Announcement of World Bank and IDA Provide Forty Million Dollars for Zambian Railways on May 15, 1980

- FOR IMMEDIATE ELEAS . ' /' " tWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 80/93 IDA NEWS RELEASE NO. 80/68 May 15, 1980 WORLD BANK AND IDA PROVIDE $40 MILLION FOR ZAMBIAN RAILWAYS Zambia wi 11 receive $40 mill ion from the World Bank and its affiliate for concessionary lending, the International Development Asso- ciation (IDA), for a project to improve its railways. The World Bank will lend $25 mill io~ and IDA $15 rni1l ion to the Government of Zambia, which will make the funds available to the Zambia Railways Board. The project comprises the final four years (1980-83) of the Zambia Railways Board's investment plan. The investments are urgently needed to avoid a deterioriation in the railway's operations and to ex- pand its capacity to handle traffic up to 1986. The project provides for • renewal of 112 kilometers of track, improvements and extension of crossing loops, renewal of the central traffic control system, and improvements in the railways telecommunications system. In addition, provisions are being made for the purchase of locomotives, wagons, and spare parts; and for improved maintenance and handling facilities. Data processing facilities are also to be purchased by the Zambia Railways Board. Technical assistance and training will also be provided to strengthen the Zambia Railways Board. The total cost of the project, estimated at $184.3 million, will be met in part by funds provided by other international agencies and coun- tries. The African Development Bank will provide $9.7 million; the European Economic Community's (EEC) Special Action Account will extend· a credit of $5 million; Japan will provide $16.3 million; the Kreditanstalt fur Wiederauf bau, $23.3 mill ion; the OPEC Special Fund, $4.5 mill ion; the EEC, $8.4 mil- lion;and the Swedish International Development Authority, $13 mill ion. The Zambia Railways Board will contribute about $50 million to the cost of the project. The World Bank loan of $25 million to the Government of Zambia is for a term of 20 years, including 5 years of grace, with 7.95% interest per year. The IDA and EEC Special Action Account credits are for 50 years, with 10 years of grace, with no interest except for a service charge of 3/4 of 1% per annum to cover administrative costs . • NOTE: Money figures are expressed in U.S. dollar equivalents. JOPIM NO. 1121 (5-76) T EC HN I CAL DA T A PROJECT: COUNTRY: TOTAL COST: Thi rd Ra i 1way Republic of Zambia $184. 3 mi 1 l ion • BANK FINANCING: $25 million loan for 20 years, including 5 years of grace and 7.95% interest per year IDA FINANCING: $15 million credit, standard IDA terms. OTHER FINANCING: European Economic Community (EEC) Special Action Account credit: $5 million, standard IDA terms; African Develop- ment Bank: $9. 7 mi 11 ion; J,_;'.)an $16.3 mi 11 ion; Kreditanstalt fur Wiederaufbau: $23.3 mi111on; OPEC Special Fund; $4.5 million; the European Economic Community, $8.4 mil- lion; and the Swedish International Development Authority, $13 million. IMPLEMENTING ORGANIZATION: Zambia Railways Board (ZR) P.O. Box 935 Kabwe, Zambia Cable: ZAMRAIL, Kabwe, Zambia PROJECT DESCRIPTION It provides for ~enewing 112 kilometers of the Zambi~ Railway Board's track and extending and improviijg crossing loops; renewing the centralized traffic control system and improving the tele- communications system; purchasing locomotives and wagons, and the requisite spare pa~ improving maintenance and handling facilities; and providing data processing facilit~ technical assistance, training and staff housing. PROCUREMENT: Equipment and material financed by the Bank/lDA will be procured through international competitive bidding in accordance with Bank/lDA Group guidelines, except for: (i) small orders under $50,000 each, but not for more than $500,000 in total; and (ii) critical spare parts, expected to cost about $3 mill ion, which are available only from the original equipment manufac- turers. These items will be procured through selective competitive bidding procedures acceptable to the Bank/lDA. Equipment financed under the EEC Special Action credit will be procured in accordance with provisions in the EEC Special Ac~ion Credit Agreement which limits bidding to EEC member countries and IDA member countries eligible to re- ceive Special Action Account. Goods and services financed by the other external finan- cing agencies will be procured according to the standard procedures of these institu- tions. CONSULTANTS: ZR will need expatriates either in executing positions or as advisers until trained Zambian staff can take over all operations. The project ?rovides for 190 man-years of technical assistance which includes consultants needed for a productivity study at the Kabwe workshop, for'a rail- way electrification feasibility study, for a study to determine whether the railway 1 ine between Mulobezi and Livingstone should be upgraded or replaced by a road, and for im- proving the planning capability of ZR and the Ministry of Power, Transport and Communica- • tions. ZR has aqreed that the qualifications, experience, and terms of reference of the ~ons~ltants will be acceptable to the Bank. ECONOMIC RATE OF RETURN: 19% EST IMATED COMP LET ION DATE: 1984 - 0 -