Announcement of a Fifteen Million Nine Hundred Thousand Dollar Loan to Colombian National Railroads on June 15, 1955

- (l FO~l IMMEDIATE RELEASE INTERNATIONAL BANK FOR- (1•~ RE~CONSTRUCTION AND DEVELOPMENT ( (W!ORLD BANK) 1818 H STREET, N.W., WASHINGTON 25, D.C. TELEPHONE: EXECUTIVE 3-6360 (1 PRF.SS ~ELFASE NO. 404 FOR RELEASE SUBJECT: $15. 9 million Colombian loan. June 15, 1955 · The World Bank today ma.de a loan of $15. 9 million to the Colombi~ National '',, 'i< Railroads. The loan will help to finance an extensicn). or the Magdalena Valley \.,f ' Railroad being built with the aid of a previous Bank loan. The extension will . I t : pr.ovide a -through rail connection between .the Caribbe~n coast and important cities in the interior, and will eliminate the need for river transport en route. • ;The<\chief benefit will b,e faster service, saving three to four days in the ·~ransport of goods. The line should alsq.-enc,ourage agricultural development in t:,he area traversed arrl increase the ea:rnings of the National Railroads. ' . The Bank of America National Trust and Savings Association is participating ii) the loan, .wi t~O\.\t the Worid Bank's guarant~e, to:, the extent of $866,000 \\ ti II retpresenting the first four maturities which fall due from November 1, · 1958 through" /'Mat 1:, '1960. The o:r;-iginal purpose of P~he Yagdalena Valley Railroad, which is still under /, ,,, I; con~tru;6tion, was. 'to provide a reliable rail-river route between central C-olombia ~nd't'?t CaribbE!!ln ports•, a~d to link, the, country's east~ and western rail ,::.(,-· ' ' ~ ~:::: networks. At present!)' traffic through "the valley is ca,rried on the Magdalena" ~' 1:::-, 1, ,) ".- .. ,, - . . .. . . . ,, ,(\ . . " River and ls subJect·to frequent inten:u~tions in dry seasons on upper sections . . 0 ., .-. ·, \) ''.- . of the river Tl1e r~j_,]!:9&d was t~ rfan 235 ,miles betw~~n Puerto ,Salgar, thei( 41 • terminus of _a railroad leacjing to Begot~,, and Gama:r_ra~ the highest point on the river which can be se:rve9- by~ reliable year-round ~~rge tfansport. At Gamarra, (/  • 2 - 0 \ • goods in tran.si t would have been transf'erred. between river barges and f1•eight cars. It has now been decided on the basis or., further enginee:ring and economic studies to extend the railroad another 190 miles to reach Fundacion, where i~ will connect witfi an existing r~ilroad to the port or Santa Marta on the Caribbean '--' ~;?" ,:J' coast. In addition pr~~sion has been riiadeJror the construction of a highway which, with a ferry connection acrqss the Magdalena ,Ri v~-iL (, ' :..~,- will~\~\onnect the ' . 0 railway with Barranquilla, Colombia's largest port on the Caribbean., The Bank's l,oan will pay £or imported equipment ~d services needed tor the construction of the 190-mile rail line from Gamarra to Funda_c;ion; -<,::, improvements in the permanent, way of the· 69 miles of the railroad·' to Santa Marta; construction of terminal facilities at Santa Marta and at Cienega-. where the railroad and • I' Barranquilla road intersect; the purcha~e of rolling stock for use on the 4I extension; the installation of ferry slips; and the purchase of a ferryboat and tractor-trailer uni ts. The Government is financing ,the local currency costs of these facilities and the full cost of t~e construction of the highway and the / expansion of port facilities at Santa Marta. The total amount or this Government t:: ( financing is estimated at the equivalent of $2p.4 million. Construction of the Magdalena Valley Railroad began early in 1953 and is now about 40% complete. Work ?as proceeded at a slower pace than was originally an+.-i "; p~+.1!3r1.1 hn+. it n~-r appe~rs that the line will be in operation by early (J - - 'i 19$8. If work on the extension starts within the nex~ few mont\~s1 the new rail route to the. Caribbean could be;)fanplete?- "at the.,same,time. The building of the Magdal~na Railroa-d is part of a larger program which C · will include the reorganization and rehabilitation of the national railways. Tq assist in carrying out this program the Government has r'etained the serVic.es • of -~gineering consultants. Perhaps" tht~ ~,1ost important measu.re ,.,,t;1,ken thus far has been the establishment by the Government., in December 1954, of thecColombian "'-:r  . Q ! \\ i PLANNED ·····•····..... !NSTAL'J.ATION· OF;,FERRY () 1, 1/VRR- EXTENSION . "l" ....J l.lJ ~ ~ "' l.lJ l.lJ ~ Information in red indicates._pro• posed work on p~oject: "Information i~ ·black indi<:ates impro,:vements and construction to .be undertaken by ) <:;olombian Government independently ·-of project. ~ ~ financed MV8R, presently under . ·I I I 1 I I '~ ·:!f~J~;:~:;>·.. Proposed MVm extension 1. 11 I I '{\ \Existing railroad to be improved_ un~er proJect I I I. I I I ., .................. ;······ Roads 10 20 30 40 !SO • I I i" WK.,, Hifhway to b~ constructed by_ Co omb1an government - - - - - Ii SALGA,t  - 3- National ;;~ Railroads , •. an autonomous. , , non political ente'l"T'I . ., rise to. on. ~l:' 11111 'l"' erate the state- 0 \~ ' 0 ownedo railroads. D The earlier loan was made to the Colanbian ,, Government but today's lorai- wa,;5 made directly to the new railway enterprise wi tll, the Government acting as ,, f..') 'J 0 guarantor. It is for a term of 2S years and bears interest of 4- 3/4% per annum, (.) including the statutory ]% conunission charged by the Banlc. Amortization will () begin Novenber 1, 19$8. 'This is the tenth World Bank loan in Colombia and brings th'3 total amount lent there to $94. 7 million. Under previqus loans, $9. 9 million was far t;;, . agriculture, $1.3 million for e~ectric power, $Jd.9 million for '·highways and $25 million for" ~he Magdalena Valley Ra.ilroad. V , , After havi,ng be.en_.approv.ed .by-th@ B~nkL~ E.~ec2.ti~; DirGctvrs., documents were signed today by: His Excellency., Dr. ~duardo Zuleta-Angel., Colombia~) • /) sc</ Ambassador in the United States, on. behalf of the Govern.men~, by Dr. Roberto Botero Londofto., representative of the Colombian National Railroads., on behalf 'of the borrower, ar:d by Mr. Eugene R. Black., President, on behalf \\ or the Bank. •