Announcement of IDA Provides Credit of Three Hundred Fourteen Million US Dollars for the Eighth Telecommunication Project in India on March 19, 1981

. " FOR- IMMEDIATE RELEASE . • World Bank 1818 H StrPet, N.W., Washington, D.C. 20433, U.S.A.• Telephone·: {202) 477-1214 IDA NEWS RELEASE NO. 81/55 March 19 , 1981 IDA PROVIDES CREDIT OF SOR 252.4 MILLION FOR THE EIGHTH TELECOM~UNICATION PROJECT IN INDIA The lriternational Development Association (IDA), the World Bank's affiliate for concessionary lending, has approved a credit of SOR 252.4 million ($31L1 million) for a telecommunications project in India. This is the eighth.project in the teiecommunications sector for which the World Bank and IDA h:ve ~een providing assist~nce sin~B 1962. Financing wi 11 be provided for fou_r subprojects. The main subproject will cover a three-year period, fiscal years 1981-83, of the Government of India's Posts and Telegraphs Department's (P&T) five-year (1981-85) investment program which is estimated to cost about $4.3 bill ion. In the three-year period covered by the project,the existing tele- • communications network will be expanded by the installation of additional local telephone s~titching, about 630,000 additional direct exchange lines, 11,000 new long-distance public call offices, 12,000 telegraph offices, about 1,600 new rural telephone exchanges~and about 6,000 new telex subscriber facilities. The long-distance telephone system will also be improved through the use of satellite communications, digital microwave radio systems, and other digital transmission media. New technologies to extend telecommunications facilities to rural areas and to backward, hilly, and tribal areas will be field-tested with a view to developing suitable alternative technologies. The three smaller subprojects will consist of upgrading and modernization of the production facilities of the three major government- owned telecommunications equipment manufacturers--lndian Telephone Industries Ltd. (ITI), Hindustan Cables Ltd. (HCL), and Hindustan Teleprinters Ltd. (HTL)-- and the construction of a new factory for each. The factories to be established are: an ITI electronic switching production facility at Palghat in Kerala, an HCL cable factory at Hyderabad in Andhra Pradesh, and an HTL electronic teleprinter factory at Hosur in Tamil Nadu. The distribution of benefits from this project, the total cost of which is S1 ,619.4 million, should touch all segments of the population. Government administration and private business will benefit from communications- related efficiency increases following improved telephone and telex access within and between the large cities, and between the national, state and district centers and smaller towns and villages. A major improvement in • NOTE: IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of negotiation of the credit. I ...  -2- quality of service will be made in smaller cities and district centers, while in smaller towns and villages, it is estimated that about 40 mill ion people • will receive local public access to telephone facilities for the first time during the project period. The 11,000 additional rural public call offices, 1,600 new small rural exchanges, and 405,000 new direct exchange 1 ines allocated to district centers and to cities other than Bombay, Calcutta, Delhi, and Madras wil 1 stimulate economic development outside the major metropolitan areas, encourage decentralization, and reduce transport and communications- rel~ted costs. The IDA credit to India is for 50 years with 10 years of grace. It is interest free but will carry a 3/4 of 1~ service charge a year to cover IDA's administrative expenses. - 0 - • • FOAM NO. 1121 (5-76) T E C HN I CA L DA T A • PROJECT: Eighth Telecommunications COUNTRY: India TOTAL COST: $ l , 6 I 9. 4 in i l I ion luA FINANCING: SDR 252.4 million ($314 million), standard terms OTHER FINANCING: Government of India Posts and Telegraphs LJepartment (P&T), $l,2SO million; Indian Telephone Industries Ltd. (ITI), $ld.2 mi 11 ion; Hindustan Cables Ltd (liCL), $29,3 mi 11 ion; (for the Posts and TeleiJrapi·1s subpro_ject)HinJustan Teleprinters Ltd. (HTL), $7.:) mill ion IMPLEMENTING ORGANIZATION: Posts and Telegraphs Department Dak Tar Bhmvc:in, Parl lament Street i~e\,v Delhi 11 0001, India Cable Address: TCL[P,]5T, IC'/ iJELHt, 1:WU\ Telex Address:31UO UGPT PROJECT DESCRIPTION: The project comprises four subprojects. The main subproject covers a three-year time slice, fiscal 1981-83, of the invest- ment program of the Posts and Telegraphs Department (P&T's) Telecommunications Branch. The ~ present telecommunications network wi 11 be expanded through the provision of additional local telephone s~1tching and direct ~xchange lines, long-distance public cal 1 offices and rurai telephone exchanges, and trunk and telex facilities. The subproject wi l 1 also pro- vide equipment and raw materials for P&T's telecommunications workshops; equipment for P&T's Teiecommunications Research Center and its Technical and Development Circle; trans- mission equipment; and computing equipment for the four major metropolitan districts. The other three subprojects comprise the upgrading and modernization of the production facili- ties of the three major government owned telecommunications equipment manufacturers -- Indian Telephone Industries Ltd., Hindustan Cables Ltd., and Hindustan Teleprinters Ltd. and the construction of a new factory for each. These new factories wi 11 be: an ITI electronic switching production facility at Palghat in Kera la, an HCL cable factory at Hyderabad in Andhra Pradesh, and an HTL electronic teleprinter factory at Hosur in Tamil Nadu. PROCUREMENT: All equipment imported directly by P&T for the P&T subproject ($80 million) and all equipment &inanced by the Association for the ITI, HCL and HTL factories subprojects ($71 mill ion) will be procured on the basis of international competitive bidding (ICB) in accordance with the World Bank/I DA guidelines. Procurement associated with the choice of collaborator and acquisition of technical ex- pertise for the new electronic switching manufacturing plant at Palghat and the new elec- tronic teleprinter factory at Hosur, will also be made under ICB. The raw materials and components ($163 mil lion) used by the domestic factories in the production of equipment purchased from them by the P&T for the P&T subprojectate procured under ICB by the factories themselves or through Government of India central procurement agencies. ~ ECONOMIC RATE OF RETURN: 17% for the P&T subproject ESTIMATED COMPLETION DATE: 1985 - 0 -