SECOND ANNUAL STATUS REVIEW OF CAPITAL LOANS - APRIL 1974

REVIEW COVERS 1/73-2/74 PERIOD AND IS BASED ON BORROWER"S REPORTS, CONSULTATIONS WITH THE BORROWER, AND CORRESPONDENCE. REVIEW NOTES USAID/B APPROVAL OF REVISED ELETROBRAS IMPLEMENTATION PLAN AND 12/28/73 USAID AUDIT. A SECOND DISBURSEMENT OF THE LOAN HAS NOT YET BEEN MADE. WITH OVER HALF OF THE LOAN PERIOD ELAPSED,ONLY 17% OF THE TRAINING PROGRAM HAS BEEN COMPLETED. AS NOTED IN THE AUDIT REPORT,DEVELOPMENT AND IMPLEMENTATION OF THE TRAINING COURSES,TECHNICAL ADVISORY ASSISTANCE,AND US PARTICIPANT TRAINING HAVE FALLEN SHORT OF EXPECTATIONS,DUE PRIMARILY TO IMPLEMENTATION DELAYS ASSOCIATED WITH DIFFICULTIES IN THE SELECTION & CONTRACTING OF TECHNICAL ADVISORY PERSONNEL. AUDIT COMMITTEE HAS ADDRESSED A RECOMMENDATION THE AID/W"S BUREAU FOR PROGRAM AND MANAGEMENT SERVICES. USAID MISSION IS CLOSELY MONITORING PROJECT THROUGH FREQUENT MEETINGS WITH THE BORROWER AND HAS CONTINUALLY STRESSED THE NEED TO ACCELERATE PROJECT"S PROGRESS AND TO INCREASE THE NUMBER OF US PARTICIPANT TRAINEES. THE BORROWER HAS BEEN ASKED TO REVISE AND RESUBMIT ITS 1975 AND 1976 LOAN PLAN PROJECTIONS,AND HAS AGREED TO DO SO BY 6/30/74. IT IS CURRENTLY ESTIMATED THAT SOME $489,073 OF THE $2.5 MILLION AID LOAN WILL REMAIN UNPROGRAMMED,BUT ELETROBRAS IS IN DISCUSSION WITH ITS SUBSIDIARIES TO ASCERTAIN THEIR FOREIGN TECHNICAL TRAINING NEEDS AND EXPECTS TO SUBMIT AN IMPLEMENTATION PLAN WITH COST ESTIMATES FOR USAID REVIEW.