60.01 100.00 39.99 - 24.99 1995 Cade" Suprrm ktt 28.00 - - 28.00 28.00 - 20.00 Totl Gnas Commitnum bl 115.t9t 181.00 965.81 Z299.60 Less: Cancelations. Terminaions. Repayment & Sales 481.57 8.19 297.98 785.72 Toti Cominttbm Now Held cl 671.43 174.82 667.65 1,513.89 84.24 67.65 205.56 Pending Commitmenn: AECSA 20.00 - 61.00 81.00 Empresa 0istibuidora Industrul Seces - - 8.00 8 00 Gasinvest Intrasttucture - 20.00 - 20.00 Nahuelsat Intraucture 30.00 5.00 - 35.00 Sancor Food & agribusiness 20.00 20.00 30.00 70.00 Transconor Intrestucturt 25.00 - 80.00 105.00 Tucuman lnfra sucture - 0.30 - 0.30 sub-tltl 95.00 45.30 179.00 319.30 TotJ Crnmittirmni Held and Pending Commi1mnt 73e.43 2S.1 2 4a.65 1,A3.19 TobRi Undicizburd Commiinenna 92.02 44.23 8925 20S.S6 al Investm-en which have ben tuly cancetled. termirated. sirttn-otf. sold, redeemed or repaid. bi Grass Commirtments consist of approved and signed projeca. c/ Held Commrtm-ent consist of disoursed and undusbursed investmebit.    IMAGING Report No; P- 6529 AR Type: MOP