The World Bank Urban Transport in Metropolitan Areas (P095485) REPORT NO.: RES37431 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF URBAN TRANSPORT IN METROPOLITAN AREAS APPROVED ON OCTOBER 20, 2009 TO ARGENTINE REPUBLIC TRANSPORT LATIN AMERICA AND CARIBBEAN Regional Vice President: Axel van Trotsenburg Country Director: Jesko S. Hentschel Senior Global Practice Director: Guangzhe Chen Practice Manager/Manager: Juan Gaviria Task Team Leader: Camila Rodriguez Hernandez, Santiago Ezequiel Arias The World Bank Urban Transport in Metropolitan Areas (P095485) I. BASIC DATA Product Information Project ID Financing Instrument P095485 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 20-Oct-2009 30-Jun-2019 Organizations Borrower Responsible Agency Argentine Republic Ministry of Transport Project Development Objective (PDO) Original PDO The overall development objective of the program is to improve the quality and sustainability of urban transport systems in Argentine Metropolitan Areas, through the improvement of sectoral decision making frameworks and by giving priority to public transport modes in the urban transport sector. The project (APL1) development objectives contribute to the overall program development objective by: (i) supporting the design and creation of a multijurisdictional Metropolitan Transport Agency for the Buenos Aires Metropolitan Area (AMBA); (ii) strengthening the institutional capacity of the transport authorities in decision making, planning, priority setting, and resource allocation in urban transport; (iii) improving the quality and performance of urban transport infrastructure and/orservices in medium size Metropolitan Areas; and (iv) improving the physical integration and access to public transport networks in the Buenos Aires Metropolitan Area. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-87000 27-Jan-2017 09-May-2017 07-Jun-2017 30-Jun-2019 45.00 43.14 1.86 IBRD-77940 20-Oct-2009 11-Aug-2010 26-Nov-2010 31-Dec-2017 149.68 149.68 0 The World Bank Urban Transport in Metropolitan Areas (P095485) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES A. PROJECT STATUS The Project was approved by the Board on October 20, 2009, in the amount of USD 149.68 million (Loan 7794-AR now fully disbursed and closed since December 31, 2017). An Additional Financing of USD 45.0 million was approved in January 2017 with an original closing date of June 30, 2019. The Additional Financing has currently disbursed USD 35,7 million, which represents about 79 percent of the loan. This would be the second level II restructuring and the first extension the original closing date of the Additional Financing. In April 2019, the Bank approved a restructuring of the Project to increase the Bank financing of eligible expenditures for category 1 (civil works) from 70 percent to 100 percent to accelerate the completion of civil works by providing the PIU with more flexibility to execute payments, without the need of having counterpart funds available. Progress towards achievement of the Development Objective (DO) and the Overall Implementation Progress (IP) are both rated Satisfactory. Most targets for the intermediate indicators have been met and all planned activities that contribute to the overall development objective of the project have been completed, with the exception of the Saenz Transfer Station, which is the only remaining investment currently underway. B. PROPOSED CHANGES The proposed Level Two restructuring of the Urban Transport in Metropolitan Area consists of (i) reallocation of proceeds among the existing categories of expenditures to adjust for overspending in civil works; and (ii) a 6-month extension of the loan closing date from June 30, 2019 to December 31, 2019 that would allow the Project to fully achieve the PDO objective by allowing the completion of the Saenz Transfer Station works. The borrower has requested to increase to funds available in Category 1 “civil works” by USD 388.832 (less the 1% of the original amount), by reallocating of remaining funds form Category 2 “goods and service” and Category 3 “operating costs”. The proposed six-month extension is based on the current action plan discussed with the Borrower, to ensure the completion of all project activities by December 2019. Nonetheless, the Borrower has agreed with the Contractor an Acceleration Plan to increase the monthly progress to conclude the works in October 2019 to allow for contingency time. C. RATIONALE FOR RESTRUCTURING The justification of the proposed restructuring is to achieve the PDO through ensuring the completion of this major infrastructure investment, that have been delayed due to the following unforeseen circumstances and modifications: (i) Additional works and modifications that were not planned have generated deviations from the work plan. These include additional electrical works for the temporary station, the installation of a security video surveillance system for the temporary station as well as the modification of the architectural layout of the temporary station. The World Bank Urban Transport in Metropolitan Areas (P095485) (ii) The high financial and exchange-rate volatility also delayed execution of civil works that depended on the supply of materials from international suppliers. The Contractor had to delay a few construction milestones that depended on imported supplies until the exchange rate stabilized. (iii) Finally, unfavorable weather conditions between April 2017 and April 2018 also led to low execution rates in that period. The reallocation of funds proceeds will allow to use remaining funds from categories that are not needed anymore for the completion of ongoing the civil works. All currently undisbursed proceed of the loan (US$4.3 million) are expected to be disbursed and executed by the new closing date. This restructuring will not change the PDO, the physical goals of ongoing civil works, monitoring indicators, or safeguards category. The results’ framework target date will be adjusted accordingly. The restructuring satisfies the requirements of the Bank’s procedures for Investment Project Financing in that: (i) Neither the loan in particular, nor the country (Argentina) in general, is subject to an ongoing suspension of disbursements; (ii) No audit reports for the project are outstanding or are not satisfactory to the Bank; and (iii) The Borrower and the Bank have agreed on an action plan to achieve the PDO within the proposed new closing date. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 31-Jan-2017, 31-Dec- IBRD-77940 Closed 29-Feb-2016 2017, 12-Jun-2018 IBRD-87000 Effective 30-Jun-2019 31-Dec-2019 30-Apr-2020 REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed The World Bank Urban Transport in Metropolitan Areas (P095485) IBRD- CW-Integration 87000-001 Subp - Parts C2 42,216,671.00 32,077,168.56 42,605,503.00 100.00 100 Currency: & C5 USD GO, CS and Non- 2,570,829.00 1,949,815.59 2,281,182.00 100.00 100.00 CS OP under Part E 100,000.00 713.18 815.00 100.00 100.00 of the Project Interest Rate CAP/COLLAR 0.00 0.00 0.00 premium Total 44,887,500.00 34,027,697.33 44,887,500.00