Announcement of Ninety-Five Million Dollars Loan for Philippine Highways on December 27, 1976

CORRECTED COPY -- ---.·-·--·--- -·· -- --·--·--·-- •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 77 / Li 3 DECEMBER 27, 1976 $95 MILLION LOAN FOR PHILIPPINE HIGHWAYS The World Bank has approved a $95 mill ion loan to the Philippines for a highway construction and improvement project. A road maintenance program is included. The Bank. loan will be used to construct and improve 10 national road sections totaling about 500 kilometers (300 miles) and 16 minor road sections totaling 230 kilometers (140 miles). The major roads in the Visayas region • will support mining activities, sugarcane processing, as well as other agri- culture, trade and services activities. The national roads in Mindanao will serve a rapidly growing area which has considerable potential for increasing production of rice, corn, sugarcanej livestock and timber. The minor roads, both in the Visayas and Mindanao, will help open up potential development areas and connect local traffic to the national road system. The project provides for substantial improvement in the Government's road maintenance program in Luzon through the construction of workshops and procurement of machinery and equipment. Assistance will be provided to the Department of Public Highways (DPH) for implementation of a road restoration component of this program. In addition to its direct benefits, the project is expected to strengthen • the Jong-term capacity of DPH to carry out a larger highway program in the future. / ... NOTE: Money figures are expressed in U.S. do11ar equivalents.  • - 2 - The Bank loan will be for a term of 20 years, including 4i years of grace. It will carry interesc at 8.7% per annum. The following four financial institutions in the United Stat~s have agreed to participate in this loan: National Bank of North America, New York; Union Trust Co., Stamford, Connecticut; American National Bank and Trust Company of Chicago; United Virginia Bank, Richmond, Virginia. • • ·-·, . . FORM NO. 1121 (5-7.6)·' T E C HN i CAL DAT A • PROJECT: COUNTRY: TOTAL COST: Third Highway Project Philippines $1 96 mi 11 ion BANK FINANCING: $95 mi 11 ion OTHER FINANCING: Government of the Phi1 ippines: $101 mi 11 ion IMPLEMENT!NG ORGANIZATION: Department of Public Highways 7ort Area, Manila Philippines PROJECT DESCRIPTION: The project provides for: (1) construction and Improvement of 10 national road sections totaling about 500 kilometers and 16 minor road sections totaling 230 kilometers; (2). implementation of the first phase of the road maintenance program in Luzon island by (a) construction and enlargement of 5 base and 23 area workshops, (b) procurement of road maintenance equipment including spares, hand tools, workshop tools and machinery, (c) procurement of spares and comp6nents for existing equipment, and (d) restoration of deteriorated sections of national road net- • work to a maintainable condition as provided for in the first two years of a 5-year resto- ration program. PROCUREMENT: Contracts for construction and improvement of national roads, amounting to about $80 million, will be awarded to prequal ified contractors on the basis of international competitive bidding. Contracts for construction of minor roads, averaging about $500,000 each and amounting to about $9 mil- l ion, will be awarded to prequal ified contractors on the basis of local competitive bid- ding; foreign contractors will be eligible to participate In the bidding. Contracts for construction and extension of workshops averaging about $150,000 each, and amounting to about $4 mill ion, wi11 be awarded to local contractors on the basis of local competitive bidding. Contracts for restoration of national road network, totaling about $21 mill ion, will be awarded to local contractors on the basis of local competitive bidding. Workshop equipment, tools, road maintenance equipment, spare parts and components, amounting to about$14.5 million, will be procured on the basis of international competitive bidding, with a 15% margin of preference to local manufacturers. Items costing less than $15,000 and hand tools for road maintenance will be procured under normal Government procedures CONSULTANTS: Consultants will be appointed for supervision of road con- struction and for carrying out feasibility studies and engineering of national roads and ferry crossings. Ten e~perts will be retained to strengthen the DPH and help Implement a road maintenance program, and 3 experts to help with the training of DPH management and operational staff. • ECONOMIC RATE OF RETURN: Weighted overall average rate of return for major roads is about 23%. Weighted average first year benefit on minor roads Is approximately 16%. ESTIMATED COMPLETION DATE: 1980 - 0 -