Announcement of Six Million US Dollars Credit to the Malagasy Republic for a Railway Project on January 17, 1974

• • LNTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H ·sTREET, N.W., WASHINGTON 0. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 74/5 Subject: $6 million credit to the Malagasy Republic \. January 17, 1974 for a railway project. The International Development Association (IDA), an affiliate of the World Bank, has approved a credit of $6 million to help finance a rail- way project in the Malagasy Republic. Modernization of the railway system, the Reseau National des Chemins de Fer Malagasy (RNCFM) is an important feature of the Government's overall plan for improvement in the transport sector. RNCFM is a single- • track, meter gauge railway comprising about 550 miles of lines in two uncon- nected systems with a gap of about 111 mileso The Northern system includes the main line from Tananarive, the capital, to the Port of Tamatave; another line extends from the capital southwards to Antsirabe. The Southern system connects Fianarantsoa with the port of Manakara. The present project is a "holding operation" to aid the railway in replacing outdated equipment and detennine its long-term prospects, and requirements of the entire transport sector. Subsequent major investments will be deferred until completion of a railway modernization and rationalization study included in project. The project comprises: renewal of rails and replacement of sleepers on a 39 mile stretch of mainline, extension of yards and sidings and con- struction of a few buildings; the provision of 50 freight wagons and 20 Note: Money figures are expressed in US dollar equivalents.  - 2 - passenger coaches, track maintenance equipment; technical assistance for RNCFM in management, accounting and operations; and also technical assist- • ance to the Ministere de l'Amenagement du Territoire (MAT) which is directly responsible for the country's transport system. RNCFM has responsibility for execution of the project under the overall supervision of the MAT. The total cost of the project is estimated at $8.9 million including a foreign exchange component of $6.0 million. The IDA credit will finance the foreign exchange cos ts. Local cos ts of the railway components amounting to $2. 7 million, will be covered by the RNCFM out of its own resources,1",-.,hile .~ the Government will finance the local cost of technical assistance to th~ HAT. $5. 2 million of the credit funds will be on-lent to the RNCFH for re- • r ~,: payment in 20 years, including 3-1/2 years of grace, at 7-1/4% interesi..::per annum. The IDA credit to the Halagasy Republic. is for 50 years, includi.ng 10 yearn of grace. It is interest-free except for a 3/4 of 1% service charge • to cover IDA's administrative expenses. • • • Project: Country: Technical Data Railway project Malagasy Republic Total Cost: $8. 9 million IDA Financing:· $6.0 million, 50 years, 10 years of grace, interest-free except for a service charge of 3/4 of 1% per annum to cover IDA's admin- istrative expenses. Other Financing: &~CFM, $2.70 million, for the local costs of the railway components. Government, $0.20 million for the local cost of technical assist- ance to the Ministere de l 1Amenagement du Terri- toire (MAT). Implementing Organization: The Reseau National des Chemins de Fer Mala- gasy (RNCFM) under the overall supervision of MAT, Tananarive, Madagascar will be res- ponsible for the execution of the project. Project Description: Part of RNCFM's 1973-1965 investment plan, • including: i) track renewal, the provision of rolling stock, track material, and track maintenance equipment; {ii) services of con- sultants to improve· the rail1:111ay 's management and operational efficiency; and technical assistance to the Ministere de l'Amenagement du Territoirc on transport planning and coordination. Procurement: Procurement of rolling stock, equipment and materials financed by the Association will be on the basis of international competitive bidding. Disbursements will be made on the basis of CIF cost (Tamatave) of imported equipment and materials, and actual foreign currency outlays for consultants. Consultants: Consultants will be employed under the tenns of the project to give technical assistance to the railway in accounting and management; to study the railway's long-term investment requ1.rements, and to assist MAT in transport planning and coordination. Estimated Completion Date: June 1976 • •