RIO GRANDE DO SUL HIGHWAY MAINTENANCE PROJECT

THE EVAL INCLUDED TESTS OF FINANCIAL RECORDS & LOAN-RELATED DOCUMENTS, AS WELL AS DISCUSSIONS WITH USAID,THE CONTRACTOR,AND DEPARTAMENTO AUTONOMO DE ESTRADAS DE RODAGEM (DAER) OFFICIALS. LOAN INITIALLY PROVIDED US $13,300,000 TO FINANCE THE US DOLLAR COSTS FOR THE PURCHASE OF HIGHWAY MAINTENANCE EQUIPMENT FOR THE ENTIRE STATE OF RIO GRANDE DO SUL,AND FOR TECH ASSISTANCE IN REORGANIZING THE DAER. HOWEVER,THE LOAN REMAINED UNSIGNED BECAUSE THE MISSION FOUND IT NECESSARY TO: 1)RE-EXAMINE EQUIPMENT LISTS DUE TO NEW IMPORT RESTRICTIONS UNDER THE GOB "LAW OF SIMILARS," PROHIBITING THE IMPORTATION OF EQUIPMENT SIMILAR TO THAT PRODUCED LOCALLY; 2)RE-EXAMINE THE CAPACITY OF THE DAER TO UNDERTAKE THIS PROG,SINCE THE GOB REDUCED THE STATE HIGHWAY DEPT"S SHARE OF THE FEDERAL GOVT GASOLINE TAX RECEIPTS; 3)ASSESS US/BRAZIL RELATIONS FOLLOWING THE GOB"S ACTIONS IN 1968. THE LOAN AUTHORIZATION WAS AMENDED ON 5/21/70 REDUCING FUNDS TO US $5,500,000 FOR TECH ASSIST & MAINTENANCE EQUIP FOR ONLY SIX AREAS IN THE STATE OF RIO GRANDE DO SUL. ON 2/5/71,DAER CONTRACTED WITH THE CONSORTIUM OF FREDERIC R. HARRIS ENGINEERING CORP,MONITOR-MONTREAL ORGANIZACCO INDUSTRIAL EECONOMIC S.A.,AND PROENGE PROJECTOS E SERVICOS DE EGNENHARIA LTDA (HARRIS) FOR TECHNICAL SERVICES. NEITHER THE US-MADE,NOR THE BRAZILAIN-MADE MAINTENANCE EQUIPMENT HAS ARRIVED. FOUR DAER EMPLOYEES DEPARTED FOR US TRNG ON 9/29/72. FOUR OTHERS WERE SCHEDULED TO LEAVE 10/72. AS OF 9/30/72,THE CONTRACTOR PROVIDED THE SERVICES OF SIX AMERICANS AND THREE BRAZILIAN FULL-TIME ADVISORS,AND TWO TEMPORARY DUTY CONSULTANTS. DESPITE THE FACT THAT THE SCOPE-OF-WORK CALLED FOR THE ASSIGNMENT OF COUNTERPARTS,THE DAER ONLY ASSIGNED COUNTERPARTS TO THE AMERICAN ADVISORS AND NOT TO THE BRAZILIAN ADVISORS. THE AUDITORS RECOMMEND THAT THE MISSION REQUEST DAER TO ASSIGN LIAISON OFFICERS FOR EACH DIVISION WITH WHICH THE CONTRACTORS ARE WORKING. THE AUDITORS ALSO RECOMMEND THAT THE MISSION ESTABLISH A REQUISITION REGISTER.