Announcement of Bank Approves Loans for Ports in India on April 16, 1958

FOR IMM_EDIATE RELEASE WO II L D • !NTERNJ\'TIONAL BJ\N RECONSTRUCTIOl\J 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE 3-6360 PRESS RELEASE rm. 527 SUBJECT: Bank approves loans f'or April 16, 1958 ports in India The World Bank has approved two loans totaling $43 million for port improvements at Calcutta and Madras, two of India's largest and most important port cities. One loan, of' $29 million, is being made to the Conmiissioners f'or the Port of Cal.cuttaj and the other loan, of $14 million; is being made to the Trustees of the Porti, of Madras. The two port authorities are autonomous agencies subject to the general control of the Government of India. • Three private banks in the United States will participate in the two loans for a total amount of $1,705,000. The Bank of America and The Chase Manhattan Bank together are taking a total amount of $1,113,000 of the $29 million Calcutta port loan; this represents all of the first maturity and part of the second maturity which fall due in 1963. The Irving Trust Company is partici- pating in the $14 million Madras port loan to the extent of $592,000 representing the first two maturities which also fall due in 1963. Improvement of transport, especially of' major ports and railways, has been given the highest priority in India's Second Five Year Plan. Calcutta and Madras are two of the main ports where measures will be taken to relieve ship congestion, expedite the handling of cargo, and improve general operating efficiency. The improvements being undertaken at Calcutta are mainly the replaqement or rehabilitation of existing facilities; they will also allow a :. modest increase in capacity. At Madras the port will be expanded to provide for the expected growth of traffic for the next ten years or more.  - 2 - Both loans will be for a term of 20 years and bear interest of 5!% • including the 1% commission which is allocated to the Bank's Special Reserve. A..-rnoTtization of the loans will begin in April 1963. The loans will be guaranteea. by the Government of India. Calcutta Port Project Calcutta, India's largest city, is also one of the largest cities in the world. Its hinterland encompasses much of the Ganges Valley and the s~..aller, but industrially important, Damodar Valley. Traffic through the Port of Calcutta now totals about 9 million tons annually and, in terms of value, con- stitutes nearly half of India's imports and exports other than petroleum. The area served by the Port produces most of India's tea and more than half its rice, lac and oilseeds, and contains most of India's coal and iron ore deposits. In recent years, impressive industrial growth has taken place there. It is the • site of practically all India's iron and steel plants, its jute mills, numerous engineering and chemical industries, locomotive factories and a variety of other industries based on local raw materials. The Bank has already made several loans for electric ~ower, steel and other projects in the area. The Port of Calcutta is situated on the Hooghly River some 120 miles/) .from the Bay of Bengal. The approach is difficult because of sandbanks at the estuary and 11 large sandbars in the river itself; navigation is seldom possible for large, modern ships having a draft of more than 26 feet, and on many days of the year impossible for even smaller ships. Port facilities have been in poor condition for some years because of overworking during the war, inadequate maintenance and the excessive age of many,installatic,ns and much of the equip- ment. The handling of cargo has become more difficult because of increasing • quantities of such cargo as machinery, iron a.rzi steela These factors have been the principa.l causes of congegtion in the port, 1nvolving serious and "ostly delays to shi~s and freight.  - 3 - Because of' the importance of the rapidly"developing area which it serves, • adequate port facilities at Calcutta are essential to the Indian economy. The authorities are now faced with the two-fold problem of eliminating present congestion at the port and making long-range plans for additional port facilities to handle the growing volume of traffic. The rehabilitation now being undertaken wi.th Bank assistance will help solve the immediate problem; it will not only relieve congestion but enable the port to handle nearly two million more tons of traffic annually. According to traffic estimates, these facilj_ties will be fully utilized at the end of the construction period. There will still be no reserve capacity in Calcutta and the port will probably continue to be threatened with congestion; furthermore, it will still not be able to handle modern deep draft vessels. The Indian authorities are aware of the need for a long-term plan to provide further port capacity for the Calcutta area and the • Port Commissioners are now making a thorough study of the problem • The main work now being undertaken consists of improvements in berthing c~pacity together with transit and storage facilities and water supply, extensicn of the raiJ:way marshalling yard, the replacement of harbor floating era.ft, the acquisitic,n of electric cranes and mechanical cargo-handling equipment, and dredging and river training w9pks at Fulta Point on the Hooghly River. At King George's D:>ck ( one of the two main dock systems) two old berths will be converted into new general cargo berths and two new ones built; and at Kidderpore Docks, 12 berths (70 years old) will be repaired and strengthened and equipped with electric cranes; some mechanical equipment will be provided to speed up the handling of cargo, and two floating cranes will pe acquired for heavy lii'ts. Improvements of railway facilities will more than double the n-wnber of freight cars that c~ be received daily. New harbor craft of varioua • types, including two dredges and a pilot boat, will be purchased to replace deteriorated vessels, and repair facilities for such craft w.tll be improved. A new tea we.rehouse will be built to provide more sria.ce for the transit of'  - 4- • 500 milli.on pounds of tea which annually pass through the port. Navigation of the Hooghly River is most difficult around Fulta Point, some 90 miles upstr~am from the Bay of Bengal. This point of land will be cut back 1,200 feet by dredging and t:r-aining works will be built to improve flow conditions in this stretch of the river and to increase the depth. As a result, ships of 26-foot draft will be ab~,e to reach Calcutta on many more days of the year. \'; All of the works being undertaken will be finished in 1962. The total cost is estj_mated to bE? 280 million rupees ( $59 million equi valerit). The Bank's loan of $29 millj_on will cover the foreign exchange requirements and the remaining·costs will be met by the Commissioners for the Port of Calcutta with some assistance from the Government of India. Madras Port Project • Madras, on the southeast coast, is the third largest port in India, now handling ab~ut ~ million tons of traffic annually. In recent years, approxi- 1· mately 1,000 seagoing vessels have QPen using the port each year, or about 30% more than before the war. Bulk exports of ma..."'lganese ore have grown to almost half a million tons a yearj and imports of general cargo have risen markedly, especially iron and steel, machinery, chemicals and fertilizers. This change in the composition of traf:fic has necessitated ne1r methods of handling and new equipment. Port facilities have not been expanded significantly since before the war, and the growth of traffic has :r.es11lted in serious congestion. The modernization and expansion project now being undertaken will reduce congestion by speeding up the turn-around time of ships in the port./ lower the cost of handling cargo, and increase overall operating efficiency. Furthermore, it will enable the port to handle over four milliod/tons of tr~ffic annually. • This should be ample to accommo~te the e:>.."'Pected traffic ·growth fd.;,.·\ the next ten years or more. 1, . ,\ \  - 5 - . • Madras has an artificial harbor, built into the Bay of Bengal; it encloses about 200 acres of sheltered water affording protection to ships during all seasons of' the year. The principal work now being undertaken to mndernize and expand the port includes the following: a new ship basin will be excavated and quay walls built to accommodate six new berths, o:f which only two will be :fully equipped at the present time; two old general cargo berths will be reconst.ruct,erl and eq_uipped with modern cargo-handling equipment, railway connec- tions and transit sheds; a third berth used for general cargo and passengers will be improved and provided with a combined passenger station and transit shed; two new berths will be constructed and equipped, one, for handling coal and. the 0ther for ore; a new railroad marshalling yard will be built; workshops will be exter::.d.~d. and provided with additional equipment; a new transit, shed, an administrative office and other buildings will be erected; a dredge, a 60-ton • floating crane, four tugs and other harbor floating craft will be purchased. The entire project is scheduled for completion by 1962. The project ·will cost a total of 153.4 million rupees ($32.2 million equivale~t). The Bank's loan of $14 million will cover the foreign exchange requirements, and the Madras Port Trustees will finance the local currency costs. Loan Signing The loan agreements have been sent to India for execution by the Commissioners of the Port of Calcutta and by the Trustees of the Port of Madras. Subsequently the loa11 agreements will be signed in Washington by an official of the Bank, and the Guarantee Agreements will be signed by the Bank and by the Ambassador of India.