Announcement of Turkey to Improve Railway Operations on July 10, 1987

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 87/4 Contact: Fawzi Rihane ( 202) 4 77-5325 TURKEY TO IMPROVE RAILWAY OPERATIONS WASHINGTON, July 10--Turkey is taking steps to improve its competitiveness in the world market, cut transport costs, and boost its export drive through improvements in railway operations, particularly in handling bulk commodity traffic for which railways are the most economical means of trans- port. The World Bank is assisting the project with a loan of $197 million. The $582.2 million project will make improvements in the availability of locomotives and line capacity, reduce operations and maintenance costs, and improve traffic safety. It will also assist the government in its efforts to improve the finances of railways to reduce government subsidies. A comprehensive program will be introduced to improve the maintenance and management of the locomotive fleet. About 740 kilometers of main line track will be overhauled and equipment for track overhaul and maintenance will be provided. Some 700 kilometers of obsolete signalling systems will be replaced with modern ones, and 65 kilometers of track will be constructed to remove a bottleneck to the movement of bulk freight. Technical assistance and training will be provided to strengthen the organization and operations of the railways. An action plan designed for institutional development will be implemented to support these efforts. Other financing for the project is expected from the government and the Turkish State Railways (a total of $376.2 million), and from suppliers ($9 million). The World Bank loan is for 17 years, including four years of grace, with a variable interest rate, currently 8.23 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balances. NOTE: Money figures are expressed in U.S. dollar equivalents.