Mexico - Second Basic Health Care Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-6520-ME MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN THE AMOUNT OF US$310.0 MILLION TO NACIONAL FINANCIERA S.N.C. WITH THE GUARANTEE OF THE UNITED MEXICAN STATES FOR A SEZOND BASIC HEALTH CARE PROJECT AUGUST 30, 1995 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = New Peso (N$) US$1.00 = 6.0 New Pesos (June 1995) FISCAL YEAR January 1 - December 31 UNITS OF WEIGHTS AND MEASURES Metric British/US Equivalent 1 meter (m) 3.28 feet 1 kilometer (km) = 0.62 mile (mi) 1 kilogram (kg) = 2.20 pounds (lb) 1 metric ton (m ton) = 2,250 pounds 1 liter (1) = 0.26 gallons (gal) 1 cubic meter (mi) = 1.3 cubic yards ACRONYMS GDP Gross Domestic Product ICB International Competitive Bidding IMSS Social Security Institute for Private Sector Employees IMSS/SOLIDARIDAD Special Basic Health Program for the Uninsured LIB Limited International Bidding MIS Management Information Systems NAFIN National Financing Agency NCB National Competitive Bidding NPV Net Present Value OECD Organization for Economic Cooperation and Development PAHO/WHO Pan American (World) Health Organization PCU Project Coordination Unit SHA State Health Authority of the SSA SHCP Federal Secretariat of Finance SPCU State Project Coordination Unit SSA Federal Secretariat of Health TAPS Primary Health Care Workers UNICEF United Nations Children Fund  FOR OFFICIAL USE ONLY MEXICO SECOND BASIC HEALTH CARE PROJECT LOAN AND PROJECT SUMMARY Borrower: Nacional Financiera, S.N. C. (NAFIN) Guarantor: United Mexican States Implementing Agencies: Secretariat of Health and State Health Authorities Beneficiary: Same as above. Poverty: Program of Targeted Interventions. The project targets the delivery of a basic package of cost effective interventions to health jurisdictions selected according to a poverty index. Amount: US$310.0 million. Terms: Fixed rate U.S. dollar single currency loan for up to 15 years. Each semester's aggregate disbursements (Disbursed Amount) will have a grace period of 3 years and a final maturity of 9 years from the rate fixing date for that Disbursed Amount. Interest Payment and Rate Fixing Dates: October 15 and April 15. Financial Benefits and The Borrower has selected LIBOR based fixed rate Risks: US dollar single currency loan terms in order to improve its overall liability management and reduce its risks. It considers US dollars to be an appropriate currency for its debt management strategy, and a fixed interest rate basis appropriate to diversify its interest rate risk, given the large share of variable rate funding in its overall portfolio and its limited access to fixed rate funding from other sources. This loan constitutes about 20% of the US$1.5 billion loan envelope for FY 1996 for Mexico. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  ii Commitment Fee: 0.75 percent on undisbursed balances, beginning 60 days after signing, less any waiver. Financing Plan: See Schedule A. Net Present Value: See paras. 19-20 for estimated savings generated by the project. Staff Appraisal Report: 13878 - ME Map: IBRD No. 26724R Project Code MX-PA-7689  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE IBRD TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO NACIONAL FINANCIERA, S.N.C WITH TIE GUARANTEE OF THE UNITED MEXICAN STATES FOR A SECOND BASIC HEALTH CARE PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed loan to Nacional Financiera, S.N. C. with the guarantee of the United Mexican States for US$310.0 million to help finance a Second Basic Health Care Project. The loan would be a LIBOR based U.S. dollar single currency loan for up to 15 years. Each semester's aggregate disbursements (Disbursed Amount) will have a grace period of 3 years and a final maturity of 9 years from the rate fixing date for that Disbursed Amount. The total project cost is estimated at US$443.4 million. 2. Background: The peso devaluation in late December 1994 triggered an economic and financial crisis which is resulting, during 1995, in negative economic growth, high interest rates and inflation of about 42 percent. With the assistance of the international financial institutions, the Government is taking the necessary steps to avert a banking crisis, which would plunge the economy into an even deeper recession. In addition, a Program of Essential Social Services (PROSSE), supported by the Bank Group and IDB, intends to support the Government to establish a social safety net, by financing emergency programs in health, education and labor markets. 3. Despite this recent crisis, Mexico's overall economic development over the past decade has been substantial. The country overcame the debt crisis of the 1980s and achieved sustainable economic growth after structural adjustment in a number of key areas. Many social issues were addressed, with increased social expenditures accounting for over 40 percent of all programmable expenditures. Over the last two decades, life expectancy increased from 58 to 70.3 years and infant mortality declined from 74 to 35 deaths per 1,000 live births. 4. The agenda remains unfinished, however. Still some 30 million people live in poverty without adequate access to health and social services. Of a total population of 84 million, 25 percent (21 million) are poor, and 15.4 percent (13 million) are considered extremely poor, not able to meet their basic needs. Real per capita income in the richer northern states is more than twice that in the poorer southern states. Parts of urban centers and the northern states have health indicators similar to OECD levels and the urban elites and the middle class are increasingly subject to an epidemiological pattern with a higher burden of chronic diseases. The urban slums, rural areas and the south, however, are more severely exposed to communicable diseases and malnutrition. Life expectancy stands at 55 years in rural areas versus 71 years in urban areas, and 53 years among the poor compared to 73 years among the wealthy. Similarly, infant mortality ranges from under 20 per 1,000 in the wealthy north to more than 50 per 1,000 in the poor south. These disparities place conflicting demands on the health services and thus represent a major challenge for the Mexican health care system.  2 5. Government Strategy. As part of its poverty alleviation policy and to ease the most prominent health problems facing the uninsured, the Government adopted strategies which include targeted interventions to reach the most disadvantaged areas in the poorest states. In the past, the social security system expanded the coverage of the IMSS-Solidaridad program (a Government financed basic health care program for the uninsured, rural poor under the auspices of the Mexican Social Security Institute: IMSS). Efforts have been made to increase the mandate of the Secretariat of Health (SSA) to determine sector priorities, re-allocate resources from curative to preventative health interventions and transfer decision-making power from federal to state health authorities (SHAs) and health jurisdictions, respectively. The Bank-financed first Basic Health Care project (Loan No.3272-ME, FY 1990) supports these initiatives in the five poorest states and is expected to close in June 1996.1 6. However, these measures, which increased federal health spending from 2.8 percent of GDP in 1988 to 4.1 percent in 1993 (accounting for 17.5 percent2 of total federal expenditures), have only been the beginning. Access to health services and their low quality continue to be problems, particularly in the poorest states. The effectiveness of the public health budget is impaired by institutional fragmentation, managerial weakness and duplication of services, resulting in a loss of efficiency, equity and quality. 7. The Government intends to rationalize resource allocation, search for alternatives to sole government provision and financing of health services, and strengthen the private sector, following the measures taken under the First Basic Health Care Project. However, it aims first to address the basic health care problems in the poorer states in order to establish a sound basis for launching sectorwide reform later. It intends to deliver a cost-effective basic health care package which includes both disease prevention and essential curative services, and simultaneously to support institutional, technical and financial reforms aimed to improve the health of 15.5 million uninsured and underserved poor in the eleven poorest states.3 More specifically, it intends to support: (a) equitable access to a cost-effective package of basic health services for the uninsured and underserved; (b) decentralization of health administration and delivery, as well as improvement of technical, managerial and financial processes in the states, to improve health service effectiveness and efficiency of resource use; and (c) modernization and restructuring of the SSA to assume an active leadership role in the health sector. The first objective would be accomplished by investments at local levels in accordance with criteria, previously agreed with the state and federal Governments. Under state guidance and local health jurisdictions would prepare annual investment programs and subprojects on a competitive basis to tackle the principal health problems in the target areas. Once authorized by state and federal Governments, the Bank loan for the proposed project would help finance these investment programs and subprojects. 8. Project Description. The project has three components: (i) basic health care services in 11 states, (ii) institutional development and decentralization at state and local levels in 32 states and (iii) SSA modernization and restructuring at the central level. (i) The Basic Health I Oaxaca, Chiapas, Guerrero, Hidalgo and the Federal District. 2 Source: Cuenra Publica y PEF, 1993-1994 (Gavto total consolidado) 3 Oaxaca, Cliapas, Hidalgo, Michoacan, Zacatecas, Puebla, Yucatan, Veracruz and Guerrero. Campeche and San Luis Potosi will be added on during the first year of operation. The second component will be started in the eleven project states and gradually extended into all 32 states.  3 Care Component (US$335.3 million or 75.6 percent of total costs) helps health jurisdictions to implement a cost-effective package of basic health care services including preventive health and essential clinical services; the content of the package is identified by a burden-of-disease analysis and cost-effectiveness studies. Based on local epidemiological needs and health priorities, financial and technical assistance would be made available for (a) technical training, staffing, supervision and maintenance for the primary and secondary care network; (b) basic equipment, vehicles and mobile units for the outreach facilities; and (c) rehabilitation, upgrading, and expansion of infrastructure to deliver the basic health care package. (ii) The Institutional Development and Decentralization Component (US$61. 1 million or 13.8 percent of total costs) would reinforce the management and service delivery capacity of state and jurisdictional health services and transfer service delivery and administrative functions from the federal to the state level and from the state to jurisdictional levels. Specifically, the component would improve service quality and efficiency by: (a) training managers to identify and respond to epidemiological, technical and administrative problems more rapidly, using management information systems (MIS); (b) improving budgeting and financial management skills; (c) increasing the coverage and quality of sanitary regulation and accreditation of health facilities; and (d) supporting the design and pilot testing of alternative health care provision models to enhance service quality and resource use. (iii) SSA Modernization and Restructuring. (US$47.0 million or 10.6 percent of total costs). This component would comprise the redefinition of the SSA's overall mission, sector policies, organizational structure and functions, in order to modernize the health system and improve its services. It would consist of four sub-components: (a) a restructuring process to enable the SSA to assume leadership in the health sector while decentralizing functions for the delivery of health care services to the states; (b) policy, legal and operational studies and pilot testing of alternative service delivery and administration; (c) upgrading the MIS; and (d) project monitoring and impact evaluation. 9. The proposed project would be implemented over a period of approximately five years and is expected to be completed by December 31, 2000 and close by June 30, 2001. Retroactive financing of up to US$3.1 million (1 percent of the total loan amount) would be provided to help cover eligible start-up expenditure for technical assistance made on or after November 21, 1994 for which budget has been allocated. Amounts and methods of procurement and disbursement and the disbursement schedule are shown in Schedule B. A timetable of key project processing events and the status of Bank operations in Mexico are given in Schedules C and D, respectively. The Staff Appraisal Report No. 13878-ME, dated August 30, 1995, is also attached. 10. Project Implementation. The project would be implemented over five years. The executing agencies are the SSA - in charge of overall coordination, logistical support, supervision and technical evaluation of all subproject proposals submitted by participating states - and the SHAs. A project Advisory Committee would be established with representatives from SSA, Secretariat of Finance (SHCP) and NAFIN to authorize project funds to the states on the basis of annual health investment programs. The SSA would sign agreements with the participating state governments for transfer of funds and project implementation. Health jurisdictions, with the assistance of the SHAs, are to be the main executors of the subprojects approved for financing under the proposed loan. Project  4 Coordinating Units at the federal (PCU) and state (SPCUs) levels would help oversee project implementation, provide technical assistance to line departments of the states and jurisdictions, and supervise and monitor project activities. During project implementation, responsibilities would be gradually integrated into line departments of the SHAs, with the central level SSA providing technical assistance. Subproject funds would be disbursed to health jurisdictions through private banks in the project states. 11. Project Sustainability. Project design contributes to sustainability by: (a) encouraging community participation in basic construction and maintenance of facilities; and (b) involving political stakeholders, particularly the State Governors for continued support of the project. The proposed project would add US$31.9 million annually to the health budgets of the eleven project states, which is less than 10 percent of the current state health budgets. Participating state governments are expected to contribute at least a 10 percent share of the annual project investment budget, to be assessed annually. Incremental recurrent expenditures (such as salaries for incremental fixed-term staff and operating costs), estimated at an average US$41.4 million per year, would be eventually absorbed by the federal SSA. As a share of the annual recurrent health budget for the uninsured in the project states, project related recurrent expenditures amount to less than 9 percent. Those expenditures would be offset by: (i) counterpart financing from state and municipal governments; (ii) a more equitable distribution of the health budget; (iii) technical assistance for resource mobilization and cost recovery. 12. Lessons Learned. The First Basic Health Care project was the first health related Bank experience in Mexico and provided the most valuable lessons to consider for the proposed project. Most prominent lessons are: (a) Targeting. While the First Basic Health Project targeted poor states, resources often did not reach populations most in need within the state. Therefore, it is necessary to target delivery of a cost-effective basic health care package to the most disadvantaged municipalities within a poor state. This is the approach being followed under the proposed project by focusing on jurisdictional investment programs. (b) Inprove Access to Basic Health Care. The First Basic Health Project supported infrastructure rehabilitation of first level health centers and second level hospitals in order to provide an environment suitable for basic services of high quality for the uninsured. It has been demonstrated that the use factor of rehabilitated facilities with adequate medical staff and supplies increased significantly. The proposed project will continue to finance the rehabilitation of the first and second level care network to provide quality services to the uninsured and operate mobile units to support effective outreach to small communities without health centers. (c) Rural Staffing. The First Basic Health Care project supported the training and recruitment of community health care workers (TAPS) who are selected from the community where they will serve. They were utilized in the project for staffing health posts in communities where no medical doctor was available and they have been instrumental in increasing the user rate of the basic health service network. The proposed project will build on this successful experience and finance training of more TAPS to serve remote communities. (d) Build Ownership in the States. The First Basic Health Care project featured institution building by decentralizing procurement of essential supplies and improving the management capacity and information systems. The proposed project will continue to support project states' institutional capacity through the training programs and decentralizing project implementation. It would also promote the involvement of political stakeholders, particularly  5 the State Governors, to guarantee continued support for the project, foster ownership and sustainability. (e) Joint Annual Review Meetings: The First Basic Health Project featured joint annual project review meetings and a mid-term review with the Bank and the Government. The proposed project would continue this practice and use these meetings to review the preparation of annual implementation and work plans and evaluate the performance of subprojects and other project elements. 13. Rationale for Bank Involvement. The proposed project is fully consistent with the Bank Group's country assistance strategy, discussed by the Board on June 22, 1995 together with the Financial Sector Restructuring Loan and the Program of Essential Social Services, which inter alia emphasizes recovery of growth, environmental improvement and poverty reduction through human resource development and institutional strengthening. While the first Basic Health Care Project provided an effective model for improving the health status of the poor in five project states, this second project would expand operations into eleven target states. This would complement the objectives of other Bank-financed projects that contribute to poverty alleviation and equitable provision of social services in the same states (Primary Education I and II, Initial Education, Low-Income Housing, Decentralization and Rural Development II, Water Supply and Sanitation Projects). Finally, the proposed project provides an opportunity for the Mexican Government to implement recommendations on key health sector strategies presented in the Bank Group's 1993 World Development Report, especially by redirecting health expenditures to the most cost-effective interventions. 14. Agreed Actions. At negotiations the following agreements were reached: (a) the SSA would approve, supervise and evaluate submitted subprojects according to criteria set forth in the Operational Manual; (b) the SSA would cooperate with the states to ensure adherence to a decentralization timetable presented at negotiations, which specifies functions to be transferred to the states; (c) the SSA would submit to the Bank the project's training program for CY 1996 by December 31, 1995, and for subsequent years, such training programs would be reviewed during the joint annual review meetings; (d) the SSA would furnish to the Bank by December 31, 1995 proposals for policy studies and pilot tests for implementation during CY 1996, and for subsequent years, such proposals would be reviewed during the joint annual review meetings; (e) no disbursement for computer equipment shall be made in any state unless a feasibility study has been completed for that state, and the Bank has approved the expenditure; (f) the SSA would present to the Bank a project progress report at the joint annual review meetings; (g) loan proceeds shall not be spent for subproject implementation in any state unless that state has entered into and is complying with the terms of an implementation agreement; (h) the Guarantor shall cause the records and accounts for each fiscal year to be audited with a separate opinion provided on SOEs and furnish to the Bank, no later than six months after the end of each year, a certified copy of the agreed audit reports and other information concerning the records and accounts; and (i) the SSA would conduct jointly with the Bank annual reviews by September each year, and a mid-term review by September 1998. The following are conditions of effectiveness: (a) the SSA will have adopted the Operational Manual satisfactory to the Bank; (b) an implementation agreement, satisfactory to the Bank, would be signed with at least five of the eleven project states; and (c) the federal PCU, and the Advisory Committee will have been established with, staff level and composition satisfactory to the Bank and  6 SPCUs would have been established with TORs and staff composition satisfactory to the Bank in at least five of the eleven project states. 15. Program Objective and Poverty Category. The project, especially the basic health care component, belongs to the poverty reduction category and is a program of targeted interventions. It benefits especially vulnerable women, children and the indigenous population, which are groups that carry a disproportionate burden of disease in the project areas. It invests in basic health interventions in the eleven least developed states as determined by a national poverty index developed by the Consejo Nacional de Poblaci6n. Specific risk areas within these states are selected according to local epidemiological and socio-economic conditions. These conditions were identified through health and nutrition surveys and epidemiological studies carried out during 1993 and 1994. 16. Environmental Aspects. The proposed project carries no environmental risk and is rated "C". Standard safety and environmental procedures already approved by the Bank will be used for civil works, operation of medical equipment and handling of medical waste. 17. Participatory Approach. The project was prepared in a participatory manner with the Mexican counterparts from project identification to the preparation of reports in the field. The SHAs, including heaith jurisdictions, participated in the design of proposed subprojects to be implemented in the first year of the operation. Local communities will participate in the implementation by selecting TAPS, maintaining health infrastructure, and monitoring health personnel performance in the incentives program. PAHO/WHO and UNICEF also participated in preparatory seminars. 18. Project Benefits. The proposed project is expected to engender significant improvements in the healtlh status of about 15.5 million uninsured people in the eleven poorest states through the implementation of a cost-effective basic health care package. By transferring more programming, managing and budgeting responsibilities to states and jurisdictions, the project would promote improvements in the efficiency and equity of resource allocation, quality of service delivery and institutional capacity of states and jurisdictions. The project would also modernize and restructure the SSA so that it may enhance its leadership function in the sector. 19. These components would impact the financial equilibrium of the health sector by reducing administrative expenditures of the SSA and improving the health of the uninsured population. Although many of the benefits of the project are not amenable to quantitative estimates, a cost-benefit analysis of the Basic Health Care component, improved pharmaceuticals management, and reduced administrative expenditures of the SSA, reveals that the project would pay back the investment over the five year project implementation. Taking a conservative estimate of a 50 percent implementation success rate for those project components, they would produce a net present value (NPV) of over US$414 million by the year 2000. Based on estimated expenditures of US$358 million in the above mentioned areas, the NPV of the benefits and costs indicates a high rate of return. Furthermore, these investments would continue to produce significant gains, both quantitatively and qualitatively, well into the next century.  7 20. Risks. Because the proposed project builds on the experience of the first Basic Health project, many potential risks can be mitigated and have been addressed in the design of the proposed project (para. 12). However, risks remain in the following areas: (a) institutional weaknesses of health sector agencies at the federal, state and jurisdictional levels, and poor coordination between them; (b) resistance to change from strong interest groups, frequent administrative changes and high staff turnover, affecting efficiency of project implementation; (c) uncertain budgetary situation due to the recent currency devaluation. These risks will be minimized by: (a) experience acquired in the first project and cross-fertilization of lessons learned between experienced and new project states; (b) the Government's commitment to the health sector decentralization and reform; (c) preparation of annual implementation plans by the state and federal agencies and annual and midterm reviews by the Bank. 21. Recommendation. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank, and I recommend that the Executive Directors approve it. James D. Wolfensohn President Attachments Washington, D.C. August 30, 1995  8 Schedule A Second Basic Health Care Project Project Cost Summary r- - ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~(US$ Million) BaTse } ~~~~~~~~~~~~~~~~~~~~~~~~~~~Local Foreign Total Css A. Component 1: Basic Health Care Serv/ces 1 1 Basic Health Care Services 201.4 27.3 228.7 74 1 iB. Component 2: Institutional Development and Decentralizationl |1. Transfer of Planning and Budget Functions to the States 12.9 12.9 4 | |2. Human Resources Development 19.6 10.9 30.5 1 0 tSubtotal 32.5 10.9 43.4 1 4 1 |~~~~~~~~~~~~~~. .... .R .. .s.. ......... ;. .5 C. Component 3: SSA Modernization and Restructuringl 1. Restructuring of the SSA 3.5 0.8 4.3 1 l2. Policy and Operational Studies 2.0 0.8 2.7 1 l3. Management Information Systems (MIS) 8.3 14.2 22.5 7 l4. Project Administration, Monitoring and Impact Evaluation 5.4 1.1 6.5 2 | lSubtotal 19.2 16.8 36.0 1 2 l lTotal BASELINE COSTS 253.1 55.0 308.0 100 | |Physical Contingencies 1.4 - 1.4 l Price Contingencies 129.9 4.0 133.9 43 Total PROJECT COSTS* 384.4 59.0 443.4 144 *Net of duties and taxes. **Figures may not add perfectly due to rounding. Financing Plan 10 | ~~~~~ ~ ~~~~~~~~~~Local | :Foreign |0 Total 00t |Government of Mexico 133.4 0.0 133.4 IBRD 251.0 59.0 310.0| |Total 384.4 59.0 443.4  9 Schedule B Procurement Method (Millions of US$) Category ICB NCB Other NBF Total Civil Works 23.7 21.3' 45.0 __________ .(16.2) (15.1) (31.3) Furniture & 13.4 43.32 56.7 Equipment (12.1) (38.9) (51.0) Vehicles 37.1 3.43 40.5 (33.3) (3.1) (36.4) Printed 7.54 7.5 Materials (5.2) (5.2) Training 8.6 8.6 l___________ (8.6) (8.6) Consultants, 78.15 78.1 Studies, (78.1) (78.1) Technical Assistance, Information Campaigns Drugs, Medical 54.36 54.3 Supplies (21.7) (21.7) Incremental Fixed Term 145.97 6.8 152.7 Staff (77.7) (0.0) (77.7) Salaries and Operational Expenses l Total 37.1 37.1 362.4 6.8 443.4 (33.3) (28.3) (248.4) (0.0) (310.0) Figures in parentheses are the respective amounts financed by the Bankl (1) Includes US$9.1 million for lumpsum fixed price contracts, for contracts under US$350,000, awarded on the basis of three quotations under the state managed model; and US$12.2 million for construction to be executed or contracted under the comrnmunity based model using direct contracting. (2) Includes US$ 14.3 million under LIB and US$1.6 million under national shopping for medical equipment; US$26.1 million under LIB for NMS; US$1.3 million under national shopping for office furniture and equipment. (3) Ambulances and mobile units would be procured under ICB procedures and motorcycles and bicycles would be procured under national or international shopping procedures up to US$3.4 million. (4) National shopping for printing services for manuals, handbooks and other materials. (5) Includes US$30.2 million for design and implementation of information campaigns carried out through consultants. (6) Includes US$48.9 million under LIB and US$5.4 million under national shopping. (7) Includes distribution of information materials, consumable medical supplies and pharmaceuticals (to the extent such distribution is not included as part of the supply contracts for such items). NBF Amounts not financed by the Bank.  10 Schedule B WITHDRAWAL OF THE PROCEEDS OF THE LOAN Category Amount of the Loan Allocated % of Total Expenditures to be L; _______D____i:__________ (in US$ millions) Financed Civil Works 28.2 70% Furniture and Equipment 45.5 100% of foreign expenditures, 100% of local expenditures (ex-factory cost), and 87% of local expenditures for other items procured locally. Vehicles 32.9 100% of foreign expenditures, 100% of local expenditures (ex-factory cost), and 87% of local expenditures for other items procured locally. Printed Materials 4.5 100% of foreign expenditures, 100% of local expenditures (ex-factory cost), and 87% of local expenditures for other items procured locally. Training 7.7 100% Consultants, Technical 70.0 100% Assistance and Information Campaigns Drugs and Medical Supplies 19.3 87% up to an aggregate amount of US$8.2 million; 66% up to an aggregate of US$15.0 million; and 33% for the remainder Incremental Fixed-Term Staff 66.7 87% up to an aggregate and Operational Expenses amount of US$25.6 million; 66% up to an aggregate of US$48.5 million; and 33% for the remainder l Unallocated 35.2 TOTAL 310.0 ESTIMATED SCHEDULE OF DISBURSEMENTS (in US$ million) IBRD Fiscal Year 1996 1997 1998 1999 2000 Annual 16.1' 57.9 77.0 84.0 75.0 Cumulative 16.1 74.0 151.0 235.0 310.0 - Includes US$3.1I million in retroactive financing and US$ 13 million for the irnitial deposit to the Special Account.  11 Schedule C TIMETABLE OF KEY PROJECT PROCESSING EVENTS (a) Time taken to prepare 7 months (b) Prepared by Ministry of Health (SSA) (c) First Bank Mission : April 1994 (d) Appraisal mission departure November 1994 (e) Negotiations : August 1995 (f) Planned date of effectiveness December 1995 (g) List of relevant PCRs/ICRs and Basic Health Care Project Project Performance Audit Reports (Ln. No. 3272-ME) Mid Term Review, October 1993  12 Schedule D STATUS OF BANK GROUP OPERATIONS IN MEXICO A. STATEMENT OF BANK LOANS (As of June 30, 1995) .......................~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~....... .....*....*......... 115 Ioans fully disbursed 15,001.84 Of which SECALs, SALs, Program Loans, and Interest Support Ln. 1929-ME 1981 BANOBRAS Railway IV 149.88 Ln. 2331-ME 1983 BANCOMEXT Export Development 349.33 lLn. 2745-ME 1987 BANCOMEXT Trade Policy Loan I 498.63 Ln. 2777-ME 1987 BANCOMEXT Export Development li 246.37 Ln. 2882-ME 1988 BANCOMEXT Trade Policy Loan II 500.00 Ln. 2916-ME 1988 NAFIN Steel Restructuring 100.00 Ln. 2918-ME 1988 NAFIN Agricultural Sector Loan 300.00 Ln. 2919-ME 1988 NAFIN Fertilizer Sector 200.00 Ln. 3085-ME 1989 BANCOMEXT Financial Sector Adjustment 486.41 Ln. 3087-ME 1989 NAFIN Industrial Sector Policy 497.51 Ln. 3086-ME 1989 NAFIN Public Enterprise Reform 499.39 Ln. 3159-ME 1990 BANCOMEXT Interest Support Loan 1,260.00 Ln. 3207-ME 1990 BANOBRAS Road Transport & Telecom. 380.00 Ln. 3309-ME 1991 BANCOMEXT Export Sector 25.00 Ln. 3357-ME 1991 NAFIN Agricultural Sector Adj. ll 400.00 Subtotal 5,892.52 Ln. 2658-ME 1986 NAFIN Agricultural Dev. Proderith II 88.30 23.16 Ln. 2666-ME 1986 BANOBRAS Municipal Strengthening 40.00 0.34 Ln. 2669-ME 1986 BANOBRAS Solid Waste Management Pilot 25.00 7.50 Ln. 2824-ME 1987 BANOBRAS Urban Transport I 90.98 14.00 Ln. 2858-ME 1987 NAFIN Small/Medium-Scale Industry IV 100.00 0.30 Ln. 2916-ME 1988 NAFIN Steel Sector Restructuring 321.01 42.35 Ln. 3047-ME 1989 NAFIN Industrial Restructuring 250.00 9.01 Ln. 3083-ME 1989 NAFIN Hydroelectric Development 460.00 24.72 Ln. 3140-ME 1990 BANOBRAS Low-income Housing II 350.00 0.36 Ln. 3208-ME 1990 BANOBRAS Telecomm. Technical Assistance 22.00 0.07 Ln. 3271-ME 1991 BANOBRAS Water Supply & Sanitation 299.52 0.08 Ln. 3272-ME 1991 NAFIN Basic Health Care 180.00 52.71 Ln. 3310-ME 1991 NAFIN Decentralization & Regional Develop. 350.00 2.29 Ln. 3358-ME 1991 NAFIN Technical Training III 152.00 47.29 Ln. 3359-ME 1991 NAFIN Mining Sector Restructuring 200.00 86.94 Ln. 3407-ME 1992 NAFIN Primary Education 250.00 82.18 Ln. 3419-ME 1992 NAFIN Irrigation & Drainage Sector 400.00 189.52 Ln. 3461-ME 1992 BANOBRAS Environment/Natural Resources 50.00 32.30 Ln. 3465-ME 1992 NAFIN Agricultural Technology 150.00 126.60 Ln. 3475-ME 1992 NAFIN Science & Technology Infrastructure 189.00 123.90 Ln. 3497-ME 1992 BANOBRAS Housing Market Development 450.00 118.29 Ln. 3518-ME 1993 NAFIN Initial Education 80.00 63.14 Ln. 3542-ME 1993 NAFIN Labor Market & Prod. Enhancement 174.00 92.48 Ln. 3543-ME 1993 NAFIN Transport Air Pollution Control 220.00 125.49 Ln. 3559-ME 1993 BANOBRAS Medium Cities Transport 200.00 177.57 Ln. 3628-ME 1993 BANOBRAS Highway Rehab. & Traffic Safety 480.00 324.62 Ln. 3704-ME 1994 NAFIN On-Farm & Minor Irrigation Network 200.00 180.39 Ln. 3722-ME 1994 NAFIN Primary Education II 412.00 373.57 Ln. 3750-ME 1994 BANOBRAS N. Border I Environment 368.00 352.00 Ln. 3751-ME 1994 BANOBRAS Water/Sanitation II 350.00 320.04 Ln. 3752-ME a> 1994 BANOBRAS Solid Waste II 200.00 200.00 Ln. 3778-ME 1995 NAFIN Rainfed Areas Development 85.00 69.86 Ln. 3790-ME 1995 NAFIN Second Decentralization 500.00 417.91 Ln. 3805-ME a> 1995 NAFIN Technical Education/Training 265.00 265.00 Ln. 3838-ME a> 1995 NAFIN Financial Sector T.A. 23.60 23.60 Ln. 38381-ME 1995 NAFIN Suppl. to Financial Sector T.A. 13.80 13.80 Ln. 391 1-ME 1995 NAFIN Financial Sector Restructuring 1,000.00 1,000.00 Ln. 3912-ME 1995 NAFIN Essential Social Services 500.00 500 00 Sub-total 9,489.21 5,483.38 Total 24,491.05 Of Which has been repaid 7.685.97 Total now held by the Bank 16,805.08 Amount sold : 92.34 Of which has been repaid: 92.34 Total Undisbursed 5,483.38 5,483.38 a> Not yet effective  SCHEDULE D -13- STaTDMENT OF IFC INVXSSMXNSS As of June 30, 1995 (In Millions US Dollars) - Original Groas Conitments - gmld Held Undieb Fiscal Years IFC IFC by by inol. Comitted Obligor Type of Business Loan Iquity Partic Totals IFC Partic Partic 1958 a/ Bristol de Mexico, S.A. Industrial equipmant end .52 - - .52 - - - 1958/59 a/ Industrias Perfect Circle Industrial equipment and .80 - .80 - - - 1961 */ Acero Solar, SA. Industrial equipmant and - - .28 .28 - - - 1962/65/66/68 a/ Fundidora Monterrey, S.A. Iron and steal 1.81 21.45 .48 23.74 - - - 1963 a/ Quitica del Rey, S.A. Chemicals and petrochbmic .07 - .68 .75 - - - 1963 e/ Tuboa de Acero de Mexico, Iron and steel .81 - .19 1.00 - - - 1964/66 a/ Industria del Hierro, S.A Industrial equipmant and - 1.96 - 1.96 - - - 1970 a/ Miners del Norte, U.A. Iron and steel .75 - .75 1.50 - - - 1971 a/ Celanese Moxican, S. A. Textiles 8.00 - 4.00 12.00 - - - 1972 a/ Promotora de Plapl Period Timber. pulp and paper - 03 - .03 - - - 1973/79 a/ Coemntos Veracruz, SUA. Cement and construction a 11.35 - 4.50 15.85 - - - 1974/81 a/ Cancun Aristos Hotel Tourism .98 .32 - 1.30 - - - 1975/78 */ Mexinox, S.A. Iron and steel 12.00 3.18 - 15.18 - - - 1978/81/84 a/ Papeles Ponderosa, SUA. Timber. pulp and paper 6.20 4.96 4.50 15.66 - - - 1978/95 Tereftalatos Mexicanos, S Chemicals and petrochamic 39.00 - 20.00 59.00 20.00 20.00 - 1979/81/87 Hotel Camino Real Ixtapa. Tourim - 4.20 - 4.20 4.20 - - 1979/84 A/ Rpress Toltaca de Maxic Cement and construction m 30.00 7.95 138.00 175.95 - - - 1979/91 Conductores Monterrey, S. Industrial equipment and 8.41 - 13.00 21.41 1.28 - - 1980 a/ Industrias Resistol, SUA. Chemicals and petrochemic 8.00 - 17.00 25.00 - - - 1980 a/ Xinera Real de Angeles, S Nonferrous mtals 30.00 - 80.00 110.00 - - - 1980 a/ Vidrio Plano da Mexico, S Industrial equipment and 15.00 - 99.90 114.90 - - - 1981 a/ Grupo Industrial Alfe S.A Food and agribusiness 15.50 - 44.00 59.50 - - - 1981 a/ Universal de Valores, S.A Food and agribusiness 6.30 3.00 5.00 14.30 - - - 1984 a/ Capital Goods Facility Development financing 34.00 - 66.00 100.00 - - - 1984/88/94 Xetalsa, SUA. Automotive and accessorie 32.00 1.40 35.00 68.40 24.00 35.00 25.00 1985 a/ Proteison, SUA. de C.V. rood and agribusiness 1.95 .82 - 2.77 - - - 1985/90 Grupo Primex. S.A. de C.V Chemicals end petrochedic 32.00 - 4.40 36.40 11.04 - - 1986 a/ Celulosa y lapel de Duran Timber, pulp and paper 10.00 3.07 - 13.07 - - - 1987 a/ Agro Industrial lxportado Food and agribusiness 1.50 .50 - 2.00 - - - 1987 a/ Indu1 trias Sulfamex, SUA. Fertilizers 2.00 .50 - 2.50 - - - 1988 a/ Sealed Power Mexicana, S. Automotive and accessoria 9.00 - - 9.00 - - - 1988 Vulica Shipping Company L Industrial services - - - 0.00 16.50 - - 1988/91/92/93 Apasco, S.A. de C.V. Cemant and construction a 156.41 - 40.00 196.41 21.45 40.00 - 1988/92 Calisas Industrials del Mining 73.00 - - 73.00 24.14 _ 1988/9S Sigma Alismnto, S. A. de Food end agribusiness 40.96 7.00 32.00 79.96 26.50 32.00 - 1989 Banca Uerfin, S.N.C. Capital markets 60.00 - - 60.00 50.00 - - 1989 Comax, SA. Cement and construction a 60.00 - 8.00 68.00 11.43 - - 1989/92 Fomento Econoico Mexican Food and agribusiness 80.00 27.60 - 107.60 57.78 - - 1989/92 Poli-ar, SA. de C.V. Chemicals and petrochaic 19.10 - - 19.10 8.10 - - 1990 a/ Bencomer, SNH.C. Capital markets 20.00 - - 20.00 - - - 1990 Banco Nacional de XMxico. Capital markets 60.00 - - 60.00 37.05 3.75 2.40 1990/92 Grupo Condumax s.A. de C. General manufacturing 35.00 9.54 18.00 62.54 24.06 9.00 - 1990/94 Indelpro, S.A. de C.V. Chemicals and petrochemic 31.00 - 3.00 34.00 24.75 1.13 - 1991 a/ The Mexico Equity and Inc Financial services - 6.57 - 6.57 - - - 1991 Petroe-l, S.A. Chemicals and petrochbic 32.00 - - 32.00 26.00 - - 1991 Vitro Flotado, S.A. de C. Industrial equipment and 25.00 - 101.00 126.00 23.75 50.50 - 1991/92 Vitro SUA. Industrial equipment end - 18.21 - 18.21 10.17 - - 1992 Aislantes de Le6n, SUA. d Autcomotive and accessorie 10.00 7.03 - 17.03 9.00 - - 1992 Banco Mercintil del Norte Capital markets 20.00 - - 20.00 - - - 1992 Celular de Telafonia, SUA Industrial services 15.00 1.00 37.00 53.00 16.00 36 .73 2.88 1992 Grupo Financiero Probursa Capital markets - 7.50 - 7.50 7.50 - - 1992 Grupo Industrial Dimbo, S Food and agribusiness 25.00 - 75.00 100.00 21.43 58. 33 - 1992 Grupo Posada s S.A. de C. Tourism 20.00 3.72 33.50 57.22 20.00 33.50 - 1992 The Mexico City Toluca To Industrial services 13.75 - - 13.75 9.55 - - 1993 C-lulora y Derivados, SUA Textiles 11.00 - 26.00 37.00 11.00 24.07 - 1993 Xasterpak, SUA. de C.V. Timber. pulp and paper 12.00 - 28.00 40.00 12.00 25.93 - 1994 Alimentos Naturales Sabro Food and agribusiness - - - 0.00 3.00 - - 1994 Aurua-Haler Factoraje, U Capital markets - .98 - .98 .98 - - 1994 Grupo Idesa S.A. de C.V. Chemicals and petrochemic 15.00 8.00 42.50 65.50 23.00 42.50 34.50 1994 Grupo operador de Termina Industrial services 4.00 2.00 2.64 8.64 3.71 2.64 2.64 1994 Internacional de Corazica Cement and construction a 21.00 - 17.50 38.50 21.00 17.50 - 1994 Pyoma, SUA. de C.V. General manufacturing - - 0.00 9.01 - - 1994/95 Mexicans de Cobra, S.A. 4 Nonferrous metals 50.00 - 45.00 95.00 50.00 45.00 35.00 1995 Arancia S.A. de C.V. Food and agribusines - - - 0.00 6.78 - - 1995 Baring Ventura Partners d Finaneial services - .15 - .15 .15 - - 1995 Compafia Tratadors de Agu Industrial services 7.11 - - 7.11 7.11 - - 1995 Mexplus Puertos S.A. de C Industrial services - 1.04 - 1.04 1.04 - - Total gross commitments b/ 1234.28 153.68 1046.82 2434.78  - 14 - SCHEDULE D MEXXCO STATUMEIT OF ZFC NVYSTNIWTS As of June 30, 1935 (In Milliong US Dollars) - Original Gross Comit-ents - Hgld HEold Undiab Fiscal Years ZFC IFC by by incl. Co-itted Obligor Type of Business Loan Zquity Partic Totals xrc Partic Partic Less cancellations, terminations. repayment & sales 636.64 96.86 569.24 1302.74 Total co itents now held c/ 537.64 56.82 477.58 1132.04 654.46 477.58 102.42 Pending cositmants Apasco, s.A. de C.V. Ceant and construction a 20.00 - 80.00 100.00 Earing Venture Fund Capital markets - 10.00 - 10.00 ESPVNSA 18.00 - 12.00 30.00 Sigma Ali-antos, SA. de Food and agribusiness - - 12.00 12.00 Total pending c-iitmLnts 38. 00 10.00 104.00 152.00 Total commitments held and pending commitents 635.64 66.82 581.58 1284.04 Total undisbursad comitnsts 47.40 - 55.02 102.42 a/ Investents which have been fully cancelled, terminated, written-off, sold, redeemd, or repaid. b/ Gros co -itents consist of approved end signed projects. c/ Held coaitaeets consist of disbursed and undisbursed investuents.  U N I T E D STATES O F A M E R I C A 0?R SONORA CHIHUAHUA 9 / 0 'I COAHUILA DLEON SC,p \ DURANGO ....... SINALOA k _: TAMAULIPAS 'ZACATECAS. ; v - I ocaa z (SAN LUIS--' ) n *' ' \POTOSI . NAYARIT 4AtcA,5tAS0SanLuisPo '- NAY RIT LJ f t /; i C ;0 , YUCATAN, Campeche j .. MEXICO JALISCO QUINTANA r oelia* MFX L ROO SECOND BASIC HEALTH CARE PROJECT 5LIMA 2 -) MEWVR CAMPECHE' /MICHOACAN(' $E~P&I~VR 2U SELECTED PROJECT STATES PU r O- )U\L/ .TABASCO""..-. . ChilponcingoS ** N- IIBLZ fl.Tl PROJECT STATES OaxoCA 0 0E'I 0 STATE CAPITALS* f j CHIAPAS j L @ NATIONAL CAPITAL /GUATEMALA . - - - STATE BOUNDARIES I HONDURAS -. - INTERNATIONAL BOUNDARIES 0 100 200 300 j - *State Capitols ore shown in project states only. /SALVADOR Cw Th. b-udurie, -oIo-, d-cenoios- -nd .ny ote ,fnuis s don-lhls Pop d.,ot,m* - oh. p.rt fThe Wudd Bunk NICARAGUA - _ emio~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~drsemrneu or urccngunrce o~ such} houuducrrnstbrby m Ni G-W, -y f lbt,~~~~~~~ f _y ~~~~~Wy, ., _y 0'.~~~N xl    1 , : I; ;: I -' ; ,! I ,ij 1 ! I.I. . I . .. . iv: I . . . . .~ ~ ~~~~~~~~~~~~~~~. .. : , 11 ,-.