Announcement of 5.5 Million Dollars Credit for Telecommunications in Nepal on April 30, 1973

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 73/28 Subject: $S.5 million credit for tele- April JO, 1973 communications in Nepal Nepal's telecommunications system will be expanded and modernized with the assistance of a $5.5 million credit from the International Development Association (IDA), an affiliate of the World Bank. The project, when completed in 1979, will provide connnunic~tion facilities essential to the development of industry, agriculture and tourism. Improved telecommunications will also help to meet the requirements of administration, health and other social services. The telecommunications sector in Nepal is still in its early stages of development. The present telephone density of about .06 per 100 persons is one of the lowest in the world and well below the average for developing countries. Minimum communications -- mainly used for telegraph purposes -- between some 78 centers throughout the country are provided by means of high frequency radio stations which operate on a part-time basis. These stations are overloaded at the main centers nnd the use of voice transmission leads to considerable distortion of messages. Even though international teleconnnunication • services are gradually improving, they are still inadequate. The project being assisted by the IDA credit is Nepal's second telecommunications plan (1974-1979). The expansion and modernization of facilities under the credit include the provision of telephone and telex exchange equipment, cable networks and subscribers' apparatus for about 11,000 subscriber connections, international and domestic HF radio station terminals, microwave systems, line circuits and rrrultiplexing equipment to provide about 150 long-distance circuits, and vehicles, tools, testing and training equipment, consultants and buildings. The project will extend telephone facilities into T,.Testern Nepal and other areas, in- cluding the north-south corridors, providing reliable local and long-distance services for nine towns. It will also provide additional facilities for the connection of subscribers on existing exchanges and for the expected growth of long-distance and international traffic together with improved reliability. The IDA credit to the Government is for a term of 50 years, including a 10-year grace period. It will be interest free except for a service charge of 3/4 of 1~ to meet IDA's administrative expenses. The Govenunent will relend the proceeds to the Nepal Telecomnrunications Board (NTB) for a term. of 20 years, including a five-year grace period, with interest at 7~ per amiUm. The execution of the project will be the responsibility of NTB, an agency established in 1969 for the provision and operation of all public domestic and international tele- communications. The total cost of the project is estimated at the equivn.lent of $7.9 • million. The IDA credit will meet all of the foreign exchange costs. The credit of $5.5 million is the second from IllA for the development of telecom- munications in Nepal. A credit of $1. 7 million, made in 1969, is financing the country's first telecommunications program covering the five years ending July 1973. Today's IDA credit brings the total of IDA assistance to Nepal to $19.9 million.  • April 30, 19 73 TECHNICAL DATA PROJECT: Telecommunications COUNTRY: Nepal TOTAL COST: $7.9 million equivalent. IDA FINANCING: $5.5 million, 50 years, including 10 years of grace, interest free except for 3/4 of li. service charge to cover IDA's administrative expenses. OTHER FINANCING: Nepal Telecommunications Board (NTB). IMPLEMENTING ORGANIZATION: Nepal Telecommunications Board, Kathmandu, Nepal. RELENDING TERMS: Government will re-lend the proce,sds of the ere di t to the Nepal Telecommunications Board for a period of 20 years, including five years of grace, at interest of 7\%. • PROJECT DESCRIPTIOO: Modernization and expansion of telecommunications including telephone and telex exchange equipment, cable networks and subscribers' apparatus for about 11,000 subscribers' connections; international and domestic HF radio station terminals, microwave systems) line circuits and multiplexing equipment to provide about 150 long distance circuits; and vehicles, tools, testing and training equipment, consultants, and buildings. · PROCUREMENT: All procurement under the project would be by international competitive bidding with the exception of some microwave equipment and telephone exchange extensions costing about $500,000 where, for reasons of compatibility and economy, orders will be placed with the original suppliers. CONSULTANTS: NTB plans to engage consultants to help design improvements in its internal audit, budgeting and cost accowting systems. ESTIMATED COMPLETION DATE: 1979. - 0 - •