Announcement of World Bank Loan to Support Expansion of a Telephone System in Colombia on March 31, 1980

FOR IMMEDIATE RElEASE eJ\/orld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 80/71 Ma r ch 3 1 , 1980 WORLD BANK LOAN TO SUPPORT EXPANSION OF A TELEPHONE SYSTEM IN COLOMBIA J A project to expand and improve the telephone service in Medell 1n, Colombia's second largest city, and its environs, will be financed partly by a World Bank loan of $44 million. This will be the fifth World Bank-financed project in the telecommunications sector in Colombia, though the first to strengthen a municipal telephone system. The project has an estimated total cost of about $110 million and is part of the 1980-90 development program of Empresas Publicas de Medellfn to more than double new connections and to improve the quality of service !hroughout the network. Empresas P~blicas de Medellfn is an autonomous public entity set up • by the municipality to provide electricity, t~lephone, water supply, end sewerage services to the population of Medellfn and vicinity. Its ~1-year program aims to increase the number of connections from about 217,000 at the end of 1979 to about 506,000 at the end of 1990. In addition to over 100,000 new connections in an area of about a 35-kilometer radius of Medell(n, the project provides for the installation of about 3,300 public call office telephones to serve largely low-income areas. Local service in Medell fn is significantly congested. During peak traffic hours, only 46% of local call attempts are successful; 20% of call attempts are lost due to congestion. As of October 1979, there were about 43,000 applicants on the waiting lists for new connections, many of them for more than five years. The project is the first Bank effort in Colombia to assist in the development of a company which so far concentrated almost entirely on providing telephone services to a major municipality, into an institution capable of serving a heavily populated and important economic region. The $44 mill ion Bank loan to Expresas PQbl icas de Medell fn has the guarantee of the Republic of Colombia. It has a term of 17 years, including four years of grace, with interest at 8.25% annually . • NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T ECHN I CAL DAT A PROJECT: COUNTRY: TOTAL COST: Fifth Telecommunications Colombia $ 110 mi 11 ion • BANK FINANCING: $44 mill ion for a term of 17 years, including 4 years of grace, with interest at 8.25% annually Empresas Publ icas de Medellfn (EPM), $44.6 million; OTHER FINANCING: Suppliers' credit, $11 .5 mill ion; and commercial bank loans, $9.9 mill ion IMPLEMENTING ORGANIZATION: Empresas PJbl icas de Medell fn (EPM) Calle 53, No. 53-16 Apartado Aereo 940 TELEX: 6582 EPMC Medellfn, Colombia CABLE: EMPRESAS PROJECT DESCRIPTION: It comprises: (a) a total of about 108,400 additional local switching equipment 1 ines in Medellfn and in the surrounding areas, with associated cables and subscribers' plant, and about 90,000 additional connections; (b) cables and subscribers' plant to enable the installation of another 10,000 connections; (c) 3,300 public call office telephones to serve largel~ low income areas; and (d) building extensions to house project equipment. PROCUREMENT: All goods financed under the Bank loan will be procured through international competitive bidding (ICB) in ac- cordance with Bank guidelines. Qualified domestic manufacturers will be given a pref- erence in bid evaluation of 15% of the c. i.f. price, or the existing import duty, whichever is lower. Other imported goods not financed by the Bank will be procured under ICB, except where additions to existing equipment warrant standardization, in which case they will be purchased by negotiation. ECONOMIC RATE OF RETURN 16.8% ESTIMATED COMPLETION DATE: 1984 - 0 - •