Argentina - Third Highway Project

ETURN To RESTRICTED REPORTS DESK FILE COPY Report No. PTR-65a IONE WE This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF A HIGHWAY PROJECT ARGENTINA March 2, 1971 Transportation Projects Department  CURRENCT QUIVALENTS: Currency Units N New Pesos ($a) US$ 1 = $a 4.0 US$ 1 milion - $a 4 minlion $a 1 million - US$ 250O000 FISCAL TYAR: January 1 to December 31 SYTEM OF WEIGHTS AND MEASURES: Metric ITRIC: BRITISH/US NQUIVALENT: I kilometer (hn) = 0.62 miles (ai) `1 meter (m) a 3.28 feet (ft) 1 square kilometer (2) - 0.386 square mnies (sq mi) 1 metric to (m ton) = 0.98 lg ton 1 metric tm (m ton) - 1.1 US short ton ABBREVIATICS: CCUADE - Consejo Nacional de Desarrollo FA - Ferrocarri1es Argentinos FHA - United States Federal Highway Administration FIEL - Fumdacion do Investigaciones 1conomicas Latino Anricanas FIB - First Year Benefit GDP - Gross Doastic Product IDB - Inter-American Development Bank I13R - Internal gEncmic Retun IRTP - Long Range Tranpwrtation Project SAB/Berger - Sociedad Argentina do Estudios/Louis Berger - Consu1tants TAMS - Tippettsa Abbott, McCarthy and Strattm (US') - Consultants UNDP - United Nations Developmnt Prograin UNSF - United Nations Special Fmd USAID - United States Agency for International Developmnt  ARGENTINA APPRAISAL OF THE THIRD HIGHWAY PROJECT TAPLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS ...... ......................... i 1. INTRODUCTION ..1....................................... 1 2. BACKGROUND ................. 2 A. General .................,. 2 B. Transport Sector ....... .......................... 2 C. Transport Coordination ........................... 4 3. THE HIGHWAY SECTOR .................................... 6 A. The Highway Network .............................. 6 B. Characteristics and Growth of the Vehicle Fleet .. 6 C. Highway Administration ...... ..................... 7 D. Financing and Planning ................ 8 E. Highway Engineering .. ............................ 9 P. Highway Construction ...... ....................... 10 G. Highway Maintenance .. ............................ 10 4. THE PROJECT ......................................... 11 A. General Description .............................. 11 B. Highways to be Constructed, Improved and Paved ... 11 C. Consulting Services for Construction Supervision . 11 D. Additional Consulting Services ........ ........... 12 E. Cost Estimates and Financing ......... ............ 12 F. Disbursements .................................... 14 G. Execution of the Project ........... .............. 15 5. ECONOMIC EVALUATION ................................... 15 6. RECOMMENDATIONS ....................................... 17 This report was written by Messrs. A. van Dijck (engineer) and B. Shields (economist), members of the Bank project appraisal missions in May and September 1970, and Miss R. Mayes (editor).  Table of Contents (continued) TABLES 1. Freight Traffic by Mode, 1960-74 2. Composition of the Highway Networks 3. Vehicle Registration 4. Motor Fuel Consumption 5. Forecast Traffic Growth Rates 6. Federal and Provincial Actual and Projected Highway Expenditures (1968-1974) 7. Design Standards for National Roads 8. Summary Details of Proposed Improvements 9. Roads to be Improved and Cost Estimates 10. Vehicle Operating Costs (Net of Taxes) in Different Conditions 11. Consultants Engaged in Detailed Engineering ANNEXES 1. Previous Bank Highway Projects and other External Assistance for Highways 2. The Project Roads 3. Estimated Schedule of Disbursements CHARTS 1. Organization of the National Highway Authority (Vialidad) 2. Distribution of National Revenues from Taxes on Highway Users MAPS 1. Principal Roads of the National Highway Network, 1970 2. Argentine Railways, 1969  ARGENTINA APPRAISAL OF THE THIRD HIGHWAY PROJECT SUMMARY AND CONCLUSIONS I. The resumption of economic growth after a prolonged recession in the decade following the Second World War, together with the establishment of a large domestic motor vehicle manufacturing industry, led to the rapid growth of highway traffic in Argentina over the past ten years. The coun- try's road network, which was more than adequate for a fleet of 500,000 ve- hicles in the mid-1940's, now has to carry over 2 million vehicles. For the last decade, Argentina has been adapting its system to meet these demands and, particularly between 1968 and 1970, an intensive building program has re- sulted in the reconstruction and paving of many kilometers of highway and in a number of modern expressways. The investment problem is to insure wise timing of improvements complemented by systematic choice of appropriate stan- dards. ii. The Bank has been involved in financing Argentine highways since 1961. The first Bank highway project (288-AR) took over seven years to complete even after the scope had been substantially reduced. The Bank has been closely associated with recent efforts of the Government to improve transportation planning and to restore viability to the railroads whose service had deteriorated badly. A Bank mission reviewed Argentine road and rail transport in September lq68, and its findings were conveyed to the Government in early 1969. After agreeing on steps to be taken to im- prove transport coordination and planning, the Bank in 1969 made a second highway loan (619-AR) of US$25 million equivalent to help finance the im- provement of about 800 kIn of highways and the execution of studies to identify and prepare future highway programs. Construction work has started satisfactorily on all the highways in the improvement project. The Govern- ment has prepared a detailed plan for rehabilitation of the railways, for which Bank lending of US$84 million equivalent is proposed. iii. This report appraises a project in Argentina for upgrading 18 road sections totaling 1,128 km. The project has been based on a highway recon- naissance survey, and on feasibility studies and detailed engineering includ- ed in the Second Highway Project (619-AR). It includes widely varying types of road improvement -- upgrading low standard earth and gravel roads, improving and repaving existing paved roads, and constructing two- and four-lane sec- tions of freeway. The roads are located in 10 provinces; thus, together with the first two highway loans, the Bank will have participated in highway works in 17 out of Argentina's 22 provinces. The project also provides for consult- ing services for construction supervision and the preparation of future proj- ects.  - il - iv. The cost of the proposed third highway project is estimated at US$150 million equivalent. The proposed loan of US$67.5 million, of which about US$9 million is for contingencies, would finance 45% of the cost of the civil works (US$54 million, including about US$18 million for local currency costs) and also 45% of the cost of consulting services for proj- ect supervision, and for further detailed engineering and feasibility studies (US$4.5 million, including about US$1.5 million for local currency costs). v. Detailed engineering for the project roads is now being completed. The cost estimates are considered reliable and adequate contingencies have been included. Consultants will assist the Government in analyzing bids and supervising construction. vi. Execution of the project will be the responsibility of the National Highway Department (Vialidad). Contracts for the project works will be let on the basis of international competitive bidding procedures satisfactory to the Bank. vii. The internal economic return of the road sections in the project varies between 14% and 39%. The average yield is 24%. viii. The project is suitable for a Bank loan of US$67.5 million equival- ent. An appropriate term would be 25 years, including a four-year period of grace.  ARGENTINA APPRAISAL OF THE THIRD HIGHWAY PROJECT 1. INTRODUCTION 1.01 The Government of Argentina has asked the Bank to help finance a project costing about US$150 million equivalent, comprising (a) the up- grading of about 1,128 km of 16 sections of national highway and two sec- tions of provincial highway, including consulting services for construction supervision, and (b) additional consulting services for the identification and preparation of a future highway investment program, including feasibi- lity and detailed engineering studies. 1.02 This would be the third Bank highway project in Argentina. The first was a loan (288-AR) of US$48.5 million equivalent, signed in June 1961, to finance the foreign exchange cost of improving 2,600 km of national highways, advisory services by consultants and provision of road maintenance equipment. At the time of the loan, a study of Argentina's transport svstem was underway with United Nations Special Fund (UNSF) financing (US$520,000 equivalent), with the Bank acting as Executing Agency; the study was completed in early 1962 and the results published as the Long Range Transportation Plan (LRTP). 1.03 A number of problems developed during the first project, such as lack of local funds, ineffective use of consultants, inadequate manage- ment of the project and poor quality of work. After unsuccessful efforts by the Bank to improve the situation, the amount of the loan was reduced to USA32 mlllion in 1965 to correspond with a reduced scope of work. Sub- sequent efforts of a new Vialidad management led to the satisfactory com- pletion of the project by its extended Closing Date of December 31, 1968. 1.04 A Bank mission to Argentina in May 1968 explored the Government's approach to the transportation sector and concluded that the Bank could play a useful role in its development. This led, in September-October 1968, to a transport mission which made a detailed review of rail and road transport; the mission's findings and recommendations were presented to the Government at the end of January 1969. Following this work, Argentina has taken steps to improve transport coordination and planning. The Bank made a second high- way loan (619-AR) of US$25 million equivalent in June 1969 to upgrade about 800 km of three national highways, plus consulting services for construction supervision and for carrying out a reconnaissance study for highway invest- ment priorities and for feasibilitv studies. The loan was only made effect- ive in January 1970 because of a delay by the Government in ratifying the Loan Agreement. This caused some months' delay in contracting, but all contracts have now been awarded at favorable prices. Initial progress is good, and it is expected that most of the work will be completed near the end of 1972, about one year behind the original schedule.  -2- 1.05 The 1968 transport mission's findings and recommendations on railways contributed to the development of a detailed plan to rehabili- tate and redimension the railways. A US$84 million Bank loar to assist in financing this plan is proposed. 1.06 The proposed third highway project is largely based on the recon- naissance survey of investment priorities for national and provincial prim- ary highways and on subsequent feasibility studies and detailed engineering included in the Second Highway Prolect. The loan would be in the amount of US$67.5 million. 1.07 This report was prepared by Messrs. A. van Dijck (engineer) and B. Shields (economist), members of the Bank appraisal missions in May and September 1970, and Miss R. Mayes (editor). 2. BACKGROUND A. General 2 2.01 Argentina, with an area of 2.8 million km , is the eighth largest country in the world. The country has a 1970 population estimated at 23.3 million and an overall density of only 8.7 persons per km2. However, two- thirds of the population is concentrated within 600 km of Buenos Aires, 2 and the population density in the rest of the country is only 2.4 per km Population growth has been slow with an annual average of 1.5% between 1961 and 1970. Average per capita GDP is about US$820, the second highest in Latin America, and higher than several European countries. The average annual growth of real GDP between 1961 and 1970 was 3.7%. Until 1967, economic growth was uneven, and depressed conditions were accompanied by inflation. In the last three years, growth has averaged 6% per annum. B. Transport Sector 2.02 General: The terrain is generally very flat, and no major geo- physical factors influence transport except the Andes to the west and the Plata River system flowing in a southeasterly direction into the Atlantic Ocean. The main factor shaping the transport system has been the high concentration of population and economic activity - industrial and agricul- tural - near Buenos Aires. With its population of more than eight million, a port handling over one-third of total port traffic, and its role as the industrial, financial and commercial center of the country, metropolitan Buenos Aires is the focal point for transport in Argentina. 2.03 About 78 billion ton km of freight (of which highways accounted for 36%, coastal shipping 29%, pipeline 10%, rail 18% and river transport 7%) were transported in 1969. A historical series, with projections from 1970 to 1974, is given in Table 1.  - 3 - 2.04 Highways: Between 1934 and 1944, 24,000 km of national trunk roads and 30,000 km of provincial primary roads were constructed; and by the mid- 1940's Argentina had one of the finest highway networks in the world. A pe- riod of reduced road construction followed, initially because the system was adequate but subsequently because the economy was depressed. The pace in- creased again in the 1960's, and Argentina now has a network of national and provincial primary roads totalling some 137,000 km (Table 2). Further details are given in Chapter 3 and on Map 1. 2.05 Railways: Argentina has an extensive railway system radiating from Buenos Aires and largelv concentrated in the surrounding provinces (Map 2). There are now some 40,000 km of lines in operation under the Ferrocarriles Argentinos (FA). Since the 1930's, the railway system has been losing traf- fic to highwavs and pipelines, both in terms of its share of national traffic and of tonnage carried. The railway deficits are large; until 1970 revenues had not even covered labor costs. The FA is overstaffed, much of its equip- ment is obsolete, maintenance is hampered by lack of spare parts, and many lines are uneconomical. However, during the past four years, management has improved, and the working ratio dropped from 214 in 1966 to 124 in 1970. Working losses were US$160 million in 1966 and had dropped to US$59 million (in 1966 prices) by 1969. Some uneconomical lines have been closed and staff has been reduced by attrition. Studies by FA and its consultants on feasible action in regard to other uneconomical lines and excess personnel are underway. A railway recovery program has been prepared for the period 1971-75. The Bank, which has for the last two years maintained close contact with PA and has actively encouraged the recovery measures which have been taken, has re- cently negotiated a loan to help finance important elements of the first two years of this program. The FA hopes to break even, except for depreciation charges, by 1975. The aim is eventually to cover all costs of the redimen- sioned system. 2.06 Inland Waterways: The waterway system formed by the Plata river and its tributaries, the Parana, Uruguay, Paraguay and Alto Parana, includes more than 3,000 km of navigable routes and carries about 7% of total freight by all modes. Between 1960 and 1969, ton kilometrage increased at an average rate of 3.1% p.a., from 4.1 to 5.4 million ton km. A UNDP-financed study to ascertain whether there are economical means of improving navigation for deep- er draft vessels on the River Parana between Asuncion, Paraguay and Corrientes is nearing completion. 2.07 Ports: There are 77 ports under the control of the General Port Administration. There are also some private ports for specific products. Total public port traffic in 1968 was almost 74 million tons, of which Bue- nos Aires handled over one-third. The ports were notorious in the 1950's and 1960's for their congestion and inefficiency, but between 1966 and 1968 port turnaround time greatly improved, the average time in port dropping from 10.0 to 5.5 days. The port of Buenos Aires improved less markedly than the national average, from 8.7 to 6.4 days. A USAID-financed study of the need for additional deepwater port capacity in Argentina is currently in progress.  - 4 - 2.08 Pipelines: Argentina has an extensive petroleum product pipeline network of some 10,500 km and is currently extending both its crude and re- fined products' lines. In 1969 petroleum products' traffic totaled 7.8 bil- lion ton km, or almost 10% of total freight carried by the domestic trans- port system. Pipelines are the fastest growing transport mode in Argentina, and it has been estimated that by 1973 they will carry more freight than the railways. 2.09 Air Transport: There are about 100 airports in the country, of which five can handle international traffic. Domestic passenger traffic increased from 670 million passenger km in 1965 to 1,087 million passenger km in 1969, or by almost 13% p.a. C. Transport Coordination 2.10 There have been major weaknesses in transportation planning and coordination and there was, until recently, no transport coordination agency, and little attempt on the part of the Government to ensure that each mode of transport performed the functions for which it was best suited. Many of the problems of the railways referred to above (para. 2.05) stemmed from a Government policy of keeping rates at artificially low levels to subsidize the cost of living, and later to maintain traffic which otherwise would have been lost to other modes. As a result of this policy, the railways were starved of funds for maintenance and renewals, and service deteriorated so much that, even with low rates, the railways could not retain their traffic in a period (1947-1966) when total freight km of traffic in Argentina more than doubled. Tariffs were substantially increased in 1967, 1969 and in early 1971, the service was improved and traffic has been increasing and is expected to grow further in spite of periodic rate increases scheduled through 1975. 2.11 The Government has not adopted a consistent well-planned approach to highway investment in the past twenty years. Periods of high investment were followed by periods of inactivity (Annex 1). Nevertheless, the highway system was good enough to permit the rapid growth of trucking services, un- hampered by any strict regulation. As a result of the good service which truckers offer, much freight, especially long haul, bulk traffic, moves by road which an efficient railway system should be able to handle more econo- mically. The present modal distribution of traffic is more the result of inferior railway service than of pricing policies, and any practicable in- crease in highway user charges is unlikely to alter it. The planned reha- bilitation of the railway is intended to correct the inferior service and to induce more economic allocation of traffic. 2.12 In 1968, Sectoral Development Offices were established in all the Secretariats as links with the Consejo Nacional de Desarrollo (CONADE), which had delegated many of its sectoral planning functions to the spending ministries. Specifically, the Sectoral Development Office in the Secretariat of Transport was charged with improving transport coordination and developing  - 5 - transport investment review procedures. As a further step, the Ministry Re- organization Law (No. 18416) was passed in October 1969 to remedy organiza- tional deficiencies in the existing government structure. As a result, the Secretariat of Public Works and Transport, together with the Secretariats of Energy, Communications and Water Resources are now in the Ministry of Public Works and Services. There is only one major public transport responsibility outside the purview of the Ministry of Public Works and Services - air transport. The Air Force retains responsibility for planning, constructing and operating airports and regulating air services. 2.13 The planning and investment review procedures of the Secretariat of Public Works and Transport should be centralized in the Sectoral Develop- ment Office. However, some types of transportation studies are still being sponsored by separate agencies. For example, Vialidad recently sponsored the first regional intermodal transport study, which resulted in a 1971-75 plan for transport infrastructure in Mesopotamia which is separated from the rest of the country by the Parana and Uruguay rivers. The Sectoral De- velopment Office has been involved, together with the rail and port author- ities, in considering the results of this study. Vialidad wishes to sponsor similar studies in other regions of the country. Such studies should over- come the deficiencies of single-mode, single-project studies, and are there- fore to be encouraged. They would, inter alia, play an important role in the preparation of subsequent Bank highway projects, but they would be more effective if mounted by the Sectoral Development Office, and the Government has accordingly agreed that all planning and investment studies which have implications for more than one mode of transport will be supervised and co- ordinated by that Office. 2.14 The Sectoral Development Office was initially handicapped by lack of staff. The Government during negotiations for the second Bank highway loan indicated that it intended to engage two foreign transport experts to advise the Sectoral Development Office on matters of transport coordination and to train personnel who would later replace the experts. The experts have not been engaged, but with the increase in professional staff, from five in 1968 to 10 in 1970, the Office might now appear to be less in need of outside technical assistance than it was in 1968 when the Second Highway Prolect was appraised. However, there is still a need to train some of the staff in the techniques of transport planning and project evaluation. The Government indicated in discussions with the 1970 Bank economic mission that it would prefer to send those of its staff requiring further training to overseas courses, such as the Bank EDI project evaluation and transportation planning courses, rather than engage foreigners to undertake the work locally. During negotiations the Government confirmed that qualified personnel would be appointed in sufficient numbers to permanent positions in this office.  - 6 - 3. THE HIGHWAY SECTOR A. The Highway Network 3.01 The primary network of 136,500 km is divided into a national network of 45,500 km (Map 1) and a provincial primary network of 91,000 km. About 30,000 km of primary road are paved. As can be seen from Table 2, 90%, or 800,000 km, of the provincial road system consists of earth roads of varying standards. In general, the present road network serves traffic adequately, but parts of the system need more capacity to cater for high traffic volumes and others require pavement strengthening or upgrading. The investment problem is to ensure wise timing of improve- ments complemented by systematic choice of appropriate standards. There is growing acknowledgement on the part of Government of the need for careful study to precede investment decisions. B. Characteristics and Growth of the Vehicle Fleet 3.02 The heavily protected domestic vehicle industry is currently pro- ducing about 220,000 vehicles per annum. The national fleet has over two million vehicles, and there is an average of one vehicle for every 11 peo- ple, close to the European average. The composition and growth pattern of the fleet are shown in Table 3. Most freight vehicles up to two tons capa- city are still gasoline fueled, but between 1959 and 1969 twice as many diesel trucks of over four tons capacity were produced as gasoline trucks in the same category, and production of gasoline trucks is declining while diesel truck production is increasing rapidly. As Table 4 indicates, the rate of growth of consumption of gasoline was far lower (7.6%) than that of diesel (12.9%) between 1960 and 1969. The distribution of the vehicle fleet matches the concentration of economic activity, with 60% in Buenos Aires province and 25% in four other provinces, Santa Fe, Cordoba, Corrientes and Mendoza. Between 1960 and 1968 average annual growth of private vehicles was 12%, and truck registration increased at the rate of 7% p.a. Recent studies by Tippetts, Abbett, McCarthy and Stratton (TAMS, consultants, US) have led to growth predictions of 12% and 6% p.a. in automobiles and trucks respective- ly until 1975, and 8% and 5% p.a. respectively for the subsequent five years. The probable rates of increase in the different provinces were investigated, and the growth rates used in the economic evaluation of the project roads ranged from as low as 1% per annum in Tucuman to 7% per annum in Santa Fe (see Table 5). These are reasonable estimates. 3.03 Commercial traffic on different roads ranges from 13% to 65% of total traffic, with 30-40% being most usual. Truck transport is used for all commodity types transported in the country, on both long and short distance hauls. Freight rates are low because of the generally flat ter- rain and good roads, which permit the use of heavy truck trailers with a low power-to-weight ratio.  -7- C. Highway Administration 3.04 Vialidad (see Chart 1), under the Secretariat of Public Works and Transport, is responsible for planning, constructing and maintaining the national highway network (Map 1). Provincial Highway Departments are similarly responsible for the provincial highway networks. Planning and engineering the national network are done in Headquarters (Buenos Aires); some field investigations and construction supervision are also handled from Headquarters. Road maintenance and supervision of construction are carried out by Vialidad personnel in 24 District Offices. For a country the size of Argentina with so extensive a road network, many of Vialidad's activities are too centralized. Furthermore, there is unnecessary duplica- tion between the national and provincial authorities, especially in the more developed and populated provinces which have fairly good organizations, although many of the more remote provinces are almost entirely dependent on the technical expertise of the Vialidad District Offices. 3.05 Vialidad intends to transfer its detailed planning, construction and maintenance functions to the provincial authorities, thus allowing it to concentrate on overall planning and coordination of the highway network. This institutional reorganization is essential for more efficient management of highways, but will take many years to carry out. During negotiations for Loan 619-AR, the broad principles and timing of such reorganization were discussed and agreed. A recent step has been the transfer of authority for maintaining national roads to the provincial department of Santa Cruz, and similar arrangements are in preparation in two other provinces. Furthermore, agreements are in force for the carrying out of 32 engineering studies and the supervision of 18 construction works by the provinces. The Government has expressed its general intention to proceed with decentralization. Viali- dad is still studying and seeking advice on the detailed scope and timing of subsequent steps to be taken. A tentative ten-year transition period has been envisaged. The Bank should follow developments in this field. 3.06 Provision was made in the Second Highway Project for consulting services and the acquisition of equipment needed to provide the highway manage- ment with improved traffic and road inventory data for planning and administra- tion purposes. U.S. Federal Highway Administration (FHA) engineers are now assisting Vialidad in this field. The procurement of the equipment is in progress. The FHA advisors have proposed a comprehensive rural traffic counting program designed to obtain and maintain up-to-date estimates of traffic volumes on each section of the 45,000 km national primary highway system, together with 8,00n km of major provincial highways including those with paved or con- solidated surfaces. To achieve this task, the advisors propose continuous traffic counts at 56 permanent counting stations, together with periodic counts at over 2,000 stations. The Government has confirmed that it will continue to collect data needed for highway operations and planning.  -8- 3.07 Another obstacle to efficient highway administration has been chronic understaffing of Vialidad due to unattractive salaries, although Vialidad is now permitted to grant merit increases in salaries to staff members and to contract individual experts for periods up to two years. Although Vialidad is still at some disadvantage vis-a-vis the private sec- tor, salary scales were increased in January 1971 which will place Vialidad in a better position to compete for staff. 3.08 The vehicle weight and dimension regulations are satisfactory, although penalties are too light to ensure satisfactory compliance and the enforcement of weight regulations requires improvement. The FHA experts are now advising Vialidad on a vehicle weighing program which will determine the actual extent and frequency of overloading. The Government has accord- ingly agreed to take measures as indicated by the results of the weighing program, to strengthen the enforcement of the vehicle regulations. A number of fixed and portable weighing scales were procured under the first highway loan, and there are now 16 fixed and 24 portable units. D. Financing and Planning 3.09 A major problem during the execution of the first Bank highway project was lack of funds to meet the local costs. The new administration of Vialidad which was appointed in 1968 has remedied this situation and during the execution of the 1968-70 Three Year Plan (para 3.17) financed almost entirely from local funds, there was no such problem, nor is one ex- pected during the execution of the second and third Bank projects. 3.10 Historically, total receipts from taxes on vehicle ownership and use have exceeded total expenditures on the highway system. The costs of investing in, administering and maintaining the highway system are met from a combination of earmarked fuel, tire and vehicle taxes and general re- venues of both the provincial and national governments. The amount alloca- ted from general revenues for highway expenditures has been less than the yield of the non-earmarked portion of taxes on vehicle ownership and use which goes into general revenues. In 1969, out of an estimated yield of 1500 million 1970 pesos, 39% (585 million) went either to general revenues or to the national energy fund. Road user taxes were increased in 1968, and more substantially in 1969, to finance the increase in highway construc- tion expenditures required by the 1968-1970 Three-Year Highway Plan. In Table 6 there is a comparison of the annual total yield of taxes on vehicle ownership and use in the years 1966-69 with expenditures on the country's roads in the same years. Because specific taxes on diesel fuel were negli- gible, it was in the past argued that owners of diesel trucks were not paying their fair share for the use of the road system. There may, however, have been elements of hidden taxation in the price of diesel, which was controlled by the Government. In any case, in January 1971 a tax of $a 0.1 per litre (about USg10 per gallon) was lmposed on diesel, resulting in a price increase of 62.5%. Additional taxes equivalent to USJ5 and 6 per gallon respectively were imposed on regular and special grade gasoline. Vehicle registration  - 9 - fees were reduced by about 40%. The net increase in revenues from highway users resulting from the changes will be about US$190 million equivalent p.a. Vialidad has recently commissioned a study to examine the incidence, equity and economic efficiency of existing taxes on vehicle ownership and use, the results of which are expected shortly. The conclusions of the study will be discussed with the Government when available. The Government also intends to carry out a study of road user charges with special emphasis on urban areas; the Bank will be afforded an opportunity to comment on the terms of reference. 3.11 The revenues from taxes earmarked for highway purposes are allo- cated on the basis of fixed formulae to funds for national highways, for provincial primary highways and for provincial secondary and tertiary roads. The allocation is shown graphically on Chart 2. (The distribution of reve- nues from the recent tax increases between highway funds and general revenues is not yet known.) The distribution of the funds for provincial primary roads among the 22 provinces is based on population distribution, fuel consumption and the amount of matching revenue collected by the provinces. These formu- lae do not necessarily result in an optimum allocation of highway funds and are complicated. A simpler means of making budgetary allocations to implement national and provincial highway plans seems quite feasible. A proposal for a change, in accordance with recommendations made by consultants (SAE (Argen- tina)/Berger (U.S.)), was considered by the National Highway Council, which is composed of representatives of the national and provincial highway authorities. This Council concluded in November 1970 that better definition of the provincial primary road systems was necessary before any change in the distribution of funds could be introduced. Vialidad will carry out the necessary studies. E. Highway Engineering 3.12 Up to 1967 highway geometric design standards were low, but now (Table 7) tend to be somewhat high, particularly in respect to roads in hilly and mountainous terrain. As regards pavements, there has been a tendency to provide heavier structures than initially are necessary. How- ever, this tendency has now been checked. In the prenaration of the project, due consideration has been given to optimizing investments by carefully se- lecting design standards and by applying stage construction principles (Annex 2). 3.13 Except where external lenders have insisted on the use of consul- tants, Vialidad had until recently performed all engineering work and construction supervision with its own limited forces. Vialidad now makes extensive use of local consultants to compensate for its shortage of staff. A list of Argentine consulting firms engaged under Loan 619-AR in the pre- paration of the proposed project is given in Table 11. TAMS has been co- ordinating and supervising the work of these consultants.  - 10 - F. Highway Construction 3.14 In the past the quality of construction was uneven and construc- tion periods were often twice as long as initially estimated, mainly due to lack of funds. Since 1967 sufficient funds and better management in Viali- dad resulted in timely completion, more rigorous enforcement of contract conditions and modernization of specifications. 3.15 The local construction industry is well developed. There are over 20 large highway construction firms able to handle road contracts of up to US$15 million per year; a few of these are locally operated subsi- diaries of large international firms. In the bidding which took place in 1970 for the road sections financed tnder Loan 619-AR, a small number of foreign firms bid, although none was able to outbid local firms, which because of a lull in construction tempo were pricing bids very keenly. These unusually low bid prices are not likely to be encountered in the Third Highway Project (para. 4.08). 3.16 Highway construction is carried out under unit price contracts let after competitive bidding. Post-bidding qualification of contractors is practiced in Argentina. Since experience with the contracts under Loan 619-AR has been satisfactory, it is proposed to continue with this method under the proposed project. 3.17 The Three-Year Plan 1968-70 provided for major reconstruction of 4,320 km of highways. Its total cost was estimated at about US$480 million in 1968. By early 1970, work on 71 sections, over 2,260 km, costing about US$270 million had been completed, and work on 61 sections, covering 2,060 km and costing US$120 million was in execution or was expected to start. Some of the remaining projects are partly financed by IDB and the second Bank highway loan or are included in the proposed project. G. Highway Maintenance 3.18 Quality of maintenance on national roads is good and is expected to remain so. The average annual expenditure of maintaining one km of the national network is about US$600 equivalent, which is adequate. Consulting services to improve the system of maintenance accounting have been provided by JICEFA (Argentine Management Consultants) as part of the Second hlighway Project, and a new accounting system will be introduced in 1971. The Govern- ment has confirmed that it intends to continue maintaining the national high- way system adequately. 3.19 Maintenance of the primary provincial roads in the more developed provinces such as Buenos Aires, Cordoba, Santa Fe and Mendoza is satisfac- tory, as well as in Tucuman province where there are two road sections to be included in the proposed project. It is less satisfactory in some of the other provinces. However, decentralization of Vialidad's responsibili- ties for national roads (para 3.05) should provide a basis for improving maintenance in these provinces.  - 11 - 4. THE PROJECT A. General Description 4.01 The proposed project consists of: (1) the improvement and paving of ten gravel and earth road sections totalling about 761 km; (2) the improvement and repaving of two sections of paved roads totalling about 136 km; (3) the construction of two two-lane sections of a four-lane divided highway totalling about 91 km; (4) the construction of four sections of a four-lane divided highway totalling about 140 km; (5) consulting services for construction supervision for the above highways; and (6) additional consulting services to: (a) coordinate and carry out detailed engineering for about 1,500 km and feasibility studies for about 2,000 km of road sections to be selected with the concurrence of the Bank; and (b) update the primary highway network reconnaissance survey. B. Highways to be Constructed, Improved and Paved 4.02 The roads proposed for construction are listed, with their essential characteristics, in Table 8 and shown on Map 1. More detailed descriptions of the roads, including discussions of the design standards, are given in Annex 2. The roads are located in 10 provinces. Sixteen road sections form part of the national highway system, and two sections are part of the provincial highway system of Tucuman. In the first two highway loans, sections in Patagonia and in the most northern provinces were included so that the Bank will be participating in highway construction in all but five of the 22 provinces in Argentina. C. Consulting Services for Construction Supervision 4.03 Advisory services for the construction supervision of the proj- ect roads would be required to augment Vialidad's limited staff. Similar services provided by TAMS (US) and Organtec (Argentina) under the first and second highway projects were satisfactory. Vialidad will divide the much  - 12 - bigger proposed project into three groups for each of which a firm of engineer- ing consultants acceptable to the Bank will be employed to assist Vialidad in analyzing bids, to establish and maintain appropriate supervising procedures and to ensure coordination between the various works in each group. The overall coordination of the three groups will be maintained by Vialidad; these arrangements would be satisfactory. D. Additional Consulting Services 4.04 With a view to preparing further highway projects which mav be suitable for Bank financing, detailed engineering studies for about 1,500 km and feasibility studies for an additional 2,000 km of highways are in- cluded in the project. The selection, subject to Bank concurrence, will be based on the reconnaissance survey (para. 1.04) and a five-year invest- ment plan for 1971-75, prepared by Vialidad, which is now being considered by CONADE. These studies, to be carried out by consulting firms satisfac- tory to the Bank, together with the intermodal studies referred to in para 2.13, should result in two groups of construction projects with a total cost of about US$120 million each: they should be ready for financing in 1972 and 1973. 4.05 To coordinate feasibility and detailed engineering work, Viali- dad proposes to continue to employ a firm of engineering consultants, who will also assist Vialidad in updating the reconnaissance survey carried out under the Second Highway Project. These arrangenents were confirmed during negotiations and are satisfactory. E. Cost Estimates and Financing 4.06 The total cost of the project is estimated at US$150 million equivalent, including contingency allowances. This amount excludes, how- ever, an estimated US$3 million for right-of-way which is a local cost item. A summary of the project cost and the Bank's participation follows and is also given in detail in Table 9.  - 13 - Pesos (million) US$ (million) Bank Local Foreign Total Local Foreign Total Participation US$ million % 1. Construction work 326.4 153.6 480.0 81.6 38.4 120.0 54.0 45 2. Construction supervision 13.2 4.8 18.0 3.3 1.2 4.5 2.0 45 3. Additional con- sulting services 14.8 7.2 22.0 3.7 1.8 5.5 2.5 45 Subtotals 354.4 165.6 520.0 88.6 41.4 130.0 58.5 Contingencies, 15% rounded (10% for quan- tities; 5% for prices) 53.6 26.4 80.0 13.4 6.6 20.0 9.0 45 Totals 408.0 192.0 600.0 102.0 48.0 150.0 67.5 4.07 The estimates of construction costs are based on November 1970 quantities, derived from substantially completed detailed engineering after review by the coordinating consultants, TAMS. Unit prices are based on estimates of Vialidad, the consulting engineers and the coordinating con- sultants, and are reasonable (para 3.15). 4.08 TAMS' estimate of the foreign exchange component of construction costs, as adjusted by Bank staff, is about 29% for work carried out by lo- cal contractors and about 45% for work carried out by foreign contractors. Assuming that one-fifth of all work would go to foreign contractors, the foreign exchange component would be 32%. In the bidding that took place for the road sections financed under Loan 619-AR (where one-third foreign participation had been anticipated), a small number of bids from foreign firms were received, but none was sufficiently competitive. However, the extent of the proposed program and the size of the individual construction contracts may encourage a modest participation, perhaps up to 20% (para 3.15). The loan would finance this foreign component and a portion of the local currency cost representing 13% of total construction costs; thus, the Bank would finance 45% of such total costs. 4.09 The total costs of consulting services have been based on recent contracts with local and foreign firms. It is estimated that the foreign exchange component of the consulting services would be about 30%, reflecting the proportion of local firms expected to participate. The loan would finance 45% of the total cost of consulting services, thus including a por- tion of local currency costs representing 15% of the total cost of such ser- vices.  - 14 - 4.10 A 10% contingency allowance has been added to the construction cost for quantity increases. About 5% has been allowed for global (dollar equivalent) price increases at an estimated 3% p.a. from November 1970 until the end of the construction period, expected to be near the end of 1973. Local cost increases will be accommodated by an acceptable escala- tion formula which is already in use; it is assumed that adjustments in the foreign exchange rate of the peso will reflect changes in the relative pur- chasing power of domestic and foreign currencies. F. Disbursements 4.11 Construction is expected to commence in the second quarter of 1971 and be completed near the end of 1973. On this basis, the annual breakdown of expenditures between the Government and the Bank would be as follows (for details see Annex 3): Total Government Bank Calendar Pesos US$ Equiv. Share Share year (Millions) (Million Pesos) (Million U.S.$) 1971 64 16 34 7.5 1972 214 53.5 118 24 1973 214 53.5 118 24 1974 108 27 60 12 Totals 600 150 330 67.5 4.12 Any surplus funds remaining in the Loan Account on completion of the project should be cancelled. G. Execution of the Project 4.13 The loan will be to the Government of Argentina and the execut- ing agency would be Vialidad assisted by qualified consultants under terms and conditions satisfactory to the Bank. Two road sections of the provin- cial primary system in Tucuman are included in the project. Vialidad Nacional will be responsible financially and administratively for execution of these works, but future maintenance will be carried out by the provincial highway authority. It has been agreed with the Government that Vialidad and the Pro- vince of Tucuman will, before July 1, 1971, conclude an agreement, acceptable to the Bank, to provide for adequate maintenance and during loan negotiations the form of this agreement was decided.  - 15 - 4.14 Construction contracts will be let on the basis of unit prices after international competitive bidding in accordance with the Bank's established procedures. The value of individual bid items would range from US$0.3 million equivalent to US$6.0 million. In order to attract foreign bidders but at the same time enable local contractors to bid for works of a size appropriate to their capabilities, the Government has agreed, where feasible, to group the smaller individual works into packages of two or three items. The contracts in each package will be bid simulta- neously, and bids allowed for anv or all contracts in the group. The packages would range in value from US$1.1 million (projects 5 and 6 together) to US$18.5 million (project 15), and are detailed in Table 9. 4.15 A law has been passed recently in Argentina requiring the national government, its branches and agencies to use Argentine contracting firms and engineering consultants to the maximum extent possible. However, the Govern- ment has agreed during loan negotiations to approve the loan agreement by law, thus enabling Vialidad to procure goods and services under the proposed loan in compliance with the Bank's requirements for international competitive bid- ding. The enactment of this legislation is a condition of effectiveness of the proposed loan. 5. ECONOMIC EVALUATION 5.01 The project is economically well justified. The combined economic rate of return on investment in all road sections contained in the project is 24% and ranges from 14% to 39%. 5.02 The initial selection of road sections for the present project was made after a reconnaissance survev of the national and provincial pri- mary highway networks conducted by consultants (TAMS) for Vialidad. The reconnaissance survey (para 1.04) involved the screening of the entire non- urban primary highway network in order to identify those sections whose improvement would be most likely to yield the greatest benefit relative to the cost of the suggested improvement. After initial break-even analysis using averaRe values had been applied to the entire network, in order to isolate the most promising sections and reduce the study to manageable pro- portions, each road section in the selected network was further studied and ranked in order of priority of its improvement. Subsequent detailed studies of each section were made by various local consultants with TAMS coordinat- ing. These studies involved traffic origin and destination enquiries, com- parative rotute alignment studies and selection of economically warranted standards. 5.03 The projected investments range from the upgrading of earth and gravel roads to the construction of two- and four-lane sections of freeway. Each project and its economic benefits is described in Table 8 and Annex 2.  - 16 - 5.04 Only direct user benefits involving driver and passenger time and vehicle operating costs were evaluated. Other benefits which have not been included are reduced breakage and spoilage, accident reduction, tiile costs to goods in transit, and savings due to elimination of road closures in bad weather; to the extent that an improvement will produce stuch beiie- fits, net benefits have been understated, but for most roads in the proi''ect they are not likely to be significant. In addition to user benefits, cih- Kes which were expected to occur in maintenance costs as a result of a proposed highway improvement were included in the analysis. As a basis for com- puting benefits, TAMS developed estimates of vehicle qperating costs for different conditions in Argentina based on de Weille_L and using current Argentine input prices. These estimates, which are satisfactorv, are shown in Table 10. 5.05 Construction costs used in the economic analyses are net of taxes but include costs of land acquisition which are assumed to reflect the al- ternative use value of the land. 5.06 The construction costs for the 10 earth or gravel roads (Nos. 1 to 10 in Table 8) to be paved in the proposed project are not considered likely to vary by more than 10% from the present estimates. Traffic on these roads is expected to grow between 1970 and 1980 at rates ranging from 1% p.a. to 6% p.a. The consultants' forecasts were carefully developed and, if anything, are on the conservative side, but even so the First Year Benefit (FYB) in 1973, the first year of opening for all sections, in all cases is at least 11% and in most cases is between 15% and 20%. Sensitivity analysis shows that, even if costs exceeded the estimates by 10%.. the probable maximum, and traffic grew at half the forecast rate, which is improbable, all road sections in this category would have an FYB of 10% or higher. The Internal Economic Return (IER) in all cases will exceed the FYB and all these roads are therefore well worth including in the proposed project. 5.07 Two roads (Nos. 11 and 12 in Table 8) are being considered for improvement and repaving. These are roads which when first paved were capable of carrying the limited traffic foreseen. An increasing number of heavy trucks is contributing to their rapid deterioration and both road maintenance costs and vehicle operating costs are increasing. It is known that sooner or later, within the next three or four years, without radical rehabilitation these roads would break up so badly that vehicle operating conditions would be inferior to those on unpaved roads. When the actual critical failure will occur is, however, not known. The economic analysis has been conducted by comparing the very heavy maintenance costs (including initial deferred maintenance) which would be required over a 20 year period 1/ Quantification of Road User Savings, World Bank Occasional Paper Number Two, 1966.  - 17 - to maintain an acceptable level of service on the road with the capital costs of reconstruction. At the same time, alignment and drainage improvements will be made which would be warranted were the roads being built from scratch for the volumes of traffic they currently carry. The IER of these projects is 16% and 20%. 5.08 The third category of improvements included in the project involves roads where congestion warrants an increase in capacity. Six sections of road (Nos. 13 to 18 in Table 8) fall into this category. The lowest FYB for these projects is 11% and the lowest IER is 19%. 5.09 As shown in Table 8, the lowest IER for the road improvements in the project was 14%. The lowest FYB was 11%. No "opportunity cost of capital" has been adopted specifically for planning purposes in Argentina. However, Argentine consultants, Fundacion de Investigaciones Economicas Latino Americanas (FIEL) have recently (November 1970) made a study of this and found the cost of capital for the public sector to have a lower limit of 8%. 6. RECOMMENDATIONS 6.01 During loan negotiations, assurances were obtained from the Government on the following principal points: (a) All planning and investment studies which have implications for more than one mode of transport will be the primary responsibility of the Sectoral Development Office (para. 2.13); (b) Vialidad will take measures, as appropriate, to strengthen the enforcement of the vehicle regulations (para. 3.08); (c) Vialidad will contract three acceptable consulting firms to assist in supervising construction (para. 4.03); (d) Vialidad will contract acceptable consulting firms for feasibility studies and detailed engineering for further highway projects and will also continue to employ coordi- nating consultants (para. 4.05); and (e) Satisfactory arrangements will be concluded between Vialidad and the Province of Tucuman before July 1, 1971 with respect to the execution and future maintenance of two provincial road sections (para. 4.13).  - 18 - 6.02 The Governmuent has written to the Bank stating its intentions in regard to: (a) strengthening the Sectoral Development Office (para. 2.14); (b) the scope and timing of subsequent steps in decentralizing some of Vialidad's functions (para. 3.n5): and (c) measures to strengthen Vialidad's staff (para. 3.07). 6.03 The enactment of legislation to enable Vialidad to procure goods and services in compliance with the Bank's requirements for international competitive bidding will be a condition of effectiveness of the loan (para. 4.15). 6.04 The proposed project constitutes a suitable basis for a Bank loan of US$67.5 million equivalent; on the basis of the economic life of the project highways, an appropriate term would be 25 years, including a four-year grace period. March 2, 1971  TABIJE 1 ARGENTINA THIRD HIGHWAY PROJECT FREIGHT TRAFFIC EY MOIE, 1960-74 (billion ton km) tUrban Highways Highways Coastal River (less than (more than Year Rail Shipping Transport 60 km) 60 km) Pipeline Total 1960 15.2 32.3 11.4 24.2 4.1 8.8 2.3 4.9 11.9 25.3 2.1 4.5 47.1 1961 14.1 25.0 16.2 29.0 4.-6 8.2 2.4 4.4 15.2 27.1 3.5 6.3 56.0 1962 11.0 18.9 17.9 30.9 4.9 8.4 2.31 4.0 17.3 29.9 4.6 7.9 58.0 1963 10.7 18.8 17.4 30.8 4.6 8.1 2.2 3.9 17.2 30.4 4.5 8.0 56.7 1964 11.6 18.8 20.1 32.6 5.0 8.0 2.4 3.8 18.2 29.6 4.4 7.2 61.7 1965 14.2 21.3 18.8 28.2 5.2 7.7 2.8 4.2 20.3 30.5 5.14 8.1 66.2 1966 14.1 20.8 20.7 304.1 5.2 7.6 2.4 3.5 19.4 28.5 6.3 9.2 68.1 1967 11.2 16.2 21.6 31.2 4.8 7.0 2.7 3.9 22.0 31.8 6.8 9.9 69.2 1968 12.7 17.1 21.9 29.5 5.1 6.9 2.9 4.0 23.7 32.0 7.8 10.5 74.2 1969 13.7* 17.6 22.6 29.0 5.4 6.9 3.2 4.0 25.6 32.6 7.8 9.9 78.3 1970 14.2* 16.9 23.1 27.6 5.7 6.8 3.4 4.0 27.6 32.8 9.9 11.9 83.9 1971 14.8 16.5 21.1 23.5 6.1 6.8 4.0 4.4 32.1 36.o 11.4 12.8 89.4 1972 15.5 16.2 22.3 23.4 6.4 6.7 4.2 4.2 32.3 33.9 14.8 15.6 95.3 1973 15.8 15.5 24.6 24.2 6.8 6.7 4.6 4.2 33.8 33.9 16.4 16.2 101.5 1974 16.2 15.0 25.9 24.0 7.2 6.6 4.6 4.2 37.0 34.2 17.3 16.0 108.2 Notes Discrepancies in totals due to rounding. Figures for 1970 are estimated. * Revised figures for the railway are 13.4 billion ton km for 1969 and 1970. The table has not been altered because information on other modes is not yet available. Source: Seconade, May 1970 February 8, 1971  TABLE 2 ARGENTINA THIRD HIGHWAY PROJECT Composition of the Highway Networks (Kilometers) A. National Network (Primary Trunk Roads) Portland Cement Bituminous Gravel or or Asphaltic Surface Stabilized Earth Year Concrete Treatment Base Earth Tracks TOTALS 1961 4,730 6,851 8,006 20,867 6,142 46,596 1962 4,810 6,973 8,278 20,400 6,142 46,603 1963 4,973 7,591 7,869 19,513 6,007 45,953 1964 4,973 7,547 7,869 19,1439 6,007 45,835 1965 6,104 8,563 8,819 17,339 5,043 45,868 19661/ 6,104 8,563 8,819 17,339 5,0o43 45,868 1967 6,255 11,157 9,o44 14,978 4,156 45,590 1968 7,017 11,451 9,044 13,860 4,038 45,410 1969 20,000 7,400 18,000 45,400 B. Provincial Networks Gravel or Stabilized Paved Base Earth Tracks TOTALS 1969 Primary 9,100 10,400 37,500 34,100 91,100 1969 Secondary and tertiary 800,000 / Data not revised from 1965 Y Data very approximate Source: Vialidad, May 1970 November 2, 1970  T A E 3 ARGENTINA THIRD HIGHWAY PROJECT VEHICLE REGISTRATION ('000) Private Vehicles Buses Trucks Trailers 1960 474 14 378 38 904 1961 535 14 424 42 1014 1962 624 16 470 46 1156 1963 697 17 503 49 1265 1964 806 19 554 53 1432 1965 915 20 572 56 1563 1966 1031 22 599 62 1714 1967 1106 25 627 66 1823 1968 1/ 1174 27 649 69 1918 1969 2/ 21$O Average Annual Growth Rates (%) 1960-68 12 8.5 7 7.7 9,8 1960-64 1h.2 7.9 10 8.6 1212 1964-68 9.8 9.2 4 608 7t6 1/ Provisional. Registration figures for the pa8t two years are very uncertain. Introduotion of a central vehicle licensing system in 1970 will result in improved st*tistics in future. Source: Vialidad, May 1970 November 2, 1970  TABLE h ARGENTINA THIRD HIGHWAY PROJECT MOTOR FUEL CONSUMPTION ('000 m3) Gasoline Diesel Fuel 1960 2597 1282 (384) 1961 3119 1550 (426) 1962 3437 1920 (752) 1963 3337 2073 (892) 1964 3727 2510 (1100) 1965 4125 2751 (1170) 1966 4362 2851 (n.a.) 1967 4739 3145 (n.a.) 1968 48o4 3469 (n.a.) 1969 50h8 3812 (n.a.) Average Annual Growth Rates (%) Gasoline Diesel Fuel 1960-69 7.6 12.9 1960-65 9.7 16.5 (25) 1965-69 5.1 8.5 Note: Diesel fuel is total sales of diesel fuel for all purposes. Figures in parentheses show consumption identified for vehicle use but may be an understatement of true consumption for this purpose. Source: Vialidad and Direccion Nacional de Energia and Combustibles, May 1970. November 2, 1970  Table 5 ARGENTINA Third Highway Project Forecast Traffic Growth Rates (% p.a.) Route 1970-1980 1980-1990 1970-1990 No. No. Auto Comm Total Auto Comm Total Auto Coma Total 1 14 6.6 4.0 5.7 2. N-178 4.0 1.3 2.7 4.1 1.3 2.9 4.0 1.3 2.8 3. N-193 4.2 6.2 4.6 3.2 / 4.1 3.4 3.7 5.1 4.0 4. N-226 4.1 4.0 4.1 3.6 2.7 3.3 3.9 3.4 3.7 5. P-331 1.6 0.9 1.4 1.5 0.4 1.2 1.5 0.6 1.3 6. P-305 0.8 0.0 0 5 2.2 0.0 1.5 1.5 0.0 1.0 7. N-12 6.7 4.8 6.2 3.0 3.6 3.2 4.8 4.2 4.7 8. N-157 3.7 2.0 2.6 1.2 1.8 1.6 2.5 1.9 2.1 9. N-157 2.2 1.0 0.3 2.1 3.5 2.9 2.1 1.3 1.6 10. N-151 4.5 3.0 3.8 4.2 3.2 3.8 4.3 3.1 3.8 11. N-3 4.7 1.8 3.1 3.5 0.9 2.2 4.1 1.4 2.7 32. N-9 8.0 4.1 6.1 4.8 5.0 4.9 6.4 4.5 5.5 13. N-9 5.4 3.4 4.6 4.7 2.6 3.9 5.o 3.0 4.2 14. N-20 3.6 2.1 3.4 3.6 1.9 3.3 3.6 2.0 3.3 15. N-9 12.0 6.5 10.0 4.6 1.8 3.8 8.2 4.1 6.8 16. N-7 5.5 3.5 5.0 4.3 2.7 3.9 4.9 3.1 4.5 17. N-40 5.9 4.1 5.4 5.2 3.2 4.8 5.5 3.7 5.1 18. N-40 4.5 2.9 4.0 7.6 3.2 6.5 6.o 3.0 5.3 Source: TAMS, Highway Reconnaieasance Study, April 1970 November 2, 1970  TABLE 6 ARGENTINKA THIRD HIGHWAY PROJBCT FeAral and Provincial Actual and Prro3cted Hig Exendits 196&-1974) --illion 1970 'pagoo) 1966 1967 8 1970 1971 1972 1973 PT Current Expenditureal/ National 129 182 163 155 167 209 227 244 26? Provincial 186 223 189 195 254 308 323 335 349 Capital Expenditures National 171 269 559 746 728 940 991 1031 1076 Provincial 181 242 327 441 700 917 976 1024 1070 Total Excpenditure National 300 451 722 901 89% 1148 1218 1274 1331 Provincial 366 455 517 636 954 1226 1299 1359 1J42 TOTAL 666 906 1239 1537 1849 2375 2518 2633 2765 Revenue from Vehicle and fuel taxes_/ 870 940 1200 1500 1/ Maintenance, admi4pt4rgtion and squippent. 2/ This is not camplpte in the absence o-f Wuwatipon Of amo provincial taxes. Source: Vialidad, Augigt 11, 1970 November 2, 1970  TABLE 7 ARGENTINA SECOND HIGHWAY PROJECT Geometric Design Standards for National Roads --------Class of Highway----------------- I II III IV V Design 5,000- 1,500- 500- 150- ADT 15,000 5,000 1,500 500 150 Design Speed flat 130 120 110 100 90 km/h rolling 110 100 90 70 50 mountainous 80 70 60 40 30 Minimum Horizontal flat 700 600 500 400 300 Radius, m rolling 500 400 300 160 80 mountainous 220 160 120 50 25 Maximum Grade, % flat 3 3 5 6 6 rolling 5 5 6 7 8 mountainous 6 7 7 8 10 Sight Distance For flat 260 220 185 160 135 Stopping rolling 185 160 135 go 60 mountainous 110 90 75 h5 30 Sight Distance for flat 860 800 740 680 610 Passing, m rolling 740 680 610 h70 330 mountainous 540 470 hoo 260 190 Pavement Width, m flat 7.50 7.30 7.30 6.70 6.oo rolling 7.50 7.30 6.70 6.70 6.oo mountainous 7.00 6.70 6.70 6.00 6.00 Shoulder Width,, m flat 3.00 3,00 3.00 3.30 1.50 rolling 3.00 3.00 3.30 3.30 1.50 mountainous 3.00 2.00 1.50 1.25 100 Width of Bridges, m flat 8.30 8.30 8.30 7.00 2/ rolling 8,30 8.30 8.30 7.00 - mountainous 8,30 8.30 7.00 7.00 I/ These standards were adopted in 1967. Bridges are designed for the German standards DIN-1075II as modified and set forth in the Vialidad standard design manual (in use]9OD) entitled "Bases para el Calculo de Puentes de Hormigon Armado." Pavement design is based on a 12,000 lb. wheel load equivalent. 2/ For structures lOm long or less, total width generally equals pavement width plus shoulders. Source: Vialidad, 1967 November 2, 1970   ARGENTINA THIRD HIGHWAY PROJECT SUMMARY DETAILS OF PROPOSED IMPROVEMENTS AADT ( NUMBER OF VEHICLES) EXISTING HIGHIWAY PROPOSED HIGHWAY ROUTE NATURENoUNIGN. RNIG C ST CIO No. No. PROVINCE FROM - TO OP PROPOSED 1970 1980 IW0 LENGTH OFLANE S URFACE PUNED ING RN.-NLNGT COF SER COTI I.E.R. F.Y.. IMPROVEMENTS AUTO - COMM - TOT AUTO - COMM - TOT AUTO - COMM - TOT KM) AND TERRAI TYPE AUTO - COMM KM LANES AUTO - COMM MILLION U.S. S 1973 GUALEGUAYCHU - PASO DE LOS LIBRES 350 - 450 - 800 730 - 720- 1450 100 - 1150 - 2650 15.8 22 I N-14 ENTRE RIOS - CORRIENTES 0) GUALEO UAYCHU - CONCORDIA PAVING 240 -160- 400 260- 260 760 600- 410-4630 4 2 FLAT GRAVEL 58 - SI 424 2 82 - 73 3.1 10 1 1 N-4 ENRE IOS CORIENES6) Co NCORDIA -GUATRO BOCAS 39 55 66 __________________ ~)QUATRO BOCAS -PASO BE LOS LIBRES 1250- 75 - 200 260-120- 360 540 -190 -630 94 9 51 2 N-178 B.A. & 5TA. FE. PERGAMINO - STA. TERESA PAVING 580 - 380 - 960 790 - 450 - 1240 1090 - 510 - 1600 63 2 FLAT GRAVEIV 53 - 45 56 2 2- 73 3.7 16 13 EARTH 3 N-193 B.A, SOLIS - ZARATE PAVING .400 - 230 - 630 620 - 350 - 970 950 - 470 - 1420 31 2 FLAT EARTH 47 - 40 31 2 82 - 73 2.1 20 16 4 N-226 B.A. BOLIVAR - PEHUAJO PAVING 375 - 175 - 550 560 - 260 - 820 800 - 340 - 1140 82 2 FLAT EARTH 43 - 34 80 2 82 - 73 4.4 28 24 5 P-331 TUCUMAN AGUILARES - LOS SARMIENTOS PAVING 270 - 110 - 380 315 - 120 - 435 365 - 125 - 490 8 2 FLAT EARTH 45 - 37 8 2 72 - 64 0.3 20 19 6 P-305 TUCUMAN LOS RITAS - EL SUNCHAL PAVING 160 -103 - 260 185 - 105 - 290 230 - 105 - 335 23 2 ROLLING EARTH 38 - 31 21 2 72 - 64 0.9 14 14 7 N-12 MISICNES WANDA - CATARATAS PAVING 340 - 110 - 450 530 - 160 - 660 700 - 240 - 940 48 2 ROLLING EARTH 33 - 27 38 2 66 - 59 3.0 26 21 NWALIGNMENT 41 S N-157 STGO. DEL ESTERO SALINAS GRANDES - 31 K.. POINT PAVING 215 - 425 - 640 310 - 520 - 830 350 - 620 - 970 31 2 FLAT GRAVEV 54 - 47 31 2 82 - 73 2.0 16 I5 EARTHi 9 N- I5 CATAMARCA 5lA. DE LA PAZ - FRIAS PAVING 250 - 460 - 710 310 - 520 - 830 50 - 620 - 970 37 2 FLAT EARTH 53 - 45 2 2 - 73 2.4 16 15 10 N-151 RIO NEGRO CORDERO - HOST. STA. TERESITA PAVING 420 - 300 - 720 650 - 400 - 1050 980 - 550 - 1530 41 2 ROLLING GRAVEL 47 - 39 40 2 78 - 69 1.5 37 36 11 N-3 B.A. LAS FLORES - AZUL 6IMPROVEMENT .1070 - 1560 - 2630 1700 - 1870 - 3570 2400 - 2050 - 450 90 i 2 FLAT PAVED 74 - 66 TO 1980 90 2 82- 73 TO 1903 8.1 16 13 11 N-3 BA. LAS PLORES- AZUL A~~~~~~~~~~~~~~&REPAVING 68 -61 TO 1990 68-R 610 990 74-65 To 1 977 82-73 To 1980 12 N-9 STA. FE CDA. DE GOMEZ - TORTUGAS IMPROVEMENT 1110 - 1600 - 2610 20 2000 - 4000 3300 - 2700 - 6000 45 2 FLAT PAVED 68 61 To 1984 45 2 74-63 To 90 3.3 20 16 & REPAVING 48 -421 1. 990 7 5T 9 13 N-9 8.A. CAMPANA - RIO TALA ADD 9WO LANES 3360 - 2610 - 5970 5700 - 3650 - 9350 9000 - 4700 - 13700 80 2 FLAT PAVED 68 - 61 TO 1972 80 4 104 - 90 14.0 19 11 - 1~~~~~~~~9 - 53 ~TO 19190~ CONSTRUCT 14 N-20 CORDOBA CORDOBA - CARLOS PAZ FOUR LANES 5035 - 1490 - 7375 0430 - 1830 - 10260 12000 - 2200 - 14200 23 2 ROLLING PAVED 48 - 41 22 4 104 - 89 7.3 25 22 CONSTRUCT 15 N-9 STA. FE SAN NICOLAS - ROSARIO FOUR LANES 3100 - 2400 - 5500 9600 - 4500 - 14100 1500 - 400 - 20400 71 2 FLAT PAVED 39-23 59 4 104 - 90 19.9 39 32 CONSTRUCT 16 N-7 MENDOZA MENDOZA - SAN MARTIN FOUR LANES 3550 - 1250 - 4800 6080 - 1770 - 7850 9235 - 2310 - 11545 39 2 FLAT PAVED 39-33 38 4 104 - 90 15.2 25 20 17 N-40 MENDOZA MENDOZA - LUJAN CONSTRUCT 530 - 1900 - 7200 9400 - 280 - 122W0 15600 - 3900 - 19500 17 2 FLAT PAVED 41 - 35 17 4 104 - 90 7.3 26 23 17 N-40 MENDCZA LMENDOZ- LUREAN FOURLNESTRC 6-4 10 N-40 MENDOZA LUJAN - AGRELO CO LANES 2370 - 1060 - 3430 3680 - 1405 - 5085 7650 - 1920 - 9D0 _ 2 FLAT 41 - 35 To 1990 _ 2 68.3 30 21 NOTE: TRAFFIC VOLUMES SHOWN ARE FOR PROPOSED ROAD. THEY MAY OR MAY NOT REPRESENT TRAFFIC VOLUMES ON EXISTING ROAD, IF PROPOSED PROSPECT 10RD - 5257(4RI IS NOT COMPLETED. DECEMBER 1970   TABLE 9 ARGENTINA THIRD HIGHWAY PROJECT CONSTRUCTION COST ESTIMATES (Without Contingencies) NUM3ER OF SUBSECTIONS No. of Cost Estimates Length Subsec- Pesos US$ Equiv. No. Route From (km) tions (millions) 1 14 Gualeguaychu - Paso de los Libres 402 5+3+2 121.2 30.3 2 178 Pergamino - S. Teresa 54.1 1 13.6 3.4 3 193 Zarate - Solis 31.2 1 8.0 2.0 4 226 Bolivar - Pehuajo 79.6 1 16.4 4.1 5 P331 Los Sarmientos-Aguilares 8.0 1 1.2 0.3 6 P305 Las Moritas - El Sunchal 21.4 1 3.2 o.8 7 12 Wanda - Cataratas 37.6 1 11.2 2.8 8 157 Salinas - Recreo (km 31) 31.0 1 7.2 1.8 9 157 De la Paz - Frias 36.2 1 8.8 2.2 10 151 Cordero - Teresita 40.2 1 5.6 1.4 11 3 Azul - Flores 89.8 2 30.0 7.5 12 9 Gomez - Tortugas 45.5 1 12.4 3.1 13 9 Campana - Rio Tala 80.5 3 52.0 13.0 14 20 Cordoba - Carlos Paz 24.0 2 27.2 6.8 15 9 San Nicolas - Rosario 61.0 3 74.0 18.5 16 7 San Martin - Mendoza 38.2 3 56.4 14.1 17 40 Mendoza - Lujan 16.5 2 26.8 6.7 18 40 Lujan - Agrelo 10.7 1 4.8 1.2 Total 480.0 120.0 December 1970  TABLE 10 ARGENTINA THIRD HIGHWAY PROJECT VEHICLE OPERATING COSTS (NET OF TAXES) IN DIFFERENT CONDITIONS FREE OPERATION us t I SURFACE SPEED FLAT ROLLING MOURTAINOUS TYPE Km.p.h. CARS COMMERCIAL CARS COMMERCIAL CARS COMMERCIAL 30 9,43 9,58 9,87 40 4,56 8,20 4,61 8,42 4,66 8,70 50 3,85 7,53 3,92 7,85 3,97 8,13 PAVED 60 3,42 7,15 3,48 7,54 3,51 7,96 70 3,15 7,05 3,19 7,55 3,21 8,o8 80 2,94 7,18 2,97 7,79 3,00 90 2,80 7,66 2,84 100 2,79 20 6,93 13,88 6,99 14,08 7,10 14,42 30 5,85 12,38 5,92 12,60 6,02 13,09 40 4,98 11,31 5,03 11,67 5,13 12,24 50 4,31 10,59 4,36 11,17 4,46 11,79 GRAVEL 60 3,81 10,26 3,86 10,96 4,01 11,82 70 3,51 10,20 3,57 10,99 3,73 80 3,41 10,40 3,47 11.11 9o 3,45 20 8,27 20,53 8,34 20,73 8,49 21,05 30 6,80 18,40 6,87 18,73 7,07 19,47 40 5,75 17,17 5,83 17,76 5,99 18,57 50 5,03 16,44 5,09 17,36 5,39 18,33 EARTH 60 4,56 16,01 4,62 17,21 4,77 70 4,33 16,60 4,39 80 4,32 NORMAL OPERATION US t AM SURFACE SPEED FLAT ROLLING MOUNTAINOUS TYPE Km.p.h, CARS COMMERCIAL OARS COMMERCIAL CARS COMMERCIAL 30 6,21 10,18 6,26 10,35 6,32 10,66 40 4,92 8,86 4,98 9,09 5,O3 9.40 $0 4,16 8,13 4,23 8,48 4,29 8,78 PAVED 60 3,69 7,72 3,76 8,14 3,79 8,60 70 3,40 7,61 3,45 8,15 3,47 80 3,18 7,75 3,21 90 3,02 RESTRICTED OPERATION U 1 /KM SURFACE SPEED - JT'TAT ROLLINO MOUNTAINOUS TYPE Km.p.h. CARS COMMERCIAL CARS COMMERCI1L CARS COMMERCIAL 30 6,50 10,66 6,57 1o,83 6,67 11,15 40 5,15 9,27 5,21 9,51 5,27 9,83 PAVED 50 4,35 8,51 4,43 8,87 4,49 9,19 60 3,86 8,08 3,93 8,52 3,97 70 3,56 7,97 3,60 80 3,32 Sources TANS, Highway Reconnaissance Study, April 1970 November 2, 1970  TABLE 11 ARGENTINA THIRD HIGHWAY PROJECT CONSULTANTS ENGAGED IN DETAILED ENGINEERING Coordinating Consultants TAMS: Tippetts-Abbett-McCarthy-Stratton (New York) assisted by Roy Jorgensen Organtec TANS, Argentina FIEL Centro Tecnico de Computacion II Detailed Engineering a. INCONAS - Ingenieros Asociados b. Bolognese - Moretto and Latino-Consult c. Sociedad Argentina de Estudios (SAE) d. Asociacion de Estudios de Planeamiento (AEPI) e. Ingenieros Nehim and Asociados f. Ingenieros Malajov-ich and Asociados g. Ingenieros Barros and Asociados h. Ingenieros Contino and Asociados i. Ingenieros Bignoly and Asociados j. Ingenieros Luisonii and Asociados k. Adina, S.A. 1. Grimaux and Asociados m. CONSULBAIRES n. CADIA Consultores Asociados October 1970   ANNEX 1 Page 1 Argentina, Third Highway Project Previous Bank Highway Projects and Other External Assistance for Highways 1. The first Bank highway loan (288-AR, US$ 48.5 million equivalent) was made in June 1961 to finance the foreign exchange cost of improving 2,600 km of national highways (see Map 1) including advisory services by consultants and road maintenance equipment. At the time of the loan, a study of Argentina's transport system was underway with United Nations Special Fund (UNSF) financing (US$ 520,000 equivalent), the Bank acting as Executing Agency; the study was completed in early 1962 and the results published as the Long Range Transportation Plan (LRTP). 2. A major highway investment program had been undertaken in 1959 after a decade of limited activity in the highway sector. Although Vialidad's capacity to undertake this program was limited when the Bank's first loan was made, there was good reason to believe that the deficiencies could be overcome with the strong leadership prevailing in Vialidad at that time and with the help of consultants. However, with a series of changes in Government and Vialidad management beginning in 1962, the construction schedule was not met and consultants were not used properly. Road works scheduled for completion in two or three years took twice as long to complete with higher costs than previously estimated. 3. The first Bank highway project was also severely affected by lack of local counterpart funds, and in 1963 USAID made a loan of US$ 30.5 million to cover the project's local currency costs. After unsuccessful efforts by the Bank to improve execution of the work, the Bank loan was reduced in 1965 from us: 48.5 million to US$ 32.0 million and the scope of road construction was curtailed. The Closing Date of the Loan was conditionally extended by two years to the end of December 1967 with the proviso that certain per- formance requirements should be met at the end of the first year of the extension . 4. The Government which came to office in 1966 took steps which improved the execution of the Bank project, such as providing Vialidad with adequate fuiids, strengthening the office in Vialidad which was responsible for coordinating activities related to the project, assigning more staff for the supervision of construction, and making more effective use of consultants. These improvements warranted the Bank's extension of the Closing Date of the two-year period already mentioned. A new Vialidad management was installed in mid-1967 in order to overhaul the organization and prepare new investment programs. The first program, a Three-Year Plan (1968-1970),  Annex 1 Page 2 was hurriedly put together in 1967. A highway planning department was also established in Vialidad. As a result, the execution of the first highway project became satisfactory and led to the eventual extension of the Closing Date of the Bank loan to December 31, 1968, in order to permit full dis- bursement against the construction works which were successfully completedu in April 1968, and to use up an estimated US$ 1.7 million balance in the loan to procure additional maintenance equipment. A further US$ 1 million was not required, and at the request of the Government was cancelled f-orm the loan account in August 1968. Procurement under the loan was satisfac- torily completed. 5. Other external assistance to the highway sector during the period was provided by the US Government through AID and the Export-Import Bank, with loans between 1961 and 1968 totaling US$ 21 million for improving a main trunk road and for assisting the construction industry to import equipment and about US$ 3 million for highway feasibility studies in the northeastern part of the country. The Inter-American Development Bank (IDB) made two loans in December 1967 totaling US$ 72 million to help improve the Argentine section (100 km) of an international road linking the city of Mendoza with the Chilean port of Valparaiso and to finance the construction of a bridge over the River Parana at Corrientes in the northeast. During the current fiscal year the IDB proposes to lend US$33.5 million in a US$80 million program consisting of 825 km of national and provincial road in the provinces of Entre Rios, Missiones, Corrientes and Formosa. The project also includes an international bridge over the Uruguay River at Fray Bentos, part of which will be paid for by Uruguay. 6. The second Bank highway loan (619-AR) of US$ 25 million equivalent was made in June 1969 to finance the upgrading of 800 km of road, the identi- fication and preparation of a Five-Year Highway Investment Program, including the carrying out of a reconnaissance priority ranking study of the national and provincial primary road networks, the carrying out of feasibility studies and detailed engineering for the highest priority sections of the system and, finally, for the improvement of planning and administration of the road net- work and the Government's transport coordinating machinery. Provision was also made for the acquisition of equipment necessary for improved planning and preparation of highway projects. The construction of all roads in the project is now under way. The reconnaissance survey has been carried out. United States Federal Highway Administration personnel are now assisting Vialidad in the improvement of the nationwide road inventory and traffic counting system. December 1970  ANNEX 2 Page 1 THE PROJECT ROADS Data on the existing roads and proposed technical characteristics of the project roads, together with the results of the economic analysis, are summarized in Table 8. A general description of the project roads follows: A. The Improvement and Paving of Route 14 The project includes the 422 km section Gualeguaychu to Paso de los Libres of Route 14. The road forms the spine of the Mesopotamia area which consists of the provinces of 3ntre Rios, Corrientes and Miasiones. The road leads from Buenos Aires to Posadas in the north. IDB intends to finance the southern section Zarate to Gualeguaychu. The province of Corrientes is improving the sections north of Paso de los Libres. The Government intends to build the bridges over the La Plata branches at Zarate near Buenos Aires. The viability of the project road does not depend on construction of the bridge. Improvement and paving of the road is long overdue. The sections south of Concordia will have traffic of about 1,000 vehicles per day upon completion of the paving and have internal economic returns which average 22%. The design has been based on Class III Standards (Table 5). The extent of improvements of the sections north of Concordia where traffic upon completion of the road will be between 400 and 600 vehicles per day was studied extensively. The sections near Concordia were based on Class III, the remainder on Class IV Standards. The internal economic returns on these sections are 15%. B. The Improvement and Paving of Nine Other Earth or Gravel Road Sections The proposed project includes, apart from Route 14, nine bther earth or gravel roads to be realigned and paveds Class of No. Route Province From To Length (1m) Highway 2. 178 Buenos Aires Pergamino - Santa Teresa 54.1 III 3. 193 " Zarate - Solis 31.2 III 4. 226 t Bolivar - Pehuajo 79.6 III 5. P331 Tucuman Aguilares - Sarmientos 8.0 IV 6. P305 n Las Moritas - 31 Sunchal 21.4 IV  ANNEIX 2 Page 2 Class of No. Route Province From To Length (km) Highwa 7. 12 Missiones Wanda - Cataratas 37.6 TTI 8. 157 Catamarca Salinas - Recreo (km 31) 31.0 IV 9. 157 De la Paz - Frias 36.2 10. 151 Rio Negro Cordero - Teresita 40.2 IIT TOTAL 339.3 km The main characteristic of these earth and gravel roads is that paving is overdue; all projects (except Nos. 5 and 6) are in main corridors. Roads Nos. 5 and 6 in Tucuman are earth roads near the provincial capital with sufficient traffic to warrant paving. Average traffic in the year after completion is estimated to be over 500 vehicles per day. The existing roads are in relatively flat terrain (except No. 7). The roads are dusty and erosion often has depressed the running surface below ground level, making drainage difficult. Driving conditions often are poor, resulting in generally low vehicle operating speeds. Increasing traffic would lead to further deterioration of the roads and further decline of service- ability and operating speeds. Road No. 7 in Missiones leading to the Iguazu Waterfalls in hilly terrain will provide a shorter and better aligned variant to the earth track now in use. The average internal economic return of the nine pro- ject roads is 20%, varying between 14% and 37%. C. Improvement and Repaving of Paved Roads Class of No. Route Province From To Length (km) Highway 11. 3 Buenos Aires Azul - Las Flores 89.8 II 12. 9 Santa Fe Gomez - Tortugas 45.5 II TOTAL 135.3 km These road sections are representative of another important type of road improvement. Many roads in Argentina were given light pavements to meet limited traffic, but with an increasing number of heavy trucks the pavements are breaking up; maintenance costs, vehicle operating costs and journey times are increasing. The alignment and drainage of the roads will be improved before the new pavement is constructed. The two project roads have traffic of about 2,500 vehicles per day. The internal economic returns are about 17%.  ANNEX 2 Page 3 D. The Construction of Four-Lane Divided Highways Class of No. Route Province From To Length (kmo) Highway 13. 9 Buenos Aires Campana - Rio Tala 80.5 I 14. 20 Cordoba Cordoba - Carlos Paz 24.0 I 15. 9 Santa Fe San Nicolas- Rosario 61.0 I 16. 7 Mendoza San Martin - Mendoza 38.2 I 17. 40 Mendoza Mendoza - Lujan 16.5 I 18. 40 Mendoza Lujan - Agrelo 10.7 I TOTAL 230.9 km With increasing traffic, two-lane roads become congested and average travel speeds begin to decrease; the process can be retarded by improvements on the existing two-lane roads. However, thereafter the solution is to increase capacity by adding an additional carriageway (project 13). Often the old alignment is not suitable, and a new alignment must be sought. If traffic requires, a full four-lane road will be constructed (as is the case for projects 14, 15, 16 and 17) or initially a two-lane road may be sufficient (as in project 18). The average traffic on the existing roads is about 6,000 vehicles per day. The internal economic returns range from 19% to 39%. December 1970   ANNEX 3 Estimated Schedule of Disbursements (millions of US$) IBRD Fiscal Year and Quarter Cumulative Disbursement at end of Quarter (US$1000) 1970/71 March 31, 1971 June 30, 1971 500 1971/72 September 30, 1971 2,500 December 31, 1971 7,500 March 31, 1972 13,500 June 30, 1972 19,500 1972/73 September 30, 1972 25,50o December 31, 1972 31,500 March 31, 1973 37,500 June 30, 1973 43,500 1973/7h September 30, 1973 49, 500 December 31, 1973 55,500 March 31, 1974 61,500 June 30, 1974 65,500 1974/75 September 30, 1974 67,500 February 4, 1971   ARGENTINA: THIRD HIGHWAY PROJECT ORGANIZATION OF THE NATIONAL HIGHWAY AUTHORITY (VIALIDAD) GENERAL DIRECTOR SUB-ADMINISTRATOR ADMINISTRATION CONTROL MAAINTENANCE CONSTRUCTION ENGINEERING PANN z- C- 0 l 0 Z _) z z -' C OZ z~~~~~~~~~~~~ m l X r,