Colombia - Seventh Railway Project

Document of The World Bank FOR OFFICIAL USE ONLY LE Report No. P-3192-Co REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE COLOMBIAN NATIONAL RAILWAYS WITH THE GUARANTEE OF THE REPUBLIC OF COLOMBIA FOR THE SEVENTH RAILWAY PROJECT January 27, 1982 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authoriation.  CURRENCY EQUIVALENTS Currency Unit = Peso - Col$ Average Calendar 1980 Average Calendar 1981 US$1 = Col$47.280 US$1 = Col$54.414 Col$1 = US$0.02115 Col$1 = US$0.01838 WEIGHTS AND MEASURES 1 meter (m) = 3.281 feet (ft) 1 square kilometer (km2) = 0.386 square mile (mi2) 1 cubic meter (m3) = 35.315 cubic feet (ft3) = 264.2 gallons (gal) 1 kilogram (kg) = 2.206 pounds (lb) 1 ton (t; metric; 1,000 kg) = 1.00 short tons (sh. tons) GLOSSARY OF ABBREVIATIONS CNR Colombian National Railways COLPUERTOS Colombian Port Authority CONPES Social and Economic Policy Committe of the Cabinet DAAC Administrative Department of Civil Aeronautics DNP Department of National Planning DRI Integrated Rural Development ECOPETROL Colombian Petroleum Agency FAN National Aeronautics Fund FNCV National Rural Roads Fund FONADE Economic Development Fund FVN National Highway Fund IDB Inter-American Development Bank IDEMA Government Marketing Institution MOPT Ministry of Public Works and Transportation PAN National Nutrition Program PIN National Integration Plan SENA Colombian National Training Center FISCAL YEAR January 1 to December 31  FOR OFFICIAL USE ONLY COLOMBIA SEVENTH RAILWAY PROJECT LOAN AND PROJECT SUMMARY Borrower: Colombian National Railways (CNR) Guarantor: Republic of Colombia Amount: US$77 million equivalent Terms: Repayment in seventeen years, including four years of grace at 11.6% interest per annum. Project Description: The project would support the Government's objective of improving the country's transport infrastructure as well as of lowering transport costs by promoting efficiency in the national railway. The project comprises the first four years of CNR's Five-Year Rehabilitation Program (1982-86), including action targets to strengthen its overall performance. The project has been divided into two tranches, with most items under the second tranche dependent upon potential traffic. The firpt tranche or Group I of the project consists of: (a) rehabilitation of about 428 km of track; (b) acquisition of fouir, high-horsepower, diesel locomotives, and related spare parts and 100 wagons; (c) rehabilitation of 139 diesel locomotives, 1,410 freight cars and reconstitution of the stock of locomotive spares; (d) rehabilitation and upgrading of workshop; (e) rehabilitation of freight-handling equipment and purchase of forklift trucks, cranes and parts and equipment for signalling and telecommunications; and (f) technical assistance to study: (i) Bogota-Buenaventura Corridor; (ii) line capacity; (iii) signalling and telecommunications; (iv) tariff structure, cost accounting, financial planning, inventory control and statistical reporting; (v) locomotive repair and scrapping program; (vi) a traffic demand model; (vii) reduction of operating costs, and (viii) training of CNR's technical staff. The second tranche or Group II of the project comprises: (a) rehabilitation of another 83 km of track; (b) purchase of 4 additional locomotives and 100 wagons including related spare parts; and (c) signalling and telecommunications equipment. In view of CNR's checkered past peformance the project faces somewhat higher risks than are usual in projects of this type. However, the Government's strong commitment to rehabilitate and strengthen CNR, the appointment of a General Manager of proven competence to head CNR and close supervision by the Bank, should ensure the successful attainment of project objectives. IThis document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Estimated Cost: Local Foreign Total --(US$ million equivalent)- Permanent Way 35.8 30.3 66.1 Motive Power 2.4 34.2 36.6 Rolling Stock 5.6 14.9 20.5 Workshops 0.9 1.6 2.5 Freight Handling Equipment 0.2 2.9 3.1 Signalling and Telecommunications 0.1 7.2 7.3 Training and Consulting Services 1.5 2.2 3.7 Sub-total 46.5 93.3 139.8 Contingencies Physical 2.3 2.4 4.7 Price 17.6 14.5 32.2 Total Project Cost 66.4 110.2 176.7 Financing Plan: Proposed IBRD loan - 77.0 77.0 Credit from the Colombian Coffee Federation 1.9 6.9 8.8 UNDP Technical Assistance - 1.0 1.0 Government Contribution 57.4 22.0 79.5 CNR's Cash Generation 7.1 3.3 10.4 Total 66.4 110.2 176.7 Estimated Disbursements: FY83 FY84 FY85 FY86 -------(US$ million equivalent)