Announcement of Eight Million Dollars Credit for Bolivian Railways on November 30, 1972

• INTERNATIONAL DEVELOPl\ffiNT ASSOCIATION 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 72/67 Subject: $8.0 million credit for November 30, 1972 Bolivian railways The International Development Association (IDA), an affiliate of the World Bank, has approved a credit equivalent to $8.0 million to Bolivia to help finance the first stage of a Five-Year Plan for the development of the Bolivian Railways (Empresa Nacional de FeITocarriles). · The Ba.nlc Group became associated with Bolivia's railway development in 1962 when it financed a consult~nt's survey cf the various railways then opera.ting in Boliv-ia. In 1964, the Empresa Naciona.l de Ferrocarriles (ENFE) was established by the Government, partly on the strength of the consultant's recommendations. During 1967-69 the Bank Group administerec'.t a National Transport Survey financed by the United Nations Development Progrannne (UNDP). The survey emphasized the need for coordinating transport development in the country. In 1969, the UNDP agreed to the Bolivian Government 1 s request to finance a program of technical assistance and training for ENFE. As the executing agency, the Bank Group retained the F'rench consulting finn, Sofrerail, to provide the assistance. The consultants helped for- mulate a Five-Year Plan for rehabilitating Bolivia's railway network which will be im- plemented with the assistance of the IDA credit. A The Bolivian econonzy- relies primarily on the railway system to carry out its external ~rade and a significant part of its domestic freight ,nd passenger traffic, being the only significant mode of transport for the fast developing Eastern region of Bolivia. The rail- way system consists of about 2,200 miles of lines most of which are administered by ENFE. Since its creation ENFE has lacked funds to replace its obsolete steam engines and averaged rolling stock and to undertake adequate track and equipment maintenance. This neglect coupled with the la.ck of staff training resulted in ENFE 1 s operations deteriorating to the extent of threatening its capability as the major transporter of Bolivia's exports and imports. The Five-Year Plan (1973-77) seeks to redress this situation; it envisages three inter-related groups of actions: the acquisition of equi.pment to make up for the heavy aITears in maintenance and replacement and to expand ENFE's transport capability, financial rehabilitation of the enterprise and the modernization of engineering and commercial practices. 'Ihe Plan is to be implemented in two stages and the project consists of the first two years (1973-74) of the Plan. The total cost of the project is estimated at $11.6 mil- lion equivalent. The UNDP has agreed to continue supporting the program of technical assistance to ENFE and has allocated up to $1 million equivalent to finance the program. The entire i.nterna tional procurement content of the project would be financed by' .the proposed IDA credit and the UNDP grant. The main investment during the project period will be in the rehabilitation of the track, procurement of 200 freight cars to replace the existing averaged and small capacity cars. The IDA credit for ENFE will be for a term of 50 years with a 10-year grace period. It is interest free but carries a service charge of 3/4 of 1% per annum to meet IDA's adminis- ~rative expenses. The Government will re-lend the proceeds of the credit to ENFE, - 0 -  TEQINICAL DATA November 30, 1972 • PRQJECl: Railways OOUNTRY: Bolivia TOTAL COST: $11 million IDA FINANCmG: $8.0 million, 50 years, 5-year grace period, 3/4 of 1% service char~e -· . - - u - t:o - - ffl~P-~ TllA I A .a~mini -- -- - - - - Gf"'t".at--fuo OYnO'l"lc:!Oa - - - - - - - ..... - - ........... r ..........,.._... ... OTHER FINANCING: Government of Bolivia; UNDP. IMPLEMENTING OBGANIZATIC!l: Empresa Nacional de Ferrocarriles (ENFE) , Casilla No. 428, La Paz, Bolivia; Cable Address: FERROBOL, La Paz. PROJECT DESCRIPTION: The first two year$ of a Five-Year Plan (1973-77) ~~r the technical and financial rehabilitation of the Bolivian Railways (ENFE). Major items to be procured are 200 freight cars, 13 rail tractors, 3 railcar sets, and equipment for modernizing workshops and for track improvement. •••• PROCUREMENT: Most of the IDA credit financed items will be procured under international competitive bidding. The exceptions will be the negotiated procurement of $500,000 worth of components and new parts for locomotive and rail car rehabilitation and maintenance from the original suppliers of the locomotives and railcars; and the local procurement of permanent way material (mainly sleepers) at an estimated cost of $800,000 equivalent. CONSULTANTS: Phase II of UNDP-financed program of technical assistance being administered by the Bank Group; a French consulting firm, Sofrerail, has been retained for the purpose. ESTIMATED COMPLETION DATE: 1975. - 0 - •