Announcement of 9.6 Million Dollars Credit to Malagasy Republic on June 17, 1970

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 70/35 Subject: $9.6 million credit to June 17, 1970 Malagasy Republic The International Development Association has approved a credit of $9.6 mil- lion for itnprovement and enlargement of the port of Tamatave, the most important port in the Republic of Malagasy. Mal~g~sy, the world's third largest island, lies in the Indian Ocean 248 miles off the southeast coast of Africa. Not only is the economy highly dependent on foreign trade, but coastal shipping is of unusual importance since land communica- tions on the island are difficult. About 75% of the country's imports, 35% of exports, and 20% of coastal traffic pass through Tamatave which serves the most • populous and developed regions, including the capital of Tananarive. Tamatave handled about 460,000 tons of general dry cargo and 670,000 tons of petrolelDil products. Projections indicate that by 1979, dry cargo traffic will In 1968 more than double and petroleum products traffic will increase by 50%. Chrome ore exports from recently developed deposits will account for a large share of the growth in dry ~argo. The increased traffic will be far beyond the capacity of the present port. Moreover, it is inadequately protected from the open sea, in- efficiently laid out, and the loading and unloading of petroleum products in the main area of shipping movement constitutes a major hazard. The project being carried out with IDA assistance is based on the master plan for the development of the port prepared by consultants financed by a technical assistance grant of $196,800 from the World Bank. It consists of an extension of the breakwater by 225 meters, construction of two new berths, new transit • sheds and warehouses, provision of mechanical cargo-handling equipment, a new /more IDA P.R. No. 70/35 - Malagasy Republic - Port - 2 - deep-water mooring for petroleum tankers, and other minor improvements. Provi- 4t sion is made for consultants' services for final engineering and supervision and technical assistance in management and accounting. The Govermnent will establish a new autonomous Port Authority to operate the port and execute the project. The project being assisted by IDA is scheduled for completion by mid-1974 at a total estim::tted cost equivaknt to $16.8 million. The IDA credit will cover the foreign exc~ange requirements. Th~ local costs will be covered by a Govern- ment equity cont~ibution in the new Port Authority and from cash flow of the Authority. An oil pipeline to be constructed from the coast to the Tamatave oil refinery will be filvm::ed by the ?Ctrolem!l coD.panies which own the refinery. The IDA credit will be extended to the Mala.gasy Republic for a term of 50 years, in,;ludi.ug 10 years of grace. It will be intsrest-f:-ee but will carry a service charge of 3/4 of 1%. When the new Port Authority is established the Goverrunent will relend the proceeds to this Authority for a tenn of 24 years, including 4 years of grace, with interest at 3/4 of 1% per annurn during the • grace period and 7% thereafter. - 0 - •