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             REPUBLIC OF PANAMA
                           January 13, 1994
International Bank for
  Reconstruction and Development
1818 H Street, N.W.
Washington D.C. 20433
    Re: Loan No. 2686 PAN
       Roads Rehabilitation Project
       Supplemental Letter No. 1
Gentlemen:
       I refer to Sections 1.02 (f), 3.01 (a), 3.03
and 3.11 of the Loan Agreement (the Agreement) of even
date herewith between the International Bank for
Reconstruction and Development (the Bank) and the
Republic of Panama (the Borrower) for the above project.
       The Implementation Letter therein referred to
comprises the following documents, hereby attached:
    1. A document designated "Project
       Implementation" (6 pages), together with the
       following attachments:
       (a) Attachment 1: Project Implementation
           Responsibilities (2 pages);
       (b) Attachment 2: Action Plan (5 pages);
       (c) Attachment 3: Key Performance
           Indicators (1 page);
       (d) Attachment 4: Subproject Implementation
           Scheduling (4 pages);
       (e) Attachment 5: Institutional
           Strengthening Component (1 page); and
       (f) Attachment 6: Overseas Training for
           Ministry of Public Works (MOP) staff (1
           page).
    2. A document designated "Interurban Transport
       Program"
    3. A document designated "Urban Transport
       Program"
                        Yours Respectfully
                        REPUBLIC OF PANAMA
                        By:
                          Authorized Representative
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Accepted:
INTERNATIONAL BANK OF RECONSTRUCTION
AND DEVELOPMENT
By: ____________________________
     Authorized Representative
Date: ___________________________