Peru - Privatization Adjustment Loan and Privatization Technical Assistance Loan

]Document of The World Bank FOR OFFI[CIAL USE ONLY Report No: 18052 IMPLEMENTATION COMPLETION REPORT PERU PRIVATIZATION ADJUSTMENT LOAN (LOAN 3595-PE) and PRIVATIZATION TECHNICAL ASSISTANCE LOAN (LOAN 3540-PE) Juine 23, 1998 Finance, Infrastructure and Private Sector Development Country Department LCC6C Latin America and the Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS June 23, 1998 Currency Unit = Nuevo Sol (S/.) US$1.00 = S/.2.94 ABBREVIATIONS AND ACRONYMS CENTROMIN Mining Company of Central Peru CEPRI Special Privatization Committee COPRI Comittee for Private Sector Investment CPT Peru Telephone Company EPAL Electricity Private Adjustment Loan ENTEL National Telephone Company FSAL Financial Sector Adjustment Loan IDB Inter-American Development Bank IMARPE Peruvian Marine Research Institute ITQ Individual Transferable Quotas OSIPTEL Supervisory Office for Telecommunications PTAL Privatization Technical Assistance Loan SEDAPAL Water and Sanitation Company of Lima TAL Privatization Adjustment Loan FISCAL YEAR January 1 - December 31 Vice President: Shahid Javed Burki Country Director: Isabel Guerrero Sector Director: Danny Leipziger Sector Leader: Susan Goldmark Task Manager: Jyoti Shukla  FOR OFFICIAL USE ONLY TABLE OF CONTENTS Page No. PREFACE. Evaluation Summary ................................................:i PART I: PROJECT IMPLEMENTATION ASSESSMENT A. Background .............................................. 1 B. Project Objectives and Design .............................................2 C. Achievement of Objectives ...... ....................................... .. 6 D. Major Factors Affecting the Project ..............................................9 E. Project Sustainability ............................................. 9 F. Bank Performance ...........................................................11 G. Borrower Performance .......................................................... 12 H. Assessment of Outcome .......................................................... 13 I. Operational Plan .......................................................... 15 J. Key Lessons Learned .......................................................... 16 PART II: STATISTICAL ANNEXES Table 1: Summary of Assessment ..................... ............................... 19 Table 2: Related Bank Loans/Credits .................................................... 20 Table 3: Project Timetable .................................................... 21 Table 4: Loan/Credit Disbuarsements: Cumulative Estimated and Actual .... 22 Table 5: Key Indicators for Project Implementation ................................. 23 Table 6: Key Indicators fo:r Project Operation ..................................... ....... 23 Table 7: Studies Included iin Project .................................................... 23 Table 8A: Project Costs .................................................... 24 Table 8B: Project Financing ................... ................................. 25 Table 9: Economic Costs and Benefits .................................................... 25 Table 10: Status of Legal Covenants .................................................... 26 Table 11: Compliance with Operational Manual Statements ........... ............ 26 Table 12: Bank Resources: Staff Inputs .................................................... 27 Table 13: Bank Resources Missions .................................................... 28 APPENDIX A Aide Memoire of the ICR Mission .......................................................... 29 APPENDIX B Contribution to the ICR of MEF - Privatization Adjustment Loan (3595-PE) .......................................................... 32 This document has a restricted distribuition and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  APPENDIX C I. Contribution of COPRI - Privatization Technical Assistance Loan .............. 57 (3540-PE) II. Privatization Transactions Under PTAL ..................................................... 69  i IMPLEMENTATION COMPLETION REPORT PERU PRIVATIZATION ADJUSTMENT LOAN (3595-PE) and PRIVATIZATION TECHNICAL ASSISTANCE LOAN (3540-PE) PREFACE This is the Implementation Completion Report (ICR) for the Privatization Adjustment Loan (PAL) and the Privatization Teclhnical Assistance Loan (PTAL) in Peru. The two loans are combined into one ICR as they had a common objective and were prepared, appraised, implemented and supervised primarily by the same project team in Peru and in the Bank. This approach of a joint IC:R for the two projects was endorsed by the World Bank's Operations Evaluation Department. This ICR was prepared by Stephen Ettinger (Consultant) and reviewed by Robert .R. Taylor and Jyoti Shukla (Task Managers), Susan Goldmark (Sector Leader, LCSFP), and Maria Victoria Lister (Quality Assurance Unit). The Aide Memoire of the Completion Mission is included as Appendix A. The Borrower contributed to preparation of the ICR by preparing separate 'evaluations of both projects' implementation, which are included as Appendices B (for the PAL) and C (for the PTAL). The Borrower has also reviewed the Bank's contribution to the ICR.  .. EVALUATION SUMMARY PERU PRVATIZATION ADJUSTMENT LOAN (3595-PE) and PRIVATIZATION TECHNICAL ASSISTANCE LOAN (3540-PE) 1. Introduction. This is the Implementation Completion Report (ICR) for the Privatization Adjustment Loan (PAL) in the amount of US$250 million equivalent and the Privatization Technical Assistance Loan (PTAL) in the amount of US$30 million equivalent. The PTAL was approved on December 10, 1992, and the PAL was approved four months later on April 20, 1993. The two loans are combined into one ICR because they had a common objective and strategy, and were prepared, appraised, implemented and supervised primarily by the same project team in Peru and in the Bank. This approach was endorsed by the World Bank's Operations Evaluation Department. 2. Project Objectives. The objective of both loans was "to support the privatization program and related sectoral policy, legal and regulatory reforms," in order to "promote competition and private investment, and contribute to improved fiscal performance and economic efficiency." The PAL established targets for both privatization and regulatory reform. The PTAL provided technical assistance support to achieve these targets by fiancing consultants and investment banks to assist COPRI, the privatization agency, in the sale or liquidation of state enterprises and the development of the regulatory systems for the main sectors involved. :3. These loans were made at a critical time in Peru, when it was beginning a profound economic and political transformation, and reentering the global economic and financial system. As such, in addition to their specific objectives, they also formed part of the wider strategy of supporting that broader transformation. Privatization was seen as particularly critical in the overall program, because it was considered to be one of the more irreversible of the reforms. 4. The privatization and sectoral reform objectives were clear, realistic, important and appropriate for Peru. They were in lirLe both with Peru's own economic strategy and with trends throughout the region and the world. The projects also correctly called for the sectoral reforms early in the process. Only in the case of fisheries, however, did the Bank err in setting sectoral reform as a disbursement condition for two tranches. 5. Implementation Experience and Results. Overall, the outcome of both loans is evaluated to be Satisfactory. Peru privatized much more than was required by the PAL (75% of the agreed agenda, as compared to the third tranche requirements of 30% offered for sale and 15% actually sold). It has also established sophisticated and relatively well-  iii functioning regulatory systems for public utilities in the telecommunications, electricity and water sectors, and management systems for key natural resource industries such as mining and hydrocarbons. Indeed, Peru's privatization experience ranks with those of Chile and Argentina as the success stories of Latin America. Not only was the process speedy and comprehensive, but it was also carried out in a relatively smooth and extremely transparent manner. 6. Achievements. The program has already brought major benefits to Peru. Enterprises which prior to privatization were losing $2.5 billion per year were sold for $7.5 billion, and mobilized a roughly equivalent amount of additional foreign investment in the subsequent five years. In only four years, the privatized telephone company has increased the density of lines from 2.9 to 7.5 per 100 people. Later sales of the Government's remaining shares in several companies have helped capital market development, and a program of soft credit for acquiring shares has broadened stock ownership to poorer Peruvians. Mining privatization has forced a clean-up of existing pollution, and the new foreign investors are adhering to higher international environmental standards. 7. Delays. Both loans did experience substantial delays, for different reasons. In the case of the PAL, the original timetable was extremely optimistic, given the complexity of the privatization process, and the many large and small state enterprises involved. This was anticipated by both the Government and the Bank at the time of loan approval, and was considered to be one way of maintaining pressure on the many actors involved. Additionally, there were major delays in two sectors, petroleum and fisheries, because of disagreements about (a) how to privatize Petroperu, and (b) what fisheries management system to adopt. The Petroperu issue was eventually agreed and resolved satisfactorily, but the fisheries dispute required waivers to be granted for the second and third tranches. 8. In the case of the PTAL, the main delay in disbursement was, ironically, the result of the program's success. In addition to the PTAL, COPRI's main source of revenue was a 2% share of the net sales proceeds from the privatizations. When the controlling 35% shares of Peru's two telecommunications enterprises were sold to Telefonica de Espafia for US$2 billion in February 1994, the immediate need to continue using Bank funds disappeared (as it was financially advantageous for COPRI to use its non-loan funds first). Eventually, COPRI was able to make good use of the remaining Bank funds, but on a much slower schedule. 9. Sustainability. Privatization is normally a hard reform to reverse. This should be especially true in Peru given the success of its overall economic reforms and its privatization program in particular. However, the increasingly negative public perception of privatization -- public support in Lima has dropped steadily from about 65% in mid- 1992 to 30% in early 1998- - has contributed to slowing down the program and to the changing of its objective from outright sales to a greater emphasis on concession contracts. The main reasons for this weakening of public support are the: (i) reduction in employment in the companies being privatized; (ii) increases in public sector tariffs which  iv resulted from adopting economic pricing principles; (iii) dominance in the electricity sector of Chilean companies; and (iv) poor public relations efforts of these companies. 10. At the same time, the Government has failed to counter these criticisms with adequate publicity in support of privatization and has even issued statements questioning whether some of the remaining SOEs should be privatized. Government's weakening support for privatization appears to reflect not only shifting public sentiment but also the cleparture of key Ministers who were the most active proponents of privatization, the end of the sense of crisis which made even radical and unpopular economic reforms palatable, and the absence of clear short-term lincages between privatization and Government's top priority of poverty reduction, given restrictions under the IMF program on Government's ability to spend privatization revenues. Continued progress and momentum on the policy for private participation in infrastructure will require much more pro-active dissemination of information on the benefits from privatization. If public opinion continues to worsen, it will significantly affect the pace and commitment to further privatization. I 1. Government's Performance. Overall, the Government's performance was extremely good in both of these projects, and is the main reason for their success. It established an effective and non-bureaucratic institutional structure for privatization, and showed imagination and flexibility in adding new elements in response to many perceived shortcomings. That not a single transaLction has been challenged on procedural or transparency grounds is a remarkable achievement. Sector reforms in hydrocarbons, telecommunications, mining and water have been equally strong, and effective regulatory frameworks and institutions are in place and functioning. The only exception to this was in fisheries, where until the past year, there was virtually no progress. The Ministry of Fisheries seemed unwilling even to have an open dialogue with the Bank, the industry and even other parts of the Government. The devastating El Nino of late 1997-early 1998 and its impact on fisheries contributed to a change in the Ministry's position on this issue. The Government's decision to use the UNDP's Lima office for disbursement and financial management also proved to be very wise. 12. World Bank Performance. The Bank's performance in the projects has also been very good, and this view is shared by almost all of the Peruvian officials. The Bank provided important technical, and financial support especially during the crucial early stage of the program, and continually sought solutions to resolve problems. Working relationships between the Bank and Government were unusually good and the Bank was appropriately flexible in extending closing dates and granting tranche-release waivers. 13. The Bank's main mistake was including the reform in the fisheries sector as a conditionality for tranche release. Relorm in this sector was not as clearly a part of the Government's own reform priorities and was included more at the behest of the Bank. Moreover, this sector was already in private hands, and reform required the gradual building of a consensus within the industry, a process inconsistent with trying to meet tranche-release deadlines. Not only was the inappropriateness of framing such a policy dialogue in this sector as a tranche condition not recognized at appraisal, but the issue was  v not revisited during implementation either. Though the Bank did eventually show some flexibility in addressing the fisheries issue by granting waivers to both the second and the third tranche release conditions, the discussions on this sectoral reform were long and complex, took a disproportionate amount of the time and attention of the supervision team and distracted from the overall objectives of the operation. 14. The Bank also substantially underestimated the cost of the PTAL. Fortunately, revenues available to COPRI from the privatizations also greatly exceeded estimates. Finally, the closing dates were set unrealistically, requiring substantial extensions in the project implementation periods. 15. Future Operations. With almost all of the smaller state enterprises sold or liquidated, with the telecommunications, fisheries and industrial sectors fully privatized, and with the mining sector privatization well advanced and on track, the remaining privatization issues mainly concern hydrocarbons, electricity, railroads and SEDEPAL (Lima's water and sewerage company). Of these, only hydrocarbons fell under this project. In addition to this privatization agenda, the Government is also currently implementing a substantial program of concessions in electricity transmission, telephony, ports, airports and roads to invite private participation in other infrastructure sectors and has requested a follow-up technical assistance loan from the Bank to support this process. Also, in April 1997 the Government requested Bank assistance to introduce private participation in SEDAPAL and expand its investment program. 16. Lessons Learned about Privatization. (a) Move very fast when a window of opportunity exists, because political opposition is quick to build once the moment of crisis is over. (b) Regulatory reform and the creation of a competitive market must go hand in hand with privatizations to attract investors, protect consumers, and maximize economic benefits. (c) It is easy to underestimate the cost and time needed for such complex transactions. (d) It is very important to pay adequate attention to public information and education right from the start, lest public resistance impede the process. (e) Top-level political support is critical for success. (f) It is important to tap into the knowledge and expertise from the private sector for such transactions and people from the private sector should be given key roles in the process. (g) Concessioning may be a useful compromise where sale is not possible politically.  vi (h) Concessioning may be a useful compromise where sale is not possible politically. 17. Lessons Learned About Bank Lending (a) Providing a TA loan alongside an adjustment loan is important both for facilitating information and for increasing other ministries' stake in the process. (b) It is more efficient to have one technical assistance operation that covers all privatizations rather than several sector-specific technical assistance operations. (c) Continuity in Bank and Government personnel is very beneficial, because, established relationships tend to be franker, more cooperative, and based on fuller information. (d) When implementation schedules are intentionally set very tight for motivational reasons, more flexibility should be allowed in setting and extending closing dates, so as not to create unnecessary work and tension. (e) The experience with the fisheries sector shows that adequate attention needs to be given to: (i) what is the most suitable management regime for a sector, (ii) who should have the right to decide; and (iii) the political economy of the initial distributional effects. (f) Use of UNDP or another procurement and disbursement agent can be an efficient way of avoiding bureaucratic delays in making funds available, especially where there are many small contracts, as in TA projects.  IMPLEMENTATION COMPLETION REPORT PERU PRIVATIZATION ADJUJSTMENT LOAN (3595-PE) and PRIVATIZATION TECHNICAL ASSISTANCE LOAN (3540-PE) PART I. PROJECT IMPLEMENTATION ASSESSMENT A. BACKGROUND 1. Economic Crisis. When President: Alberto Fujimori assumed office in August 1990, Peru was considered the "basket case" of South America. Its economy was in shambles, a cholera epidemic was threatening, and thwe "Shining Path" terrorist movement was gaining strength and expanding its grip from rural areas towards the capital. Peru's external debt was $22 billion, two-thirds of which was in arrears, and it was in default to the IMF, the World Bank and the Inter-American Development Bank (IDB). Inflation had reached an annualized rate of 36,000 percent, per capita income had dropped to the level of thirty years earlier, 75% of the labor force in Lima was unemployed or underemployed, and real wages had fallen by 60% over five years. 2. Impact of SOEs. One of the contributing factors to the economic decline was the performance of the state-owned enterprises (SOEs). These were largely the products of nationalizations of foreign-owned firms Iby Peru's military regimes during the 1960s and 1970s, and dominated the banking, telecommunications, water, electric power, hydrocarbons, mining, steel and other sectors. The SOEs had become increasingly inefficient and politicized, and were hampered by government regulations and low, controlled prices. By 1990, they were losing about $2.5 billion/year, much of which had to be covered by the budget. In addition, their inability to invest in and modernize basic infrastructure, especially telecommunications and electricity supply, was constraining development in the rest of the economy. 3. Economic Reforms. Although President Fujimori was not elected on an economic reform program, once he assumed office he took strong and comprehensive measures to reverse his country's slide. A series of stabilization measures in the areas of taxation, public expenditures, interest rates and exchange rate policy brought inflation down dramatically. For the longer term, a structural reform package was introduced, initially emphasizing trade liberalization and finencial sector reform, but quickly spreading to specific sectoral changes in energy, industry, agriculture, infrastructure and social services. 4. Motivation for Privatization. Privatization was not part of the initial set of reforms, but within a year the President was convinced of the need to launch a  2 comprehensive privatization program. Central to this was his recognition that Peru lacked the resources to make the necessary investments in the SOEs, especially in energy and telecommunications, where billions of dollars would be needed to bring the country up to regional standards. While many top Peruvian officials supported privatization on philosophical grounds related to the proper roles of the public and private sectors, others, apparently including the President, endorsed it on more pragmatic grounds. This distinction, however, was not important operationally, at least in the initial phases. The country was in crisis, radical measures were needed, and all major elements in the Government were in favor of privatization 5. Launching the Privatization Program. On September 25, 1991, Legislative Decree 674, the "Law for Promotion of Private Investment in State Enterprises," established the legal and institutional framework for privatization. It created the Minister- level Committee for Private Sector Investment (COPRI) as the privatization agency, with a COPRI secretariat, headed by an Executive Secretary in charge of day-to-day management. COPRI then established Special Privatization Committees (CEPRIs), in charge of individual enterprises or sectors being privatized. A single CEPRI was in charge of a sector such as telecommunications, where sectoral coordination was essential, but in other cases, such as mining, each major enterprise had its own CEPRI. 6. Bank Adjustment Lending. The Bank, the IMF and the IDB developed a joint strategy to enable Peru to clear its arrears with them and to get new money to support its ambitious reform agenda. The Bank approved five adjustment loans during 1992-94. The Trade Policy Reform Loan and Structural Adjustment Loan were disbursed in single tranches in March 1993, in conjunction with the clearance of arrears. The first tranche of the Financial Sector Adjustment Loan (FSAL) was also disbursed at that time. The Privatization Adjustment Loan (PAL) was the fourth of these adjustment loans. The PAL, the FSAL and the Electricity Privatization Adjustment Loan (EPAL) which followed were conditioned on an ambitious future program of actions--with privatization of state enterprises a central element in all three operations. The Privatization Technical Assistance Loan (PTAL) was designed to provide the technical assistance needed to accomplish reforms supported through the PAL. B. PROJECT OBJECTIVES AND DESIGN 7. Overall Objectives. The PAL and PTAL had common objectives: "to assist the Government in the preparation and implementation of its privatization program and related sectoral policy, legal and regulatory reforms. These measures would promote competition and private investment (domestic and foreign), and contribute to improved fiscal performance and economic efficiency."  3 8. PTAL Design. The PTAL financed consulting and related services in three areas: (a) to facilitate the operations of the COPRI secretariat and the CEPRIs, as these were temporary agencies whose employees were not regular civil servants; (b) to promote privatization amd private investment in Peru (e.g. by road shows to attract foreign investors), and to develop programs to assist laid- off workers from state enterprises; and (c) to assist with privatizations and related sectoral policy/regulatory reforms. Although the banking and electricity sectors were left out of the PAL (because they were being handled by the FSAL and EPAL, respectively), technical assistance for privatizing these sectors was included in the PTAL, so that COPRI would get its Bank financing for technical assistance from only one operation. 9. PTAL Cost and Financing. The Bank loan of $30 million equivalent was to be supplemented by ongoing and anticipated funds from Japan ($4.5 million project preparation grants), UNDP ($0.6 million general support and program evaluation), the Andean Development Fund ($1.0 million for mining and general support) and Canada ($0.5 million for fisheries privatization). Peru's own contribution, conservatively estimated at $6.8 million, was to come from the 2% of sales revenues allocated to COPRI. The total cost, estimated at $43.4 million, turned out to be less than half of the actual cost. Fortunately, COPRI's revenue from the sales also turned out to be way above estimates and insufficient financing did not become an issue. 10. PAL Conditionality. The $250 riillion equivalent PAL spelled out the privatization and sectoral reform objectives which this technical assistance was to support. The disbursement of the three tranches was then linked to progress in this reform program, summarized as follows:  4 Policy Area Effectiveness Second Tranche Third Tranche ($75 million ($75 million ($100 million equivalent) equivalent) equivalent) Macroeconomic & Underway Maintain Maintain overall reform Privatization Legal/institutional Offer for sale $450m Offer for sale (general) framework in place in assets, including $1,200m, including $275m from mining, $300m each from telecommunications mining & telecomm; & hydrocarbons Sell $600m. Privatization of Prepare agreed plan Offer for sale $300m Petroperu and timetable including 70% of , storage capacity La Hydrocarbons New law drafted Send draft law to Enact law & Sector Reform Congress regulations Mining Sector New law enacted Issue regulations Reform . Telecom. Sector New law enacted Prepare competition, Implement plan & Reform tariff& privatization issue regulations plan Water Sector Policy framework Send draft law to Enact law & Reform agreed under SAL Congress & draft regulations regulations Fisheries Sector Policy framework Send draft law to Enact law & Reform agreed under SAL Congress & draft regulations I_I regulations /a As agreed at second tranche. The laws and regulations were to be acceptable to the Bank. I1. The privatization objectives were clear, realistic, important and appropriate for Peru. They were in line both with Peru's own economic strategy and with trends throughout the region and the world. Privatization was an important part of Peru's fiscal strategy (both to eliminate SOE losses and to earn revenue), central to its emphasis on economic efficiency and private sector development, and was considered the most difficult reform to undo. The specific privatization targets were quite modest when compared to the Government's target of privatizing all the SOEs before the end of its five-year electoral mandate in 1995. Out of a privatization agenda totaling $4,135 million (in book value), which included the SOEs in all sectors except banking (which was already being handled under the FSAL), electric power (which was to be the subject of the Electricity Privatization Adjustment Loan -- EPAL) and railroads, only 30% had to be offered for sale by the third tranche, and only 15% had to be sold. The specific sectoral targets for mining and telecommunications were similarly low. These low levels reflected concerns that political, legal or administrative obstacles might delay the auctions, and that there  5 might be few interested buyers. The privatization process was recognized as being very demanding for a country that was just emerging from economic and political chaos. 12. The special privatization strategy for Petroperu was also appropriate, because at the time of negotiations, there was major disagreement about how and even whether to privatize Petroperu. Because this was such an important SOE, the Bank insisted that it be privatized, but rather than rush the decision about how to privatize it (i.e., whether to sell it en bloc or split it up in any of a number of ways), the Bank left this decision for the second tranche. 13. The sector reform objectives, except for that related to fisheries, were also appropriate. These reforms were necessary to create the sector structures and rules that would encourage competition and economic efficiency. The widespread recognition of the inefficiency of these sectors in Peru created the political environment that permitted comprehensive reforms. It was recognized that sector policies, laws and regulations should normally be in place before SOEs are privatized, so that private firms will have enough confidence in the sectoral framework to enter bids, and enough information to reasonably decide how much to bid. The PAL was therefore correct in calling for these laws and regulations to be drafted relatively early in the project (in most cases by second tranche), and in all cases enacted by third tranche. Telecommunications, mining, hydrocarbons and water were also the four largest sectors being privatized under the loan. For telecommunications and water, it was necessary to have regulatory frameworks that determined, inter alia, how prices were set, so as to protect consumers against monopolistic practices. For mining and hydrocarbons, the need was to establish rules, procedures and responsibilities for attracting private investment, assigning exploration and development rights, and ensuring Government a reasonable share of the rents from discoveries. 14. The case of fisheries, however, was quite different from these other sectors, and in retrospect the Bank erred in setting fisheries sector reform as tranche conditions. First, the fishing industry was already entirely in private hands (as was most of the fish processing industry). Thus, the linkage between privatization and sector reform was weak--unlike in the other four sectors covered, where reform was a precondition for efficient privatization. Second, despite the very general fisheries "policy framework" agreed under the SAL, the extent to which there was a clear and agreed policy direction was in fact considerably less in fisheries, than in the other sectors. Third, the sectoral data needed for policy formation were much. weaker. And finally, the main benefits of the fisheries reform advocated by the Bank--the adoption of an ITQ (individual, tradable quotas) system--were to accrue to the existing fishing industry itself (by reducing its fishing costs; prices were set by the world market, and catch limits were set on biological grounds). Thus, it was necessary, from a practical as well as a political perspective, to obtain the consent of the industry. And, given the large number of fishing companies, the differences in perspective and economic interest among them, and the novelty of the ITQ concept this would necessarily be a long process, quite inconsistent with the anticipated tranche-release timetable. In the Bank's eagerness to reform this important sector (second  6 to mining in export revenues), these crucial considerations were overlooked. In retrospect, the Bank should have limited its involvement in fishing to technical assistance under the PTAL, as a vehicle for initiating a sectoral dialogue. 15. Project Timetables. The first tranche was released upon loan effectiveness, in recognition of the substantial progress already achieved. Because Peru had set the target of completing the privatizations and related sectoral reforms before the July 1995 elections, June 30, 1995 was established as the closing date for the PAL. The closing date for the PTAL was set six months later, because of the lags involved in disbursing on a large number of consultancy contracts. These timetables were recognized as being tight, but were considered useful as a way of inducing faster implementation, as well as of showing confidence in Peru's ability to meet its privatization targets. But more allowance should have been made for the likelihood of delays. In particular, the PTAL closing date was quite inconsistent with the PAL tranche-release privatization targets, for if the Bank and Government were only confident that 30% of the privatization agenda would be offered for sale by the end of 1994, it was unrealistic to have assumed that the consultancy costs for all of the privatizations would be incurred by the end of 1995 (especially as 1995 was the election year). C. ACHIEVEMENT OF OBJECTIVES 16. Macroeconomic Reform. Though the adjustment program and Bank financing for it was conceived in a period of significant fiscal and external deficit, Peru has since adhered to its macroeconomic reform program, with excellent results. GDP has grown an average of 7 percent per annum over the past five years, the highest rate in Latin America, and by 1997 inflation was down to 6.5 percent, the lowest rate in the past quarter century. The ratio of investment to GDP rose from 18.6% in 1993 to 24.7% in 1997, the second highest in Latin America. The public sector deficit, even excluding privatization revenues, was reduced to zero, and net international reserves passed $ 10 billion. At the time of the disbursement of the last tranche in December 1997, Peru's internal and external balances had improved considerably but the last tranche disbursement assisted it in meeting the large and unanticipated expenditures for prevention activities related to an unusually strong El Nifio event in 1997-98, and allowed the country to continue to meet the targets under its Extended Fund Facility with the IMF. 17. Overall Privatization. Peru's privatization experience ranks with Chile, Argentina and Bolivia as the success stories of Latin America. Whereas the third tranche condition was for at least 30% (by book value) of the SOEs (excluding banking, electricity and railroads) to be offered for sale, and at least 15% actually sold, the actual achievement by end-1994 (the originally-anticipated date for the third tranche) was about 40% on both counts, and the individual third tranche targets for telecommunications and mining had also been exceeded. By the actual (early 1998) closing date, 75% of enterprises on the list had been offered and sold. The only important SOEs on the agenda which have not yet  7 been privatized are SEDAPAL (the Lirma water company), the oil pipeline and Talara refinery of Petroperu, the hydropower plants and Cerro de Pasco mine of Centromin. 18. Privatization of Petroperu. As anticipated, Petroperu proved to be one of the most difficult enterprises to privatize. Its initial management was opposed to p.rivatization, and only after its Presidernt was replaced was progress possible. The question of whether to sell it en bloc as a "national" (albeit private) oil company, as was being done, for example, with Argentina's petroleum company YPF, or break it up into units so as to promote competition, was the next major issue. For the second tranche, the CGovernment agreed with the Bank that national interests were best protected against monopolistic abuses by ensuring adequate competition. Accordingly, a privatization plan was adopted based on open access to storage facilities and separate sale of each major part of Petroperu, with the purchasers allowed to engage in vertical but not horizontal integration (so as to ensure competition). With the long-term concessioning of the storage facilities and the sale of the oil fields and the La Pampilla refinery, the third tranche conditions (agreed at second tranche) were finally met in December 1997. 19. Overall Sector Reform Prograrn. Peru moved effectively during the implementation of projects to meet the sector reform conditions in hydrocarbons, mining, telecommunications and water. It utilized--with PTAL and other resources--leading world experts to design the basic laws and regulations for these key sectors, carefully studying the reforms in Chile, Argentina and elsewhere. As in privatization, Peru is now one of the developing-country models of how to open up the natural resource sectors (hydrocarbons and mining) to more private sector investment and competition. It also has among the more advanced independent regulatory systems for public utilities. In the fisheries sector, hlowever, progress was limited. 20. Hydrocarbons Sector Reform. Peru's wide-ranging reform of this sector had essentially two parts. One focused on development of private sector oil and gas production and included the opening the country to private sector exploration and development, the transfer of the exploration and development concessioning power from Petroperu to the Government, the establishment of a stable tax regime, and the transformation of the pipeline into a common carrier. The other part was the shift from controlled to market prices at the retail and wholesale levels, which has given Peru one of the most market-determined price sysl:ems in the world. A key to establishing this system was the requirement of open access tc, and competition between the storage terminals, so that imported petroleum products could compete with the output of the local refineries. 21. Mining Sector Reform. Reform of the mining sector has been a major success in Peru, and is now being touted around the world as a model. Among the critical elements was the geological survey for obtaining, analyzing and presenting basic information to potentially interested investors, and an efficient system for allocating and adjudicating mining claims--the massive confusion and backlog of the former system have been eliminated. Peru has also introduced up-to-date and comprehensive environmental and safety standards.  8 22. Telecommunications Sector Reform. The reform of this sector involved: (i) establishing a new tariff structure that ended the cross-subsidization between local and long distance calls; (ii) rationalizing the sector structure by combining the existing Lima phone company (ENTEL) with the long-distance and non-Lima local company (CPT); and (iii) giving the purchaser of the new company controlling shares and a five year monopoly which ends in 1999. The five year monopoly, which is somewhat shorter than that granted in other Latin American privatizations (six years in Chile, seven in Venezuela and Mexico, nine in Argentina), was considered essential to allow time for rate rebalancing, to attract major operators that would have the experience and resources to operate and improve the system, and to give them incentives to substantially expand the network. An independent regulatory agency (OSIPTEL) was created, and has functioned well. 23. Water Sector Reform. In the water and sanitation sector, several antiquated laws were replaced by a single, comprehensive one. An effective regulatory entity, SUNASS (the National Superintendency for Water and Sanitation Services), was created, and has been functioning well. Tariffs in Lima were quadrupled to economic prices. The Bank has continued assisting this sector under the Lima Water Project. Even though there is virtually no private sector participation in this sector as yet, the sectoral reforms achieved in this sector have laid the foundation of such participation in the future. And SEDAPAL (the Lima water and sewerage company) as well as some municipalities outside of Lima are now considering the possibility of concessioning of their water companies. 24. Fisheries Sector Reform. Fisheries is the only sector that did not have adequate progress on sector reform. Although the situation improved markedly during 1997, the fisheries law and regulations that were enacted in 1992 and in 1994 respectively were not a substantial improvement and the Ministry continued granting fishing licenses despite the already excessive size of the fleet and the attendant dangers of over-fishing. Only since 1997 was there significant progress, which included stopping the granting of new licenses, conducting (by a private firm) a census of fishing boats (which found that actual capacity was 25% more than had been self-reported) and processing facilities, strengthening the fisheries research institute (IMARPE), and privatizing the monitoring of fish catches. The inadequate progress on fisheries reform became a major issue within the Government and between Peru and the Bank, and eventually required waivers of both the second and third tranche conditions. Because this was the last outstanding issue, it received inordinate attention, which may have given some in Peru and the Bank the misleading impression that the PAL as a whole had been less successful than it actually was. Though the issue remained difficult throughout project implementation, since 1997, however, a meaningful dialogue between the Government, industry and international consultants is finally underway, and this may yet eventually lead to an improved resource management regime such as ITQs.  9 D. MAJOR FACTORS AFFECTING THE PROJECTS 25. Political developments. The privatization program was able to get off to a rapid start in large part because Congress had given the executive branch the power to undertake individual sales without Congressional approval. The temporary suspension of C'ongress in 1992 made COPRI's administration of the program easier, as it did not have to deal with Congressional oversight during that time. When a new Congress was elected in 1993, the pro-Government majority strongly supported privatization. Thus, it was not until 1995, when new presidential elections were held, that privatization was slowed down for political reasons. In particular, the opposition candidate, Javier Perez de Cuellar, came out against the privatization of Petroperu, and this was one of the reasons that operation took so long to get started. The program picked up after the elections, but growing political criticism has since slowed down the pace. The impact of these political developments, and the fact that some of the easier enterprises were privatized first, can be seen in the following table: Calediar'' Value of Transactions ..%X,00,0'0- . , 1992 209 1993 344 1994 3,233 1995 1,225 1996 2,669 1997 684 26. Delays in PTAL Disbursements. The PTAL closing date had to be extended for two years, because the loan was disbuirsing slowly. There was an initial six-month delay in effectiveness while waiting for Peru to clear its arrears with the Bank, but the main delay in disbursement was, ironically, the result of the program's success. In addition to the PTAL, COPRI's main source of revenue was a 2% share of the net sales proceeds from the privatizations. When a controlling 35% share of Peru's two telecommunications enterprises was sold to Telefonica de E_spana for US$2 billion on February 28, 1994, the iimmediate need to continue using Bank funds disappeared as it was financially advantageous for COPRI to use its non-loan funds first. Eventually, COPRI was able to make good use of the remaining Bank funds, but on a much slower schedule, and only because it had to use some of its own revenues for related purposes such as paying 'benefits to displaced workers when the SOEs lacked the resources to do so. E. PROJE,CT SUSTAINABILITY 27. Difficulty in Reversing Privatizations. One reason that privatization is such a critical element of economic reform, is that for a variety of legal, economic, political and  10 practical reasons, it is difficult to reverse. Although Latin America suffered waves of nationalization during earlier decades, repetition of this in the current global context is hardly imaginable, where country after country is following the same general route of economic liberalization. Furthermore, the overall economic success of the current Peruvian administration, especially in contrast with the disastrous results of its "populist" predecessor, makes any general assault on Peru's economic reforms unlikely. And the fact that Peru's privatizations were on the whole very successful, in terms of the prices and investment commitments received, the high-quality firms attracted, and the absence of even a hint of scandal, should further ensure the sustainability of this program. Finally, the "Citizens' Participation" program, under which some 40,000 poorer Peruvians have bought shares in a few privatized companies on soft credit terms, makes reversal even more unlikely. 28. Growing Public Opposition. Nevertheless, there is cause for concern about the future, because of the increasingly negative public perception in Peru of privatization. Public support in Lima, (the only place which is surveyed) has dropped steadily from about 65% in mid-1992 to 30% now. Even more disturbing is a poll that showed that 72% of Lima residents would like to see their public utilities (electricity and telecommunications) re-nationalized. The main reasons given for these results are the: (i) reduction in employment (estimated at 94,000) in the companies that were privatized; (ii) increases in public sector tariffs in the move to economic pricing which accompanied the privatizations; (iii) dominance in the electricity sector of Chilean companies, with whom Peru has had a long, contentious relationship; and (iv) poor public relations efforts of these companies. This declining popular support for privatization has made that progran a target for the Government's opponents. 29. Governmental Attitude. At the same time, the Government has failed to counter these criticisms with adequate publicity in support of privatization, and has even issued statements questioning whether key remaining SOEs should be privatized. Already, this has had the effect of slowing down the privatization process, and shifting some enterprises from sales to concessions. The Government's weakening support for privatization appears to reflect not only shifting public sentiment but also: (i) the departure of key Ministers who were the most active proponents of privatization; (ii) the end of the sense of crisis which made even radical and unpopular economic reforms palatable; and (iii) the absence of clear short-term linkages between privatization and Government's top priority of poverty reduction, given restrictions under the IMF program on Government's ability to spend privatization revenues. This changed public and private attitude towards privatization, however, has led to considerable slowing down of the privatization program. Nevertheless, though the Government has withdrawn from an active stance on privatization per se, it is continuing with its policy to invite private participation in infrastructure sectors with a parallel program of concessions in electricity transmission, ports, airports and roads.  I1 F. BANK PERFORMANCE 30. Early Stages. The Bank's overall performance in the projects was very good, and this view is shared by almost all of the Peruvian officials. The Bank played a particularly irrmportant role during the crucial early stage of the program, by (a) organizing seminars that brought in regional and world experts on privatization, (b) being flexible in permitting the secondment of Bank-group staff, and (c) finding other sources of funds (chiefly Japanese grants) before arrears with the Bank were cleared. The Bank's support strengthened key Peruvian officials' cornviction that they were on the right track, made worldwide expertise available to them on short notice, and increased Peru's credibility vis- a-vis investment banks and other consultants. With the few exceptions mentioned earlier (fisheries conditionality and PTAL cost estimates and closing date), overall, the Bank's project appraisal and negotiations were also sound. 31. Implementation. During project implementation, Bank staff constantly sought ways to resolve problems and facilitate implementation. Working relationships between the Bank and Government were unusuedly good, in large part because of the continuity as well as the expertise of Bank project and sectoral staff involved. The Bank also used first- rate consultants where it lacked the in-house expertise. Its attention to the need to restructure and privatize Petroperu, in spite of strong opposition, finally paid off. The Bank was, in the end, appropriately flexible in extending closing dates and granting tranche-release waivers (although it could have saved itself a lot of work if these dates and the fisheries conditions had been better in the first case). 32. Fisheries Sector. But, as at appraisal, the main area in which the Bank did not perform well during implementation was fisheries. The resource management regime the Bank advocated, ITQs, was probably appropriate, but despite great effort the Bank was not able to convince the Peruvian fisheries industry of it, nor demonstrate its practical applicability in the Peruvian context. There appear to have been several reasons for this: (i) the Bank never quantified the benefits for Peru of ITQs, which would have made the issue more concrete and could have become the focus for a sharper dialogue; (ii) the Bank hedged on the most sensitive issue, the initial allocation of ITQs, and so never came to grips with the Peruvians' main concern and the inherent political economy of the reform effort; (iii) Bank consultants, although expert fisheries economists, came primarily from places where ITQs were accepted, and so did not appear to represent a balanced spectrum of views; (iv) the Peruvians felt that rather than there being a shared search for the best system, the Bank was trying to impose its theories on them, and was denigrating Peru's own experience; (v) the Peruvians resented the use of loan conditionality as a way of pressuring them to accept a new system; and (vi) the Peruvian fisheries industry was doing well financially during this period, because of adequate supplies and high prices, and therefore felt no pressure to enact changes. Although the task manager recognized that the loan conditionality related to fisheries had "been counterproductive," the Bank never offered to amend the loan agreement. The Bank also ended up paying inadequate attention to other reforms (such as privatization of catch monitoring) which were, in fact, preconditions to applying an ITQ sysl:em successfully. And in pressing the Government to  12 impose a system whose primary objective was to benefit the industry, but which the industry (wisely or unwisely) opposed, the Bank ended up in the awkward position of asking the public sector to second-guess the private sector on what was in the latter's interest. 33. Need for Management Attention. After the Bank had failed to resolve the fisheries dispute for several years at the task manager level, there was need for higher management attention to this, but there is no evidence that any such attention was paid. The task manager did point out in his memos that he believed the conditionality had been counterproductive, but neither he nor anyone else specifically called for an amendment. Perhaps the Managing Director's instructions at the time of the waiver for the second tranche that no such waiver would be authorized for the third tranche inhibited a review of the appropriateness of the conditionality in the first place and the effectiveness of the Bank's continued insistence on it. G. BORROWER/IMPLEMENTING AGENCY PERFORMANCE 34. Privatization. Government's performance has been extremely good in both of these projects, and is the main reason for their success. It established an effective and non- bureaucratic institutional structure for privatization, consisting of COPRI and the CEPRIs. The first COPRI President and the Ministers of Economy and Finance worked closely together to launch the process. Especially in the early years, the COPRI staff were extremely dedicated and close-knit, and smoothly handled a large number of transactions, with very few failures. COPRI and most of the CEPRIs made sound decisions to limit pre-privatization investments, only to require investment commitments where it would be clearly to the purchaser's advantage, and to downsize the SOEs before sale. Most importantly, the whole system was so transparent, that not a single transaction has been challenged for even the appearance of corruption or unfair procedures. 35. Government also showed imagination and flexibility in adding new elements in response to perceived program shortcomings. In particular, it developed; (i) the Citizens' Participation (Participation Ciudadana) program, under which over 400,000 Peruvians bought shares, on credit, in telecommunications and power companies; (ii) the Business Promotion (Promocion Empresarial) scheme to allow Peruvian companies to purchase small- and medium-sized SOEs on credit; and (iii) a training program (with IDB financing) for staff displaced by privatization. In a related area, it is now launching a program for concessioning of new and existing infrastructure which does not belong to SOEs (such as ports, airports and roads), and has established PROMCEPRI, modeled after COPRI, to manage this. 36. However, lately the pace of privatization has slowed. While such weakening in performance is not unusual once a crisis response is replaced by business as usual, and the people with original "ownership" of the program have moved on, it is nonetheless unfortunate, given the important (though few) enterprises still to be privatized (including  13 mtajor ones in the electric power sector, which is being handled by the EPAL rather than the PAL). 37. Sector Reform. On the sector reform side, Government's overall performance was equally strong. Sound legislation and regulations were developed for hydrocarbons, telecommunications, water and mining, and effective regulatory institutions established. As mentioned above, the only exception to this was in the fisheries sector. Even here, however, though it is still not clear whether ITQ systems will be adopted for any of Peru's major fisheries, there has been some progress on biological sustainability, if not yet economic efficiency, and the issue is finally receiving attention from the sectoral policy nmakers. 38. Public Information and Dissemination. The other area in which Government's performance has been weak is in educating the population about the benefits of privatization and the related sectoral reforms. Opponents of privatization have been able to turn public opinion against it because Government has not publicized the benefits of the program. Though the COPRI Secretariat recognized the importance of public relations and met with unions, church groups, thie press, etc. to explain their program, in retrospect a, much higher-level and broader Government initiative was required. 39. UNDP Role. The UNDP Lima office played the vital role of managing all of C:OPRI's funding, including that from ithe PTAL. After the PTAL was effective, the IJNDP reviewed all the disbursement requests from COPRI and promptly made advances once it approved them, subject to subsequent review and reimbursement by the Bank. This system worked very well by avoicling possible delays due to either Government bureaucracy or the Bank's slow disbursement processes. H. ASSESSMENT OF OUTCOME 40. Fiscal. Peru's privatization and sectoral reform program has clearly been a success. The most obvious benefit has been fiscal, as SOEs (including electricity and banks) that were losing $2.5 billion/year have been sold so far for $7.5 billion (excluding $0.9 billion in additional capitalization of the companies, as this does not go to the Government). Of this $7.5 billion, $0.5 billion is in debt paper, $1.0 billion is to be paid over time under the Citizens' Participation, Business Promotion, and workers' shares programs, or under concessions/options, and $5.9 billion has been paid in cash. In the vast majority of the auctions, the bid prices were above the minimum specified; in several cases, most notably telecommunications, the sales price far exceeded expectations. The $5.9 billion that has been paid so far represents over half of total foreign investment in Peru over this period. 41. Additional Investment. It is not so straightforward to calculate the additional investment resulting from the privatization and sectoral reforms, as some investment would have occurred even without the changes, and some of the investment commitments (especially in development of new mines) are contingent upon geological findings and  14 world prices. Some $7.7 billion is expected to be invested in the privatized firms over the first 5 years. Of this, $2.5 billion is to develop the Antamina copper mine; the winning bidders have until July 1998 to exercise their option to develop this mine. Telecommunications investments should reach $2.5 billion over 5 years, and another $2 billion is anticipated to be invested in the mining sector. Beyond privatization itself, it is clear that the sectoral reforms are leading to greater private investment. In the mining sector, these results are the most obvious: investment in exploration has risen from $10 million per year to $250 million per year, bringing Peru to the level of Chile as the most attractive developing country in the world for exploration. While most of this has been from foreign firms (over 100 of them), there is increasing exploration and development by existing Peruvian mining companies as well. Mining exports are projected to double in the next 10 years. 42. Improvement in Basic Infrastructure. The most notable infrastructure improvements have been in telecommunications and electricity supply, (the latter under the EPAL). The phone density in Peru has increased in only four years from 2.9 to 7.5 lines/100 people, there has been a 5-fold increase in the number of public telephones, and the waiting time to get a new phone has fallen from nine years to one week. Electric power shortages have disappeared, and even the poorest parts of Lima now have electricity. In addition, bus service and gasoline stations in Lima are markedly better in terms of quality, variety and availability. 43. Capital Market Development. Starting in 1996, Government began selling its remaining minority shares in privatized companies on the stock markets in Lima and New York. The sales in New York were valuable for Peru's international reputation, while those in Peru substantially increased the capitalization of the Lima Stock Exchange. 44. Environment. While environmental improvement was not a specific objective of the privatization program, it has been an important side benefit of the mining sector privatization, in two ways. Firstly, when Government first tried to sell CENTROMIN, the largest mining company in Peru, there were no bidders, in large part because no one was willing to assume the environmental liabilities that had accumulated (e.g. piles of slag, from which dangerous chemicals were being leached into rivers). Prior to the second (and successful) round of sales, a major program of environmental clean-up was announced, with clear division of responsibility between CENTROMIN (costing $75 million) and the new purchasers (costing $40 million). Secondly, while foreign mining companies are legally bound only to the same environmental standards in Peru as the SOEs were, in fact the former almost universally adhere to stricter international standards, because they are being monitored by international environmental groups as well as their home governments, whereas the SOEs did not even adhere to the Peruvian standards. 45. Study of Benefits. Several preliminary and limited studies have been made of Peru's privatization program--by UNDP, USAID, and the Peruvian research and consulting firm Apoyo--all of which have been very positive. Within the next few years, after the program has been completed, a more comprehensive study should be carried out.  15 This would be important both for Pera, where there is substantial and growing opposition to privatization, and for other developing countries, which could have much to learn from Peru's experience. I. OP]ERATIONAL PLAN 46. Remaining Privatizations. With almost all of the smaller state enterprises sold or liquidated, with the telecommunications, fisheries and industrial sectors fully privatized, and with the mining sector privatization well advanced and on track (Cerro de Pasco and some mining properties of CENTROMIN are to be sold this year), the remaining privatization issues mainly concern energy and railroads. In water, SEDAPAL's operational performance has improved markedly and the government is interested in attracting private participation in the company. In electricity, the Mantaro-Restitucion Hydroelectric complex (the largest power generator in Peru), the regional utility companies, and the electric generation capacity of the mining company, CENTROMIN, have yet to be privatized. In petroleum, the remaining operations are the Talara and Iquitos refineries and the oil pipeline; the pipeline will probably be auctioned as a concession, which is reasonable givern its limited financial prospects. Privatization of the railroad company has also not yet started. In addition, Government has remaining minority shares to sell in a number of enterprises. The Bank still has involvement through the Electricity Privatization Adjustment Loan (EPAL) and the Energy and Mining Technical Assistance Loan (EMTAL'). In addition, the Government also has its on-going program of concessions including the Mantaro-Socabaya transmission pipeline which was concessioned out earlier in 1998 as well as planned concessions in ports, airports and roads. 47. Post-privatization Monitoring. Even after SOEs are privatized, Government needs to monitor the operation of concessions and the amortization payments by Peruvian purchasers under the various incentive programs. These are still being handled by COPRI, but as COPRI is a temporary agency whose mandate would soon expire once the remaining privatizations are carried out, these responsibilities would need to be reassigned. There are also some investment commitments. However, these should be treated flexibly, as the economic logic is weak for trying to control such matters by private firms in competitive industries. 48. Public Relations. As noted above, Govermment has not yet mounted any serious effort to educate the population about the benefits of the privatization program. There are a number of steps which it should now take. Analyses already done of the effects of privatization (which have all come to positive conclusions) should be disseminated, seminars organized, and academic institutions (which have been kept at arms' length) encouraged to do case studies. Some of COPRI's income from the sales could be allocated for this purpose.  16 J. KEY LESSONS LEARNED 49. Lessons Learned about Privatization. (a) Privatization programs should move very fast when there is an opportunity, because afterwards it becomes much harder, once the crisis is gone and politics-as-usual returns. Although Peru implemented its program much faster than most countries, privatization proponents there regret not having gone even faster, before political opposition could build. In addition, the faster the privatization, the shorter the period of uncertainly and possible malaise within the enterprise. (b) Sector policy and regulatory reform should be well underway before privatization in the sector, so that bidders can feel that they are entering a secure environment, and will have a sound basis for calculating their bids. Much of Peru's success in privatization is due to the progress that was made beforehand in preparing comprehensive sectoral legislation and rules. (c) It is often better to break up large companies, so as to make them more attractive to a range of buyers and to encourage competition. In the cases of both Centromin and Petroperu, there was strong pressure to privatize the companies en bloc, so as to preserve the company ethos and not have to deal with messy break-ups. The first Centromin auction failed to attract bidders partly for this reason (along with environmental and social issues), and it also appeared that there was little private-sector interest in buying Petroperu as a single company. (d) It is easy to underestimate the costs and time needed for such complex transactions. This mistake was committed by the Bank and the Peruvians, as both the cost and the time required for the program have been more than double the appraisal estimates. (e) Attention must be paid to public relations, lest public resistance impede the process or threaten its results. The Peruvian Government apparently believed that the benefits would "speak for themselves." Yet even in a sector like telecommunications, where there has been a dramatic improvement in service, critics have been able to focus on the increase in connection and local-call charges (to economic costs; long distance and international tariffs have been correspondingly reduced), to turn public opinion against privatization. (f) Top-level political support is critical for success. When the message from the top was clearly in favor of privatization, the process moved ahead rapidly. Now that there appears to be more ambivalence, progress is much slower.  17 (g) People from the private sector should be given key roles in the process. COPRI selected mostly people from the private sector for the CEPRIs, and this is considered one of the main reason for their success. Existing SOE managers proved less committed to and/or adept at privatizing their firms. (h) Concessioning may be a useful compromise where sale is not possible politically. In several cases in Peru, there was considerable public opposition to sales of SOEs, but virtually none to concessioning as an alternative. 50. Lessons Learned About Bank Lending (a) Providing a TA loan alongside an adjustment loan can be valuable not only for providing the funds, needed to undertake the reforms, but also for increasing other minist:ries' stake in the process. While the Ministry of Economy and Finance was the one most directly interested in the PAL, the Ministries of Mining and Energy and of Transport and Communications had access to PTAL funds for sector reform studies, and this helped ensure their ability to carry ouLt the reforms called for under the PAL. (b) It is more efficient to have one technical assistance operation that covers all privatizations rather than several sector-specific technical assistance operations. (c) Continuity in Bank and Government personnel is very beneficial, because, established relationships tend to be franker, more cooperative, and based on fuller information. Key staff in the Ministry of Economy and Finance and in the sectoral ministries, as well as in the Bank, have been in place since the projects began, and this was one of the reasons for the projects' success. (d) When implementation schedules are intentionally set very tight for motivational reasons, more flexibility should be allowed in setting and extending closing dates, so as not to create unnecessary work and tension. While there was good justification for trying to adhere to a very optimistic time schedule, the Bank should have set more realistic closing dates, or not made such a great fuss about extending them. (e) Adequate thought needs to be given not only to what is the most suitable management regime for a sector, but also to who should have the right to decide. In the case of' fisheries, the Bank gave most of its attention to designing the optimal system (ITQs), but did not recognize that since any benefits of the change would accrue almost entirely to the existing fishing industry, they should have the deciding voice.  18 (f) Use of UNDP or another local office as the disbursement agent can be an efficient way of avoiding bureaucratic delays in making funds available, especially where there are many small contracts, as in TA projects.  19 PART II: STATISTICAL ANNEXES Table 1: Summary of Assessments Loan 3540-PE and 3595-PE A. Achievement of Objectives Substantial Partial Negligible Not Applicable Macro policies x Sector policies x Financial objectives x Institutional development x Physical objectives x Poverty reduction x Gender issues x Other social objectives x Environmental objectives x Public sector management x Private sector development x B. Project Sustainability Likely Unlikely Uncertain x C. Bank Performance Highly Satisfactory Satisfactory Deficient Not Applicable Identification x Preparation assistance x Appraisal x Supervision x D. Borrower Performance Preparation x Implementation x Covenant compliance x Operation x E. Assessment of Outcome x  - 20 - Table 2: Related Bank Loans/Credits Loans 3540-PE and 3595-PE Loan/credit title Purpose Year of Status approval Preceding operations 3489-PE /Fin. Sector Reform of banking sector 6/92 Closed Adjustment Loan including Privatization of banks Following operations 3811-PE/Lima Water Sector Provide water efficiently and 11/1994 In execution Modemizatoin expand coverage 3810-PE/Electricity Power Sector Reform & 11/94 In execution Privatization Adj.Ln. privatizaton of power companies 3610-PE/Energy & Mining TA Technical Assistance to 06/1993 Closed Project reform the Egy/Mining sector  -21- Table 3: Project Timetable Loan 3540-PE Steps in Project Cycle Date Planned | Date Actual/ Latest Estimate Identification 04/06/92 04/06/92 Preparation 05/11/92 05/11/92 Appraisal 06/29/92 06/29/92 Negotiations 10/15/92 10/15/92 Board Presentation 12/10/92 12/10/92 Signing 04/21/93 Effectiveness 09/24/93 Loan Closing 12/31/95 12/31/97 Loan 3595-PE Steps in Project Cycle Date Planned Date Actual! Latest Estimate Identification 03/17/92 03/17/92 Preparation 05/11/92 05/11/92 Appraisal 10/26/92 10/26/92 Negotiations 12/11/92 12/11/92 Board Presentation 04/20/93 04/20/93 Letter of Development Policy 03/24/93 Signing 04/21/93 First Tranche Release 05/31/93 05/07/93 Midterm review n.a n.a. Second Tranche Release 05/94 08/94 Third Tranche Release 05/95 01/98 Loan Closing 06/31/95 12/31/97  - 22 - Table 4: Loan Disbursements: Cumulative Estimated and Actual (US$ millions) Loan 3540-PE FY93 FY94__ FY95 FY96 FY97 FY98 Appraisal Estimate 4.5 9.0 9.0 7.5 - Cumulative Estimate 4.5 13.5 22.5 30.0 Actual - 2.9 6.2 8.2 4.3 8.4 Cumulative Actual 2.9 9.1 17.3 21.6 30.0 Actual as % of Estimate (cum.) 21 40 58 72 100 Loan 3595-PE FY94 FY95 FY96 FY97 FY98 Appraisal Estimate 75.0 75.0 100.0 - - Cumulative Estimate 75.0 150.0 250.0 Actual 75.0 - 75.0 - 100.0 Cumulative Actual 75.0 75.0 150.0 150.0 250.0 Actual as % of Estimate (cum.) 100 50 60 60 100  - 23 - Table 5: Key Indicators for Project Implementation Loans 3540-PE and 3595-PE Table 6: Key Indicators for Project Operation Loans 3540-PE and 3595-PE [ N.A. Table 7: Studies Included in Project Loans 3540-PE and 3595-PE Note: The privatization transactions supported by the consulting services financed through Loans 3595-PE are listed in Appendix C.  - 24 - Table 8A: Project Costs Loan 3540-PE Appraisal Estimate (US$M) Actual/Latest Estimate(US$ Local Foreign Total Local Foreign Total Item Costs Costs Costs Costs I.General Support 7.0 0.9 7.9 11.6 2.Info/Promotional 1.8 5.0 6.8 26.41 Programs 3. Privatization and 5.9 18.3 24.2 57.0 Regulatory Reforms 4. Administration Fee 0.9 0.0 0.9 2.8 5.Price 1.4 2.1 3.5 Contingencies TOTAL 17.0 26.3 43.3 97.8 1/ includes $18.4M for "Citizens Participation" program Loan 3595-PE N.A.  - 25 - Table 8B: Project Financing Loan 3540-PE Appraisal E]stimate (US$M) Actual/Latest Estimate(US$M) Local F oreign Total Local Foreign Total Source Costs Costs Costs Costs IBRI) 7.5 22.5 30.0 30.0 Government of Peru 6.5 0.3 6.8 61.7 Other 3.0 3.5 6.5 6.1 TOTAL 17.0 26.3 43.3 97.8 Loan 3595-PE N.A. Table 9: Economic Costs and Benefits Loans 3595-PE and 3540-PE K__N.A.  - 26 - Table 10: Status of Legal Covenants Loan 3540-PE and 3595-PE Agreement Section Covenant Present Original Revised Description of Comments type status fulfillment fulfillment covenant date date Loan 4.01 1 C Annual Annual Audit of Accounts With UNDP Loan 3.03 5 C Effectiveness Annual Management Agreement With UNDP Loan 3.06 (b) 9 C Semi-Annual Semi- Progress Reports With UNDP Annual Covenant types: 1. = Accounts/audits 5. = Management aspects of the project or executing agency 9. = Monitoring, review, and reporting 8. Present Status: C = covenant complied with CD = complied with after delay CP = complied with partially NC = not complied with Table 11: Compliance with Operational Manual Statements Loan 3540-PE and 3595-PE N.A.  - 27 - Table 12: Bank Resources: Staff Inputs Loan 3540-PE AND 3595-PE Stage of Revised Actual Project Cycle Weeks US$ Weeks US$ Preparation to Appraisal 18.0 48.2 Appraisal-Board 9.9 29.7 Negotiations through Board 3.3 10.5 Approval _ Supervision 76.3 201.7 Completion 3.0 12.0 TOTAL 110.5 302.1 Loan 3595-PE Stage of Revised Actual Project Cycle I Week; US$ Weeks US$ Preparation to Appraisal 79.8 238.1 Appraisal-Board 15.3 52.0 Negotiations through Board Approval 22.4 70.5 Supervision 233.4 776.4 Completion 3.0 12.0 TOTAL 353.9 1,149.0  - 28 - Table 13: Bank Resources: Missions Loans 3540-PE and 3595-PE Performance Rating Number Specialized Implemen- Develop- Stage of Month/ of Days in Staff Skills tation ment Types of Project Cycle Year Persons Field Represented Status Objectives Problems Through Appraisal 5/92 6 11 _ - Appraisal through 6/92 4 11 Board Approval Supervision 9/93 5 12 Fin.Analyst 2 1 11/93 5 2 Fin.Anal/Economist - - 1/94 3 6 Fin.Anal/Fisheries - 3/94 2 9 Fin.Anal/Telecom - - Specialist 5/94 1 11 Fin.Analyst 2 1 8/94 1 6 FirLAnalyst 2 2 3/95 4 7 Economist 2 2 5195 1 3 Fin.Analyst - - 1/96 1 9 Fin.Analyst I 1 7/96 1 10 Fin.Analyst 1 1 5/97 1 5 Fin.Analyst 2 2 Completion 3/98 1 13 Economist l ~~~~~~~~(consultant}-  APPENDIX A: AIDE MEMOIRE  - 29 - PERU: Privatization Adjustment (PAL) and Privatization Technical Assistance (PTAL) Loans Aide Memoire of the Implementation Completion Mission 1. Introduction. This Aide Memoire summarizes the main findings of my visit to Peru from March 3-12, and the next steps needed to produce the Implementation Completion Report (ICR) for the above projects. It reflects only my personal and preliminary views, and has not been reviewed yet by the Bank. A combined report is to be produced for the two projects, because of their close interrelationship. I wish to thank all the Peruvian agencies and individuals I met for the time they have given me and the frankness with which they have discussed these projects. 2. Achievements. Overall, it is clear that both projects have been carried out successfully by Peru, and that they have achieved good results. a) Peru's privatization program has been one of the fastest and most sweeping in the world. About two-thirds (by value) of the state enterprise sector has already been privatized. This amount greatly exceeds the relevant conditions under the PAL. b) The program has been carried out in a very transparent manner, through an effective institutional structure of COPRI and the CEPRIs, and they have come up, where needed, with innovative solutions such as Participaci6n Ciudadana and Promoci6n Empresarial. c) Privatization has been accompanied by adequate attention to the need to ensure competition in the sectors being privatizaed, and the requirements for regulation in those sectors where adequate competition is not feasible. d) The program has already brought major benefits to Peru, including some $8 billion in revenue from the sales, massive additional foreign investment undertaken and planned, improvement in basic infrastructure, increased economic efficiency, capital market development, and a redirection of Government focus away from activities best left to the private sector and towards those properly in the public sector. 3. Sustainablity. Despite these impressive achievements, there is cause for concern about the future. The problem is the increasingly negative public perception of privatization. Public support (in Lima) has dropped steadily from about 65% in mid-1992 to 30% now. Among the reasons for this are the (a) short-term reduction in employment accompanying the privatizations, (b) increases in certain public sector tariffs in the move to economic pricing, (c) dominance in the electricity sector of Chilean companies, (d) use of privatization as a convenient target for those opposing other Government policies, and (e) Government's failure to respond to these criticisms. Already, this has had the effect of slowing down the privatization process, shifting some emphasis from sales to concessions, and removing at least one major enterprise entirely from the process. There also appears to be lack of public confidence in the regulatory systems for electricity and telecommunications. If unchecked, these negative public perceptions might eventually even lead to some policy reversals, and thereby threaten the sustainability of the program's achievements.  - 30 - 4. To reverse this trend will require a concerted effort by the Government to study and publicize the results of the privatization and regulatory reform program. Analyses done by APOYO should be widely circulated, seminars should be organized, and academic institutions should be encouraged to do c,ase studies. Some of COPRI's income from the sales could be allocated for this purpose. 5. Government's Performance. Government's performance has been extremely good in both of these projects, and is the main reason for their success. The privatization of PetroPeru, despite considerable resistance, and the moves towards competition in the hydrocarbons sector have been among thie highlights. Also, the fact that not a single transaction has been challenged on procedural or transparency grounds is a remarkable achievement. 6. There has been, however, a considerable slowing down in the pace of privatization, largely as a result of the decreasing popular support, the loss of a sense of urgency, and the lack of a sufficiently-strong top-level advocacy for privatization. The privatization program has taken considerably longer than planned -- the original goal was to complete it before the 1995 elections -- but this is unlderstandable, given the large number of entities involved and the complexity of many of them. The unfortunate result, however, has been that considerable uncertainty remains concerning the important entities not yet privatized, especially in the energy sector. 6. World Bank Performance. The Bank's performance in the projects has also been very good, and this view is shared by alrnost all of the Peruvian officials with whom I have spoken. The Bank provided important technical, psychological and financial support especially during the crucial early stage of the program, and throughout has sought ways to resolve problems. Working relationships between the Bank and Government have been unusually good The Bank's attention to regulatory systems and to the PetroPeru privatization were particularly commencdable. The Bank was appropriately flexible in extending closing dates and granting a waiver (for the PAL third tranche), although it seems to have made these processes more difficult for itself than necessary. It also substantially underestimated the cost of the PTAL -- fortunately, revenues available to COPRI from the privatizations also greatly exceeded estimates. 7. Fisheries Management. Special discussion of this matter is warranted because of the inordinate attention it received during PAL implementation, and the fact that it finally led to the only waivers required. Both the Government and the Bank could have handled the fisheries sector better. Until 1996, the Mdinistry of Fisheries was uncooperative with the efforts of the Bank, the Peruvian fisheries industry, and other MEF to devise a more suistainable and efficient system of resource management. The Bank, for its part, became too much of an advocate for a particular (ITQ) system, and the Peruvian fisheries industry felt that its concerns tended to be brushed aside. The Bank also ended up paying inadequate attention to other reforms which were, in fact, preconditions to applying an ITQ system. In pressing the Government to impose a system whose primary objective was to benefit the industry, but which the industry (wisely or unwisely) opposed, the Bank  - 31 - ended up in the awkward position of asking the public sector to second-guess the private sector on what was in the latter's interest. With the recent reforms in the sector, and the granting of the third-tranche waiver, both sides have largely rectified the matter. 8. Lessons Learned about Privatization. It will take considerable more reflection and discussion before I feel confident about the lessons to be learned from these projects. The following is therefore only a tentative list. a. Move very fast when there is an opportunity, because afterwards it becomes much harder, once the crisis is gone and politics-as-usual returns. b. Regulatory reform and concern with sector competition must go hand in hand with privatizations, to attract investors and protect consumers. c. It is often better to break up large companies, so as to make them more attractive to a range of buyers and to encourage competition. d. It is easy to underestimate the costs and time needed for such complex transactions. e. Pay attention to public relations, lest public resistance impede the process. f Top-level political support is critical. g. Give people from the private sector key roles in the process. h. Concessioning may be a useful compromise where sale is not possible politically. i. A mechanism is needed for dealing with post-privatization issues that arise, especially where there are ongoing payment or investment commitments. 9. Lessons Learned About Bank Lending a.. Providing a TA loan alongside an adjustment loan is important for increasig other ministries' stake in the process. b. Continuity in Bank and Government personnel is very beneficial, because, established relationships tend to be franker, more cooperative, and based on fiuller information c. When implementation schedules are intentionally set very tight for motivational reasons, more flexibility should be allowed in setting and extending closing dates, so as not to create uncessary work and tension. d. Adequate thought needs to be given not only to what is the most suitable management regime for a sector, but also to who should have the right to decide. 10. Next Steps I have received from COPRI and MEF their draft contributions to the ICR, for the PTAL and PAL, respectively. This should make the following tight schedule feasible: a. April 22 -- Bank sends draft ICR to Government for comment; b. May 1 -- Government sends comments to Bank; c. May 15 -- Bank sends ICR to its Executive Directors. Stephen J. Ettinger March 12, 1998  APPENDIX B: BORROWER'S CONTRIBUTION TO THE ICR PRIVATIZATION ADJUSTMENT LOAN (LOAN 3595-PE)  - 32 - PROJECT COMPLEllON REPORT PRIVATIZATION ADJUSTMENT LOAN (PRIVAT7ZATION ADJUSTMENT LOAN-PAL) EXECUTION RESUME The refonn progrmm fosweed by the Privatization Adjustiment Loan (PAL), entered into with the World Bantk in April of 1993, has bon caarred out vithin the fmatnewerk of sound macroeconomic policies established by the Peruvian Government, and has achieved an ample apenure of a capital market In this context, the loan components made possible a more adquate fiuncioning of a market economy, promotod private investment in different production sectors, cstablished an appropriate regulatory framework which in tumn promoted economic efficiency, competition within such sectors, and development of a capital markeL It has also contributed to generate a climate of confidence iD the country, permitting a greater flow of long- term forign investments. The privatization process is under the direction of the Private Investment Promotion Committe (COPRI). established in 1991, and of the Privatization Special Committees (CEPRIS). In the Initial stae of the proces, Govemment efforts concentrated on the transfcr of assets from the Public Sector (slato owned enterprises) to the private sedor. In the second slage, the Governmet called upon the private sector to assist in the devlopment and administration of infrastrucmue works and services of tlhe public soctor. For this purpose the Private Franchise Prnotion Comnmission (PROMCEPRI), was created, as an agecy- respousibe for the design and management of the promotion procss, and solecion of the works and services to be given over as franchises, as well as the form of these franchisees. lcome gonerated by the s6cessful privatization program borders on USS8.364 million. LUkewise the program pmits investments which will aexd USS6.000 million. The pivatization prWoss has prmittod the suppont of economic mcfonrs establishod by the Government and the  - 33 - improvoment of competition within the privac isoctors. Thus, intcnational expts With the mom advanoed technologios have becn attracted, the rfficiency level of rpublic sevices ruaed, conoitions for a wider basw ownership creatd, as well as the promotion of labor force participation in entrpris. In addition, the privatization has allowed the Gov rnmcnt to obtain more ample resourcs which it has allocated to permanent soial investment, anid has augmented it8 reserves. Ar a result it has given suWport to the eomic program. An imporlant aspect of the privatization progran has been the public placing of rmaining Goverunent sbares in soene privatized corporations (Cemenios Norte Pacasmayo, Telefonos del Peru, Luz del Sur). In addition to benefiting more than 385,000 peoplic it has opeed the way for Peruvian citizens to shae in the benefits of privatization, contnud to the -evelopment of the capital uarket, spread private ownership, and stimulated domestic saving and investmet. Moover, an Enteprenou Promotion Program has boon established for the purpose of facilitating the participation of local entreprnurs In the privaizatioin prooess, offering them spocal inicctives, such as financing plans similar to those available abroad. The privatization process has been performed with gat transpamecy amd its impact has been defnitive, reprsenting income for the Govermnent of 12% of the Gross Domestic Product (GDP). During 1998 a new strengthenod impetus will be given to the privalization of those remaining in the eloctric, hydrocaibon, and mining sectors witln the goal of completing the privatization process in 1999. The Peruvian Gwornmenmt considers that liO loan has been a success, attaining the m eomics program objectives. Moreover, the sectorial policy measures, the legal and regulatory mures in the aras of mining, hydrocarbons, telecoonumuicationms fishing, and usnitaion, have been implemented, and the foreseen privatization progam has boen implemented sucoesully.  - 34 - Fom Itk experience obtained, from fth borrower's poi of view, it should be emphasized that the principal objwive of the adjustment loan was to grant appropriate gudance to the beeiciay countuy during tbe reform procecs. This should be done without fut requiring in a prioritive and strit manner, the fulfillment of an exnsive list of conditions which oftea distract the executors from the primazy objective for which tho loan was entered into. With this in mind, it is evident that the Bank should work in the future to elaborate programs more consistent with the realities faced by the individual country, and avoid mnading standard application of the same policies to different countries. Also, whein evaluating the follow-up of policies applicable to each individual case, there should be a spirit of mutual cooperation betwcen the Bank and the benelciay to miuake the attainment of planned objectives in the best posible maimer. In the panicular case of PAL, the priiipal objectivc of the loan was to support the privatizalion program creatod by thc Peruvian Government. During its execution, it was niot fecasble to oxpect a strict adherence to the specific fuUllmn of a list of conditions. Rather a close relationhip between the Bank and tho country arose, in which the Bank showed reasonable flexbliy, adapting to the needs of tho loan receiver, Yet, it did happen that at the time of the signing of the contract, the Bank as well as the Peruviau Govenumnol conceived objoctives too optimistic, creatinig tension btwee the parties with respect to their compliance. These goals were not achieved and led to many extension requests of the fmnal conpletion date originally agreed upon. Introduction The Privatization Adjustment Loan (PAL) was conceived to assist the Peruvian Governmenl in the cxecution of an ambitious privatization program wlich has contributed to a beoter Ibactioning of the  - 35 - market oconomy, the promotion of private inveCasent, the developmen of a capital market, and the gaenration of larg rerweour for e Publicl Trostuy. The PAL was approved by t-h Govenment of Peru by vinuw of Suprem Decrwe No. 59-934E, published on April 13, 1993, and siP}d on April 21, 1993. For the Paruvian Govanmnct, PAL wavao ftrd loan granted to the cnnly after Ihe r.sablihmeri of relations with the World Bank, made possiblc on March, 18,1993 through the liqukdation of, arnages of US$867 million. This operation included loans for te A4djtmen of the Commee Sector (TPRL), A4ju6nent of fhe Financial Socw (PSAL). and Structural A4jument (SAL). In this mamne Peru has again bcowme creditworthy fokr the Bank  PAL -ICR - 36 - Informne de Cierre de Proyecto Pr6stamo de Aluste de Privatizaci6n (Pnvatization Adjustment Loan - PAL) Resumen Ejecutivo El programa de reformas amparado por el Prestamo de Ajuste de Privatizaci6n - Privatization Adjustment Loan (PAL) acordado con el Banco Mundial en abril de 1993, se ha desarrollado en el marco de sanas politicas macroecon6micas implantadas por el Gobierno Peruano y la total apertura de la cuenta de capitales. En este contexto, los componentes del referido prestamo han permitido un mejor funcionamiento de ia economia de mercado mediante la promoci6n de la inversi6n privada en diferentes sectores productivos, el establecimiento de un marco regulatorio apropiado que promueve la eficiencia economica y la competencia en dichos sectores, y el desarrollo del mercado de capitales. Ello tambien ha contribuido a generar un clima de conflanza en el pais, permitiendo atraer mayores flujos de inversi6n extranjera de largo plazo. El proceso de privatizaci6n esta a cargo de la Comisi6n de Promoci6n de la Inversi6n Privada (COPRI) creada en 1991 y los Comites Especiales de Privatizaci6n (CEPRis). Durante la primera etapa de este proceso, los esfuerzos del Gobierno se concentraron en la transferencia de los activos del Estado (empresas estatales) al sector privado. Para la segunda etapa, el Gobierno ha convocado al sector privado para el desarrollo y la administraci6n de obras publicas de infraestructura y servicios p6blicos. En este sentido, se ha constituido la Comisi6n de Promoci6n de Concesiones Privadas (PROMCEPRI), 6rgano que disena y conduce el proceso de promoci6n y define las obras y servicios que se entregaran en concesi6n asi como la modalidad de concesi6n. El exitoso programa de privatizaciones ha generado ingresos que bordean los US$ 8,364 millones. El programa ademas permitira inversiones por mas de US$ 6,000 millones. El proceso de privatizaci6n ha permitido apoyar las reformas econ6micas implantadas por el Gobierno, mejorando la competitividad de los sectores privatizados. Asi, se atrajo operadores internacionales con tecnologia de punta, se aument6 el nivel de bienestar en la prestaci6n de servicios al publico, y se crearon condiciones para una base mas amplia de propietarios, promoviendose incluso la participaci6n de trabajadores en las empresas. De otra parte, la privatizaci6n le ha permitido al Estado obtener mayores recursos que se han destinado a inversi6n social de caracter permanente y al aumento de las reservas, lo que le brinda sostenibilidad alprograma econ6inco Un aspecto importante del programa de privatizaci6n ha sido la colocaci6n publica del remanente de acciones del Estado en algunas empresas privatizadas(Cementos Norte Pacasmayo, Telef6nica del Pera, Luz del Sur). El sistema, ademas de haber beneficiado a la fecha a mas de 385,000 personas permitiendo que ciudadanos peruanos compartan los beneficios de la privatizaci6n, contribuye con el desarrollo del mercado de capitales, difunde la propiedad privada y fomenta el ahorro interno y  PAL -ICR - 37- la inversi6n. Adicionalmente, se ha implantado un Programa de Promoci6n Emlpresarial que busca fomentar 1I participaci6n de empresarios locales en el proceso de privatizaci6n, otorgandoles condiciones especiales para el pago mediante esquemas de financiaci6n similares a los existentes en el exterior. El proceso de privatizaci6n se ha efectuado con la mayor transparencia y su impacto ha sido concreto habiendo significado ingresos para el Gobierno que representan el 12% del Producto Bruto Interno (PBI'> Durante el ano 1998 se retomara con un renovado impetu las privatizaciones que auri restan en el sector electrico y en el de hidrocarburos y mineria, con el fin de concluir con el proceso de privatizaci6n en 1999. El pr6stamo es considerado como exitoso por el Gobierno peruano habiendose mantenido las metas del programa macroecon6mico. Asimismo, se han implementado medidas de politica sectorial, reformas legales y reglamentos en las areas de mineria, hidrocarburos, teloacomunicaciones, pesca y saneamiento y se ha implementado exitosarnente el programa de privatizaci6n previsto. Entre las lecciones aprendidas, desde la perspectiva del prestatario, es preciso resaltar aquella que permite confirmar que el objetivo principal de un prestamo de ajuste debe ser el de brindar una adecuada gula al pais beneficiario durante el proceso de reforma, orientada basicamente al logro de un sano desarrollo de la economia del pais antes que exigir, de manera prioritaria y estricta, el cumplimiento de una larga lista de condiciones que muchas veces distraen a los ejecutores de las metas primordiales por las cuales se acord6 el prestamo. En este sentido, ha quedado en evidencia la necesidad de que el Banco trabaje, en lo sucesivo, en el disenio de planes mas acordes con las realidades de cada pais evitando estandarizar la aplicaci6n de politicas similares a diferentes paises. IguLalmente, al momento de evaluar el seguimiento de las politicas aplicables segun cada caso, debe existir un espiriltu de colaboraci6n mutua entre el Banco y el beneficiario para alcanzar los objetivos trazados de la mejor manera posible. En el caso particular del PAL, el objetivo principal del pr6stamo fue apoyar el programa de privatizaci6n concebido por el gobierno peruano, y durante su ejecucion no oper6 la circunstancia de ceniirse estrictamente al cumplimiento especifico de una lista de condiciiones. Mas bien se dio un trabajo de estrecha coordinaci6n entre el Banco y el pals, donde el primer demostr6 una flexibilidad razonable para adaptarsea las necesidades del receptor deJ prbstamo. Empero, si ocurri6 que tanto el Banco como el gobierno del Perui trazaron metas rnuy optimistas al momento de la suscripci6n del prestamo, hecho que genero presiQnes por ambas partes para llegar a cumplirlas, lo que finalmente no se concret6, dando lugar a que se solicitaran varias pr6rrogas a la fecha de cierre pactada inicialmente. lntroducci6n  PAL -ICR - 38 - El Prestamo de Ajuste de Privatizaci6n -Privatization Adjustment Loan (PAL)- fue concebido para apoyar al gobierno del Peru en la realizaci6n de un ambicioso programa de privatizaci6n que ha permitido contribuir a un mejor funcionamiento de la economia de mercado, promover la inversi6n privada, desarrollar el mercado de capitales, asi como generar ingentes recursos para el Tesoro Publico. El PAL fue aprobado por el gobierno peruano mediante Decreto Supremo No. 059- 93-EF publicado el 13 de abril de 1993 y fue suscrito el 21 de abril de 1993. Para el Gobierno del Peru, el PAL fue el primer prestamo otorgado al pais tras el restablecimiento de relaciones con el Banco Mundial concretada el 18 de marzo de 1993 con la lmpieza de atrasos por US$ 867 rnillones, operaci6n que incluy6 los prestamos de Ajuste del Sector Comercio (TPRL), Ajuste del Sector Financiero (FSAL) y Ajuste Estructural (SAL). El Perui de esta manera volvia a ser sujeto de credito frente al Banco. El contexto macroeconomico La columna vertebral del programa econ6mico peruano ha sido la disciplina fiscal y monetaria. El programa se sustenta en un regimen de tipo de cambio flotante, aunado a un estricto control monetario, acompafiado de una politica fiscal austera, con una administraci6n tributaria eficaz y un ferreo control del gasto publico. La total apertura de la cuenta de capitales, conjuntamente con sanas politicas macroeconomicas y estrictas normas prudenciales y de supervisi6n bancaria, han reportado importantes beneficios. Estas politicas, ademas de haber contribuido a generar un clima de confianza, han permitido atraer significativos flujos de inversi6n extranjera de largo plazo. Desde inicios de 1993 y luego de las duras medidas de estabilizaci6n iniciales, el Peru ha crecido 5 anios consecutivos y lo ha hecho a una tasa promedio anual de 7.3%. Este crecirmiento no ha estado basado en la expansi6n del consumo ni en el estimulo del gasto fiscal, sino en la inversi6n (tanto interna como externa) del sector privado y en el reciente dinamico desarrollo de las exportaciones de los bienes no- tradicionales. La aplicaci6n del Programa Econ6mico ha permitido alcanzar un crecimiento sostenido con una baja tasa de inflaci6n. Asi la tasa de inflaci6n en 1997 fue de 6.5%, la mns baja en los ultimos 25 aftos y el deficit del sector publico (excoluidos los ingresos de privatizaci6n) ha alcanzado 0%. Por su parte la tasa de inversi6n ha aumentado de 18.6% en 1993 a 24.7% en 1997 constituyendo la segunda tasa de inversi6n mas alta en Latinoamerica. El ahorro interno creci6 de 13% a 20% del PBI y casi el 90% de los flujos de capitales privados extranjeros en los ultimos 5 anios se realizaron bajo la forma de inversi6n directa extranjera. Finalmente la fortaleza de los indicadores macroecon6micos se refleja en que el crecimiento ha ido acompafiado por una constante acumulaci6n de reservas internacionales netas que ascienden a US$ 10.3 mil millones equivalentes a 15 meses de importaciones, 6 veces la base monetaria y 80% de la liquidez total del sistema bancario. Se puede aseverar que en la actualidad el Peru cuenta con una  PAL-ICR - 39 - combinaci6n ideal de tasa de cambio flotante y una posici6n fiscal y monetaria fortalecida. En relaci6n al servicio de la deuda peruana, la deuda del sector publico ha sido reprogramada en su totalidad de acuerdo a la capacidad de pago del pals. Asimnismo, no existe deuda intema ni deuda externa de corto plazo. Actualmente se cuenta con un sisterna financiero s6lido, regulaciones prudenciales estrictas y una excelente superintendencia de banca. Los objetivos en el mediano plazo incluyen una tasa anual de crecimiento de 6.5%, una continua reducci6n de la inflaci6n a niveles internacionales hacia el fin de la d6cada, asi como una reducci6n del deficit en cuenta corriente a menos del 3% para el aino 2002. Estos objetivos son resultado del compromiso del Gobierno de maintener la estabilidad macroecon6mica y el fortalecimiento de las reformas estiructurales, incluyendo las de segunda generaci6n que ya han sido iniciadas. Finalmente se pretende alcanzar iguales oportunidades para todos los peruanos a traves de la concentraci6n del gasto publico en la promoci6n de la cantidad y calidad de la educaci6n, salud y justicia. La Drivatizacion en el Peru En el nuevo papel que el gobierno del Presidente Fujimori ha otorgado al Estado, el sector publico ha sido reestructurado para mejorar las finanzas y servicios publicos, reorientando el rol del Estado hacia sus funciones esenciales en las areas de salud, educaci6n, justicia, seguridad e infraestructura, en tanto que el sector privado tiene la responsabilidad de producir los bienes y servicios que se demandan en el mercado. En ese marco, el gobierno asumi6 la tarea de privatizar mas de 200 empresas estatales. Los objetivos de la privatizaci6n incluyeron: a La contribuci6n al mejor funcionamiento de la economia de mercado o La promoci6n de la inversi6n privada, nacional y extranjera, en sectores gravitantes para el desarrollo E.con6mico (energia, comunicaciones, petr6leo, etc.) o La promoci6n del desarrollo del mercado de capitales nacional incrementando el monto y nCimero de transacciones y participantes (a traves de mecanismos como participaci6n ciudadana, fondos mutuos) o La generaci6n de ingresos para el Tesoro Publico (financiamiento de programas de lucha contra la pobreza, etc.) En el proceso de privatizaci6n, el Estado s6lo ha efectuado tareas de reestructuraci6n de las empresas 21 ser privatizadas cuando ha sido estrictamente necesario y en areas donde se cont6 con ventajas comparativas, como la racionalizaci6n del personal y la reorganizaci6n financiera. La promoci6n de la venta se ha sustentado en el mantenimiento de un cdima empresarial que promueve la rentabilidad y la inversi6n productiva, el ofrecimiento  PAL -ICR - 40 - de informaci6n tecnica y financiera de calidad sobre las empresas, la promoci6n de la venta en los mercados locales y extranjeros. En este proceso, se ha invitado a participar como asesores a empresas consultoras y bancos de inversi6n de primer nivel, se ha garantizado un trato no discriminatorio a los inversionistas interesados y se ha conducido un proceso de precalificaci6n apropiado para garantizar que el control de las principales empresas privatizadas corresponda a operadores capaces. Las ventas se han realizado mediante subastas publicas y son pagadas en efectivo, ademas se ha permitido el canje de deuda por privatizaci6n en adici6n a estos pagos. Es importante destacar que es el mercado el que fija el precio de las empresas y activos que se privatizan. El proceso de privatizaci6n esta a cargo de la Comisi6n de Promoci6n de la Inversi6n Privada (COPRI) y los Comites Especiales de Privatizaci6n (CEPRIs). La COPRI fue creada en 1991, actua como el directorio del proceso y tiene plena autoridad legal sobre la privatizaci6n de empresas estatales, los CEPRis administran con autonomia a los procesos individuales de cada empresa. La COPRI esta integrada por los Ministros de Trabajo y Promoci6n Social; Economia y Finanzas; Industria, Turismo, Integraci6n y Negociaciones Comerciales Internacionales; y el Presidente del Consejo de Ministros. La COPRI ha monitoreado los esfuerzos del Gobierno durante la primera etapa del proceso privatizaci6n de empresas del Estado. La segunda etapa de este esfuerzo la constituye la promoci6n de la inversi6n privada en la construcci6n y operaci6n de obras publicas de infraestructura y servicios publicos. Con este prop6sito el Gobierno ha creado la Comisi6n de Concesiones Prvadas (PROMCEPRI), que es el 6rgano encargado de la promoci6n de la inversion privada en obras publicas de infraestructura y servicios publicos que sean financieramente viables, dejando para el Estado las obras publicas de infraestructura de menor rendimiento financiero, pero socialmente necesarias y de mayor impacto en los sectores de menores recursos. Los integrantes de la PROMCEPRI son el Presidente del Consejo de Ministros, quien la preside, el Ministro de la Presidencia, el Ministro de Economia y Finanzas y el Ministro de Transportes, Comunicaciones, Vivienda y Construcci6n o sus representantes. Loaros del proarama de Drivatizaci6n El exitoso programa de privatizaciones ha generado ingresos que bordean los US$ 8,364 millones. Asimismo, este programa permitira inversiones por mas de US$ 6,000 millones.  PAL -ICR _ 41 - Cabe seffalar que al iniciarse el proceso de privatizaci6n, el Estado era propietario de alrededor de 200 empresas publicas que en 1990 habian llegado a tener un deficit operacional de US$ 2.5 mil millones, equivalente al 10% del PBI. Lai participaci6n del Estado en la aclividad empresarial durante el Gobierno Militar de. finales de los ahios sesenta era total, luego de la nacionalizaci6n de practicamente todas las empresas privadas existentes en el pais. Este experimento result6 un verdadero fracaso en I:erminos de manejo empresarial, resultados firiancieros, eficiencia y calidad. Los gobiernos siguientes acentuaron esta situaci6n pues se sucedieron designaciones politicas en cargos claves, hubo trafico de influencias sobredotandose a las empresas con personal sin aptitudes, y como consecuencia de ello, su nivel de endeudamiento fue incrementandose paulatinamente con el unico prop6sito de mantenerlas operativas, a pesar de la perdida de capitales. Con la privatizaci6n se ha reducido la burocracia estatal, hay activa participaci6n del sector privado, se cuenta con mayores recursos para el Estado, se ha redefinido la funci6n del Estado y se ha logrado la modernizaci6n empresarial. El proceso de privatizaci6n se inici6 en junio de 1991 con la venta de la empresa Sogewiese Leasing del sector financiero por US$ 1 mill6n y hasta la fecha se han pirivatizado 158 empresas. A continuacion indicaremos algunos beneficios del programa de privatizaci6n en sectores tales como telecomunicaciones, construcci6n, electricidad, etc. En el sector telecomunicaciones, en lo que se refiere al servicio de telefonia, se ha reducido el tiempo de espera promedio para la instalaci6n de una linea telef6nica, de diez anios en 1992 a 7 dias en 1997. Por otro lado, el costo de la linea telef6nica ha pasado de US$ 1,500 a US$ 300, el numero de lineas en servicio por cada 100 habitantes ha pasado de 2.9 en 1993 a 7.5 en 1997 y el numero de hogares con linea telef6nica ha crecido de 17% en 1993 a 42% en 1997 con un gran numero en los estratos de menores ingresos. Ademrs, Telef6nica del PerCi se comprometib entre otros, a la colocaci6n en un plazo maximo de cinco anos de un mill6n de lineas telef6nicas, asi como la interconexi6n que permita que todos los poblados con mas de 500 habitantes esten integrados a la red nacional de telefonia antes de los cinco afns. En el sector electrico, luego de la privatizaci6n de las empresas de distribuci6n y la empresa de generaci6n de electricidad en Lima, el grado de electrificaci6n ha crecido. de 68% en 1994 a 98% en 1997 y la perdida de energia en distribuci6n ha bajado de 19% a menos de 14% del total recibido, las inversiones realizadas en el sector practicamente garantizan lae no interrupci6n del servicio en ausencia de Iluvias. La oferta de electricidad ha crecido significativamente. El 14 de febrero de 1996 concluy6 el proceso de subasta de las acciones del Estado en la empresa Siderurgica del PerCi S.A. (Sider Peru). El ganador fue el consorcio denominado Sider Corp. S.A. a quien se le adjudic6 el 96.46% de las acciones de la empresa por US$ 162.7 millones en efectivo, mas US$ 25.1 millones en titulo de la  PAL -ICR - 42 - deuda a valor nominal y US$ 30 millones como compromiso formalizado de inversi6n. El consorcio Sider Corp. SA esta integrado por Acerco SA (40%) subsidiaria de GS Industries Inc. de los Estados Unidos, Wiese Inversiones Financieras S.A. (40%) y Stanton Funding Co. (20%). GS Steel Company es el operador siderurgico del consorcio. El indice de producci6n de acero de esta empresa antes de ser privatzada era de 98,2% (febrero de 1996) y ahora es de 151,1% (enero de 1998). La empresa Siderperui, luego de la privatizaci6n exporta productos especializados. En el sector financiero, el crecimiento de la banca sin la participaci6n del Estado es significativo, beneficiandose directamente el publico usuario. En los servicios bancarios, los gastos operativos como porcentaje de los activos promedio han descendido de un 7,3% a 5,7% en el Banco Continental y de 8,5% a 6,6% en Interbank. Se ha verificado ademas mejora en la calidad de la cartera y la mayor competencia ha originado una flexibilizaci6n en las condiciones de los prestamos personales y en el lanzamiento de nuevos productos. En el sector minero, la empresa Centromin se transfiri6 de modo fraccionado a traves de la venta de activos, capitalizaci6n y venta de acciones. Los proyectos Paucara, Proyecto de cobre de Antamina, Prospecto de Oro Quicay, Yaukyaco S.A., Metal Oroya S.A., Mahr Tunel S.A., Mina Yauricocha, en conjunto cuentan con una inversi6n prevista en US$ 2,833.7 millones. Adicionalmente, la empresa Minero Peru cre6 tres nuevas sociedades para vender acciones de cada una de estas empresas y consideraba la venta de las concesiones separadamente a traves de contratos de opci6n en la mayoria de los casos. A la fecha, el Yacimiento Minero Quellaveco, la Sociedad Minera Cerro Verde S.A., las Huaquillas, Jehuamarca Cafnariaco, La Granja, Colpac, Hualatan y Pallacochas, Sociedad Minera Refineria de Cobre llo S.A., Sociedad Minera Refineria de Zinc S.A., Yacimiento Berenguela y San Artonio de Poto, en conjunto tienen una inversi6n prevista que supera los US$ 500 mi. Por otro lado, existen ciudades como Chimbote que se han visto beneficiadas de la privatizaci6n por encontrarse en ella dos grandes industrias, la de acero, a cargo de Siderperu y la de Pesca Peru. Los trabajadores de las empresas en proceso de privatizaci6n tienen el derecho preferencial de adquirir hasta el 10% del capital que se transfiere. Esta opci6n ha sido ejercida en la mayor[a de los casos, de tal manera que mas de 16 mil trabajadores han ejercido su derecho de compra. Por su parte el programa de participacion ciudadana aplicado en los saldos de acciones de Telef6nica, Luz del Sur y Cementos Norte Pacasmayo, ha beneficiado a mas de 385,000 personas. Este sistema busca que mas peruanos se conviertan en accionistas de empresas que han sido privatizadas y brinda una oportunidad de inversion en el mercado  PAL -ICR - 43 - burs*til a traves de la adquisici6n cle pequefhos paquetes iguales vendidos en el mercado. Sin embargo, no todas las ventas tienen que tener un componente de participaci6n ciudadana o realizarse a traves de ella. Se debe de identificar claramente aquellas empresas en las que el sistema sea viable y con ello reducir la participaci6n del gobierno en dichas empresas. El Programa de Promoci6n Empresarial busca fomentar la participaci6n de empresarios locales otorgandoles condiciones de financiaci6n similares a las existentes en el exterior. Hasta la fecha, se ha logrado aplicar este Programa en mas de 80 transacciones en diversos sectores econ6micos. El proceso de privatizaci6n se ha efectuado con la mayor transparencia y su impacto ha sido concreto habiendo significado ingresos para el Gobierno que representan el 12% del Producto Bruto Interno (PBI). Asimismo, el Gobierno a la par que ha avanzado en su programa de privatizaci6n, ha venido creando entidades reguladoras a fin de que se encarguen de supervisar el cumplimiento de las concesiones u otros contratos por parte de operadores del sector privado en los diferentes sectores. Estas entidades cuentan con autonomia politica, administrativa, tecnica y financiera. De esta manera el nuevo rol del Estado serk el de regular las diferentes actividades productivas de bienes y servicios. Durante el anio 1998 se retomara con un renovado impetu las privatizaciones que auri restan en el sector electrico y en el de hidrocarburos y mineria, con el fin de coricluir con el proceso de privatizaci6n en 1999. Obietivos del Prestamo de Aiuste le PrivatizacL6n El programa de reformas que el Banco ha apoyado con este prestamo incluy6 tres componentes principales: a) mantenimiento de un programa macroecon6mico y un plan financiero satisfactorios para el Banco, b) irmplementaci6n de medidas de politica sectorial, reformas legales y regiamentos en las areas de mineria, hidrocarburos, telecomunicaciones, pesca y saneamiento, y c) implementaci6n del programa de privatizaci6n. 1 Mantenimiento de un programa macroecon6mico v un plan financiero satisfactorios Para el Banco. Desde la suscripci6n del prestamo en abril de 1993 y el desembolso del tercer tramo en diciembre de 1997, el Banco Mundial ha realizado un seguimiento de la politica macroecon6mica del Peru y un plan de financiamiento consistente con los objetivos del programa de reformas. Las Misiones del Fondo Monetario Internacional han realizado un seguimiento continuo de la politica macroeconomica. Entre los principales objetivos y logros macroecon6micos planteados y alcanzados respecto de aquellos trazados segun la  PAL -ICR - 44 - Oltima Pre-publicaci6n de la Carta de Intenci6n presentada al FMI en mayo de 1997, encontramos los siguientes: o Crecimiento del PBI real de 7,4% en 1997, lo cual supera el crecimiento proyectado de 5%. o Reducci6n del nivel de inflaci6n: en 1996 la tasa de inflaci6n fue de 11,8% y en 1997 se redujo a 6,5%, con lo cual se cumple ampliamente la meta propuesta en la mencionada carta (se esperaba que la inflaci6n se ubicase entre 8-10%). o Se logr6 una reducci6n del d6ficit de cuenta corriente de 5,9% del PBI en 1996 a 5,2% en 1997 (se incluy6 que fuera menor al 5,5%). a Las Reservas Intemacionales Netas del Banco Central de Reserva llegaron a niveles de US$ 10,3 billones lo cual equivale a 15 meses de importaciones de bienes y servicios no financieros (mientras que en 1996 equivalia a 12 meses), 6 veces la base monetaria y el 80% de la liquidez total del sistema bancario. o La tasa de inversi6n asciende a 25% del PBI y la tasa de ahorro nacional a 20% del PBI. De la misma manera ambas tasas superan lo proyectado. o Por otro lado, el deficit del sector publico, antes de ingresos de privatizaci6n, se redujo a 0% en 1997, lograndose de esta manera un equilibrio fiscal. b) Implementaci6n de medidas de politica sectorial, reformas leQales v realamentos en [as areas de mineria, hidrocarburos, telecomunicaciones, Pesca v saneamiento Mineria En el area de mineria, la meta acordada con el Banco incluy6 la publicaci6n del reglamento de la Ley de Mineria. El 4 de junio de 1993 se public6 el Texto Unico Ordenado de la Ley General de Mineria y entre los meses de setiembre de 1992 y febrero de 1994 se publicaron los reg!amentos de esta Ley. Estos reglamentos incluyeron: procedimientos mineros, seguridad e higiene minera, protecci6n ambiental en la actividad minero metalurgica, garantias y medidas de promoci6n de la inversi6n en la actividad minera, actividades mineras y forma de ejercerlas, concesiones mineras, estado en la industria minera, derechos comunes de los titulares de concesiones, obligaciones de los titulares de concesiones, distribuci6n de ingresos del Estado, extinci6n de concesiones y su destino, pequefios productores mineros, jurisdicci6n minera, contratos mineros, bienestar del trabajador minero, y presentaci6n, aprobaci6n y ejecuci6n de los programas de inversi6n con cargo a las utilidades no distribuidas. Hidrocarburos Las metas en este sector incluyeron la remisi6n al Congreso del borrador de la Ley de Hidrocarburos y eJ borrador del regimen tributario sobre el consumo de los productos dervados del petr6leo, y la preparaci6n del borrador del reglamento para estas leyes. Asimismo, se acord6 la promulgaci6n de la Ley de Hidrocarburos, la promulgaci6n de la legislaci6n que estableciera el regimen tributario sobre el  PAL-ICR - 45 - consumo de los productos dervados de petr6leo y la emision del reglamento para estas leyes. En esta area, se public6 la Ley No. 26221, Ley Organica de Hidrocarburos, el 20 de agosto de 1993 y entr6 en vigencia a partir del 19 de noviembre de 1993. Esta Ley norma las actividades de hidrocarburos en el territorio nacional considerando que el Estado promueve el desarrollo de las actividades de hidrocarburos sobre la base de la libre competencia y el libre acceso a la actividad econ6mica y el Ministerio de Energia y Minas es el encargado de elaborar, aprobar, proponer y aplicar la politica del sector y velar por el cumplimiento de esta Ley. El regimen tributario de los productos derivados del petr6leo se estableci6 con el Decreto Legislativo No. 775 del 31 de diciembre de 1993 que aprob6 la Ley del Impuesto General a las Ventas (16\V) y el Impuesto Selectivo al Consumo (ISC), esta Ley fue ratificada por el Decreto Legislativo No. 821 de abril de 1996 y rnodificada por Decreto Suprerno No. 1 08-97-EF de agosto de 1997. Adicionalmente, los bienes afectos al IGV estan afectos al Impuesto de Promoci6n Municipal (IPM). En base a este marco legal, son biesnes afectos al Impuesto Selectivo al Consumo, la gasolina para motores, el kerosene, gasoils, fueloils y gas de petr6leo licuado en montos que fluctuan entre S/.0.13 para fueloils y S/. 2.54 para gasolina para motores de mas de 95 octanos. Estos bienes tambien estan afectos a una tasa de 16% por IGV y 2% por ]PM. Finalmente, los reglamentos de la Ley de Hidrocarburos se publicaron a partir de noviembre de 1993. Estos incluyen: protecci6n ambiental en las actividades de hidrocarburos, calificaci6n de empresas petroleras, aplicaci6n de la regalia y retribuci6n en los contratos petroleros, refinaci6n y procesamiento de hidrocarburos, normas para el almacenamientc de hidrocarbSuros, comercializaci6n de los combustibles liquidos derivados de los hidrocarburos, seguridad para establecimiento de venta al publico de combustibles derivados de hidrocarburos, reglamento de gas por ductos, exploraci6n y explotaci6n de hidrocarburos, utilizaci6n de recursos provenientes de contratistas para la -capacitaci6n cde-persoraal del subsector hidrocarburos, comercializaci6n de gas licuado de petr6leo, transporte de hidrocarburos por ductos, normas para el calculo de tarifas para el transporte de hidrocarburos liquidos por ductos, seguridad para el transporte de hidrocarburos, seguridad para instataciones y transporte de gas licuado de petr6leo y -reglamento de seguridad industrial para actividades de hidrocarburos. Telecomunicaciones Como meta previa al desembolso clel segundo tramo, se acordo la preparaci6n del nuevo regimen de competencia, la nueva estructura tarifaria y el plan de privatizaci6n del sector. Como meta previa al desembolso del tercer tramo, se acord6 la implementaci6n del nuevo regimen de competencia, estructura tarifaria y plan de privatizaci6n. Asimisma, la emisi6n del Reglamento de la Ley de relecomunicaciones con respecto a la operaci6n de la nueva agencia reguladora, los principales tipos de servicio, el proceso y metodologia para el establecimiento de tarifas y el proceso para el otorgamiento de concesiones.  PAL -ICR - 46 - Asi, se public6 el Texto Unico Ordenado de la Ley de Telecomunicaciones (Decreto Supremo No. 013-93-TCC), la Ley de Desmonopolizaci6n progresiva de los servicios puiblicos de telecomunicaciones de telefonia fija local y de servicios de portadores de larga distancia (Ley No. 26285 de enero de 1994), y el Reglamento del OSIPTEL (Decreto Supremo No. 62-94-PCM). Se estableci6 ademas un periodo de transici6n hacia la libre competencia para los servicios de telefonia local fija y de portadores de larga distancia nacional e internacional, contandose con un periodo de concurrencia limitada durante el cual s6lo se otorgara la concesi6n a una empresa, segun lo indicado en la Ley No 26285 y los Contratos de Concesi6n. En relaci6n al organismo regulador, el Organismo Supervisor de la Inversi6n Privada en Telecomunicaciones (OSIPTEL) promueve la libre y leal competencia, controla y sanciona los abusos de posici6n dominante en el mercado y emite de manera transparente reglas de juego claras y estables para los inversionistas y consumidores. El 28 de febrero de 1994 se subast6 un paquete compuesto por el 35% desaccones de la Empresa Nacional de Telecomunicaciones S.A. (ENTEL), alrededor del 20% de las acciones del Estado en la Compaffia Peruana de Telefonos S.A. (CPT) y la suscripci6n de capital en CPT para alcanzar el 35% del accionariado. El consorcio ganador fue liderado por Telef6nica Internacional de Esparia que ofreci6 US$ 2,002.2 millones. De este modo, el Estado recibi6 US$ 1,391 millones por sus acciones, mientras que US$ 610.8 millones fue suscrito como capital adicional en CPT. Asimismo, se vendieron acciones a los trabajadores de ENTEL en enero de 1995. Entre junio y julio de 1996 culmin6 con gran exito la oferta publica de acciones del Estado en Telef6nica del Peru, constituyendose en una operaci6n que incluy6 la colocaci6n de acciones en los tramos internacional, institucional local y el Sistema de Participaci6n Ciudadana. Pesca El Gobierno y el Banco Mundial acordaron que en el sector pesca se promulgue la Ley de Pesca y se emita el reglamento de esta Ley estableciendo un nuevo regimen de ordenamiento pesquero. El 22 de diciembre de 1992 se public6 la Ley General de Pesca (Decreto Ley No. 25977) y el 15 de enero de 1994 se public6 el Reglamento de la Ley General de Pesca, Decreto Supremo No. 01-94-PE) el cual tuvo observaciones por parte del Banco. La Ley General de Pesca norma la actividad pesquera a fin de promover su desarrollo sostenido como fuente de alimentaci6n, empleo e ingresos y asegurar un aprovechamiento responsable de los recursos hidrobiol6gicos, optimizando los beneficios econ6micos, en armonia con la preservaci6n del medio ambiente y la conservaci6n de la biodiversidad.  PAL -ICR - 47 - Por otro lado, el Reglamento de la Ley General de Pesca ha sido objeto de sucesivas modificaciones para adecuarlo a los requerimientos de la actualidad pesquera en el pals. Dichas modificaciones, ademas, han sido debidamente concordadas con los principios de conservaci6n y aprovechamiento responsable de los recursos Ihidrobiol6gicos buscando asegurar el sostenimiento de la actividad y evitar las ineficiencias econ6micas asociadas a la realizaci6n de inversiones desmesuradas en capacidad de planta y flota. En octubre de 1997 se modificaron algunos artfculos del IReglamento de la Ley General de Flesca referidos a la actividad pesquera artesanal. Aun se realizaran modificaciones a este reglamento en lo que respecta a infracciones, sanciones y programas de adecuaci6n ambiental, estando previsto elaborar un proyecto destinado a sustituir parte del reglamento de la Ley General de Pesca, para lo cual se contarb con el apoyo de la 'Sociedad Nacional de Pesqueria y representantes del sector pesquero privado, a fin de lograr un marco legal promotor para el desarrollo de esta actividad. A continuaci6n se presenta la actuail politica pesquera, las actividades desarrolladas en el sector durante el periodo de vigencia del prestamo, asi como las perspectivas del mismo. ILa politica del sector se orienta haicia la armonizaci6n de los intereses nacionales con el concurso e iniciativa empresarial del sector privado. Asi, la implementaci6n de las politicas de manejo y regulaci6n pesquera se han basado en la consideraci6n ,de factores biol6gicos, pesqueros, ambientales y econ6micos involucrados en la actividad de extracci6n y de procesamiento y su correlaci6n con el factor social, coadyuvando a la preservaci6n y a Ia explotaci6n racional de los recursos Ihidrobiol6gicos en el marco de los planes de ordenamiento y constantes medidas de regulaci6n pesquera fijadas de acue.rdo a la dinamica de la pesquerfa nacional. El sector pesquero ha ejecutado programas de investigaci6n tecnol6gica para lograr el maximo aprovechamiento de los recursos hidrobiol6gicos marftimos y continentales como fuentes de alimentaci6n, velando por aspectos de seguridad y calidad en los productos que se elaboran, y propendiendo a diversificar la producci6n pesquera. En lo concerniente a la investigaci6n cientifica, se intensificaron los cruceros de investigaci6n, asi como las acciones de monitoreo y !prospecciones para el conocimienlo y regulaci6n de la pesca de las especies de mayor importancia comercial como la anchoveta, sardina, jurel, caballa, y merluza, entre otras. Asimismo, se han realizado monitoreos oceanograficos permanentes con la finalidad de estudiar la evoluci6n del calentamiento del mar peruano y la predicci6n del fen6meno "El Niffo"; un mejor conocimiento de este fen6meno permitira contar con los elementos iiecesarios para mitigar sus efectos negativos en la actividad pesquera. Finalmente se ha fortalecido al IMARPE brindandole mayor autonomia en su gesti6n y mejor. presupuesto. Otros logros a destacarse en el sector pesquero son el crecimiento y desarrollo de la infraestructura de la pesqueria artesanal, el apoyo crediticio otorgado a la actividad pesquera artesanal y acuicultura, la capacitaci6n de los pescadores artesanales a escala nacional, y la ampliaci6n de lla infraestructura piscicola. En terminos de participaci6n estatal en la producci6n pesquera, el Estado ha dejado de ser propietario de las plantas de harina y aceite de pescado de Pesca Peru. En  PAL -ICR - 48 - ese sentido, se procedi6 a subastar las siguientes plantas de harina de pescado: Chicama, Chimbote Centro, Mollendo, La Planchada, Atico, Norte Supe, Chancay, Huacho, Callao Norte, Huarmey, Tambo de Mora Sur, 1lo Centro, llo Sur, lo Norte, Tambo de Mora Norte; y las refinerias de aceite de pescado de Chimbote y Callao. Actualmente s6lo queda la Oltima planta de Pisco Norte para que la ex-empresa estatal Pescaperu pase por completo al sector privado. De otra parte, el Ministerio de Pesqueria aprob6 los lineamientos de polffica pesquera pare el desarrollo sostenido de la pesqueria y acuicultura (R.M.No.646-97-PE, publicada el 25.10.97) que se resumen en: o Promover e incentivar la investigaci6n cientifica y tecnol6gica pesquera y capacitaci6n pesquera en aguas marinas y continentales o Fortalecer la gesti6n del Instituto del Mar del Peru (IMARPE), Instituto Tecnol6gico Pesquero (ITP), Centro de Entrenamiento Pesquero de Paita (CEP Paita) y Fondo Nacional de Desarrollo Pesquero (FONDEPES) o Propiciar la cooperaci6n tecnica y econ6mica nacional e internacional o Fomentar la pesca responsable de los recursos hidrobiol6gicos o Desarrollar e implementar los Sistemas y Planes de Ordenamiento Pesquero y Acuicola o Propiciar el desarrollo y diversificaci6n de la pesca artesanal y acuicultura o Apoyar la operatividad de una moderna flota pesquera de consumo humano directo o Priorizar el desarrollo tecnol6gico de la pesca para consumo humano directo, a fin de incrementar el consumo per capita o Promover el consumo de recursos y productos pesqueros, asi como el abastecimiento, distribuci6n y comercializaci6n de recursos hidrobiol6gicos , Optimizar en acci6n concertada entre el Estado y el sector privado, la explotaci6n de los recursos hidrobiol6gicos en las fases de extracci6n, acuicultura, procesamiento y comercializaci6n o Promover la inversi6n nacional y extranjera hacia el aprovechamiento diversificado de las especies inexplotadas o subexplotadas para el consumo humano directo o Fomentar la preservaci6n de la calidad del medio ambiente y la diversidad biol6gica o Promover el desarrollo de la acuicultura de subsistencia, especialmente en las zonas andinas de mayor pobreza y en las zonas de frontera. Se aprobaron los Planes de Ordenamiento del Calamar Gigante o Pota (abril 1994) de la Merluza (enero 1997), y del Atun y especies afines a fin de contar con una norma legal mas dinamica que permita lograr el aprovechamiento racional y sostenido de los stocks de atun y especies afines, y fomentar el desarrollo gradual de su pesquerla. Actualmente, se encuentra en elaboraci6n el plan de reordenamiento del atun y del calamar para lo cual se vienen recibiendo importantes aportes del sector privado. Para los prop6sitos del ordenamiento pesquero se tiene previsto la adopci6n de sistemas modernos en materia de monitoreoa vigilancia y control de las actividades de extracci6n acordes con los avances tecnol6gicos. En este sentido, el MIPE ha dispuesto la puesta en marcha de un Sistema de Control Satelital para las embarcaciones pesqueras de bandera nacional. El referido Sistema tambien comprende la instalaci6n de Centros de Control en la Direcci6n Nacional de Extracci6n  PAL -ICR - 49 - del MIPE, en la Direcci6n General Je Capitanias y Guardacostas del Ministerio de Defensa y en el IMARPE. La instalaci6n del Sistema permitira conocer la ubicaci6n de la flota pesquera, efectuar su segluimiento y mantener comunicaciones con las embarcaciones que se integraran ail mismo; ademas, esta herramienta de control automatizado cubrira la amplitud del ambito geografico del mar peruano, incluyendo la zona de altamar hasta donde se desplaza eventualmente parte de la flota pesquera que cuenta con permisos de pesca otorgados por el MIPE para realizar actividades extractivas, de conformidad con los Planes de Ordenamiento Pesquero. En el marco del Censo y Programa de Verificaci6n de Capacidad de Bodega, el 12 de junio de 1997, se promulg6 el D.S. 006-97-PE mediante el cual se aprobaron normas complementarias al D.S. 013-97-PE que en febrero de 1997 precis6 la situaci6n de embarcaciones pesqueras que fueron materia tanto del censo como del mencionado Programa. Este nuevo dispositivo oficializ6 la situaci6n legal de las embarcaciones autorizadas a realizar actividades extractivas, para cuyo efecto se public6 la relaci6n de las mismas. Posteriormente, por D.S. 0008-97-PI_ publicado el 22 de octubre de 1997, se aprob6 los listados definitivos de las embarcaciones con permiso de pesca, incrementos de flota y embarcaciones siniestradas con p6rdida total. En dichos listados se comprueba la existencia de 736 ernbarcaciones pesqueras autorizadas a realizar actividades extractivas, de las cuales 565 son embarcaciones con permiso de pesca para el recurso anchoveta/sardina. Asimismo, del total de embarcaciones pesqueras autorizadas a realizar actividades extractivas, 570 realizan labores de pesca para consumo humano indirecto, 19 para consumo humano directo e indirecto y 147 exclusivamente para consumo humano directo. Como una medida destinada a combatir la pesca ilegal, se dispuso que las enmbarcaciones no consignadas en los listados emitidos mediante el D.S.0008-97-PE estan impedidas de efectuar labores de pesca. De acuerdo a los objetivos de promoci6n de la participaci6n privada en el monitoreo y supervisi6n del sector, la Resoluci6n Ministerial No. 404-97-PE publicada el 10 de setiembre de 1997, aprob6 las normas complementarias para ejecuci6n del Programa de Verificaci6n y Certificaci6n de la capacidad de operaci6n instalada de las plantas de procesamiento, consistente en la verificaci6n de las declaraciones realizadas por las embarcaciones piesqueras sobre el recurso extraido, asegurando que las mismas se correspondan con la autorizaci6n otorgada respecto del volumen capturado, tamafio del recurso y artes de pesca utilizadas para su extracci6n. La Comisi6n Especial encargada de coordinar y centralizar la ejecuci6n del mencionado Programa hizo conocsr los resultados del proceso de apertura de sobres y evaluaci6n de propuestas confirmando la selecci6n de Bureau Veritas S.A. Sucursal en el Peru, como la entidad especializada que se encargada de ejecutar el referido programa, precisandose que la Comisi6n Especial suscribira con Bureau Veritas S.A. Sucursal en el Peru el Convenio, sus anexos y demas documentos requerdos para la ejecuci6n del programa sefialado.  PAL -ICR - 50 - Desde el mes de setiembre, se vienen desarrollando programas piloto de verificaci6n de descarga de las especies hidrobiol6gicas atun, sardina, jurel y caballa. Estos planes consisten en verificar del 15 al 20% del total descargado. A partir de noviembre y hasta fines de aflo, se verificara el 20% del total descargado. A partir del presente afio comenzaria la verificaci6n al 100% de la descarga de las especies mencionadas. Estos planes piloto han permitido detectar infracciones, tales como pesca sin autorizaci6n, pesca de especie no autorizada, etc. Finalmente, en el caso del recurso sardina para consumo humano directo, la verificaci6n se esta haciendo al 100%. Asimismo, se autoriz6 la realizaci6n del Plan Piloto de Verificaci6n destinado a proteger el recurso anchoveta, el mismo que estara a cargo de la Asociaci6n Bureau Veritas - CERPER Sucursal del Pero, empresa que resulto ganadora del concurso "Verificaci6n de artes de pesca, sistemas de preservaci6n a bordo y volumenes de descarga de las embarcaciones pesqueras industriales para consumo humano directo e indirecto de las especies: anchoveta, sardina, jurel y caballa". Desde octubre de 1997 dicha asociaci6n viene encargandose de las inspecciones tecnicas y del seguimiento y control de las actividades extractivas, en adici6n a tareas similares que realizan los 6rganos del Ministerio de Pesquerfa (MIPE) y las Direcciones Regionales y Subregionales de Pesqueria. Tambien se autoriz6 la realizaci6n del Plan Piloto de Verificaci6n destinado a proteger el recurso sardina, el mismo que, al igual que en el caso del recurso anchoveta, esta a cargo de la Asociaci6n Bureau Veritas - CERPER Sucursal del Pero. Por su parte, a fines de octubre de 1997, se design6 una Comisi6n conformada por representantes de los sectores publico y privado, encargada de elaborar el Plan Estrategico para el Desarrollo de la Pesqueria en el mediano plazo, el cual estaria por culminarse. En relaci6n a las actividades de investigaci6n, el Instituto del Mar del Pero (IMARPE) realiza un seguimiento cientifico de las especies con la finalidad de disponer de informaci6n sobre su biologia, dinamica poblacional, determinaci6n de la biomasa total y del stock de reproductores, del potencial de captura o rendimiento y sus perspectivas de explotaci6n en el corto y mediano plazo, asi como de los demas requerimientos para el ordenamiento pesquero, con la finalidad de lograr la explotaci6n racional y el desarrollo sostenido de su pesqueria, estudios que pueden ser reforzados en el futuro. Entre sus actividades, IMARPE tambien realiza el monitoreo de las condiciones ambientales. En este contexto, en agosto de 1997, se autoriz6 al IMARPE la ejecuci6n del Plan de Operaci6n Eureka Sur I con cobertura entre los puertos de Atico y la Frontera Sur, y con la participaci6n de embarcaciones pesqueras de mayor escala. El objetivo del referido Plan es la comprobaci6n o determinaci6n de los cambios en la distribuci6n y concentraci6n que se producen en dicha zona del litoral, asi como la constataci6n de las condiciones biol6gicas-pesqueras, principalmente del recurso anchoveta y sus relaciones con el ambiente. Los recursos hidrobiol6gicos extraidos con fines de investigaci6n de acuerdo a lo dispuesto en el Plan de Operaci6n y en el ambito sefialado, son autorizados a ser procesados en las plantas que cuenten con licencia  PAL -ICR - 51 - de operaci6n vigente en las zonas; comprendidas entre los puertos mencionados. IMARPE presentara un Informe Final de la investigaci6n a ejecutar a la Direcci6n Nacional de Extracci6n. El IMARPE ejecutara el crucero de evaluaci6n de recursos pelagicos en el verano de 1998, con la finalidad de determinar la ampliaci6n de la cuota de captura permisible del recurso anchoveta. Cabe seifalar que el presupuesto del IMARPE se ha incrementando en los ultimos anos. De la asignaci6n dispuesta para el ejercicio 1993 ascendente a S/. 6.1 millones de nuevos soles se pas6 ai una asignaci6n de Sl.17.8 millones de nuevos soles en 1995, S/.22.8 millones de nuevos soles en 1996 y S/.27.3 millones de nuevos soles en 1997. En torno al fen6meno de "El Nifno", 4,ste viene desarrollandose desde marzo de 1997 a lo largo de la costa peruana y sus efectos ya se han mostrado en el sector. Asi, por ejemplo se ha estimado que durante 1997 se ha obtenido una menor extracci6n de la anchoveta de aproximadamente 21,6% respecto a 1996. En el mes de marzo de 1998 se concluiria una investigaci6n para determinar la disponibilidad de la anchoveta y las cuotas de captura que se fijarian para el presente anio. Durante el periodo que dure "El Nino" con ia aparici6n de recursos tropicales, como el perico y el langostino, se orientara la producci6n a la elaboraci6n de conservas y congelados. Asi, se ha observado por ejemplo, que la pesca de sardina, jurel, caballa y otros pescados, crustaceos y moluscos, destinada a la elaboraci6n de conservas de pescado y mariscos ha tenido un incremento de 69,9% con respecto a 1996. Finalmente se considera que a pesar del fen6meno de "El Niffo" no se producira desabastecimiento de productos pesqueros, debido a que este suceso climatol6gico trae consigo la presencia de una variedad de recursos que pueden ser explotados. Adicionalmente el IMARPE ha informado el surgimiento de una gran corriente de agua fria frente a la costa peruana, clue permitiria reanudar en abril la temporada de pesca de anchoveta y sardina para 1a producci6n de harina y aceite de pescado. A fines de 1997 y en coordinacion con el Banco Mundial, se organiz6 la visita de un consultor de reconocido prestigio internacional en el area de pesca. El referido consultor estuvo en nuestro pais para identificar las areas en que brindara asesoramiento especializado al MIPE respecto de las diferentes opciones para la administraci6n de recursos pesqueiros, identificando sus ventajas y desventajas. Igualmente, el consultor ha proporcionado informaci6n sobre la experiencia internacional en materia de sistemas de administraci6n pesquera, y ha bnndado asesoria puntual en torno al actual sistema de administraci6n de los recursos anchoveta y sardina. Tambien ha sugerido mejoras al sistema de administraci6n pesquera y ha efectuado una primera evaluaci6n del impacto del fen6meno "El Niffo" en las condiciones de operaci6n de la industria de la anchoveta y la sardina. Entre las actividades por realizar en el sector, se deberS concluir con el programa de fortalecimiento de las funciones de control, monitoreo y verificaci6n, continuandose ademas con la delegaci6n gradual de estas funciones al sector privado. Como  PAL -ICR - 52 - resultado de este programa tambiCn se podra identificar los recursos que requieran del establecimiento de planes de ordenamiento especificos. Asimismo, durante 1998 se llevaran a cabo coordinaciones con la industria pesquera privada a fin de determinar la introducci6n, en una primera etapa, del sistema de cuotas individuales transferbles (ITQs) para el calamar gigante o pota y la merluza, especies que actualmente cuentan con sus respectivos planes de ordenamiento. El avance del programa de fortalecimiento mencionado anteriormente permitira identificar otras especies que eventualmente podrian ser incorporadas al referido sistema de cuotas individuales transferibles. Como se ha detallado antes, la empresa Bureau Veritas viene apoyando al Ministerio de Pesqueria con la realizaci6n del censo de embarcaciones para determinar su capacidad de bodega, el censo de plantas procesadoras para determinar su capacidad instalada y la realizaci6n de los proyectos piloto para verificar la descarga de anchoveta, sardina, jurel y caballa. Actualmente se esta realizando el censo para determinar la capacidad instalada de las plantas procesadoras. Posteriormente, cuando se levante la actual veda, en mayo de 1998, se dara inicio a la realizaci6n del proyecto al 100%, vale decir la verificaci6n de la descarga al 100% las especies anchoveta, sardina, jurel y caballa. Finalmente dentro del ordenamiento pesquero se contemplaria la reducci6n en el mediano plazo del 30% de la capacidad de bodega de la flota para recursos plenamente explotados. Saneamiento En el sector saneamiento, las metas incluyeron aspectos como la remisi6n al Congreso de un borrador de la Ley en el sector y la preparaci6n del borrador del reglamento para dicha ley; asi como la promulgaci6n de la Ley en el sector saneamiento, la emisi6n del reglamento de la Ley y el establecimiento de la agencia reguladora para el sector. En diciembre de 1992 se cre6 la Superintendencia Nacional de Servicios de Saneamiento (Decreto Ley No. 25965) y en 1994 se public6 la Ley General de la Superintendencia Nacional de Servicios de Saneamiento (Ley No. 26284) y su reglamento (Decreto Supremo No. 24-94-PRES). En julio de 1994 se public6 la Ley General de Servicios de Saneamiento (Ley No. 26338) y en 1995 se aprob6 el Reglamento de la Ley General de Servicios de Saneamiento (Decreto Supremo No. 09-95-PRES). c) Implementaci6n del programa de privatizaci6n Programa de Privatizaci6n El Acuerdo del Prestamo PAL estableci6 que antes del desembolso del segundo tramo se ofrezca en venta por lo menos US$ 450 millones en activos de la "Agenda de Privatizaci6n", con un minimo de US$ 275 millones en activos de dos de los tres sectores de minerfa, hidrocarburos y telecomunicaciones. Por otro lado, antes del  PAL -ICR - 53 - desembolso del tercer tramo, el Perb se comprometi6 al ofrecimiento en venta do por lo menos US$ 1,200 millones en activos de la "Agenda de Privatizaci6n", con un minimo de US$ 300 millones en cada uno de los sectoros de minoela y telecomunicaciones y la venta efectiva al sector privado de por lo menos US$ 600 millones en activos de la "Agenda de Privatizaci6n". Se entiende por "Agenda de Privatizaci6n" la relaci6n de empresas y valorizaci6n de sus activos que se estableci6 en la Carta Suplementaria al Pr6stamo PAL. En t6rminos de la referida Agenda, det los US$ 4,135 millones establecidos en ella, se ha logrado ofrecer en venta mas de U.S$ 3,000 millones. En el sector minero se ha logrado ofrecer en venta mas de US$ 875 millones con una inversi6n proyectada de US$ 4 690 rnillones aproximadamente. Entre las empresas privatizadas se incluye: Hierro Peru, mina de cobre Condestable, mina de cobre de Cerro Verde, refinerla de cobre deo Hay refinerla de zinc de Cajamarquilla, entre otros. En el sector hidrocarburos el monto transado alcanz6 los US$ 790 millones con una inversi6n proyectada de US$ 170 rnillones, habiendose privatizado las siguientes empresas: Solgas (distribuidora de gas), Petrolera Transoceinica (transporte maritimo de combustibles), Petromar (explotaci6n de petr6leo off-shore), Petroperb (estaciones de gasolina), Planta de Lubricantes Petrolube, Lote 8 y Loat 8X y el Lote X (concesi6n para explotaci6n y exploraci6n de hidrocarburos), Terminales del Norte, Centro y Sur. En el Area de telecomunicaciones, el monto ofrecido en venta borde6 los US$ 2 600 millones con una inversi6n proyectgada de US$ 2 176 millones, monto explicado mayormente por la subasta de la Empresa Nacional de Telecomunicaciones S.A. (ENTEL) y la Compaflia Peruana de Telefonos S.A. (CPT). Petroperu El pr6stamo PAL contribuy6 al esquema de privatizaci6n de PetroperO. La meta establecida con el Banco con relaio6n a esta empresa indicaba quo antes del desembolso del segundo tramo, soi prepararia el plan do implemontaci6n y ol cronograma de privatizaci6n. Antes del desembolso del tercer tramo, se ofrocerla en venta los activos de Petropero de acuerdo con el plan de implementaci6n y el cronograma establecidos (antes del desembolso del segundo tramo) con un minimo de US$ 300 millones de los activos de Petroperb de la "Agenda de Privatizaci6n" y con un 70% en plantas de almacenamiento, de manora tal que so promueva el meircado abierto y competitivo. En la "Agenda de Privatizaci6n", laI empresa Petroperb estuvo valorizada do la siguiente manera:  - - ~~~~~~~~~~~PAL -IOR - 54- Refinerla La PampIlla 160 Refinerd. Talars 80 Refinerl. Iqultos 7 Reflnerla Pucallpa 4 Refinear. Conchin 7 Terminales de almacenamlento 100 Oleoducto 1S0 Planta de lubricantes/ fertlizantes 40 Lotes 246 Total PetroperC 804 El 19 de diclembre de 1997 concluyb el proceso de subasta del Contrato de Operaci6n de los Terminales del Norte (Etin, Salaverry, Chimbots y Supo), loo Terminales del Centro (Terminal de Combustibles Callao) y loo Torminales del Sur (Pisco, llo y Mollendo), el cual tendri una vlgencla de 15 iMoe, con lo cual as cumpll6 con la meta establecida en tirminos de la "Agenda de PrIvatIzal6n." Anteriormente se habla privatizado el Lote 8/BX, la Refinerla La Pampllla, Petrolube yel LoteX. El esquema de privatizaci6n en el sector fue flexIble y obedec[6 al anillls de Is coyuntura en que se desenvolvi6, lo que determln6 por ejemplo quo la subaset de los Contratos de Operacl6n de los Terminales procedleran a la prlvatlzacl6n de la Refiner!a de Talara que en un prlnclplo se establecIl provla I sa prlvatlzacl6n de dlchos Terminales. Asl, la venta de esta reflnera soe ha flJado reolin pare junlo de 1998. L2cclones asrendldas Sobre el Acuerdo de Pr6stamo: En relacl6n a las condiclonalldades de los pristimos de sjusto on genral, debs considerarse que el objetivo prlncIpal de un pristamo de ajusto os el do brlndar una adecuada gula al pals bonificlarlo durcnte el prociso de reforms, orlentada bislcamente al logro di un sano desarrollo de la sconomia del pals antos quo exlglr, de manera prlorltarla y estricta, el cumpllmlonto do uns larga lIsta de condlciones que muchas vOces distraon a lo ejeocutoris di las meta prlmordlalio por las cualeos o acord6 el pristamo. En este sontldo, ha quedado on ovldonols la necesldad de quo el Banco trabaje, an l sucoslvo, on el dlefMo do planis mis scordis oon las resildades de cada paIe ovltando estandarlzar Is spllcaclon de politlos slmllares a dlferontis palss, Igualmente, al momento de evaluar il segulmlento do ls polltloas pliloables saegn cods osso, debe exlstlr un espirltu do oolaboracl6n mutus intro el Banco y el boneflolarlo para alcanzsr los objetlvos trazados do Is mJor manors poolble. Sobre el deseme o gdel Bunco: El goblerno del Pert considera al Pristamo do Ajusti do Prlvatizacl6n como un pr6stamo exltosoo El equlpo de trabajo del Banco aslgnado pars esti pristamo fue  PAL -ICR - 55 - muy bueno. Por ejemplo, en el cumlplimiento de las metas del sector pesquero, el Banco evalu6 los pros y contras de la aplicaci6n del sistema de ITQs tratando de dejar de lado la discrecionalidad de los actores involucrados. En ei caso del PAL en particular, el principal objetivo del prestamo fue apoyar la realizaci6n del programa de privatizaci6n en el Perui y no el cumplir unicamente con un listado de condiciones. El Banco y el Gobierno trabajaron juntos y se tuvo una flexibilidad razonable para la adaptaci6n a las necesidades del beneficiario. El Banco no debe tratar de imponer condiciones, mas bien se debe tener en claro que estas son un Acuerdo entre Banco y el Gobierno. Una gran ventaja en el prestamo PAIL fue la continuidad de la(s) personas a cargo que permitio aplicar flexibilidad necesaria en el cumplimiento de metas. El !Pr6stamo de Asistencia T6cnica de Privatizaci6n (Privatization Technical Assistance Loan - PTAL) tambien ayud6 a cumplir las metas del prestamo PAL. No s6lo en el MEF, sino tambien en COPRI y los CEPRIs, se tuvo asesoria t6cnica y continuidad en el campo de acci6n del pr6sLamo. Punto importante a seffalar es la necesidad de mejora en la coordirlaci6n al interior del "Grupo Banco Mundial" con la finalidad de lograr el mejor efecto en los menores plazos en las coordinaciones que se efectuen con las misiones provenientes de las instituciones conformantes del Grupo. Sobre el desempefho del Beneficiario del Prestamo Tanto el Banco como el gobierno del Peru trazaron metas muy optimistas al momento de la suscripci6n del pr6stamo, hecho que gener6 presiones por ambas partes para Ilegar a cumplirlas, lo que finalmente no se concret6, dando lugar a que se solicitaran varias pr6rrogas a la fecha de cierre pactada inicialmente. Peru trat6 de cautelar todos los aspectos del proceso de privatizaci6n lo que implic6 algunos atrasos. Sin embargo, entre 1998 y 1999 se concluira con este proceso. Pesca v PetroperO: Al principio, las condiciones de mayoir trascendencia en el prestamo PAL fueron las referidas a los sectores de pesca y Petroperu. Las fechas establecidas en los cronogramas resultaron muy optimista perdiendose un aflo por posponerlos. Con relaci6n al sistema de Cuotas Inclividuales Transferibles (Individual Transferable Quotas - ITQs), a pesar de tener claridad en la concepci6n del Sistema, se tuvo problemas en determinar la mejor manera de implementarlo - de ser esta la decisi6n - en el sector pesquero peruano. La implementaci6n del sistema de ITQs podria tornarse inmanejable por el sector pesquero a menos que se le delegue al sector privado. Duraci6n del or6stamo:  PAL -MCR - 56 - El pr6stamo suscrito el 21 de abrl de 1993 tonia como fecha inicial de cierre el 30 de junio de 1995. Hubo una primera pr6rroga hasta el 30 de junio do 1996, una segunda hasta el 30 de junio de 1997 y una tercera hasta el 31 de dicdembre de 1997. Finalmente hubo una iltima pr6rroga por razones administrativas hasta el 30 de enero de 1998. El p raodo indicado en e, :onvenio de Pr6stamo de dos affos de duraci6n result6 insuficiente para las reformas que se adoptaron.  APPENDIX C: I. CONTRIBUTION OF COPRI (PRIVATIZATION TECHNICAL ASSISTANCE LOAN - 3540-PE) IL PRIVATIZATION TRANSACTIONS UNDER PTAL  - 57 - . :.'f.. :'.:..."'- : Comisi6n de I Promocion de la Inversi6n Privada COPRI INFORME FINAL Evaluacion del Programa de Privatizacion Con Financiamiento del Banco Mundial . Al 1 1/03/9 8  - 58 - EVALUACION DEL PROGRAMA DE PRIVATIZACION CON FINANCIAMIE:NTO DEL BANCO MUNDIAL I.- OBJETIVOS 1.1. Convenio del Prestamo El objetivo del proyecto establecido en el Convenio del Prestamo (Proyecto de Asistencia Tecnica para Privatizaci6n) entre la Republica del Peru y el Banco Internacional de Reconstrucci6n y Fomento - BIRF de fecha 21 de abril de 1993, se ha cumplido a cabalidad al haberse concretado la asistencia a la COPRI en la preparaci6n e implementaci6n del Programa de Privatizaci6n, habiendo contribuido con las reformas de las politicas sectoriales y participado en la definici6n de un nuevo marco regulatorio. El Financiamiento del Banco Mundial ha permitido cumplir los siguientes objetivos especificos: F ortalecimiento de la Capacidad Administrativa de COPRI y los Comitds Especiales, a trav6s de la contrataci6n de consuiltores, coordinadores y asistentes tecnicos. Campafia Informativa y Promocional, a trav6s del desarrollo de campanas promociones locales e internaciones para difundir el programa de privatizaci6n e interesar a los potenciales inversionistas. Preparaci6n e Implementaci6n del Programa de Privatizaci6n y apoyo en la definici6n del marco regulatorio necesario para garantizar la ejecuci6n del programa. La preparaci6n del programa comprendi6 la realizaci6n de auditorias financieras, evaluaci6n y valorizaciones, elaboraci6n de prospectos y documentos necesarios para la venta de las empresas en proceso de privatizaci6n. 1.2. Programa de Privatizaci6n A lo largo de estos afios se viene cumpliendo los objetivos trazados al inicio del proceso, los cuales estan orientados a: Contribuir a un mejor funcionamiento de la economia de mercado.  -59 - Promover la inversi6n privada, nacional y extranjera, en sectores gravitantes para el desarrollo econ6mico (energia, comunicaciones, petr6leo, etc.) Promover el desarrollo del mercado de capitales nacional incrementado el monto y nuimero de transacciones y participantes (a traves de mecanismos como participaci6n ciudadana, fondos mutuos) Generar ingresos para el Tesoro Puiblico (financiamiento de programas de lucha contra la extrema pobreza, etc.). II. EVALUACION DEL PROCESO DE PRIVATIZACION En 1990 el gobierno inici6 un programa de reformas estructurales orientado a redefinir el rol del Estado y sentar las bases para un desarrollo integral y sostenido; los objetivos sobre los que se ha venido trabajado incluyen la estabilizaci6n de variables macro econ6micas y monetarias como son los gastos fiscales y ia presion inflacionaria, la reinserci6n internacional, la apertura hacia el libre mercado, la promoci6n de la inversi6n privada, la buisqueda de competitividad internacional y la consolidaci6n de la pacificaci6n. La privatizaci6n es un componente esencial de este esfuerzo y no una simple venta o transferencia de empresa o activos, constituyendo una herramienta a traves de la cual el Estado deja en manos del sector privado la iniciativa empresarial y productiva, a la vez que se fortalece en areas donde fue perdiendo presencia como educaci6n, salud, seguridad, administraci6n de justicia, infraestructura, que son claves para el bienestar de la poblaci6n. Paralelamente, el Estado adopta un rol regulador para el funcionamiento sano del mercado. 2.1. Marco Legal En 1991 se da inicio al Programa de Privatizaci6n promulgandose el 25.09.91 el Decreto Legislativo 674 "Ley de Promoci6n de la Inversi6n Privada en las Empresas del Estado" que define los principios generales de la privatizaci6n, los 6rganos del proceso (COPRI, CEPRI), mecanismos, modalidades, venta a trabajadores y crea el FOPRI para financiar las actividades del proceso. Asimismo, la Ley 26438 precisa que el FOPRI es un organismo descentralizado, dependiente de la COPRI, con personeria juridica, que cuenta con autonomia funcional, econ6mica, financiera y administrativa. Las funciones, organizaciones y facultades de la Direcci6n  - 60 - Ejecutiva FOPRI estan contenidas en su estatuto aprobado mediante Decreto Supremo No. 060-97-PCM del 24.11.97. Por este dispositivo el FOPRI sigue siendo el soporte del proceso de privatizaci6n y ademas participa como la entidad responsable de velar por los intereses del Estado en materia de posprivatizaci6n, cumpliendo una labor importante en la supervisi6n de los compromisos de los inversionistas, cuando esa funci6n no haya sido asignada a los organismos reguladores correspondientes. 2.2. Resultados Obtenidos y Experienci.a Adquirida - Como resultado del proceso de privatizaci6n, el total de ingresos generados a la fecha por las transacciones realizadas a diciembre de 1997, asciende a US$ 8,363.8 millones, distribuido en: compra de acciones y/o activos US$ 6,988.9 millones, concesiones/contratos de cesi6n/contratos de operaci6n/derechos de vigencia opci6n US$ 477.6 millones, capitalizaciones US$ 897.3 millones. De este total de transacciones (sin la capitalizaci6n) se ha pagado al contado US$ 5,925.6 miillones y US$ 343.1 millones en papeles de la deuda. quedando un saldo financiado de US$ 1,197.8 comprendidos dentro de los siguientes esquemas: Programa de Promoci6n Empresarial 19%, Trabajadores 2%, Participaci6n Ciudadana 29%, Concesiones/Opci6n 25% y otros 25%. (Anexo No.l, A ance del Proceso de Privatizaci6n) Asimismo, las operaciones de privatizacii6n permitiran inversiones a futuro por mas de US$ 6 mil millones, donde US$ 2,729 millones (que incluye la inversi6n a ser realizada con los recursos aportados en la capitalizac:i6n) corresponde a inversiones comprometidas contractualmente y con metas establecidas; los informes peri6dicos de auditoria reflejan en la mayoria de los casos el cumplimiento de los compromisos de inversi6n de acuerdo a lo previsto en los cronogramas. Es de resaltar que dicho cumplimiento es liderado por el sector minero, telecomunicaciones y electrico. (Anexo No. 2, Estado de Situaci6n de los Compromisos de Inversi6n) Se ha logrado una notable ampliaci6n de la base de propietarios. Por un lado. los trabajadores de las empresas a ser transferidas pueden adquirir hasta el 10% de las acciones de la empresa privatizada, lo cual ha posibilitado que mas de 16 mil trabajadores, que han ejercido su derecho de compra, disfruten de los beneficios que esto conileva. Por otro lado, inas de 385 mil personas se han beneficiado a traves del Sistema de Participacion Ciudadana  - 61 - aplicado en el saldo de acciones de Telefonica, Luz del Sur y Cementos Norte Pacasmayo. El establecimiento de mecanismos efectivos y transparentes garantiza el desarrollo del mercado de capitales, difunde la propiedad privada, fomenta el ahorro, la inversi6n y promueve una cultura de mercado. Igualmente, el proceso busca fomentar la participaci6n de empresarios locales otorgandole condiciones de financiaci6n similares a las existentes en el exterior, logrando hasta la fecha aplicar el Programa de Promoci6n Empresarial en mas de 80 transacciones en diversos sectores econ6micos. Se ha atraido a importantes operadores, como por ejemplo: Telef6nica (Espania), Generandes (EE.UU/Chile), Mobil Oil (EE.UU.), Repsol (Espafia), Doe Run/Renco Group (EE.UU.), Banco de Credito (Peru). Cambior Inc. (Canada), Perez Companc (Argentinal), Banco Bilbao Vizcaya (Espafia), BHP (Australia), Acerco/Stanton Funding/Wiese (EE.UU./Peru), Rio Algom/Inmet (Canada), Cominco/Marubeni (Canada/Jap6n), etc. Se ha generado mayor eficiencia en el servicio de telefonia donde el tiempo de espera promedio para la instalaci6n de una linea se ha reducido de 118 meses en 1992 a 7 dias en 1997, el costo de la linea telef6nica ha bajado de US$ 1,500 a US$ 300, la densidad telef6nica ha aumentado de 2.9 en 1993 a 7.5 en 1997 de lineas en servicio por cada 100 habitantes, el numero de hogares con linea telef6nica en Lima creci6 de 17% en 1993 a 42% en 1997, gran expansi6n estratos de menores ingresos. En la distribuci6n y generacion de energia en Lima, el grado de electrificaci6n ha crecido de 68% en 1994 a 98% en 1997, la perdida de energia en distribuci6n ha bajado de 19% a menos de 14% del total recibido, las inversiones realizadas en el sector prActicamente garantizan la no interrupci6n del servicio en ausencia de lluvias. En los servicios bancarios, los gastos operativos como porcentaje de los activos promedio han descendido de un 7.3% a 5.7% en el Banco Continental y de 8.5% a 6.6% en Interbank, mejora en la calidad de la cartera, la mayor competencia ha originado una flexibilizacion en las condiciones de prestamos personales y en el lanzamiento de nuevos productos. Asimismo, el proceso de privatizaci6n ha permitido: la reducci6n de la burocracia estatal, activa participaci6n del sector privado, mayores recursos para el Estado, redefinici6n de la funci6n del Estado y una modernizaci6n empresarial.  62 - Finalmente, dada la complejidad que reviste el proceso de privatizaci6n en su conjunto, que incluye acciones preparatorias y propias de transferencia, han surgido algunos problemas de posprivatizaci6n, como: Contingencias legales, laborales, tributarias (incluyendo reclamos, juicios, etc.). Incumplimiento en algunos casos del calendario de pagos correspondiente al saldo de precio, en los casos que se vendan acciones y/o activos en forma diferida (caso de 5 ex hoteles de turistas de Chimbote, Huaraz, Ica, Iquitos y Moyobamba, asi como el Circuito No.2 de propiedad de Epsep). Incumplimiento de los compromisos minimos de inversi6n de acuerdo a los plazos para su ejecuci6n (donde mencionaremos nuevamente a los 5 ex hoteles de turistas detallados en el punto anterior). Complejidad de los procesos de las liquidaciones y extinciones. 2.4. Principales Privatizaciones 2.4.1. Sector Telecomunicaciones - Entel / CPT Con la transferencia al sector privado de las empresas de telecomunicaciones, en el marco de la exitosa subasta realizada el 28 de febrero de 1994 en la cual el consorcio Telef6nica del Peru liderado por Telef6nica Intemacional de Espafia ofreci6 US$ 2,002 millones por el 35% de acciones de Entel Peru, el 19.9% de la Compafiia Peruana de Telefonos CPT con la obligaci6n de suscribir un aumento de capital para alcanzar el 35% del accionariado de CPT, se crearon asi las condiciones propicias para la modernizaci6n de este sector sobre la base de la eliminaci6n de las distorsiones que en el pasado detuvieron su desarrollo. El compromiso del consorcio ganador de la subasta contemplaba, entre otros, la colocaci6n en un plazo maximo de cinco afios de un mill6n de lineas telef6nicas, asi como la interconexi6n que permita que todos los poblados con mas de 500 habitantes est6n integrados a la red nacional de telefonia antes de dicho plazo. De igual modo, entre junio y julio de 1996 culmin6 con gran exito la oferta puiblica de acciones del Estado en Telefonica del F'eru, constituyendose en una operaci6n que incluy6 la  - 63 - colocaci6n de acciones en los tramos intemacional (US$ 918 millones), institucional local (US$ 41 millones) y el Sistema de Participaci6n Ciudadana (US$ 280 millones). Asimismo, con el fin de contar con un ente regulador en el sector de telecomunicaciones se cre6 al Organismo Supervisor de la Inversi6n Privada en Telecomunicaciones OSIPTEL que tiene como objetivo principal promover el acceso, modernizaci6n, calidad y eficiencia de los servicios publico de telecomunicaciones, asi como de regular el comportamiento de las empresas operadoras, establecer la politica de defensa de los usuarios, fijar los cargos de interconexi6n de los servicios piublicos de telecomunicaciones, etc.. 2.4.2. Sector Hidrocarburos - Petroperu La estrategia contempla la reestructuraci6n de Petroperut en Unidades de Negocio, en las que se viene promoviendo la participaci6n de inversionistas estrategicos, otorgandoles control sobre las operaciones, a traves de contratos de operaci6n, de cesi6n de posici6n contractual o de gerencia y a traves de la venta de acciones manteniendo el Estado, en algunos casos, un determinado porcentaje del capital social. Resultados a la fecha (En Millones de US$): Fecha de Unidad de Negocio Comprador Modaltdad Pago Inversi6n Subasta .Involucrado Prevista 11.06.96 Lote 8 / 8X Consorcio Pluspetrol Peni Contrato de Cesi6n 142.2 25.0 Corporation 11.06.96 Refineria La Pampilla S.A. Refinadores del Per6 S.A. Venta 60";o ace. 180.5 50.0 15.08.96 Petrolube S.A. Mobil Oil del Peri S.A. Venta 100%.o acc. 18.6 29.10.96 Lote X Perez Compane del peru S.A Contrato de Cesi6n 202.0 25.0 19.12.97 Terrninales Norte, centro Consoreio GMP S.A. - Graha y Contrito de 99.0 18.5 y Sur Montero S.A. v Serlipsa Operaeion Transacciones 642.3 11P..5 - Los US$ 99 MM, corresponde al VPN de los ingresos anuales previstos por L$SS 11.83 MM (duraite 15 anos) y 1 pago por el Derecho de Suseripei6n de I7S$ 9 MIM. 2.4.3. Sector Minero Centromin Luego de la subasta de Centromin de modo integrado, declarada desierta en mayo de 1994 por falta de postores, se inici6 la adecuaci6n y la definici6n de una nueva estrategia, que fue  - 64 - puesta en ejecuci6n en enero de 1996, y considera una transferencia de modo fraccionado a traves de las siguientes modalidades: Venta de activos: proyectos (Antamina, Toromocho, Yauricocha) y prospectos mineros (Quicay, otros). Capitalizacion: utilizada en Metaloroya (Complejo Metalurgico de La Oroya). Venta de acciones: utilizadas en las empresas creadas: Yauliyacu S.A. (mina Casapalca), Mahr Tunel S.A. (minas San Crist6bal / Andaychagua), Cobriza S.A. (mina Cobriza), Paragsha S.A. (mina Cerro de Pasco), Imexcallao S.A. (dep6sito y facilidades portuarias), Electroandes (sistema electrico). Para lograr dichos objetivos, se hizo necesario transferir a distintas entidades del Estado, servicios basicos y de apoyo: Sistema Ferroviario Yauricocha-La Oroya-Cerro de Pasco, (Colegios, Hospitales, Servicios locales de agua, energia. Resultados a la fecha (En Millones de US$): Fecha de Nombre Comprador Modalidad Pago Inveesidon jSubasta= _____=Involucrado Prevista Enie-96 Prospecto Paucaray Inv. Mineral del Sur S.A. (Peni) Transferencia 0.2 Jul-96 Provecto de Cobre Consoreio In riet / Rio Algom Opci6n 2 arios 20.0 2,520.0 1 --___________ aria Ltda (Canada) Jul 96 Prospecto de Oro Quicay Barrick Gold Corporation Opei6n 2 ahos 203.0 10j. ___ L__ ____ __|I (Canada) Dic-96 Yauliyacu S.A. CiaMinera Casaplca S.A.(Pern) Venta 100% accioties 9.1 110.2 Abr-97 MetalOroya S.A. Cons. The Renco Group, Inc. / Capitalizaci6n 121.5 126.5 Doe Run Resources Corp.(USA) Jui-o' Mahr Tuinel SA. Volcan Comp.Minera S.A.(Penri) Venta 100 M acciones 127.8 60.0 Oct-97 iina Yauricocha Compahia Miners San Ignacio de Opci6n 2 agos 6.0 s . Morocoeha S.A. (Perfu) Otros ingresos 1.5 Transacciones previstas, si las opciones e inveusiones son ejecutadas 489.1 2,833.7 Minero Perui La estrategia de venta plante6 dividir a Minero Peru, creando 3 nuevas sociedades: Sociedad Minera Cerro Verde S.A., Sociedad Minera Refineria de Cobre de llo S.A., Sociedad Minera Refineria de Zinc de Cajarnarquilla, para vender acciones de cada una de estas empresas; asimismo, consideraba la venta de las concesiones separadamente a traves de contratos de opci6n en la mayoria de los casos. Resultados a la fecha (en Millones de US$)  - 65 - Fecha de Nomnbre Comprador Modalidad Pago Inversi6n Subasta Involtcrado Prevista 09.12.92 Yac.Minero Quellaveco Minera Mantos Blancos Transferencia 12.8 2.5 10.11.93 Soc.M.Cerro Verde S.A. Cyprus Climax Metal Co. Venta 100% acciones 35.5 485.3 25.01.94 Las Huaquillas I Vegsa Andescorp Opci6ti de transferencia 0.9 1.9 25.01.94 Jehuasnarca/Caariasco Placer Domie Opci6n de transtrtnIcia 2.1 2.5 10.03.94 La Granja I Cambior Inc Opci6n de transferencia 7.0 25.0 22.07.94 Colpar, Hualatan, Cia. Miners San Jose Opci6n de transferencia o_.1 0.1 Pallacochas 3 22.04.94 Sociedad Minera Refi- Southem Peni Venta 100%o acclones 66.6 20.2 neria de Cobre lo S.A. 04.11.94 Sociedad Minera Ref,- Cominco Ltda. / Marubeni Venta 100%io acciones 193.3 20.0 neria de Zinic S.A. (Canadr i lap6n) 08.03.95 Y'acimiento Berenguela I Kappes i Cassiday Opci6n de transferencia 0.7 (I8 25.08.95 San Antonio de Poto 2 Andrade Gutierres M.(Brasil) Opci6n de transferencia 1.0 Otros ingresos 2.0 Transacciones 322.0 558.31 1 Ejercieron Is opci6n de transferencia en 1997 2 Decidieron no ejercer la opci6ri de transferencia 2.4.4. Sector Electricidad La transferencia al sector privado de este sector se basa en los siguientes principios: la generaci6n, transmisi6n y distribuci6n deben ser manejados por empresa separadas e independientes; la actividad de generaci6n electrica debe realizarse dentro de un marco de libre competencia absoluta; los derechos y responsabilidades de las compafnias deben ser regulados, debido a su naturaleza monop6lica. Resultados a la fecha (En Millones de US$) Fecha de *Jnidad de Negocio Comprador Modalidad Pago Inversion Subasta Involucrado Prevista 12.94 Edelnor Invefsiones Distnilima Venta del 60"'oe acc. i 76.5 15c.0 12.01.94 Luz del Sur Ontario Quinta AVrV Vents del 60% se cc. 212.1 120.0) 25.90.95 Emp. Generaci6n Cahua Sindicato Pesquero V enta del 60, scc. 41.8 1-.10.95 Edegfl Generandes Co. \entn del 61t . 524.4 42.0 12.12.95 Eteeusas Generali-s Capitaliz-ci6n 120.1 1i.12.95 Ede - Chancay Inversiones Distrilinsa Venta del 60S'A acc. 1(0.3 25.06.96 Egenor Dominion Perui Ve,na del 60" s acc. 228.2 42.1 2-.06.96 Ede - Cafiete Luiz del Sur S.A. Venta del 100l"%, acc. 8.6 (. 1(1.96 Emp. Electrica de Pitera Electrica Cabo Blanco Capitalizsci6n 19.2 40.11 11.02.97 Electro SLur Medio Consorcio HICA Vents del 1001% ac. 25.6 25.6 N.v die 96 Luz del Sur Varios Oferta Publica 162.5 Otros Trahajadores y Otros 164.7 Transacciones previstas 1,574.3 59.7  - 66 - Asimismo, se crea al Organismo Supervisor de la Inversi6n en Energia OSINERG, con la misi6n de fiscalizar el cumplimiento de las disposiciones legales y tecnicas relacionada con las actividades de los subsectores de electricidad e hidrocarburos, asi como el cumplimiento de la conservaci6n y protecci6n del medio ambiente en el desarrollo de dichas actividades. III. Evaluaci6n del Prestamo del Banco Mundial 3.1. Estructura de Financiamiento del Programa de Privatizaci6n El presupuesto del proceso de privatizaci6n se financia con los recursos provenientes del Fondo de Promoci6n de la Inversion Privada (FOPRI), cuyas fuentes se sustentan en lo dispuesto por el Articulo 30 del Decreto Legislativo 674: el 2% del producto de la venta de las empresas a privatizar, los fondos que le transfieran algunas empresas en proceso, creditos y donaciones externas y otros ingresos. Los gastos de privatizaci6n entre 1991 a 1997 son US$ 180 millones, de los cuales US$ 83 millones corresponde a otros egresos como pagos por racionalizaci6n de personal, beneficios sociales, incentivos, laudos, saneamiento, transferencias a entidades del Estado, prestamos. Los US$ 97 millones restantes corresponden a los gastos de privatizaci6n como consultorias (legal, financiero, auditorias, valorizaciones, tasaciones, peritajes, promoci6n, etc.), otros servicios (divulgaci6n, publicaciones), pasajes, viaticos, etc; cabe resaltar que estos gastos de privatizaci6n representan el 1.2% del total de transacciones realizadas. Estos US$ 97 millones han tenido como soporte financiero el prestamo del Banco Mundial hasta por US$ 30 millones, representanclo asi el 31% de participaci6n en el proceso. 3.2. Programas y Proyectos Financiados con el Prestamo del Banco Mundial Podemos afirmar entonces que el Banco Mundial ha participado en el financiamiento de los principales procesos de privatizaci6n, cuyos resultados han sido desarrollados en la segunda parte del presente informe, destacando:  67 Proyecto Proceso Monto Financiado Principales Contratos en Miles de US$ Financiados PER/92/017 CENTROOMIN 1,042 Baker & Mckenzie, First Boston/Macroinvest, K;night Piesold PER/92//026 ENTEL 635 Cons. Morgan G. / Coop. / Proinversion. PER/92/037 CPT S.A. 1,501 Baker & Mckenzie, Doylc .___ ___ ___ __ _ _Galleg2s PER/92/038 ELECTROPERU 2,452 Arthur Andersen, Rothschild & Sons, Clifford Chance PER/93/001 PETROPERU 5,668 Bafur, Booz / Allen & Hamilton, Arthur D.Little, Merril Lynch, Prisma Invers., Andrews & Kurt PER/93/022 BANCOS 1,512 Credit Conumercial de France, Hansen Holm PERf93/028 ELECTROLIMA 1,022 Coleridge y Asociados, Clifford _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ C hance PER/95/005 PARTICIPACION 4,219 First Boston, Apoyo Argentaria CIUDADANA PER/94/010 BAYOVAR 852 Rothschild & Sons / Apoyo, Interinvest, Pincock Otros 11,097 Varios Total 30,000 En el Anexo No. 3, se encuentra el detalla del financiamientodel Banco Mundial. 3.3. PNUD Administrador de los Recursos FOPRI Mediante Cartas Acuerdo entre el Gobierno del Perut y el PNUD se conviene en lo concemiente a la utilizaci6n de los recursos del FOPRI a traves de la administraci6n del Progratna de las Naciones Unidas para el Desarrollo (PNUD), en principio en lo concerniente a la ejecuci6n de la donaci6n Japonesa administrada por el Banco Mundial y, posteriormente, a los demnas recursos del FOPRI incluido el Prestamo del Banco mundial hasta por US$ 30 millones. En lineas generales, la administraci6n de PNUD de los recursos del FOPRI, ha pennitido la transparencia del proceso, agilidad en los tramites, asi como tambien ha actuado como palanca financiera en los inicios del proceso hasta contar con la liegada de los recursos del Banco Mundial y del FOPRI; posteriormente, al generarse excesos de caja provenientes principalmente del 2% de las ventas en los afios 1994 (US$ 10.5 millones), 1995 (US$ 23.8 millones) y 1996 (US$ 21.8 millones) basicamente, no se ha logrado rentabilizar dichos recursos debido al no reconocimiento de intereses por nuestros saldos positivos.  - 68 - IV. PERSPECTIVAS Durante 1998 y 1999 se tiene programado culminar el proceso de privatizaci6n de las empresas. En esta etapa se tendra especial cuidado en la calidad de la privatizaci6n de tal modo que se cuente con un marco regulatorio e instilucional que rija el funcionamiento de las empresas, especialmente si se trata de servicios puiblicos. Durante 1998 destacarian la ejecuci6n del Fondo Mutuo de Ahorro Publico como un instrumento financiero orientado a elevar el bienestar de los trabajadores jubilados (puiblicos y privados), y con mecanismos que contemplan la utilizaci6n parcial de los remanentes de acciones que todavia el Estado mantiene en empresas privatizadas. Previamente, se efectuaria una colocaci6n en mercados internacionales y en menor medida nacionales, de los remanentes ya mencionados mediante la Oferta Publica de Venta. De igual modo, se continuara con la venta de tierras como medida para impulsar el desarrollo del agro y como un mecanismo para la generaci6n masiva de puestos de trabajo. En mineria quedan Bayovar, Cerro de Pasco / Paragsha, Dep6sito IM / EX, Las Bambas, Michiquillay, otros. Esta pendiente las refineria (Conchan, Iquitos y Talara) y el Oleoducto, ENAFER y las empresas regionales de electricidad, que consta de 9 distribuidoras y 4 generadoras. En pesca se acaba la privatizaci6n con la venta de la ultima plata de Pisco Norte. En el sector financiero se culminara con la venta de la Compania de Seguros Popular y Porvenir.  ANEXOS  Anexo No. 1 Avance del Proceso de Privatizacion Al 31/12/97  - 69 - I. PRIVATIZACIONES A. VENTA DE ACCIONES Y/O ACTIVOS. 1992 1. Cia. Minera Condestable S.A (Condestable) . - Mina de Cobre. Se vendi6 2' 154,999 acciones (80.2% del capital social) en la subasta realizada en la Bolsa de Valores de Lima (BVL), el 26 de mayo de 1992. El comprador fue el grupo local Serfm que ofreci6 S/.0.68 por acci6n, equivalente a un monto total de US$ 1.3 MM. 2. Banco de Comercio S.A.- Banco. Se vendi6 1'877,138 acciones (59% del capital social) en la subasta realizada el 5 de junio de 1992, en la BVL. El precio fue de S/. 3.33 por acci6n, lograndose un monto total de US$ 5.4 MM. 3. Gnifos Petroperi. Estaciones de venta de gasolina. En la primera ronda de 11 subastas, realizada entre el 23 de junio y el 16 de julio de 1992, se adjudic6 48 grifos por US$ 26.2 MM. La segunda ronda de subastas se realiz6 entre el 21 y 28 de agosto, adjudicandose 26 grifos por US$ 11.2 MM. Finalmente, el 1