Announcement of World Bank Lends One Hundred Fifty-One Million Five Hundred Thousand Us Dollars for Argentine Transportation Projects on April 1, 1971

INTERNA"TIONAL BANK FOR .RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON :>. C. 2043.3 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 71/15 Subject: World Bank lends $151.5 milli~n April 1, 1971 for Argentine transportation projects Two World Bank loans amounting to $151.5 million will assist Argentina in expanding and improving highways and rail transportation, it was announced today. Total cost of the projects is estimated to be over $500 million. The rail loan, of $84 .O million, is the Bank's first to Ferrocarriles Argentinos, the Argentine national railways. It will help finance the first two years of a five-year rehabilitation and investment program • • Proceeds of th~ loan will be used mainly for purchasing freight cars, rehabilitating locomotives and c~rs, renewing and maintaining track, and procuring telecomnnmications equipment. The other World Bank loan, of $67.5 million, will help finance con- struction and improvement of approximately 700 miles of Argentine highways and feasibility and engineering studies on about 2200 miles of highways for future projects. It is the World Bank's third loan for Argentina's highways. A general reorganization and rehabilitation of the railways was begun in 196 7. A new corporate statute provides more autonomy, and substantial improvements in' the operations and maintenance of the system have led to better financial performance. The Government and the railways have/no\J adopted a comprehensive five year program of modemization wh;l.ch entails an • investment of $839 11lillion and aims at imp,ro.ving service while making the system financially viable. /more Bank P.R. No. 71/15 - Argentina - transportation - 2 - The World Bank loan will cover approximately one half of the foreign exchange component of the first· two years of the program, which will cost an estimated $368 million. Suppliers' credits, local financial institutions • and the Argentina Govemment will provide the balance. Argentina's highway network serves more than 2 million vehicles. Since 1968 the planning, construction and maintenance activities of the national roads organization have been improved and an intensive road construe tio,1 and improvement program launched. The $150 million highways project the Bank is assisting covers 18 road sections including Rout~ 14, the major road of the Mesopotamia region, which provides access from Buenos Aires to Brazil and Uruguay; and Route 9, which serves the densely populated industrial belt between Buenos Aires and Cordoba. The World Bank loan will finance some 45% of the cost of civil works, a~d detailed engineering and feasibility studies for future highway projects. The Government will finance the balance of the project cost. The highway and the railways loans are for a term of 25 years, including • 4 years of grace, with interest at 7~%. Ferrocarriles Argent:lnos (Avenida Doctor Ramos Mejia 1302, Buenos Aires) will be respoq~ible fo1~ the execution of the railway project and the National Highway Departmen'.t (Vialidad Nacional, Avenida Maipu 3, Buenos Aires) for the highways project. Seven financial institutions are participating in the highways loan for a combined total amount of $1,025,000: Seattle First National B,ank; Security Pacific National Bank, Los Angeles; United States National Ba~k of Oregon; Bank of America International of Florida; The Bank of Tokyo Trust Company, New York; Marine Midland Bank, New York; and the Bank of California, N .A. Four financial institutions are participating in the rail loan for a combined total amount of $500,000: Washington, D.C. United States National Bank of Oregon; Bank of America, New York; Marine Midland Bank, New York; and The Riggs National Bank, - 0 - •