Transcript of joint meeting of the Executive Directors of the IBRD and IDA, held on Tuesday, April 28, 1970 : Chile - Second Highway Construction Project

STRICTLY CONFIDENTIAL INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION JOINT MEETING Washington, D.C. Tuesday, April 28, 1970 A joint meeeing of the Executive Directors of the --- ~International Bank for Reconstruction and Development and the .... Yffternational Development Association was convened at 10:00 .Q;'<::lock, a .m. in the Board Room, 1818 H Street, N. W., Mr . . -~ert S. McNamara, President, presiding as Chairman. i·•... ' ,,."r, ..,_ ... .  2 STRICTLY CONFIDENTIAL C O N T E N T S page 3. Proposed Loan - Chile (Second Highway Construc- tion Project) 3 .  3 STRICTLY CONFIDENTIAL P R O C E E D I N G S ----------- s ;( No. 3 is a proposed loan in the amount of $10.8 I million to Chile for a highway construction project, and I will  4 STRICTLY CONFIDENTIAL ask Mr. Glaessner to come to the table and introduce it to you. MR. GLAESSNER: Mr. Chairman, Members of the Board: The loan proposal presented for your consideration today constitutes a further step in the Bank's cooperation wit the efforts of the Chilean Goverrunent to improve transport sector planning, investment and operations. Reflecting its geographic configuration, Chile's main highways, railroads, coastal shipping and domestic airlin services are strung out over long distances and parallel each other. This special situation calls for close transport coordi a- tion and careful planning of new investments to avoid the creation of excess capacity and a major misallocation of resources. The need for coordination has become the more urgent following the substantial improvement of key highway facilities during the early 1960s, the expansion of the motor vehicle fleet resulting from the rapid increase in domestic automobile assembly operations, and the construction of modern airports end the upgrading of the national airline's flying equipment. The result of these developments has been a relati e shift of passenger traffic from the railroads to highways and airlines. and of general cargo, and even some bulk commodities, from the railroads and coastal shipping to road transport. The~;';; of the railroads to provide prompt and efficient  5 STRICTLY CONFIDENTIAL efficient service has been a pa.r~icularly significant factor in the increase in trucking which has led to a rise:-in the cost of maintenance. The first result of the increasing awareness of the Government of the need for a more coherent transport poli was its decision in December 1967 to centralize respon~ibility for all forms of transport in the Ministry of Public Works, which was transformed into a Ministry of Public Works and Transport with a special Transport Planning Division. The work of this sectoral planning office, which is staffed with capable young technicians, is beginning to have a real impact on operations and investment decisions in the trans.port sector The Bank has followed the work of the new planning office with keen interest a-nd is assisting it by providing funds from Loan 558-CH to pay for the services of two French transport ~~- These experts are helping the Ministry to establish criteria for the improvement of transport facilities during the next decade and to formulate appropriate policies affectin th the various modes of transport. The Government has also recognized the importance / of improving the operations of the State railroads so as to enable them to play their proper role. Under a UNDP financed project for which the Bank is the executing agent, SOFRERAIL  6 STRICTLY CONFIDENTIAL has been ~ g the railroads in working out a systematic time-phased plan for improvement in their operations and finan Some of these improvements have already been carried out: tariffs have been increased in real terms in each of the last several years, there has been some reduction in the number of redundant personnel, and procurement procedures and track maintenance have been improved. While this is only a beginning, it has already led to some improvement in the financial situat· n of the railroads. Moreo'fver, the rate of traffic loss to othe )(.. modes of transport has declined. The Bank has considered improvement of railway operations to be of such key importance for the proper functio - in~of the entire transport system that before proceeding with the proposed highway project, it obtained assurances from the Chilean authorities that they would implement a time-phased plan of action to improve railroad service. Under the program, the railroads are to cover their operating expenditures at the latest by 1975. We are carrying on a continuing dialogue with the railroads concerning this program. In a few days, a small Bank mission will visit Santiago to consult with the authorities on progress made. As part of the plan of action, the railroads are drawing up a medium-term investment program of which the key features will be the consoliiation and modernization of workshops, and improvement in the permane t  7 STRICTLY CONFIDENTIAL way of key railroad lines. Under appropriate conditions, the Bank expects to be able to provide financial assistance for sucf program. Chilean port administration is also in need of improvement. Even though a special public enterprise, the 0 Empresa Protuaria de Chile," was created in 1960 to operate the country's most important ports, the entity lacks adequate autonomy to operate effectively. It has experienced staffing problems, has failed to do an adequate maintenance j:>b, has no effective power to set tariffs, is dependent on the Treasury for operating subsidies, and subject to cumbersome pre-audit by the Controller-General. Up to now it has had little influence on the planning and construction of port improvements, which are carried out by a special department of the Ministry of The Government fully recognizes the need for e establishment of a truly independent port o~~apization hich can operate the ports along sound economic and commercial has so far been unable to devise a successful strate y o achieve this objective. Bureaucratic jealousies, regional olitics, and the great strength of the labor unions are some the key factors tha~ve blocked progress. We are continuing ><. o encourage the authorities to come to grips with these roblems, so as to be able to go forward with a loan to improve  8 STRICTLY CONFIDENTIAL facilities in Valparaiso and San Antonio, the two major ports serving Santiago. The loan being proposed today will help finance the reconstruction and improvement of four key highways of which three are in Santiago, San Antonio and Valparaiso triangle, wh re traffic density is highest. These highways have been care- fully chosen on the basis of economic priority and the decisio tcr30 forward with the loan reflects our judgment that there have been significant improvements in the management of highwa s since the time, almost a decade ago, when the Bank first becam associated with the sector. The loan, in addition to providin funds for reconstruction of the four highways as well as the = supervision of construction, is designed to finance pre-invest ment studies for highway construction. With continued progress by Chile in improving transport coordination and K. the planning and operation of transport facilities, the Bank expects to be able to finance the improvement of importan highways in the future. Thank you, Mr. Chairman. MR. McNAMARA: Thank you. Gentlemen, are there questions or comments? Mr.Moro. MR. MORO: Thank you, Mr. Chairman.  9 STRICTLY CONFIDENTIAL I warmly support this project because I think that the investment is in the most suitable mode of transport for Chile, the road. Nevertheless, I should like to raise some general comments on this project and ask two specific small questions. I fully agree with the recommendation in the Appraisa Report, paragraph vii, page ii, to the effect that the Bank will pay due attention to the action of the consultants, saying that "Consultants will assist in the supervision of the construction," because I think that the rate of disbursement ill be better if we pay attention to this aspect, supervision f construction or implementation of the project. I don't want to insist on a subject that has been icussed before, coordination of systems of transportation, hich is a very difficult task, even in countries that ave more advanced administrative structures. I think it ould have been advisable, though, to make a study of all eans of communication, taking into consideration further uture demand on the increasing exploitation of the country's atural resources, before financing one of these modes, e::,, ighway. Nevertheless, from the presentation of th~eti-, assume that the highway alternative must be the best e. In connection with the railroad services, the fact tha  l STRICTLY CONFIDENTIAL the railroads are government-owned and operated indicates that there is and will be a certain limitation in the extent to whi ~ improvement and changes can be implemented. We must recognize that tariffs are based not only on real cost, and we admit that sometimes the prices are political prices. Therefore, as the rate of inflation is 30 percent annually, I think that the measure suggested by the consultants is not based on the realities of the situation, especially in paragraph iii and 2.09 of the Appraisal Report. I quote, "tariff changes and other steps which would eventually bring the operating account of the CSR into balance," which in my opinion con- tradicts the view of the government which is expressed in paragraph 2.16 of the same Appraisal Report, and I quote, "tha the Government intended to pursue a policy of equalising inter modal competition by introducing tariffs which reflected the true costs of the different modes; that where social services were performed, the transport mode affected would be compen- sated by the government." This paragraph involves the idea that with intervention, sometimes the prices will not reflect the real cost of transport. Therefore, in the view of the characteristic of growth of road traffic shown in paragraph 3.21, between 1960 and 1968, total vehicle registration in Chile grew at an ann  11 STRICTLY CONFIDENTIAL average rate of 9.2 percent, passenger vehicles increased by 10.4 percent per annum, trucks increased by 5.7 percent per annum, and so on and so forth. All of this paragraph. Also it reads that it takes into account that the motor industry is one of the most rapidly growing in Chile. "he output of passenger cars, vans and light trucks assembled from locally manufactured and imported components has been growing at the rate of over 20 percent per annum since 1962." It states, · 11The Government recently enacted legis- lation to create a sp~-cial financial institution to extend credit for car purchases. Initially, at least, this will sust in the growth in the automobile fleet." In my opinion, the increase in productivity and reduction of cost because of closing of lines and improvement of means of transport could not equal the increase in cost due to ever increasing prices and salaries. A toll increase in this sense is going to cause lower traffic. In my opinion, all the points including the idea that they import,also in shipping, the same problem is presented now. Paragraph 2.1 says that "in terms of goods transported, coastal shipping is the most important mode. Almost 8 billion ton-km were attaine in 1968. The only cargoes which are increasing are bulk liquid and bulk ore traffic, general cargoes having been  12 STRICTLY CONFIDENTIAL declining for the past ten years." This is diversion from shippi~g to the road. The same idea is reflected in paragraph 2.14, transfer from rail to the road. I quote, "There has been considerable diversion of traffic from rail to road, because of poor service on the railways." I think this is a hope, only, in the following sentence: "Some of this traffic is expected to return to the railway when the improvements described in paragraph 2.09 above have been implemented." I think this is not realistic according to the view that the prices and the tariffs will be increased, according to the 33 percent inflation per year. Therefore, in view of the above, and without a need for further study, I believe it would be to the advantage of th Bank aid the country to continue to finance highway construction I think the best alternative for the mode of transport for hile is precisely the roads. There are two questions I should like to raise. ne is in paragraph 2.05 of the Appraisal Report. The distribu tion of traffic in 1968 does not indicate a trend. Tt might e estimated that there is an increase in highway transport. o you have any data regarding the changes in the trend? Secondly, in paragraph 3.25, the Appraisal Report,  13 STRICTLY CONFIDENTIAL this paragraph explains the situation on tolls, tariffs, fees, and so on in transport. I should like to hear some comment from the staff if the scheme of this list of tolls is appropriate or for the implementation of the project do we need to modify the scale of tolls, and so on? MR. McNAMARA: Thank you. Mr.Glaessner, let's take these one by one. First, in relation to paragraph 2.05 and the comments relating to traffic levels there. MR. GLAESSNER: Surely, Mr. Chairman. The tendency, the trend in general until about three years ago was a very strong diversion of traffic from both coastal shipping and the railroads to the roads. In the last three years, particularly lately with the relative improvement in railroad services, some of the heavy and bulk commodities have not been deserting the railroads at the same rate as before. The trend described in the report is a very real one, and just to explain i t a I think ·that none of us has any illusions about the difficultie of the railroads recovering freight, but what has taken place in Chile, actually, is that service, for example between the capital and the major industrial center of Concepcion in the South had deteriorated to the pointiere it took several X days for freight to move from the capital to Concepcion, and  14 STRICTLY CONFIDENTIAL vice versa, whereas trucks were able to make the same journey and make door-to-door deliveries in a matter of ten to twelve hours, now that the roads are fully paved. Some of the bulk freight, heavy freight that ~d.,~ is being carried by trueks-; really a very uneconomic use of resources, as soon as the railroads showed that they could once again give a modicum of decent service, some of this freight has returned to the railroads as a matter of fact. The references to tariff adjustment in the railroads which was made incidentally are, of course, to average tariffs. The main point about what the French consultants SOFRERAIL recommended and what the government itself in a statement to the Bank has expressed very clearly, is the very important idea that the railroads will return to making use of tariffs as a commercial tool, which had almost been lost as a concept in that railroad, so that they would go in for a much more differentiated tariff system and the first fruits of this are perfectly clear. In some cases they have reduced the tariffs, and in others raised them quite strongly, and they found that on the average, they can raise tariffs despite inflation to such an extent that real tariffs are increased by something like 3 to 4 percent a year, not only without loss of traffic, but with a certain relative recovery  15 STRICTLY CONFIDENTIAL of railroad traffic. Incidentally, these measures outlined in 2.09 are no only recommendations of the consultants, but they are a summar of a statement which the government made to us and it might be of great interest, perhaps, to you to read to you a relevan paragraph of the statement of plan of action which the govern- ment outlined because I think it shows how sophisticated and we believe at least how realistic their approach is. The government in relation to how they would reestab ish the effectiveness of the railroads and as a by-product, the financial position, stated the following: "The government will take measures such as the implementation of the report in its transport policy, accompanied by legal and structural changes within the transpo t sector, which might prove necessary and the railroads shall effect organizational changes, reduction in personnel, o~erational improvements, tariff adjustments for freight and passengers, and elimination or rationalization of uneconom c branch lines and services, so that as soon as possibl~, and in any case, not later than 1975, operating revenues shall cover operating expenditures not including depreciation and debt service. "The railroads will continue to improve their operat'ons  1 STRICTLY CONFIDENTIAL and realize economies in order to enable revenues to be sufficient to cover operating costs including appropriate depreciation charges and interest on debt within three years of achieving the above-mentioned target. "Tariffs shall be raised to achieve this target only to the extent that such action does not involve the diversion of traffic to modes of transport which would carry high economic costs. ~order to help the railroads achieve these targets, the government shall adopt such tax and pricing policies and measures with respect to competing modes of transport that the users of these competing modes will cover at least the relevant economic costs of operation." In other words, there has developed, it seems to me, a great consciousness and a quite sophisticated approach to the whole question of relative pricing of various modes of transport and while I fully agree with you, sir, that the question of a strong union which of course continually pres es for wage adjustments, at least in line with cost of living increases, is a difficult problem to handle for an outfit like the railroads which are experiencing losses, the experience of the last two or three years in fact is quite encouraging. MR. McNAMARA: Thank you. Before going on to the othe  17 STRICTLY CONFIDENTIAL paragraph, let me add just one word to this question Mr. Moro raised about paragraph 2.05. The main point of 2.05 is the existing low traffic density in the Chilean system and the paragraph goes on to say that in view of that it is very important that.:investment in the future not contribute to a continuation of that{iow density, and the degree to wlich Chile is below any reasonable degree of density is indicated by the fact that jus~icking four or five countries at random, Korea, West Germany, India, for example, have traffic densities five to seven times as great as Chile, and that is really what that paragraph was addressing. No, Mr.Glaessner, will you turn to paragraph 3.25 which is discussing the variable tolls and comment on the potential rationalization of the toll structure. MR. GLAESSNER: I cannot pretend, really, to be much of an expert on this. I do know even at the present time n this highway, there are differential tolls both with respect various types of traffic and with respect to the time of the d eek, and as a matterji"fact, of the year, when traffic akes place. For example, on the San Antonio - Santiago oad, there is of course most intense traffic on summer week nds, and they tend to put up the tolls in order to really have sensible economic approach to the toll problem. On the other  18 STRICTLY CONFIDENTIAL hand, of course, when heavy trucks are involved they charge them very substantially more than they do, let us say, lighter trucks in order again to discourage the excessive use of the facility. Mr. Chairman, if you would want to -- MR. McNAMARA: I think that is sufficient, unless Mr. Moro wants more. Mr. Lynch. MR. LYNCH: Thank you, Mr.Chairman. My point too arises out of the rather alarmingly steep rate of inflation in Chile, but it is concerned with the local cost of the project, not with its effect on the tariffs or anything like that. We are told in the Appraisal Report that there is an escalation formula for looking after this situation, a situation in which the local costs during the course of the project might rise to such an extent as to be disruptive of its efficient completion, but I can't find in the report any description of this formula. It may be that we've had it in past appraisal reports. I would like some information about it if it is available, please, Mr. Chairman. fll.,i MR. McNAMARA: Yes. ?4R<Glaessner, would you comment on that or if you wish, call on one of your associates.  19 STRICTLY CONFIDENTIAL MR. GLAESSNER: I would prefer to do that. MR. McNAMARA: Yes. Mr. North, the question is in this inflationary environment, is an escalation formula used and if so, what is it? MR. NORTH: AN escalation formula is used, Mr. Chair- man, and gentlemen. I haven't got the formula with me, but it is of the form of a number of factors related to cost of equipment, related to the rate of exchange applied at the beginning of the project and at the time of payment of monthly bills; it is related to indices of equipment, costs in the United States. May I just clarify this a moment. The formula is of this nature, and I can provide the actual formula for you after the meeting. MR. McNAMARA: Mr. Lynch, let's do that and if you wis further elaboration now, we can have someone get it and discuss i t during the meeting. Yes, go ahead. MR. LYNCH: I didn't intend to bowl a fast one on this -- MR. McNAMARA: No, not at all. MR. LYNCH: What I seek really is r .e assurance that in the view of the management, this formula is sufficiently comprehensive to assure the local costs of this project, which  20 STRICTLY CONFIDENTIAL I believe amount to something like $13 million of the $23 million -- MR. McNAMARA: Yes, that's right. rfs essentially X a $24 million project, of which we propose to finance $10 million plus. There are $13 million of local costs in an environment in which prices rise 30 percent per year. MR. NORTH: We can provide assurance that the escalation formula will enable us to determine the amounts to be paid to contractors perfectly adequately. As far as the provision: o f local funds is concerned, clearly the government -- the number of escudos must rise, and the government must make provision accordingly. This has nothing t do essentially with the escalation formula . MR. McNAMARA: Yes, Mr. Lynch. MR. LYNCH: Please proceed, Mr. Chairman. MR. McNAMARA: --- think J. your question is directed to the issue of will the government provide the local currency required and in answering that question, has the government really taken account of the potential inflationary effect on the requirement for local currency? MR. NORTH: May I answer that one, sir. We have in fact in negotiations of this loan, specifically addressed ourselves to that point. I'm sorry I misunderstood you, Mr.  21 STRICTLY CONFIDENTIAL Lynch, previously. We have arranged for the government to provide us with estimates of their budgetary requirements in advance of each year, in order that we can review them in the light of the increased costs, in the light of inflation and in the light of the progress of the project generally, so that we can assure that in the project sufficient provision is made each year for the continuation of the project. MR. McNAMARA: Yes, Mr. Lynch. MR. LYNCH: I'm afraid I haven't studied the form (6 ~ pt:- eh" Loan Agreement, but is there any actual undertaking in the Loan AGreement-- MR. NORTH: Yes, t~ere is a side letter. No. 1, I think. It details the procedure to be followed in determinin the budgetary allocation for each year. MR. LYNCH: I am much obliged, Mr. Chairman. MR. McNAMARA: Thank you. Mr. Ali. MR. ALI: THank you, Mr.Chairman. I have just one question to ask on the fourth of these project loansr the Loncomilla-Constitucion. We have been told that consultants are studying ways to improve the efficiency of the railways,. and thus help to return traffic to them, particularly bulk commodities which normally travel over the rails. Now, with regard to this fourth project road, the traffic forecast i  22 STRICTLY CONFIDENTIAL dependent on the operation of the cellulose mill at Constitu- cion, for which presumably the raw material comes from the forest area around Loncomilla, and the raw material would, I assume, be timber and would not this bulk traffic of that sort preferably go by the roughly parallel railway line, rather than anticipating closure of the railway line and justifying the road on the basis of its carrying that timber? MR. McNAMARA: Mr. Glaessner. MR. GLAESSNER: Sir, these extraordinary California pine forests which feed the pulp mills in Chile are actually along the coast. They are around Constitucion. They are right around the area in which the mill will be located, and they are trucked in over trucking trails and trucking roads. They could not be brought in normally by this railroad, because the railroad, while it passes through some of this area, would not cover except a very small part of it. The advisability of closing this road will be subjcc to a very systematic study for which the railroads on the basis of advice from the SOFRERAIL consultants have establishe a very good procedure. They don't very lightly recommend closing the lines. They first study the existing and prospec- tive traffic possibilities, on the railroads' existing traffic, and then after they have tried to estimate what the  23 STRICTLY CONFIDENTIAL costs of the branch line is versus possible revenues that can be gained on the line, they compare this with alternative means of transportation, number of buses and trucks that have been raised, and only if it would cost 50 percent more than to have the alternative means of transport used, do they even contemplate abandoning the line, so that really every attempt is made to make sure that this is not done lightly and that/io mistakes are made in the sense that a railroad line tha-y.might after all serve a very good economic purpose in the future is lightly abandoned. This is the type of procedure which is being applied to all the 23 potentially uneconomic branch lines, and which would also be applied in this case. MR. McNAMARA: Dr. Hanemann. DR. HANEMANN: THank you, Mr. Chairman. I have some comments to make. We see in your report, Mr. Chairman, that the highway maintenance aoan granted in 1968 is running about one year behind schedule. This seems to be due to the fact tha~onditions of effective- ness which have been stated at this time, had been met only after some months' delay. I think this policy of conditions of effectiveness practically means that the Bank, even if the contract and  24 STRICTLY CONFIDENTIAL agreements are signed, not like to be asked to act in the field of the project before some conditions are met, things which are absolutely necessary for sound implementation of the project. Now in this case, in this project we have before us, we have no such conditions of effectiveness. There have been, of course, a numbeff matters discussed with the government and we see in the recommendation that agreement has been reached with the government, for example, on appointment of consultants for project supervision. Now in other cases, and we can later on in the projec for Ethiopia see that appointment of a manager for coordination, for coordinating of the project or manager in this case, of the project, appointment is made a condition of effectiveness in the case of Ethiopia. Here it is mentioned as something which has been agreed upon with the authorities, and we see here no special provisions, no special conditions for effective ness, although in the last highway loan, conditions of effecti ness had been arranged and they had even been instrumental in the delay, because the effectiveness was not assured as early as one had expected it, so my question is, Mr. Chairman, what is the general rule followed in the Bank in this policy of setting conditions of effectiveness? Is this made according to some criteria which are similar in various cases or is it  25 STRICTLY CONFIDENTIAL done just at the discretion of the managment, of the staff, dealing with the project,on what are the reasons that in one project you find these conditions of effectiveness an~n others, not, although there are questions raised with the government which also tend in the direction that something has to be done before one can expect tha~mpl~menta- tion of the project can be expected to be satisfactory: My second remark, Mr. Chairman, I noted in paragraph 11 of the report, the Appraisal Report, that the German Government has recently made a loan of about $1 billion availa le toward purchase of maintenance equipment. I could not verify, wasn't in a position to verify this statement. It might well be that some resources were granted to the Chilean authorities the rail authorities, which have been used for purchasing main tenance equipment, but I could not find out that a special loan had been granted just for the purchase of maintenance equipment, though I can take the matter up later on with the staff, but I couldn't find verification of this statement. With respect to the inflationary pressures, Mr. Chairman, in this country, I have already expressed my concern at a meeting when we discussed Chile some weeks ago, and I expressed the hope that the new government would take this matter up rather urgently, as soon as the election campaign is  26 STRICTLY CONFIDENTIAL over. Thank you, Mr. Chairman. MR. McNAMARA: Thank you, Dr. Hanemann. I'll ask Mr. Knapp to comment on our policy with respect to conditions of effectiveness. MR. KNAPP: Mr. Chairman, the cases differ very widely as between different projects, as to need or desirabili of establishing conditions of effectiveness. It is our genera policy to minimize conditions of effectiveness and to get whatever needs to be done to make the project viable, accom- plished during the negotiations stage and before the proposal ,ta brought to the Board. However, often cases arise, for example, routine actions of a legal nature to be accomplished, starting, say, w :f:ih ratification by parliament which becomes a condition of effectiveness. There may be other lenders involved whose action becomes a condition of effectiveness of our own loan, or there may be things which perhaps in an ideal world would have been done before the loan is brought to the Board, but steps on which delays have occurred, and here it becomes a mat r of}udgment and of negotiation. We will, sometimes, recognize ~time has not permitted accomplishment of a certain act like the appointment  27 STRICTLY CONFIDENTIAL of a manager. One ideally would like to see the manager appointed, even before the matter is brought to the Board, but if we're convinced that this can be accomplished within a reasonable time -- by "reasonable" I mean 60 to 90 days and it would not be worth holding up the progress 6f the entir project to await that action, we'll make it a condition of effectiveness. You might bear in mind that in some cases it's a matter of negotiation; in some cases the borrower wants to b assured he's got the loan or that he has approval of the loan by the Executive Directors before he takes his final action. There's no good his going out, for example, to recruit a team of managers, he may argue with us, unless he knows he's got the loan, and he doesn't know he's got the loan until it i brought before the Executive Directors, so in some cases we to that wish and make i t a condition of effectiveness, but we do not like to have a long list of conditions of effectiveness and we particularly do not like to have a loan pending for a long while, awaiting conditions of effectiveness. Lots of things can happen in that interval, and it is much cleaner to as much as possible done at the moment chat the loan is brough before this Board. MR. McNAMARA: Gentlemen, are there other comments  28 STRICTLY CONFIDENTIAL or questions? If not, we will consider this approved. Dr. Caram. DR. CARAM: Thank you, Mr. Chairman. In the name of the Government of Chile, I wish to thank the Board for aproval of this loan, and I would also like to thank the staff for their efficient preparation of the report and the excellent presentation to the Board. Thank you, Mr.Chairman. MR . McNAMARA: Thank you, sir.