Announcement of World Bank Loan to Aid Colombia's Highways Sector on June 11, 1987

. FOR IMMEDIATE RELEASE 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 87/80 Contact: Ciro Gamarra (202) 4 77-5320 WORLD BANK LOAN TO AID COLOMBIA'S HIGHWAYS SECTOR WASHINGTON, June 11 -- About 7,200 km of roads will be rehabilitated or improved in Colombia with the assistance of the World Bank. A $180.3 million Bank loan will help finance the second national highways sector project in the country. The project includes a policy reform and institutional development Action Plan and an investment component. The Action Plan builds on and broadens the achievements of the first highway sector project, approved in April 1982, covering planning, financial control, road safety, personnel training, and effectiveness of road maintenance operations. It also includes adjustments in road user charges for improved cost-recovery as well as in government intervention in the road transport market to increase operational efficiency. Specifically, the facilitation of transport services is pursued through actions aimed at streamlining regulation and documentation, and removing other bottlenecks which so far have prevented a more efficient flow of goods, particularly exports. The Action Plan also aims at improving the transport sector budgetary process through implementation of programming and monitoring systems covering the different subsector agencies. The physical investments focus mainly on paving, rehabilitation and maintenance of existing road , infrastructure, road safety improvements, and road maintenance equipment and spare parts. The total project cost -- about $1.6 billion -- covers the Ministry of Public Works and Transport's (MOPT) 1987-93 highway investment and maintenance program. MOPT is directly in charge of administering the national highway system (about 26,000 km). In addition to the World Bank loan, the government is providing more than $1.3 billion, the 1nter-American Development Bank $102.3 million, including a future loan, and the World Bank an ongoing amount of $21 million. The Bank has played a major role in the development of Colombia's transport system. Since 1950, the Bank has lent a cumulative amount of about $803 million to the transport sector, of which $378 million went to highways including the first highway sector loan of $152.3 million in 1982. The World Bank loan will be disbursed over a period of seven years. It is for 17 years, including four years of grace, with a variable interest rate currently 7.92 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.