Announcement of Fifty Million Dollars Loan for Indian Railways on July 15, 1959

,, FOR IMMEDIATE RELEASE flP WORLD • 11\JTER 1818 H ~- '·) I: ·,l STREET, N.W. 1 WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE3-6360 PRESS RELEASE No. 595 6'UBJECT: $50 million loan for Indian July 15, 1959 Railways The World Bank today made a loan equivalent to $50 million to India for a program of modernization and expansion being carried out by the Indian Railways. The railway program is a central part of India's Second Five-Year Plan (which runs to March 31, 1961), and accounts for about one-quarter of all public ex- penditures under the Plan. Execution is prc,:>gressing on schedule and during 1958 the Railways, for the first time in many years, were able to handle all • the freight offered • Seven private banks are participating in the loan, withou.t the World :Bank's guarantee, for a total amount equivalent to $3,762,000 representing all of the first three maturities and parts of the fourth, f'ifth and sixth maturities fall- ing due between January 1963 and January 1965. The participating banks ~e Lloyds Bank Ltd., London; The Chase Manhattan :Sank; The Chartered Bank, New York Agency; Bank of Americ~; Irving Trust Company; The Hanover Bank; and The Riggs National :Sank of Washington, n.c. The participation by Lloyds Bank Ltd. is in pounds sterling and that of all the others in United States dollars. The Indian Railways system is the fourth largest in the world, with a total route mileage of 34,500 miles. Owned by the Government, the system is operated. by the Railway Board, a part of the Ministry of' Railways. The Rail- ways are well managed and efficient in operation. In addition to permanetlt .: way, locomotives and rolling stock, the propert·ies of the system include the  ,.) C (,-.' (I • Q ~ 2 - Chittaranjan Locomotive Works and the Integral Coach Factory near Madras, as well'as over 6,000 stations, railway workshops, engine and store,houses, " staff quarters, hospitals and :training schools •.. During the Second Five-Yeiar Plan the Railways are raising freight ca.pa.- city from 114 to 168 mil1.ion " toris annµa.lly, I, and. are increasing passenger capacity by'J 151,. During the . third year of the program, the volume of rail.- way freight traffic originating in India reached a total of 132 million tons.· Total expenditures \; ' called for by the railway progra'rn are,"estimated at .• :, ., .. ,, ~ ,_:_> 11,21.5 million Iridian rupees (abgut ~fa,355 million), qf whi,ch .~s. 3·,65Q --- million ( $809 million) are in foreign currencies. Foreign currency needed ,. c~uring the remaining tw yea.rs of the program is estimated at the equivalent • /[ of $276 mil:lion. Part of this amount lias already been covered'by foreign I/ exchange credits other than the new Wo~ld Bank loan. It.. , , At the eng of the program's third year;/ on March 31, 19 59, expenditures ·;were about three-fifths complete. The Railways had received delivery of 1,493 locomotives, 4,lo8 pa.ssengerDcars, 190 electric multiple units, 24 rail \ \\ cars ,and 75, 612 freight cars. Nearly 2, 6oo miles of rail had been renewed, ·. ~) . and construc.tion of about J75 miles of new line was under way or completed• 1 .------;.-::::/ ' ' Work on improvements in yards and signaling equipment and on the electrifica-., (J tion of main lines is proceeding well. One of the largest bridges in the C-::{ program, the Ganga bridge across the River Ganges at Mokameh, about 45 miles east of Patna, the capital of Bill.ar State, was opened to rail and road traffic last May. This bridge, a major engineering feat, replaced. an in- adequate ferryboat service; by providing easier access to the areas north ,. of the Ganges, it is ma.king possible greater production an& trade.  \ • . /1 The)world Bapk loan is for a term of 20 yea.rs, and bears interest of () 61,, including the . /~· ,. 1% - 3 - 11 (/ comaj.ss~on that is allocated to the Bank's Special Reserve. Amortization will begin January 15, ;}$~3. The loan brings to $225 .million the amount the BRn~ hasfi~or the ,,.:=~ " !( current railway program; earlier, in 1949, tI?,e Bank h~t made a,, loan of $32 ,; .. 'Z~ million for railway rehabilitation. The previous loru:s for the program, // = .. amounting to $175 million, helped to. covlr foreign _exchange expenditures from January 1957 through March 1959. Today's loan 'Will be applied mainly to expenditure~ for imported equipment., materials and services during the current , year of the Plan, en~g March 31·, 1960. !J After having been approved by the Bank's-Executive Directors, the loan docum(3>-ts were signed by His Excellency M.C. Chagla, AJ1.bassador of India in the United States, on behalf of the Government of India . • \