The road sector is the dominant mode oftransport in Argentina carrying nearly 80 percent of totalfreight volume. The road network has a total length of about630,000 km (11 percent paved), divided in threeadministrative levels: national, provincial, and municipal.However, more than 70 percent of total traffic volumes areconcentrated on the paved national and provincial network,with the municipal network consisting of unpaved roads,access roads to farms and feeder roads with very low trafficvolumes. A survey carried out in 1992 confirmed that only 44percent of the national paved network was in good condition,with a high 35 percent of roads in poor condition.Rehabilitation works for the non-concessioned portion werecontracted to the private sector under the traditionalad-measurement type or unit price-based system whilemaintenance activities continued to be carried out byforce-account. In 1993 a loan from the World Bank wasapproved to finance, for the first time, high priorityrehabilitation and maintenance works on the non-concessionedpaved network, leading to the development of a long-termmaintenance strategy based on the gradual expansion ofperformance-based contracts, a modality that is currentlybeing replicated in other countries around the world. Thispaper is organized as follows: chapter one presents thenational road network of Argentina; chapter two givesorigins and definition of the Contrato de Recuperacion yMantenimiento (CREMA) contracts; chapter three givesevolution in the procurement and the design standards of theCREMA; chapter four presents the market's response tothe CREMA system; chapter five presents impact of the CREMAon the condition of the national road network; chapter sixdeals with cost effectiveness of the CREMA system; chapterseven presents Bank's strategy and role in the roadsector in Argentina; and chapter eight gives lessons learned.
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