Announcement of Eighty Million Dollars Credit for Railways in India on December 20, 1973

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET. N.W,, WASHINGTON 0. C. 204$3 TELePHONE, EXECUTIVE 3-6360 IDA Press Release No. 73/89 Subject: $80 million credit for railways in December 20, 1973 India The Indian Railways will continue its program of modernization and in1provements with the help of a credit of $80 million from the International Development Association (IDA), an affiliate of the World Bank. The project, part of the Railways' larger investment program, will involve an investment of $654 million during the next 15 m.onths. It will enable the Railways to meet the expected increase in freight and passenger traffic duri.ng India's Fifth Five-Year Plan (1974/75-1978/79). Since the inception of planned economic development in 1951, India has placed considerable emphasis on the development of transport. The Bank and IDA have assisted Indian efforts with loans and credits. Including the presiant cr~<i.1.t, the Ba·nk and IDA ~ have provided a total $1,017 million for the development of various modes of Indian transport -- railways, ports, shipping, roads and aviation. The share of the Indian Railways in this total is at $786 million -- by far the largest p~rticipation by the Bank and IDA in any single enterprise. The Indian Railways is one of the largest rail systems·in the world. It has 60.000 route-kilometers (37,000 miles), employs about L7 million people and has an annual gross revenue of about $1.6 billion$ Since 195~, the Railways has greatly expanded both passenger and freight services, passengers carried have increased from 1. 2 to 2. 5 billion and originating tonnage of freight· has risen from 93 to 208 million tons per year. Estimates are that freight tonnage will reach 280 million in 1978/79 and that passenger traffic will increase at an average annual rate of 4%. The program being assisted by the IDA credit includes replacement of stean1 by diesel or electric locomotives, additions to freight-carrying capacity through wagon replacements and increases in wagon fleet~ further electrification of main lines. track renewal works and increase in workshop capacity. The IDA credit to India will be for· a term of 50 years, including a 10-year grace period. It will be free of interest but will carry a service charge of 3/4 of 1% per 4I annum which will cover IDA's administrative expenses. Money figures are expressed in US dollar equivalents.  IDA P.R. 73/89 -- India -- railways PROJECT: Railways TECHNICAL DATA • COUNTRY: +ndia TOTAL COST: $654 million IDA FINANCING: $80 million, 50 years including 10 years of grace, interest free, 3/4 of 1% service charge to meet IDA's administrative expenses. OTHER FINANCING: Indian Railways, Government of India, Bilateral loans/credits already available. IMPLEMENTING ORGANIZATION: Indian Railway Board, New Delhi, India. PROJECT DESCRIPTION: Investment program of Indian Railways for the 15 month period ending March 1975. Credit will finance 82% of the imported requirements of the program. The proceeds of the credit will be utilized for the importation of equipment, materials and components essential to the manufacture of locomotives and rolling stock and for the completion of on-going electrification and other track works. PROCUREMENT: Through international competitive bidding except for $16 • million for purposes of standardization, and orders for $50,000 or less which will be purchased in accordance with Indian Railways normal procedures. ESTIMATED COMPL:J::TION DATE: 1975. - 0 - •