Announcement of China to Relieve Congestion at Huangpu Port on October 8, 1987

, HOLD FOR RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.•Telephone: (202) 477-1234 BANK RELEASE NO. 88/14 Contact: Marjorie K. Sheen IDA NEWS RELEASE NO. 88/10 (202) 477-3642 CHINA TO RELIEVE CONGESTION AT HUANGPU PORT WASHINGTON, October 8 -- China is launching a project to relieve congestion at Huangpu, its largest southern port. The World Bank is providing a loan of $63 million and the International Development Association (IDA), a credit of SDR 19.8 million ($25 million) for the project. IDA is the World Bank's concessionary lending affiliate. The project includes developing additional deepwater berths and modern equipment for other specialized berths. It will also strengthen the management capacity of the port authority. Huangpu Harbor is close to the Pearl River, which is 130 kilometers northwest of Hong Kong, and is connected to the South China Sea. As in all large ports in China, Huangpu's facilities are congested and future demands are expected to increase substantially. Port traffic is forecast to grow 9 percent a year to the end of the century. Transportation is one of the two most critical bottlenecks in the Chinese economy, caused by rapid economic growth and heavy shipping demands for coal, the most important resource during China's current energy shortage. There has been an increasing demand for the shipment of various conunodities and for passenger travel. The country's port traffic is low in relation to the size of its economy, which is growing rapidly following its opening up to foreign trade. Supporting the government's goal to expand capacity and improve productivity at its harbors, the World Bank has previously provided two loans, totalling $199 million, for improvements and new construction at four ports. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 7.76 percent, linked to the cost of the Bank's borrowings. It also carries an annual conunitment charge of 0.75 percent on the undisbursed balances. The IDA credit is for 35 years including 10 years of grace; it carries no interest, but has annual charges (0.5 percent on the undisbursed balances and 0.75 percent on the disbursed balances). Note: Money figures are in U.S. dollar equivalents. IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of the negotiation of the credit.