Announcement of World Bank Lends Ninety-Six Million Dollars for Railway Project in Argentina on March 29, 1979

. FOR IMMEDIATE RELEASE .World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 79/65 March 29, 1979 WORLD BANK LENDS $96 MILLION FOR RAILWAY PROJECT IN ARGENTINA The World Bank has approved a loan of $96 million to help finance a project to rehabilitate and improve the national railways system in Argentina. The project also aims at reducing, and eventually eliminating, large govern- ment subsidies. The project will strengthen Ferrocarriles Argenti nos (FA), the state- owned Argentinian railway company. It will include rationalization of the system, rehabilitation of the tracks and equipment, and improvement of the company's management. A major objective will be to organize the railways into an efficient long-haul bulk carrier. The railway project forms part of the FA's investment plan for 1979-83, covering the first two years of this period. It includes rehabilitation of • tracks, bridges, and communications; purchase of locomotives, passenger coaches, specialized wagons, and some track maintenance equipment. Studies for a master plan for the suburban railway, intercity passenger services, and uneconomic lines are also included in the project. The FA's investment plant is designed to enable the railways to avoid further deterioration and to carry the traffic forecasted. It is expected to reduce, and eventually eliminate, FA's financial dependency on the govern- ment. FA has sustained large operation losses for many years and government subsidies averaged some $360 million a year between 1974 and 1977. The $96 million loan to FA has the guarantee of the Argentine Republic. It has a term of 15 years, including three years of grace, with interest at 7% per annum. This is the second World Bank loan to the railway sector in Argentina. In 1971 th.e Bank approved an $84 mi 11 ion loan to FA. NOTE: Money figures are expressed in U.S. dollar equivalents . • FORM NO. 1121 (5-76) T EC HN I CA L DA T A PROJECT: COUNTRY: TOTAL COST: Second Railway Argentina The financial plan includes $748.9 million of project costs as well as $453.1 million of other investments • started prior to the project. BANK F ~··"~CI NG: $96 million for a term of 15 years, including three years of grace, with interest at 7% per annum OTHER FINANCING: Suppliers and foreign banks loans, $348 mill ion Government of Argentina, $758 million IMPLEMENTING ORGANIZATION: Ferrocarri les Argentinos Avenida Dr. Ramos Mej{a 1302 Buenos Aires, Argentina TELEX: 122507 BUEFA PROJECT DESCRIPT10N: The project comprises: a) rehabilitation of track, bridges, and communications, and partial track renewal of main lines; b) purchase of line and shunting locomotives, passenger coaches, and specialized wagons; c) rehabilitation of wagons, purc~ase of spare parts for wagons and locomotives, and modification of existing box cars; and d) technical assistance and studies. • PROCUREMENT: All materials and equipment to be procured under the loan will be subject to international competitive bidding in accordance with Bank guidelines. In bid evaluation, Argentine manufacturers of equipment will be allowed a margin of preference of 15% of the c.i .f. cost of competing imports, or the relevant custom duties, whichever is lower. CONSULTANTS: About 324 man-months of consultant services to assist in the personnel training and in the preparation of studies a re req u i red. ECONOMIC RATE OF RETURN: 22% ESTIMATED COMPLETION DATE: 1982 - 0 - •