Announcement of Bank Group Lends Seventeen Million Dollars for Tunisian Railways on April 30, 1969

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMEN'I' INTI~RN ATION AL DEVELOPMF~NT ASSOCIATION 18 1 8 H ST R E ET, N W WASHINGTON D.C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 69/22 Subject: Bank Group lends $17 million IDA Press Release No. 69/lS for Tunisian Railways April 30, 1969 The rehabilitation and modernization of the Tunisian Railways, urgently needed to meet traffic demands more efficiently, will be carried out with the assistance of loans equivalent to $17 million from the World Bank and its affiliate, the !nternational Development Association (IDA). The project will result in lower maintenance costs and better utilization of equipment; faster, more frequent and more reliable service; and reduced carrying costs. A World Bank loan of $8.5 million will be made to the Societe Nationale des tt Chemins de Fer Tunisiens (SNCFT), a state-owned corporation which operates the railways. It will be for a term of 25 years, including a 4-year grace period, with interest at 6-1/2%. An IDA credit, also of $8.S million, will be extended to the Republic of Tunisia for 50 years, including a 10-year grace period. It will be free of interest, but a service charge of 3/4 of 1% will be made to cover JDA's administrative costs. The Government will relend the proceeds of the IDA credit to SNCFT on the same terms as the Bank loan. The Tunisian railway system comprises a 950-mile long Northern-Center net- work, and a 275-mile Southern network, which serves the country's main phosphate mining areas. Passenger and freight traffic has been growing steadily over the l&st 10 years; in 1967 the railways carried 6.24 million tons of freight and over 3.2 million passengers, excluding heavy suburban traffic in the Tunis area. • Traffic is expected to continue to rise at an annual average rate of 8% • /more B&nk P.R. No. 69/22 - Tunisia-Railways IDA P.R. No. 69/15 - 2 - The railways were included in a survey of Tunisia's entire transport sector recently completed by the Italian consulting firm, Italconsult, with financial • assistance from the United Nations Development Programme and the World Bank as Executing Agency. The consultant's recommendations were taken into account in formulating the rail transport section of the Government's Second Four-Year Plan (1969-72). The project now being assisted by the Bank and IDA, while not appre- ciably enlarging the system's capacity, will lay the foundation for future expan- sion. The project includes track renewal, the acquisition of locomotives, rolling stock, equipment for maintenance and workshops, and consultants' services. About 65% of rails on the Northern-Center network are at least 50 years old, and those on most of the branch lines in the southern mining areas are too light for the 16-ton axle-loads necessary for carrying bulk freight economically. Heavier rails, ~ better ballasting and reinforcement of bridges on four main lines and southern branch lines, a total of 220 miles, will permit higher speeds and axle-loads. Seven 1,400-horsepower diesel locomotives will replace seventeen 620-horsepower ones purchased in 1950, making double and triple heading of trains unnecessary. Improved-design replacements for obsolete rolling stock include 10 railcars, 5 trailers and 640 freight cars. An additional 34 ballast cars will be for track works under the project and continuing maintenance work. SNCFT will retain consultants to determine the technical characteristics of the equipment, the size and layout of the facilities required to meet future traffic increases, and workshop requirements, and to make studies of costing and rates and of management. The project is scheduled for completion by the end of 1972 at a total cost equivalent to $29.2 million •. The Bank loan and IDA credit will cover the foreign exchange requirements. The Government and SNCFT will finance the local currency costs. - 0 - •