Document of The World Bank Report No: ICR00003421documents.worldbank.org/curated/pt/... · The World Bank Report No: ICR00003421 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-73850)

Document of

The World Bank

Report No: ICR00003421

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IBRD-73850)

ON A

LOAN

IN THE AMOUNT OF US$ 110 MILLION

TO THE

ARGENTINE REPUBLIC

FOR A

BASIC MUNICIPAL SERVICES PROJECT

October 27, 2015

Social, Urban, Rural and Resilience

Argentina, Paraguay and Uruguay Country Management Unit

Latin America and the Caribbean Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective 09/29/2015)

Currency Unit

1.00 = US$ 0.11

US$ 1.00 = 9.41

FISCAL YEAR 2015

ABBREVIATIONS AND ACRONYMS

AADT Annual Average Daily Traffic

BMSP Basic Municipal Services Project

CAF Banco de Desarrollo de América Latina (Latin American Development Bank)

CAS Country Assistance Strategy

FRL Fiscal Responsibility Law

GoA Government of Argentina

GDP Gross Domestic Product

IDB Inter-American Development Bank

INDEC Instituto Nacional de Estadística y Censos (National Institute of Statistics and

Censuses)

IRF Involuntary Resettlement Framework

ISR Implementation Status and Results Report

MDP I Municipal Development Project I

MDP II Municipal Development Project II

MINPLAN Ministerio de Planificación Federal, Inversión Pública y Servicios (Secretariat of

Public Works at the Ministry of Federal Planning, Public Investment and

Services)

M&E Monitoring and Evaluation

MS Moderately Satisfactory

NBI Necesidades Básicas Insatisfechas (Unmet Basic Needs)

O&M Operation and Maintenance

PAD Project Appraisal Document

PDO Program Development Objectives or Project Development Objectives

PIU Project Implementation Unit

PROMEBA Programa Mejoramiento de Barrios (Neighborhood Upgrading Program)

SIL Specific Investment Loan

SLA Subsidiary Loan Agreement

TA Technical Assistance

TTL Task Team Leader

UCPPFE Unidad Coordinadora de Programas y Proyectos con Financiamiento Externo

UEC Unidad Ejecutora Central (Central Executing Unit)

UEP Unidad Ejecutora Provincial (Provincial Executing Unit)

Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez

Sector Manager: Anna Wellenstein

Project Team Leader: Christoph Prevost

ICR Team Leader: Augustin Maria

ICR Main Author: Marisa Garcia

ii

ARGENTINA

Basic Municipal Services Project

CONTENTS

Data Sheet

A. Basic Information

B. Key Dates

C. Ratings Summary

D. Sector and Theme Codes

E. Bank Staff

F. Results Framework Analysis

G. Ratings of Project Performance in ISRs

H. Restructuring

I. Disbursement Graph

1. Project Context, Development Objectives and Design ............................................................... 1

2. Key Factors Affecting Implementation and Outcomes ............................................................... 6

3. Assessment of Outcomes ........................................................................................................... 17

4. Assessment of Risk to Development Outcome ......................................................................... 24

5. Assessment of Bank and Borrower Performance ...................................................................... 25

6. Lessons Learned ........................................................................................................................ 27

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ........................... 28

Annex 1. Project Costs and Financing .......................................................................................... 29

Annex 2. Outputs of Component 1 ................................................................................................ 30

Annex 3. Economic and Financial Analysis .................................................................................. 34

Annex 4. Bank Lending and Implementation Support/Supervision Processes ............................. 41

Annex 5. List of Supporting Documents ....................................................................................... 43

MAP .............................................................................................................................................. 44

iii

A. Basic Information

Country: Argentina Project Name: AR Basic Municipal

Services Project

Project ID: P060484 L/C/TF Number(s): IBRD-73850

ICR Date: 10/27/2015 ICR Type: Core ICR

Lending Instrument: SIL Borrower: ARGENTINE

REPUBLIC

Original Total

Commitment: USD 110.00M Disbursed Amount: USD 103.28M

Revised Amount: USD 110.00M

Environmental Category: B

Implementing Agencies: Central Executing Unit (Unidad Ejecutora Central, UEC) in the

Coordinating Unit of Programs and Projects with External Financing (Unidad Coordinadora de

Programas y Proyectos con Financiamiento Externo, UCPPFE) of the Ministry of Federal

Planning, Public Investment and Services (Ministerio de Planificación Federal, Inversión

Pública y Servicios, MINPLAN).

Cofinanciers and Other External Partners:

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 04/07/2005 Effectiveness: 06/01/2007 06/01/2007

Appraisal: 12/02/2005 Restructuring(s):

06/09/2008

06/22/2010

06/03/2012

07/17/2013

Approval: 06/06/2006 Mid-term Review: 02/01/2008 --

Closing: 03/31/2012 11/30/2013

04/30/2015

C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Moderately Satisfactory

Risk to Development Outcome: Moderate

Bank Performance: Moderately Satisfactory

Borrower Performance: Moderately Satisfactory

iv

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory

Quality of Supervision: Moderately Satisfactory Implementing

Agency/Agencies: Moderately Satisfactory

Overall Bank

Performance: Moderately Satisfactory

Overall Borrower

Performance: Moderately Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation

Performance Indicators

QAG Assessments

(if any) Rating

Potential Problem

Project at any time

(Yes/No):

Yes Quality at Entry

(QEA): None

Problem Project at any

time (Yes/No): Yes

Quality of

Supervision (QSA): None

DO rating before

Closing/Inactive status: Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Sanitation 27 27

Sub-national government administration 11 11

Urban Transport 21 21

Wastewater Treatment and Disposal 14 14

Water supply 27 27

Theme Code (as % of total Bank financing)

City-wide Infrastructure and Service Delivery 29 29

Decentralization 28 28

Municipal governance and institution building 29 29

Water resource management 14 14

v

E. Bank Staff

Positions At ICR At Approval

Vice President: Jorge Familiar Calderon Pamela Cox

Country Director: Jesko S. Hentschel Axel van Trotsenburg

Practice

Manager/Manager: Anna Wellenstein John Henry Stein

Project Team Leader: Christophe Prevost David Sislen

ICR Team Leader: Augustin Maria

ICR Primary Author: Marisa Garcia

F. Results Framework Analysis

Project Development Objectives (From the Loan Agreement) The objective of the Project is to improve the quality of: (a) basic

municipal services, through the provision of water supply and sanitation, urban drainage and roads

infrastructure in an equitable and fiscally sustainable manner within the territorial jurisdiction of

Participating Provinces; and (b) life of the population to be benefited by the provision of said

services.1

Revised Project Development Objectives (as approved by original approving authority) N/A

(a) PDO Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised

Target

Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1

Original: One million consumers benefit from improved access to reliable and

safe water supply and sanitation, urban drainage infrastructure and improved

roads

Revised (2012 restructuring): One million consumers benefit directly or

indirectly from improved access to reliable and safe water supply and sanitation,

urban drainage infrastructure and improved roads

Value

quantitative or

Qualitative)

0 1,000,000

1,000,000

(direct +

indirect

beneficiaries)

1,463,486

(297,158 direct

beneficiaries;

1,166,328 indirect

beneficiaries)

Date achieved 04/03/2006 03/31/2012 04/30/2015 04/30/2015

1 PDO formulation in the PAD is slightly different: “Improve the quality of life and the quality of basic municipal services

through the provision of water supply and sanitation, urban drainage, and roads infrastructure in an equitable and fiscally

sustainable manner.” As per the ICR guidelines, the PDO from the Loan Agreement will be used as a basis for this evaluation.

vi

Comments

(incl. %

achievement)

Revised target 146% achieved. The indicator was revised to clarify that the

project would have direct and indirect beneficiaries. Direct beneficiaries were

defined as residents of properties having benefited from new access to water

supply, sanitation, and drainage, or directly adjoining a road improved under the

Project. Given the type of investments financed under the Project, the subprojects

also benefited populations beyond the “direct beneficiaries” as defined above.

For example, system-wide improvements to municipal water supply systems

provided improved quality of service to a wider population than just those

provided with new connections. In the case of improvements in urban and

productive roads, the population benefitting from improved traffic conditions

was also assessed, in addition to the direct beneficiaries.

Indicator 2 Beneficiaries in a majority of subprojects for water, sanitation, urban drainage

and urban road have greater NBI on average than the municipal average.

Value

quantitative or

Qualitative)

N/A Yes Yes

(12 municipalities)

Date achieved 04/03/2006 03/31/2012 04/30/2015 04/30/2015

Comments

(incl. %

achievement)

Target achieved. Necesidades Básicas Insatisfechas (NBI) is an index used by

the Government of Argentina to measure access to basic needs - crowding,

housing, sanitation, educational status and related measures. It was envisaged at

preparation that the indicator could be measured based on census information at

the census tract level, to compare the NBI of the areas covered by the Project

with the average NBI at the municipal level. During implementation, it became

apparent that this method could not be applied due to the difficulty in defining

the project area in a way that could allow to compare the NBI in this area with

the municipal average. In December 2013 the Implementing Agency and the

World Bank agreed to measure the indicator as the number of subprojects

implemented in a municipality with an NBI higher than the average NBI of the

respective province. Based on the 2011 census information from the National

Institute of Statistics and Censuses (INDEC) (Instituto Nacional de Estadística y

Censos), 12 out of the 21 participating Municipalities have a higher NBI than the

Provincial average, representing 55 percent of the sample.

(b) Intermediate Outcome Indicator(s)


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

COMPONENT 1

Indicator 1

Original: 200,000 new consumers are connected to water supply networks

Revised: 250,000 consumers have access to infrastructure and improved

networks for water supply and sanitation services

Value

quantitative or

Qualitative)

0 200,000 250,000

173,129

vii


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

Date achieved 04/03/2006 03/31/2012 04/30/2015 04/30/2015

Comments

(incl. %

achievement)

Revised target 69% achieved. The indicator was modified to include both water

and sanitation beneficiaries and to increase the target value from 200,000 to

250,000. Given that the BMSP was designed as a Framework Project,

Municipalities’ demand shifted towards more road investments, and subprojects

in water supply had a lower demand than initially anticipated. Although the

indicator was not achieved even after being modified during restructuring, other

subsectors (new users for sanitation and roads) exceeded the targets.

Indicator 2

Original: 600,000 new consumers are connected to sanitation and sewerage

networks

Revised: 16,000 new consumers are connected to sanitation and sewerage

networks

Value

quantitative or

Qualitative)

0 600,000 16,000 28,600

Date achieved 04/03/2006 03/31/2012 04/30/2015 04/30/2015

Comments

(incl. %

achievement)

Revised target 178.7% achieved.

The target value was modified to better reflect subproject demand from

Municipalities. The demand to finance sanitation and sewerage works under the

Project was significantly lower than expected at the appraisal stage due to the

availability of grant financing for this type of investment under other national

programs.

Indicator 3 500,000 consumers receive access to improved sanitation and sewerage

networks.

Value

quantitative or

Qualitative)

0 500,000 -- --

Date achieved 04/03/2006 03/31/2012 -- --

Comments

(incl. %

achievement)

The indicator was dropped during 2012 restructuring.

Indicator 4 Each subproject for water and sanitation includes a mechanism for achieving full

cost recovery of O&M costs for investments

Value

quantitative or

Qualitative)

N/A Yes N/A Yes

Date achieved 04/03/2006 03/31/2012 -- 04/30/2015

Comments

(incl. %

achievement)

Achieved. All water and sanitation subprojects were designed with a mechanism

for O&M cost recovery. In the cases of the subprojects in the Province of

Santiago del Estero (Monte Quemado and Campo Gallo), the introduction of cost

recovery mechanisms is being considered but has not yet been implemented. The

Bank continues to support the Provincial government on comprehensive policies

for sustainable service delivery; and the introduction of the proposed cost

recovery mechanisms appears likely. Given that the wording of this indicator

viii


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

refers only to the inclusion of a mechanism, and not the actual cost recovery, the

indicator is considered as achieved.

Indicator 5 Original: 100 km of urban drainage

Revised: 10 km of urban drainage

Value

quantitative or

Qualitative)

0 100 10 4.20

Date achieved 04/03/2006 03/31/2012 04/30/2015 11/30/2013

Comments

(incl. %

achievement)

Revised target 42% achieved. The target was not achieved because the list of

subprojects financed under the Project changed after the targets were adjusted.

Given that the BMSP was designed as a Framework Project, Municipalities’

demand shifted towards more road investments, and subprojects in urban

drainage had a lower demand than initially anticipated. Although the indicator

was not achieved even after being modified during restructuring, other subsectors

(new users for sanitation and roads) exceeded the targets.

Indicator 6 Original: 200,000 beneficiaries benefit directly from improved urban drainage

Revised: 20,000 beneficiaries benefit directly from improved urban drainage

Value

quantitative or

Qualitative)

0 200,000 20,000 7,200

Date achieved 04/03/2006 03/31/2012 04/30/2015 11/30/2013

Comments

(incl. %

achievement)

Revised target 36% achieved. This indicator includes beneficiaries from the

only two subprojects (in Rafaela and San Martin) that financed urban drainage.

The BMSP was designed as a Framework Project and Municipalities opted to

finance other types of works rather than drainage. As mentioned before, even

though the indicator was not achieved, it should be noted that indicators in other

subsectors (new users for sanitation and roads) exceeded the targets.

Indicator 7 85 percent of investment cost for urban drainage is recovered from direct

beneficiaries

Value

quantitative or

Qualitative)

N/A Yes N/A No

Date achieved 04/03/2006 03/31/2012 -- 4/30/2015

Comments

(incl. %

achievement)

Not achieved. All subprojects were prepared along with financial evaluations

that included specific provisions for cost recovery. In the case of urban drainage

subprojects, the majority of the direct beneficiaries would pay for improvements

through provincial taxes. However, by the end of Project implementation, the

application of cost recovery mechanisms was reviewed, as was found that

Provinces subsidized investment costs in the two urban drainage subprojects.

Therefore, zero percent of investment cost was recovered from direct

beneficiaries.

Indicator 8 Original: 30 km of rehabilitated and paved urban roads

Revised: 75 km of rehabilitated and paved urban roads

Value 0 30 75 85.50

ix


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

quantitative or

Qualitative)

Date achieved 04/03/2006 03/31/2012 2/19/2014

Comments

(incl. %

achievement)

Revised target 114% achieved. The final value achieved reflects beneficiaries

from seven subprojects: Rafaela, Maipu-Godoy Cruz, Gral. Pueyrredon, Rosario

de la Frontera, Guaymallen, Rosario and Cerrillos.

Indicator 9 Original: 90 km of rehabilitated and paved productive roads

Revised: 125 km of rehabilitated and paved productive roads

Value

quantitative or

Qualitative)

0 90 125 131.5

Date achieved 04/03/2006 03/31/2012 02/19/2014

Comments

(incl. %

achievement)

Revised target 105% achieved. The final value achieved reflects beneficiaries

from subprojects Roca-Allen, Roca-Cervantes and Lules.

Indicator 10 200,000 beneficiaries receive access to improved urban roads

Value

quantitative or

Qualitative)

0 200,000 --

1,196,473 (122,829

direct beneficiaries

and 1,073,644

indirect

beneficiaries)

Date achieved 04/03/2006 03/31/2012 4/30/2015

Comments

(incl. %

achievement)

Target 598% achieved. The target was significantly exceeded because the

project financed more urban roads than what was originally anticipated at project

preparation. The reported value corresponds to the estimated direct and indirect

beneficiaries from the Azul, Cerrillos, Frias, General Pueyrredon, Guaymallén,

Lules, Maipu-Godoy Cruz, Rafaela, Roca-Allen, Roca-Cervantes, Rosario, and

Rosario de la Frontera subprojects.

Indicator 11 85 percent of investment cost for urban and productive roads is recovered from

direct beneficiaries

Value

quantitative or

Qualitative)

N/A 85% N/A 24.4%

Date achieved 04/03/2006 03/31/2012 -- 4/30/2015

Comments

(incl. %

achievement)

Target partially achieved. All road subprojects were prepared with a provision

for cost recovery from direct beneficiaries. However, the provisions for cost

recovery were only partially implemented and the ex-post financial analysis

indicates that only 24.4 percent of the investment cost for urban and productive

roads was recovered from direct beneficiaries.

COMPONENT 2

Indicator 12

Improvements in basic commercial and operational indicators for municipalities

and provincial service providers including: reduction in leakage rates in case of

water supply; improvement in billing and collection rates - arrangements for

x


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

operations and maintenance in place and effective; arrangements and targets for

cost recovery outlined in each subproject are achieved2

Value

quantitative or

Qualitative)

N/A N/A N/A

Date achieved 04/03/2006 03/31/2012 -- --

Comments

(incl. %

achievement)

Not gathered. The improvements measured by this indicator would have been

supported by TA, which was not implemented due to provinces’ objection to

borrow for this activity. The indicator was not dropped during restructuring

because a TA activity was being prepared for the Province of Nequén at that

same time. Nevertheless, the Province opted out and did not request funds for the

activity. Terms of reference had been prepared with a focus on management of

the sanitation subprojects that were financed.

COMPONENT 3

Indicator 13 80% of subprojects have been implemented as scheduled on an annual basis

Value

quantitative or

Qualitative)

N/A Yes N/A Yes

Date achieved 04/03/2006 03/31/2012 -- 4/30/2015

Comments

(incl. %

achievement)

Despite obstacles throughout implementation, the Project was able to commit

most funds and deliver the subprojects to a greater number of beneficiaries than

originally planned.

Indicator 14 Regular independent technical reviews find the quality of subproject

implementation as satisfactory.

Value

quantitative or

Qualitative)

N/A Yes N/A Yes

Date achieved 04/03/2006 03/31/2012 -- 04/30/2015

Comments

(incl. %

achievement)

Achieved. The technical quality of the subprojects was found to be satisfactory.

The independent technical reviews were carried out regularly by technical

specialists in relevant sectors hired by the Bank. The reviews were based on site

visits to all 22 subprojects. All technical comments on subproject implementation

provided by the review were satisfactorily addressed by the implementing

agency.

2 Indicators noted here are indicative for different types of subprojects and the UEC, in association with

UEPs and participating municipalities, will outline, monitor and report on key indicators for each

subproject for technical assistance.

xi

G. Ratings of Project Performance in ISRs

No. Date ISR

Archived DO IP

Actual

Disbursements

(USD millions)

1 11/20/2006 Satisfactory Satisfactory 0.00

2 06/04/2007 Moderately Satisfactory Moderately Satisfactory 0.00





7 12/30/2009 Moderately Satisfactory Moderately

Unsatisfactory 13.70

8 05/05/2010 Moderately

Unsatisfactory

Moderately



Unsatisfactory

Moderately



Unsatisfactory

Moderately








H. Restructuring (if any)

Restructuring

Date(s)

Board

Approved

PDO

Change

ISR Ratings at

Restructuring

Amount

Disbursed at

Restructuring

in USD

millions

Reason for Restructuring &

Key Changes Made DO IP

06/09/2008 MS MS 8.32

An amendment to the loan

agreement was approved to allow

participating Provinces -upon

written delegation by the pertinent

Eligible Entity (Municipalities)-

to carry out and finance

Subprojects instead of the

pertinent Eligible Entity.

06/22/2010 MS MS 13.80

The project was restructured

(Level one) to trigger the OP 4.12

on Involuntary Resettlement.

03/06/2012 Yes MS MS 35.43

(i) The project’s closing date was

extended from March 31, 2012 to

November 30, 2013 (20 months).

xii

Restructuring

Date(s)

Board

Approved

PDO

Change

ISR Ratings at

Restructuring

Amount

Disbursed at

Restructuring

in USD

millions

Reason for Restructuring &

Key Changes Made DO IP

(ii) The percentage to be financed

by the Bank loan for Categories 1

(Water Supply and Sanitation)

and 2 (Urban Drainage and

Roads) was increased from 75%

to 100% (dropping co-financing

by Municipalities).

(iii) Funds were reallocated from

Category 1 to Category 2 to

reflect municipalities’ higher

demand for road infrastructure

(rehabilitation and pavement).

Funds from Category 3 (Capacity

Building and Training) were also

transferred to Category 2.

(iv) The project adjusted the

Results Framework to reflect

changes in indicators.

07/17/2013 MS MS 70.14

The Project’s closing date was

extended from

November 30, 2013 to April 30,

2015 (17 months).

I. Disbursement Profile

1

1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

1. Argentina's recovery in the years following the 2001-02 economic crisis was impressive. After three years of fast growth (averaging roughly 8.8 percent during 2003-05), at the time of

Project approval in 2006, gross domestic product (GDP) had recovered to pre-crisis levels. A

Country Assistance Strategy for the period 2006-20083 was approved in May 2006 with the

objective of supporting Government efforts to transition from crisis recovery to sustained, private

sector-led growth with improved equity and reduced structural poverty. Support to infrastructure

development represented the main lending area in the 06-08 CAS, recognizing the need to rebuild

key infrastructure capacity following several years of decline in infrastructure investment4.

2. Within Argentina’s federal structure, subnational governments play a key role in service

delivery, although both provincial and municipal governments have remained highly dependent

on transfers from higher levels of governments. Additionally, in spite of a high level of

decentralization from the federal to the provincial level, the municipal sector has remained

underdeveloped in Argentina. Municipalities are dependent on the provinces, which dictate their

organization, taxing powers, and basic service delivery responsibilities. Priorities were identified

at Project appraisal to enhance the municipal sector’s capacity to finance, manage, regulate and

deliver infrastructure services while at the same time improving the efficiency and sustainability of

investment. These included: (a) improving the municipalities financial autonomy, accountability,

and market discipline, (b) improving the use of public funds to leverage access to private capital

investment, and (c) scaling up capacity building activities.

3. Municipal expenditures have been increasing in the period following the 2001-02 crisis

but have remained a small fraction of overall public expenditure, and financial autonomy at the

municipal level has not improved. Between 1990 and 2005, municipal expenditure fluctuated

between 2 and 2.8% of GDP. Since 2006, municipal expenditures have been increasing, reaching

3.4% of GDP in 20135. However, this increase has taken place in the context of a faster expansion

of overall public expenditure, reducing the share of municipal expenditure in the total public

expenditure from 8.5% in 2006 to 6.7% in 2013. In addition, Fiscal reforms following the 2001-02

crisis have taken the form of greater concentration of revenues and centralization of authority over

debt management. At the time of project preparation, the National Government had introduced two

main instruments of fiscal coordination: the Federal Fiscal Responsibility Law, enacted in 2004

through Law 25917 and the provincial debt authorization mechanism enacted through Resolution

1075/93 issued by the National Ministry of Economy and Production. The latter resolution grants

powers to the Ministry of Economy and Production to authorize all domestic and external

provincial and municipal borrowing operations that are denominated in foreign currency or that

commit, as collateral, resources from the federal revenue sharing system.

4. The BMSP was designed to contribute to the higher-level objectives of the Country

Assistance Strategy (CAS) and was included in the lending program of the 2006-2010 CAS. The

Project substantially supported one of the CAS’s three pillars, sustained economic growth with

3 Country Assistance Strategy for the Argentine Republic. 2006-2008. The World Bank. Report No. 34015-AR 4 The CAS 2006-2008 noted that Average total investment in infrastructure during the 1990s remained well under 2

percent of GDP, placing Argentina at the lower end among Latin American countries. 5 IERAL (2013), “Anatomía del Gasto Público Argentino: Expansión en la última década y desafíos a futuro” based on

data from MECON.

2

equity and social inclusion, and its objectives were fully consistent with those of the CAS: to seek

opportunities to build on an investment partnership to support Government efforts to transition

from crisis recovery to sustained growth with equity and reduced structural poverty. Expanding

access to all segments of Argentine society, in all parts of the country, to basic services was a key

element in meeting these strategic objectives.

5. The Project was structured around three key investment sectors (Water Supply and

Sanitation, Urban Drainage and Roads, and Capacity Building and Training), which broadly

corresponded to local needs across provinces and which formed the core of emerging civil works

and investment demand from municipalities expected to participate in the Project. Municipal

governments in Argentina are primarily responsible for the provision of basic water and sanitation

services (including solid waste management), local urban transport investment and management,

traditional municipal investments such as drainage and street lighting, and a host of smaller local

services such as parks, cemeteries, and markets.

6. The provision of basic municipal services in Argentina has been facing several

challenges in key sector issues, including (a) expanding the coverage of basic services; (b)

improving the efficiency by which services are delivered; (c) reducing the cost of services and

making them sustainable by improving the selection process through which infrastructure is

designed and “rightsizing” investment; and (d) putting in place cost recovery mechanisms which,

in the context of the limited fiscal capacity of municipalities to finance investment through general

revenues, address financing needs for operation, maintenance, and depreciation.

7. Bank’s previous experience in Argentina. The Bank had accumulated over 15 years of

experience supporting the Government through two other previous municipal projects: Municipal

Development (MDPI) and Second Municipal Development (MDPII). With a focus on physical

infrastructure and training, both projects aimed to mobilize resources for municipal investments

and build municipal capacity for investment planning and execution. The Basic Municipal Services

Project (BMSP) built upon that experience and recognized the need to focus and deepen the Bank’s

engagement. The Bank’s engagement and the Government’s approach had been successful in

maintaining financial flows to local governments in the face of the economic crisis and in providing

a source of funds for capital investment. BMSP maintained that trajectory and supported the

Government’s efforts to provide a source of investment resources for fiscally sustainable

municipalities. Finally, the operation aimed to maintain the Bank’s presence in Argentina and to

engage in a medium-term policy dialogue to further address the sector’s reform and development

needs.

8. Bank’s value added in Subproject design and selection to improve Municipal Capital

Investment Planning. BMSP sought to assist participating municipalities in three fundamental

ways:

- First, by focusing investments on a selected set of high-impact basic services sectors,

namely water and sanitation, roads and urban drainage which, when properly targeted, can

have significant economic and social benefits.

- Second, by enhancing the technical, economic, and financial screening of subprojects and

of service providers to ensure “rightsizing” of investments and to advance towards service

sustainability.

- Third, by introducing incremental but important changes in the institutional arrangements.

For instance, by involving sector actors in Project oversight at the provincial and central

levels, and by embedding local investments within provincial sector plans prepared by each

province.

3

1.2 Original Project Development Objectives (PDO) and Key Indicators

9. Project Development Objective, Loan Agreement6 : The objective of the Project is to

improve the quality of: (a) basic municipal services, through the provision of water supply and

sanitation, urban drainage and roads infrastructure in an equitable and fiscally sustainable manner

within the territorial jurisdiction of Participating Provinces; and (b) life of the population to be

benefited by the provision of said services.

10. Key Indicators: (1) One million consumers benefit directly or indirectly from improved

access to reliable and safe water supply and sanitation, urban drainage infrastructure and improved

roads; (2) Beneficiaries in a majority of subprojects for water, sanitation, urban drainage and urban

road have greater NBI7 on average than the municipal average.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and

reasons/justification

11. PDO Indicator 1 was reworded during the 2012 restructuring to define the target

beneficiaries as either direct or indirect, and to account for beneficiaries of improvements made in

both new and existing infrastructure. Calculating direct and indirect beneficiaries varies according

to each subproject, but can be differentiated in broad terms. Direct beneficiaries refer to residents

of properties having benefitted from new connections to water, sanitation and sewerage supply

networks, as well as those bordering improved roads. Indirect beneficiaries refer to a wider

population, such as people that live in the area where the subprojects were carried out and who are

also benefitting from the overall economic and social impacts attributed to them. The detailed

descriptions of direct and indirect beneficiaries for each subproject are presented in Annex 2

Outputs of Component 1.

Table 1. Changes in PDO indicators

Original Updated

Project outcome indicators

One million consumers benefit from improved access

to reliable and safe water supply and sanitation, urban

drainage infrastructure and improved roads.

Beneficiaries in a majority of subprojects for water,

sanitation, urban drainage and urban road have greater

NBI on average than the municipal average8

One million consumers benefit directly or

indirectly from improved access to reliable

and safe water supply and sanitation, urban

drainage infrastructure and improved roads.

Same.

6 PDO formulation in the PAD is slightly different: “Improve the quality of life and the quality of basic municipal

services through the provision of water supply and sanitation, urban drainage, and roads infrastructure in an equitable

and fiscally sustainable manner.” The PDO was not formally revised, despite issues with inconsistent wordings. Due to

Argentina’s political situation, the World Bank Board did not discuss any Argentina-related projects for a period of 3.5

years between 2011 and 2014 (see Factors affecting Implementation), during which period no document related to

Argentina (including Level 1 Restructurings) was submitted for approval to the Board of Directors.

7 Necesidades Básicas Insatisfechas (NBI) is a measure used by the Government of Argentina to measure

access to basic needs - crowding, sanitation, educational status and related measures. 8 The indicator was designed to compare the value of the '# of households with at least 1 NBI' for each

4

1.4 Main Beneficiaries

12. Primary beneficiaries: The project’s primary target groups were the direct and indirect

beneficiaries of the capital investments (water supply and sanitation, urban drainage, and roads

infrastructure), through improvements in their quality of life. In the majority of subprojects, direct

beneficiaries were individuals with homes or other kinds of properties (e.g. farms and businesses)

that gained new access to water supply, sanitation and drainage, or bordered improved roads. In

addition to these direct beneficiaries, subprojects benefitted larger groups within the participating

municipalities. For example, road improvement subprojects brought benefits in terms of traffic

congestion and reduced travel times as well as lower vehicle operation costs. Investments in water

supply systems generated benefits beyond the new connections provided through system-wide

improvements in the quality of service. These benefits were identified through the social and

economical analysis prepared for each subproject during implementation, and the quantification of

indirect beneficiaries was estimated for each subproject on this basis.

13. Secondary beneficiaries: Eligible beneficiaries include municipalities and basic service

providers, regulators and policymakers in the water and sanitation and roads sectors through

capacity improvements derived from project preparation, implementation and technical assistance

for capital investment planning.

1.5 Original Components (as approved)

14. Component 1: Municipal Infrastructure (US$ 132.6 million, including US$ 99.4 million

of Bank financing). The component financed investments to improve water supply and sanitation,

urban drainage, and basic transportation access services in participating provinces and

municipalities. Specifically, investments in the following sectors will be included:

- Basic Water and Sanitation, including the construction and rehabilitation of production

infrastructure, primary and secondary water supply networks, sewer network rehabilitation

and expansion, water treatment plants, construction, rehabilitation and expansion of

existing wastewater treatment and disposal facilities.

- Urban Drainage and Small Retention Works, including the rehabilitation and expansion

of drainage network and small retention works. Subprojects under this component would

be relatively small and would complement investments under - where possible - the parallel

flood protection APL. Typical investments would include main drainage and secondary

networks, manholes and junctures.

- Urban and Productive Roads, including works for the pavement and rehabilitation of

urban, municipal connector and productive roads in order to both increase access and

improve traffic flows through paved roads for under-serviced urban neighborhoods and

rehabilitate priority segments of productive roads that will have an important impact on the

reduction of logistics costs.

15. Component 2: Institutional Strengthening of Municipalities and Service Providers

(US$ 5.0 million, including US$ 5.0 million of Bank financing). The component was designed to

finance technical assistance primarily at the municipal level for improved planning, management

participating municipality with that for the specific project area as measured at the level of census tract(s),

the specific methodology for measurement was expected to be developed during implementation.

5

and operational capacity that aims specifically to improve the quality and coverage of water,

sanitation, sewerage, urban drainage and roads services. Eligible beneficiaries include

municipalities and basic service providers, regulators and policy makers in the water and sanitation

and roads sectors. Subprojects for technical assistance under this component would also be on-lent

to municipal and provincial service providers in a manner similar to Component 1 for works. The

component would finance demand-driven technical assistance including, but not limited to:

- Capacity building for technical, economic, financial, social and environmental preparation

and assessment of subprojects.

- Multi-year strategic investment planning and budgeting.

- Tariff reviews.

- Updating and improving cadaster of users.

- Improvements in billing, collection and commercial management.

- Technical exchanges, twinning and outreach activities.

- Information, communications and education campaigns in key service sectors.

- Poverty targeting and monitoring mechanisms as part of investment planning.

- Preparation of territorial sector development and urban development plans.

- Business and operational planning for service providers.

16. Component 3: Program Management (US$5.3 million, including US$5.3 million of

Bank financing) to finance the operating expenses associated with program management,

monitoring, evaluation and supervision. The component financed the staffing of the Central

Executing Unit/Unidad Ejecutora Central (UEC) with technical specialists including sanitary

engineers, environmental experts, roads experts and economists to effectively support subproject

development and assessment, as well as procurement and financial management staff. Additional

key activities to be financed under the component through external technical assistance and

consultant services included:

- Project preparation assistance.

- Monitoring of poverty impacts.

- Impact evaluation.

- Public opinion monitoring.

- Independent technical review of works.

- Dissemination and outreach activities, including efforts to promote good practices at the

local level.

1.6 Revised Components

17. Not applicable.

1.7 Other significant changes

18. A total of four Project Restructurings were carried out. The first restructuring (2008)

introduced changes in implementation arrangements, mainly transferring responsibilities from the

Municipal to the Provincial level. The second restructuring (2010) triggered the OP 4.12 on

Involuntary Resettlement for a subproject in Rio Negro, and for any potential resettlements in

existing or future subprojects. The third restructuring (2012) extended the project closing date,

reallocated funds between components and adjusted the Results Framework to reflect demand. The

last restructuring (2013) introduced a second extension of the project closing date. Further details

of each restructuring are presented in section 2.2 Implementation.

6

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

19. The project preparation introduced improvements based on the work and outcomes of

previous projects in Argentina. Albeit their successful ratings, past investments responded to a

large variety of municipal needs, all of which did not necessarily focus on achieving economic

growth and poverty reduction. The BMSP sought to focus the menu of subprojects for each

investment type to those that would result in positive economic and social impacts. It did so by

establishing a specific menu of eligible investments identified as key basic municipal services

(water supply and sanitation, roads and drainage), and strengthening the requirements for

subprojects using detailed technical eligibility criteria that was agreed during project preparation.

This was done to ensure the relevance and sustainability of eligible investments. At appraisal a set

of potential subprojects was identified and appraised. In addition, the process of subproject

preparation and screening during implementation also included a systematic economic and

financial analysis of every subproject.

20. The project design incorporated lessons learned in implementation and on-lending

processes from the Bank’s earlier operations supporting municipal development activities in

Argentina. A three-layered implementation structure (i.e. federal government, provinces and

municipalities) was selected to maintain the sectoral dialogue at the national level, while at the

same time involving provinces and municipalities. The operation relied on the existing structure

for on-lending through public sector budget between federal, provincial and municipal

governments and for repayment along the same lines, instead of using intermediation. The project

did not aim to introduce reforms. To lessen foreign exchange risks, the GoA decided to on-lend to

participating provinces in United States Dollars, which in turn would on-lend to municipalities in

local currency.

21. The operation reflected the GoA’s preferences on resource allocation, organizational

structure and targeting. The GoA requested to separate the BMSP’s implementation (through the

Ministry of Federal Planning) from that of the Subnational Governments Public Sector

Modernization Project (through the Ministry of the Interior). It was noted at appraisal that, as a

result, the BMSP was nearly a pure investment operation. However, the project was expected to

advance the municipal development agenda through improved transparency in the allocation of

subloans to eligible subprojects and improved focus on well-dimensioned sustainable investments.

The Project Appraisal Document (PAD) also notes that the GoA chose not to restrict the number

or geographical spread of participating provinces. It was recognized that the resulting small

amounts allocated to each participating province would limit the Project’s impact in terms of

leveraging investments to provincial reforms, and the operation was thus presented as a first step

focused on improving sustainability and introducing better project eligibility and management

practices.

22. Based on previous project experiences, changes were integrated into subproject

proposals. The project incorporated eligibility criteria as a filter for project selection, and to

increase the quality of project proposals and provincial sector strategies (water, sanitation and

transportation) to define an investment plan. Subproject proposals included plans for cost recovery

of project investments. Also, the Project did not allow any expenditures in equipment.

7

2.2 Implementation

23. The project experienced delays in signing the Loan and declaring effectiveness. The

project was approved in June 2006, but was not declared effective until June 2007. This delay was

mainly due to the procedures of the GoA that required the signature of a national decree, and which

affected most projects in Argentina. Let alone the processes which had to be completed at the

national and provincial level following the Project’s approval by the WB’s board of executive

director, the Project met the criteria for readiness for implementation at appraisal, and there were

no additional delays in signing the Loan and declaring effectiveness.

24. Continuous changes in pipeline of subprojects required new projects to be identified and

prepared during implementation, involving a lengthy process and adding further delays. Project

design was overly optimistic when estimating the time length for approval of subprojects. Before

their implementation, subprojects required meeting the following conditions: (i) adoption of

Provincial Debts Laws9 that authorized the Provincial Executive to access project funding; (ii)

preparation of Provincial sector plans; and (iii) Bank approval after fulfilling all the key eligibility

criteria participation. Only after these three conditions were met, a Subsidiary Loan Agreement

(SLA) between the national government and the participating province was processed. Subsidiary

agreements specified the amount of funds each province was receiving from the Project, and the

total amount of funds approved by the Subsidiary Agreements could not exceed the total envelope

of the project. In some cases, the SAs with Provinces were amended because the selected

subprojects, which changed over time, exceeded the initial funding envelope.

25. Table 2 below illustrates the timeline for local debt laws approval, signing of Subsidiary

Agreements and start of procurement procedures. As of 2008 (two years after the project approval),

only the province of Rio Negro had signed a Subsidiary Agreement10. Project implementation

improved after 2008, and by 2010, eight subsidiary agreements had been signed and 100% of

resources had been assigned to subprojects. It is important to note that after the project’s first

restructuring in 2008, which allowed the Provinces to take debt instead of the municipalities, the

project advanced at a faster rate.

26. The Bank and UEC provided significant support to Municipalities to ensure timely

preparation of subprojects. The Municipalities had limited capacities in project preparation,

especially in meeting requirements related to economic and cost recovery analysis, technical

specifications, procurement procedures and safeguards compliance. Although the Bank and UEC

provided substantial and continuous support, it was not enough to avoid numerous Bank revisions

of project documents and delays in implementation. Project design provided for the financing of

capacity building for preparation of subprojects under Component 2, which would have been

helpful in this case. However, most provinces and municipalities proved unwilling to finance

technical assistance activities with loan proceeds resulting in very limited execution of the activities

identified under Component 2.

9 Adoption of Provincial Debt Laws requires authorization by the Ministry of Finance for the Province to

take on more debt, and approval by the local legislative body. 10 August 2008 Aide Memoire.

8

Table 2. Timeline: Local Debt Laws, Subsidiary Agreements, and Procurement

Province

Municipality

Provincial

Debt Laws

Approval

Signing of

Subsidiary

Agreements

Procurement

Buenos Aires

General

Pueyrredón 2008 2009 2012

Azul 2013

La Rioja Capital

2008 2009/2014 2012

Capital 2012

Mendoza

Guaymallén

2008 2009/2014

2010

Maipú-

Godoy Cruz 2010

San Martín 2010

Neuquén

Chos Malal

2008 2009

2009

San Patricio

del Chañar 2012

Río Negro

Roca-Allen

2007 2007/2009

2006

Roca-

Cervantes 2011

Santa Fe

Rafaela

2007 2008

2010

Rosario 2009

Rufino 2010

Salta

Cerrillos

2008 2009

2012

Rosario de la

Frontera 2012

Santiago del

Estero

Campo Gallo

2009 2011

2013

Frías 2013

Herrera 2013

Monte

Quemado 2013

Tucumán Bella Vista

2008 2009 2013

Lules 2012

27. Shifts in the political and financial environments diminished demand for Bank

financing. The circumstances under which the BMSP was designed changed immediately after

project approval and effectiveness. Although it was initially assumed that the demand for Bank

funding from Provinces and Municipalities would be high given the shortage of funds for capital

investments, many other sources of funding later became available. With more options to choose

from, requiring fewer conditions for project approval and execution (e.g. economic evaluations of

subprojects and safeguards requirements), the Bank’s financing became a less attractive source.

Since this development was unforeseen at preparation, most of the original subprojects that were

to be financed by BMSP were dropped. The process to identify new subprojects for which

provinces and/or municipalities were willing and able to borrow took longer than anticipated.

Project implementation was therefore extended by three years. Similarly, even though the

justification to include a Capacity Building Component was initially sound, Project design

overestimated the Municipalities’ demand to finance capacity building activities with debt.

28. Amendment to the Loan Agreement (Restructuring 1). On June 9, 2008 an amendment to

the loan agreement was approved to allow participating Provinces -upon written delegation by the

9

pertinent Municipalities- to carry out and finance Subprojects instead of the Municipality itself.

Based on low municipal capacity, some Provinces believed that centralizing project

implementation at the provincial level would ensure better quality implementation.

29. Triggering of OP 4.12 on Involuntary Resettlement (Restructuring 2). On June 22, 2010

the project was restructured (Level one) to trigger the OP 4.12 on Involuntary Resettlement. At the

time of appraisal no resettlement had been anticipated, but in 2009 the Bank was informed that a

subproject in the province of Rio Negro (productive roads in Roca-Allen) involved the demolition

of one house and resettlement of two individuals. The Bank team reviewed the case and concluded

that in spite of proactive efforts of the Central and Provincial executing units, the management of

the case did not fully comply with the Bank’s OP 4.12. Consequently, a Remedial Action Plan was

prepared and approved by the Bank in November 2009, and the second restructuring was approved

in June 2010 to trigger OP 4.12 so that the operation could develop the appropriate mechanisms to

manage and prepare for any resettlement issues that could arise under implementation.

30. Extension of closing date, reallocation of funds and revision of Results Framework

(Restructuring 3). The third restructuring was approved in March 2012 and included an extension

of the closing date, a reallocation of funds between components and a revision of the Project’s

Results Framework. At the time this third restructuring was approved, the Project had disbursed 30

percent of the financing amount, and the list of subprojects to be financed had been mostly finalized

(albeit with significant differences from the initial list considered at appraisal). The BMSP was

prepared as a Framework Project that included subprojects on a subset of provinces and three

sectors (water and sanitation, urban drainage, roads), as reflected in the PDO. When the Project

was designed, Provinces were consulted and a list of potential subprojects was pre-identified. As

the Project started implementation, demand from the Provinces changed as other sources of federal

funding became available. As a consequence, the final list of subprojects financed by BMSP was

different than the one identified at preparation. The relative importance of sectors changed, namely

with demand concentrated in road projects rather than in water and sanitation.

31. On March 6, 2012, the project was restructured to reflect the above-mentioned changes in

the following way:

(i) The closing date was extended from March 31, 2012 to November 30, 2013.

(ii) The percentage to be financed by the Bank for Categories 1 and 2 was increased from

75% to 100% (dropping co-financing by Municipalities).

(iii) Funds were reallocated to better reflect municipalities’ demand. Demand for road

infrastructure was significantly higher than anticipated while demand for water supply

and sanitation was lower. Twenty million dollars were transferred from Category 1

(Water) to Category 2 (Urban Drainage and Roads). Also participating Provinces

showed little interest in using Category 3 expenditures (Capacity building and

Training) since other sources of non-reimbursable funding for these kinds of activities

became available. For this reason, US$4.4 million were reallocated from Category 3

to Category 2.

(iv) The project adjusted the Results Framework to reflect changes in indicators.

32. The table below summarizes the changes introduced in the Results Framework. While the

PDO remained unchanged, the PDO Indicator 1 was modified to differentiate between direct and

indirect beneficiaries. The target values for intermediate outcome indicators for Component One

were modified to reflect Provinces’ actual demand in each sector (i.e. decreasing target values

under basic water and sanitation and urban drainage subprojects, and increasing target values under

urban and productive roads subprojects).

10

Table 4. Changes in Results Framework

Original Updated

Project outcome indicators

One million consumers benefit from improved

access to reliable and safe water supply and

sanitation, urban drainage infrastructure and

improved roads

One million consumers benefit directly or

indirectly from improved access to reliable and

safe water supply and sanitation, urban drainage

infrastructure and improved roads

Intermediate outcome indicators (Component 1)

200,00 new consumers are connected to water

supply networks

250,000 consumers have access to infrastructure

and improved networks for water supply and

sanitation services

600,000 new consumers are connected to sanitation

and sewerage networks

16,000 new consumers are connected to sanitation

and sewerage networks

100 km of urban drainage 10 km of urban drainage

200,000 beneficiaries benefit directly from

improved urban drainage

20,000 beneficiaries benefit directly from

improved urban drainage

30 km of rehabilitated and paved urban roads 75 km of rehabilitated and paved urban roads

90 km of rehabilitated and paved productive roads 125 km of rehabilitated and paved productive

roads

33. Second extension of closing date (Restructuring 4). On July 17, 2013 the project’s closing

date was extended from November 30, 2013 to April 30, 2015 (17 months), as requested by the

borrower. This was the second extension of the project’s closing date, accounting for a total of 37

months of extension. This second extension was necessary to allow for additional time to complete

ongoing contracts and new subprojects. The restructuring would also improve the impact of the

project and the likelihood of PDO achievement.

34. Project implementation had a slow start, but the team was able to adjust to new

conditions through the restructurings, and ultimately disbursed most of the loan proceeds. Of

the seven potential participating provinces identified during appraisal, one did not participate

(Chubut) and three others were added (La Rioja, Salta and Santiago del Estero). Additionally, the

Bariloche subproject was dropped because it required triggering the Natural and Critical Habitats

Safeguard Policy, and no Level One Project restructuring could be carried out due to the freezing

of Board action on Argentina. Despite these changes in the Project’s pipeline, the Bank and

borrower remained committed to identifying new municipalities and subprojects to ensure full

disbursement of the loans and PDO achievement. The task proved challenging and long-delayed

but was successfully accomplished.

35. The BMSP financed 22 subprojects in 9 provinces with various levels of capacity. As

shown in Table 6, road infrastructure received most of the funding (61%), followed by water and

sanitation (38%). Funding for urban drainage was minimal, with only one project implemented in

this category (1%). The average project amount was US$ 5.3 million. See Tables 6 and 7, and

Annex 2 for a complete list and description of the subprojects.

11

Table 5. Participating Provinces

Provinces identified

during appraisal

Participating Provinces after

restructurings

Buenos Aires Buenos Aires

Chubut

La Rioja

Mendoza Mendoza

Neuquén Neuquén

Rio Negro Río Negro

Santa Fe Santa Fe

Salta

Santiago del Estero

Tucuman Tucumán

Table 6. Subprojects by Province

Province Number of

projects

Direct

beneficiaries

Indirect

beneficiaries

Estimated

amount

financed

(US$)

Estimated

total

amount by

8/31/2015

(US$)

Buenos Aires 2 38,905 614,151 6,171,062 8,069,802

La Rioja 2 76,800 66,884 5,228,911 5,228,911

Mendoza 3 10,544 189,051 10,034,854 15,959,413

Neuquén 2 33,000 - 5,227,699 5,732,505

Río Negro 2 10,000 90,000 27,710,017 33,034,969

Santa Fe 3 32,790 126,232 8,980,180 13,045,934

Salta 2 4,000 30,800 3,465,157 3,730,824

Santiago del Estero 4 76,329 14,000 24,591,496 24,706,146

Tucumán 2 14,790 35,210 6,343,393 6,843,801

Total 22 297,158 1,166,328 97,752,769 116,352,304

Table 7. Subprojects by Sector

Sector Number of

projects

Direct

beneficiaries

Indirect

beneficiaries

Estimated

amount

financed

Estimated

total

amount by

8/31/2015

(US$)

Average

project

amount

per sector

Water and

sanitation 9 173,129 78,884 37,253,857 39,463,730 4,384,859

Urban

drainage 1 1,200 13,800 1,348,114 1,733,047 1,733,047

Road

infrastructure 12 122,829 1,073,644 59,150,798 75,155,527 6,262,961

Total 22 297,158 1,166,328 97,752,769 116,352,304 5,288,741

36. Freezing of Board Action on Argentina. Starting in 2011—near the middle of effective

Project implementation— the Bank’s Board of Directors did not discuss any Argentina-related

12

projects or project restructurings for a 3-year period (FY12, 13, and 14; the last Board discussion

was on April 2011). For Projects under implementation, like BMSP, this meant that all

restructurings had to be kept at Level 2, where no Board approval was required (no changes to the

PDO could be made). This restriction had important impacts on the Project. The subproject in

Bariloche, despite being fully prepared, needed to be dropped since no Level 1 restructuring could

be carried out. New subprojects needed to be identified to commit the funds made available from

this subproject. Identification of additional subprojects caused project delays and was one of the

main reasons leading to the project’s extension.

37. Changes in exchange rates. The Argentine Peso/US Dollar exchange rate shifted

dramatically over the Project’s lifetime, from AR$2.9 to 1 US dollar in 2005, to AR$3.05 at

appraisal, to AR$8.55 at Project closing. As a result, since contracts were signed in pesos and

executed during a period of rapid devaluation of the peso, the value in dollars of some works

contracts fell during execution, leading to unexpected under-commitment of loan resources and

some undisbursed funds (7% of loan amount) as of Project closing.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

38. The M&E Framework was designed to track progress in implementation, measure

intermediate outcomes and measure Project impacts. Responsibility for M&E was divided among

the national level UEC, UEPs and Municipalities. The Project planned for Poverty Impact

Monitoring, an Impact Evaluation and Public Opinion Monitoring, all which were not implemented.

Progress reports were compiled by the UEC using inputs from the provincial and municipal

agencies.

39. M&E Design. The Results Framework adequately reflected initial project design.

However, the framework was later deemed too ambitious because many indicators were measured

differently, or not measured at all. This led to the need to review some of the indicators.

40. The Necesidades Básicas Insatisfechas (NBI) (Unmet Basic Needs) index, used by the

Government of Argentina, was included as a PDO indicator with the intent of measuring the extent

to which participating municipalities targeted project investments to areas of greater relative

deprivation. The idea behind using this indicator was to understand if the project was truly targeting

the areas of greatest need within each Municipality. The World Bank and the UEC agreed to change

the indicator after it became clear that the information was very difficult to gather at the census

tract level. Instead, the indicator gathered information comparing Municipal NBI with Provincial

NBI.

41. The Intermediate Indicators for Component 2 (Technical Assistance) were left blank in the

PAD so they could be designed after demand from Municipalities became more specific regarding

the type of Technical Assistance (TA) the Project would finance. As previously explained, the

Municipalities found it unattractive to request funding for TA, so the component was partially

disbursed and only funded technical studies for the preparation of specific subprojects, and the

unutilized proceeds were reassigned. However, the TA component and indicator were not dropped

during the 2012 restructuring because at that time TA activities were being prepared and ready for

tendering for the Province of Neuquén, even though the Province did not follow through.

13

42. M&E Implementation. The PDO and intermediate indicators were adjusted during the

2012 restructuring11 to establish a better link with project activities. Although the matrix’s outcome

indicators proved to be more aligned with the project, the modifications were not sufficient to

completely capture the project’s impacts and outputs. Due to early changes in the Municipalities’

demand for Project financing, the focus of Project implementation efforts has been on the

identification of new subprojects to ensure full commitment of the loan, and subsequent

implementation of the subprojects. As a results, there was limited focus on the results framework

and the need to update and validate it based on the evolution of the portfolio of subprojects. The

Bank regularly monitored the project’s progress through supervision missions. The Project also

organized workshops for subproject implementers to share experiences and provide feedback.

During the project’s closing workshop, implementing agencies presented the subprojects’

additional impacts.

43. Most of the PDO and intermediate outcome indicators were closely monitored by the

Bank’s supervision team and reported in the ISRs (Implementation Status and Results Reports).

The impact of the subprojects in the Municipalities was greater and more significant than was

reflected in the M&E matrix. In order to obtain a more complete picture of the Project’s impacts,

some implementing agencies gathered other kinds of social indicators (e.g. those related to water-

borne diseases in the case of water and sanitation, and to the productivity of fruit producers in the

case of roads) that helped to better understand the project’s impact on the quality of life. See Section

3.5 for a record of these additional project impacts.

2.4 Safeguard and Fiduciary Compliance

44. Application and observance of safeguard policies were adequate throughout Project

implementation. At Project preparation only the Environmental Assessment (4.01) and Cultural

Property (OPN11.3) policies were triggered. The Bank later made adjustments to trigger OP 4.12

on Involuntary Resettlement.

45. Social Safeguards (Resettlement). The PAD did not trigger OP 4.12 on Involuntary

Resettlement since no resettlement was foreseen at appraisal. However, the Project’s

Environmental and Social Framework included a resettlement plan for adequately addressing any

potential population displacements. Consequently, the Project was restructured in the same year to

trigger OP 4.12, and an Involuntary Resettlement Framework (IRF) and abbreviated IRF were

prepared.

46. A total of three abbreviated resettlements plans were carried out in Monte Quemado

(Santiago del Estero), Gral. Roca-Allen (Rio Negro) and Rosario (Santa Fe). In Monte Quemado,

six artisanal micro-businesses were relocated, one of which received economic compensation from

the Municipality by reason of engaging in a different remunerative activity. In addition, two

individuals in Gral. Roca-Allen, and one small produce business in Rosario were relocated. The

adopted measures proved to satisfy the safeguards requirements.

11 World Bank. Restructuring Paper on a Proposed Project restructuring of the Municipal Services Project

Lean 7385-AR. March 6, 2012

14

47. Resettlement plans had also been formulated for Godoy Cruz and Guaymallén, but

ultimately neither required carrying out any resettlements. Godoy Cruz’s Abbreviated Resettlement

Plan was formulated because the Municipality’s subproject involved pushing back house/property

fences (made up of wire and sticks) that invaded public space to make room available for sidewalks.

However, individuals living in these housing units voluntarily adjusted their fences in accordance

with the new construction works. In the case of Guaymallén, an Abbreviated Resettlement Plan

was prepared for three people that needed to adjust perimeter fences to make room available to

build a roundabout at the intersection of the streets Carril Rodriguez and Urquiza. The subproject

was modified and dropped the roundabout construction, so no fencing adjustments were made.

48. Environmental Safeguards (Natural Habitats). The PAD did not trigger the Natural

Habitats (4.04) policy since no works in natural habitats were foreseen at appraisal. In 2011, the

Bank’s safeguards team realized that the implementation of the Bariloche subproject would require

triggering the Natural and Critical Habitats Safeguard Policy since the subproject was located next

to Lake Nahuel Huapi, within in a protected area (Parque Nacional Nahuel Huapi). Triggering a

new safeguard policy required a Level One Project restructuring, along with the Bank’s Board

approval. The UEC and Bank worked jointly to prepare the policy instrument in the subproject and

also made the needed updates in the Environmental and Social Framework, but the restructuring

was not possible due to the freezing of Board action on Argentina. As a result, this subproject was

dropped, and the Bank offered the option of presenting alternative eligible subprojects, at an

advanced stage of preparedness, recognizing that their completion would require extending the

project’s closing date.

49. Fiduciary compliance. Despite slow subproject start-up in most Provinces, procurement

processes were overall satisfactory. The Bank had initially observed delays in contracting

procedures; however, continuous supervision and support from the UEC and Bank helped

Municipalities and Provinces become better acquainted with the Bank’s contracting requirements,

resulting in improved subproject procurement processes and more timely disbursements. Standard

Bidding Documents acceptable to the Bank were prepared and amended as necessary to streamline

contracting processes.

50. Financial Management Implementation. Project financial management (FM) is assessed

as Moderately Satisfactory. Throughout the implementation period, the Project showed adequate

FM arrangements that complied with Bank requirements, and audits did not identify any significant

issues impacting the project. However, there were constant delays in submitting the Interim

Financial Reports and Audited Financial Statements to the Bank by the Auditoría General de la

Nación (up to 9 months overdue), causing the Project’s FM rating to be downgraded to Moderately

Satisfactory. These delays resulted from issues within the Auditoría General de la Nación, and not

from within the UEC. The Project closed on April 30, 2015, reaching 93 percent of disbursements.

The last audit report, covering a 16-month period from January 1, 2014 to April 30, 2015, will be

presented to the Bank on October 31, 2015, and will include disbursements made during the grace

period.

2.5 Post-completion Operation/Next Phase

51. Investment Cost Recovery. The Project Results Framework called for the recovery of

investment costs from direct beneficiaries for subprojects in roads infrastructure and drainage.

From these, only some roads infrastructure subprojects have implemented cost recovery

mechanisms for investment. Table 8 for subprojects in roads infrastructure shows that General

Pueyrredón, Azul, Rafaela and Rosario are the only four participating Municipalities that will

15

recover 100 percent for investment. Table 9 for drainage subprojects shows that San Martin will

not recover cost for investment.

52. O&M Plans for Infrastructure. All infrastructure constructions have been entrusted to

the relevant agencies following the works’ commissioning. However, the financial sustainability

of Operations and Maintenance remains an area of concern for all sectors. The financial analyses

of all subprojects identified requirements for O&M recovery and provided specific options to

recover these costs, but the post completion review of the implementation of these costs recovery

mechanisms showed only partial implementation of the cost recovery mechanisms identified during

Project implementation. Tables 8 & 9 present the post-completion assessment of cost recovery

mechanisms for Roads and Drains subproject, based on information collected by the UEC from

provincial and municipal counterparts.

Table 8. Cost Recovery Mechanisms for Roads Infrastructure Projects

Province Municipality

Estimated

Financed

Amount

(US $)

Cost

Recovery

for

Investment

Cost

Recovery

for O&M

Comments /

Recovery Source

Buenos

Aires

General

Pueyrredón 4,436,154 Yes – 100% Yes

A betterment fee was

applied by the

Municipality to finance

the loan’s repayment.

The Municipality repays

the loan.

Azul 1,734,908 Yes – 100% Yes


applied by the




the loan.

Mendoza

Guaymallén 3,405,969 No Yes

The Province subsidized

the Municipality’s

investment.

Maipú-

Godoy Cruz 5,280,771 No Yes



investment.

Rio Negro

Roca-Allen 10,671,057 No Yes

Initially, a trust was to

be created, but the

Province ultimately

subsidized the

investment due to an

economic emergency.

Roca-

Cervantes 17,038,960 No Yes

Initially, a trust was to

be created, but the

Province ultimately

subsidized the

investment due to an

economic emergency.

Santa Fe

Rafaela 892,681 Yes – 100% Yes


applied by the



16


the loan.

Rosario 6,536,216 Yes – 100% Yes


applied by the




the loan.

Salta

Cerrillos 2,651,939 No Yes



investment.

Rosario de la

Frontera 813,218 No Yes



investment.

Tucumán

Lules 2,305,330 No Yes



investment.

Total Investment 55,767,203

Amount recovered from

beneficiaries 13,599,959

Percentage (%) 24.39%12

Table 9. Cost Recovery Mechanisms for Urban Drainage Projects

Province Municipality

Estimated

Financed

Amount

(US $)

Cost

Recovery

for

Investment

Cost

Recovery

for O&M

Comments / Recovery

Source

Mendoza San Martin 1,348,114 No Yes (100%)



investment. A

betterment fee was

applied for O&M.

Total Investment 1,348,114

Amount Recovered for

Investment

0

Percentage (%) 0%

53. Physical Infrastructure. Project design clearly set out the responsibilities for post

completion maintenance and operation of investments. The large number of physical investment

subprojects financed under the Project are likely to continue to work well and be adequately

maintained as a result of good technical design and supervision of works, as well as the provisions

made for operation and maintenance costs.

12 The percentage of amount recovered for investment would have totaled 75% if the Province of Rio Negro

continued to have cost recovery mechanisms, as it initially did.

17

54. Institutional Development. By introducing enhanced capital investment project

preparation practices and sustainable financing mechanisms for municipal investments, the project

has improved municipalities’ technical capacity. This gained capacity has also been used for

preparing projects for other lines of financing, such as the IDB. However, it is less clear how long

the newly acquired skills will remain within Municipalities given successive changes in

government administration, particularly in small and medium-size Municipalities, and in cases

where consultants carried out the technical work. During the interviews conducted as part of the

project’s final evaluation, local officials consistently reported the need for ongoing training in areas

such as subproject preparation and evaluation and bidding procedures to minimize the impact of

staff rotation.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

Rating: High

55. The BMSP was designed to contribute to the higher-level objectives of the Country

Assistance Strategy (CAS) and was included in the lending program of the 2006-2010 CAS.

The Project substantially supported one of the CAS’s three pillars: sustained economic growth with

equity and social inclusion, and its objectives were fully consistent with those of the CAS: to seek

opportunities to build on an investment partnership to support Government efforts to transition

from crisis recovery to sustained growth with equity and reduced structural poverty.

56. Strengthening of the municipal sector was at the time of Project preparation and

continues to be today an area of priority. Argentina is a federal country characterized by a

substantially higher degree of decentralization of expenditures than of revenues. In 2011, the own-

source revenue of provinces and municipalities was equivalent to 7.5 percent of GDP but covered

only half of subnational primary government spending. The resulting vertical imbalance is filled

by an automatic revenue-sharing system and by discretionary transfers.13

57. The Project’s objective continues to be highly relevant for the country for the following

reasons: (i) service delivery at the Municipal level still needs improvement; (ii) the demand for

capital investment financing prevails; and (iii) Municipalities expressed the need to increase

capacity to prepare investment projects. The latest Country Partnership Strategy FY2015-2018 has

shifted the Bank’s engagement towards a more comprehensive approach to urbanization. The first

pillar of the CPS supports employment creation in firms and farms, and within that theme, a specific

objective is to support agglomeration economies reach low-income populations and areas. Findings

from an ongoing analytical work on Agglomeration Economies14 indicates that limited financial

and technical capacity at the municipal level impacts the growth dynamics of Argentina’s cities,

thus hindering their potential to deliver agglomeration economies.

3.2 Achievement of Project Development Objectives

58. PDO (Loan Agreement): The objective of the Project is to improve the quality of: (a) basic

municipal services, through the provision of water supply and sanitation, urban drainage and roads

13 Fretes Cibils, Vicente; Ter-Minassian, Teresa. Decentralizing Revenue in Latin America: Why and How.

IDB. APRIL 2015 14 Programmatic Approach on Agglomeration Economies in Argentina (P153198)

18

infrastructure in an equitable and fiscally sustainable manner within the territorial jurisdiction of

Participating Provinces; and (b) life of the population to be benefited by the provision of said

services.

59. The Project’s efficacy in achieving its Development Objectives has been substantial. The

Project was prepared as a framework Project15, and the specific targets changed significantly due

to changes in demand from the Municipalities. The targets were adjusted through the

restructurings and several of the original intermediate indicators were only partially achieved, not

achieved at all, or dropped. The two PDO-level indicators were achieved. However, these two

indicators do not fully capture the achievement of the PDO and the paragraphs below develop the

analysis beyond the PDO-level indicators to assess separately the two parts of the PDO: Improve the quality of basic municipal services through the provision of water supply and

sanitation, urban drainage and roads infrastructure in an equitable and fiscally sustainable

manner within the territorial jurisdiction of Participating Provinces; and

Improve the life of the population to be benefited by the provision of said services.

Part 1: Improve the quality of basic municipal services through the provision of water supply

and sanitation, urban drainage and roads infrastructure in an equitable and fiscally sustainable

manner within the territorial jurisdiction of Participating Provinces.

Rating: Substantial

60. The Project has improved the quality of basic municipal services in the participating

municipalities. As could be expected in projects financing demand-based municipal investment in

basic infrastructure, the initial targets for water supply and sanitation, urban drainage and roads

infrastructure were revised during implementation in response to the actual demand from the

municipalities. As mentioned previously, the share of roads subprojects increased significantly

compared to the estimates made at appraisal. This change in sector focus did not, however,

negatively impact the Project’s contribution in terms of improving the quality of municipal services

in an equitable and fiscally sustainable manner. The Project remained focused on service

improvement by selecting subprojects that had their expected impacts in service improvement

identified and quantified through the required social and economic analyses. The satisfactory

results of the ex-post economic analysis confirm that the Project achieved this objective, and that

the investments in basic municipal infrastructure did result in tangible improvements in terms of

quality of service enjoyed by the Project’s beneficiaries.

61. The Project’s technical contribution to improvement in the quality of services was high. High technical standards were satisfactorily applied to the preparation and execution of all

subprojects, as confirmed through technical reviews and field visits carried out by technical experts

hired by the Bank. The technical eligibility criteria and preparation processes used for all

subprojects ensured that the investments were adequately dimensioned and that clear mechanisms

for operations and maintenance were identified. The project conducted timely technical reviews of

subprojects and, once identified and approved, subprojects were implemented as scheduled.

Despite delays in subproject formulation and respective contracting procedures, 93 perccent of

project funds were committed and reached a larger number of beneficiaries than expected. The

15 The PAD provides an estimate of project disbursements to participating provinces, however, the document

clarifies that “given the demand-driven ‘framework’ nature of this project, the list is entirely indicative and

will be subject to change during implementation based on the willingness and eligibility of provinces and

municipalities to participate and prepare technically sound and appropriate subprojects.”

19

technical reviews, which were prepared by sector specialists hired by the Bank, rated the quality of

subprojects as satisfactory.

62. The Project’s approach to ensuring fiscal sustainability was substantially applied. To

promote fiscal discipline, investments were limited to Provinces that were in compliance with the

Government’s approach to assessing fiscal sustainability, which includes the Fiscal Responsibility

Law. Similarly, in the cases of subprojects that were financed through sub-lending at the municipal

level, the Project screened municipalities based on the municipalities’ compliance with the

principles and parameters of the Fiscal Responsibility Law that were applicable to them. In addition,

the Project required participating municipalities to develop investment plans and to identify cost

recovery mechanisms for each subproject. A post completion review showed that the cost recovery

mechanisms were only partially implemented in terms of direct recovery of investment costs from

beneficiaries. However, the review indicated that the proposed mechanisms for covering O&M

costs were applied in all cases (Roads and Drainage). It should be noted, however, that the limited

cost recovery observed through the ex-post financial analysis did not directly impact the fiscal

sustainability at the municipal level for two reasons: (i) as assessed in the fiscal analysis prepared

at appraisal, the subproject investments would have had a minimal to moderate impact on municipal

debt stocks, (ii) in the case of the subprojects that did not implement cost recovery mechanisms

from the beneficiaries, the investment was subsidized by the respective province, thus eliminating

any fiscal impact at the provincial level. Although the issue of limited cost recovery at the

subproject level impacts the efficiency rating, it is not considered to impact the Project’s

achievement of ensuring fiscal sustainability as envisaged at appraisal.

63. The equity of the improvements is assessed as substantial. Although the Project focused

on targeting fiscally sustainable Municipalities, 55 percent of subprojects were executed in

Municipalities with NBIs equal to or above Provincial NBI averages, thereby achieving the second

PDO-level indicator. See Table 10 for differences in NBI percentages between the municipal and

provincial levels. It should be noted that, although the Project aimed for an equitable distribution

of financing, as measured through the PDO level indicator, the Project was not designed as a

poverty-focused intervention. The PAD explicitly mentions that a poverty-focused intervention

was one of the alternatives considered and rejected during preparation, and explains that it was the

Government’s strategy to focus the intervention on supporting investments in basic municipal

services in fiscally responsible provinces and municipalities, while using other transfers and other

non-reimbursable resources for poverty targeting. As explained in the PAD, the Project did,

however, introduce technical eligibility criteria and preparation processes (including social

assessments and economic evaluations) that were explicitly designed to favor pro-poor investments

in service expansion and basic infrastructure.

Table 10. Provincial and Municipal NBI (Subprojects with an (*) have equal or higher Municipal NBI than the Provincial average, representing

55% of the sample)

Province Provincial NBI

(households) Subproject

Municipal NBI

(households)

Buenos Aires 13%

General Pueyrredon 9%

Azul 8%

La Rioja 17%

Capital 14%

Capital 14%

Mendoza

13%

San Martin* 14%

Maipu - Godoy Cruz* 14%

Guaymallen 11%

20

Neuquen 15%

Chos Malal* 19%

San Patricio del Chañar 13%

Rio Negro 16%

Roca – Allen* 20%

Roca – Cervantes* 20%

Salta 28%

Rosario de la Frontera 24%

Cerrillos* 31%

Santa Fe

12%

Rosario* 12%

Rufino 10%

Rafaela 9%

Santiago del Estero

26%

Campo Gallo* 44%

Frias 21%

Herrera* 40%

Monte Quemado* 39%

Tucuman 21%

Lules* 26%

Bella Vista* 28%

Source: http://www.sig.indec.gov.ar/index.php. Figures based on 2010 Census.

Part 2: Improve the life of the population to be benefited by the provision of said services.

Rating: High

64. As measured by the first PDO-level indicator, the Project improved the quality of life of

nearly 1.5 million direct and indirect beneficiaries through the provision of basic services,

surpassing the original goal of 1 million people by 46%. The information gathered for the post-

completion analysis indicates that the subprojects have had significant positive impacts for the

beneficiaries. Benefits derived from water supply subprojects included increased access to water

and improvement in service quality. Households with no access to drinking water became

connected to potable water distribution networks, and homes with existing water connections

benefited from an improved and more efficient network thanks to the installation of water meters

(La Rioja) and system remodeling (Campo Gallo). Beneficiaries in Herrera and Monte Quemado

enjoyed increased water availability from the installation of new treatment plants. Under sewerage

subprojects, beneficiaries enjoyed improved sewerage disposal and treatment services. For example,

households in Chos Malal benefitted from a newly constructed sewer network and home

connections, while households in San Patricio del Chanar benefitted from an expanded and

refurbished network and treatment pond. Roads infrastructure subprojects brought positive

outcomes to beneficiaries related to improved travel conditions and shortened travel times thanks

to road pavement and rehabilitation. In the Province of Rio Negro, for example, beneficiaries in the

municipalities of Roca-Allen and Roca-Cervantes included farmers and fruit transporters whose

produce, to be sold at local or international markets, were at less risk to be damaged thanks to better

road conditions. Lastly, the drainage subproject implemented in San Martin helped reduced the

vulnerability of the area to damages caused by floods and lowered the potential of damage costs to

beneficiaries’ properties. The quantification of beneficiaries from the different subprojects is

detailed in Annex 2 – Outputs of Component 1.

3.3 Efficiency

Rating: Modest

65. The Efficiency is rated as modest, based on the positive results of the economic analysis

carried out at completion, mitigated by the limited cost recovery achieved at the subprojects’ level.

The economic analysis carried out at completion confirms that the subprojects executed in the

different sectors brought positive impacts, and the overall Economic Rate of Return (ERR) of the

21

sample evaluated at completion is higher than the ERR of the sample evaluated ex-ante during

appraisal. However, the provisions for cost recovery from the beneficiaries which were developed

for each subprojects were only partially implemented and the financial analysis shows that the

financial sustainability at the subproject level is lower than what was envisaged during appraisal.

66. An economic and financial analysis was carried out to evaluate the Basic Municipal

Services Project. For this ICR, the evaluation was conducted using cost benefit analysis as used at

appraisal. Each of the subcomponents was evaluated, that is: a) water and sewerage services; b)

drainage; and c) paved roads, both urban and productive roads.

67. At appraisal the economic evaluation was conducted through cost benefit analysis using

avoided costs. At that time, the evaluation was applied to a sample of 9 subprojects chosen as

representatives of the type of works to be implemented. For the ICR evaluation the same approach

was used selecting a representative sample of 6 subprojects, with investment costs close to 45

percent of total cost. Actual costs and benefits were included in this evaluation. The benefits were

measured using the same approach than at appraisal, namely, averted cost. Benefits of water

interventions were captured through socio-economic surveys conducted in the municipalities

included in the sample. For water, averted costs were equal to savings when no alternative water

sources were needed. For sewerage, averted costs were measured as savings on cleaning septic

tanks or other on-site wastewater disposal system. For drainage, averted costs were measured as:

a) avoided damage cost in properties, and b) savings in maintenance costs of road and public

infrastructure. For roads, averted costs were measured as savings on time and fuel cost. When

evaluating productive roads, benefits of reduced losses on agricultural products impaired during

transportation were added.

68. Project’s impact on socioeconomic development. The project had a positive impact on the

socio-economic conditions of beneficiary households in participating Municipalities. Results show

that benefits outweighed the costs by more than two-fold, and that the Project achieved returns of

36 percent. These results are explained by the poor conditions of water supply, sanitation, drainage

and roads that were in place before the project, as well as by the high prices households had to pay

to cope with the situation. Actual returns were higher than those expected at appraisal, with only

19 percent of returns originally foreseen for the sample of subprojects. All interventions showed

positive results, except for those in sanitation, which did not quantify the most important health and

environmental benefits due to lack of information.

Table 11. Returns Expected at Appraisal and Actual Returns

Expected at Appraisal Actual

Subprojects sample IRR B/C Subprojects sample IRR B/C

Water 15% 1.5 Water 35% 2.4

Sewerage 9% 1.0 Sewerage 6% 0.6

Drainage 39% 2.1 Drainage 53% 4.4

Roads 23% 2.1 Roads 36.2% 3.0

Total Sample 19% 1.7 Total Sample 35.4% 2.6

69. A financial evaluation of the project included the costs and benefits as they were paid and

received by the agencies in charge of operating the works. To develop financially sustainable works,

a financing plan was designed during preparation, including tariffs, charges of contribución

especial de mejoras, and subsidies from municipal and Provincial Governments.

22

70. At appraisal it was foreseen that significant subsidies were needed from public funds, as

some of the Provinces did not have financial mechanisms to cover the associated costs.

Arrangements to find mechanisms for improving cost recovery were discussed. These included a)

tariffs to be adjusted to cover operating costs for water and sewerage subprojects; and b) charges

applied to cover maintenances and operating costs, plus 85 percent of investment costs, for road

and drainage sub-projects. These targets were partially achieved. All sub-projects but water, fully

recovered operating and maintenance costs, and only the road sub-project in the Province of Buenos

Aires achieved investment cost recovery. The resulting financial gap has been covered by

Municipal or Province funds. The Provinces are working on improving their cost recovery policies,

but these policies have yet to be implemented.

71. Rationale for Public Sector Provision/Financing. The Project improved access to quality

water, sanitation, drainage and road infrastructure in municipalities where services provision was

poor and had low coverage. The Government of Argentina was committed to solve these problems

and offered subsidies to low-income beneficiaries to have access to the services. The operation

was designed containing financial mechanisms to include participation of private financing to

reduce the amount of subsidies provided by the Government. Those mechanisms included: a) tariffs

aimed to cover at least operating costs; b) existing charges such as contribución especial de mejoras

to partially pay for investment; and c) new property tax to farmers to cover a portion of paving

roads. However the financial analysis shows that these mechanisms were not fully implemented.

72. World Bank Value Added. The Bank has been a strong supporter of the GoA in helping to

improve basic services provision throughout the country. This operation was a continuation of the

long time involvement with the Government in financing municipal development activities. It

helped to strengthen the approach and assistance to participating municipalities in three ways: a)

by focusing investments on high impact basic services sectors; b) by enhancing the technical and

financial screening of subprojects and of service providers, to move towards financial

sustainability; and c) by building municipality capacity for investment planning and execution,

through physical infrastructure and training.

3.4 Justification of Overall Outcome Rating

Rating: Moderately Satisfactory

73. Overall Project Outcome is rated as Moderately Satisfactory based on the assessment of

the Project’s relevance (high), efficacy (substantial), and efficiency (modest). The Project

objectives, design and implementation were, and continue to be, highly relevant to Argentina’s

priorities and the Bank’s assistance strategy. Despite the project’s slow start and its extension for

an additional three years, all selected subprojects were finalized and have improved the quality of

service and the quality of life of a large number of beneficiaries, while achieving the stated

objectives of fiscal sustainability and equity. The Project’s main limitation is the limited

implementation of the cost recovery mechanisms, which have been proposed at the subproject level.

This is a major departure from the Project’s initial design and justifies the modest efficiency rating

– in spite of the positive results of the economic evaluation – as well as the MS overall rating.

3.5 Overarching Themes, Other Outcomes and Impacts

74. Since the BSMP was structured as a framework project, the M&E matrix was developed

without knowledge of the specific subprojects that were to be financed. Many desirable outcomes

that contributed to quality of life were not included in the M&E matrix, but the implementing

23

Municipalities gathered other indicators that helped observe the subprojects’ additional impacts on

the beneficiaries’ quality of life. Table 12 below shows some examples of these additional

indicators.

Table 12. Selected Additional Impacts from Subprojects16

Subproject Short description Additional Impacts

Santiago del Estero –

Herrera, Monte Quemado and

Campo Gallo

Water treatment plant, tank,

cistern, and distribution

network.

Served very small

municipalities (population

Herrera: 1,894; Monte

Quemado: 12,543; Campo

Gallo: 6,222)17. These

numbers do not include

surrounding rural areas that

are also served by the plants.

Decrease in migration

Average water

consumption increased

from 30 l. per day to 150 l.

per day

Access to water for

productive purpose

Savings in time used to

stock up water (people used

to get water in barrels)

Rio Negro (Roca-Allen and

Roca Cervantes)

131 km of rehabilitated

productive roads in a fruit

production area (Alto Valle

de Rio Negro).

Lower cost of vehicle

maintenance

Improved productivity of

fruit production through

reduction of discarded fruit

from transportation (fruit

travels in bulk), and

reduction in plant pests.

Increased property values.

Improved travel times.

La Rioja (Capital City, 2

projects)

Installation of water

consumption macro and

micrometers.

20,000 meters installed.

Provision of a wealth of

information and ability to

identify leakage and main

consumers.

Neuquén (Chos Malal and

San Patricio del Chañar)

Construction of two

wastewater treatment plants. Improvements in

gastrointestinal diseases.

Economic impact in

household budgets, since

families were able to avoid

a much higher cost of

cleaning individual tanks. Source: Table based on information provided by implementing agencies at the Project’s final workshop in

April, 2015.

16 The information presented in this table summarizes the results presented by PIUs at the closing workshop

in April 2015. 17 2010 Housing and Population Census. INDEC.

24

(a) Poverty Impacts, Gender Aspects, and Social Development

Not applicable.

(b) Institutional Change/Strengthening

75. The final workshop presentation by implementing agencies was very positive about the

capacity gained at the local level for project preparation. Municipalities claimed that future projects

should include more opportunities for training and capacity building and peer learning, especially

at the beginning of the project. The strict subproject preparation requirements served to increase

local capacity for capital investment project preparation beyond the BMSP. Municipalities claimed

that the newly gained capacity could be used to mange other sources of financing.

(c) Other Unintended Outcomes and Impacts (positive or negative)

76. No other unintended consequences were observed.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

77. The Project did not commission a beneficiary survey.

4. Assessment of Risk to Development Outcome

Rating: Moderate

78. Considering both the nature of the investments made and the next steps envisioned, the risk

to Development Outcome is deemed moderate. The main risk relates to the O&M of works.

Although the Project design was heavy on cost recovery plans, cost recovery mechanisms have not

been implemented in some areas (particularly in the poorest areas, and in the Water and Sanitation

sectors). Operation and Maintenance depends on Provincial subsidies, since fees only cover a very

small portion (sometimes nominal) of the cost. The situation is most extreme in subprojects in

Santiago del Estero, where all three water supply facilities are located in very small towns.

Additionally, one town has very costly operations since water needs are met through desalinization.

But even in this case, the situation has been acknowledged and plans are being made to improve

the sustainability of investments.

79. This situation is not new, and it was acknowledged at Project design. The financial

evaluation of sample subprojects estimated that all water and sewerage projects would need

subsidies to cover investment costs. Water projects would require subsidies amounting to

approximately 60 percent of investment, while sewerage projects would need subsidies equal to

almost the whole investment cost. Some drainage and road pavement projects are covered by

betterment fees (contribuciones por mejoras), while others require subsidies of between 20 and 60

percent18.

18 PAD. Annex 9: Economic and financial analysis.

25

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry

Rating: Moderately Satisfactory

80. Project preparation was solid and included: (i) good quality background studies (e.g. solid

economic analyses of subprojects); (ii) support to the UEC in the preparation of a thorough

Operations Manual including adequate frameworks for project preparation (i.e. Environmental and

Social Frameworks); (iii) stock taking of the two previous MDP projects by reflecting the lessons

learned in the previous engagements in the design of the new project.

81. The BMSP was conceived as a Framework project and followed a demand-driven approach,

allowing output targets to evolve during project implementation in response to local demand.

However, project implementation was impacted by changes in the country’s environment, which

could not have been anticipated during project appraisal. The provinces’ political and financial

situation changed considerably from preparation to implementation. At entry, provinces had very

limited access to financing for capital investments, but other funding options became available

during project implementation. Demand from provinces diminished, and it took a long time to find

provinces interested in the Bank’s financing. This was reflected in the lengthy period it took to sign

the Subsidiary Agreements and to find suitable and well-prepared subprojects that would fit the

economic/financial and technical eligibility criteria.

82. Project implementation was impacted by significant changes occurring after project

approval, which according to both the Bank and the Government, could not have been anticipated

at appraisal. Project design at appraisal was adequate given the information available at the time.

However, given the Argentinean context and the demand-based nature of the operation, additional

flexibility could have been introduced in the design to allow managing changes in demand, both

for investment and technical assistance activities at the local level. Specifically, the lack of demand

for TA activities caused some delays in preparation of subprojects. The initial project design had

envisioned both local investments and TA activities to be financed through borrowing based on the

successful implementation of similar arrangements in previous municipal development projects in

Argentina; however, a detailed assessment of the demand for TA activities could have helped to

identify a risk concerning limited demand, and therefore, introducing more flexible financing

options would have had a mitigating measure.

83. The project was overly optimistic regarding the interest and demand of provinces on

technical assistance to improve provincial capital investment planning and project preparation

capacities. There was no demand for these kinds of activities, as provinces did not want to increase

their debt to finance capacity building.

(b) Quality of Supervision Rating: Moderately Satisfactory

84. The Bank’s supervision allowed the Project to disburse 93 percent of the proceeds while

achieving its main objectives in a very adverse situation. The implementation team worked with

the Government to adjust the Project design to respond to changes in local demands – dropping 25

percent of the local co-financing requirement, reassigning proceeds, extending implementation and

adjusting the M&E framework. Important efforts were made to identify and prepare new

subprojects, while ensuring high technical standards for subproject preparation and execution. On

26

the flip side, the team’s focus on subproject identification, preparation and execution shifted the

attention away from opportunities to strengthen the Project’s M&E framework.

(c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory

85. Based on the Bank’s performance in ensuring quality at entry, and in its quality of, the

overall Bank’s performance is rated as moderately satisfactory.

5.2 Borrower Performance

(a) Government Performance Rating: Moderately Satisfactory

86. In light of significant policy changes affecting project implementation, the Government of

Argentina remained committed to the achievement of project objectives. The Ministry of Finance

continuously expressed to the Bank their interest in moving forward with the project in light of

several challenges.

87. However, significant delays were experienced in meeting the Project’s conditions for

effectiveness, due to the time taken – both at National and Provincial Level – to complete the

administrative and legal processes required for declaring the loan effective. While such delays were

not specific to this Project, they contribute to the rating of the Government Performance as

Moderately Satisfactory.

(b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory

88. The UEC did a good job in coordinating all efforts at the national, provincial and municipal

levels during stages of subproject identification, preparation and implementation. It succeeded in

attracting demand to expand the coverage of the Project, and in fully committing the available

financing. Despite the Provinces’ and Municipalities’ decreased demand for the Bank’s financing,

the UEC was very proactive in identifying new Municipalities and subprojects to fund. To avoid

any further delays in project implementation, the UEC decided to select subprojects that were in

the final stages of formulation. The UEC also ensured timely execution of the respective

subprojects, which allowed the Project to achieve its development objectives. The BMSP surpassed

its target of improving access to reliable safe water supply and sanitation, urban drainage and

improved roads to one million consumers, by reaching more than 1.5 million direct and indirect

beneficiaries. In addition to targeting Municipalities that were fiscally sustainable, the majority (55

percent) had NBIs higher than the Provincial average. Finally, the UEC complied with the Bank’s

requirements concerning periodic report deliveries.

89. Project implementation generated capacity both for the UEC and UEPs, as evidenced by

their increasing procurement capacity over implementation and the quality of the progress reports,

which improved considerably towards the last years - becoming more timely, comprehensive and

disaggregated at the subproject level.

90. Some of the subprojects were prepared and implemented at the Provincial level, and others

at the local level. Some Provinces considered that it would be more efficient to centralize

implementation since Municipalities sometimes lacked the capacity to implement the Projects. In

the same manner, even though the PAD established that the debt would be transferred to

27

Municipalities, the Provinces absorbed it in most cases. Buenos Aires and Santa Fe constitute the

exceptions.

91. In cases where Municipalities implemented the Projects, they expressed that the interaction

with the UEC and the Bank increased their capacity to prepare investment projects. This knowledge

was used to prepare proposals for other sources of funding, such as the IDB and CAF.

92. In fact, the main limitation in the Implementing Agencies’ performance was the initial low-

level capacity to prepare and execute subprojects following the Project’s procedures. This was

expected, and a TA component was included in the project to finance capacity building for the

technical, economic, financial, social and environmental preparation and assessment of subprojects.

However, Provinces and Municipalities found it unattractive to make use of the financing available

for TA, and ended up “learning by doing” with significant support from the UEC and the Bank

teams, but with significant delays in subproject preparation. This could have been avoided by

providing upfront technical assistance financed by the Project.

(c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory

93. In spite of delays in meeting the Project’s condition of effectiveness and subproject

preparation, the overall borrower performance is deemed moderately satisfactory, given the

continued commitment of the Borrower (GoA) to implement and complete subprojects, as well as

the collaborative performance of the implementing agencies.

6. Lessons Learned

94. The next paragraphs highlight the main lessons learned.

95. There is a trade-off between demand driven investment and sector specific approach.

The decision to structure the projects with a demand driven approach (for flexibility and to respond

to a variety of local demands) limited the depth of the technical discussion and decreased the

possibility to support sectorial reforms. Although subproject eligibility criteria required detailed

economic and technical evaluation of individual investments, it is important to note that individual

subprojects in a multi-sector project do not receive the same level of attention as in operations with

a more limited scope. Focusing on fewer sectors seems to be a more effective strategy to mitigate

this risk and, at the same time, to fully capitalize on economies of scale and the know-how

generated by the project. This applies for both physical investments and institutional development.

96. Demand matters for demand-driven Projects. The Project faced a set of significant

challenges early on that were related to significant changes in the demand for the financing offered.

This not only required the significant efforts from the Government and the Bank to identify a new

pipeline of subprojects; it also reduced the Project’s leverage in terms of capacity building and

sectoral improvements. When preparing demand-based project, special attention should be paid to

potential shifts in the Project’s environment, which can impact the local demand for financing, and

flexible mechanisms for adjustment of the Project’s financing conditions should be considered and

assessed.

97. Financing conditions should be designed to ensure demand for key technical assistance.

Even though Municipalities may lack technical capacity for project preparation and implementation,

it is key to involve them throughout subproject design and implementation to generate learning and

commitment for future maintenance of the investments. In the case of the BMSP, key technical

28

assistance activities which could have proved critical in improving the Project’s execution and the

sustainability of sectoral policies was not implemented due to the Provinces and Municipalities’

lack of willingness to fund technical assistance through loan proceeds. Providing technical

assistance and opportunities for peer learning from other Municipalities on attractive financial

terms is a central element to increase that capacity, a point that was expressed numerous times by

implementing agencies.

98. Finding the right balance between systemic improvements and requirements at the

subproject level is key. The participating Provinces and Municipalities expressed their appreciation

of the internal capacity build through the experience of preparing and executing projects in

alignment with international best practices. However, the extent of this capacity building was

limited to the execution of one or two subproject in each institution. Efforts should be made to

maximize the use of systemic improvements through the implementation of specific measures to

improve existing systems at the Provincial and Municipal level, instead of focusing on subproject

level compliance with sophisticated requirements.

99. Project implementation arrangements requiring sub-lending at the provincial and

municipal level lead to significant delays within Argentina’s institutional framework. The

administrative and legal processes required for the approval and signing of subsidiary loan

agreements led to significant delays in the Project’s effectiveness. Similar delays have been

affecting similar Projects implemented in Argentina during the same period, such as the Flood

Prevention and Urban Drainage Project (P093491) and the Provincial Roads Infrastructure Project

(P070628). Based on this experience, the Bank and the Government have chosen to adopt different

implementation arrangements for projects financing investments in multiple provinces, with the

debt remaining at the central level, and Project activities executed directly through Central

Execution Units in coordination with technical units at the provincial or municipal level.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

100. A copy of this ICR was shared with the Borrower and specific comments have been

received and included in this version of the report. No issues were raised by the Borrower on this

version of the report.

(a) Borrower/implementing agencies

(b) Cofinanciers

(c) Other partners and stakeholders

29

Annex 1. Project Costs and Financing

(a) IBRD Financing by Category (in USD millions equivalent)

Categories (1) Appraisal Estimate

(USD millions)

Actual/Latest

Estimate (USD

millions)

Percentage of

Appraisal

1. Works, goods and/or

consultants’ services under Water

Supply and Sanitation Subprojects

45.30 36.71 81.03

2. Works, goods and/or

consultants’ services under Urban

Drainage Subprojects and Road

Infrastructure Subprojects

58.53 60.13 100.03

3. Goods, consultants’ services

and/or Training under

Institutional Development

Subprojects

0.60 0.40 66.67

4. Goods, consultants’ services,

Training and Operating Costs

under Part C of the project

5.30 3.70 69.81

Front-end fee IBRD 0.27 0.27 100.00

DA 0.00 2.07

Total Financing Required 110.00 103.28 93.89

(1) Information as of September 23, 2015. Source: Client Connection

(b) Financing

Source of Funds (2)

Appraisal

Estimate

(USD

millions)

Actual/Latest

Estimate

(USD

millions)

Percentage of

Appraisal

Borrower 33.20 19.59 59.01

International Bank for Reconstruction

and Development 110.00 102.28 92.98

Total 143.20 121.87 85.10

(2) Information as of June 30, 2015. Source: Interim Financial Report (IFR).

30

Annex 2. Outputs of Component 1

Sub-Project List

Province Municipality Brief description project Sector

Direct

beneficiaries

(Est.)

Indirect

beneficiaries

(Est.)

Estimated

Financed

Amount

(US$)

Estimated

Total

Amount by

8/31/2015

(US$)

1 Buenos Aires General Pueyrredón

Urban roads pavement and rehabilitation

with existing curb (291 paved blocks) Roads infrastructure 24,000 564,056 4,436,154 5,756,591

Comments: Direct beneficiaries are housing units bordering the improved roads. On average, there are 20 beneficiaries for each identified block, totaling approximately 6,000

habitants. By counting 4 people per family, the total number of direct beneficiaries equals to approximately 24,000. Indirect beneficiaries are estimated by Mar de Plata’s tourism

floating population of 1.8 million. The project encloses an area that benefits almost one third of that population, 564,056.

2 Buenos Aires Azul

Urban roads pavement and rehabilitation (97

paved blocks) Roads infrastructure 14,905 50,095 1,734,908 2,313,211

Comments: There are approximately 2,500 units bordering the improved roads. Given the project’s location in the downtown area, the number of direct beneficiaries increases to

14,905. Indirect beneficiaries are calculated as almost 90% of the Municipality’s population.

3 La Rioja Capital

Provision and installation of water meters at

homes – 1st stage (9,288 small meters and

67 large meters)

Water and sanitation 76,800 66,884 3,331,958 3,331,958

Comments: Benefits accrue to the entire population since the whole water system becomes more efficient. Direct beneficiaries are people living in homes with installed water

meters.

4 La Rioja Capital

Provision and installation of water meters at

homes – 2nd stage (12,046 small meters and

67 large meters)

Water and sanitation - - 1,896,953 1,896,953

Comments: Same as 1st stage. The numbers of direct and indirect beneficiaries in the second stage are the ones previously identified in the first stage, so as to avoid duplicating the

benefits received.

5 Mendoza Guaymallén Urban pavement (14.8 km) Roads infrastructure 6,024 115,251 3,405,969 4,805,369

Comments: Direct beneficiaries are the 6,024 people living in the 1,198 units bordering the improved roads. Indirect beneficiaries represent a percentage of the Department of

Guaymallén since the project relieved congestion affecting a significant part of the Province’s population outside the project area.

6 Mendoza Maipú-Godoy Cruz

Expansion of road lane of Provincial Route

Rodriguez Peña, No, 4; 4 km) Roads infrastructure 3,320 60,000 5,280,771 9,420,997

Comments: Direct beneficiaries are the 3,320 inhabitants living in 857 homes bordering the improved roads. Indirect beneficiaries are calculated using the Annual Average Daily

Traffic (AADT) measure. The ADDT is 20,100 vehicles carrying 60,000 beneficiaries.

31


Direct

beneficiaries

(Est.)

Indirect

beneficiaries

(Est.)

Estimated

Financed

Amount

(US$)

Estimated

Total

Amount by

8/31/2015

(US$)

7 Mendoza San Martín

Construction of storm water drainage in La

Palmira (3,100 m) Urban drainage 1,200 13,800 1,348,114 1,733,047

Comments: Direct beneficiaries are the 1,200 people living in the 300 units bordering the water drainage network. Indirect beneficiaries are the Municipality’s inhabitants. Seventy-

five percent are low-income beneficiaries.

8 Neuquén Chos Malal

Construction of sewer network (30,000

linear meters of; 1,535 home connections

distributed)

Water and sanitation 15,000 - 2,469,065 2,954,706

Comments: Direct beneficiaries are the 15,000 inhabitants that are connected to the sewer network. The number of beneficiaries is expected to reach 25,000 by the year 2025.

9 Neuquén

San Patricio del

Chanar

Expansion of sewage network –

Refurbishment and expansion of sewage

treatment pond


Comments: The entire population benefits directly. The number of beneficiaries is expected to reach 25,000 by the year 2030.

10 Río Negro Roca-Allen Pavement of productive roads (75 km) Roads infrastructure 5,000 45,000 10,671,057 14,154,979

Comments: Direct beneficiaries are the 1,400 units bordering the improved roads, representing 5,000 users and producers working on 16,000 hectares of land, including packagers,

fruit transporters, refrigerated truck drivers, producer cooperatives and other industries located along the roads. Indirect beneficiaries are the rural populations of both locations

(Gral. Roca and Allen) that benefit from the economic activity generated by the producers, as well as the road users whose jobs are not tied to land work. Reductions in general

travel and vehicle operation costs are also taken into account.

11 Río Negro Roca-Cervantes Pavement of productive roads (49.7 km) Roads infrastructure 5,000 45,000 17,038,960 18,879,990

Comments: Direct beneficiaries are the 1,250 farms bordering the productive roads, representing 5,000 people. This indicator is based on the number of producers that lower their

losses caused by crushed produce and by road users that reduce their general travel costs.

12

Santa Fe Rafaela

Pavement (Calle Estanislao) and

complementary storm water drainage (13

blocks; 1,100 linear meters of drainage

pipelines)

Roads infrastructure 6,000 94,000 892,681 1,183,468

Comments: Direct beneficiaries are the 1,192 families living in the project’s area, representing 6,000 inhabitants. Direct beneficiaries are bordering the paved roads and are

connected to the drainage pipelines. Indirect beneficiaries are the Municipality’s entire population since the improved road is an important entrance and exit point to the National

Road. The ADDT equals 1,757.

13 Santa Fe Rosario Pavement – 1st Stage (131 blocks) Roads infrastructure 6,790 32,232 6,536,216 8,714,822

Comments: Direct beneficiaries are the 1,250 units bordering the paved roads, representing 6,790 inhabitants. Rosario has an automobile fleet of 400,000 vehicles, and it is

estimated that 25% of that fleet benefits from the project.

32


Direct

beneficiaries

(Est.)

Indirect

beneficiaries

(Est.)

Estimated

Financed

Amount

(US$)

Estimated

Total

Amount by

8/31/2015

(US$)

14 Santa Fe Rufino Expansion of sewer plant Water and sanitation 20,000 - 1,551,284 3,147,644

Comments: Direct beneficiaries are the Municipality’s entire population. Inhabitants benefit from a revamped treating system with a daily capacity of 5,000 square meters.

15 Salta Cerrillos

Pavement of Alternative Road Circuit (49

blocks) Roads infrastructure 3,500 6,300 2,651,939 2,818,792

Comments: Direct beneficiaries are the 428 units bordering the paved roads, representing 3,500 inhabitants. Indirect beneficiaries are the Municipality’s entire population.

16 Salta

Rosario de la

Frontera

Pavement of Palaul Avenue, main access to

Rosario de la Frontera (5 blocks with

parking lot, sidewalks and lighting)

Roads infrastructure 500 24,500 813,218 912,032

Comments: Direct beneficiaries represent the sum of the units bordering the paved road plus a percentage of the ADDT (2,356 as of year 2009). Indirect beneficiaries are the

Municipality’s entire population.

17 Santiago del

Estero Campo Gallo

Remodeling and expansion of drinking

water services (25,250 meters of network) Water and sanitation 10,000 5,000 4,192,535 4,192,535

Comments: Direct beneficiaries are the Municipality’s entire population. Indirect beneficiaries account for the dispersed rural population.

18 Santiago del

Estero Frias

Construction of transport terminal (10

docks/harbors) Roads infrastructure 41,000 9,000 3,383,595 3,498,245

Comments: Direct beneficiaries are the Municipality’s entire population. They benefit from transit relocation and improvement. Indirect beneficiaries are people living in the

Department of Choya.

19 Santiago del

Estero Herrera

Provision of potable water through reverse

osmosis plant (750 water connections;

42,500 m of network)


Comments: Direct beneficiaries are the Municipality’s entire population – which lacked access to drinking water. Water was distributed to people in jerrycans. Water treatment

plants use inverse osmosis technology.

20 Santiago del

Estero Monte Quemado

Water treatment plant and distribution

network (60,370 linear meters of network) Water and sanitation 21,729 - 11,432,093 11,432,093

Comments: Direct beneficiaries are the Municipality’s entire population.

21 Tucumán Bella Vista

Revamping and expansion of sewerage

system (24,240 linear meters of network;

1,866 home connections)

Water and sanitation 8,000 7,000 4,038,063 4,146,771

Comments: Direct beneficiaries are the 8,000 inhabitants with the home connections. Indirect beneficiaries are the Municipality’s entire population. The project also includes the

upgrading of two existing pumping stations.

33


Direct

beneficiaries

(Est.)

Indirect

beneficiaries

(Est.)

Estimated

Financed

Amount

(US$)

Estimated

Total

Amount by

8/31/2015

(US$)

22 Tucumán Lules

Pavement of productive roads to Quebrada

de Lules and others (6.5 km) Roads infrastructure 6,790 28,210 2,305,330 2,697,031

Comments: Direct beneficiaries are the 1,000 units bordering the paved roads, representing 6,790 inhabitants. Indirect beneficiaries are the Municipality’s entire population.

TOTAL FOR COMPONENT 1 297,158

1,166,328

97,752,769

116,352,304

34

Annex 3. Economic and Financial Analysis

1. The objective of the Project was to improve the quality of: a) basic municipal services

through the provision of water supply and sanitation, urban drainage and roads infrastructure in an

equitable and fiscally sustainable manner within the participating Provinces; and b) life of the

population to be benefited by the provision of said services. On the basic of this objective, this

evaluation aims to analyze whether the interventions implemented under the Project had a positive

impact on the development of the Municipalities’ beneficiaries.

2. This annex presents the evaluations of each component from two different perspectives:

economic and financial. The economic analysis included the costs expressed in economic terms,

eliminating market distortions caused by subsidies and taxes, among others. The benefits were

expressed, as the population perceived its wellbeing improvement. The financial analysis included

the costs and benefits as they were actually paid and received by Municipalities or the agencies in

charge of implementing or operating the works.

Economic Evaluation

3. At appraisal the economic evaluation was conducted through a cost benefit analysis using

avoided costs. At that time, the evaluation was applied to a sample of 9 subprojects chosen as

representatives of the type of works to be implemented. For the ICR evaluation the same approach

was used selecting a representative sample of 6 subprojects, with investment costs close to 45

percent of total cost. Actual costs and benefits were included in this evaluation. The benefits were

measured using the same approach as at appraisal, namely, averted cost. Benefits of water

interventions were captured through socio-economic surveys conducted in the municipalities

included in the sample. For water, averted costs were equal to savings when no alternative water

sources were needed. For sewerage, averted costs were measured as savings of not having to clean

septic tanks or other on-site wastewater disposal system. For drainage, averted costs were measured

as: a) avoided damage cost in properties, and b) savings in maintenance costs of road and public

infrastructure. For roads, averted costs were measured as savings on time and fuel cost. When

evaluating productive roads, benefits of reduced losses due to transportation impairments were

added.

4. The cost benefit analysis calculates the net benefits generated by each component on an

incremental basis. The benefits of the project are equal to the difference between the incremental

benefits and the incremental costs of two scenarios: “with” and “without” the project. The “with”

project scenario considers actual achievements obtained with the interventions. The “without”

project scenario corresponds to business as usual scenario. The activities were appraised measuring

their flow of costs and benefits for the lifetime of the project, estimated at 30 years for water,

sewerage, and drainage works, and 20 years for roads. Operating and maintenance costs were

included to ensure the sustainability of works.

5. The selected sample consisted of 6 subprojects with an investment cost of US$ 45 million,

which corresponds to 44 percent of total cost of the operation. It included all components of the

project and interventions implemented in five Provinces.

35

Table 1. Sample of Sub-projects evaluated for ICR

Sectors & Municipalities Investment Costs

(in US$ Thousands)

Water

Campo Gallo (Santiago Estero) 4,193

Monte Quemado (Santiago Estero) 11,432

Total Water 15,625

Sewerage

Chos Malal (Neuquen) 2,955

Drainage

San Martin (Mendoza) 1,733

Roads

Paved Productive Roads: Roca Cervantes (Rio Negro) 18,880

Paved Urban Roads: General Pueyredon (BsAs) 5,757

Total Roads 24,637

TOTAL SAMPLE 44,949

Benefits

6. Water subprojects. Water services in Campo Gallo and Monte Quemado, two

municipalities in the Province of Santiago del Estero, were improved under the project. Both

subprojects were chosen for the economic evaluation. The interventions not only improved the

service for those households that were already connected to the network, but they also expanded

the service to all households that lacked connection.

7. In Campo Gallo, coverage was 76 percent, yet water supply was not enough to satisfy

demand. According to the municipality, about half of the population has to find other water sources

to serve their water needs. The quality of treated water was reported as good by the municipality,

yet insufficient to serve its customers. The capacity of production was far below the demand, with

the water treatment plant producing only 48 percent of what population needed. The deficit figures

were higher as physical losses were not included in the calculation. Moreover, some of the water

produced was distributed to rural communities using water trucks, which lowered the amount of

water available for the population of Campo Gallo.

8. Monte Quemado experienced a similar situation to Campo Gallo in water provision. The

volume of water supplied represented only 43 percent of demand, not including physical losses or

water distributed to rural communities by water trucks. Furthermore, the quality of treated water in

Monte Quemado did not comply with regulation.

36

Table 2. Water Indicators With and Without Intervention:

Campo Gallo and Monte Quemado

Campo Gallo Monte Quemado

w/o project With project w/o project With project

Population 10,000 10,000 28,000 28,000

Coverage 76% 100% 67% 100%

Capacity of WTP (lt/hour) 40 100 200 300

Production of water (000 m3-year) 350 876 876 2,190

Demand for water (000 m3-year) 724 724 2,044 2,044

Demand/Production (w/o UFW) 48% 121% 43% 107%

9. A survey conducted during preparation19 yielded the following information: 46 percent of

households in Campo Gallo stored water; 86 percent of interviewees described amount of water

received as insufficient or meager; 43 percent bought bottled water; and 11 percent boiled their

water or added chlorine. In Monte Quemado 99 percent of interviewees perceived quality as poor

or bad; 97 percent said the amount of water received was scant; 49 percent bought bottled water;

and 20 percent boiled water or treated it.

10. According to the survey, the average price paid for boiling, treating or buying bottled water

in Campo Gallo was Ar$ 0.9 per liter, and the amount bought per day was approximately 3 lt/pp.

In Monte Quemado, the average price was Ar$ 0.5/lt for 2 liters bought on average by one person

per day. These prices were used to estimate the savings that would result from the project.

11. Sewerage subprojects. The municipality of Chos Malal expanded its sewerage network to

connect around 1,500 households. It is estimated that approximately 50 percent of households had

septic tanks. The benefits from sewerage works were estimated as savings on the price paid for

cleaning the septic tanks, which at time of preparation was Ar$ 200, and the recommended

frequency of cleaning was twice a year. The benefit was partially offset by the cost of adjustment

of in-house connections that were needed to make them suitable to connect to the network. Impacts

on health and the environment, which were the most important benefits attained with this

intervention, were not quantified. As such, the evaluation results only show partial benefits.

12. Drainage subprojects. The works implemented in San Martin in the Province of Mendoza

improved the drainage system by reducing the vulnerability of the area to damages caused by

floods. Benefits were estimated as a) the averted damage cost in properties, and b) the

Municipality’s savings on maintenance costs of roads, as well as on cleaning and assistance costs

to deal with floods. The costs of damages, maintenance of roads, and others, incurred by the

Municipality, were based on previous events according to the recurrence period.

13. The Municipality’s records show that the average damage cost to properties caused by

floods from rainfall of a 2-year recurrence period was about Ar$ 1,200 per dwelling. The data also

shows that the cost of maintenance of roads and other aspects related with flood management from

the same recurrence period is about Ar$ 1.3 million per year. These costs increase with intensity of

19 Ecomic evaluation of Campo Gallo. Government of Argentina.

37

the event. Expected benefits were estimated in probabilistic terms for floods caused by rain events

lasting for a recurrence period of 2 and 10 years.

14. Productive roads subprojects. The intervention that was evaluated corresponded to a paved

road of 49.7 km long and 6 m wide in the upper Valley of Rio Negro in the Municipalities of Gral.

Roca and Cervantes. Fifty percent of the area of influence is cultivated with fruits, 80 percent with

apples and pears. The fruits are transported and sold in local and international markets. Twenty-

seven percent of pears are sold in local markets and 73 percent are exported, while 45 percent of

apples are sold locally and 55 percent are sold internationally.

15. Before this intervention, farmers experienced large economic losses when transporting

their fruit on gravel roads, a kind of road that often stirred dust and affected the quality of the fruit.

At appraisal it was estimated that around 15 percent of fruit production was lost due to damages to

fruit. The share of damages caused by this kind of transportation was previously unknown, yet it is

estimated that the newly paved road reduced damages by 50 percent, or 7.5 percent of production.

16. The intervention has shown benefits beyond the reduction of damage to fruit. The

evaluation highlighted additional benefits such as savings on vehicles maintenance, and savings on

time and fuel costs when travel time diminishes.

17. The benefits received from farmers were identified based on the estimated production of

pears and apples of 301 farmers registered in the area of influence. The production level of a typical

farm was taken as reference. A 7.5 percent of reduction in losses of production was applied.

Benefits were estimated using prices per kg sold at local markets or sold for exportation.

18. Savings on maintenance costs of vehicles were estimated by comparing costs per mile on

gravel roads versus costs per mile on paved roads, in terms of savings in time and fuel costs. This

information was based on the figures published by the Dirección Nacional de Viabilidad (National

Directorate of Roads).

19. Urban roads subprojects. Pavement of urban roads in Mar del Plata benefited about 18,000

people living in residential areas with a low index of unmet needs. The benefits were estimated as

savings on maintenance cost of vehicles crossing the road including savings in time and fuel costs,

based on figures published by the National Directorate of Roads.

Results of Economic Evaluation

20. The economic evaluation of all subprojects in the sample shows benefits being 2.6 times

higher than costs and returns as high as 35 percent. Urban roads and drainage subprojects show the

highest returns, 53 and 63 percent, respectively.

21. Results of the sewerage intervention do not show the actual impact on the population. For

instance, due to lack of information, improvements in health and the environment could not be

quantified. The only benefits included in the evaluation were corresponded to savings on septic

tanks cleaning, which as expected, were not enough to pay off the investment and operation costs.

38

Table 3. Actual Economic Results

In AR$ Thousands

Costs Benefits Net benefits ERR B/C

Water

Campo Gallo (Santiago Estero) 35,223 55,886 20,663 22% 1.6

Monte Quemado (Santiago Estero) 84,956 237,093 152,137 39% 2.8

Total Water 120,179 292,979 172,800 35% 2.4

Sewerage

Chos Malal (Neuquen) 6,896 4,233 (2,663) 6% 0.6

Drainage

San Martin (Mendoza) 9,331 41,483 32,153 53% 4.4

Roads

Paved Productive roads

Roca Cervantes (Rio Negro) 36,366 53,712 17,346 19% 1.5

Paved Urban Roads

General Pueyredon (BsAs) 23,715 123,598 99,882 63% 5.2

Total Roads 60,082 177,310 117,228 36.2% 3.0

TOTAL SAMPLE 196,488 516,006 319,518 35.4% 2.6

22. When comparing actual results with those expected at appraisal, all interventions, except

for sewerage, had higher returns than originally projected. This is not surprising given that

candidate projects were better screened, and those that were not feasible needed to be redesigned.

Sanitation subprojects did not yield positive results as benefits included in the evaluation

corresponded to a tiny fraction of actual costs. Impacts on health and the environment were the

important benefits from the sanitation subprojects, but could not be quantified.

39

Table 4. Expected and Actual Economic Returns

Economic Returns Expected at

Appraisal Actual Economic Returns

ERR ERR

Water Water

San Jorge n.a Campo Gallo (Santiago Estero) 22%

Tupungato 21% Monte Quemado (Santiago Estero) 39%

Total water 15% Total Water 35%

Sewerage Sewerage

San Patricio n.a

Chos Malal (Neuquen) 16% Chos Malal (Neuquen) 6%

Total sanitation 9% Total Sewerage 6%

Drainage Drainage

Palmira 35% San Martin (Mendoza) 53%

Armstrong 45%

Total drainage 39% Total drainage 53%

Roads Roads

Paved Productive roads

Rawson 36% Roca Cervantes (Rio Negro) 19%

Rosario 14% Paved Urban Roads

Allen 27% General Pueyredon (BsAs) 63%

Total Roads 23% Total Roads 36.2%

TOTAL SAMPLE 19% TOTAL SAMPLE 35.6%

Financial Analysis

23. During appraisal, financial sustainability was addressed. Cost recovery evaluation showed

that the amount of public funds needed to finance operating and investment costs was significant

in some of the sub-projects.

24. Water and sanitation projects reviewed at appraisal. Two of the water and sewerage

projects –Tupungato in Mendoza and San Patricio in Neuquen– had a tariff so low that it did not

even cover 40 percent of operating costs. The other two –San Jorge in the Province of Santa Fe and

Chos Malal in Neuquen– had tariffs similar to operating costs. There was an additional charge of

contribución especial de mejoras that contributed to financing the investment costs, yet subsidies

from public funds were higher than 50 percent of investment costs in all cases.

Table 5: Operating Cost-Recovery in Water and

Sanitation Subprojects Reviewed at Appraisal

Water Sewerage

San Jorge Tupungato San Patricio Chos Malal

Cost recovery through tariffs for the

service

O&M 94% 35% 39% 100%

25. Drainage projects reviewed at appraisal. One of the drainage projects, Armstrong in the

Province of Santa Fe, presented full cost recovery through the contribución especial de mejoras

charge. The other one, Palmira in the Province of Mendoza, recovered only 42 percent of costs.

40

26. Paved road projects reviewed at appraisal. The Province of Rio Negro had all investment

costs paid by beneficiaries through the contribución especial de mejoras. The other two road

projects –Rawson in the Province of Chubut and Rosario in Santa Fe– needed public funds to pay

for the costs, 21 and 40 percent respectively.

Table 6: Cost Recovery Results on Sub-projects reviewed at Appraisal

Water Sewerage Drainage Road

San

Jorge

Tupunga

to

San

Patrici

o

Chos

Malal Palmira

Arms

trong

Rawso

n Rosario

Roca

-

Allen

Cost Recovery

Through:

Contribución mejora 36% 44% 4% 14% 42% 100% 79% 60% 100%

Municipal subsidy 64% 56% 96% 86% 58% 0% 21% 40% 0%

Total 100% 100% 100% 100% 100% 100% 100% 100% 100%

27. During preparation it was foreseen that none of the projects, with the exception of one

paved road in the Province of Rio Negro, and a drainage project in the Province of Santa Fe, were

financially viable without subsidies from either the municipal or provincial government, or both.

The project included a component to strengthen institutional capacities to improve cost recovery

and attain efficiency improvements.

28. The financial mechanisms foreseen at appraisal consisted of: a) tariffs high enough to cover

O&M costs in water and sanitation projects; and b) fees charged to beneficiaries to cover operating

costs, plus 85 percent of investment costs, in drainage and roads projects.

29. Results at the end of Project implementation show that application of cost recovery

mechanisms was not fully achieved and that Municipalities and Provinces subsidized investment

costs in the most of the subprojects. From the sample, only the road subproject implemented in

Province de Buenos Aires fully recovered costs. All sub-projects, except water, charged fees to

fully cover operating costs. Water subprojects needed subsidies to cover both operating and

investment costs. Provincial Governments are working on policies to attain full cost recovery, but

they have yet to be implemented.

Table 7. Cost Recovery After Implementation

Water Sewerage Drainage Roads

Campo

Gallo

Monte

Quemado

Chos

Malal

San

Martin

Roca

Cervantes

Mar de

Plata

1. Operating Cost recovery

through:

Tariffs/betterment fees 0% 0% 100% 1000% 100% 100%

Municipal/Province funds 100% 100% 0% 0% 0% 0%

2. Investment cost recovery

through:

Tariffs/betterment fees 0% 0% 0% 0% 0% 0%

Contribución especial mejora 0% 0% 0% 0% 0% 100%

Municipal/Province Govt 100% 100% 100% 100% 100% 0%

41

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/

Specialty

Lending

Antonio Leonardo Blasco Sr Financial Management Specialist GGODR FM Specialist

Jonas Manuel Frank Senior Public Sector Specialist GGODR Public Sector

Specialist

Jose Luis Irigoyen Director GTIDR Sector Manager

Abhas Kumar Jha Practice Manager GSURR Senior Infrastructure

Specialist

Manuel G. Marino Lead Water and Sanitation Spec GWADR Water and Sanitation

Specialist

Carolina Marcela Piedrafita E T Consultant LCSUW-

HIS

Taimur Samad Senior Urban Economist GSURR Urban Specialist

David N. Sislen Program Leader AFCS1 TTL

Horacio Cristian Terraza Senior Environmental Specialist LCSEN -

HIS

Environmental

Specialist

Supervision/ICR

Marcelo Hector Acerbi Senior Environmental Specialist GENDR Environmental

Specialist

Juan Manuel Campana Consultant LCSTR -

HIS Engineer

Daniel Chalupowicz Financial Management Specialist GGODR FM Specialist

Claudio Luis Daniele HQ Consultant ST GENDR Environmental

Specialist

Mary Lisbeth Gonzalez Senior Social Development Spec GSURR Social Development

Specialist

Ricardo Eduardo Lugea Senior Procurement Specialist GGODR Procurement

Specialist

Augustin Maria Senior Urban Specialist GSURR ICR/TTL

Manuel G. Marino Lead Water and Sanitation Spec GWADR TTL(SPN)

Daniel Nolasco HQ Consultant ST GWADR Water and Sanitation

Specialist

Lilian Pedersen Consultant GSURR Social Development

Specialist

Taimur Samad Senior Urban Economist GSURR TTL (SPN)

Ricardo Schusterman Consultant GEDDR Social Safeguards

Support

Alejandro Roger Solanot Sr Financial Management Spec GGODR FM Specialist

Horacio Cristian Terraza Senior Environmental Specialist LCSEN -

HIS

Environmental

Specialist

Christophe Prevost Sr Water and Sanitation Specialist GWADR Project Team Leader

Maria Catalina Ramirez Water and Sanitation Specialist GWADR Team Member

42

Gustavo Adrian Canu Procurement Specialist GGODR Procurement

Specialist

Paula Agostina Di Crocco Financial Management Specialist GGODR FM Specialist

Andrea Mara Rispo Consultant GEN04 Safeguards Specialist

Santiago Scialabba Program Assistant LCC7C Safeguards Specialist

(b) Staff Time and Cost

Stage of Project Cycle

Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including

travel and consultant costs)

Lending

FY99 0 11.3

FY00 0 0.00

FY05 30 210.91

FY06 30 238.64

FY07 0 0.02

Total: 60 460.87

Supervision/ICR

FY07 21 92.62

FY08 12 58.68

FY09 9 85.79

FY10 27 110.405

FY11 22 81.71

FY12 19 93.60

FY13 10 62.11

FY14 21 89.79

FY15 22 118.82

FY16 1 2.573

Total: 164 151.32

Grand Total : 224 1,256.99

43

Annex 5. List of Supporting Documents

Project Appraisal Document, Basic Municipal Services Project, April 2006.

Loan Agreement, Basic Municipal Services Project, Loan Number 7385-AR, May 8, 2007.

Economic Evaluation and Cost Recovery Plans from Municipalities for each Subproject.

Manual Operativo. Proyecto de Servicios Básicos Municipales. Septiembre 2008.

Marco de Política de Reasentamiento. Programa de Servicios Básicos Municipales BIRF 7385-

AR. Febrero de 2010.

Marco Ambiental y Social, Programa de Servicios Básicos Municipales, Marzo 2012.

Restructuring Paper, Basic Municipal Services Project, Loan 7385-AR. March 2012.

Restructuring Paper, Basic Municipal Services Project, Loan 7385-AR. August 2013.

Municipal Development Project Document (now PAD). February 1988.

Implementation Completion report. First municipal Development Project (Ln 2920-AR), May

1997.

Project Appraisal Document. Sub-National Governments Public Sector Modernization Project.

November 2005.

Implementation Completion Report. Second Municipal Development Project. December 2005.

Country Assistance Strategy for the Argentine Republic. Report No. 34015-AR. May 2006.

Implementation Completion Report. Sub-National Governments Public Sector Modernization

Project. November 2013.

Country Partnership Strategy for the Argentina Republic. Report No. 81361-AR. August 2014.

World Bank (2005-2015), Documents in Project’s Electronic File, including Aide Memoirs,

Back-to-Office Reports, Project Status Reports, Project Financial Assessments, and Project

Procurement Assessments; WBDocs Washington, D.C.

Mar del Plata

Bahía Blanca

Azul

General Pueyrredon

Chos Malal

Tupungato

PalmiraSan Martin

Guaymallén

Maipú-Godoy Cruz

Cerillos

Rosario de la Frontera

Lules

Monte Quemado

Campo Gallo

HerreraFrias

Bella Vista

Allen-General RocaRoca-Cervantes

San Patriciode Chañar

RosarioArmstrong

San Jorge

Rafaela

Rufino

Stanley

Comodoro Rivadavia

Santa Rosa

Neuquén

Viedma

Rawson

Ushuaia

Río Gallegos

Mendoza

San Luis

San Juan CordobaParanáSanta Fe

La Rioja

Catamarca

San Miguelde Tucumán

Santiagodel Estero

Salta

San Salvadorde Jujuy

Formosa

Resistencia Posadas

La Plata

BUENOS AIRES

J U J U Y

S A L T A

TUCUMÁN

SANTIAGODEL ESTERO

LARIOJA

CATAMARCA

FORMOSA

CHACO

S A N T AF E

CORRIENTES

MISIONES

E N T R ER Í O S

B U E N O SA I R E S

C O R D O B A

SANJUAN

SANLUISM E N D O Z A

L AP A M P A

R I O N E G R O

NEUQUEN

TIERRADEL FUEGO

C H U B U T

S A N T AC R U Z

PA R A G UAY

B R A Z I L

U R U G UAY

C H I L E

C H I L E

BOLIVIA

LagunaMar Chiquita

Para

ná

Colorado

Para

ná

Para

guay

Pilcomayo

Negro

Deseado

Chica

Chico

Chubut

Uruguay

Salado

Desaguadero

ToCoihaique

ToPuertoMontt

ToLos Ángeles

ToTalca

ToValparaíso

ToLa

Serena

ToCopiapó

ToCalama

To Tarija

ToSan Pedro

ToCascavel

ToSanta Rosa

ToSanta Maria

ToArtigas

ToTacuarembó

ToMontevideo

Mar del Plata

Bahía Blanca

Azul

General Pueyrredon

Chos Malal

Tupungato

PalmiraSan Martin

Guaymallén

Maipú-Godoy Cruz

Cerillos

Rosario de la Frontera

Lules

Monte Quemado

Campo Gallo

HerreraFrias

Bella Vista

Allen-General RocaRoca-Cervantes

San Patriciode Chañar

RosarioArmstrong

San Jorge

Rafaela

Rufino

Stanley

Comodoro Rivadavia

Santa Rosa

Neuquén

Viedma

Rawson

Ushuaia

Río Gallegos

Mendoza

San Luis

San Juan CordobaParanáSanta Fe

La Rioja

Catamarca

San Miguelde Tucumán

Santiagodel Estero

Salta

San Salvadorde Jujuy

Formosa

Resistencia Posadas

La Plata

BUENOS AIRES

J U J U Y

S A L T A

TUCUMÁN

SANTIAGODEL ESTERO

LARIOJA

CATAMARCA

FORMOSA

CHACO

S A N T AF E

CORRIENTES

MISIONES

E N T R ER Í O S

B U E N O SA I R E S

C O R D O B A

SANJUAN

SANLUISM E N D O Z A

L AP A M P A

R I O N E G R O

NEUQUEN

TIERRADEL FUEGO

C H U B U T

S A N T AC R U Z

PA R A G UAY

B R A Z I L

U R U G UAY

C H I L E

C H I L E

BOLIVIA

LagunaMar Chiquita

Para

ná

Colorado

Para

ná

Para

guay

Pilcomayo

Negro

Deseado

Chica

Chico

Chubut

Uruguay

Salado

Desaguadero

ATLANTICOCEAN

PACIFICOCEAN

ToCoihaique

ToPuertoMontt

ToLos Ángeles

ToTalca

ToValparaíso

ToLa

Serena

ToCopiapó

ToCalama

To Tarija

ToSan Pedro

ToCascavel

ToSanta Rosa

ToSanta Maria

ToArtigas

ToTacuarembó

ToMontevideo

80°W 70°W 60°W

50°W

50°S

40°S

30°S

30°S

50°S

40°S

ARGENTINA

0 100 200 300 Miles

0 100 200 300 400 500 Kilometers

IBRD 41862

SEPTEMBER 2015

ARGENTINA

BASIC MUNICIPAL SERVICES PROJECT

FALKLAND ISLANDS (ISLAS MALVINAS)A DISPUTE CONCERNING SOVEREIGNTY OVER THE

ISLANDS EXISTS BETWEEN ARGENTINA WHICH CLAIMSTHIS SOVEREIGNTY AND THE U.K. WHICH ADMINISTERS

THE ISLANDS.

This map was produced by the Map Design Unit of The World Bank.The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

GSDPMMap Design Unit

PROVINCES AND MUNICIPALITIESEXPECTED DURING PREPARATION

PROVINCES AND MUNICIPALITIES DROPPED

PROVINCES AND MUNICIPALITIESJOINED AFTER THE PROJECT APPROVAL

CITIES AND TOWNS

PROVINCE CAPITALS

NATIONAL CAPITAL

MAIN ROADS

PROVINCE BOUNDARIES

INTERNATIONAL BOUNDARIES