FILE COPY
DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
Not For Public Use
Report No. P-1635-GR
REPORT AND RECOMMENDATION
OF THE
PRESIDENT
TO THE
EXECUTIVE DIRECTORS
ON A
PROPOSED LOAN
TO THE
HELLENIC STATE
FOR A
THIRD EDUCATION PROJECT
May 21, 1975
This report was prepared for official use only by the Bank Group. It may not be published, quoted
or cited without Bank Group authorization. The Bank Group does not accept responsibility for the
accuracy or completeness of the report.



Currency Unit        =        Drachma
1953 - March 9, 1975:
Dr. 1                =        US$).03
US$1                          Dr. 30
Dr. ,000             =        US$33.33
Dr. 1,000,000                 US$33,333.33
Since March 10, 1975:
The Greek Drachma has been redefined in terms of
a basket of currencies including the U.S. dollar
and those of its other major trading partners,
and is floating.
Fiscal Year          -        January 1 to December 31
Abbreviations:
KATE                          Higher Technical Education Center
L.A.                          Loan Agreement



INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
REPORT AND RECOMMENDATION OF THE PRESIDENT
TO THE EXECUTIVE DIRECTORS ON A PROPOSED
LOAN TO THE HELLENIC STATE
FOR A THIRD EDUCATION PROJECT
1.        I submit the following report and recommendation on a proposed loan
to the Hellenic State for the equivalent of US$45 million to help finance the
foreign exchange cost of an education project. The loan would have a term of
15 years including 5 years of grace, with interest at 8-1/2 percent per annum.
PART I - THE ECONOMY
2.        An economic report entitled "Current Economic.Position and Prospects
of Greece" (EMA-49a), dated March 22, 1972, was distributed to the Executive
Directors on March 31, 1972. An economic updating mission visited Greece in
January 1975 and is preparing its report; its findings are reflected in the
following paragraphs. Country data sheets are attached as Annex I.
3.        Following the Cyprus crisis in July 1974, the seven-year old mili-
tary regime was replaced by an interim civilian Government. In November 1974,
an elected Government, backed by a large parliamentary majority, was estab-
lished. In December 1974, the Greeks voted to establish a republic. The new
Government has been largely preoccupied with foreign policy issues, especially
relations with Turkey, and with economic issues, particularly the need to re-
store and broaden economic relations with the world at large and with the EEC,
as well as inflation, a growing balance of payments deficit and stagnating
economic activity.
4.        Throughout the 1960's and up to 1972, the Greek economy enjoyed
rapid GDP growth averaging 8 percent per year in real terns, with the main
stimulus coming from rapidly rising domestic demand stemming from large in-
creases in private fixed investment - especially in housing - and public in-
frastructure investment. Private consumption rose at a rate of 8 percent per
annum and gross fixed capital formation at 11 percent over this period. This
growth was associated with relatively stable prices. However, by the end of
1972, as the economy reached full employment, supply constraints began to
develop and domestic prices came under increasing pressure. The inflationary
trend was reinforced by the termination of price controls in 1973 and by
increases in import prices, particularly of petroleum (after October 1973),
higher agriculture support prices, and increased Government expenditures.
Consumer prices, which had increased by less than 3 percent per annum (on an
annual average basis) in the previous five years, rose 16 percent in 1973 and
27 percent in 1974; but Government measures, including reduced budgetary out-
lays and restrictive monetary policies, reduced the increase in the second
half of 1974 to only -5 percent. However, these restrictive policies, together



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with the impact of the Cyprus crisis and resulting domestic political un-
certainties, severely affected economic growth. GDP increased by 9 percent
in 1973, but declined by about 1 percent in 1974. GNP per capita in 1974
(Atlas basis) is estimated at about $1,7B0.
5.        Agriculture still accounts for about 20 percent of GDP, 40 percent
of employment and 35 percent of all exports, besides providing raw materials
for the food processing and textile industries. Agricultural production has
increased by 5 percent per annum since 1968, somewhat below overall GDP
growth, but dropped in 1973. Following an increase in support prices in
October 1973, and with favorable climatic conditions, output increased by a
record 13 percent in 1974. Growth in agriculture continues to be hampered
by insufficient development of irrigation, the small size and fragmented
nature of farm holdings, and inadequate extension services.
6.        Industry has been the mest dynamic sector, with an average annual
growth of nearly 10 percent between 1968 and 1974; industrial value added
increased by 13 percent in 1973, but dropped almost 6 percent in 1974. There
was an increase in industry's share of GDP from nearly 29 to 32 percent. The
share of manufactured goods in total exports also increased sharply, from 25
percent in 1968 to an estimated 45 percent in 1974, largely as a result of
increased capacity in the chemical and basic metal industries.   Despite rising
productivity, however, Greek industrial growth is still restricted by a small
domestic market, limited export orientation, inappropriate plant size and heavy
dependence on capital goods imports. The Government emphasis on industrial
development as a key to rapid growth is well justified. However, there is a
clear need for Government guidance in determining priorities for future indus-
trial growth, including an emphasis on highly productive export-oriented
industries and medium skill consumer goods establishments, which can take
advantage of a relatively inexpensive labor force.
7.        Recent economic difficulties have been compounded by a deterioration
of the balance of payments in the last two years. The trade deficit stood at
$1.6 billion in 1972.   It increased sharply to $2.8 billion in 1973 as im-
ports grew rapidly, reflecting domestic supply constraints caused by a high
level of economic activity.   In f974, the iapoit Will increased &nlV moderate-
ly, as non-oil imports reflected the decline in GDP. The increase in the oil
import bill was $444 million, but re-exports of oil products rose too; the
net increase was $360 million, equivalent to 12 percent of 1973 exports of
goods and non-factor services and workers' remittances. Rapidly rising exports
prevented any further rise in the trade deficit. While exports, particularly
of manufactured products, have grown by about 25 percent per annum between
1968 and 1974, they still finance only about one-third of commodity imports.
Invisible earnings, mainly from shipping, workerst remittances and tourism,
have usually been equivalent to nearly half of commodity imports. In 1974,
however, this proportion declined to 35 percent, reflecting lower tourism
receipts - largely because of the Cyprus crisis - and a decline in workers'
remittances due to reduced demand for foreign workers in Europe. As a result
of these developments, the current account deficit increased threefold from
1972, to some $1.2 billion in 1973 and 1974. Greece has had only limited



- 3 -
access to long-term foreign capital, and inflows of concessional funds have
been minimal. As a result, financing needs have been met by medium- and
short-term borrowing as well as by suppliers' credits. The terms of bor-
rowing deteriorated noticeably in 1973 and 1974, reflecting both higher
interest rates and declining grace periods. Although foreign exchange re-
serves were about $1 billion in 1972, the increased current account deficit
and rising amortization requirements led to a slight decline to about $900
million at the end of 1974. This was equivalent to less than 2-1/2 months
of imports.
8.        The Government is postponing the formulation of a new medium-term
development plan for at least one year, until investment priorities can be
established. The crucial elements in such a plan are, however, already
apparent: reduction of dependence on agricultural and petroleum imports,
promotion of industrial and agricultural exports, and less housing invest-
ment than over the last decade. Tourism and transport infrastructure, and
in particular highway construction, are likely to be accorded lower priority
than in the past.
9.        The Greek economy faces significant problems.    In the short term,
the Government may experience difficulties in striking the right balance be-
tween measures directed to restore aggregate purchasing power and regenerate
growth on the one hand, and those to ensure relative price stability and ex-
ternal balance on the other. Given the immediate priority of stabilization,
GDP growth is unlikely to exceed 2-3 percent in 1975, with the main contri-
butions coming from agricultural output and exports of manufactured goods. It
may not recover to the long term trend of about 7 percent even in 1976. The
Government expects to keep price increases below 10 percent in 1975. Heavy
dependence on imports, especially for capital goods, and the vulnerability
of earnings from shipping, tourism and workers' remittances, pose serious
short-term problems. Even after taking into consideration available undis-
bursed loan funds, access to the IMF oil facility, uncommitted funds from EIB,
a new financial protocol being prepared with the EEC, and a possible recourse
to the IMF, Greece will have to borrow a significant amount on world capital
markets and will need to obtain as great a proportion in long-term funding
as possible. In 1975 and 1976, the financing gap to be filled by non-
concessionary borrowing is forecast at $700 million and $980 million respec-
tively, assuming reserves are to be kept at the equivalent of at least 2
months of imports.
10.       Although Greece's economy is approaching a more advanced stage of
development, significant regional and sectoral disparities persist. Further-
more, the economy has to prepare itself to face increasing competition from
imports from the European Economic Community (EEC), particularly in the indus-
trial sector, where tariffs and other protective barriers are being gradually
reduced under the Association Agreement with the EEC. Given the level of
economic development already achieved, a GDP growth rate of about 7 percent
per annum over the longer term seems feasible, provided there is favorable
weather for agriculture and provided relative price stability is maintained.



- 4 -
It deperss maialy or, continuing expaasion of Manufactuiring industry at about
13 percesnt per annu% and ar. inccrase in lt-ricultujral Vroductrin of 4-5 percelnt
Der arnum. Participation in the EEC shotuld foster improved management and
technclogica   od>ernizstron.  2rFe-e iss ituortart assets in its flexible,
market-oriented entrepyeneurial capacity and a comparatLzeel' cfleap lal'or  orce
by Euroipean standards. hlowrever, fall atilizatoron of tbese resources will re-
quire increased Jnvesterat in agriculcure, in export oriented indusrrie!s, and
the introduction of efiective qoeatolna, technMical and maragerial tralinlng.
11.       Public external debt outstanding at the enar of 1673 amounted to
$Ž. 250 million, of hi-cb $730 million was tLrldisburseri. Reprt:ed  ew ct it-
n-ents in 1474 aimunted to $404 million (excluding $124 million from the DiF
oil facility).  Debt servrice pasments in I973 reached $260 niililon (of which
$6 million on Bank loans), and represented 1 percezt of t4i:seipts <tOrat e-ots
of goode and :ren-factor aer sic  and workets' remittaoces.  Service payments
on existirkg aebt are expected to stabilize at aroTlt 535U million nril 19O&.
Based ona teasona'ole erczpectattus regardiag export gro-wth and fature totrowing,
the debt service ratio wi&d increase to about 13 percent byf t9SO. A`.oat 3
percent ci totaL service paymerits would be due to IERD.  Zn i-ew cf the good
prospects for tu:ture- economic growth, even if at a diminished rate, Greece
contiaues to he creditworthy for bank lendin.S.
PART ii - BANK GROUJP 0~PKgg~TIOV ~ipGRE-ECE
t2.       Bank lending to Greece starte6 in 29i8, after dispUte  inr conmec-
tian A-ith the country's pre-war external debt were subsCanctally settled.
Greece has received eight loans totalling $263.9 million (net of caitcelLa-
tions), of which $146.6 million was held by the IBank as of April 1975. Pour
lwns rotall;ng $71 .5 -millionI have been prv'iaed to the National Investment
gaa'c for iduslatrial Develupmeet (VNI3CID for development finance company
operations, two loane for education (§37.3 -illior), anxd two lcans for irri-
gation (155 million).  The executIoin of Bank financed proJects has generally
been satiafactory.  Annex X1 crntains a sumary statemrnt of Bank -oanr.s and
in invettzetnts as of April 30, 2975, and notes on the execution of ongoing
projects.
13.       3ank assistance to Greece ains at providing essential iafrastructure
in key sectors, inluding'aighbays ad sEeweraage; red-icing regional disparities,
p,articularly in agricultuire and indlustrial developeent; and supporting tlhe
_ecr.-izn cdf i'~titckas i sectors where Bank finaning would be provided,
A proposed fifth loan tG NEB-13  asS    r _er -egyat43f& ad is scheduled for board
conSideration shortly. .4 triA ;<tigatinn project has been appzaised anrd is
likeLy to be ready for boari cosls'att     in thle first halt of 7'ii6 2 ,e
Bank is actiog as executinF agezy f-or UIUF fiwnaed highway reconnaissance
an4d feasibility studies, which are expected to Ilead to a highway project, in-
cluding support for highway maintelance, later ia FY76.  A sewerage project
being processed woauld emphasize institutiont building as wel1 as ixproved
.living aoaditions in towns atrside the hUiLly develop?ed Athens area.



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14.       Greece is of course a developing country with a relatively high
per capita income, and should be able before long to finance its development
program without resort to the resources of the Bank.   However, some further
Bank lending to Greece is still justified by the fact that the country's
external capital requirements still exceed what it can raise from alternative
market sources on reasonable terms, as well as by the role which the Govern-
ment wishes the Bank to play in strengthening some sectors critical for the
country's further economic development and for which the Bank is probably
the only present source of external funds. This year, Greece is facing
particularly difficult balance of payments pressures at this critical junc-
ture in its economic and political life, and some relatively quick disbursing
projects have been included in the program.
15.       IFC has made investments totalling US$16.2 million in six Greek com-
panies. An equity and loan investment of $600,000 was made in a fertilizer
factory in 1962 (sold in 1970); an equity investment of $720,000 in NIBID in
1965; loans and investments totalling $5 million in the Greek cement industry;
and loan and equity investments totalling $8.7 million in an aluminum company
in 1970 and 1972. In early 1975, IFC invested $1.15 million in an agro-
industry project in Larisa for processing of tomatoes and, at later stages,
asparagus and peaches from the area of the Groundwater Development Project
assisted by the Bank (Loan 754-GR).
PART III - EDUCATION IN GREECE
16.       The Ministry of National Education and Religions is responsible for
almost all private and public education. Although there is a planning group
within the Ministry, overall educational planning is the responsibility of
the Ministry of Coordination and Planning.
17.       The education system is quantitatively well developed.    It has a
three-tiered structure of: (1) six years of compulsory primary education
normally beginning at age 6; (ii) six years of secondary education divided
into a first and second cycle of three years each; and (iii) one to six years
of higher education in universities or other post-secondary institutions.
Primary education is universal, 72 percent of the relevant age group attend
secondary schools and 11 percent are in higher education. Retention and pro-
gression rates are generally high, while virtually 100 percent of primary and
general secondary teachers, and 90 percent of the technical secondary teachers,
are academically qualified. There are no significant imbalances in enrollment
between boys and girls, except in higher education. This development has been
achieved while spending a relatively small proportion of national resources on
education - 11 percent of total Government expenditures and 3.8 percent of GDP
in 1973, percentages which have changed little over the past decade.
18.       There are, however, some features of the system which adversely
affect the quality and relevance of education. A strong concern to preserve



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the nation's cultural heritage has resulted in an over-emphasis on traditional,
classical education at all levels. Consequently, curricula have become less
relevant to the needs of a changing economy and society for the majority of
students not continuing beyond the first grades of secondary education, as
well as for those who want to enter vocational or technical careers. In
addition, most teachers in secondary and higher education have neither re-
ceived adequate pedagogical training nor been exposed to modern curricula.
19.       The emphasis on classical education is reflected in the priority
given to the traditional academic secondary schools (gymnasia), where enroll-
ments have increased from 226,000 in 1957/58 to 488,000 in 1972/73. This has
produced two distortions. First, insufficient resources have been allocated
to the expansion of vocational training and technical education, which - in
spite of the recent rapid growth of private schools - remain quantitatively
and qualitatively inadequate to meet the manpower requirements of the economy.
Second, as students enter gymnasia at the end of the primary cycle, and the
system does not allow later horizontal transfers, students are forced to make
irreversible vocational choices at an early age, when neither skills nor
aptitudes can be assessed adequately.
20.       Because of the academic bias of the system and its influence in
shaping students' attitudes and expectations, post-secondary non-university
education (which is largely technical) has expanded slowly and at present rep-
resents only 12 percent of total higher education enrollments. On the other
hand, with the rapid increase in the numbers of classical secondary school
graduates without marketable skills, demand for university admission - and
consequently university expansion - has become increasingly intense. Since
1961, first year university enrollments have more than doubled, with only neg-
ligible increases in space and an increase in teaching staff of some 30 percent.
21.       At present, the four autonomous universities and the seven public
institutions with university status enroll about 80,000 students, more than
40 percent in the classical disciplines of theology, philosophy, law and po-
litical science which offer limited employment opportunities. Reform and
reorientation of the university system are needed. However, the Government
has'encountered difficulties in motivating the older autonomous universities
to change. The traditional professorial system and the practice of electing
rectors at short intervals (every one to three years) stifle innovation and
long-term planning, and hinder the required pedagogical, organizational and
administrative reforms.
22.       The Government's Perspective Development Plan projects manpower
needs over the period 1975-1987. Average incremental requirements for tech-
nicians are estimated to be 15,000 per annum; the present output of the
education system is 5,000, and the three Bank projects (including the pro-
posed project) would together add a further 4,500. Incremental requirements
of skilled workers are estimated at an average of 67,000 per annum; the
present output of the educational system is 45,000, while the three Bank
projects would together add a further 13,300. The Government therefore has
to, and is, planning further investments to provide the extra numbers of
technicians and skilled workers needed.



23.       The Government recognizes the deficiencies in the educational sys-
tem. Despite long-standing traditions and powerful interests, it is therefore
beginning to implement a long-term strategy which would (i) extend compulsory
universal education by three years with the concomitant phasing out of lower
vocational schools; (ii) diversify the secondary curriculum, with greater em-
phasis on science, mathematics and technical courses; (iii) expand vocational
training enrollment at secondary level (by 7 percent per annum) and provide
more adult training opportunities; (iv) regionalize, and rapidly expand (by
12 percent per annum), enrollment in higher technician training; and (v) en-
large university intake, with a reorientation toward science and technology,
and introduction of pedagogical training for secondary school teachers.
Student/teacher ratios would also be reduced at all levels, and as a result
public recurrent expenditures on education could double their share of GDP
to a level similar to many European countries by 1987. Investment in educa-
tional facilities is planned to be some 9 percent of total public investment
over this period.
24.       In furtherance of these long-term objectives, the Bank has previous-
ly made two education loans to Greece, in 1970 and 1972. The first, for $13.8
million, provided for the construction and equipping of five higher technical
education centers (KATEs) and related technical assistance, to help meet cri-
tical shortages of sub-professional manpower in fields such as agriculture
and food processing, engineering, business administration and health. The
second, for $23.5 million, provided assistance to improve the quality of
education and stimulate reform across a broad spectrum of types and levels
of institution, including primary teacher training, a variety of specialized
vocational schools (agricultural, tourism, merchant marine, and accelerated
industrial centers), and the schools of engineering and science at the Uni-
versity of Patras. Both projects began slowly, due to delays in appointing
consultant architects, but subsequent implementation has been satisfactory.
The first project is expected to be completed by the end of 1975 and the sec-
ond by mid-1977. The Bank is considering a recent request from the Govern-
ment to delete the extensions to the University of Patras from the second
project, for which substantial cost overruns are likely, and to reallocate
the remaining funds.
PART IV - ThIE PROJECT
Project History
25.       The proposed third education project was identified by a UNESCO/IBRD
Cooperative Program mission which visited Greece in May/June 1973.    It was pre-
pared by the Government, with Bank assistance, and appraised in June/July 1974.
Negotiations were held in Whshington in April 1975, with a Greek delegation
which was headed by Mr. Papadakis, Director General of the Ministry of Coor-
dination and Planning.



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Project Description
26.       The proposed project would reinforce the system of vocational train-
ing and technical education to help meet the growing manpower requirements of
the economy, and at the same time take a first step towards the much needed
reforms at the general secondary level and further changes in higher education.
Specifically, it would include:
(a) design, construction, furnishing and equipping of five new
accelerated training centers, three new higher technical
education centers (KATEs), and ten new multilateral second-
ary schools;
(b) a pre-investment study of a proposed University Center of
Pedagogical Studies;
(c) a post-secondary education system development study;
(d) a feasibility study of an educational materials production
facility; and
(e) related technical assistance.
Details of the proposed project are provided hereunder and in the Loan and
Project Summary in Annex III. A report entitled "Appraisal of a Third Edu-
cation Project in the Hellenic State" (No. 755-GR) dated May 2, 1975 is being
distributed separately to the Executive Directors.
27.       The accelerated training   centers would provide two-year courses
for apprentices and six-month accelerated trade training courses for adults.
In addition, short courses of varying duration would be organized on an ad hoc
basis to upgrade the skills of workers already employed. The centers are sim-
ilar to those included in the second education project and would offer a range
of specializations including maintenance mechanics, machinery, welding, plumb-
ing, automotive mechanics, electricity, carpentry, masonry, blacksmithing,
timber moulding, and agricultural mechanics. The selection of trades to be
taught in each center, varying from five to eight, would depend on the man-
power needs of the area to be served.
28.       To alleviate the shortage of higher technicians in all sectors of the
economy, the project would include three new higher technical education centers
(KATEs) in regions experiencing increased industrialization, as a follow-up to
the program of five similar centers financed under the first education project.
These centers would be multi-disciplinary, post-secondary technical institu-
tions, offering two- and three-year courses covering both basic fields of en-
gineering (civil, mechanical, and electrical) and new specializations and
achieving efficient use of specialized teachers, equipment and teaching areas



- 9 -
through economies of scale. Technical assistance would be provided for curric-
ulum development for the new specializations, and fellowships abroad for staff
training.
29.       The Government wishes to introduce new forms of general secondary
education, to break away from the current classical type of education at this
level. The proposed project assists in this objective, through the provision,
on a pilot basis, of a multilateral secondary school in each province, which
will combine general education and technical courses on the same premises, under
common management and with new multilateral schooling curricula. Total enroll-
ments in the proposed schools would be about 17,500 students. Three schools
would be constructed in large urban centers and the others in provincial towns.
The new schools would differ from existing secondary schools in a number of
ways: the first cycle (grades 7-9) would provide a common curriculum for all
students, instead of differentiating among students according to whether they
would later pursue an academic or technical career; this curriculum would in-
clude four hours per week of workshop instruction, and place more emphasis on
natural sciences; the second cycle (grades 10-12) would offer a choice between
academic programs (arts, science, commerce) and technical programs (mechanics,
electricity, building), which would share part of the facilities and, to the
extent possible, the teaching staff; the classical orientation of existing
curricula would be de-emphasized in favor of natural and social sciences and
foreign languages; and in contrast with existing practices, the best graduates
from the technical streams would have access to post-secondary technical in-
stitutions such as the KATE's. Administrative arrangements for the new
schools have been agreed. Draft curricula and syllabi would be furnished
to the Bank for discussion within three years of loan signature and before
their introduction; they would not be changed after introduction until they
had been evaluated following the system to be established within six months
of the opening of the schools (L.A. 3.04(a) and Schedule 2). Understandings
have been reached on the scope of technical assistance under the project for
curriculum development, the development and introduction of an evaluation sys-
tem, and in-service training of teaching staff, and of fellowships abroad for
training of senior staff. Agreement was reached that officials and staff would
be selected in time to enable them to complete their respective training pro-
grams (L.A. 3.04(b)).
30.       Among the preconditions for education reform in Greece are better
planning and administration of the education system, more systematic pedagogi-
cal training for secondary school teachers, improved educational research,
and availability of more and better educational equipment and other learning
materials. The proposed project will assist in each of these areas. A devel-
opment study of the post-secondary education system would analyze the present
state of post-secondary education in Greece, propose needed pedagogical and
institutional reforms, and identify future expansion needs and investment
priorities. A pre-investment study of a University Center of Pedagogical
Studies would determine its specific functions, study the physical require-
ments in relation to existing facilities, investigate the academic, adminis-
trative and legislative requirements, prepare preliminary drawings and cost
estimates and draw up a program for training key administrative and teaching



- 10 -
personnel including fellowships abroad. A feasibility study of the expansion
of production of education materials would include assessment of equipment
lists for primary and secondary schools, evaluation of current procurement
practices, analysis of present and possible new production methods including
their costs and physical and manpower resource requirements, and comparison
of likely production costs with the costs of commercially available equipment.
Project Cost and Financing
31.       The total project cost is estimated at $105.6 million.   The pro-
posed Bank loan of $45 million would cover the foreign exchange cost of fur-
niture and equipment, consultant services and technical assistance and nearly
the whole foreign exchange cost of civil works. The balance ($60.6 million),
together with interest during construction, would be financed by the Govern-
ment. The proposed Bank loan would have a term of fifteen years, including
five years grace.
Project Implementation Arrangements
32.       The Programming and Planning Section of the Ministry of National
Education and Religions, which is responsible for the five primary teacher
training academies under the ongoing second education project, would be re-
sponsible for the implementation of all items under the proposed project,
except for the accelerated training centers. These would be the responsibil-
ity of the Technical Services Unit of the Manpower Employment Organization in
the Ministry of Labor, which is also responsible for the similar vocational
centers financed under the said,second project.
33.       The Central Project Unit, established under that project, would be
responsible for (i) ensuring overall management of, and coordination of the
agencies involved in, the implementation of the project; (ii) providing tech-
nical advice to them as needed; and (iii) maintaining liaison with the Bank.
Due to the additional workload involved in the proposed project, the Govern-
ment has agreed to increase its staff by adding an architect and a programming
officer, within six months of loan signature, and experts in engineering,
equipment procurement, and other specialized fields as required for-project
implementation (L.A. 3.01(b)), to a total of 5 man-years, as part of the
technical assistance to be provided under the project.
34.       Sites for project institutions would be selected according to mu-
tually agreed criteria before preliminary designs were prepared. The insti-
tutions would be designed by consultant architects/civil engineers, of whom
there is an adequate number in Greece. Other consultants and experts would
assist in carrying out the studies and in providing technical assistance
under the project. Where their contracts are to be financed out of the
proposed loan, these consultants and experts would be acceptable to the Bank
and appointed on terms and conditions acceptable to the Bank.



Procurement
35.       Civil works, furniture and equipment contracts would be awarded on
the basis of international competitive bidding, in accordance with Bank
guidelines. It is expected that few foreign firms will submit bids for civil
works, as Greece has a well developed and competitive construction industry.
Detailed lists of furniture and equipment would be presented for the Bank's
review prior to procurement. These lists would identify all items or cate-
gories of items costing more than US$3,000, the residual items being included
in one miscellaneous category not exceeding US$100,000 for each institution.
Items would be grouped to the extent possible to permit bulk procurement.
Local manufacturers of furniture and equipment would be allowed a margin of
preference equal to the existing rate of custom duty applicable to competing
imports or 15% of c.i.f. price, whichever is lower.   Contracts for the items
in the miscellaneous category would be awarded under normal government procure-
ment procedures, which are satisfactory to the Bank, and which would include
requests for price quotations from at least three suppliers. Nearly all
equipment is expected to be obtained from foreign manufacturers, while vir-
tually all furniture contracts would probably be awarded to local firms. The
project is expected to be completed in 4-1/2 years.
Disbursements
36.       Disbursements would be on the basis of:   (i) 100 percent of the
c.i.f. cost or ex-factory price for furniture and equipment; (ii) 100 percent
of foreign expenditures for technical assistance and studies; and (iii) 26
percent of expenditures for civil works. It is intended that undisbursed
funds, if any, would be made available for further development of the proj-
ect in accordance with a program agreeable to the Bank.
Benefits
37.       The proposed project would further reinforce the reform and expan-
sion of vocational training and technical education, which is being supported
by the first two Bank education projects. By increasing the annual output of
the system by about 2,400 `gfaduates' at the craft level and 1,500 at the tech-
nician level, it would meet 10 and 15 percent respectively of projected aver-
age annual manpower shortages of these levels in the period to 1987. By pro-
viding training in new specializations, it would support the growing diversif-
ication and technological sophistication of Greek industry, which is one of
the basic goals of the socio-economic development strategy of the country.
38.       The project would also represent a first step toward much needed
improvements in the relevance and quality of general secondary education, by
introducing multilateral secondary schools which would also have experimental
curricula. These innovatioiis would represent a considerable departure from
established education patterns in Greece and should stimulate further reforms
of secondary education. It would also assist in developing the preconditions



- 12 -
for educational reform, including improved secondary teacher training and edu-
cational research, better planning and administration of post-secondary edu-
cation, and the availability of more and better educational equipment and
other learning materials.
PART V - LEGAL INSTRUMENTS AND AUTHORITY
39.       The draft Loan Agreement between The Hellenic State and the Bank,
the Report of the Committee provided for in Article III, Section 4 (iii) of
the Articles of Agreement and the text of a draft resolution approving the
proposed loan are being distributed to the Executive Directors separately.
The draft agreement conforms generally to the normal pattern for loans for
education projects.
40.       I am satisfied that the proposed loan would comply with the Articles
of Agreement of the Bank.
PART IV - RECOMMENDATION
41.       I recommend that the Executive Directors approve the proposed loan.
Robert S. McNamara
President
Attachments
May 21, 1975



?.ge 1 of 3 p.g..
WORThTY DATA - GREECE
AREA                                  ~~~~~~~~~~~~~~~POPULATION                     OMOlUT
132,0(X)  Sal  ~ ~ ~ ~ ~   ~     j~~tllioo   (eid-1973) ~~~~~~370 /b                  Per hetof arable land
SOCIAL IDIDCATORO
Wereroo   Countries
Greece                   Sa              io       Prrane
GM? 788 'APfLTAh) ALA       ASS   a4                                           1,460 /a        1,210 /a       3,210 /a    3,620 /a
=u-Zthrate (per thmosand)                                 19               16 /419 /4 c                13.   /    16.1/
Orti. deoth rots (p.r thous,d)                                  7                9                           21A         10.7/
In est mOrtality rate (per th-uand live birth.)                10 44 28 /4                   1. /$1. /4                 2   /4
Li fe axp.ctancy at birth (year.)                              609 /470                         70             71        71.2
Gross rIrdoie        e./                                       .               1                 1    1.13              1.3
Popu-tion growth rate       bn2/h                                                5                              9         2
Ag8. structur(emereoc)
0-1,                                                        27       ~       25/             28           23.1/4      23.084
L5-61,                                                       65                               63           63.1/       62.7
Ago dop..d-cy ratio A4                                                 0        .0.610.                            a        .5
65 sod ovor                                                    21 ,n            p           13.5~~~~~~~~0  0.   06  13. 6
Icocovic dopendetcy ratIo                                       .0   a ~~~~~O'I1.1            1.0          0.7
tiobon populotios so Par .oot of total                         L3 /h            53 lh.-         19 /d.1      87.1 Lb       70 LLk..
Pootl  Planning,  No. of ac...ptore comudati-e (thoos.        ...
No. of users (% of married wosen)           ...
REta%  labr force (thonoands)                                3,600 /I 30         0                          i,C00~ 2120700
Por-atags amPloyed in agriculture                            5                 o2                             o      2T
percentage uo-.ployac                                                          313d                                       .
~7cort of octlnol 100000 reei-ed by highoot 5%            23 L
Porce.nt of n.tIonal icoocmo -riceid by highest 20%            50 4.
Po-ot of r.ollo.a l trcc  received by lowest 20%9 4                          .
Nier  f relona  lroooa rci-ed by lowest 10%                21 4.
3 ne  t. tp 103 of owter                                  .25.? /
8ood by smallne-) 10% of owners                                             2.6 /
PPnpulllo., p.r ponym-ion                                      90t             620             70t/           650         750
Poo1nir .7r nursIng parson                            1260             1,110 /4        l1,30 /810                   370
W1 y   a  hoayitol- 80d                                 170              AGM  6          220 /4         120          110 /
Per         r        ,pt  0101  oply as % of roqireneete /    120 'LI          126             107            128         127
Par os:aproteIn m.yPI, tot8i (grass par ~ayo346                99/3             99              01             9!.        101
0If which, altoal and pulse                                  39 /             52/Lyz                          66
Deathrate 1-4yearo /7                                                          0.9             090.                         .
ROUCATICS
ATFusted k8 PrImary school enroll,set ratio                   109              lo9 84            3            ill         118
Adjusteda70secondary school enrollment ratio                   39               60 /y           19            72            3
VYears-     d holing provided, first aod second level.         12               12              13             12           2.4
Vocational an'roll"anot as % of dec. school enrollment         17/R             20 /.           2061/                      234
dlt liercy rat  %                                          800              82 /4   ~       94 /nab                    99
ise-rago No. of persons p.r room (urban)                      1.1 4            0.9    ~         .0.6                      0.9 /
Percent of occupied units ,rthout piped water                  71 /.±           35     ~       .13 /~                     9,p
Aocee :tto,elsotriolty (tas % of total Population)             53               97                            9             99
Poron   of rura  pepolat      on-stod to a1ectriobty           IL7                                            98 
RadOio vcivers per 1000 population                              05 41-12 24 210 /4                            367/         329
Passooger oars per 1000 pop.ulation                             5               31 4           95   W         3   ~.i     21/
llectri. PeWTr coosucmption (kwh p.c.)                        2.1,6                4         ,96 /4        1076h ,13/
Neo-sprint coneumptioo p.c. kg per year                      2.6              5. 6 /4   *     6.0   a       19.5  4)     1.2/
Notes, Figures refer either to the latest periods ort Won                     fmsreetltmeaue                 oyCiOo        n
the latest years.  Latest periods ref-r in principle to              dietriboticn by age and, a" of national populations.
the years 1956-60 or 1966-70; the latest years in ps.ln-         A4Protein otandards (reisq.iramato) for all co-ntries as cotab-
niple to 1960 nod 1970.                                              lished by hDA Eeooool Reseaarch Service provide for . m1i.nimu
/I  The Per Capito GNP entimato is et maonet pricee for              a.Uowance of 60 grams of total protain par day, and 20 grams of
y-ar otbhr than 1960, calculated by the asme converoion          andmal "n pulse protein, of which 10 grams should be animal
techoiq-e ae the 1972 World Bankc Atlos.                         protein.  Thes  standar-ds   a   -esswhat lower, than those of 75
/2 Average number of daughters per womon of reproductive             gramse of total protein and 23 grams of animal protein se a
age,                                                             average for the world, propoaed by 710 in the Third World Food
/4 Pbpulatioo ggowth ratec ar  for the de-sdes ending in           Sur,,ey.
1960 and1970.                                                L4  Som,e studies hvre suggested that crude death rates of children
/4  atio of populatia  under 10 an,d 69 end over to popula-        ago. 1 through 1 nay be need a .a first opproxim.Ut.ind edx of
tion of ages 15-61 for age depoode'oY ratio and to labor          almoutrition.
fozne of ages 15-61, for scenonic depee.dency ratio.         /B Percentage enrolled of correap.-dng population of sohool age
/4 FAO reference otandarde reprcet physiological e-                am defined for eaoh ceantay.
q,dreo,ooto for normoal activity and health, takcing
,La  1972;    A4  1973;   /4   Excluding Canto And Nolil.la;   /d  Estimate;    /e  Data oxcludeo live-born Inftant   ding before
reghetretino of birth;    L4   1960-62,   /4 2l960.-7P;   74  Munlcipalities end communes in which the largest population
co terhoe 10,000 or sore inhabitants end population of 12 otter urban aggloeerationo irreapeotive of their population;
/4   toallties of 10,000 or ann     inbmbitants;    /4  Cities, uriso  ogglommreticoe and urban c=     ..nes  a4  Oes. 2,000
population;    /4l  2961;  /.   1971;   /-  1960;    /_4  Lccluding perons in compuleocy ailitacy service;      /L ExcludIng
porenna seeking Work for the first ti-m;     la   Excludidng unemployed oanmo; it&    1957;    /a  19621    A4  Nuber 0n th.
register,nt all working in the country,       Z_4 Including midwives,   ures   wihmdwifer'Y qualificat.ioao;      /4  1969;
/4 Including smtemity hospitals;     /x   Ocvsront hoopital establishments;       /4  1967;   /n   1969-70;   /as, Teacher
training not included in evco,dary school en-1lJ.rst;      /4b  15 yeezo and over;    /4c  Total, urban nod rurl;
~ d Data r     r to households in .ooveotiooal dwellings;      A.- Inside;    14f  Inside. or outaide;   L-A   Refer to dwellings;
oh Iogi-c nod Luxembourg;   /a1   XKcludIng vehicles sosapt fran tacAt.ot.
oTie similarity of the presocst Frech and Greek ...nonic otructoras makes Frece an appropriate bh;e-ti- for the,
ftutor dvvolop-et proopocts of Grveo..
R1 March 26, 1975



ANNEX I
Page 2 of 3 pages
COUNTRY DATA - GREECE
GNP PER CAPITA in 1974 (Atlas method) t US$1780 (estimate)
GROSS NATIONAL PRODUCT IN 1974 (current prices)                                             ANNUAL RATE OF GROWTH (%, constant 1958 Prices)
US$ Mln.                                                          . 1960-65  1965-70  1968-,2  1973     1974
GNP at Market Prices         20,047      100.0                                                   8.0      7.6      8.9      8.6     - 2.9
Gross Domestic Investment      4,550      22.7                                                  15.4      7.5     12.3     19.4     -30.4
Gross National Saving          3,267      16.3                                                  10.2     11.1    1.1       5,1     -35.1
Current Account Balance        1,219       6.1                                                  25.6      2.2      6.6    192.1     -18.4
Export of Goods, NFS           3,407      17.0                                                            5. 6.5           13.2     - 5.4
Import of Goods, NFS          5,201       25.9                                                            ..       8.1     3°.5      0.0
OUTPUT, LABOR FORCE AND
PRODUCTIVITY IN 1971
Value Added                Labor Force              Value Added per Worker
US$ Mln.      %               ('00)    %                    uss       %
Agriculture                   1.707       18.6            1330.3   40.5                1,283     46.0
Industry _/                   2,840      31.0             840.8    25.6                3,378    121.1
Services                      4,616      50.4            1112.8    33.9                4,148    148.7
Total                         9,163     100.0             3283.9  100.0                2,790    100.0
GOVERNMENT FINANCE (National Accounts Basis)-
Gencral Government                                    Central Government
Drachmae Billion              % of GDP                Drachmae Billion              % of CDP
1970   1971   1972   1973   1968-72  1972    197      I970   1971  '1972   1973   1968-72  1972   1975
Current Revenues                78.6   87.1    97.7  117.8     31.5   29.8   27.6     47.5   52.7   59.5   77.2      19.2   18.1   18.1
Current Expenditures            68.5   76.7   84.9    98.3     27.6   25.9   23.0     43.8   49.3   53.7   65.0     17.8    16.4   15.2
Current Surplus                 10.1   10.4    12.8   19.5      3.9    3.9    4.6      3.7    3.4    5.8   12.2      1.4     1.7    2.9
Capital Expenditures             20.4   26.8   32.4   39.1      9.0    9.9    9.1     11.4   12.4   16.0   19.3       4.5    4.9    4.5
MONEY CREDIT AND PRICES                          Drachmae Billion (End of Period)
1965     1969     1970     1971      1972     1973     1974
Money and Quasi Money              71.7     131.2    155.8    190.0    234.0    271.0    327.8
Bank Credit to Public Sector        16.9     31.0     35.2     42.4     46.0     60.4     58.9
Bank Credit to Private Sector       49.3     96.9    118.0    144.1    177.8    212.6    242.8
Money and Quasi Money
as % of GDP                      41.3      50.8     54.2     59.7     63.7     57.0     56.2
Wholesale price index
(1969 e 100).                    92.7     100.0    103.9    107.5    114.3    141.1    192.9
.Consumer price index
(1969 - 100)                     91.0    100.0     103.U    106.1    110.'!,  127r.9   162.1
(Annual percentage changes in)
Wholesale price index                4.4      3.9      3.9      3.5      6.3     23.4     36.7
Consumer price index                 3.0      2.4      3.0      3.0      4.3     15.5     26.8
Bank credit to Public Sector         9.3     26.3     13.5     20.5      8.5     31.3      3.0
Bank credit to Private Sector       10.2     17.4     21.8     22.1     23.4     19.6     17.0
Note:  All conversions to dollars in this table are at the average exchange rate prevailing during the period.    1973 and 1974 data are
provisional.
1/ Mining, manufacturing, energy and construction.
Source: Ministry of Coordination and Planning
May 14. 1975



ANNEX I
Page 3 of 3 pages
COUNTRY DATA - GREECE
TRADE PAYMENTS AND CAPITAL FLOWS
BALANCE OF PAYMENTS                                                 MERChANDISE EXPORTS (AVERAGE 1970-1973)
Jan-Nov.
1972     l9W5     1974                                          US $ Mln 
(Millions US $)                Tobacco                        100.4    12.2
Currants, raisin8 and fruits     97.5    11.8
Exports of Goods, NFS            1839.6   2638.1   3034.5           Textiles                         79.7     9.7
Imports of Goods, NFS-'          2726.4   4496.8   4619.4           Minerals                        55.1     6.7
Resource Gap (deficit - -)       -886.8  -1&85.7  -1584.9           Cotton                           53.0    6.4
All other commodities           440.0    53,3
Interest Payments (net)          - 56.3  - 51.9   - 64.1                 Total                     825.7    100.0
Workers' Remittances              575.3    735.4    483.4
Other Factor Payments (net)         -        -        -
Net Transfers                       -        -        -           EXTERNAL DEBT, DECEMBER 31, 1974
Balance on Current Account       -367.8  -1175    -1174.6
US $ Mln
Direct Foreign Investment (net)   280.4    415.7    326.7
Net MLT Borrowing                 356.1    407.2    453.3           Public Debt, incl. guaranteed          2000.0
Disbursements 2/                513.4    579.4    608.8           Non-Guaranteed Private Debt              --
Amortization                   -157.3  - 172.2  - 155.5           Total outstanding and Disbursed
Subtotal                        636.5    822.9    780.0
Capital Grants                      -        -        -           DEBT SERVICE RATIO for 1974 S
Other Capital (net)               210.1    211.6    355.0
Other items n.e.i.                 22.3    153.1  - 93.2
Increase in Reserves              501.1     12.4  - 132.8           Public Debt, incl. guaranteed          6.9
Non-Guaranteed Private Debt
Gross Reserves (end year)        1003.9   1016.3    883.54/         Total outstanding and Disbursed
Net Reserves   (end year)         853.0    762.7    722.0-'
Fuel and Related Materials
Imports
of which: petroleum prod.     212.5    416.4    860.0v
Exports
of which:  petroleum prod.     16.7     46.4    130.05J
RATE OF EXCHANGE                                               IBRD/IDA LENDING_ Apr. 30, 1975 (Million US $)
1953 - March 9, 1975                                                                             IBRD      IDA
US $ 1.00 = DR 30.00
DR   1.00 = US'$ 0.0333                                        Outstanding and Disbursed         62.3 *      -
Undisbursed                        8h.3       -
Since March 10, 1975:                                          Outstanding incl. Undisbursed
Floating exchange rate
I/ Excluding ships registered under L.D.2687/53.
2I  Including net disbursements of suppliers' credit.
/ Ratio of debt service to exports of goods and non-factor services, plus workers' remittances.
4 As of end-September, 1974.
5   Estimates for entire 1974.
not available.
not applicable
May 14, 1975



ATn9EX II
Page 1 of a
THE STATUS OF BANK GROUP OPERATIONS IN GREECE
A.   STATEMENT OF BANK LOANS (as of April 30, 1975)
US$ Million
Amount
Loan
Number    Year    Borrower          Purpose      (Less cancellation)   Undisbursed
Two loans fully disbursed                                31.6               _
711       1970    Hellenic State    Education            13.8             11.2
754       1971    Hellenic State    Irrigation           25.0             1)4.3
791       1971    NIBID             Industrial finance   25.0              0.2
859       1972    Hellenic State    Education             23.5            23.h
945       1973    NIBID             Industrial finance    15.0             5.2
1/
991       1974     Hellenic State   Irrigation            30.0            30.0
Total                                 163.9
of which has been repaid             12.1
Total now outstanding                 151.8
Amount sold                   5.2
of which has been repaid     -        5.2
Total now held by Bank
Total undisbursed                                      84.3
1/ Not yet effective
2/ Prior to exchange adjustments



ANNEX II
Page 2 of 4
B.     STATEMENT OF IFC INVESTMENTS (as of April 30, 1975)
Amount in US$ Million
Year   Obligor                           Type of Business      Loan    Equity  Total
1962   Aevol Industrial Company of
Organic Fertilizers, S.A.        Fertilizers           o.60       -     o.60
1965   "Titan" Cement Company, S.A. I    Cement                1.00     G.50    1.50
1966   National Investment Bank for      Industrial
Industrial Development, S.A.     finance                -       0.72    0.72
1966   General Cement Company, S.A.      Cement                3.50      -      3.50
1966   "Titan" Cement Company, S.A. II   Cement                 -       0.03    0.03
1970   Aluminium de Grece, S.A.
Industrielle et Comnmerciale I   Aluminum              3.50     5.10    8.60
1972   Aluminium de Grece, S.A.
Industrielle et Cormmerciale II  Aluminum               -       0.05    0.05
1975   Hellenic Food Industries,S.A.     Food processing       1.00     0.15    1.15
Total Gross Commitments                                 9.60     6.55   16.15
less cancellations, terminations,
repayments and sales                            6.26     3.41    9.67
Total commitments now held by IFC                       3.34     3.14    6.48
Total undisbursed                                       1.00     0.15    1.15



ANNEX II
Page 3 of 4
C.   PROJECTS IN EXECUTION 1/
Loan No. 711 - First Education Project; $13.8 million Loan of November 5, 1970;
Closing Date: December 31, 1975.
Civil works for construction of the project schools are proceeding
satisfactorily and most of the schools should be completed by the end of 1975.
Bids for furniture and equipment have been called twice, as the first tenders
involved complex procedures which discouraged bidders. The second set of bids
has been evaluated. Despite these delays the project is expected to be com-
pleted within about six months of the original schedule.
Loan 859 - Second Education Project: $23.5 million Loan of October 2, 1972;
Closing Date: July 31, 1977.
Consultant architects for all thirty-three schools to be built under
the project hiave been appointed and space standards set, and preliminary de-
signs are underway. Bids on the first group of equipment and furniture con-
tracts for project schools are being evaluated. The Education Project Unit
is performing satisfactorily. The government has very recently requested the
deletion from the project of the extensions to the University of Patras, rep-
resenting 43 percent of total costs, and reallocation of the savings to other
project institutions, on which there have been considerable cost increases.
Loan No. 754 - Groundwater Development Project (Irrigation): US$25 million
Loan of June 21, 1971. Closing,Date: December 31, 1976.
Implementation of this project began slowly due to delays in con-
tract awards, changes in designation of project areas prompted by the ongoing
consultants' study, and a protracted search for a satisfactory solution
(found in December 1973) to the question of farmers' contributions to the
capital cost of the project. Studies are now being made to find the most
efficient design of tertiary systems. Drilling operations are now proceed-
ing at a satisfactory rate, and the project is expected to be completed by
June 1978, about two years behind schedule.
Loan 991 - Nestos and Yannitsa Irrigation Project: $30.0 million loan of
June 3, 1974; Closing Date: December 31, 1979.
Because of recent political changes in Greece, not all of the con-
ditions of effectiveness of this loan have yet been fulfilled. The current
effectiveness date is June 30, 1975. Consultants to review the tertiary
1/   These notes are designed to inform the Executive Directors regarding the
progress of projects in execution, and in particular to report any prob-
lems which are being encountered, and the action being taken to remdy
them. They should be read in this sense, and with the understanding
that they do not purport to present a balanced evaluation of strengths
and weaknesses in project execution.



ANNEX II
Page 4 of 4
canal design standards have been selected, and project implementation is now
expected to begin in mid-summer 1975.
Loan 791 - Third NIBID Project: $25.0 million loan of December 6, 1971:
Closing Date: December 31, 1975.
The third DFC loan has been fully committed, and only $0.2 million
remained to be disbursed as of April 30, 1975. Project implementation has
been satisfactory.
Loan 945 - Fourth NIBID Project: $15.0 million loan of November 29, 1973;
Closing Date: December 31, 1977.
The fourth loan has been almost fully committed, and $5.2 million
remained to be disbursed as of April 30, 1975. Project implementation has
been satisfactory.



ANNEX III
Page 1 of 3
GREECE - THIRD EDUCATION PROJECT
LOAN AND PROJECT SUMMARY
Borrower:            The Hellenic State
Amount:              $45 million equivalent
Terms:               15 years, including 5 years of grace
Interest:           Standard
Project              Improvement of general secondary education, vocational
Description:        and technical training, teacher training and planning
for post-secondary education system development, through
(i) construction, furnishing and equipping of
(a)  5 new accelerated training centers, with an
annual enrollment of some 1,380;
(b)  3 new higher technical centers (KATEs), with
an annual enrollment of some 3,960; and
(c)  10 new multilateral secondary schools, with
an annual enrollment of some 17,450.
(ii) studies for
(a)  post-secondary education system development,
designed to analyze the present situation,
propose needed pedagogical and institutional
reforms, and identify future expansion needs
and investment priorities;
(b)  a University Center of Pedagogical Studies, to
improve the training of secondary school
teachers; and
(c)  expansion of production of educational materials.
(iii)  consulting services for design of project institutions
and for studies
(iv)  technical assistance for the Central Project Unit in
the Ministry of National Education and Religions,
KATE curriculum development, and multilateral sec-
ondary school administration, curriculum development
and staff training; and fellowships for training
abroad (about 34.5 man-years).



ANNEX III
Page 2 of 3
Estimated Cost:                                -US$ millions----
Local         Foreign       Total
1.  Accelerated Training Centers                3.6            3.2           6.8
2.  Higher Technical Education Centers         11.4           11.4          22.8
3.  Multilateral Secondary Schools             22.9           16.1          39.0
4.  Consultant Architect Services               4.0              0           4.0
5. Studies for Post-Secondary Education
Development, Pedagogical Center
and Educational Materials Production
Facility                                 0.2             0.7          0.9
6.  Technical Assistance                        0.4            1.4           1.8
Base Line Cost                                 42.5           32.8          75.3
7.  Physical Contingencies                      4.1            2.8           6.9
8.  Expected Price Increases                   13.7            9.7          23.4
Total Project Cost                             60.3           45.3         105.6
Financing Plan                                 Local        Foreign        Total
($ million equivalent)
IBRD                        0             45.0         45.0
Government                 60.3            0.3         60.6
Total                      60.3           45.3        105.6
Estimated Disbursements:                            ($ million)
1975  1976   1977  1978  1979  1980
Annual               0.1   1.3   2.7    10.1  26.6   4.2
Cumulative           0.1   1.4   4.1    14.2  40.8  45.0
Procurement:         Civil works contracts would be awarded on the basis of
international competitive bidding, in accordance with Bank
guidelines. It is expected that few foreign firms will
submit bids, as Greece has a well developed and competitive
construction industry. Detailed lists of furniture and
equipment would be presented for the Bank's review prior
to procurement. These lists would identify all items or
categories of items costing more than US$3,000, the resid-
ual items being included in one miscellaneous category not
exceeding US$100,000 for each institution. Items would be
grouped to the extent possible to form sizeable packages
to permit bulk procurement. Furniture and equipment con-
tracts, except for the items included in the miscellaneous



ANNEX III
Page 3 of 3
category, would be awarded on the basis of international
competitive bidding in accordance with Bank guidelines.
Local manufacturers of furniture and equipment would be
allowed a margin of preference equal to the existing rate
of custom duty applicable to competing imports of 15% of
c.i.f. price, whichever is lower. Contracts for the items
in the miscellaneous category would be awarded under normal
government procurement procedures, which would include
requests for price quotations from at least three sup-
pliers.
Consultants:         To assist in carrying out the following studies:
(i) post-secondary education system development study
(about 12.5 r,anyears);
(ii) investigation of the requirements of a proposed
University Center of Pedagogical Studies (about
2 man-years); and
(iii) feasibility study for expansion of an education
materials production facility (about 3 man-years).
In addition, teaching and administrative expertise would
be provided to project schools (about 33 man-years) and
to the CentTal Project Unit in the Ministry of National
Education and Religions (about 5 man-years). The project
schools would be designed by consultant architects/engineers,
of which there is an adequate supply available in Greece.
Appraisal Report:    No. 755-GR, dated May 2, 1975