Announcement of IDA Provides Thirteen Million Dollars to Madagascar for Railway Project on May 10, 1979

•' FOR ''IMMEDIATE RELEASE ~ .world Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A: • Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 79/69 May 10, 1979 IDA PROVIDES $13 MILLION TO MADAGASCAR FOR RAILWAY PROJECT Madagascar's efforts to improve its railway service will receive a boost with a $13 million credit from the International Development Association (IDA), the World Bank's affiliate for concessionary lending. The $43.66 million project, which will be implemented by the~Reseau National des Chemins de Fer Malagasy (RNCFM), the national railway system, is a continuation of the First Railway Project of 1974, which aims to improve RNCFM's line ability with increased safety and reliability in traffic operation to meet demands up to 1983. Among the project's goals are the modernization of 160 kilometers (km) of track and the improvement of another 124 km. Renewal of points • and crossings and the procurement of track maintenance equipment and tools are also of prime importance. The RNCFM plans to acquire new railcars, coaches and wagons to modernize its rolling stock, and to replace workshop equipment. The railway is seeking to improve its telecommunications and accounting systems· and its financial management, and a study on the future of the low traffic density lines is included. Co-financing is being provided by the RNCFM and the Caisse Centrale de Cooperation Economique. The $13 mill ion credit is for 50 years, including a 10-year grace period. The credit carries no interest, but has a service charge of 3/4 of 1% per annum to cover administrative costs. The proceeds of the credit will be onlent by the §OVernment to the RNCFM at 8% interest over 20 y~ars, including a grace period of five years. NOTE: Money figures are expressed in U.S. dollar equivalents . • FORM NO. 1121 (5-76) T E C HN I CAL DA T A PROJECT: COUNTRY: TOTAL COST: Second Railway Democratic Republic of Madagascar $43.66 million • IDA FINANCING: $13 million, standard IOA terms OTHER FINANCING: Caisse Centrale de Cooperation Economique (CCCE), $20.5 million; Reseau National des Chemins de Fer Malagasy (RNCFM), $10.2 million IMPLEMENTING ORGANIZATION: Reseau National des Chemins de Fer Malagasy B. P. 259 Antsananarivo, Madagascar TELEX: 22233 CHEMINFER PROJECT DESCRIPTION: It will provide for the modernization of 160 kilometers (km) of track and the _improvement of another 124 km, and for the procurement of track maintenance equipment and tools. It will also provide for: (a) replacement of seven 1 ine locomotives; (b) replacement and acquisition of one railcar, coaches and wagons; (c) improvement of telecommunica- tions; (d) replacement of workshop equipment; (e) improvement of the railway's financi~ management and accounting system, implementation of its new Transport Plan, and the carrying out of studies concerning the long-term viability of Antsirabe-Antananarivo and Manakara-Fianarantsoa lines with the help of consultants; (f) review and imple- mentation of a unified financial and cost-accounting system; carrying out of the Railways' Transport Plan; training of accounting personnel; and (g) carrying out a study of the long-term viability of the Antsirabe-Antananarivo and the Manakara- Fianarantsoa railway 1 ines. PROCUREMENT: Equipment and material will be obtained through international competitive bidding in accordance with IDA guidelines except for small orders of under $25,000 each. These small orders are not expected to total more than $250,000. Items will be procured abroad through international competitive bidding or locally through local purchase procedures acceptable to IDA. IDA will finance track materials, points and crossings, aerial ropeway and technical assistance, while CCCE will finance ballast wagons, locomotives, motorized railcars, coaches, and realignment work. CONSULTANTS: Consultant services will be provided for implementing (f) and (g) of the project (see project description) . ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 17% 1983 - 0 - •