Announcement of Twenty-Five Million US Dollars Loan to Colombia for a Sixth Railway Project on August 9, 1973

•• 1818 H STREET, N.W., WASHINGTON Bank Press Release No. 73/61 D. C. 20433 Subject: TELEPHONE: MENT~ EXECUTIVE 3-6360 $25 million loan to Colombia August 9, 1973 for a sixth railway project The World Bank today announced a loan of $25 million to assist a railway rehabilitation and improvement project to be undertaken by Ferrocarriles Nacion-ales de Colanbia (Colombian National Railways - CNR) during the next two years. Approximately 225 miles of track will be rehabilitated and various sections of CNR's lines will be improved under the project, which is part of CNR's 1973-76 investment plan. More than half of the project's total cost, which has been estimated at $44.2 million, will be used to improve pennanent way, including switches, track materials and equipment, bridges and ballast cars. Other important components of the project are the purchase of 28 diesel locomotives, to be financed through suppliers' credits, consulting services, spares for freight cars, and teleconnnunications. Carrying long-haul bulk conunodities, the railways play an important econOllic role in the country. CNR' s investment plan and program of action seeks to main- tain that role by preventing the deterioration of the infrastructure and impi:oving its services, thus avoiding diversion of railway to road transport. As part of CNR's program of action, two tmeconornic lin,s totaling 74 milee -- one linking Pereira and Armenia and the other between Armenia and Manizales -· will be closed. During the seUne period, services will be curtailed and some stations closed on four other lines~ The loan is the sixth to be made by the Bank to CNR, an autonomous Govern- ment entity. The first three loans, made between 1952 and 1960 for a total amount of $46.3 million, helped to construct the Atlantic Railway, linking Bogota, the capital city, and Santa Marta on the Atlantic coast. Two other loans, of $30 million in 1963 and of $12.4 million in 1968, were made to support dieeeliza- tion and modernization of CNR's facilities. The Bank loan is being made to CNR with the guarantee of the Republic of Colombia. It will be for a term of 25 years, including four years of grace, with annual interest at 7~%. • Two financial institutions are participating in the Bank loan to CNR for a total amount of $255,750.31 equivalent. These are the Union Bank of Switzerland, Zurich, and American National Bank and Trust of New Jersey, Morristown, New Jersey, USA. Note: Money figures are expressed in US dollar equivalents. - 0 -  August 9, 1973 • TECHNICAL DATA PROJECT: Sixth railway C.OUNTRY: Colombia TOTAL COST: $44. 2 million BANK FINANCING: $25 million, 25 years, 4 years of grace, interest 7~% per annum. OTHER FINANCING: National Railways, Government of the Republic of Colombia and suppliers' credits. IMPLEMENTING ORGANIZATION: Ferrocarriles Nacionales de Colombia (Colanbian National Railways - CNR)., Calle 13 No. 18-24, Bogota, Colombia. Cable • Address: FERROCARRILES, Bogota. PROJECT DESCRIPTION: Rehabilitation of 225 miles of track, involving invest- ments in track materials, switches, bridges and ballast cars; purchase of spares for freigh~ cars and improvement of teleconunwiic,~tions; consulting servic~s. 28 diesel locomotives will be purchased with suppliers ' credits. PROCUREMENT: All goods financed under the. Bank loan would be procured under it1t·emationa.l competitive bidding except for certain replacement parts ft~r locom~tives which would be procured from t~e original suppliers. C:f.).ril works are expected to be carried out by the Colombian National Railways. CONSULTANTS: A French finn, SOFRERAIL, is cont:f,.nuing work under an earlier project on track maintenance and rehabiiitation, workshops and operations. Management consultants will be selected. ESTIMATED COMPLETION DATE: Mid-1975. - 0 - Note': Honey figures are expressed in US dollar equi,valents. •