GAO Says U.S. Loans to Brazil Founder
By Dick Barnes	nomic analyses, failure to ing agency of Congress covers the poor soil conditions, the</br></br>More than $100 million in flation and other management ects administered by the would never become an indus-U.S. development loans to Bra- errors, says the General Ac- Agency for International De- trial complex.Û zij have foundered on unde- counting Office.	velopment.	jn another power transac- pendable technical and eco- A new report by the audit- After reviewing a prelimi- tion, AID loaned $2.4 million</br></br>nary draft of the report, AID for the purchase of 12 electric told GAO it has adopted strict- generators to meet an emerg-er loan standards and other ency power need in Fortaleza, preventive measures.	GAO	said	AID	justified	the The GAO said a synthetic loan on the basis of emergen-rubber plant built with the cy power needs for 1963 and help of a $3.4-million AID loan 1964. But, said the GAO re-has been unable to market its port, the loan was not signed product. Instead of helping until October 1963, generator economic growth it ÛÏis becom- installation was not^ substan-ing a drain on the resources of tially completed until Septem-northeast Brazil," the report ber 1964, and in January 1965, said.	the power shortage was elimi-</br></br>The report said that al- nated with completion of a though AID knew the synthe- transmission line from a hy-tic rubber would have to be droelectric dam. sold at a price considerably The 12 generators were higher than that of rubber be- used at about 20 per cent of ing imported into Brazil, no capacity, the GAO said, and detailed marketing study was since have fallen to virtual made.	disuse.</br></br>Now, to reach a break-even point with competitive pricing, the report said, the plant would have to reduce wages and indirect expenses by 77 per cent and cut the cost of sugar alchohol, a key raw material, by 90 per cent.