Announcement of Tanzania Receives Fifteen Million Dollars IDA Credit for Trucking Industry on October 6, 1977

•World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 IDA NEWS RELEASE NO. 78/13 October 6, 1977 TANZANIA RECEIVES $15 MILLION IOA CREDIT FOR TRUCKING INDUSTRY Tanzania is to receive a $15 million credit from the International Development Association, the World Bank affiliate, for a project that will improve the country's trucking industry. The credit will finance the Trucking Industry Rehabilitation and Im- provement Project, whose major objectives are to assist the Tanzanian Govern- ment in the development of five new public trucking companies and the improve- ment of existing transport facilities. Tanzania's largely agricultural economy depends heavily on truck transport. Almost sixty percent of the country's domestic cargo traffic is moved by trucks. However, trucking services have deteriorated so much in the last few years that the present lack of efficient and reliable services con- • stitutes a serious bottleneck to economic activity . The new project aims at breaking this bottleneck. The five public trucking companies will be established in the regions of Mwanza, Tabora, Mtwara, Ruvuma and Dodoma. These are widely scattered, heavily agricultural regions which collectively represent about one fourth of Tanzania's popula- tion and area. Apart from the establishment of the five new public trucking compan- ies, the project includes the rehabilitation of existing vehicles, purchase of new vehicles and the provision of truck repair facilities. A training component will increase the supply of trained transport personnel by pro- viding instructors, teaching aids and workshop equipment. The project also foresees the replenishment of depleted vehicle spare parts inventories, im- provement of the spare parts and truck import systems, and technical assis- tance to the National Tra~5port Corporation (NTC). The private segment of the Tanzanian trucking industry is expected to benefit as well through the spare parts component and from the expected improvement in the present system of import control. The $15 million IOA credit to Tanzania is for 50 years with a grace period of 10 years. It is without interest but carries a service charge of 3/4 of 1 percent to meet IDA's administrative expenses . • NOTE: Money figures are expressed in U.S. dollar equivalents. FORI\A ~JO. 1121 (5,-76) T ECHN I CAL D A T A PROJECT: COUNTRY: TOT.L\L COST: Trucking Industry Rehabi 1 itation and lmp·rovement Tanzania $ l 7. 3 mi 11 ion • I DA FI NANC I NG: $15.0 million, standard IDA terms OTHER FINANCING: $2.3 million Government of Tanzania IMPLEMENTING ORGANIZATION: The National Transport Corporation (NTC), City House, Mkwepu Street, P.O. Box 3101, Dar es Salaam, Tanzania PROJECT DESCRIPTION: The major component will assist the Government in the de- velopment of five public trucking companies including tech- nical assistance, the rehabilitation of existing vehicles, purchase of new vehicles, and the provision of truck repair facilities. The training component will increase the supply of trained trucking personnel through the provision of instructors, teaching. aids and workshop equipment. Financing is also provided for replenishing depleted vehicle spare parts investories. PROCUREMENT: All procurement will be coordinated by NTC, with the Tanzania Rural Development Bank (TRDB) playing a major role in the trucking companies component. In the trucking component new trucks and associated spares will be purchased under international competitive bidding from suppliers who will be required to provide adequate service, repair and maintenance facilities in Tanzania. Equipment for the trucking companies 1 workshops and for the National Institute for Transport (NIT) component will also be procured through interna- tional competitive bidding. Spare parts for rehabilitating the existing fleet of the trucking companies and teaching aids for NIT will be procured through international shopping. The imports financed under the spare parts component will be procured through the various dealers and merchants purchasing through their commercial channels which are normally competitive. CONSULTANTS: Extensive technical assistance is ir.cluded in this project. A total of 815 man months ranging from $3,000 to $5,000 per man month has been included in project costs. ECONOMIC RATE OF RETURN: 37% on the public trucking companies component, and 38% on ~ the spare parts component. ESTIMATED COMPLETION DATE: 1983 - 0 -