Announcement of Ninety Three Million Dollars in Two Credits for Power Transmission and Agricultural Marketing in India on March 29, 1973

• INTERNATIONAL DEVELOPJ\1ENT ASSOCIATION 1818 H STREET, N.W .. WASHINGTON 0. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 73/19 Subject: $93.0 million in two credits for March 29, 1973 power transmiss:f.on and agricul- tural marketing in India The International Development As~ociation. (IDA), an affiliate of the World Bank, today announced two c:redi ts totaling $93.0 million to assist key sectors of the I11dian economy -- electric power and agriculture. A credit of $85.0 million will help finance a $151 million project for the expansion of power transmission facilities in Assam, Delhi, Haryana, Kerala, Madhya Pradesh, Maharashtra, Mysore, Orissa, P'lllljab, Rajasthan and Tamil Nadu. The project is part of a $622 million program of investments in transmission systems during 1972-77. The other credit of $8.0 million will be devoted to the development of agricultural wholesale markets in the State of Mysore • .Among those beD1fittiag • from the project will be 700,000 small farmers in the State. Both credits to the Government of India are for a term of 50 years, including a 10-year grace period. They are interest-free, except for a service charge of 3/4 of 1% to cover IDA's administrative expenses. $85.0 million credit for power transmission India's large electric power sector is growing fast. Between 1965 and ~971, installed capacity inc.reased at an annual rate of about 10% to reach 16,500 megawatts and energy generated by almost 11% a year to reach 61,355 mil- lion kilowatt hours. By 1971, over 107,000 towns and villages have been electrified, representing a rise of 18.4% a year since 1965. The Government has formulated a "Decade Plan" (1971-1981) to increase installed capacity to 52,000 megawatts. There is, however, an urgent need for inter-connection of transmission systems through inter-state and inter-regional lines to improve transfers from surplus to deficit areas a.qd, within states, to support the Government's large rural electrification program. The project being financed by IDA includes the construction of about ~ 4,000 circuit kilometers of transmission lines operating at voltages between 110 and 400 kilovolts and about 60 substations with an aggregate capacity of about 4,600 megavolt amperes. The project forms part of a $622 million invest- ment program for transmission systems to be constructed during 1972-77 by the IM P.R. No. 73/19 -- India -- power transmission and agricultural marketing • - 2 - State Electricity Boards of Assam, Kerala, Mysore, Madhya Pradesh, Orissa and Tamil Nadu, the Beas Construction Board to supply hydroelectric pel'~er to the States of Punjab, Haryana and &:ljasthan, the Delhi Electricity Supply Under- taking, and the Tata Power Company which supply power to the Delhi area and the City of Bombay, respectively. The project also includes comnllllication and supervisory equipment for the Southern and Northern Regional Electricity Boards load despatch stations to enable optimum use to be made of generating capacity in their constituent States. The project is scheduled for completion in 1977. Goods and services under the credit will be procurad on the basis of international competitive bidding with Indian suppUers receiving a preference of 15% or the level of prevailing cus tons duty, wh:.chever is lower. $8.0 million credit for azricultural markP.ti~~1 Mysore State The credit will help to finance a five-year program of investments in the development of agricultural wholesale markets in Mysore State. One of the key elements in India's strF.:.tegy to induce increased agricul- tural production is the development of regul2.ted wr.olesale markets aimed at increasin~ trade efficier,cy and reducing procuce losses. Traditional marketing systems are characterized by scattered opportunities, location in congested • areas, inadequate storage and auction facil:f.d.es. These leave t:he farmer little incentive to improve the quantity and quality of ·,i.1s proc:;.uction. In order to improve the situation, the Government of India has encouraged state governments to establish modem regulated markets. The IDA credit, like the previous credit of $14.0 million for agricultural marketing in Bihar, is in support of the Goverament's strategy. Myso~e is pi--!.marily an agricultural State. Some 6~7 million persons or about 65% of the State's working population are engar..;ed in agriculture. One of the State's development aims is to increase agricultural production through investQients in irrigation a variety of programs aimed at spreading high- alld yieldin$ varieties of seeds and more intensive cultivation practices. Consider- able increases in agricultural production have occurred in recent years and Improvement in agricultural marketing to handle • further increases are likely. surpluses has been given high priority by the State. The State has set up 99 Regulated Committees consisting of farmers, traders and officials under an Agricultural Produce Marketing Regulati.on Act passed in /more  IDA P.R. No. 73/19 -- India - power transmissioll and agricultural marketing • 1966. - 3 - The project being financed by the IDA credit will provide modern facili- ties for selected Market Cammi ttees; these will include construction of access roads, auction platforms, fencil,g, shops and warehouses for market inte:cmedi- aries, intemal roadways and parking areas, utilities, equipment such as grain dryers, scales, tea ting and connnunications equipment, and buildings for Market Committees. It also provides for training of staff of the State .Marketing Department and the Marketing Comm! ttees and for an economic evaluation of the results of the investment by a qualified research institution. The project, when completed in 1979, will help to bring about fair trading practices, competitive prices and efficient handling of produce, and will reduce wastage. About 700 ,000 small farmers whose bargaining pCYer has been less than the large farmers, will benefit. Better farm prices, resulting from the project, should stimulate higher agricultural production. The total cost of the project, excluding land, is estimated at $12 million, • of which the IDA credit will finance two-thirds. The balance will be provided by the Market Comm.1tt~e$, market intermediaries, partJ.cipating commercial banks ·· and the Agricultural. Refin.ance Corporation of India (ARC}, an agency established in 1963 to provide medium and long-term finance to agl'i.cultural credit institu- tions. ARC and participating commercial banks will be the channel for IDA ftmds. - 0 - •  • INTERNATIONAL DEYELOPMENT ASSOCIATION 1818 H STREET, N.W., WASHINGTON D. C'. 20433 TELEPHONE: EXECUTIVE 3-6360 -.,-.- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 • March 29, 19 73 TECHNICAL DATA PROJECT: Electric Power Transmission COUNTRY: India TOTAL COST: $151. 36 million IDA FINANCING: $85.0 million, 50 years, including 10 years of grace, interest-free, service charge. of 3/4 of 1% to meet IDA's administrative expenses. OTHER FINANCING: Government of India, State Govemments and State Electricity Boards. • IMPLEMENTING ORGANIZATIONS: Participating State Electricity Boards, The Delhi Electricity Supply Undertaking, the Beas Construction Board, the Southern and Northern Regional Electricity Boards on behalf of the Govern- ment of India and the Tata Power Company. PROJECT DESCRIPTION: Construction of 4,000 C'.ircuit kilometers of transmissioi.:. lines operating at voltages between 110 kilovoltsand 400 kilovolts and about 60 substations with an aggregate capacity of about 4,600 MVA. The project also includes communications and supervisory equipment for the Southern and Northetn Regional Electricity Boards load despatch stations. OONSULTANTS: None PROCUREMENT: On the basis of international compt?titivc bidding with Indian suppliers receiving a preference of 15i. or the level of prevailing cu.~toms duty, whichever is lower. ESTIMATED COMPLETION DATE: 19 77. - 0 - • • • INTERNATIONAL DEVELOPl\fENT ASSOCIATION 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 --J'----------------------------------------------1 • March 29, 19 73 TECHNICAL DATA PROJECT: Agricultural ¥Jarketing in Mysore COUNTRY: India TOTAL COST: . $12 million equivalent IDA FINANCING: $8.0 million, 50 years, including 10 years of grace, interest-free except for 3/4 of 1% service r.harge to meet IDA's administrative expenses. OTHER FINANCING: Market Canmittees, market intermediaries, participating • connnercial banks and the Agricultural Refinance Corporation of India (ARC) • RELENDING TERMS: Government of India to ARC effective rate of interest of 5 3/4%, repayment over 15 years; ARC to participating commercial banks 6 1/2%, repayment to reflect sub-loans; parti~ipating commercial banks to Market Connnittees, 9%, repayment up to 15 years including three years grace. IMPLEMENTING ORGANIZATION: The State Marketing Department, Government of Mysore, Mysore, India~ PROJEcr DESCRIPTION: A program to help finance the development, over a period of 5 years of new or improved market facilities in Mysore. The facilities to be provided include access roads, auction platforms, fencing, buildings, traders' shop-cum-godowns, internal roadways, parking areas, utilities and ancillary equipment. The project will also provide for training of marketing personnel and for project evaluation. PROCUREMENT: Local competitive bidding as the design and size of civil works for market centers does not lend itself to international competitive bid- ding. CONSULTANTS: None • ESTIMATED COMPLETION DATE: 1979 • - 0 -