Announcement of Fifteen Million US Dollars to Thailand for Fourth Railway Project on April 26, 1973

INTERNATIONAL BANK FOR .RECONS"tRUCTION AND DEVELOPMENT \'•. . 1818 H STREET, N\N., WASHINGTON D. C. 20433 TELEPHQ!.~E: EXECUTIVE 3-6360 /! laak Pre•• laleaae. lo. 73/20 Sul,ject: $15.0 lllillin 1•• to.Tbailati jp.d1 ..26, 19 73 f:or f-rtla railway proJ•.ct The World Bank today announced a loan of $15 .o taillioa. to help finance a project to modernize and increue the capacity of· the State Railway of Thailand (SRI), and enable it to maintain it• co11petit~ve p08ition with othex :mde• cf transport. SRT operates about 2,375 mi lea of aeter gauge track radiating from Bangkok., the capital. The principal lines run north to. t~e city of Qiiengmai, a distance of 465 miles, and south to the border with Malayaia, a diatance of 680 miles. Although the railway has loitt local and less-than-caiload traffic to road trans- port, there ·has been an increase in long-distance passenger traf fie -.and in built and mit-load freight traffic. These increases are expected to continue over • the next several years • The project is part of the first stage of SRT's.1973-76 investment prog~vaa which is included in Thailand •,a current Development Plan. ,, Third Five-Year Social ,and Economic SRI' has already replaced some of it• steam locom-.ltives by di.esela, and has recently contracted to buy a further 54 diesels financed by a loan from the Credit National and by a buyer's credit from the Banque Francaise du Commerce Exterieur and the Banque de Paris ::~t dea Pays Bas. (/ •, '.\ . The World Bank loan will help finance, modifications to the r:ailway system made necessary by this dieselization •. ·. In addit~on it will help SRT in the renewal and expansion of its rolling stock to meet the expected increase in traffic. The modification to the system will include remode~ling mci mode1"Uiziog station yards and workshops, and the strengthening of track and bd.dges. The latter improvement will not only meet tk& needs of diesel engines, which are heavier \·, than steam ones, but will also permit nigher sp'tlii~de. The annual saving in operating and maintenance. c~"ts 'reisulting from the p,roject '"1 :, ... _} is expected to"be about $2. 7 ',~!llion equivalent. In ,acf:~itiont the increued capacity of the railway will make possible savings in transport costs of about $1.9 million equil1'1ent ·compared with ~he alternative carrier, road transport. ~ The project is scheduled for completion in Septeaber ,1976 and is to be /more Bank p.r. 73/20-Thailand - 2 - executed by SRI', which has carried out similar projects in the past. Of the project's total cost, estimated at $69 .. 3 !tlllion equivalent, $15. million will • be financed by the Bank loan and the rem;iiuder will be provided by SRI', the Government of Thailand, a loan from tha Credit Nat:tonal, .t:r..:id a. buyar'a ci·eq.it .. The Banlt loan is being made to SRT, which is a Government a.gt?ncy with a separate legal entity, with the guarant~e of the Kingdom of Thail~~d. It is for a term of 20 years, inc::luding four years of grace, anrl carries interest at 73'% per annum. Three earlier Bank loans to SRI\ r1ade in 1950, 1955 and 1961, also contributed to modemization of the zailw~y. Five French, Japanese, Swiss arJ.cl Un:f.ted. Kingdom financi.~l institutions are parti,cipating in the Bank loan for s. tot.al ~11-nm.mt oi ~pp:r.tnd,m.a.tely $900,000 equivalent. They are: The Mitsubiah:t Trust t'.: Bs.nking Corporation, Tokyo; National Westminster Group, London; Un:lon :Fl.a;;:~~ 0f S-witzerland, Zurich; The Sumitomo Bank, Ltd., Tokyo; and Banque de l: Ind.ochine, Paris~ - 0 - • •  \ \ .INTERNATIONAL. Bl\NK FOR RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W .. WASHINGTON 0. C. 20433 T"LE.-HONIE: EXIE<:UTIVE 3-8380 . April 26, 1973 TICDICAL DA1'A PBOJIG'r: rourth l&llwa,· COUIITlY: Tbailad TarAL OOST: $69. 3 llillion BAR 1IIANCING: $1S 111.llion, 20 yeara, 4-year grace period, 7lsl illterut • per mmua • OTB!ll FIHANCDIG: . The State lailvay oif Thailand, tba Govel'IUlellt of Thailand, Credit Natioaal acl a buyer'• creclit. IMPLEMENTING OJK;ANIZATION: The.State lailw•y of Thailand, laqkok, Thailand. PIOJEcr DISCIIPTION: Procure•nt of diaael locoaotivu and hopper car•; raplac. .aat aa.d expanaion of roilina atock; reaodelina and IIOdenaiaation of atat:Lm yarda ad workabop; atr•athenina of ra:Ll aod brid..•; track iaprove11111,t sad aaint•aca equipa•t; iaprov•tmt• to ai111alfas •d inter- lockiDg equipant; ataff ud office buildinp; and apert ••me•. Intarut!ooa,l coap•titift._hi.dclin1 for .. ~-•quip-t • • auppliu PBQ.clllUllfl..: financed by th• lank loa, with • 1.5% pr•f•!•C(!'.:aaq1n. for local unufacturers. <X>NSULTAlffS: Th• State lailvay of Thailand will obtain the ·ae~c• of a apeciaJ.iat to &aaiat in prep~I a coapreben.ive plan COYeriBI all upecta of ,the final atqu ot-~di•••lization. ESTIMATED COMPLETION DATE: Septeaber 1916. • - 0 - ,,-· ;