Announcement of Seventeen Million US Dollars Telecommunications Loan in the Republic of China on August 3, 1967

~· q.L~~ '·";,-,".<,~t~ ''jf· ,<, ~RLD-B~ •• 1818 H ST RE • .~. '_; E1". ! N . W. , WASH I NG TON D . C. 2 0 4 3 3 . TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 67/35 Subject: $17 million telec011111UDications August 3, 1967 loan in the Republic of China The World Bank has made a loan equivalent to $17 million for the expansion and improvement of local and long-distance telecOD111unications services in the i·, Republic of China. The loan was made to the Directorate General of Tele- commun~cations (DGT) and will f~ance most of t~e foreign exchange costs of specific works included in its 1967-71 expansion program. The installations being financed will enable DGT to expand telephone service to approximately 100,000 new customers and will greatly improve the qua~ty of its services. Twelve commercial banks have agreed to participate in the loan for a total • amounl? of $1,045,000, representing all of the first three maturities and part of the fourth which fall due between October 1971 and April 1973. The participants will be Chemical Bank New York Trust Company; Seattle First National Bank; Provi- dent National Bank,, Philadelphia; The First National Bank of Chicago; Bank of America National Trust and Savings Association, San Francisco; The Ba11k of Cali- fornia National Association, San Francisco; National Bank of Commerce of Seattle; ;~fl The Citizens & Southern National Bank, Atlanta; Crocker-Citizens National Bank, San Francisco; The Northern Trust Company, Chicago; Detroit Bank and Trust Company; and First Western Bank and Trust . Company, L~s \ Angeles • ~ ':,:\ Taiwan has 1. 32 telephones per 100 popula-tion. While this proportion is higher than that of many other .developing Asian countri~s, it is well below tha~ of industrialized countries -- for example, 14.8 telephones per 100 population ·in Japan. As a result of the growth of the national economy and improvement in ·• living standards, the d~nd for telephone service in Taiwan has been high for over ten years. A bac~log of unfilled~demand continues despite the substantial  - 2 - telephone expamioncarried out in recent years. Thi• demand is evidenced by the abnormally high calling rate of 15~8.calls per day per subscriber's line (nearly four times that of the United States) and the fact that applicants press for the • installation of telephones despite a,connection charge equivalent to $350. ,\ /1 0 The DireFtorate General of Telecoamunications, a government agency und,~r the Ministry of Coamunications, is responsible for the ope·ration of all of Taiwan's public telephone and telegraph services, national and international. DGT has em- barked on a program of expansion and improvement of telecommunication facilities covering the years 1966-71. Part of the program has already been completed and part is under construction with the assistance of funds from the United States and Japan. The Bank loan will be applied to specific works within the program that are to be put into operation in successive stages· during 1969, 1970 and 1971. These consist of the installation of about 118,000 lines of automatic exchange telephone switching equipment with new telephone instruments and accessory facilities in the • cities of Taipei, Keelung, Taichung and Kaohsiung; the establishment of direct long- distance dialing between 11 cities, with automatic toll switching systems located in 1 Taipei, Taichung and Kaohsiung; and the establishment of a TeleCOlllllUDica.; }~:,0ns Train- ing Center with a capacity for 200 to train new employees and to provide refresher courses for te~ecommunications engineers and technicians. The project includes the employment of consultants to plan and execute the expansion program. The total cost of these works is estimated at the equivalent of $50.2 million. The Bank loan equivalent to $17 million will cover mos~ of the foreign exchange requirements. The balance of the financing will be . covered mainly by DGT's own funds. All contracts financed by the Bank loan are to be awarded on the basis of international (/ competitive bidding. I\ ·. The Bank loan is for a term of 20 years and'bears interest at the rate of 61 per annmn. Amortization will begin in October 1971. The loan is suaranteed by the Republic of China.