Announcement of Eighty Million Dollars Credit to India for a Telecommunications Project on June 21, 1973

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, NW, WASHINGTON 25, 0, C. TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 73/53 Subject: $80.0 million credit to India June 21, 1973 for a telecommunications project The International Development Association (IDA),·an affiliate of the World Bank, is joining the Canadian International Development Agency (CIDA) and Hungary to help finance a telecommunicatio?s project in India.· IDA approved an $80.0 million credit for the project the fifth lending operation by the World Bank Group in its continuing support for this sector of the Indian economy. It brings total Bank Group lending for telecommunications in India to $288 million. The project will cost approximately $534 million equivalent and covers essentially the first two years (April 1974-March 1976) of Indian Posts and Telegraphs' Five-Year Development Program. It includes a $57 million carry-over from the Fourth Plan which IDA also helped to finance. CIDA is providing an $11 million equivalent credit, and Hungary is providing a $6 million equivalent credit for the project. Approximately 25~,000 direct exchange lines will be added to the syste~; long- • distance facilities will be expanded to provide for an additional 17,100 trunk circuits and trunk exchange capacity will be increased. Service will be extended to rural areas with an additional 2,000 public call offices and 2,800 new telegraph offices. Telex service will be increased by 6,250 lines. The project also includes provision of staff housing and expansion of research facilities. These project components are designed to continue expansion and improvement of the Indian telecommunications system achieved under earlier development programs and to alleviate some of the system's major problems. The wide dispersion of industry and agriculture in India puts heavy demand on telecommunications within regions and between industrial, commercial and population centers. The close relations between states and the central Government also generates considerable traffic. As a result, the long-distance network is ·generally heavily over- loaded and t~nk calls are subject to long delays • . Moreover, the telephone density is extremely low, applications for service high, and the average waiting time is more than two years. This results in traffic overloads in several city networks and inadequate.service. The IDA credit is for 50 years, including a 10-year grace period, and is interest free except for a· 3/4 of 1% service charge to meet IDA's administrative expenses. - 0 - •  • June 21, 1973 TECHNICAL DATA PROJECT: Fifth telecommunications project COUNTRY: India TOTAL COST: $534 million equivalent IDA FINANCING: $80.0 million, 50 years, 10 years of grace, interest free except for 3/4 of 1% service charge to cover IDA's administrative expenses. • OTHER FINANCING: Canadian International Development Agency, Hungary, Government of India, internal cash generation. IMPLEMENTING ORGANIZATION: Indian Posts and Telegrpahs Department, Sardar Square, Parliament Street, New Delhi, India. Cable Adress: TELEPOST, New Delhi. PROJECT DESCRIPTION: Improvement, expansion of India's telecommunications system including: connection of an additional 258,000 direct exchange lines; expansion of long distance facilities to provide an additional 17,100 circuits; expansion of trunk exchange capacities; extension of service to rural areas by providing 2,000 additional call offices, 2,800 new telegraph offices; expansion of telex service by 6,250 lines; provision of staff housing; e]r,:pansion of research facilities. PROCUREMENT: Of IDA financing, approximately $18.8 million in equipment to be procured through international competitive bidding; up to $12.0 million may be procured through negotiated purchase in interest of system standardization; remainder to cover foreign exchange component of local production -- through normal international procurement employed by factories. CONSULTANTS: None ESTIMATED COMPLETION DATE: Mid-1976 0- - •