Following the rejection by the council of ministers of the US$2.5bn iron ore-copper project, the finance and economy ministers tender their resignations.
The 12-year credit line will be used to expand and improve water service quality in the Buenos Aires conurbation.
State-owned water utility AyA is carrying out several water and sanitation projects in the province.
The 25-year concession had been awarded in 2011, with the completion of works originally scheduled for 2014.
The new pipeline will serve a region with some 2mn people.
The government is looking to increase public spending on small-scale irrigation and transport infrastructure projects in regions such as Oruro.
The state water utility will reduce the city's debt by 30%, according to a letter of intent.
German software giant SAP was the winner of a tender held by Latin America's largest water utility.
Construction works have been delayed since last year and aqueduct concessionaire Abengoa could end up losing its contract, according to Mexican media reports.