ARTWORKS AND SANITARY SERVICES Decree No. 149/97 Apply measures regarding the implementation of the current contract for the granting of safe drinking water and drainage services by the Aguas Argentinas S. A. Company, which was approved by Decree No. 787/93.

Bs. As., 14/2/97

VISTO Issue No. 399-000034/96 of the registration of MINISTERY OF ECONOMY AND ARTWS AND PUBLIC SERVICES; Law No. 23.696; Decree No. 999 of 18 June 1992; Decree No. 1381 of 29 November 1996 and Decree No. 787 of 22 April 1993; and

CONSIDERING:

That the SECRETARIAT OF PUBLIC AND TRANSPORT ARTWORKS AND SERVICES PUBLICS, in its capacity as the Implementing Authority, bases the need to take measures that constitute a solution to the problem arising in relation to the execution of the existing contract for the granting of the sanitary services of drinking water and sewage drains, by the Company AGUAS ARGENTINAS S A.

Since the inauguration of the privatized public service provided for in the concession contract approved by Decree No. 787/93, a significant experience has been accumulated in relation to the various incidences of execution, making it appropriate to take corrective measures.

That in the period indicated there were new demands motivated by reasons of public interest that have been translated through several presentations of the Company ARGENTIN AGUAS S. A. before the regulatory authority of the concession contract.

That the issues in analysis are presented with a high degree of complexity and must be resolved taking into consideration requirements of unquestionable social roots, to arrive at a solution framed by the general objectives and principles of the concession.

That in this context it is appropriate to initiate a joint process of renegotiation of the contents that integrate contractual counterclaims without altering the economic-financial equation in a timely manner.

That various sectors of the community, national, provincial and municipal authorities, have expressed the need to find solutions to the various disadvantages arising during the execution of the Contract.

On the other hand, the incorporation of new areas into the geographical area of the concession should also be evaluated.

That the Authority for the Application of the concession contract is the SECRETARIAT OF PUBLIC ARTWS AND TRANSPORTS of the MINISTERY OF ECONOMY AND PUBLIC SERVICES.

That, by Decree No. 1381 of 29 November 1996, annexes II and III of its similar No. 660 of 24 June 1996, are amended to form part of the SECRETARIAT for NATURAL RESOURCES AND SUSTAINABLE DEVELOPMENT DEPENDIENT from the NATIONAL PRESIDENCE, the SUBSECRETARIA DEPENDIOUS POLITIES ENVIRONMENTAL with competence in the development of national water policy and in all matters relating to knowledge, use, quality, availability, preservation and protection of water, in the framework of integrated watershed management.

That the complexity of the subjects regulated in the concession contract and the circumstances in which they are agreed, make it necessary to establish a reasonable time for the performance of the tasks assigned as well as the authorization of the designated agencies to hire the consultancy studies advising the circumstances.

That he has taken the intervention of the General Directorate of Political Affairs of the MINISTERY of ECONOMY and ARTWORKS and PUBLIC SERVICES.

That the present is given in the exercise of the powers conferred by Article 99(1) of the NATIONAL CONSTITUTION and by Law No. 23.696.

Therefore,

THE PRESIDENT OF THE ARGENTINA NATION

RIGHT:

Article 1 El The contract for the granting of safe drinking water and sewage sanitary services, concluded with ARGENTIN AGUAS S. A., approved by Decree No. 787/93 and governed by Law No. 23,696, may be amended to meet public interest needs not provided for in the original contract and which have arisen during its execution. Art. 2° . Dispose, from the date of the present dictation, the opening of the negotiating body for the purposes of compliance with Article 1 of this decree.

They shall be subject to this negotiating body:

(a) THE NATIONAL STATE, through:

I) SECRETARIAT OF PUBLIC AND TRANSPORT MINISTERY OF ECONOMY AND PUBLIC SERVICES.

II) The SECRETARIAT OF NATURAL RESOURCES AND SUSTAINABLE DEVELOPMENT under the NATIONAL PRESIDENCE, in accordance with the powers assigned by Decree No. 1381 of 29 November 1996.

(b) The company AGUAS ARGENTINAS S. A. in its capacity as a concessionaire of the public service of drinking water and draining cloacales in the field provided for in the concession contract.

Art. 3rd La Negotiation will include the aspects of the contract listed below, as well as any other issue that contributes to the better implementation of the objectives and principles of the Regulatory Framework adopted by Decree No. 999/92 and the public interest needs:

(a) Infrastructure charge.

(b) Supporting the environmental management plan of the Matanza-Riachuelo watershed and the water and sewer management plans.

Art. 4° de For the purposes of the negotiation referred to in Article 3 of the present decree and, in relation to the object of the renegotiation mentioned in the same article, the following alternatives may be contemplated:

(a) Extension of the contractual period;

(b) Investment differentiation;

(c) Reprogramming of works;

(d) Identification of new investments;

(e) Plans of directors of sewage and drinking water;

(f) Economic and financial parameters of the concession;

(g) Incorporation of new areas into the concession.

Art. 5° . Note a time limit of SCIENTA (180) days for the fulfillment of the provisions of this decree, which may be extended, for the same time period, by joint resolution of the SECRETARIAT OF PUBLIC ARTS AND TRANSPORTS dependent on the MINISTERY OF ECONOMY AND PUBLIC SERVICES and the SECRETARIAT OF NATURAL RESOURCES Art. 6° . The SECRETARIAT OF PUBLIC AND TRANSPORT MINISTERY OF ECONOMY AND PUBLIC SERVICES AND THE SECRETARIAT OF NATURAL RESOURCES AND SUSTENTABLE DEVELOPMENT OF THE PRESIDENCE OF NATION shall bring to the NATIONAL EXECUTIVE PODER within the period specified in Article 5 of the present decree the proposal for the modification of the NATIONAL EXECUTIVE Art. 7° a Fill out the SECRETARIAT OF PUBLIC AND TRANSPORT MINISTERY OF ECONOMY AND PUBLIC SERVICES AND THE SECRETARIAT OF NATURAL RESOURCES AND SUSTAINABLE DEVELOPMENT OF PRESIDENCE DE LA NATION, while the renegotiation deadline and the intervention of the COM lasts. BICAMERAL DE REF. OF THE STATE AND FOLLOW-UP TO THE PRIVATIZATIONS OF THE HONORABLE CONGRESS OF NATION and of the General SINDICATURA OF NATION to adopt the provisional measures regarding the Contract of Concession held with ARGENTIN AGUAS S. A. that are expressly agreed with the concessionaire. Art. 8° a Fill out the SECRETARIAT OF PUBLIC AND TRANSPORT MINISTERY OF ECONOMY AND PUBLIC SERVICES AND THE SECRETARIAT OF NATURAL RESOURCES AND SUSTAINABLE DEVELOPMENT OF PRESIDENCE OF THE NATION to hire the consulting services that are necessary to carry out the tasks entrusted to them by the present. Art. 9° a Fill out the SECRETARIAT OF PUBLIC AND TRANSPORT MINISTERY OF ECONOMY AND PUBLIC SERVICES AND THE SECRETARIAT OF NATURAL RESOURCES AND SUSTAINABLE DEVELOPMENT OF PRESIDENCE OF THE NATION to perform the interpretations and clarifications that demand the application of this decree. Art. 10. . Please note this decree to the BICAMERAL COMMISSION ON STATE REFORM AND FOLLOW-UP TO THE PRIVATIZATIONS OF THE HONORABLE CONGRESS OF NATION, in accordance with Article 14 of Law No. 23,696. Art. 11. . Communicate, publish, give to the National Directorate of the Official Register and archvese. . MENEM. . Jorge A. Rodriguez. . Roque B. Fernández.