Announcement of Thirty-Six Million Dollars Loan to Thailand for Highways on June 13, 1966

• ! 18.18 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 66/29 Subject: $36 million loan to Thailand June 13, 1966 for highways The World Bank has approved a loan equivalent to $36 million to Thailand for the development of highways. The loan will finance the construction or improvement of sections, totaling about 480 miles, of four national primary highways, and feasibility studies and engineering of a further 120 miles. The project forms part of the Government's current large-scale road investment program designed to provide a network of paved roads capable of accommodating traffic, which has been growing at an annual rate of about 20% in recent years. Seven private financial institutions will participate in the loan for a total • amount of $1,010,000, representing the first maturity and part of the next four maturities which fall due between October 15, 1970 and October 15, 1972. The participants will be Manufac.turers Hanover Trust Company, New York; First National City Bank, New York; Bank of America National Trust & Savings A~sociation, San Francisco; Crocker-Citizens National Bank, San Francisco; National Bank of Conunerce of Seattle; The American Express Company, Inc., New York; and The First Pennsylvania Banking & Trust Company, Philadelph ... a. In addition the First National City Bank is purchasing out of portfolio $290,000 of the July 15, 1969 maturity of a $25 million road loan which was made to Thailand in June 1963. The rapid growth of highway transport f.1.:'.. t:he last decade has made it the most important mode of transport in Thailand. The highway network under the jurisdic- tion of the Department of Highways has been increased by 1,440 miles to a total of • 7,000 miles, and the length of paved roads by 2,000 miles to 3,100 miles. th:i.s, expansion, the present road system is inadequate even for existing traffic, Despite and major improveme~i,ts will be 11.eeded to carry the traffic expected as the economy  - 2 - develops. It is estimated that by 1970 the number of vehicles will reach 300,000, ~ or nearly double the present number, and that traffic will grow at about the same or somewhat higher rate. During 1965-71, the Government plans to invest the equivaleni: ,·,f about. $400 million for the construction of 2,800 miles of new roads and the paving of 1,950 miles of existing roads. This will almost double present road capacity. The roads being assisted by the loan announced today are part of the program. Some of the roads were engineered with funds from a B~"k loan of $25 million made in June 1963. The earlier loan also financed the construction or improvement of 390 miles of roads, the purchase of maintenance equipment, and consultant's services for the reorganization of the Department of Highways, including the training of Thai per- sonnel. Thailand's road network, like its other transport arteries, runs mainly fiom ·;,)crth to south; a lateral network of secondary roads feeds into them. Communica- tion from e~st to west is difficult and less developed because several mountain • rat1ges and rivers must be crossed. All major roads converge on Bangkok. One of the roads being financed with the present loan extends 60 miles from Bangkok to Siracha via Cholburi; it forms part of the trunk road that crosses the southeastern region from Bangkok to the Cambodian border. The most heavily con- gested parts of the existing two-lane road will be replaced by four-lane, divided sections and a second two-lane road will be built over the rest of the route to Siracha. Although it covers only 7% of the land area, the southeast grows 80% of the cassava crop, a t,drd of the sugar cane and 10% of the rice. It is also Thailand's most important industrial area; between Bangkok and Cholburi, some 30 miles away, there is a large petroleum refinery, several textile mills, sugar and tapioca refineries and several food-processing plants. •  - 3 - The second road extends 260 miles from Nakorn Sawan to Chiengrai and comprises the northern two-thjrds of a trunk road that traverses the country from Bangkok to the Burmese border. This road is the backbone of the transportation network of the northern region, and connects with the populous and well-developed Central Valley. The northern region produces more than half the country's maize and tobacco, half the cotton and groundnuts, all the teakwood and half all other timber. It has several urban centers· including Chiengmai, the second largest city and an important cultural and tourist center. The other two project roads are in the northeast, the least developed part of the country. They are the Udorn-Sakolnakorn 100-mile road, which is an easterly branch of Thailand's second north-south trunk road, and the Khonkaen-Chumphae 60- mile road, a westerly branch of the same trunk road. These roads should help open • up the northeast and support the Government's efforts to alleviate the poverty of the area by investments in agriculture~ irrigation, transport and community development. The road project is scheduled for completion in the first half of 1970 at a total estimated cost equivalent to $72.5 million. The Bank loan will cover the foreign exchange requirements and the remaining costs will be provided by the Government. Unit price contracts for construction work are being placed on the basis of international competitive bidding. The loan will be for a tern1 of 24 years and bear interest at the rate of 6% per annum. Amortization will begin October 15, 1970 • •  •• • .......~······ Fang f .. ···: ···...............: ...........: •' ~-· • 4' •:: ........ •' •' ..... ·: \ ·········· I.. ······... { 0 '• ......... ·~ ··. ·····~ ··....... C. ... C A M B O D A • ......:···· ······.: G t1 If of Siam NATIONAL HIGHWAY SYSTEM EXISTING NATIONAL HIGHWAYS - - - - Primary - - - - Primary, under construction or proposed - - - - Secondary PRO,TECT ROADS ----construction and improvement} FIRST • •••••••Study and engineering ~ROJECT Construction and improvement} SECOND .................. Study and engineering PROJECT RAILWAYS FEBRUARY 1966 . :·:. . ··Noradhiwat ···\;.:.~~kboi ~'-\:(.-. •:.,,.;...:. :.:.:. ·\·.;:•.. 0 0 ~5 25 50 50 ~1=:::::::=l::==:3:::::====l 75 75 IOOKm IOOMi IBRD - 1082 Rl2 •