n574 ~~~~~~~RESTRICTFED

wiA 1RN R F .~ A YReport No. PTR-l$'a

I- Public Disclosure Authorized 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 The report may not be published nor may it be quoted as representing their views.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 Public Disclosure Authorized

AX1DD A TCATA T,

A SECOND HIGHW'AY PROJECT

ARGENI'INA Public Disclosure Authorized

June 10, 1969 Public Disclosure Authorized

Transportation P-rojects Department Currency Equivalent s:

Currency Unit = Peso M$N US$:1.00 = M$N 350 US$l million = MIN 350 million M$N 1 million = US$2,857.1 4

Fiscal Year:

January 1 to December 31

Units of Weights and Measures: Metric

Metric: British/US Equivalents

1 kilometer (hm) = 0.62 miles (mi) l me+er tm - 3.28 feet (fPt 1 square kilometer

~1I 1" / S _,)U LJU. . L4.L ZAII.L± % 1 IJLI. I 1 metric ton (m ton) = 0.98 lg. ton 1 metric +on (r.+ton) =1l.l USshort +on

Totals may not add up because of rounding

Abbreviations - Acronyms

ADT - Average Daily Traffic BPR - 'unrdtedeStates Bureau oI Public Roads EFA - Empresa Ferrocariles Argentina LRTP - Long Range Transportation Pian (1962) OLD - Origin and Destination sI - Tippetts, Abbett, McCarthy and Stratton (US) -Consultants UwoS - -United Nations Special Fund (now United Nations Development Programme - Special Fund) USAID - United States Agency for International Development APPRAISwALT OF A QECOn3D H T(M T4AY PROJECT

TABLE OF CO'NtTENlTS

SUMARY Page

1. INTRODUCTION 1

2. BACKGROUND 3

A. General 3 B. The Transport Sector 3 C. Transport Coordination 4

3. THE HIGIDiY SECTOR 6

A. The Highway Network, Characteristics and Growth of Road 6 Traffic B. Highway Administration 6 C. Financing and Planning 8 D. Highway Engineering 10 E. Highway Construction 10 F. Highway Maintenance 11

4. THE PROJECT 13

A. General Description 13 B. Highways to be Upgraded and Paved 13 C. Additional Consulting and Expert Services 15 D. Miscellaneous Equipment 17 E. Cost Estimates and Financing 17 F. Execution of the Project 19

5. ECONOMIC EVALUATION 21

A. Introduction 21 B. Route 7, Laboulaye-Mercedes Section 21 C. Route 3 and Rpute 251 Sections 21

6. RECOMMEENDATIONS 23

This report was prepared by Messrs. Alexander (engineer) and Haker (econrrmist). TABLE OF CO,iENmTS (COINTD.)

TABLES

1. Freight Traffic by Modes of Transport 2. Incidence of U 'serChLlJarges on VeicleJ. Costs- 3. Revenues from Principal User Taxes

4. ederal Vn' .LI[U adro-vinciaVl[IU £CV LE-L L MW1Ui1.L0i± Lp1 0nJituri e 5. Composition of the Highway Networks 6. Vehicle Registration 7. Fuel Consumption 8. Design Standards for National Roads 9. Roads to be Upgraded and Cost Estimates 10. Project Cost Estimates

Annex 1 - The First Highway Project and Other External A5sistance for Highways Annex 2 - Transport Coordination Annex 3 - Basis for Economic Justification of Project Road Sections

CHART - Organization of Vialidad

MiAPS 1. Principal Roads of the National Highway Network 2. Railway Network 3. Project Road Section - Route 7 4. Project Road Sections - Routes 3 and 251 ARGENTINA

APPRAISAL CF A SECOND HIGHWAY PROJECT

SIJmaRy i. After making a highway loan in 1961 and acting as Executing Agency for a United Nations Special Fund Study (UNSF) of the transport sector at the same time, the Bank was for several years not closely asso- ciated with overall highway development in Argentina. This was due to poor performance under the highway loan, the reluctance of the Government to im- plement major reccmmendations of the UNSF Study and the lack of a consistent approach to transport development. In 1967, the present Government gave priority to improving the neglected transport sector, and to strengthening the capacity of the Government agencies responsible for the sector's plan- ning, administration and coordination. In the highway sector, a major three>- vear construction program (Three Year Plan) was started in 1968 and the strengthening process begun. The Government requested the Bank's assistance in financing a oronosed proiect which includes the unarading and paving of 796 km of national roads contained in this three-year program; the identification and prepnratiin nf a fiutiure 'hichwai investment program; and. assistance tc) improve the planning and administration of the highway network

;; 'Thae total coat of the m^Qe ;r'1v9;nc r+ia n ; . 1C __ _. mated at US$50 million equivalent. The Bank loan of US$25 million, of which UqS$3t 3 million is for vn-ge s would finance 50% Of the c5t of construction (US$17.6 million, including about US$5.28 million of local cvurrency cost-.s)s andA 4the forigr excge cost of fil -ndofceeup ment needed for the proper planning and administration of the highway net- work (uJS$500 0.j lTe Govexrnment w.ll-4LA2' L4. er.te cost of Ls coordination experts to the Secretariat of Transport (US$200,000 equivalent), consulting and expert services for the improvement of thne planning and ad- ministration of the highway network (US$1,000,000 equivalent), and a reccn- naissance stu.dy (US$400,0000 equivalenilj to identify t1he future road invest- ment program for which feasibility and detailed engineering studies will be carried out subsequently. The loan would also f inance 6up4 of the cost of services t.o be provided by local and foreign consultants for the construction supervision of the project roads (uS$600,000 equivalent), and. the carrying out of feasibility and detailed engineering studies (US$3.0 million equivalent). The figure 60% was selected in view of the substantial participation. expected by local firms and the recommendation that their services be financed by the Bank in the same proportion as would have been. the case had foreign consultants been enployed, so that financing arrange- ments would not affect the choice of firms. iii. Detailed engineering for the project roads has been completed by the Government and is satisfactory; consultants will assist the Government in analyzing bids and supervising construction. The cost estimates are considered reliable and adequate contingencies have been included. - ii - iv. The project is technically and economically sound. The economic rates of return for the different works range from 10 to 14%. v. Contracts for the project works will be let on the basis of in- ternational competitive bidding. Execution of the project wi.ll be the responsibility of the National Highway Department (Vialidad). vi. The project provides a suitable basis for a Bank loan of US$25 million eauivalent. An anpropriate term would he 25 years. nTniuding a four-year period of grace. ARGBM'1TINJA

APPRAISAL OF THIE SECOND HIGrHtALLY PROJECT

1. hITRODUCTION

1.01 The Government of Argentina has requested a loan of US$25 million equivalent to help finance a project costing about US$50 million equivalent comprising (a) the upgrading of about 796 Im of three national highways including cornsulting services, and (b) additional consulting and expert services for the identification and preparation of a future highway invest- ment program. including feasibility and detailed engineering studies, the improvement of the planning and administration of the country's highway network and the improvement of transport coordination.

1.02 This would be the second Bank project in the transportation sector. The first was a loan (288-AR) of Us$h8.5 million equivalent. signed in June 1961, to finance the foreign exchange cost of improving 2,600 km of national highways (see Map 1), including advisorv services by consultants., and road maintenance equipment. At the time of the loan a study of Argentina's transoort svstem was inderwav with United Nations SDecial Fun(d (UNSF) financing (US$520,000 equivalent), the Bank acting as Executing AMenc'7 the study was cnrmltted in early 1962 arnd the results published as the Long Rlange Transportaticn Plan (LMITP).

1.03 A number of problems developed during the execution of the first nrn-iel. miicrh n 1.ln'k o~f' lrer:ll f'irno - incf'f8o+.;3 usl of ptr^on,i1+~nn.c nn management of the project and poor quality of work. After unsuccessful efforts by the Bankl to irove the situation, the amou-+ of the loan -was reduced to US$32 million and the scope of work curtailed in 1965. The S~i'oiibSn roln+ nff^+'r , - fc -~ T4 ., . ',,n,~-,,,---1E)-d +0- 4'-I,- 4-4 -.f..- ,-',r susquentef.forts.o a new V- lidad rage led to the C CV.4.VLtU completion of the project by its extended Closing Date of December 31, 1968. Fu_r+uh,er dCta-ils0 ------n the above subJe-t and 04her-P-4 - as 4sistance VC~LCC 1JA~i. IJ.1~, U11C; CAJCJ Vt:; ou.L' ,Uo CXILU UlLd I J. VI U _'L6I .1. ., to the highway sector are given in Annex 1 and para. 3.19. This improve- men combIILVnLll wi thl V.L-aClV±Ud.adU j±LL£ f Lu Uplanse lor U.i1g iLts weak' organ. zLau-Lull justify the Bank in proceeding with the loan under consideration.

1.04 Early in 1968 the Government indicated its desire to give increased a4t4tenti4on to th-~,e 4transport sect-o r and t o c on sidLue r a- loaL-ucu' for- a ro0a d p ro-uject; for which feasibility studies were being carried out. An exploratory Bank missuilon to Argentina in May 1968 broaaLy examined the Government sS approach to the transport sector and concluded that the Bank could play an important role in the development oI the sector. This ied to a transport mission to Argentina in September-October 1968 to make a detailed review of rail anc6 road transport. Thne transport mission;s findings and recorrnendations were presented to the Government at the end of January 1969. Following this work, Argentina is taking steps to improve transport coordination and planning, and is developing a detailed plan to rehabilitate and redimension the railways. The Government has addressed a letter to the Bank outlinirng the direction of its present policies for improving the planning and admini- stration of highwayE. 1.05 This report has been prepared by Messrs. Alexander (engineer) and Haker (econrnjmist) who anpraised the nroiect as members of the transport mission which visited Argentina in September-October 1968. - 3 -

2. BACKGROUND

A. General

2.01 Argentina, with an area of 2.9 million km'2 is the eighth largest country in the world. The country had an estimated 1968 population of 23.. million and an overall density of only 9 per km . However, two-thirds of the population are concentrated within a 600 km radius from Buenos Aires;_ in the remainder of the country the population density is only 2.4 per km3. Total population growth has averaged only 1.8% annually between 1950 and 1967. Argentina had a 1966 GNP of US$17.L billion, with an estimated per capita average of US$75O. ranking second in Latin America. after Venezuela. In this respect Argentina also ranks higher than many European countries. Thp annual GNP growth has hpn 3% be-wepn 1Q5O anri 1966.

B. ThA Trqn.nnrt. Rrjtn--

2 02 General : Manor geophysical factors influencing the transport system are few, confined to the Andes on the west boundary and the Plata river system that f Orac in into the A+ nnr nmnn The system has therefore been largely determined by demographic and economic considerations -- th the predominating factor being the high concentration of population and economic activity around Buenos Aires, covering only 15% of the country but cont.mii,ing uvwv-ui.lus oLf Le lato. Ihi. ae aLso contains 65% of the livestock, produces 85% of all grains and cereals, and accounts for M,ost of the i ndustriaL activity. Mevtropolitan uenos 4ires itself constitutes the hub of this area, with its population of 7.1 million (30%k of the country-s total), its port that handles about one-half of the country's dry cargo, and its role as the industrial, financial and com- mercial center of tne country; it is tne focal point for transport in Argentina. The most recent data on traffic volumes for the various transport modes are for 1966 and show a total of 70 billion ton-km; highways account for 23 billion, coastal shipping 20 billion, railways 14 billion, pipelines 7 billion and river transport 6 billion (Table 1).

2.03 Highways: Details of tne nignway sector are given in unapter 3 and Tables 2, 3 and 4.

2.04 Railways: Argentina already had a well developed railway systen in the beginning of this century. It now comprises about bl,700 km of lines in operation under the Empresa Ferrocarriles Argentina (EFA) over half of which were built around 1890 and 1920. The system is largely concentrated in the provinces around Buenos Aires (see Map 2). Since the thirties, tha railways have been losing traffic to road transport in relative and even absolute terms. The railway deficit is very large and railway revenues are insufficient to cover even labor costs. The railways are overstaffed, a large proportion of their equipment is obsolete, maintenance is hampered by lack of spare parts, operations are inefficient and many lines are uneconomic. During the past year a new management has improved the rail- ways' performance considerably by restoring discipline, improving operating efficiency and procuring spare parts, and it has initiated studies on uneconomic lines and staff redundancy. A railway rehabilitation and redi-- mensioning program is being prepared which forecasts that in 1973 railway revenues could cover all operating expenses and provide an allowance for depreciation on renewable assets.

2.05 Inland Waterways. The waterway system is formed by the Plata river and its tributaries, the Parana, Uruguay, Paraguay and Alto Parana. It covers more than 3,000 km of navigable routes but does not play a majo?' role in the transport system because of inadequate depth. A UIJDP study on the Parana River from Asuncion, Paraguay to Corrientes is underway to find ways of improving navigation to permit the use of deeper draft vessels.

2.06 Ports: Official statistics show 177 ports and loading places along the rivers and the coastline, but most of these are unimportant. Total port traffic amounted to about 63 miLLion tons during 1966 including about 33 milLion tons of petroleum products. Buenos Aires is the leading port with 15.4 million tons of dry cargo; Rosario handles 3.6 million tons; Bahia Blanca 2.2 million tons and eight others carry over 90% of the re- mainder. Dry cargo traffic has been growing rather slowly in the past sevren years (under 4% per annum). Buenos Aires has been congested but, through the efforts of a new port management, a considerable improvement has been made.

2.07 Pipelines: Argentina has a rather extensive petroleum product pipe- line network of some 10,500 km that connects all major production and con-- sumption centers. In 1966 petroleum products traffic controlled 7 billion ton-km corresponding to one-half of the total traffic carried by railways. Pipelines are the fastest growing transport mode in Argentina.

2.08 Air Transport: Because of its large size and low population den- sity; Argent.ina reli heavnly on air transport. There are 98 airports in the country, five of which handle both international and domestic traffic.. The inrports of Tbenos Aires,cordoba and M.endoza together handrled h5% Of the 2.5 milLion passengers carried in 1965; the annual passenger traffic growt.h rn+nhas bnen bout. 7I hna+.an IQ,R vnA 1QfA V-.icrhj+. +.rnffjio amount.- ed to about :30,000 tons in 1967, two-thirds of which had an international origin or destinationl.

C. Transport Coordination

2.09 Argentina has not dev loped effmetiv.e trans-ortation policy and coordination measures. The existing institutional arrangements hamper the formulation of appropriatve poices T "c'-i-at- of' T r- sponsible for coordination but it directly controls only the railways and to in a number of investments in the highway sector with low rates of return, ti.LLued.ra way jJerLtiLn.p-cn_ha JJUpoice neon.L UlaaU. ------mic UVdo: noLIUla ,- coen sUVU±Uoprtn p tonoJw.L1rcosts,----Juse rUandJ t>e,UIca con-h.av tinued opera-tion of uneconomic railway lines. Up to now user charges have - 5 - unduly favored the use of diesel trucks but a new diesel fuel tax that the Government intends to introduce shortly will help correct this. A Sectorial Development Office at the Secretariat of Transport was recently created to plan transport policy, but it lacks adequate staff and experience. The em- ployment of two experts for a period of about two years to advise the Office and train local staff was discussed during negotiations and receipt of tha Government's confirmation of these arrangements is expected shortly. The Government would finance the entire cost of these experts; the Secretariat would assimn two senior counterparts to work with them. Details concerning transport coordination problems and the duties of the experts are given in Annex 2. - 6 -

3. THE HIGHWIAY SECTOR

A. The Highlw1ay Network, Characteristics and Growth of the Vehicle Fleet

3.01 The Highlway Network: The primary network of 137,000 km is divided into a national network of h6.000 km (see Man 1) and a nrovlncial nrimary network of 91,000 km; 28,000 km (20%) of the primary network are paved in- cluding 200 nkmof roads of four or more lanes, 18iOn km.. (13%) are gravelled and the remainder (67%) are earth roads and tracks. In addition there is a provincial secondary and tertiary road system roughly estimated at 800,00O km. There is little information on the latter's length, quality and concdi- tion and the inventory of the natio.1nal nUrk is in3d3e.q Det+ails 0 4' the distribution of roads by type and systems is given in Table 5. In gene.-' th-a present network 4rff L ~'~**'*-&, '~~.'~J ~)4JU UWJ.f of'L L roalsLJU,u 1Im,eets Ud3 .L df i . c LU eurmIteq ir4. LJiLI~O IALu ,IUhr is need for selective improvement of the system mainly by shortening align- men's and strengllheI1ng oring parveuxnn.

3 .02JL UI±dLaracterlsti cS and Growt;h o f the VehicLle r' eet:U The large aut;o- mobile industry is capable of supplying all local needs; it produces abot.t 180,0 -vehicles annually but production costs are roughly 50% higher than comparable vehicles made in Europe and the United States. There were 1,786,000 vehicles in 1967 consisting of 1,081,000 of cars, 618.000 truck vans and pick-ups, 64,000 trailer combinations and 23,000 buses (Table 6). The vehicle density was one for 13 persons -- the second in Latin America and compares with the average of 11 persons per vehicle for Europe as a whole. The spread of the vehicle fleet is uneven; close to 60% is con- centrated in the Buenos Aires province, and a further 25% in the adjacent, provinces of Santa Ee, Cordoba, and Corrientes and in Mendoza to the west. The rate of annual growth in the fleet for 1947-1967 exhibits an uS"' curve pattern: between 1947 and 1956, growth averaged only 2.8% per annum; increased to 7% between 1956 and 1960, to 12% between 1960 and 1961, but between 196b and 1967 it declined to 7.7%. The future growth will probably be moderate, in the order of 7% annually.

B. Highway Administration

3.03 Vialidad (see Chart), under the Secretariat of Public Works, iE responsible for the planning, construction and maintenance of the national highway network (Map 1). Provincial Highway Departments are similarly responsible for the provincial highway networks. The planning of and engineering for the national network are performed in Headquarters (Buencs Aires); all field investigations and some construction supervision are also handled frcm Headquarters by visiting teams. Road maintenance and super- vision of construction are done by Vialidad personnel in 24 District Offices. For a country the size of Argentina with so extensive a road network, many of VialidadTs activities are too centralized. Furthermore, there is un- neeessary daplication of services sunplied by the national and provincial authorities, especially in the more developed and populated provinces which have fairly vood organizations, although many of the more remote provinces are almost entirely dependent on the technical expertise of the Vialidad Di-stricr-O ff,incq- 3.04 Vialidad intends to transfer its detailed planning, supervision of caistruction and road maintenance functions to the provincial authorities, thus leaving it to concentrate on overall planning and coordination of the country's high-way network. This institutional reorganizatJon is considered to be essential for *the more efficient management of highways, but will take many years to carry out. Dur ing loan- negotiations, the broad princi;ples and timing of such reorganization have been discussed and agreed and con- firmation obtained from the Government that it will carry outv the reorgaLiza- tion on this basis. A recent first step was the establishment of seven regions to which have been delegated more authority and some of the Head- quarters' engineering and investigating function. This decentralization is intended to make the Vialidad regional offices self-supporting in the design, construction and maintenance of national highways and to bring this expertise in direct contact with the provincial authorities, with the eventual aim Df transferring the responsibility for these duties to the provinces. 3.05 Major obstacles to efficient highway management are the lack of basic data (such as a highway inventory and reliable traffic counts) for planning and administration purposes, of the equipment to collect such data, and of a satisfactory cost accounting system. Provision has been made in the project for ccnsulting services and the acquisition of needed equipment to help remove these obstacles. For example, the present traffic counting system is deficient in that counts are mainly limited to the national net- work and are taken only once a year at insufficient and badly located points; they are not adequately supervised. During 1967/68, with the help of a traffic engineer financed under a Ford Foundation grant, an initial plan was developed to improve the system for the national network. The plan is basically sound, but the financing from the Foundation has ceased and the system still remains to be established on a proper and permanent basis. The Government has agreed that it will maintain a suitably staffed and ea.uipped office to collect and analvze traffic and cost data for the purpose of road management and planning.

3.06 In 1970, when much of the basic planning data should be available, the Government will be in a positi on to carrv out. detailed studies in one or more of the seven regions to assess the most efficient organization and operating m-ethods for regional administration and transfer of Vialidad functions to the provinces and to establish a timetable for such transfer. The studies would also provirde a more accurate determination of the physical and financial needs of the provinces to enable them to plan, execute and maintain highway inves+tm.en,ts. T.hese studi c are rnot i. _ureliin the nro- posed project because existing data deficiencies would prevent their satisfactory execution. The Bank shou.d re view progress r.ade on them.

3.07 Another obstacle to efficient highway administration is chronic ±understL±.L.U,9 of Via.LLda Uue to low salaries. Vialidad now has about 115 engineers in. Headquarters and 90 engineers in the Districts; these numbers should be increased to 220 and 175 respectively to handle its present work= load. The present management of Vialidad is trying hard to solve this problem. Competent personnel from within the organization aare being placedC - 8-

4 , ne r. o- P n..4-1,-.nw 4-.. T -, ,-4 .-.Il -4.-4 - n .,AlrI 1 . . n.+n.y . . nV %Vbn Vialidad to grant merit increases in salaries to staff members, and to con.tract individual experts fr up to 2 years, as a result of whIchLialidad should be able to attract further qualified staff on both a permanent and

3.08 The vehicle weight and dimension limitations are satiUactory. The maximum single axle :Load is 10.5 m tons. However, penalties are too ligh-t f or proper erforcement and the control of weight regulations requires improvemenut. A number of fixed and portable weighing scales were procured under the firs-t highway loan and there are now 16 fixed and 4 portable units operating between Buenos Aires and Mendcza. Vialidad has 10 portable units on order and requires about 20 more; provision for the latter is included in the project. Provincial authorities do not assist in enforcement at present, and Vialidad is seeking their cooperation. Assurances have been obtained from the Govern- ment that it will take measures as appropriate to strengthen and ensure the enforcement of the vehicle regulations.

C. Financing and Planning

3.09 Financing: The cost of administering and maintaining the highway system is borne out of general revenues of both the provincial and the federal goverrnments. Investment expenditures are financed by earmarking part of the taxes on road users (for the transport coordination aspect of these taxes, see Amnex 2), mainly taxes on fuel and tires. The total revenues irom these earmarked taxes anounted to M$N 40 billion in 1967 out of a total of M$N 142 bill:ion collected from users, compared with a total highway invest- ment expendi-ture of ISN 42 billion in that vear. There was a deficit of M$N 25 billion in amounts earmarked in 1968 which was covered from the general budget. The Government has increased earmarked road user taxes further to cover the large expansion of highway construction expenditures under the Three-Year P:Lan. The revenues for hisnhwav investment expenditures are channeled on the basis of fixed formulae through (i) the fund for nationa:L high- wavs (nrimnry nfrtwrlc); ( ii) +'hefPderal r prnnqrti ni nqiion find (pnrouvincial primary network); and (iii) the provincial road fund (secondary and tertiary roads) ReL ve minues in thp federa1 clonarticination fu nd are sibseouentlv ap- portioned be-tLween the 22 individual provinces on the basis of (i) 30% in enin1 shRres; (il) 20% in prnnn-rti-nn to p-pulationD; (iii) 20. in nronortion to own revenues from provincial sources; and (iv) 30% in proportion to fuel cons,wmp,.t i nn .

3 10 T. ^'D ap-plceo ofA,-r,nothes.e fr Trigi rnohl1.mq_ (i) there is no logical connection between real resource needs of the highway ecr-+ a-r, parti '--ar vol4mes ofP revr.ues ge..erA-fcal bJr the roadr fund,rs and (ii) overinvestment is produced in certain provinces and underinvestment .L-otuhers .rIt is) 4here-P--- Aesirable 4that4 the- ar-ge,e.t o dsrb- of revenues be revised as soon as possible and levels of investment be uCt el-liluiu t udiriui± i i 'ra llUst OfU1 . XnueUds . JA fi.t s ±11XX u i l , _,_ tion is described in para. 3.12 in connection with the reorganization of planning. - 9 -

3.11 OrgS ztor of P-4-Mng High.vJay plaradng is the re-ponsibilit.y of a recently created depar-tment of Vialidad. It is badly understaffed ald now cor.cen-trates Ma-H;l- i,lrm--- CV g roa sis si .15n r. Thr is insufficient commumication between the Planning Department and other r,1>L-s t-r ies concernred -witvh eccrLormLc activity ar,d, J'n pat-Lcu-l , with41 thIe Secretariat of Transport, and these agencies have failed to pay sufficient attention to econoCM-ic criteria in the pra a . of their huighway_ vestment plans.

3.12 The present planning mechanism, whether at the provincial or federal level, suffers from two prilcipal deficiencies: (i) the absence of an adequate data system on which to base investment decisions and formulate appropriate criteria; and (ii) the absence of a central investment review mechanism within the Planning Department of Vialidad. As mentioned earlier (paras. 2.09 and 3.05) assistance is to be provided in the prcposed project to help remedy the first deficiency. The Government has agreed that it will evaluate the economic merits of such roads as shall be included in the future road construction plans in £irgentina, and that due account shall be taken if these merits in the formulation of such plans. 3.13 Paste tten!ts at Planning: The 1962 Long Range Transportation Plan (IRTP) (para. 1.02) provided the first comprehensive approach to high- way planning and transport coordination policy. Unfortunately, most of its recommerndations were not implemented due to the many changes in Govern- ment and conrsequent absence of continuity in Vialidad's management. Plarn- ning activity was not renewed until 1967 when Vialidad formulated an am- bitious Three-Year Plan (1968-1970), but iwrithout economic studies.

3.14 The Three--Year Plan provides for improvements to 16,800 km of roads of which 2g800 km were already under execution in 1967; its total cost from 1968 is estiiLaated at M$N 227 billion (US$650 million) and plamned expenditure levels are MMN 36 billion in 1968. 51 billion in 1969, 63 billion in 1970 and the balance of E$N 77 billion thereafter. Many of the roads contained in the Plbrn arpeAr to have lttle nonomic justification. In 1968 the execution of the Plan was accelerated and about 80% of the Plan roads are either under construiction or are ready for tender. This acceleration is causing considerable strain on Vialidad's executive capacity.

3.15 The annual investments on all highways are estimated to reach the level of M$N 82 billion (TJSw24 mlllior.) irn 1968 andmn N 103 hillion (US$294 million) by 1970. Although the highway system needs continuous Aprovemenrt along.ith- the general development of th-e mcon-....i.t avrall condition does not constitute a major bottleneck to road transport require- m,ents. For this reas-r, futre arn.ual highway investment should probably be considerably less than at present and the determination of road projects shov'dhA o-n, a muclc m.ore selpCti4T -a; fo-l, hP-1y fuly dtaled desi gns. - 10 -

3.16 A reccnnaissance study will be carried out under the project to identify the future investment needs of the primary road network; roads in the Three-Year Plan for which detailed engineering is not complete or which will not be contractDd under authority granted in the 1969 budget would be reviewed in this study. An assurance has been obtained from the Governmenat that its decision to execute these Plan roads will be deferred until after they have been evaluated in the study.

D. Highway Engineering

3.17 In the past, highway design standards were somewhat low but in 1967 they were changed (Table 8) and now tend to be too high. particularly in respect of pavement and shoulder widths for low traffic roads. While the need for strengthening or upgrading existing roadway siirfaces is apparent, there is a tendency by Vialidad to provide heavier and more elaborate pavements than are necessary. Tn the last few years, not enough consideration has been given to optimizing investments by the application of stage construction principles, e.g the roa4a"aond arding pave- ment strength in later years as traffic warrants. These commnents apply to a number of the roads in the Three-Year Plan and to the original design o some roads included in the proposed project; the standards for these latter hlave been m,c;difiel 'para. L4.05).

3.18 Except where foreign ad-visory services have been required by external lenders, Vialidad has performed all engineering work (and construc- tion super-visionj with its own forces wiitrh the resulti thati the highway con- sulting profession in Argentina is at an early stage of development. Although ViClidad is able to deal with a limited highway program, it is not able to cope with the volume of project preparation work which is nai fore- seen. To overcome this problem and at the sane time to develop the local consulting profession, Vialidad intends to make maximum use of local con- sultants to fill the gap, at least for major new construction; however, as most of these firrns have had little experience with highway work, it is necessary that they associate themselves with foreign firms who would provide experienced guidance until local expertise (in engineering and economic studies) is developed. Drafting and photogrammetry equipment are also required to increase the output of Vialidad's present staff and provision for such equipment is made in the loan.

E. Highway Construction

3.19 Past shortages of funds delayed payments to contractors by up to 12 months. In such circumstances Vialidad had difficulty in enforcing con- struction schedules or specifications, and as a result the quality of construction was irregular and construction periods were often more than doubled. Field staff lacked authority to deal with routine construction problems and direction from Headquarters was inadequate. Since 1965, when the Bank established certain requirements as a condition for continuing - 11 -

the first highway project, and particularly since 1967, many improvements havne taken place, such as the provision of ad3equate fmuds: prompt pavments to contractors; modernizing of specificatvions; and attention to construc- tion schedu].es. These 4.proynnn.es ha-.nm ?sulcd.PA in theb morem rinrrms enforcement of c mntract coniditions. However, further improvement is

laboratories, and by engaging outside assistance to supplement Vialidad'

.L±LU.Lt.,| =1U9.L V.LG.J± QUO .VI S"U-L LD vLouculfi L Js vJ .s .-*. since the construction activity under the Three-Year Plan is placing severe

S L.UHill I 1 V.J.d±L±dLU VI±±11-l (.V.3LLU J.)JVJUUiLk.; WM1t .L'J. VALL.IJJ IllLQU .L A -. possibly the prcposed project roads. The Government has confirmed that Vialidad nas been given the authority to engage local firm,s or- pers;Onel to supplement its field staff.

3.20 The local construction industry is well developed and there are over 20 large highway construction firms able to handle road contracts ranging in value up to US$15 million equivalent per year; a iew OI these are locally operated subsidiaries of large international firms. At pre- sent, only Argentine firms participate in bidding for construction work. Foreign contractors have worked in Argentina, but inflation coupled with poor contract administration and uncertainty of payments discouraged them from bidding in recent years. However, renewed foreign interest is expected for the road works in the proposed project. 3.21 Highway construction is carried out under unit price contracts let after competitive bidding. The Bank has agreed to the request of the Government that for contracts under the loan, post-bidding qualification of contractors be used rather than pre-bidding qualification. The Govern- ment agreed that a minimum period of 60 days be allowed for bidding; that Vialidad's normal guarantee for performance of work (bank guarantee) be increased from 5% to 10%; and that Vialidad's detailed construction cost estimates not be macle available to bidders.

F. Highway Maintenance 3.22 The quality of maintenance work on national roads continues to be satisfartory due largelv to the effective use of maintenance equipment pro- cured under the first project. The organization is basically sound. Field crews and shops are. wl organized and eouinment properly maintained. Equip- ment holdings are valued at around US$25 to US$30 million equivalent and are adequates for the near future, excent for normal replacements and for additions to account for traffic growth. There is no immediate need for ircreasing maintenan 1rgl1lee^els b u nce t.he roads i n the Three-Year Plan have been improved, the requirements for their maintenance will be reduced for se-veral years. The aTerage expend-ture per Ikm of the national network; including equipment, is about US$600 equivalent, which is adequate. Assur- ances have been obtai:,ed from the4-"-G-oernmen that all national high.ways, - 12 - maintenance shops and equipment (including the roads in the project) will continue to be operated, maintairned anrd repair-ed in accord-ance with soLund highway engineering practice.

3.23 Maintenance of the primary provincial roads in the more developed provinces such as Buenos Aires, Cordoba, Santa Fe Wnd 14Mdoz1a i9 satisfac tory hotever, it is less than satisfactory elsewhere. The highway reconnaissa-ace study, '"nventory and the establishment of a trfic coutg system, for which provision is made in the project (paras. 4.09 and 4.12), and the carry- ing out of the studies in 1970 related to the decentrualization of Valdad's activities (para. 3.06) should provide a basis for improving maintenance at all levels.

3.24 A system of detailed maintenance accounting was recently introduced in Vialidad to provide management with a tool for controlling and improving the efficiency of maintenance operations, and for planning future investment. Conceptually the system is sound but, as it is somewhat complicated and con- fusing to field staff, it is not fully operational. Consulting services to improve the system are provided for under the project (para. 4.13). 4. THE PROJECT

A. General :Description

4.01 The proposed project consists of:

(i) the upgrading and paving of about 796 km of three national highways, including consultUlng ser-vices for coLstruction supervision;

(ii) additional consulting and expert services to:

(a) identify a future highway investment program, and carry out feasibility studies and detailed engineer- :ing for selected road sections;

(b) improve the planning and administration of the highway network;

(c) advise on transport coordination; and

(iii) misce:Llaneous equipment related to (ii) (a) and (b) above.

B. Highways to be Upgraded and Paved (Table 9, Maps 1, 3 and 4)

4.02 Route 7, Laboulaye-Mercedes (203 km) (Maps 1 and 3): The construc.- tion of this section (at present only a lao standard earth road) will follow the present alignment for the most part and complete a shorter paved con- nection between Buenos Aires. Iendoza and Chile (see Map 3). A remaining 165 km section o:e road (not included in the project) is now being constructed by contract with Government funds and should be completed to the same standards in early 1970. It is expected that when the new route is opened a substantial amount of traffic wi:Ll divert imediatelv from Route 8. the lon er alternate. Route 7 has been designed to Class II standards (Table 8) and will receive a 7.30 m wide asphaltic concrete navement: this desien is acceptable.

40,4 Route ' and Route 2<1 Sections (Mans 1 and k)A San Antonio Oeste- Arroyo Verde (169 km), Uzcudum-Canadon Ferrais (222 kmj, Intersection Rouite 22 - S-n Antnmio 0este (202 km.): Ro1te 3 is the principal artery of the country from Buenos Aires to Tierra del Fuego and the activities in, and nenl+nil+,-atin of, the oiutherr. provinces n&- nhaviltr depennrden+. on havna a-n .. ion of - - -- _ all-weather road. As traffic volumes are low in the south, Vialidad adopted Class III de-i., stl-dard- (Table 8) from Bahia Blar.ca sout ards. I le these standards call for a total 13.30 m roadway width, comprising a 7.30 m bit,minous surface treatm44ent plUs3,.00 am shoulders, Via'idad reduced the surface treatment to 6.70 m due to low traffic volumes, but maintainedl UlleI I.3m roadway -Lwdth. Ihe on'y gaps in paved saracinl b San Antonio-Oeste and Commodoro Rivadavia (a principal oil producing center) are thie sectioLrns San Antonio Oeste-Arroyo Verdue and Uzcudum-udCanaudon Ferrais; the improvement of these sections together with Route 251, as described be'low, would complete a paved route throughout. - 14 -

4.04 At present Route 251 is a poorly aligned earth road parallel to Route 3 (Map 3). A new alignment has been designed to Class III design standards. A bridge to replace a ferry at about the mid-point of' Route 251 (not included in the project) is under construction by contract with Government fumds and should be opened to traffic early in 1969. It is expected tha-t most of the Route 3 long distance traffic will be diverted to Route 251 when this road is improved. As a result of this diversion. the parallel Route 3 section will become a secondary road serving only local traffic.

4.05 The final engineering of the Route 3 and Route 2',1 sections has been completed and is satisfactory. The proposed 6.70 m triple bituminous surface treatment for these sections i9 annrcnriate ho,wver; the pronospei shoulder width (3.30 m) was excessive in relation to traffic requirements (about ADT 250 i-n 1970)' nnd a 1)5 m wrnithh has nrT bhen ad^rnpted bh Vi-l1idadi (para. 3.17). The quantity and cost estimates have been adjusted according- ly and are t±xcry.

4-06 The following summarizes the costs of +he construction program included in the project (para. 4.16):

Basic Cost VS - __&- 1 / October 1968

IJS$ 1'o ad SctionC4n lul r equiv. (bill.) (mill.)

Route 7 - Laboulaye-Mercedes 203 5.05 14.4

Route 251 - Junction Route 22- San Antonio Oeste 202 2.45 7.0

Route 3 - San Antonio Oeste-ArroyoTE _ | n AVerde A I . tt s A/ AA1oy1/| .1.74A >.U

'uzcudum-Canadon Ferrais 222 3.0 8.8

Subtotal 796 12.32 35.2

Quantity contingencies (about 10%) 1.23 3.5

TOTAL 13.55 38.7

1/ Excludes contingencies for price escalation which is given in para. 4.21. The estimates also exclude the costs of land acquisition which have a]ready been borne entirely by the Government. - 15 -

4.07 Con-riultirng 'Oer-r-ces 'or lonsltructlion SuperwJlsion: AdvisoYny ser- vices for the construction supervision of the project roads would be re- quired to augment Vialidadis limited staff (para. 3.19). Simlar servce.s provided by TAM4S (US) under the first highway project were satisfactory and Vialidad has concluded a contract with TAIVIS to coniLnue this arrangement.

C. Additional Consulting and Expert Services

Future Investment Program, Feasibility Studies and Detailed Engineering

4.o8 With a view to preparing further highway projects which may be suitable for Bank financing, Vialidad proposed pre-investment studies for 4,600 km of roads. However, while most of the road sections included need some form of improvement, on the basis of available information many of them appear to involve excessive investments in relation to benefits from existing and likely future traffic and to lack priority in terms of the country's overall needs. In addition the h,600 km were limited to the national highway network and did not include important provincial primary roads.

4.09 The project makes provision for the identification of a future highway program and pre-investment studies as follows:

(:L) a reconnaissance study to screen the country's 137,000 km of national and provincial primary networks and to identify roads having high priority for improvement or constructioni. The studv would provide sufficient information on the tech- nical characteristics and economic justification of all maior highway investment projects to enable the Government to establish priorities and subsequently to define a national highway plan for the period 1971-1975 with an indication of annual levels of expenditure;

(ii) feasibility studies of about 2,500 km of highl priority roads selected in consultation with the Bank from (i); and

(iii) detailed engineering of approximately 2,000 km of prior- ity rna-ds selected in crnsml-tation with the Bank. Assum- ing costs of about US$50,000 per km, the total construc- tion cost of the-se roads vrollld be about US$100 million equivalent.

4.10 About four specialists from a foreign consulting firm working with an equal nmnber of Argentine sei1ts will be recuired for the reconnaissance stucd which would last about seven months. The feasibi- lity studies and +he detailed engineering parts will require about six months each to carry out and together would involve about 400 man-months of special:Lst work. Vialidad has contracted TMAiS to carry olut the reconnaissance study and later to coordinate the feasibility and detailed engineering work which would be undertaken by about four Argentine firms in parltnershlip with other foreign firms; the coordination work wIould require about 70 man--months of specialists' time. The reconnaissance studly will initially focus on trhe econoriu priorities of the road investmuentS i the Three-Year Plan which are not yet conmritted(para. 3.16). The recon- naissance stuldy will be financed entirely by the Go-vern-ment.

Planning and Administration

4.11 The provisions described below are included in the project to as- sist Vialidad in strengthening its planning and administration of the highi- way network (para. 3.06); these provisions are to be financed entirely by the Government.

4.12 Highway Inventory and Traffic Counting System: The existing inven- tories of and traffic counts for the national and provincial primary netwoks, particularly the latter, are inadequate for highway planning purposes (paras. 3.01 and 3.03). To improve this situation up to eight specialists would be provided for varying times during a 24-month period to assist Vialidad in (a) carrving out an inventory of the primary networks (some 137,000 km), (b) devising and initially operating a detailed traffic counting system for the primary networks, including origin and destination studies, and (c) in training its staff which would take over the operation of (a) and (b). Unllike the reconnaissance study (para. 4.09), the inventory would not examine in-vest- ment requirements but would examine in detail the full lengthl of primary net- works for their quality and characteristics, with emphasis given to maintenance requirements, organization and the administrative aspects of managing the networks. Vialidad has requested the U.S. Bureau of Public Roads (BPR) to pro- vide specialists for the above tasks; the provision of services in this manner would be satisfactory and is under consideration by BPR. Should BPR be unable to supply them, they will be provided by a suitable foreign consulting firm.

4.13 Cost Accounting: While accounting now meets Government's fiscal accounting requirements, the establishment of an efficient internal costing system for maintenance (as described in para. 3.2h) and construction is urgently required. Vialidad lacks the expertise to formulate such a system which is essential for cost control, programming, forecasting expenditures, and in preparing cost estimates. Vialidad contracted a group of Argentine management experts to study its accounting methods. the report of the study and its detailed recommendations should be available in July 1969.

Transport Coordination

4.14 As described in para. 2.09 and Annex 2, the project provides for two transport specialists to assist the Ministry of Transport in transport coordination matters. Such assistance is to be given over a period of two years. The arrangements for the emplovment of these experts was discussed during negotiations, and the Bank is expecting the Government's confirmation of them shortlyv - 17 -

D. Miscellanieous Equipment

4.15 If the improvements in administration, -.-lanning and. pre-paration of highway projects are to be effective, certain equipment must be pur- chased. A detailed 'List of the reauirements will be worked out by Vialidad in collaboration with the coordinating consultants for the pre-investment studies! howmver. it is estimated that US$500.000 equivalent would cover the needs. An allowance in this amount has been made in the proposed loan. The equipment wouilAd conmprise such items as scales to cnntrol vehiclt weights (para. 3.08), field laboratory equipment (para. 3.19); highway inventory item.s, traffi-c cominters, speed detectors (para. 3-05); nnd drafting and photogrammetry equipment (para. 3.18).

E. Cost Est:imetes and Financing

4.16 The total cost of the project is estimated at US$50 million equ:Lv- a L Dn, .L.A .LUCLJ.J..L.contiW.ngency allowances 1=-AVtJ,4e c.s t ofLJ. tuL cou'tinIJ6s dUe.rcseUc. which the Government has decided to finance entirely with its own funds for

WIU etrI.LU L_i:; U IOUiUy, LL4IlWay LVeIIUIIty cUdLL UiJc.L.LU %LAVLU L±UVn ssiIll, costu accounting, and transport coordination (paras. 4.10 and 4.11). A summary of uth pruojeu andL ithenanK!s p LU4IJt.UIon $'olluws aid is alsoU giLver ii detail in Table 10.

N$N (billions) US$ (millions) % Bank Govt Bank Total Govt Bank Total Prci-.c'

1. Construction of 7(96' im of- highways. 6.16 6.16 12.32 17.60 17.60 35.20 '50 2. Consulting services for supervi- sion of (1) above 0.14 0.21 0.35 0.40 0.60 1.00 60 3. AdditionaL consulting and expert services for:et (a) highway recowiaissance study 0.14 - 0.14 0.40 - 0.40 0 (b) execu-tion and coordination of highway feasibility studies & detailed engineering 0.70 1.05 1.75 2.00 3.00 5.oo 60 (c) improvement of planning and administration of the high- way network 0.35 - 0.35 1.00 - 1.00 0 (d) transport coordination 0.07 - 0.07 0.20 - 0.20 0 4. Equipment related to (2) and (3)(b)(c) above, and weighing scales - 0.17 0.17 - 0.50 0.50 100 Subtotals 7.5 7.59 15.15 21.60 21.70 43.30

Contingencies, 15% rounded (10% for cuantities, 5% for prices)1.19 1.16 2.35 3.40 3.30 6.70

Totals 8.75 8.75 17.50 25.00 25.00 50.00

*is the prerequisites for the execution of (b) are the timely completion of (a) and the conculrrent execution of the services for (c) and (d), Items (a), (c) and (d) are considered to be an integral part of the project. - 18 -

4.17 The construction cost estimate is based on October 1968 estimates (TLable, i7). -5U.i -usdU fur this es atime were taken froma detailed engineer- ing studies (adjusted for shoulder width reductions) and unit prices from cont'racts recently awarded to domestic contractors for similar works, and reviewed by Vialidadts consultants (TAMS); the estimates, including contingen- cies (see para. 4.21), are considered to be satisfactory.

4.10 Tne total costs of consulting services for items 2 and 3(a) are based on concluded contracts (paras. 4.07 and 4.10). The costs of the remain- ing consulting and expert services have been estimated on the probable number of man-months required applying average local and foreign man-month rates. For item 4 the estimate representing the foreign exchange cost of imported equipment (CIF) is based on a preliminary list of equipment requirements.

4.19 The foreign exchange cost of the consulting services for item 3(b) could vary widely depending upon whether the services were given by foreign consulting firms alone or in combination with Argentine firms. In view of the probable substantial participation by local consulting firms and in order that the financing arrangements should not affect the choice of firms, it is p:ro- posed to finance the cost of suitably qualified Argentine consultants in the same proportion as would have been the case had foreign consultants been employed. Experience with the first highway project and other countries about equal to Argentina's level of technical development suggests that 6O% would be a representative figure for services provided by a foreign consulting firm. This percentage has been applied to determine the Bank's contribution.

4.20 The consultants' estimate of the foreign exchanLe comnonent of construction costs, as adjusted by Bank staff, is about 30% if all work was carried out by local contractors qnd about. liq if all work t.was rtarried niot. by foreign contractors. Assuming that one-third of all the work goes to foreign contrPctors (npra. 3.20)- the foreign exchange co.mponent w.Touild be 35%. The loan would finance this component and a portion of the local currency cost representing 15I%of total constructi on c-%osth; s tth.e Bltk ' l f 501% of such total cost.

4.21 As the project costs have been based on fully verified constructiort Mllo.nvnce~ rmai.rti+y-J- cstn!.Jrsn o-_,n. - - - -fVL- --*%l - of1n,V I UJfl has-S4L be1JX en & ,,AA.1r-le x. .. wrLfo- tfl.Lunoreseen -J qu-tit;+,.4t&04SC 'j. increases. A 5% allowance for price contingencies has been provided for loca ad f ; cost. 4,ncreases betUween1 'ale of estZ IJ1 A. J1on I4.(October I 4, and the award of contracts, and during the course of the project.

4.22 In summary it is proposed that the Bank participate in the project ins the followring m=anner:

(a) fifty percent of construction costs;

(b) s ixty percent of the cost of consulting services for supervision and for execution and coordination of high- way feasibility studies and detailed engineering; and

(c) the foreign exchange cost of equipment (CIF). 4.23 Construction is expected to commence in the third quarter of 1969 cund be copleted in the third quaurter ofI 971 consulting services for the feasibility and detailed engineering studies should be ccmpleted in the first quarter of I 971. n this basis, the tentative annual breakdown of ex- penditures between the Government and the Bank would be as follows:

Total N$N (billion) US$ Equiv. (mill.) 'vk- -uS$ Equlv. Govt. Bank Govt. Bank (billion) (million) Share Share Share Share 1969 1.1 3.1 0.6 0.5 1.8 1.3

1970 9.3 26.5 4.6 4.7 13.1 13.4

1971 7.1 20.4 3.5 3.6 10.1 10.3

Totals 17.5 50.0 8.7 8.8 25.0 25.0

Any surplus funds remaining in the Loan Account on completion of the project should be cancelled.

F. Execution of the Project

4.24 The loan would be to the Government of Argentina and the executing agency would be the National Highway Department (Vialidad) assisted by quali- fied consultants under terms and conditions satisfactory to the Bank as described above. The project construction contracts would be let on the basis of unii, prices after international comoetitive bidding and in accorcl- ance with the B-ank's established bidding procedures. The value of indivi-- dual contracts would range from UlS$1 5 million equ-ivalent to TTS$2i6 million equivalent. In order to attract foreign bidders but at the same time enable local cntracntors to bid for works of a size appropriate to their capabill- ties, the Govrernment agreed to group the individual works into packages of 2 to 4 contracts. Each npckage wnuld 'hid h simil1tq-^onii1v and hids wouldc be allcot*ed for any or all works in the group (Table 9). The packages woul]d r,nge in value frnm US$4.0 to TTSt77;milliaon equiinTrn1P.

2 TPA. .. ;1ill -odrlde the -cso- rv--- for c- Q r-o-Q on -

-_ -_ K-- _ -_ w - _V1- v fi i -Z VX1"_ - - SJ_ V- sion of the project roads (para. 4.07), the execution of the reconnaissance st+iirdr (mny. 4.10)I1' d subseq-P c4or a- ,s4yof h f std.es and detailed engineering work to be carried out by other consultants. The ,,rits V.. of qWLJ..MIJ.s4propo sa.l ar.ehaU (.i) Vi 'ida.LdL" s aw mLIstine worklo, --A related to consultant. employment would be kept to a minimum; (ii) TAMS ha< IAILLkVUU V.J4 V.L.L.J.LUCLLL CL±t." ±0 Ajt:%&JJU1 IU1t-U ±U1± t LJi~~LUL±I dUIly (iii) their employment permits the prompt starting of a number of urgent iLtUt.: .llz< The hWas1ad; grveedutU hisj prupuoal. incu arranger-MenUs ur uontiu±U- ing services in respect of the feasibility and detailed engineering studies -wi-ll be finalized when tne scope oI work is estaD'lisned during the recon- naissance stutdy (para. 4.09). The arrangements for consulting and expert ser-vices for uuu impro-verrnt Of highway pianning (paras. h.12 and L4.13) - 20 - were discussed during negotiations and have been confirmed by the Government. h.26 The benefib of all the various consulting and expert services which are being provided under this loan will not be fully realized unless a sufficient number of counterparts are assigned to key subjects. The Gov- ernment has agreed to assign counterparts accordingly.

L.27 As most of the equipment to be financed from the loan consist of small numbers of highly specialized equipment of relatively low cost, it is proposed that individual items or groups of similar items whose cost does not exceed US$10,000 equivalent should be procured on the basis of limited local bidding. The remaining items would be purchased following the Bank's normal international competitive bidding requirements. - 21 -

f- rnThTC1M7( tT1'TTAT~T -TA-r?N

-,.* ifUV14 VJ±lL 1, fP,VI .jA J.IIV \

,,. T-+ro-4uc:4j-o

.. J. 1LLtIIAU. j.JJ U I) J_4,L.LA%A4- U111: U.V-61 "UJU46A V..n 'SL4 '- '-5- -1 -'* -..' - national roads. These are Route 7, which connects Buenos Aires with the .-esce ntr a. provne up t Menoza aril Ihe Cle an ronir dRue 3 and 251 which ccnnect Buenos Aires with the southern provinces. The quantifiXable benefits produced by the project road c istructon comsprise (i) reduction in vehicle operating costs due to road upgrading; (ii) traf- -Li iUduced by these reduct(ioub; (ili) reductions in journiey cost as a result of savings in distance; (iv) savings in maintenance costs; and (v) decongestion benefits for traffic remaining on those routes from, which some diversion uill take place to the project roads once they are upgraded. Details concerning the benefit calculations for the project road sections are given irn Annex 3.

B. Route 7, Laboulaye-M"Iercedes Section (flap 3)

5.02 The zcne of influence of Route 7 ccntains about 137,000 km2 west of Buenos Aires in the privinces of Santa Fe, Cordoba, San Luis, San Juan and Mendoza. The 1967 population of the zone was 1.9 million, of which about one-third was in seven principal urban centers. The soil, topography and temperate climate of the eastern part of the zone are favorable for cattle raising and for agriculture and permit good yields of grain. The area contains about 2.6 million cattle (6S' of the country's total) and 1.3 mil- lion sheep. In the area of Mendoza, with the help of irrigation, many Icinds of fruit are grows7n, the most important of which are grapes (229,000 hectares of vineyards are under cultivation). Practically all the produc- tion of wine, fruit and preserves is transported to Buenos Aires, mostly by road. Mendoza has proven oil reserves of 120 million m3 and an annual production cf 5.4 million m3 . Other minerals extracted are lead, vanadium, wolfram, zinc, copper and uranium.

5.03 A well established pattern of traffic allocation exists on the parallel road and rail routes in the corridor between Ruenos Aires and Mercedes (H4ap 3). Although the prcposed upgrading of Route 7 to paved standards will reduce the distance between Buenos Aires and i-lendoza and cities further west by 36 kim, this pattern is unlikely to clhange; however, this reduction would attract users from Route 8 to Route 7. As a result of this diversion, the induction of new traffic and allowing for normal growth, 1971 openin&- year ADT will total about 730 vehicles compared with a 1967 ADT of about 250. The rate of return on the proposed investment is 13%.

C. The Route R and Route 251 Sections (Map l4)

5.0)i These sertions totalling 591 km in length are:

(i) Route 3 (169 lin)j Sqn Antonio OestP-Arrnvo VPrde! (ii) Route 3 (222 km), Uzcudum-Canadon Ferrais; (iii) Roue 251 (202 kn), Ttersecton Route 22-S-n Antnrio 0est ^ - 22 - Tle last section, once upgraded, will become a substitute for a part of the present, Ronuni 3 and is, thrfnrT . nconsirderer together with the other two= All the three sections form part of the ccun try's chief link with its sout1hern nrovinces, a link with a total length of 3,100 km from Buenos Aires to Ti.erra del Fuego.

5.05 The scuthern provinces of Rio Negro, Chubut and Santa Cruz (together krnown as Pat;agonia) have an area of 672,000n (23, of the national total), but a 1967 population of only 450,000 (about 20 of the country's total). The terrain is fllat with sparse vegetation. The climate is semi arid to desert and comes under the influence of Antarctic iwinds. Farming is limited to t r . of a,'ou U oIJUUU Une-thir of thewit: UUI11±ty 49 miL±±ullo sh1tep. ouiUy to fifty thousand tons of wool are produced annually and shipped north tc,

5.C6Patagonl5a's mOst important resources are minerals, of which oil is the most prominent. Proven oil deposits amount to about 500 million tons and anuaal producti -lonhas reached 8.5 mlli-on tons in Chubut ana Santa uruz. There are also coal deposits estimated at L[O million tons and an annual production Of about 400,000 tons. The oil and coal are transported either by pipeline or by coastal shipping and hence do not directly demand road transport, bLut as a result of these activities a number of oil and mining tow-rns have sprung up mainly along the coast, the largest of which are Comodoro Rivadavia (population 17,000), Rio Gallegos (21,400) and Trellew (17,000). These towns are almost totally dependent on the north for food and other consumer goods, as are mines and oil wells for their supplies. Although there are a number of minor ports along the Patagonian coastline, they can- not operate with the flexibility required for general cargo in small volumes. Route 3, therefore, constitutes the transport lifeline of Patagonia.

5.07 The benefits produced by the upgrading of the three project road sections are (i) reductions in vehicle operating costs, and (ii) savings in road maintenance costs. In the case of Route 251, there are additional benefits due to the shlortening of distances and induced traffic. Route 251 parallels Route 3, but is 54 km shorter; when upgraded, the present long haul traffic on the parallel Route 3 section will be diverted to Route 251. A recent origin-and-destination survey shows that based on 1967 ADT's the traffic so diverted will total 65 vehicles, consisting of 38 heavy trucks, 10 medium truclks and 17 light vehicles. The 1971 opening year ADT will total 300 vehicles compared to a 1967 ADT of about 125.

5.08 The following rates of return have been arrived at for the project road sections:

(i) Intersection Route 22-San Antonio Oeste yz' (ii) San Antonio Oeste-Arroyo Verde i14 (iii) Uzcudum-Canadon Ferrais 10%

These rates nf return are hbasr on the modifif 2ti on of the design standards described in para. 4.05. - 23 -

6. T. r11M A m-r nivreC

Li. nEU2UUYVir'ITh -1L.L UIIJ.

6.01 During negotiaticns agreement was reached with the Government on the follow-ing principal points:

(i) The appointment of consultants for project construction supervision and the highway reconnaissance study (para. 4.-25%';

(i:i) the importance of evaluating the economic merits of road construction plans and that due account will be taken of these merits in the formulation of such plans (para. 3.12).

6.02 V:Lalidad has also written to the Bank stating its policies with respect to:

(C) the intended decentralization which will lead ultimately to a transfer of its highway functions to the provinces (para. 3.04);

(ii) the employment of consultants and experts for the super- vision of the works of the Three-Year Plan (para. 3.18);

(iii) the employment of experts to assist Vialidad in making a highway inventory and devising a traffic counting sys- tem (para. h.12);

(iv) the employment of experts to study and make recommenda- tions on its accounting methods (para. h.13):

6.03 The Bank is awaiting the Government's oonfirmation that it wilL employ experts to assist in transport coordination matters (para. U.14).

6.ob The project is technically sound and economically justified. It constitutes a suitable basis for a Bank loan of US$25 million ecuivalent. On the basis of the economic life of the project highways, an appropriate term would be 2q years. includinpg a foulr-year perinod of gracp.

June 10, 1969 ARGENTINA

SECOND HIOlWAY PROJECT

Freigit Traffic By Modes of Transport 1950-66

(millions of ton km)

Coastal River Pipe Year Total Highways Railways Shipping Transport Line io50 29 -0h 7 j652 A16;20 5.189 93 1-51H 32,049 8,67 16,479 6,812 151 1952 32,094 8,212 15,256 8,434 192 1953 33,5'5 9,681 15,016 8,597 248 1954 34,183 9,468 15,197 9,234 284 1955 35,129 9,502 15,392 9,941 294 i956 10135,91810,01 u,870 ,920 3,719 318 1957 35,662 10,263 14,367 6,481 3,720 831 1958 37,999 11,346 13,835 8,339 3,670 809 1959 40,723 1,411 15,530 8,974 3,798 1,010 1960 47,084 14,216 15,188 11,437 4,135 2,108 1961 56,048 17,645 14,014 16,232 4,624 3,533 1962 57,988 19,613 10,959 17,927 4,898 4,591 1963 56,707 19,406 10,695 17,439 4,623 4,544 1964 62.897 20.618 12,560 20,102 5,221 4,396 1965 70,488 23,532 14,186 19,945 5,153 7,672 1966 69,499 23,169 13,798 19,917 5,579 7,036

Source: Ministry of Econcmy

March 21, 1969 ARGENTINA

SEROND HITSAY PROJECT

Incidence o0 User Charges On Vehicle Operating Costs

(in 1968 M$N per vehicle kilcmeter)

6.5-Ton Capacity Freiegt 20-Ton Capacity Truck ard Typical Passenger Car Vehicle Trailer Combina.tion (Gasoline Super) (Gasoline) (Diesel)

With Tax W/o Tax %Tax With Tax W/o Tax %Tax With Tax W/o Taw %Tax Fuel 2.06 1.03 50% 6.6 3 .32 3.09 7%

Lubricants .09 .08- 11% .30 .25 17% .96 .81 16%

Tire .92 .59 36% 5.61 4.09 27% 11.01 8.10 26%

Depreciation 5.10 4.59 10%'/ 8.83 7.95 10% 15.99 14.40 10.

Interest 3.15 2.84 10% V 4.42 3.98 10% 5.91 5.32 :LO

Maintenance (Parts) :1.64 1.48 10o% 7.80 7.01 10% 10.34 9.31 10%

Maintenance (Labor) .34 .34 - 1.2 1.24 - 1.70 1.70 -

Crew W'ages - - - 4.-5 4 45 - 12.01 12.01 -

Insurance 1.46 1.46 - 1.78 1.78 - 2.06 2.06 -

Overheads - - 1.34 1.34 - 2.40 2.40 -

License .67 - 10(% .33 - loo0 .10 - 100%

Total Vehicles 15.43 12.4L 19i 42.78 35.43 17% 65.88 59.20 10%

1/ The actual tax rate is 25%, the difference being identified as the "general taxation component."

Source: Ministry of Economy

AarcfL 21, 1969 TABLE 3

ARGENTINA

SECOND HIGHWAY PROJECT

Revenues From Principal User Taxes

(in billions of 1968 M$N)

Petrol Tires Transfer Emergency Total and Lubricants Tax Tax

1962 10.3 1.8 1.7 13.8_

1963 20.i. 1 . I

J2%014 214.1I.1 .0 = 3

196, 214 .h h.3 6.2 - 3h.9

106 3 6.7 82.6

1967 55 1 . 6.9 0. - 70.L

1968 82.0 20. 6.5 - 109.0* (142.0)-

Source: Ministry of Economy. *1he difference between the 1968 M$N 142 billion figure appearing in pa-a 3.09 of the main text and the 109.0 billion figure that appears in the table is accounted for by license charges for 1963 of MSiN 1.3 bill.ion an, ta:ces on the production of vehicles of AMSN 15 billion.

^larch ?i, 1969 JiXGNTP4A

SECOND HIGHWAY PROJECT

Federal and Provincial Government Hihway Expenditures 1963-1968 / (in millions of 1968 M$N)

1963 1964 1965 1966 1967 1i6bd- A. C ent nse 4,017 5,083 5,1372 Govermeent 1,179 1,894 2,h01 1. Administration Federal 9,650 Gover-nent 2.593 3.7B3 5,377 7,5 43 8.721 2. Administration Provincial 11,560 13,80i 155,4 Total Administration 3,552 5,6i 7,77S i,943 3,066 3,572 5,811 7,736 8,076 3. Maintenance Federal Administration 8,931 15,425 Administration 2,234 3,062 5,74. 7,873 h. Maintenance Provincial 865 2,281 3,600 Purchases (Federal Govermnent) 530 1,050 780 5. Equipment 10.093 11,459 18,948 27,fi Total N(aintenane 4__707 7_176 2, 95 17,671 26,10C9 32.752 4 2,62 UotalCurrernt Exp-ense a ,74 1

1. Construction 8,241 6,626 10,084 17,321 40,532 National Highway Syste2/ 6,956 3,061 4,6o 5.579 6.231 9,708 21,497 Provincial Primary System 8,791 10,413 13,500 Provincial Roads 421 1,995 3,511 Other 2,877 4,231 5,003 6,050 Federal Access Roads & Miscellaneous3/ 1,595 2,962 16,593 2,34 14*4 D - 7 n 12,033 17,556 Total Cons=ructi 36,46b 55,449 75,195 124, Zt Total Expernditures 20512 30,411

Paents being goverenent expenditures are on a cSah basis, deferred 1/ Federal are budge_ted f"guares registered as they appear. Provincial government expenditure^ on investments executed 2/ There is an outstanding debt of 3.5-4.0 billion pesos during this period where pqmtent has been deferred. 3/ Federal goverrnment share only. / Estimates only.

June 10, 1969 TABLE 5

ARGENTINA

SECOND HIGHWAY PROJECT

Cozmposition of the HighwyMNetworks (Kilameters)

A. National Network (Primary Trunk Roads) 1/

Portland Cement Bituminous Gravel or or Asphaltic Surface Stabilized Earth Year Concrete 2/ Treatment Base Earth Tracks Totals

1961 4,730 6,851 8,006 20,867 6,1142 46,596

1962 4,810 6,973 8,278 20,400 6,1112 46,603

1963 4,973 7,59:L 7,869 19,513 6,0(7 45,953

1964 4,973 7,547 7,869 19,439 6,0(7 45,835

1965 6,10 8,563 8,819 17,339 5,0143 45,868

1966 6,104 8,563 8,819 17,339 5,0143 45,868

1967 6,061 10,313 9,414 15,038 4,6:L5 45,Lh1

1968 (Jan.) 6,500 11,792 7,957 15,223 4,395 45,867

9. Provincial Network avs. ~or Stabilizcce Earth Paved Base Earth Tracks Totals

196o- rrimary 9,100 1.0,100 37,500 314,100 91j100

±66 oSecondary 800,000 -800,000 and Tertiary

to J .ny reducton ln totLal h of-ent ne-ok or type of road- pared tot.qls for previous years is due to improvement which shortened length anti/or upgrading which shifted the affected roads to a higher category. 2/ Less than 200 Icn are 4-lane highways; all other roads in network are two-lanes, except for tracks VIhich are one-lane. 3/ No earlier data available / No data available; estimate is approxf-riate d these corprise earth roads and tracks.

Source: Vialidad

June 10 1969 TABLE t6

ARGENTINA

SECOND HIGHWAY PROJECT

Vehicle Registration (in '000's)

Private Vehicles Buses Trucks Trailers Total

1960 1473.5 14.? 377.7 38.3 903.8 1961~ ~ ~~~~qh.9 1Lh.2 h23.6 41.7 i,oil.4 1962 624.3 15.6 470.O h5.9 1,1L55.8 ]963 696.8 16.8 502.6 L8.6 1.2614.8 1964 805.7 19.1 55365 53.2 1,431.5 1,65 91h.6 1. 8 ~ 55653h l$L¶.O 1966 1,030.5 21.7 602.6 62.7 1,717.5 1967 1,0n1. 22017__ 6L1~. 1.78q.B

fl row1, . .. RaYCJ

1lfl6j-19C,7 12 6. 7.3 7.7 10 2 -i7U'J L7'Jf 6.8 1 1964 1967 10.3 6.0 3.7 6.5 7.7

Source: V-iaaiadad

iarch 21., 1969 TABLE 7

ARGENTINA

SECOND HIGHFAY PROJECT

Fuel Consumption

A. National Totals

in '000 cubic meters Petrol (2 i.lI tal

1960 2P-97JI 02R1.8 3 F7R A 1961 3,119.9 1,550.4 4,670.3 1952 34)37.0 1,920.9 5,3577 * 1963 3,337.3 2,073.2 5,410.2 I _ 79A A 9 CAO '7 A ' 2c 1965 4,124.7 2,751.2 6,875.9 1966 tS,362.h 29,851.3 7,213.7 1967 4,738.6 3,145.0 7,883.6

Growjt.h RAtesn(%)l 1 06Ot- 047 -1iri1467

National Totals all fuels 10.7 8.1 petrol 9.0 8.3 gas oil) 13 7.8

'ource: Vialidad

June 10, 1969 TABLE 8

ARGEN7TINA

SECOND HIGHIAY PROJECT

Desiszn Standards for National Roads, ------Class of Highway------2 III IV v Design 5,000- 1,500- 500- 150- ADT 1j.000 1.500 500 <15

Desi-n Sneed. flat 130 120 110 100 90 km/ih rolling 110 100 90 70 50 moirntninourn 80 70 60 J1n 30

1 3 l4ini.m.ntim nr17flflt2nt.al

,iaxinim n G-rade, flat 3 3 6 A6 rolling 5 5 6 7 8 mounta-n Ous 6 7 7

Sight Risnc-fat U6. 1RA 220 n 1i Stoppin7, m roll-ing 185 160 135 9u 60 n7.ountanousl11 °O 75 30'5

Q-ign4 for ft 41s4arc PAn 80n0 1.n 6B0 6Lo

Passing, m rolling 740 680 610 470 330 moun ,n in Ou>_- el.n Innr I .nn nt)4n ion

^ ^ 121Lw Eiti];il11; (ts | d 4tItLit { * v4u 14 1 v v u cuv L .v 'Pavem.-,-U-t4A~ CPI.447 rt r jfln C -n .n £avctIicilLA tr,..LU I, zi .L.J-La *)J.L 7 f .)Uv U. (U U rolling 7.50 7.30 6.70 6.70 6.oo 70-' rxnn u n6 6. '70, 'r.7 6 .n UIUWIjdJU~~iU I.uu U. V . U. (U u. vu

Shoulder Width, m flat 3.00 3.00 3 .303.50 rolling 3.00 3.00 3.30 3.30 1.50 mut 4 : 2 f n An, , n,1) I nA, I MI IILnJjjlaJ..i..Lvu,O J)aVV Cot/U IU . C).V _L. VU Width of Bridges Structures 10 m long or less: total width equals pave- ment width plus shoulders. Structures more than 10 m long: 8.30 m Notes

1T/ c: -.n,nwAay-i TmCr-o sdnn+oalr 4 n 1 CA? fl.v4Ac,ae nenaA4., -P A-1,n' 1,.. _~zc _ ' _'_ _ -'S I -L 5- - .L J German standards "DIN-1075$" as modified and set forth in the Vialidad stanclard design mrnual (in use in 968) ernti+led Ima.ses pa a elCalculo de Puentes de Hormigon Armado." Pavement design is based on a 12,000 lb. wheel load eqnivalent.

2/ The iRoute 7 section included in the project' is designed to these standards and wrill receive an asphaltic concrete pavement.

3/ The Route 3 and 251 sections included in the project are designed to these standards except t1hat the pavement and shoulder widths will not exceed 6.70 m and 1.50 m respectively; the pavement for these sections will be a triole bh Luminous surface treatment.

tJune 1u. 1'SI9 -CO.~~~~~~~~~~~~~~~~FAI-n"^ V.O0 1p A riaThjI'TM.T A D%T1f

Roadsm to Wu 'upgraded,~J~A.JL~AJLLLUflYYfA anduL A Cost%1LAJUSJ'J. mO'a%0tes0

NLo. o4 sivCss...... Ae Subsec- October i968 T --.t. tion 2--%/ -1;1N 'Jv7quiv (km: (billions)(mili

1. Route 7. Lab'ouiaye-Mercedes

T 1-^.'1 M vrn_ 07 7 0 7A 7 7 Mackenna-Border Cordoba/San Luis 68.2 2 1.68 4.8 Border Cordob t uTii4-l-- cedes ,7.0 _ A7 1.0

203.1~~~~~~~~n I 14.4

O D-4fi+A Oel T-,,--4-n 4 A_ no_1 A * San Antonio C)este 202.1 4 2.45 7.0

3. Route 3, San Antonio Oeste-

Au-royo Verud 16VU. I L.74f).

L.Route 3, Uzcud-UM,L-.lL,anadon FerisL.L

Uzcudu-MlLaEspina 1U04.2 1.j40 4.0 Malaspina-Carnadon Ferrais 117.9 3 1.68 4.8

Subtotal 222.1 3.08 8.8

Total ],2,3,4 796.0 12.32 35.2

Quantity contingencies (aoout iuj) Grand Total 1.23 3.5

13.55 38.7 Notes

1/ Excludes contingencies for price increases, which are given in para 4.21. They also exclude the cost oI iand acquisition which is borne entirely by the Government. 2/ To attract a wide interest from local and foreign contractors, most of tnEt sections would be divided into 2 to 4 parts for the purposes of international bidding and for each section suitably qualified contractors would have thei option of bidding on any or all subsections.

June 3, 1969 ARGENTINA

SECONi) HIGH1I4Y PROJECT

Project Cost Estinstes

L968 M$N (billions) Uts$ Equivalent (millions) 1969 1970 _ _ 1971_ Totala3 i of BaLnk [9t09 1970 1971 Totalo Item Govt. Bank Gcrt. Bank Govt. Bank Govt. Bank Total Participation Govc. Bank Govt. Bank Govt. Bank Govt. Bank Total

I. Upgrading of Routes 3, 7 anid 251 n! 5 .3O 3.1 3.19 '.66 2.66 6.16 6.16 12.32 W0 1.00 1.CO 9.D0 9.00 7.60 7.60 17.60 17.60 35.20

II. Consulting Services fcor S.'er-i 0.02 0.07 0.11 (.06 0.08 0.14 0.21 0.35 60 0.01 o.C6 0.'20 0.30 0.16 0.24 0.40 0.60 1.00 vision of I.

III. Additionlal CornsultinLj and IFPert Services for: A. Uden.Hti`-iTon of Futuar Road Prc- gram and Preirnvestment Studies 2/ (i) Highway - Recconnaissance Study 0.ah - - - - - 0.114 - 0.1h4 C 0.40 - - - - - 0.40 - 0.40 (ii) Feasi'bility Studies of up to 2,500 km of Roads Selected from. (i) above 1/ - - 0.17 0.25 - - 0.17 0.25 0.42 6t) - - 0.148 0.72 - - 0.48 0.72 1.20 (iii) Detailed En&ineering of uip to 2,000 km of Roads Selected from. (ii) above I! - - 0.28 0.42 t).21 0.31 0.49 0.73 1.22 6t) - - 0.Bo 1.20 0.60 ().90 1.40 2.10 3.50 iv) Coordiatiork of (i) and (ii) above .036 - - 0.08 0.12 0.04 0.06 0.12 0.18 0.30

Subtotal A 0.214 o.48 0.72 0.22 0.33 o.84 1.05 1.89 0.4(0 - 1.36 2.04 0.6h4 1.96 2.40 3.00 5.40

B. Improvemsent of' the P]annin and Administration of the Highwray Network Highway (i) Inventorl 1 amd Traffic Countinig System_ - - 0.17 - 0.11 - 0.28 - 0.28 C) - - 0.50 - 0.30 - 0.80 - 0.80 (ii) Cost Accounting 2/ 0.02 - 0.05 - - - 0.07 - 0.07 C) 0.05 - 0.15 - - - 0.20 - 0.20

Subtotal 0.02C 0.22 - t.11 - 0.35 - 0.35 0.05; - 0.65 - 0.30 - 1.00 - 1.00

C. Advice on Trarsport Coordination o.0l - 0.04 - O.Q2 - 0.07 - 0.07 ) 0.0 _ - 0.10 _ 0.05 _ 0.20 - 0.20

Subtotal III I17 0.74 0.72 0.35 0.33 1.26 1.05 2.31 0.50 - 2.11 2 0o4 0.99 0.96 3.60 3.00 6.60

IV. W ighLn; Scales and 21(iscell.aneous EquiDn it el cLtesd to 7I E) Rd lIII JTT[BTabove - 0.03 - 0.11 - 0.03 - 0.17 0.17 1Ot) - 0.10 - 0.30 - 0.10 - 0.50 o.50

V. Contingencies 0./10 0005 0.62 0.60 0.47 0.51 1.19 1.16 2.35 0.26 0.2_ 1.79 1.76 1.35 '.140 3.40 2-2 6.70

Total P-oject Cost o.63 o.45 4.58 4.69 1.54 3.61 8.75 8.75 17.50 1.80 1.3;0 13.10 13.40 10.10 10.30 25.00 25.00 50.00

Notes:

I/ A large amount of local consulting services -s to be urovided and it is recommended that the 3ank finance the cost of these services in the saine proportion as if they ))ad beeni provided by foreign firms alone. On this basis, Eank particip.ation toward the total cost of the items marked 1 has been taken at 60% (para. 14.19) 2/ Vialidad has decided to f'inance the erntire cost of these studies. > ' vUr;ir.ercyallv"rc ;*rabv-t 1> has'ee povi:ded- fc-, all :Itamz, as deszri-hpd in para. .2L'1' for quar.titic:a and/or unforeseen nieeds, and about 5% for prices).

June LO, 1969 Annex 1 Page 1 ARGENTINIA

SECOND HIGHWJAY PROJECT

The First Highway Project and Other External Assistance for Highways

1. The first 3ank hightiay loan (283-AR) of US,A48.5 million equiva:Lent rias made in June 1961 to finance the foreign exchange cost of improving 2,600 Ian of nationa:L 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 Fundi (UNSF) finnn_i g (UST520O0O equivalent),. the Bank acting as Executing Agency; the study was completed in early 1962 and the results pubLished as the Long Range Transportation Plan (TRTP)L

°. A njor r inve+ment program was undertaken in 19q5 after a dec- ade of limited activity in the highway sector. Although the National Highway Department's (Vialidlad) capacity to u.ndertake this program was limited when the Bank's first loan was made,there was good reason to believe that the A. 1._. DhIL, t-1-e "Irn lendrhi. Tpree-an i hncn in deficiencie; cou-lAd bbe overcom,e wilhtesrn edrsi rlriigi Vialidad at that time and the use of consultants. However, with a series of changes in Goveriment and Vialidad ageent begiing with 1962, the construction schedu:Le was not met and consultants were not used properly.. Road works scheduled for completion in two or three years took twice ltha time to complete at increased costs and with auestionable quality,and Vialidad.-. organization deteriorated to its pre-1959 level.

3. The first highway project was also severely affected uy lack ouJ local funds and in :L963 USAID made a loan of US$30.5 million to cover the project's local currency cost. After unsuccessful efforts by the Banx 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 curtail3cl. The Closing Date of the Loan was conditionally extended by two years to t-he end of December 1967 with the proviso that certain performance requiremenits would have to be met at the end of the first one-year extension.

4. The Govern-ment which came to power in 1966 took steps which improu d the execution of the Bank project, such as providing Vialidad with adequate funds, streiftthening an existing office within Vialidad to coor>.irrte activities related to the project, assigning more staff to supervise construction, iand making more effective use of consultants. These improvements warranted the Bank's extension of the Closing Date for the balance of the two-year period envisaged earlier. A new Vialidad management was installed in mid-1967 charged with responsibility for overhauling the organization and preparing investment programs. The first program, a Three-Year Plan (1968-1970),was hurriedly put together in 1967. Steps were taken to improve highway adminij- tration through better control of contractors, decentralizing operations, delegating authority, and establishing a highway planning department. As a result, the execution of the first hiehway project became satisfactory and led to eventual extension of the Closing Date to December 31, 1968, to rnrit full disbuarsement against ongoingi construction works (which were satisfaterily Annex 1 Page 2- completed in April 1968) and to use an estimated $2.7 million balance in the loan to procure additional maintenance equipment. $1.0 million of this amount was not required and at the request of the Government was cancelled from the loan account in August 1968. Procurement under the loan was satisfactorily completed and a remaining balance of about $50,000 was canceled in February, 1969.

5. Other external assistance to the highway sector was provided by the US Government through AID and the Export-Import Bank with loans between 1961 and 1968 total:Ling about US$21 million for improving a main trunk road and to assist the construction industry to import equipment, and about US$3 million for road feasibili-ty studies in the northeastern part of Argentina. The Inter-- American Development Bank made two loans in December 1967, totalling US$72 nillion5 to help improve the Argentine section (100 kIn) of an international road linking the city of Menldoza with the Chilean port of Valparaiso and to construct a bridge over the River Parana at Corrientes in northeast Argentina.

(• i ./l9yO Page 1

Transport Coordination

Present Institutional Arrangements

1. The existing arrangements do not permit the effective formulation, implementation and supervision of transport coordination pol:icies. The Secretariat of Transport is responsible for transport coordination, but it directly controls only the railways and road transport industry, whereas the planning for the highwqay infrastructure is done in Vialidad which reports to the Secretariat of Public Works. The Sectorial Development Office, recently created within the Secretariat of Transport, is intended to be directly re- sponsible for transport coordination,but as it lacks staff and experience it does not yet function. This state of affairs has resulted in many past transport investments having been made without reference to priorities based on economic analysis and a number of investments which have very low economic returns.

Road User Charges

2. Total proceeds from road user taxes in 1968, for highway expend:itures, administration, construction and maintenance are estimated at M$'I1 142 bil:Lion (see Table 3). Only about 0ho of these revenues are earmarked at present for highway purposes, bul total revenues from road users adequately cover estimate: expenditures in 1968 and likely expenditures for 1969 and 1970. The earmark- ing arrangements are discussed in paras 3.09 and 3.10 of the main text. HowT- ever, the distribution of revenues collected from various classes of users does not correspond to the distribution of traffic carried by the different tvnes of vehicles. For exampnel. diesel truck owners are naving under 10-,; of total revenues,which is inadequate in relation to their use of road facili- ties. This is due to the extremely low tax on diesel fuel which is now set at 9P,l 1.16 per liter (US¢Q.3 per liter). The Sectorial Development Office will review l;hiq situation with the view to nronosing adrustments in rates of road taxes, such as the tax on diesel fuel, which would charge the user the economic cost of' resouircs required tn provrid thP in rnrt.ire

Railw7ay Tariffs

3. Iwm1irw uvsr1iavy atse+f+. !ntdta - no -nnf' ej hui+A n to-. jnfrastruciit+Iu-re costs at all. However, there is considerable room for reducing operating costs and increasing tariffs which would perm-it gradual improvements in the railTJayts firnancial performance. It is reasonable to expect that the prese±. 1 i1ailwa y m. anagremn t c an eflect these ch-anes t+ -s -tb 197 f users would cover the full operating and investment costs.

Administrative Restrictions on Traf.fic Allocation

«l. There is no administrative allocation of traffic as between mOs t~.- rgunrina. Nevertheless a number of restrictive rei Lat.lCis hIve -t.t I Annex 2 Page 2

emActsd which affect. road hauIprq. Route rates and schedules must be approved by the Secretariat of Transport before the opening of new passenger services. Simnlnr regulations exist for freight transnort hut are not being enforced and there is a de facto situation of almost free competition between rcad and raoil fr l. he tr n.sport of freight. These regulhtnhil i 'hp.eabndon.ed and transport industries left free to compete among themselves. This matter is to b1- st+urd,iedA by, +1-e sec+torw1 Dnhrc1 ^r%rm-n+ rOff VV>...

C. 'j 0 TnL~~~J' ordler- t'**t t1o LJ's..,Usfacilita-te L U.&CIV 4-heU~L.., app"ican4rC%.aN..kAS%.,OV.W4. of c-.m.on -riteri for all1 types of transport investments, and permit the formulation and enactmen.t of cohlierenu t s po.liy±'tjy meIasures, a ceUtr-al UUUby i needudu Wl"Ll, at she technical level, would act as a coordinator for the whole transport sector. ILhe SectOial DevelopmrIent OffiCe is SU! eU for sULch a ctrL1Lal_ roLe. The provisional terms of reference for this office have been reviewed and are satisfactory; special emphasis should be given to t-he follo-wing 1unctiUns:

(i) For'ecasting of transportation demand Devlo short a,dln ,g croi forecasts- of transportation demand for both public and private services, passenger and goods traflic, domestic and international.

(ii) Data Collection Det;ermine the type of inrform.ation required for nl-nnnin-g pur- poses, e.g. road vehicle fleet, traffic counts; commodity ad ~~,nApa_seng.rn.~aenn mows,^_ lUghfw.ay1,.4 nl1..,-r expend-t1Sesn,nn 4+1,n a+'-+ al i1 1crl government, railway inventory and costs, etc.; LEASt_ab,l;ish procedures and techniques sui +tale fnr +he re+rtrl v VCtV | ~~.LA 'AS V b>U ov AUW4sX - -- V Uu VV S_VX . collection and compilation of the required information.

(iii) Investment Programming Review the methodologies used by the National Railways and Vialidad in the preparation of their investment programs; Review the consistency of these programs and the impliecl level of capital exDenditures; Make recommendations regarding the acceptability of such programs.

iv) Pri e-i naoPo)li c-ies

Undertake economic analyses into road costs and, on this basi-:.; make recommendations with regard to road taxes and fees: Review the National RailwaY's cost analyses and, on thiS b.-_;.. propose maximum levels for rail tariffs with a view to CLVCid-'U.; excessive cross subsidization and abuse of a dominant rosition.

6. As mpntionped earlier the .ectorial Denvelopnment Office does not vet function. It has less than five professional staff, none of whom are pro- fesion azil traInspot- f-n mi c To n e.f`rc+i-irv wrkT.l i n mect+rlin-rr.l n'u Annex 2 _ .

will require a team of about 15 professionals including transport economists, . t4±Ck-.LJ f Uk) knalystsand stat-isticiLns. * o. thrULI w.ld be n major difficulty recruiting most of this staff locally, highly qualified persons ho-I 4ng both thI,eoretic,a" backgroud and mAngret4aailte 4 are not available in Argentina. In view of the foregoing, the Bank has recomn-

r.endedA,Mended anAd isL awaitin th4uueIJIg Goverrm,.entU-IiIiL ! ScoLi,aions conirma1L'±Vi thatLLLd-L twoVLVJLt eApr b employed for a period. of about two years to build up the Office, advise the Secretariat on matters of -ransporj coord(Jnation, adi JraUin persoriiel -who would later replace the experts.

June 10, 1969 AA'JNEX 3 Page 1

ARGE\TTIHNA

SECOID HIGOh-1Y PROJECT

Basis for Economic Justification of Project Road Sections

A. TraPfio-Volumes

1. Tt,ese are based on December 1967 .4DTIs adjusted by (i) 1O960l1967 growth trends through multiple regression analysis, and (ii) seasonalit;y factors calculated on the basis of monthlly fuel cons,Mpt^ion data for the relevant provinces. The following are the adjusted 1967 ADT's for the four pDroject road sectionls.

(i),-. ' (2))/ (v (4/. Route 251 Route 3 Route 3 Route 7 Junction San Antonio Uzcudum- Laboulaye- Route 22-San Oeste-Arroyo Canadon Mercedes Antonio Oeste Verde Ferrais

1967 ADT's (existing traffic) Light (L) 81 80 85 190 2Iediurf (H) 26 64 45 43 Heavvr (HI) 20 52 58 21 Total 127 196 188 25)4

Diverted Traffic From Route 3 From Route 8

Light (L) 17 114 Viediuni (h) 10 28 Heav (H) 38 79 Total 221

Total 1967 ADT 192 196 188 475

2. Traffic projections have been made on the assumption that in the next five years the national arerage will be around 750 per amnum with growth rates for Route 3 being below and those for Route 7 above average. It is also assumed that growth rates will be slower on secondary roads and that the grow..th will peak onf- more rapidl . Accordingly the following growth rates have been assumed:- ANNEX 3 Page 2

in < ner annum for e-xisting, traffic Project Road Sections 1 r 2 3 Tvne of Tratfic T. M H T. M 14 T. M H T. M H 1967-1972 6 5 5 7 6 6 7 6 6 6 5 3 1973-1977 5 5 5 6 5 5 6 5 5 6 h 3 1978-1982 5 5 5 5 5 5 5 55 5 4 3 1983-1987 4 4 5 55 4 4 4 3 3 3 1988-1996 h L L L h L L h 2 2 2 -__ n % er annum for diverted traffic 1967-1972 7 6 6 7 86 1973-1977 6 5 5 6 7 6 1978-1982 5 5 5 555 1983-1987 555 555 1988-1996 [} h hi4h

3 T, diiAo+ienn rlires ,ctmA < r mTvl Tkmw-t"r'inH -il:n/e+. as described in paras. 6 and 7 of this annex. The following is an openirng y ?i 0,171) ADT' 3rr-m,¶-A a+ or the b-ais of4 the above -- s+tioffl \,aa-.4,-D / -.A *,-4 ., y . I,~-,~

ProjectV R,oad- S'ect i 1. _2 Light 173 108 111 486 L18U UI U..L.L_r5QJrrzn L Heavy 77 65 74 136 LO %a-l aiiis 3°3 25 40 3

B. 'Vehicle Operating Costs

4. Th-ley have been arrived at on the basis oI the physical coeiiicients in the Bank Occasional Paper Number Two "Quantification of Road User Savings" and Argentinie input prices. The following is a comparison.

in US$ equivalent Bank Paper Argentine Prices

Gasoline/li-ter 0.0h7 0.050 Diesel/liter 0.03 0.043 Lube oil/liter 0.189 0.457 Tires European 16.60 23.99 Tires 61½ truck 72.80 1h9.92 Tires 20T truck & trailer 123.80 171.601/ European car 1449.0 1920.- 61 truck 3623.00 468dO.OO./ 20T truck & trailer 14249.00 17600.001/

Wages per hour 6&2 truck driver 0.25 0.77 20T truck and trailer driver 0.25 1.83 Private car 0°40 1.83 Maintenance (mechanic) 0.h0 1.51 1/ After apDoropriate adjustments to eliminate the effect of excessive local production costs in accordance with the Staff Report C-162 ?iAutomoblie Industries in Developing C2ountries'. A T. flT I Page 3

5. Vehicle operating costs based on these coefficients appear in the attached Table to this Annex. The following is a summary of unit vehicle operating costs in US¢/km for calculating the benefits for the opening year traffic of 1971; these were derived from the Table using appropriate vehicle speeds and roadway characteristics for the present and the proposed facility.

Project Road Sections 1 _ 2 3 _ _ __34 Present Proposed Present Proposed Present Proposed Present Proposed

Light 4.58 3.67 4.58 3.67 h.67 3.67 6.10 3.67 Medium 13.07 9.29 13.07 9.29 13.51 9.29 18.Sh 9.29 Heavy 22.75 15.23 22.75 15.23 23.47 15.23 29.98 15.23

C. Benefits Reduction in Vehicle Operating Costs (normal and induced traffic)

6. Savings in vehicle operating costs for the various types of vehicles for the different road sections were derived from the costs shown in para. 5 above. In addition to savings in vehicle operating costs accruing to normal traffic on all project road sections due to the upgrading, there will be similar savings for induced traffic on some of them. The road section with the greatest savings is Laboulave-Mercedes (Route 7). Its zone of influence lies on the principal east-west axis from Buenos Aires to Mendoza and has impnortant economic characteristics as described in pararranh 5.02 of the main text. There is no doubt that the relatively undeveloped state of the irmedialve

zone of influence ic s +deo r bn +; rn +.rnncrnmrv +.c oe+rn Pi1-.P 7 wThicrh tTi I be almost halved as a result of the proposed upgrading. 3enefits for the inducedtafl on this sectio;n have been calclated,-, on the+-n J ,i of' unit elasticity. 7. Benefts on ac-count of induced traffic for the P.oufte 29531 section San Antonio Oeste-Junction Route 22 have been calculated on the basis of an elasticity of 0... As2 ttn e two+TRoute 3 pnrPio+jnct roascon s no indulced traffic has been assumed since economic activity at present and for the future is rather limited within their immediate zones of influence; 'practic-ly all the traffic on the project sections is long haul traffic which is not sensitive t-o very re-l-reutons Cveal in I ------tation costus.

Dleconges542541..2 .. tL4.' V 1- il ~JAa.L. 4V l .LU. t.[ 425.141. I5UiI .I i AJ5lV I.5±'JLL CLAJ VU U V

L. Ur,iLU saV.Lngs i vehcle2n operaltin cos a desUCrUibeSd. abov do take into account the fact that such costs on the present facilities will go up once traffic vol-meS eAceed existirng capacivy and congot-ion sets in. It has been assumed that gravel roads of the type which will be upgraded in this project have a daily capacity oI aDout 350 vehicles. Between ADT'rs of 350-450 vehicles operating costs go up by 5% on account of the slolwing down of vehicles due mainly to dust and poorer roadway surface conditions. Between 450-550, vehicle costs are 10% higher and for traffic volumes pvrer 550, they are 15% higher0 'AI'vX 3 Page 4

9. As for nnved roads. Route 8, the only one affected by the project, has a capacity of 6,000 vehicles from which some traffic will be diverted to Route 7 As traffic reaches this ca.pacitv in the late 80's the diversion of vehicles from Route 8 will produce decongestion benefits of a similar pro- portion to those given for gravel roads

Short er l'r a ve 1D ,St n.ce=- lO * One last source of benefits reae to verhincle operating costs -s related savings in travel distances, namely 36 kcn for traffic diverted from RouteA 4-o Route 7 and. 1- for +raffic dier-ted from Route 3 to Ruite '.l

I leduc tion iLn Mai.Litenlair.lce Cot

ll. Dtneits ono account of savings in .aintenance costs have been cal- culated on the basis of data provided by TAMS in the feasibility studies ior the proJecb r.oads ani on Qdata pro-v.dLUeU En uiit 1976 LonigI e T.s Plan. The followiing is a summary of the data used to calculate total main- tenance cost, per annum per kilometer of various types of roads.

In U, per ar1I

Fixed Variable

Asphaltic concrete 900 o.Oo venicle after AIJL LUT 0

Bituminous 600 0.o8 900

Gravel (partly earth) 300 2.44 ii 10

For gravel roads the variable element goes up to US$2.56 per vehicle afte^- ADT's of 350 are reached to US$2.68 per vehicle after ADT's of 450 vehicles and to US$2.80 for ADT's of 550 vehicles and above.

T,-, r ' o,o1 ANNEX 3

ARGENTINA TABLE

SECOND HIGHWAY PROJECT

Vehicle Operating Costs

(in U.S.¢/Vehicle km')

A. European Car

Type of Road Paved ==…Crave ---- Earth----

Speed/hr in Im 88 72 64 56 48 40

Fuiel 0.36 0.38 0.36 0.40 0.40 0.41 Engine oil 0.02 0.03 0.03 0.04 0.04 0.04 Tire wear 0.20 0.36 0.34 0.59 0.57 0.55 Depreciation 0.61 0.81 0.86 1.18 1.27 1.38 Interest 0.36 0.44 0.50 0.58 0.67 0.81 Maintenance parts 0,21 0.27 0.27 0.36 0.36 0.35 Maintenance labor 0.10 0.14 0.13 0.18 0.17 0.17 Occupants Time 1.30 1.58 1.79 2.04 2.38 2.87 Insurance 0.51 0.62 0.70 o.80 0.93 1.12 Total 3.67 4.63 4.98 6.18 6.79 7.70

B. 6½ T Truck

Type of Road ---Paved------Gravel ------Earth--

Speed 80 72 64 56 48 40 32

Fuel 1.23 1.17 1.43 1.38 1.63 1.61 1.63 Engine oil 0.07 0.0A7 0.1-I 0 .11 0.,016 01 Tire wear 1.38 1.17 2.52 2.35 5.29 5.16 5.04 Depreciation 1.50 1.59 2.25 2.43 4.03 4.26 4.59 Interest 0.75 0.80 0.89 1.03 1.22 1.45 1.83 Maintenance parts 1.50 1.48 2.20 2.11 3.51 3.42 3.32 Maintenance labor 0.38 0.36 0.56 0.53 0.89 0.87 0.85 Drivers wages 1.15 1.27 1.44 1.64 1.92 2.30 2.88 insurance 0.89 0,99 1I. 1=27 1IA4 1.78 2.22 Overhead 0.43 0.47 0.57 0.62 0.87 0.98 1.15 Total 9.28 9.37 13.07 13=47 20.99 21.99 23.67

_~~~~~~~~~ 9 C. 20 T Truck-Trailer

Type of Road ---- Pave-d--- Gravel ------Earth-----

peed,/A.r in le- 72 B 40h ho2

Fuel 1.17 1.08 1.50 1.18 1.)2 1.94 2.06 Engine oil 0.20 0.23 0.28 0.30 0.32 0.42 0.45 Tire wear 2.80 2.32 5.59 5.22 4.91 12.37 11.98 Depreciation 2.62 2.88 3.93 4.19 4.71 7.07 7.59 Interest o.80 1.07 1.07 1.33 1.60 1.60 1,86 Maintenance parts 1.87 1.86 2.93 2.93 2.66 5.06 5.06 Maintenance labor 0.53 0.49 0.78 0.75 0.73 1.28. 1.26 Drivers Wages 3l.04 3.43) 3.92l1 L.en e.ff0 5.v 6.870 Insurance 0.91 1.03 1.17 1.37 1.64 1.64 2.05 Overhead 0.74 0.84 1.01 1.15 1.35 1.58 1.8h

Total 14.68 15.23 22.19 23.30 24.94 38.46 41.02

March 21, 1969 ARGIENTIINA: SECOND HIC4HW/kY PROJIECT ORGANIZATrION OF THE NATIONAL HIGHWAY DEPARTWIENT (VIALIDAD)

ADMINISTRATOR

SU[-ADMINISTRATOR

CHIEF ENGiNEIER

FINANCES DESIGN CONSTRUCTO FMA.NTEIANE 7PLANNING FLEG, DEPARTMEN TI~~ITMEJ [PARTMENL DEPARI1MENT DEPARTMENT DEPART

NCESX; ~~~~~~~~~~~~~~a o xI il z I N S1> Z

'4 7 2 2 1

c Z~~~4

> D< tR&CT 4 0

. . R ,. _ 47 4-44 _

I a -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

March196 -'4 (R) IS R1 - 4163j- I) ~ ~ 1 ' 4 '-k W _ , :JASUNCION a.. .

1 -) X ~AN MIGUEL de TUCUMAN n I/3JO ?

I ( g ~ II

s ~~~~~~~r POSADA

VALPARA1506 '%JM,,NUUL

L.Au 8 \2~ R-kSG,-DEL ESTEROA PLATA

CATAMARCA ZAAN

It ,,/ '5.,f- FI< -%,VE , ARGENTINA SAN CARLOS rtde BARILOCHE..r I../ __ tV k _, t(r @k ' ARROYO VERDE'J S tz° SECOND HIGHWAY PROJECT

_~ }A q (RIOJAk PRINCIPAL ROADS OF I j ' S 5 RAWSON THE NATIONAL HIGHWAY NETWORK

J - < !4. > UZCUDUM 1968 2 b.?i. /

ALAR .IS UV SCANADONFERRAIS c \--E) '-.-*RCOMODOROGRIVADAVIA R U ny~ ~~ -qj DOR ---- HIGHWAYS IMPROVED UNDER FIRST PROJECT| S.- ? >> ~~~~~~~HiGHWAYSTO BE IMPROVED UNDER SECOND PROJECT|

4 ( ( g5 liS >~~~~~~~~______GRAVEL OR CONSOLIDATED ,;, . / " / _____ ~~~~EARTHROAD (and some trolls)

* JULiAN_... _INTERNATIONALBOUNDARY

, £ > PROVINCES| cL_ '.. I~vff. JUJUY 12. CORDOBA Q,---)14 > ~~~~~~~SALTA ~ ~ ~~2.13. RIO NEGRO

V ( A i 4IFR!OtAEEEGOS 3.1. SGO.CHACO DEL ESTERO1 15.4. ASNMCHIUBUT CRuPZ N- PA CIFIC 0 C EA

lbl0 L I)'-fc2 _4,H, L C)>11& :...... S

10 r c 0 ------c R r 0 p 0 0 0

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1>1 :D C,

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X m r Z Z c m 0 m r, Z ?D0 V. 9 >0 c 0,, m >

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'nrn % t4 ...... ADT 1967 1971-O0' L 8,73 1, 006 M 356 4443 H 3 1 8 3 0 3 5AN ]UT 1 ,547 1,752] SANTAN FE

i______\ PROVINCE

, PAMPORDOBACA VINCE

SAN LUIS ~RIO CUAR TO7)

MEDES FC E O~(23 k, L A~

ADrF 1967 1971-OT __ _ ID L 190 48 750-3'C'ov M 143SAN~ LUIS11 2 I INC I 33 / H 21 136 IRBENO LA PLAT

Ti 2514 ~J314 _ I __ - AIRES LAPLATA

F?ROVINCE PGO VINCI: S

LA PAMPA - a PJ FO SECTIONPROVINCE to amesadrsasPo;cNOLUISN PROVNDCEE A

DISANC BEWEAN BUENO A]RE - MECEES SUPLETR LE,N *PresentZY unde~r construction SE6A to same standa'rds as ProjectFO MANLEDSEMP1 R-oad Section LabouZaue-Mercedes. ComnZetion schtedul.ed for earlu A RGEN TIN A I 9 7 0 ~~~~~~~SECOND HIlGHW'AY PROJECT

DISTrANCE BETWEE7N BUENOS AIRES - MERCEDES:: SUPPLE'MENTARY LEGEND Railroad PROJECT ROAD SECTIONI (<) Via Route 8 731km ADT Average daily traffic L Light vehicles ROUTE 7 ,tj via Route 7 t,bkbn M medium vehicles H Heavy vehicles ~~DitneDistance savedaidwith®T36km with @ 36km T Total vehicles 0 50 1oo 150 2C0O [ OY Opening year traffic KILOMETERS >

DECEMBER 1968 1EIRD-2477 MAP 4

BUENOS AIRES I*W! t PPROVINCER OV I NC ~~~~~LA PAM PA \ 'o

d PROVINCE roNeu_ RIO NEGRO

IIADT |18967Q 1971 1 I IADT 1967 | 1971-DY M 26 53 M 36 34

H 20 1, 777 3 A1ay] lnKk 7H ) 56 22 I 127 I~~3031 EjT 18 4 151__

CARI ANlrnkltin Z I

ADT 19671 1 | 1nJ7Y 9 L 80n mn 1F ] M 64 8 196 | 254 526 654

Arroyo Verde_ .- | t- - -A ARGENTINA SECOND HiGH'VV/AY PRiJECT I

ICHUBJT A C > PROJECT ROAD SECTIUONb

.' ) ROUTES 3 AND 251 Trel

iRWESO'N FOR MAIN LEGEND SEE MAP 1

SUPPLEMENTARY LEGEND

______~~~~~~ADTAverage daily traffic ADT 11967 1 97-OY Uzcudu L Light vehicles L 1 85 111 M Medium vehicles M 45 55 1- f H Heavy vehicles I H °I 7 1. s T Total vehicles 240 OY Opening year traffic

DISTANCE BETWEEN SAN ANTONIOTt OESTE - BAHIA BLANCA.

| f~~~~~Cano'doii Ferrais >Ca1 nodon F-.rois Via Route 3 420km o /COMODORO P RIVADAVIA Q Via Routes 251 and 22 366km

Distance saved with B 54km

0 50 100 150 200 I ' I ' _ KILOMETERS

DECEMBER 1968 1ER D-2480