WASHINGTON, June 7, 2005 - The World Bank today approved a $150 million loan for Argentina to support road investment programs at the provincial level in Chubut, Corrientes, Córdoba, Entre Ríos, Neuquén and Santa Fe. The project will also improve the reliability of essential roads that facilitate access of provincial production to the markets, as a means of facilitating the return to a path of sustained economic growth and poverty alleviation.
“This loan is an integral part of our strategy to support infrastructure operations in Argentina. With this operation, we have now approved four operations for $630 million in the past six months and we will continue to further support the investments needs in infrastructure,” said Axel van Trotsenburg, World Bank Country Director for Argentina, Chile, Paraguay and Uruguay. “We are supporting this project because improving provincial roads will benefit the agricultural and industrial industry. It has been estimated that nearly 60% of logistic costs in the country are transport costs. The loan will contribute to the reduction of operating and time related costs.”
The Provincial Road Infrastructure 2 Project will support the provincial network by: (i) strengthening the planning process to support the preparation and implementation of comprehensive multi-year road programs; (ii) introducing the use of performance-based contracts as a key step toward implementing a sustainable and cost effective road management strategy; and (iii) bringing about the required capacities in the provincial road agencies to confront the introduction of new management strategies, gradually supporting their transformation into results-oriented organizations.
More specifically, the project will:
· Rehabilitate and maintain some 2,200 km of roads through Performance-based Rehabilitation and Maintenance Contracts (CREMA); · Rehabilitate and/or pave 270 km through traditional admeasurements type contracts; · Develop a comprehensive routine maintenance program over 9,400 km approximately to ensure that no potholes remains open, no edge break occurs between the pavement and the shoulders and that all horizontal marking and vertical signs are adequately restored to comply with the most critical road safety requirements.
The road network in Argentina has a total length of about 630,000 km (11% paved), divided in three administrative levels: national, provincial and municipal. More than 70% of total traffic volumes are concentrated in the paved national and provincial network. Provincial road networks comprise about 190,000 km that are under the jurisdiction of 23 Provincial Road Agencies (DPVs), representing 30% of the country’s total road length. These networks serve as main collectors of the system of rural and local roads under the responsibility of municipal governments (400,000 Km), connecting productive areas with consumption centers, ports and other export gateways through the national system of national highways (38,000 km).
“One of the main issues to be addressed is the development of a more comprehensive and efficient road management strategy in the provinces, based on appropriate design and maintenance standards, that ensures the convergence of the road assets towards a steady state-condition,” said Maria Marcela Silva, World Bank task manager for the project.
The objectives of this operation are in line with the Country Assistance Strategy (CAS) discussed by the Board in April 2004, which contemplates the improvement of infrastructure assets as key to sustained economic growth and mitigating the severity of poverty, as recent empirical research shows, improvements in the stock and quality of the road network leads to higher rates of economic growth and better income distribution. The $150 million single-currency, fixed spread loan has a repayment period of 12.5 years, including 6.5 years of grace. ### For more information on the Provincial Road Infrastructure 2 Project, please visit: http://web.worldbank.org/external/projects/main?pagePK=104231&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P070628 For more information on the World Bank’s work in Argentina, please visit: http://www.worldbank.org/ar | 
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