Announcement of India Receives One Hundred Twenty Million Dollars for Telecommunications Project on June 12, 1978

FOR IMMEDIATE RELEASE •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 78/111 JUNE 12, 1978 INDIA RECEIVES $120 MILLION FOR TELECOMMUNICATIONS PROJECT Some 60 million people in small towns and villages will have local access to telephone facilities for the first time under the current Indian Five-Year Plan; half of this will be provided under a Seventh Telecommunications Project to be supported with a loan of $120 million from the World Bank. With more than two mill ion telephones and more than 1 .7 mill ion direct exchange lines, India has a comparatively large telecommunications network by world standards; yet, the quantity and quality of telephone and telex service is poor compared with many other countries. Its telephone density of 0.3 (per 100 population) is half the average for Asia excluding Japan; prospective • telephone subscribers must wait many years for service; and many rural areas are totally without service. The Bank-assisted project will expand and improve services outside large metropolitan areas as well as reduce the waiting time for high priority applicants in the big cities. The $818.5 mill ion project consists of four subprojects. The main subproject is a priority component of the Posts and Telegraphs Department's (P&T) investment program. It will result in a significant extension of the present telecommunications network into rural areas with the provision of an additional 7,500 rural public call offices and 260,000 new direct exchange lines lines, the major~ty of which wi11 be in the rural areas. The three other subprojects are concerned with upgrading and moder- nizing the production facilities of the three major government-owned tele- communications equipment manufacturers: Indian Telephone Industries Ltd. (ITn ~ Hindustan Cables Ltd. (HCL), and Hindustan Teleprinters Ltd. (HTL). These subprojects provide replacement machlnery ln the production and tool- • making units and the addition of modern testing ~nd measurlng equipment to replace and supplement obsolete existing equipment. NOTE: Money figures are expressed in U.S. dollar equivalents.  • - 2 - By adding many new small rural exchanges and steadily upgrading local telecommunicatlons manufacturing capabilities, the project should help achieve the Government's goals of stimulating economic development outside of the major metropolitan areas, encouraging decentralization, and reducing transport and communication costs. The Bank loan has a term of 20 years, including three years of grace, with interest at 7.5% per annum. - 0 - • • FORM NO.1121 (5-76) T E C HN I CAL DAT A • PROJECT: COUNTRY: TOTAL COST: Seventh Telecommunications India $818. 5 mi 11 ion BANK FINANCING: $120 million for a term of 20 years, including 3 years of grace with interest at 7.5% per annum. OTHER FINANCING: (1) Indian Telephone Industries (ITI) (2) Hindustan Cables Ltd. (HCL) (3) Hindustan Telep.· inters Ltd. (HTL) (4) Posts and Telegraphs Dept. (P&T) IMPLEMENTING ORGANIZATION: Posts and Telegraphs Dept. (P&T) New Delhi India. PROJECT DESCRIPTION: It consists of four subprojects: (a) The P&T subproject, which includes the installation of 340,000 lines of local telephone exchange equipment, provision of approximately 7,500 new long-distance public • call offices in rural and backward areas of the nation, provision of subscriber's cable and associated equipment to permit the connection of approximately 260,000 new direct exchange lines, and the extension of the automatic trunk network by the provision of 38,000 lines of trunk exchange equipment; (b) the ITI subproject, which involves the expansion of the facilities of the microcircuit laboratory, increased computer capacity for production and management control, and replacement of obsolete machines in produc- tion and tool room units; (c) the HCL subproject, which will enable HCL to increase the output of large-size telephone cables by approximately 40%, and small-size distribution and coaxial cable by more than 100%; (d) the HTL subproject, which involves the replace- ment of worn out and obsolete machines in the production and tool room areas of the factory, and the upgrading of HTL's research and development capability. PROCUREMENT: Procurement of equipment and materials will be in accor- dance with international competitive bidding (ICB) con- sistent with the Bank's guidelines. As with previous lending operations, ICB is not proposed for those equipment items in the P&T subproject for which considerations of economy and efficiency give a clear advantage to domestic factories . • ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 20% 1981. - 0 -