Announcement of Twenty-Three Million Dollar Credit to India on June 30, 1966

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W, WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE3-6360 IDA Press Release No. 66/12 Subject: $23 million credit June 30, 1966 to India The International Development Association (IDA) has extended a credit equiva"" lent to $23 million to India. The credit will assist in financing imported equip- ment and services required for developing hydroelectric power on the River Beas and extending irrigation in the Punjab and Rajasthan. At the time of the Indus Basin settlement between India and Pakistan in 1960, the World Bank and the United· States Government, in addition to joining a group of governments (including the Government of India) in financing works to be carried ~ out in Pakistan, agreed to provide India with foreign exchange for the Beas project. The $23 million credit from the Bank's affiliate, the International Development Association, and a loan of $33 million from the United States Agency for Inter- national Development are part of the financing agreed to at the time of the settle- ment. The total cost of the Beas project is estimated at the equivalent of $315 million. The rupee costs will be met by the Government of India. The IDA credit is for a term of 50 years. Repayment of the principal will be- gin February 1, 1977, after a IO-year period of grace. Thereafter 1% of the prin- cipal will be repayable annually for 10 years and 3% will be repayable annually for the final 30 years. The credit is free of interest, but a service charge of 3/4 of 1% per annum on the amount withdrawn and outstanding will be made to meet IDA's administrative costs • • • INTERNATIONAL DEVELOPMENT ASSOCIATION ·sis H STREET. N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 66/13 Subiect: $10 million credit for road July 29, 1966 project in Malagasy Republic The International Development Association (IDA), an affiliate of the World Bank, has approved a credit equivalent to $10 million to the Malagasy Republic for a road project. This is the first operation in the Malagasy Republic by one of the World Bank Group of institutions. The credit will help to finance the reconstruction to modern standards of two sections of road totaling 100 miles, and a feasibility study and engineering of an additional eight miles, inciuding • a large bridge. The road sections will complete a 375-rnile trunk highway from Tananarive, the capital, to Majunga, the princiJ;al port of trade. is one of the most important in the country. This highway It prov.ides ti:1e only access from the port to the interior; it traverses important agricultural regions and serves a region contaiLing about a quarter of a rrilliou people on the hish Central Plateau. The MalagaEy Republic lies in the I~~ian Ocean, 250 miles off the southeast coast of Africa. With an area of 228,000 squar~ miles, it is the fourth largest island in the world. The mountainous terrain divides the island into four dis- tinct regions, which are not interconnected by adequate surface trRnsportation facilities. About two-thirds of the population of six million live on the Cent~al Plateau. The variety of the land and climate have made possible diversified agri- culture, but only 15% of the land is arable and of that less than 5% is under cul- • tivation. Economic development has been hampered by the island's distance from world markets, by the sparse population in many areas, and by the lack of adequate transportation and marketing arrangements. Railways serve only limited areas;  - 2 - coastal navigation •nd air transport are important. Highway transport is still ~ relatively undeveloped, although it has expanded rapidly in the last decade. Less than half the road network of about 18,600 miles is all-weather, and even these roads are inadequate for present traffic. Accelerated economic growth in the Republic will require more public invest- ment. A new development program has just been started, with high priority being given to transport and agriculture. Foreign Assistance will be required for a ncmber of years, if the Government is to expand public investment significantly. Under the development program, the Government plans to build and improve over 4,900 miles of roads by the end of 1968. Completion of the Tananarive- Majunga highway has been given high priority. Most of the highway is in good condition, but traffic is frequently interrupted on the two sections which will now be improved with the assistance of the IDA credit. and erosion. These sections are narrow and winding, with sharp curves and steep gradients, and are often closed by slides They will be reconstructed as two-lane, asphalt-paved modern high- • ways. Realignments and relocations will reduce the length from 100 to 90 miles. The economic feasibility study will be carried out on a presently abandoned 8-mile alternate section of the same road, between Andramy and Boinakely, including a bridge over the Betsiboka River at Boinakely. Execution of the project will be the responsibility of the Ministry of Public Works. The Ministry will be assisted by consultants who will have primary respon- sibility for the feasibility study and engineering of the bridge. Construction will be carried out by unit price contracts awarded on the basis of international competitive bidding. The project is scheduled for completion in three years at a total estimated cost equivalent to $12.8 millione The IDA credit of $10 million will finance 781 •  - 3 - of the total. The Government is financing from domestic sources about a third of its current road program, which will cost a total of $94 million. The IDA credit will be for a tenn of 50 years. Repayment of principal will cegin October 15, 1976, after a 10-year period of grace. Thereafter 1% of the ~rincipal will be repayable annually for 10 years and 3% will be repayable an- nually for the fin~l 30 years. The credit will be free of interest, but a ser- ~ice charge of 3/4 of 1% per annum on the amount withdrawn and outstanding will be made to meet IDA's admiulstrative costs • • •