Announcement of Mexico Receives One Hundred Million US Dollars for Five-year Railway Investment Plan on April 1, 1976

.world Barik 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 76/30 APR I L 1 , 1976 MEXICO RECEIVES $100 MILLION FOR FIVE-YEAR RAILWAY INVESTMENT PLAN The Five-Year Railway Investment Plan of the Ferrocarriles Nacionales de Mexico wi 11 be assisted by a World Bank Joan of $100 mill ion to Nacion- ales and Nacional Financiera, S.A. The five-year plan, which will run from 1975 to 1979, will cost about $1,401 mil lion. The project the Bank is helping to finance will enable Nacionales to cope with increasing traffic. The main items of the project include track renewal on about 1,060 kilometers (km) of principal lines; purchase of about 124 new diesel locomotives, 5,800 new freight cars and 180 new passenger coaches; rebal lasting and sleeper replacement; and completion of a new radio tele- communications program. • The freight tonnage of Nacionales has been increasing by about six percent a year since the latter h~lf of the 1960s, reaching 55.7 mill ion tons in 1975, The rate of growth of freight ton-km has been even higher -- with traffic growing from 11 billion ton-km in 1961 to 27 billion ton-km by 1975. Freight ton-km are expected to increase by about 7.8 percent a year between 1975 and 1980, with iron ore and steel shipments accounting for about two-thirds of the increase. Nacionales has about 1,000 diesel locomotives. Over the period 1976-1979, about one-fourth of these will have to be withdrawn for scrapping because of age or condition~ and about 300 higher horsepower locomotives wil 1 be introduced. The freight car fleet of about 26,000 units is relatively modern and of good design. However, to cater for the projected increase in traffic and reduce the use of cars rented from U.S. railways, new cars will be ordered at the rate of about 2,500 per year from 1976 through 1979. About half of the 1,400 passenger-car fleet is too old, but minimum investments to replace over-aged stock are foreseen because of the poor competitive position of the railways for serving most intercity passenger traffic. The National Bank of North America, New York, has agreed to participate in the Bank loan. The $100 million loan is payable in 25 years, including four years of grace, at 8!% per annum . • Note: Money figures are expressed in U.S. dollar equivalents. Form No. 1121 (9-75) T E CHN I CAL DAT A PROJECT: COUNTRY: Thi rd Railway Mexico • TOTAL COST: $576 mi 11 ion BANK FINANCING: $100 mi 11 ion payable in 25 years, including 4 years of grace, at 8-1/2% interest per annum OTHER FINANCING: Export-Import Bank of the United States, Export Development Bank of Canada, Banco Naciona1 de Obras y Servicios Publ icos (BNOSP), and credit from local suppliers IMPLEMENTING ORGANIZATION: Ferrocarriles Nacionales de Mexico Avenida Central 140 Mexico 3, D.F., Mexico PROJECT DESCRIPTION: The project consists of a two-year tranche, 1976 and • 1977, of Nacionales' fiye Year (1975-1979) Jnyestment · Plan. The main project components include track renewal (660 km) and renovation (400 km) of principal traffic lines; continuation of a program for reballasting and resleepering of worn-out track; bridge strengthening and realignment and improvement of track; drainage and earthworks for station, terminal and marshal- ling yard extensions, and construction of workshops, depots and other buildings; improvements of signalling and telecommunication facilities; and purchase of about 124 new diesel locomotives, 5,800 freight cars, 30 mai 1 vans and 180 passenger coaches. PROCUREMENT: All goods financed under the loan will be acquired on the basis of international competitive bidding. Local bidders wi 11 be granted a margin of preference of 15% of the c. i .f. price or the prevailing tariff, whichever is lower. CONSULTANTS: Nacionales will retain local consultants to assist in:the design and preparation of its bridge strengthening, general works construction and operation improvement programs. Foreign consultants· wil 1 provide assistance in the areas of telecommunications and car/train operational cont ro 1 . ECONOMIC RATE OF RETURN: ESTIMATED COW?LETION DATE: At least 17% for the Five Year Investment Plan December 31, 1978 -0- •