STATE REFORM

Decree 635/97

Amend Article 58 of Decree No. 1105/89, in relation to the presentation of venture projects, through the private initiative modality, establishing a procedure that will be divided into two phases, the first referring to the study of technical-economic feasibility of the project and the second to the execution and concession of the work.

Bs. As., 11/7/97

B.O. : 17/7/97

VISTO Article 4 (c) of Law No. 17.520, as amended by its similar No. 23.696, and Decree No. 1105 of 20 October 1989, and

CONSIDERING:

That one of the key functions of the NATIONAL STATE is to encourage private activity aimed at the common good, motivating individuals to perform it through various types of incentives.

That private initiative has been considered as an appropriate tool for the development of activities of public interest and has been evidenced by the amendments included in Act No. 23,696 cited in the VISTO.

It is the Government ' s policy to stimulate investments in public works to increase the supply of services, improve the overall efficiency of the economy and stimulate the creation of productive jobs, ensuring that this does not involve the indebtedness of the NATIONAL STATE.

That one of the avenues to stimulate such investments is to encourage private ventures with risk investment under the law No. 17.520, amended by Law No. 23.696.

That while Law No. 23.696 and its Rule Decree No. 1105 of 20 October 1989 were appropriate at the time to grant important works, the presentation of private initiatives carried out on the basis of serious and feasible studies, it was not as fruitful as it was to be expected to guide the investment of the private sector towards enterprises that the NATIONAL STATE considers a priority.

It cannot be overlooked that the high cost of carrying out related feasibility and engineering studies, especially when it comes to large-scale works, discourages individuals from taking the risk while not implementing appropriate protection mechanisms.

That, without prejudice to the provisions of Article 4 (c) of Law No. 17.520 as amended by its similar No. 23.696, it is appropriate to divide into DOS (2) phases the presentation of projects through the private initiative modality, setting a first phase for the development of the feasibility study of the project, and a second phase for the execution of the works.

That when the procedure is unfolded in DOS (2) phases, it is necessary to set the mechanism by which the cost for the first phase can be reimbursed to the author of the initiative, if the process for the second phase is completed in full.

As a result of the above-mentioned, it is appropriate to include in the tenders clauses that provide for a mechanism whereby the author of the project may recover in whole or in part the actual expenses incurred, together with an honorary established on a scale for the assumption that he is not a beneficiary of the work.

In no case shall the NATIONAL STATE be obliged to pay any expense or honorary arising from the procedure regulated by this decree.

That corresponds to the NATIONAL EXECUTIVE PODER, taking into account the merit, originality and benefit that the project reports to the community and the scope of the work, to resolve the application of the procedure established by the dictation of this rule.

That the present measure is in exercise of the powers conferred by Article 99, paragraph 2, of the NATIONAL CONSTITUTION.

Therefore,

THE PRESIDENT OF THE ARGENTINA DECRETA NATION:

Article 1 - Add, as Article 58 (1), 11 (m) and (n) of Decree No. 1105 of 20 October 1989 "Regulation of Law No. 23,696", the following text:

(1) Without prejudice to the provisions of article 4 (c) of Act No. 17.520 as amended by its similar No. 23,696, individuals may submit projects through the private initiative modality, through the procedure set out in this subparagraph and below. This procedure will be divided into DOS (2) phases.

The first phase will be aimed at the technical-economic feasibility study of the project as well as related engineering studies; and the second phase will be aimed at the execution and concession of the work.

In the first phase, individuals present initiatives aimed solely at the technical-economic feasibility study of the project and related engineering studies. To this end, the author of the project must comply with the following:

1. Present the terms of reference of the studies, their time of implementation and presentation, and their estimated cost of completion.

II. To present the complete history of the company and of the consulting firms that will participate in the preparation of the studies, it is not necessary at this stage to certify registered recruitment capacity.

III. To present a guarantee of maintenance of the initiative, which may not be less than DOS per SCIENTY (2 %) of the amount of the studies included in the proposal, and shall guarantee, in the same manner as set out in subparagraph (f), the timely realization and presentation of such studies. The guarantee must be extended for a time limit equal to that provided for the execution and presentation of the studies, plus CIENTO VEINTE (120) days.

In its case, the guarantee shall be adjusted as set out in paragraph II.

II) The NATIONAL EXECUTIVE PODER will resolve whether the proposed studies, by their scope and interest, deserve to be developed through the regime set out in this paragraph. If so decided, the following procedure shall be followed:

I. Approval of the terms of reference with the modifications it deems necessary, which will give the right to redetermine the estimated cost and, if there is a variation in more or less, of a VEINTE BY CENTO (20 %) of the initial proposal, to withdraw the initiative without penalties. It shall also set the maximum amount of costs eventually refundable and establish a maximum contingent fee in accordance with the following scale:

 MAXIMOS HONORARY INVERSIONS (a) Up to 1 million pesos ($ 2 % 1,000,000) b) Up to 5 million pesos ($ 20,000 plus 1.5 % over 5,000.000) c) Up to pesos 25 million ($ 80,000 plus 1 % over 25,000.000) d) Up to pesos 125 million ($ 280,000 plus 0.30 % over 125,000.000) surplus (e) Up to pesos 625 million ($ 780.000 plus 0.20% over 625,000.000) surplus (i) More weights 625 million ($ 2.655,000 plus 0.10 % over 625,000.000) surplus 

When the project includes DOS (2) or more concessions, the scale will be applied autonomously for each of the concessions that integrate it.

II. If modifications were made to the original project, the maintenance guarantee of the initiative should be adjusted in amount, time and mode to the terms of reference set. Failure to comply in due time on the part of the individual, of such an obligation, will matter his withdrawal from the initiative presented, proceeding to execute the maintenance guarantee in the event of the corresponding.

III. The proposal shall carry out and present the studies contained in its initiative and establish the expenses incurred for the realization of the same, in the form and time limits set.

(m) After the study is completed and presented, the NATIONAL EXECUTIVE POWER shall be pronounced within the VEINTE SCIENT (120) days of its submission or within the longer period that it had set on the opportunity to set the terms of reference, accepting or dismissing the project, a decision that it may adopt discretionally. To this end, and in accordance with the scope of the project, a project evaluation advisory committee may be formed, consisting of representatives of the various sectors involved and specialists in the field. If the proposed project does not conform to the terms and parameters that have been set upon the adoption of the terms of reference, in addition to the rejection of the same and the loss of the rights that, according to the terms of the present, may correspond to him as the author of the initiative, the implementation of the guarantee of maintenance of the initiative will be provided.

I. In the event that the NATIONAL EXECUTIVE POWER dismisses the project, whatever the case, its author shall not be entitled to receive any compensation of expenses or fees.

II. In the event that the NATIONAL EXECUTIVE POWER accepts the project, it shall declare it of public interest, recognizing in proposing or consortium that it shall integrate, as the author of the initiative, with the scope and with the rights provided for in Article 4 (c) of Law No. 17.520, as amended by its similar No. 23,696 and paragraph J of this Regulation. In the same act, it may convene public tenders for the second phase, consisting of the execution and concession of the work.

In this case, the author of the project may submit an offer in accordance with the entire tender. If it is not a award, it shall have the right to receive from the person who is a award, and thus shall be recorded in the respective solicitation documents of the tender, the maximum reimbursable costs and the contingent honorary as provided for in paragraph II) of paragraph I, all within a no greater period of TREINTA (30) days from the subscription of the concession contract by the awardee. The maximum reimbursable costs recognized to the author of the project, as provided for in paragraph II, may be considered as costs in the event that the award is made, with no corresponding amount for contingent fees.

Once the author of the project perceives the reimbursable costs, as well as the contingent honorary, as set out in paragraph II, paragraph I, he shall not be able to make any other claim arising from his authorship of the project

If the tender is declared to be desolate, they are not offered, or the call is left without effect, whatever its cause, the author of the initiative will retain the rights provided for in the present regime for the maximum period of DOS (2) years from the first 11 beloved, provided that the new call is made using the same studies and the same project.

III. The NATIONAL STATE shall in no case be obliged to reimburse expenses or fees to the author of the project for his quality.

IV. In the same resolution that declares the draft or rejects it in public interest, the guarantee of maintenance of the initiative was released.

(n) The special regime established in subparagraphs (1) (a) (m) does not impede the possibility of presenting initiatives that bring together the development of the project and the execution of the works, as provided for in Article 4 (c) of Law No. 17.520, as amended by Law No. 23.696, and in subparagraph (e) and in accordance with this article. Also in these cases, if the author of the initiative is not awarded, the reimbursement of the costs and the contingent fee, as provided for in paragraph II, of this article, shall be recorded in the respective documents.

Art. 2o - Contact, post, go to the National Directorate of the Official Register and archvese. - MENEM. - Jorge A. Rodriguez. Roque B. Fernández.