Argentina - Provincial Roads Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-6710-AR MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US$300 MILLION TO THE REPUBLIC OF ARGENTINA FOR A PROVINCIAL ROADS PROJECT August 14, 1996 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (as of August 1, 1996) Currency Unit = Peso (Arg$) US$1 = Arg$1 WEIGHTS AND MEASURES Metric System FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS CEU - Central Executing Unit DPV - Direccion Provincial de Vialidad Provincial Road Department GOA - Government of Argentina GOP - Government of Province HDM - Highway Design and Maintenance Standards Model ICB - International Competitive Bidding IERR - Internal Economic Rate of Return NCB - National Competitive Bidding NPV - Net Present Value PDP - Provincial Development Project PIP - Project Implementation Plan PMU - Project Management Unit POM - Project Operational Manual PRP - Provincial Road Program SAP - Subsecretaria de Asistencia a las Provincias Subsecretariat for Assistance to the Provinces SAREP - Secretaria de Asistencia para la Reforma Economica Provincial Secretariat for Assistance to Provincial Economic Reform SIA - Specific Investment Application SIP - Subproject Implementation Plan SLA - Subsidiary Loan Agreement FOR OFFICIAL USE ONLY ARGENTINA PROVINCIAL ROADS PROJECT Loan and Project Summary Borrower: Republic of Argentina Implementing Agency: Subsecretariat for Assistance to the Provinces (SAP), Ministry of Interior Beneficiaries: Road Departments (DPVs) of the participating Provinces Poverty: Not applicable Amount: US$300 million equivalent Terms: Repayment in 15 years, including five years of grace, at the Bank's standard variable interest rate for currency pool loans Commitment Fee: 0.75% on undisbursed loan balances, beginning 60 days after loan signing, less any waiver Onlending Terms: Loan proceeds to be onlent to Provinces on the same terms and conditions as the loan Financing Plan: See para. 6 and Schedule A Net Present Value: Arg$5.5 billion Staff Appraisal Report: No. 14915-AR, dated August 14, 1996 Map: IBRD No. 27555 Argentina - Provincial Roads Project Project ID Number: AR-PA-5980 Vice President: Shahid Javed Burki Director: Gobind T. Nankani Division Chief: Asif Faiz Task Manager: Jacques Cellier 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.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF ARGENTINA FOR A PROVINCIAL ROADS PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed loan to the Republic of Argentina for the equivalent of US$300 million to help finance a Provincial Roads Project. The loan would be at the Bank's standard variable interest rate, with a maturity of 15 years, including five years of grace. The proceeds of the loan would be onlent to participating Provinces on the same terms and conditions as the loan. The Beneficiaries would bear the foreign exchange risk. 2. Background. Road transport plays an essential role in Argentina's economy, accounting for about 70% of domestic freight and 85% of inter-city passenger movements. Annual road transport expenditures, estimated as total road vehicle operation costs, are about US$12 billion equivalent or 6% of GDP. Expenditures on road infrastructure, however, were drastically reduced during the 1980s, with public investment in the transport sector reduced from 1 .3% to 0.2% of GDP over the decade. As a result, the national (38,000 km) and the provincial (262,000 km) road networks, which were built in the 1960s and the 1970s, deteriorated during the 1980s. In addition to the funding issue, the inadequate priority assigned to maintenance and the higher-than-expected traffic volumes and vehicle weights contributed to the deterioration of the networks. As much as 40% of the national network was rated in poor condition throughout the last decade. Over the past five years, however, the Government has made substantial efforts, supported by one completed and one ongoing Bank project, to rehabilitate and maintain the national network. The operation and maintenance of trunk highways (about 10,000 km) has been transferred to private concessionaires. The maintenance of about 20,000 km of national highways has been or is currently being contracted with private contractors. As a result, the condition of the national network has begun to improve significantly; surveys currently rate less than 15% of the network in poor condition, and targets are to reduce this percentage to less than 7% within the next two to three years. The Government has also delegated the maintenance of nearly 6,000 km of the national network to provincial governments. The challenge is now to expand the higway reform to the provincial level, and in particular to strengthen the technical and administrative capabilities of the DPVs to effectively carry out their responsibilities for the provincial networks and for the delegated national highways. 3. Lower traffic as well as very conservative pavement designs have contributed to the slower pace of deterioration of provincial paved roads, which carry about 50% of the inter-urban traffic. However, many roads in poor condition already require rehabilitation, and many more roads will soon reach that point if they do not receive timely preventive maintenance and strengthening. The secondary and feeder road systems remain in poor condition in most provinces, after almost two decades of drastically curtailed road budgets. Their maintenance needs to be improved, and upgrading and paving investments are justified on many sections with -2- sufficient traffic. The much higher cost of transport on deteriorated highways and unimproved roads, which represent many times the infrastructure cost, is hindering economic growth in many provinces, as well as Argentina's export competitiveness (para. 18). Many provincial governments have realized that in the past they gave higher priority to costly new construction investments, often at the expense of the maintenance and low-cost upgrading and paving of the existing infrastructure. In order to improve the serviceability of their road systems, the provincial governments must strengthen the capabilities of their road agencies to monitor the networks, prepare economically efficient road programs, with adequate priority given to maintenance and to low-cost upgrading investments, and to implement the road programs effectively. 4. Project Objectives. The project's main objectives are to: (a) develop and implement efficient provincial road programs (PRP), based on appropriate design and maintenance standards, with a view to improving the efficiency of resource use in the road sector and the serviceability of the provincial road networks; (b) reorganize DPVs' operations by transferring maintenance execution to private contractors or to local road consortia, strengthening DPVs' technical and management capabilities, establishing clear goals and accountability for implementing the road programs, and assuming the decentralized responsibilities for the national road network; and (c) strengthen DPVs' environmental management capabilities. The project is expected to help establish an institutional and technical framework for maintenance, rehabilita- tion and upgrading of provincial roads nationwide. It would contribute to the growth of the provincial economies by reducing the cost of road transport. 5. Project Description. The project would consist of similar subprojects in eligible participating provinces. Each subproject would include: (a) a policy and institutional develop- ment component (1.5% of total project cost), with technical assistance, equipment, software, and training of staff, to: (i) prepare and monitor the province's annual road programs (PRP), in accordance with agreed policies, criteria and methodologies, thereby strengthening DPV plan- ning, programming and budgeting systems; (ii) re-assess DPV maintenance strategy with a view to contracting out the maintenance of a gradually-increasing portion of the network, re-design or improve DPV processes, methods and/or techniques for engineering, economic and environmental assessments, procurement, works supervision, contract management, accounting and auditing, and program monitoring; and right size DPV staff; and (iii) establish or strengthen DPV environmental unit to implement appropriate road environmental, resettlement and indigenous people standards and guidelines; (b) a rehabilitation and maintenance component (74% of total project cost), consisting of the rehabilitation and periodic and routine maintenance components of the provincial road program; (c) an upgrading and new construction component (21 % of total project cost), consisting of highest-priority upgrading, paving and new construction investments, subject to satisfactory performance in road maintenance; and (d) a studies component (3% of total project cost), consisting of the engineering designs, environmental assessments, and works supervision services for the above civil works components. The project would also include: (e) a project management component (0.5% of total project cost), consisting of technical assistance for project management and monitoring. 6. Project Cost and Financing. The project cost is estimated at US$1,500 million equivalent, with a foreign exchange component of US$600 million equivalent (40%) and taxes -3- and duties estimated at about US$225 million equivalent (15%). The project would be financed by the proposed Bank loan of US$300 million equivalent (20% of total project cost), by a possible loan of US$150 million equivalent (10% of total project cost) from a Cofinancier to be determined, and by the governments of the participating provinces for US$1,050 million equivalent (70% of total project cost), from fuel tax revenues earmarked for road expenditures and from general revenues under the national Co-participation Fund. Project expenditures incurred after November 30, 1995 or twelve months before the date of the loan agreement, whichever is later, would be eligible for retroactive financing, up to an amount of US$10 million, in order to permit the start up of urgent works and services. A breakdown of project costs and the financing plan are shown in Schedule A. A summary of project benefits and costs is given in Schedule B. Amounts and methods of procurement and of disbursements are shown in Schedule C. A timetable of key project processing events and the status of Bank Group operations in Argentina are presented in Schedules D and E, respectively. The Argentina-at-a- Glance table is included as Schedule F. A map is also attached. The Staff Appraisal Report, No. 14915-AR, dated August 14, 1996, is being distributed separately. 7. Project Implementation. Provinces with (a) a current account surplus in the most recent executed budget period, and (b) total debt service obligations less than 15% of total current revenues, would be eligible to participate in the project. To finance new construction investments, provinces should in addition (c) maintain road network condition and maintenance budgets and expenditures in line with agreed targets specified in a subsidiary loan agreement. As a second alternative, provinces which do not meet the above criteria but are implementing the reforms, in a manner satisfactory to the Bank, as part of a Transformation Fund Agreement under the Provincial Reform Project (Loan No. 3836-BR) or as part of a similar agreement satisfactory to the Bank, would be eligible to participate in all components of the project except new construction. Provinces which do not satisfy either of the above alternatives would be eligible for the institutional component only. 8. The Central Executing Unit (CEU) of the Ministry of Interior's Subsecretariat for Assistance to the Provinces (SAP), recent successor to the Secretariat for Assistance to Provincial Economic Reform (SAREP) responsible for implementing the First and Second Provincial Development Projects, would be responsible for implementing the project in accordance with an agreed Project Implementation Plan (PIP). The CEU would appraise subprojects, negotiate Subsidiary Loan Agreements (SLAs) with provincial governments, and review engineering designs, economic and environmental assessments, procurement, and disbursements. The Bank would approve subprojects on the basis of the draft negotiated SLA and the Subproject Implementation Plan (SIP), and review ex-ante samples of specific investment applications and procurement documentation. A Financial Agent, satisfactory to the Bank, would onlend the proceeds of the Bank loan to provincial governments under conditions proposed by the CEU and approved by the Bank. The provincial governments, through the DPVs, would be responsible for preparing and implementing the respective subprojects in accordance with policies, criteria and methodologies specified in a Project Operational Manual (POM), with the terms and conditions of the SLAs, and with the indicators, targets and implementation schedules included in the SIPs. Eight provinces (Buenos Aires, Chaco, Cordoba, Corrientes, La Pampa, Misiones, Neuquen, and Santa Fe) have already prepared subprojects, which have been appraised by the CEU and presented to the Bank for review and -4- approval. Several other eligible provinces are expected to complete the preparation of subprojects in the second semester of 1996. A Mid-Term Review of project implementation would identify problem subprojects, which would be reformulated or terminated, and subloan amounts canceled as necessary. Cancelled amounts might be reallocated to well-performing provinces with the Bank's prior approval. 9. Project Sustainability. The project is designed to promote sustainable maintenance of provincial road networks. The procedures and methodologies to be established for planning, programming, budgeting, and management of maintenance activities are consistent with the administrative capacity of the DPVs. The proposed formal and on-the-job training programs would contribute to sustainability by improving the competence and motivation of DPV staff. In addition, the involvement of private contractors in the maintenance of the networks is expected to provide incentives to private industry to take an interest in the allocation of appropriate resources for maintenance. 10. Lessons Learned from Previous Bank Involvement. A large proportion of completed Bank-financed highway projects is rated satisfactory. The physical objectives of the projects have generally been attained. 1lowever, the institution-building components have often fallen short of their objectives of establishing sustainable capabilities for the effective maintenance of the networks. The experience with the completed and ongoing highway projects in Argentina is consistent with Bank-wide conclusions. Maintenance, especially where it is carried out by force account, suffers from inadequate planning and programming, centralized decision-making processes, lack of accountability and ineffective staff incentives. However, progress has been made where appropriate network planning-programming systems and funding mechanisms have been established, and where maintenance, including routine operations, has been contracted out, such as in Brazil and Chile, or transferred, on high-traffic highways, to private concessionaires, such as in Argentina. The project incorporates these experiences by focusing primarily on developing cost-effective provincial road programs; assigning adequate priority to maintenance, consistent with the provinces' finances; executing maintenance primarily through private contractors; strengthening the DPVs' technical and management capabilities in key functional areas; and establishing monitorable indicators, targets, and review mechanisms to monitor the implementation of the programs. 11. Rationale for Bank Involvement. The Bank's country assistance strategy for Argentina, discussed by the Board of Executive Directors on May 4, 1995, with an update discussed in April 1996, is to-assist in consolidating the macroeconomic reforms and deepening their impact by strengthening institutions, as well as providing for investment in infrastructure that has deteriorated due to long periods of underinvestment. The project would build on the achievements of the Provincial Development and Provincial Reform Projects, which assist the provinces in carrying out fiscal and administrative reforms consistent with the national reform program. It would also complement the ongoing Road Maintenance and Rehabilitation Sector Project (Loan No. 3611-AR), which is assisting the national government in transferring the maintenance of portions of the national network to provinces, and the projects in the health, education and agriculture sectors. The proposed project would contribute to this strategy by helping provincial governments prepare efficient and sustainable road expenditure programs, -5- with adequate priorities and standards, and implement them efficiently, primarily through private contractors, thereby improving resource use in the sector. 12. Agreed Actions. During loan negotiations, the Government of Argentina (GOA) confirmed that: (a) the CEU would appraise subprojects in accordance with criteria, including eligibility criteria, and methodologies set forth in the POM satisfactory to the Bank; the Bank would approve subprojects on the basis of draft negotiated SLAs and SIPs; and the GOA would onlend the proceeds of the loan to eligible provinces in accordance with agreed onlending targets included in the PIP; (b) the CEU would annually review the provincial road programs (PRPs), budgets and specific investment applications (SIAs) prepared by the DPVs, and approve specific investments for financing under SLAs, on the basis of agreed policies, criteria and methodologies included in the POM and implementation indicators and targets included in the SIPs; (c) the CEU would cause participating provinces to: (i) increase the portion of the network maintained by private contractors, reduce their staff accordingly, and strengthen their planning, maintenance management and monitoring systems in accordance with indicators and targets included in the SIPs; (ii) adopt appropriate road environmental, resettlement and indigenous people standards and guidelines, and strengthen the DPVs' environmental management units to implement the guidelines; and (iii) contract technical assistance and implement training programs in accordance with agreed terms of reference and targets included in the POM and the SIPs; (d) the CEU would maintain, and require the DPVs to maintain, organizational arrangements, including project management units, satisfactory to the Bank; and (e) a detailed Mid-Term Review of project implementation would be carried out by the end of 1998. 13. Prior to Loan Effectiveness, the GOA should have: (a) approved the POM, satisfactory to the Bank; (b) entered into at least one SLA; (c) taken all actions, satisfactory to the Bank, to permit the procurement of goods and services under the project management component in accordance with the Bank's Procurement Guidelines; and (d) through the CEU, established a computerized project monitoring system, satisfactory to the Bank. Conditions of Disbursement under a subproject would be that the Government of the Province or the DPV has: (e) entered into a satisfactory SLA; (f) approved the POM; (g) taken all actions necessary to permit the procurement of goods and services financed under the SLA in accordance with the Bank's Procurement Guidelines; (o) established the project management unit; (h) established the computerized project management system; and (i) adopted road environmental, resettlement and indigenous people standards and guidelines, established the DPV environmental unit and revised the general specifications of DPV contracts in accordance with the guidelines. 14. Poverty Category. The project is not expected to confer direct poverty-reduction benefits, although the works contracts generated should provide employment opportunities for skilled as well as unskilled labor, thus contributing to the income of poor families in the project areas. 15. Environmental Aspects. The direct environmental impacts of road works are primarily related to quarries and borrow pits, disposal of used pavement materials and other wastes, and the activities of road crews. Prior to inviting bids, DPVs will revise their norms and specifications for road engineering and works in order to incorporate appropriate requirements for environmental quality of the works, and will make payments to contractors subject to -6- compliance with these requirements. The upgrading, paving and new construction components of the project could have indirect impacts on the environment and/or indigenous peoples through increased settlement or intensified land use; but no resettlement of population is expected. DPVs will carry out appropriate screening and assessments of such impacts in accordance with agreed criteria, procedures and sample terms of reference included in the POM for all such sections to be built, upgraded and/or paved in the future. Summaries of such assessments, in an agreed format, will be reviewed by the CEU and the Bank, prior to authorizing the financing of the specific investments under the project. In order to allow first for the strengthening of their environmental management capabilities, no such upgrading, paving or new construction investments have been included in the first-year programs of the DPVs which do not have adequate environmental capabilities. The project has been rated "B" by the Bank for environmental assessment purposes. 16. Program Objective Categories. The main thrust of the project would be Economic Management (EA), since it would strengthen the management of the provinces' road programs through more efficient allocation of public resources to maintenance and their effective management. The project would support Private Sector Development (PV) by promoting the development of the private contracting industry in road maintenance activities. It would contribute to Environmentally Sustainable Development (EN) by strengthening environmental management in the road subsector of the participating provinces. 17. Participatory Approach. Provincial governments and DPVs have actively participated in the design of the project through various meetings of the Federal Road Council, which includes the Administrators of the 23 DPVs. In preparing specific investments, DPVs would be required to seek the participation of potentially affected local populations, including indigenous peoples, in accordance with terms of reference included in the POM and with relevant Bank policies, and the CEU and the Bank would carry out appropriate supervision. 18. Project Benefits. By helping to reduce the deterioration of existing provincial road networks and improve their condition, the project would: (a) avoid further depletion of valuable capital in public roads; and (b) substantially reduce the cost of transport on provincial roads, and consequently support the resumption of growth in agriculture, industry and exports. The direct economic benefits resulting from the reduction of vehicle operating costs have been adequately quantified with the help of the Bank's Highway Design and Maintenance Standards (HDM III) model. Although they are not easily quantifiable, the benefits from induced economic growth can also be important. The 1994 World Development Report has shown that better road services can contribute significantly to accelerate economic growth. A recent econometric study on Argentina Transport Privatization and Regulation (Report No. 14469-AR) shows that poor roads had significantly contributed to slow economic growth in at least twelve provinces, including the four most advanced (Buenos Aires, Cordoba, Mendoza and Santa Fe), most of the poorest (Chaco, Corrientes, Formosa, Jujuy, and Misiones), and some intermediate provinces. The poor quality of roads is likely to be an even more constraining factor in the future with the increased volume of trade opportunities which will result from the Southern Cone Trade Agreement (MERCOSUR). The project would contribute to: (c) enhanced accountability and more efficient use of public resources in the highway subsector; and (d) prevention or mitigation of adverse environmental impacts of road construction and maintenance. An economic analysis of the eight -7- appraised subprojects using the HDM III model shows that the project has an estimated Net Present Value (NPV) of about US$5.5 billion and an estimated Internal Economic Rate of Return (IERR) of about 39%. Individual appraised subprojects have estimated IERR ranging from 23% to 45%. If investment costs were to increase by 20%, the project IERR would fall to 33%, which would still be very satisfactory. 19. Risks. The main risks are: ineffective management of subprojects by DPVs; inadequate coordination and monitoring of the project by the CEU; and insufficient counterpart funds, in particular for maintenance. The experience acquired with similar projects has been incorporated into the project's design in order to minimize these risks. In particular, the project would provide for: adequate organizational arrangements, with clearly defined processes, responsibilities and accountability; simple methodologies, well-suited to the technical capacity of DPVs; detailed subproject implementation plans, with indicators and targets to monitor procurement, physical and financial execution of work programs, network condition, and DPVs' institutional development; well-focussed technical assistance and training of DPV staff in key technical and management areas; as well as a comprehensive project operational manual (POM). The CEU has been strengthened with experienced technical staff and consultants, its internal processes and responsibilities are clearly defined in a manual of procedures, and a detailed Project Implementation Plan (PIP) would be the basis for managing and monitoring implementation. In order to ensure appropriate funding, the CEU would review provincial road expenditure and funding programs each year at the time of budget preparation, against the agreed targets. The Bank and the CEU would have the right to exercise appropriate remedies under the loan and the subsidiary loan agreements, including suspension of disbursements or cancellation and reallocation of loan proceeds to well-performing sub-borrowers, if a sub- borrower has defaulted on the obligation to achieve these targets. 20. Recommendation. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank, and recommend that the Executive Directors approve it. James D. Wolfensohn President by Caio Koch-Weser Washington, D.C. August 14, 1996 Attachments -8- Schedule A ARGENTINA PROVINCIAL ROADS PROJECT Estimated Costs and Financing Plan (US$ million equivalent) Estimated Project Costs 1/ Local Foreign Total Policy and Institutional Development 12.0 8.0 20.0 Rehabilitation and Resurfacing 223.0 149.0 372.0 Maintenance 402.0 268.0 670.0 Upgrading and New Construction 157.0 104.0 261.0 Studies 18.0 12.0 30.0 Project Management 3.0 2.0 5.0 Total Base Cost 815.0 543.0 1,358.0 Physical Contingencies 54.0 36.0 90.0 Price Contingencies 31.0 21.0 52.0 Total Project Cost 900.0 600.0 1,500.0 Financing Plan Provincial Governments 900.0 150.0 1,050.0 Bank - 300.0 300.0 Cofinancier - 150.0 150.0 Total 900.0 600.0 1,500.0 1/ including taxes and duties equivalent to US$225.0 million -9- Schedule B ARGENTINA PROVINCIAL ROADS PROJECT Project Benefits and Costs (US$ million, 1996) Present Value of Flows Source of Difference Economic Financial Analysis Analysis Taxes Subsidies Other Benefits: 1. Buenos Aires 3,552 5,896 2,344 2. Chaco 219 363 144 3. Cordoba 866 1,438 571 4. Corrientes 439 729 290 5. La Pampa 208 345 137 6. Misiones 323 536 213 7. Neuquen 350 581 231 8. Santa Fe 1,395 920 Total Benefits 7,352 12,202 4,850 Costs: 1. Buenos Aires 691 987 296 2. Chaco 126 180 54 3. Cordoba 192 274 82 4. Corrientes 156 223 67 5. La Pampa 82 117 35 6. Misiones 116 166 50 7. Neuquen 165 236 71 8. Santa Fe 324 463 139 Total Costs 1 2 794 Net Present Value: 5,500 n.a. n.a. IERR: 39% n.a. n.a. Overall riske oabilit NPV <O0is Ues thanl 5 kv Main Assumptions: discount rate: 12% average traffic growth: 4% per year vehicle operating and road costs as per SAR Annex 2, sections C (b) and C (c) Nature of benefits: reductions in vehicle operating costs; travel time savings and safety and environmental benefits not quantified Main beneficiaries: road users and producers and consumers of goods transported by road - 10 - Schedule C ARGENTINA PROVINCIAL ROADS PROJECT Procurement and Disbursement A. Procurement Arrangements n (US$ million) Procurement Method Project Element ICB NCB Other N.B.F. Total 1. Civil Works 260.0 250.0 10.0 940.02/ 1,460.0 (130.0) (125.0) (5.0) (260.0) 2. Equipment - - 5.0 - 5.0 (5.0) (5.0) 3. Consultants and Training - - 35.0' - 35 .03/ (35.0) (35.0) Total 260.0 250.0 50.0 940.0 1,500.0 (130.0) (125.0) (45.0) - (300.0) 1/ Figures in parentheses are the respective amounts hnanced by the Bank loan. 2/ Not Bank-financed, routine maintenance and other works financed by Cofinancier or GOPs. 3/ Services contracted in accordance with Bank Guidelines for Use of Consultants - 11 - Schedule C B. Disbursement Arrangements ' Loan Category Amount Disbursement Rates ($ million) 1. Civil Works 50% of total expenditures (a) rehab. & resurfacing 160.0 (b) upgrading & paving 80.0 2. Goods 5.0 100% of foreign expenditures 80% of local expenditures 3. Consultants & Training 100% of total expenditures (a) subprojects 25.0 (b) project management 5.0 4. Unallocated 25.0 Total 300.0 Estimated Disbursements Bank Fiscal Year 1997 1998 1999 2000 2001 2002 2003 --------------------------------- ($million) -------------------------- Annual 12.0 31.0 65.0 80.0 73.0 31.0 8.0 Cumulative 12.0 43.0 108.0 188.0 261.0 292.0 300.0 4/ FY97 amount includes an initial deposit of less than US$12.0 million into the Special Account. - 12 - Schedule D ARGENTINA PROVINCIAL ROADS PROJECT Timetable of Key Project Processing Events (a) Time taken to prepare: 12 months (b) Prepared by: The Provincial Roads Departments (DPVs), and the Central Executing Unit (CEU) with the assistance of the Bank (c) First Bank mission: June 1994 (d) Appraisal mission departure: June 1995 (e) Negotiations: November 1995 (f) Planned Date of Effectiveness: December 1996 (g) List of Relevant ICRs and PPARs: Loan No. 2296-AR Highway Sector Project PCR dated October 21, 1993 - 13 - Schedule E Status of Bank Group Operations in Argentina IBRD and IDA Credits in the Operations Portfolio as of June 30, 1996 Difference Original amount In USS millions between expected Pro Loan or Fiscal and actal ID CreditN. Year Borrower Purpose lIRD IDA Cancellations Undisbursed disbursements Number of Closed Loans/Credits 49 Active Loans AR-PA-5968 L28540 1987 ARGENTINA SEGBA V 276.00 68.45 68.45 AR-PA-6005 L32B00 1991 ARGENTINA PROVINC DEV PROJ 200.00 85.66 81 81 AR-PA-5977 L32810 1991 ARGENTINA WTR SUPPLY!I 100.00 86.79 5845 AR-PA-6009 L32970 1991 ARGENTINA AG SERVCES&INST DEV 33.50 7.31 2.66 AR-PA-6034 L34600 1992 ARGENTINA TAX ADMIN 11 20.00 2.83 1 88 AR-PA-6036 L35200 1993 ARGENTINA YACYRETA ll 30000 4.85 370 AR-PA-6051 L35210 1993 ARGENTINA FLOOD REHABILITATION 170.00 18.89 18.89 AR-PA-6003 L36110 1993 ARGENTINA RD MAINT & REHAB SCT 340.00 198.24 109.39 AR-PA-6025 L36430 1994 ARGENTINA MTNAL CHILD HLTH & N 10000 73.57 2617 AR-PA-5988 L37090 1994 ARGENTINA CAPITAL MKT DEWT 500.00 484.27 -1573 AR-PA-6062 L37100 1994 ARGENTINA CAPITAL MKT TA 850 6.57 273 AR-PA-5992 L37940 1995 ARGENTINA SECONDARY ED I 190.00 184.15 70.75 AR-PA-6035 L38360 1995 ARGENTINA PROV REFORM 300.00 100.37 -3297 AR-PA-6060 L38600 1995 ARGENTINA MUNIC DEVT il 210.00 - 205.01 -289 AR-PA-6018 L38770 1995 ARGENTINA PROV DEVT I 225.00 225.00 11.15 AR-PA-40826 L38780 1995 ARGENTINA PROV BANK PRIV. 500.00 16600 138.35 AR-PA-34091 L39210 1996 ARGENTINA HIGHER ED REFORM 165.00 15854 16.88 AR-PA-40904 L39260 1996 ARGENTINA BANK REFORM 500.00 - 333.00 139.15 AR-PA-6055 L39270 1996 ARGENTINA MINING SCTR DEWT 30.00 28.20 0.45 AR-PA-6030 L39310 196 ARGENTINA PROVCLHLTHSCTRDEV 101.40 9874 1.64 AR-PA-6040 L39480 1996 ARGENTINA FORESTRY/DV 1600 16.00 0.46 AR*PA-35495 L39570 1996 ARGENTINA SOCIAL PROTECTION 15200 81.16 5.20 AR-PA-37049 L39580 1996 ARGENTINA PUB.INV.STRENGTHG 16.00 16.00 1 15 AR-PA-38883 L39600 1996 ARGENTINA ENTEXPORT DV. 38.50 38.50 4.60 AR-PA-6057 L39710 1996 ARGENTINA - ECNDARY ED2 115.50 115.50 8.16 AR-PA-40909 L40020 1996 ARGENTINA H. INSURANCE REFORM 250 00 250.00 AR-PA-40909 L40030 1996 ARGENTINA H INSURANCE REFORM 100 00 100.00 AR-PA-40909 L40040 1996 ARGENTINA H. INSURANCE REFORM 2500 25.00 TOTAL 498240 0.00 000 3178.60 720.48 Active Loans Closed Loans Total Total disbursed (IBRD and IDA) 1803.80 5563.39 7367.19 Ofwicthrepaid 112.17 263572 2/47.89 Total now held by IBRD and IDA 4870.23 2931.37 7801.oO Amount sold 0.00 12.79 12.79 Of which repaid 0.00 12.79 12.79 Total undisbursed 3178.60 3.69 3182.29 a Intended disbursements to date minus actual disbursements to date as projected at appraisal Note Disbursement data are updated at the end of [he first week of the month. - 14- Schedule E ARGENTINA STATEMENT OF IFC INVESTMENTS As of June 30. 1996 (In Millions US Dollars) Originat.Qross Comnm_,eis Undisb Fisca] Year IFC Held by Hed by incl Commrrtted Obligor Type ofBusiness C. oan Eqtity PIpt Torsil WFC PIpnt. Pprt 1960 s/ Papeler Rio Prana. S A. Timber. Pulp and Faper 3 00 3 00 1960/95 Acindar Industria Argenlina de Ac Miming and Exrmron of Mel 27 94 2073 4867 25.00 2000 20.110 1961 11; Fabnc. Argentina de FEapinajes Motor Vehices ad Comrop. 1 23 0 28 151 1962 al Pms. Peroqmica Argentina. S Oil Refinig 3 05 3 09 1965/72 a/ Celulosa Argerna. S A Tirmber. Pulp med Paper 8 25 4 25 1250 1969 a/ Editoril Codex Sociedad Manufacturing 5 00 160 1)40 ' 00 1969/75 at Dilmine Sidern. S A I C Mmg and Earaclion of Met /4 7< 2 25 I' 00 1973 . Caler Avellaeda S A Cemrit and Ctone,nt Ma , 50 55/i 1977/84/86/88/4 Alpargaltas S A I C Trexdes 62 93 500 36 5" 104 43 28 51 20.71 1977/85 a Soyex S A. Frd and Agiluessr 21 00 21 00 1978/1s/86/87/93/94/96 Jan Mmetti S A Cement and Coeruction M 54 00 9150 151 50 14.42 3444 23.60 1978/85/86/8919 a/ Massuh S A Trber. Plip and Paper 2< 65 4 25 3.10 32 90 1979/82/87/92 a/ lpako industrias Petroquimicas Ar Chemicals med Petrochemnire 2111) 1 I5 900 31 15 1979/83/84 sI Alpens. S A Fod and Agr.nbusns 5 25- 161 6.81 1984 s; Petroquitica Cuyo S.A I C Chemticls and Ferrrcherme 21 0 4 0 21.119 46119 1986 a/ Atnr S A ti Chemicals and Petrocheninca 00 1 Ol 80 1986 Ciatorini Hnos. S.A. Manufacturing 5-06 1986 Roberis Paricipaciones S A Finnncial Servie 005 505 05 1986 a S.A de Inversiones de Capital de Fintaial Services 2 00 2.00 1986/89/9195 Banco Roberts S.A Finncial Services 48.00 4800 20110 1987 aL S A. Garovaghto y Zerraqumo Chemicals and Peltr,emic 13 00 13 00 1987/90 a Hidrii Oil Developtern Project Miitoing and Extraction of Fue 8000 2' 60 107 60 1987/90/91/96 Terriml 6 S A -itistrilure 23 00 6.50 2950 10.75 650 3.00 1988 aw Arcor S A.l.C Fred med Apritnsess 12 10 12 00 1988 a/ Aset C A P.S.A- Mining and Etrace of Fue 12 38 12 38 1988 C,. Inndutrial Latera S A. CGlsa/ Textiles n.03 1988 Colortex S A Trtle [ 13 1988 Corporatcin General de Almeteto Food aind AiIbsinese t,,,7 1988 Productos Pulp. Moldeada. S A l Timber. iP/p nd Paper / 13 1988 Sat Sebast, n S A I C I f y A Food nd Agnbusmer 0 13 1988 Teeyeom Fepere 5 A Mamifactnnig -A14 1988 Valley Eaporating Compan. S Food ad Agrittmeos 07 1988 VinderIfil. S.A I C I F y A Textiles 0.07 1988/89 Fiea Flielhmn, S A Feod ad Agribusmess 0.27 1988/89/94 Baeo General de Negacios 5 A Fomncial Services 35 00 35 0i 15.00 1988/92 Banor Rio de la Plata. S A. Fiancital Semces 50 00 5000 17 91 2 63 7.53 3988/92 a/ Chirei/MNorillo/Olleros Oil Explo Mining and Extc eti of Fel MLnerals 6 62 6 62 1988/93 Bunge y Born S A Ford and A6iiess 0300 57 Si, 120 50 4 '9 36.09 1988/93 Longvie Paran . S A. Manufctuerg 0 61 1988/93/96 Bridas S A P I C Mming nd Exirrienn ofFije '5 63 25 110 10000 200 63 71 57 83 43 1989 ai Argentine biestment Comtripany Financial Semee 2 00 2.00 1989 Banco Frae.s del R,o de la Plata Fnmnciil Serices 1S00 5 00 539 1 43 1989 Ceneosud. 5 A lndsirial mnd Constimer Sertces ø /3 1989 a/ Chilidos Petroleum Mmg tind Firtlon Fuel Mineral 4 98 4 98 1989 Coesi S.A I C Manfactinng 04' 1989 i. Compa General de Siversioes Fmncial Siece ø 10 0 10 1989 Fracci,h Hnes SA ufrasructure 028 1989 bia S A Trexi/es 0 47 1989 Parfin del PI.s.. S A Clemicals and Pei.che,n,c e 88 1989 S.A Genaro Garcn Liinndit C 1. Food and Agntisiiecs 0 96 1989/92 Asr - Cope,as Argentma de P Mietig atid Etractioi of Fie i. f0 43,1 193 ei /5 96 24 50 1990 Algedeira Sata Fe S A Tei/re 0 38 1991) Corporacit de Inver-lones Y Pri Fmancal Sremces /0 8 11,8 1118 1990 Frigor,fico Tba. S A Fod and Agibushmess 1)18 1990 Willmor 5 A FOd anl Agibufiness 196 1990/95 Petr eiro Ftrrquim Ensendr Chemrals and Petrochemice /I (1010 i i 1 <3 00 31 67 7 08 1991 Banco de Cr.dito Argetnllo 5 A Filncial Service 10 00 /0 0( 2 51 3 20 1991 Grdferd Argetima S A Te,tles 1127 1991 Jugs del Sur. 5 A Feod snd Agbtei s ø 13 1991 TBR, S A Marufacuriig u 25 1992 Fngor,fico Rioplialele 5 A / C / food ami Apriuisimrec 12 00 I ØI 6110 19 /I 8 33 2 33 1992 MBfA Soedad de Bol,o S A F,mncs/ Seymcrs 118 0/38 1 16 1992 Gleagnoam reste. S A i on Agrlbulriecs 20 .10 /5 Ol 35 0 13 411 13 38 1992 a/ Psir. S M Chemicals ind Pelrlohetical - ' I 199293 Petrolera Argerntai Sn Jorge S 0 Miog and/ Fxriol i Fuie / 0 27 0i) 3/ l 7 ni 38 25 26 21 27 00 1993 Bollajel & C,a. 5 A Hoiels aid 1no,,m ' I 1993 Cadipsa 5 A Mnunig and ES1raello, el Fle 11 00 1 l, 2'l 'n tl 1 0 15111 13 00 1993 Erprlgs S A li&wncrtre 11 56 1993 Ferroexpreso Ptmpelaiw. S.A C. difrastruClure /300 2I00 l30 /335 14 13 4.60 !‘〕！，〕〕’〕，,，〕〕！。。／ l 閃 -16- Sdwduk F Argentina at a glance Latin Upw- POVERTY and SOCIAL America middle- ArOntinn & Carib. Income Development diamond* Population mid-1995 (milgions) 34.6 481 44 Life expectancy GNP per capita 1995 (USS) 7,770 3,320 4,300 GNP 11995 (billions US$) 26B.8 1,597 1,901 Avwage annual growth. 1990-95 Population 1.2 1.7 GNP Gross 2.0 1.8 Labor force 1 %) 2.4 2"1 per primary Most recent estimate oatest yew zrivadable, since 1969J Capita enrollment Povertr headcount index i % of poputation) Uiban population (% of total population) as 74 74 Lft expectancy at birth (years) 72 68 69 Went mortality (per 1.000 " births) 24 41 36 Child malnutrition (% of chlildren under 51 4 Access to safe water Access to safe walw (% of population) 64 80 8i Illiteracy (% orpopulatilon age IS+) 5 14 13 Gross primary enrollment (% of school-age population) 107 110 107 -Argentina Male 108 - Upper-middle-income, group Farr-ale 107 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1976 1985 1994 1996 Economic ratios* 'POP (biffions US$) 52.4 88.4 281.9 274.1 Openness of economy Gross domestic invesirrientIG13P 20.4 17.6 10.9 18ro Exports or goods and non-laclor servicewGDP $1 11 '7 6.8 41-$ Gross domestic saylngstGDP 19.3 23.1 17.6 182 Gross national mings/GDP 30.7 17.7 16.4 16.5 Current account baiancelODP -2.5 -1.1 -3.6 -1.5 Savings Investment Interest paymenlWGDP 0.9 5.0 1.2 Total debvGDP 14.7 $7.8 28,7 32.4 Total debt servicelexporls 44.7 60.1 49.8 52.8 Present value of debUGDP 29.2 Present value of debtlexporls 391 2 Indebtedness 1976-84 IS86-26 1994 1995 1996-04 (average annual growth) GOP 1.0 2.8 7A -15 4.9 -Argentina GNP per.capita -1,$ 2.0 5.9 -5.2 3.7 Upper-middle-incomee group Exports of. gocift and nfs 511 519 14.8 25.7 8.0 STRUCTURE of the ECONOMY f% of GDP) 1975 1985 11 9S4 1995 Growth rates of output and Investment Agriculture 6.6 7.6 4.9 40 Industry 50.1 39.3 30.1 20 Manufacturing 38.2 29.6 20.0 Services 0 43.3 53.1 65.1 -20 7 .1 U .3 Private consumption 58.1 -40 General government consumption 12.6 Imports of goods and non-factor services 6.0 6.3 9.1 8.6 _GD1 GDP (average annual growth) 1975-84 1986-95 1994 1996 Growth rates of exports and Imports Agriculture 1.7 1.6 3.8 75 Industry -1.1 2.7 6.5 Manufacturing -1.4 1.4 50 Services 2.5 3.1 8.5 25 Private consumption 0 ;. ')1 92 94 General government consumption 940 : .2 0 Gross domestic investment -2.4 5.4 19.0 -12.6 -25 imports of goods and non-factor services 4.5 14.0 20.9 -10.4 -Exports -imports Gross national product 0.0 3.4 7.2 -4.1 Note: 1995 data are preliminary estimates. Figures in italics are for years other than those specified. The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. - 17 - Schedule F Argentina PRICES and GOVERNMENT FINANCE 1975 1985 1994 1995 Inflation (%) Domestic prices (% change) Consumer prices 182.6 .. 3.9 1.6 30o Implicit GDP deflator 198.2 618.0 1.8 2.5 2000 Government finance 1000 (% of GDP) Current revenue .. .. 16.6 16.5 90 91 92 03 94 95 Current budget balance .. .. 0.7 -0.1 Overall surplus/deficit .. .. 0.0 -1.0 -GDPdef CPl TRADE 1975 1985 1994 1995 Export and import levels (mill. US$) (millions USS) 25000 Total exports (fob) .. .. 15,739 20,830 Food .. .. 1,323 1,956 Meat .. .. 1,546 1,572 Manufactures .. .. 8,059 10,635 1s000 Total imports (cit) . 21,544 19,899 Food 10000 Fuel and energy .. .. 591 628 s.000 Capital goods .. .. 6,039 4,754 Export price index (1987=100) .. .. 118 124 o 90 91 92 93 94 95 Import price index (1987=100) .. .. 115 120 Terms of trade (1987=100) .. .. 102 103 O Exports (DImports BALANCE of PAYMENTS 1975 1985 1994 1995 current account balance to GDP ratio (%) (millions USS) Exports of goods and non-factor services 3,498 10,039 19,090 24,593 2 Imports of goods and non-factor services 4,324 5,285 25,828 24,055 Resource balance -826 4,754 -6,738 539 Net factor income -466 -5,706 -3,654 -5,293 0 T o s2 Net current transfers 6 0 318 452 1 91 92 Current account balance, before official transfers -1,286 -952 -10,074 -4,302 2 Financing items (net) 208 2,200 10,190 2,550 -3 Changes in net reserves 1,078 -1,248 -116 1,752 Memo: Reserves including gold (mill. USS) 848 4,703 16,029 16,229 Conversion rate (loca/USS) 3.70E-10 6.02E-05 1.0 1.0 EXTERNAL DEBT and RESOURCE FLOWS (m"llions US$) 1975 1985 1994 1995 Composition of total debt, 1994 (mill. US$) Total debt outstanding and disbursed 7,723 50,946 77,388 .. G A IBRD 341 700 4,109 .. 717 4109 C IDA 0 0 0 .. D Total debt service 1,603 6,209 6,692 ) 3587 IBRD 43 114 709 IDA 0 0 0 . Composition of net resource flows 11070 Official grants 0 6 16 Official creditors 58 217 745 Private creditors -111 2,350 5,809 Foreign direct investment 0 919 1,200 Portfolio equity 0 0 1,205 .. F World Bank program 47240 Commitments 0 0 508 .. A - IBRD E - Bilateral Disbursements 19 144 548 .. B - IDA D - Other multilateral F - Private Principal repayments 17 68 425 .. C - IMF G - Short-term Net flows 1 75 123 . Interest payments 26 46 284 Net transfers -25 30 -161 International Economics Department 8120/96  IBRD 2755, 70 BOC)LIV IA 6 1 5 0 PARAGUAY San Salvador 1 . 01 E deiJujuy C, ) N %\ C Sata 0 30 0 GTcum6n CA"*~, Santiago Rgs5.BRAZIL Odel Estero lit Caamrc ()SANTIAGO La RiojaI E ,S TERO SANTA 14/01"r 30 )SAN R IOJA6 ,F 0 0 3 UAN S,at' O, E N 7REI' S. J Juan ( RIO S aoan Z ' ~Mendozoa K- San Luis SAA R URUGUAY U LSata IE SLTA (L UJ PAMPA U LU C; L A G ENTINA . A RIOJFE . nRO PROVINCIAL ROADS PROJECT 40 I NEGR 40 Carmen de Paoag ones Provinces with already Viedmo appraised subprajects ) 0 Province Capitals Rawson National Capitl CHUBUT Province Boundaries International Boundaries MILES 0 1 00 200 300 400 500 ) SAN T . LUIS S N Kv eEo 0e 20 * Rit Gallegos 5U 0 The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of huciaThe World Bank Group, Aany judgment on the legal N status of any territory, DEL or any endorsement or acceptance of such 80C 70 FUEGO P c' boundaries. MIOVEMBER 1 005