Announcement of Five Million Four Hundred Thousand US Dollars for Colombian Railways on September 20, 1960

G FOR IM.MEDIATE RELEASE - l ·f. Q l • ; WORLD • I NTFRNAT'IO . '~TF~l RECON l 1818 H ....... .. .J C"T STREET, 11~ 11 . "!~.I L N.W., WASHINGTON 25, D. C. EVELOPMENT TELEPHONE: EXECUTIVE 3-6360 PRESS RELEASE NO. 652 SUBJECT: $5 .)+ million loan for September 20, 196o Colombian railways The World Bank today made a loan equivalent to $5.4 million to equip the new Atlantic Railroad in Colombia. When the Railroad is completed, it will interconnect Colombia's railway systems and provide the first fast and reliable transportation between Atlantic Ocean ports, central Colombia and the Pacific. The Bank's funds will finance purchases of locomotives, rolling stock and maintenance equipment. • Four private banks are participating in the loan, without the World Bank's guarantee, for a total amount of $512,000 representing the first four maturities and part of the fifth maturity which fall due between May l, 1962 and May 1, 1964. The participating banks a.re Continental Illinois National Bank and Trust Company of Chicago, Brown Brothers r ,.liman & Co. , Chemical Bank New York Trust Ccmpa.ny and Grace National Bank of l'Iew York. The loan is being made to the Colombian National Railroads ( CNR), an autonomous entity established by tta.e Government in 1954 to own and operate the railroads of Colombia. Establishment of the CNR was part o:f' a program f'or reorganization of the administrative, operational and financial system of the railroads and for the rehabilitation of existing track and other railroad properties. In the past, the l4~gdalena River, supplemented by various rail and road • links., was the ma.in artery for export-import trade moving between central  - 2 - Colombia atlld the Atlantic Coast, as well as for north-south internal trade. Traffic was, slow and subject to frequent interruptions, however, because of uncertain navigability in upper reaches of the river, particularly during dry seasons. In 1952 the (]Overnment undertook the construction of a railroad to by-pass the1se sections of the river; it subsequently decided to extend the railroad. al:l the WJN to the coast providing an alternative to river transport en route. This required the construction of a. new railroad 425 miles long and the rehabilitation of a 6o-rnile section linking it to the port city of Santa Marta. WorLa Bank loans totaling $40.9 milli:,on, made in 1952 and 1955, have assist.ed in ite financing. Three sections of the railroad have already been opened to traffic, and the entire railroad is scheduled to be open to through traffic early in 1961. Apart from providing transportation between central Colombia. and the Atlantic • ports, the Atlantic Railroad will connect with existing rail lines, allowing uninterrupted rail traffic between four of Colombia's most important cities, Bogota, Cali, Medellin and Bucarama.nga. The Railroad. is also opening up to settlement and cultivation the once thinly populated tropical jungles of the Magdalena River Valley. New farms and cattle ranches have been established 1: near completed sections of the railroad, and land along its route is increasingly in demand. The Colombian National Railroads need additional m:>tive power and rolling stock to meet.the freight and passenger traffic demands on the Atlantic Rail- road. The Bank's loan has been made. for this purpose and will finance the purchase of 16 diesel locomotives, about 300 fre,ight cars in "Im.ocked down" condition to be assembled 1n Colombia, parts to rehabili~~te passenger coaches, and shop equipment. The total cost is estimated at the eq\dvalent of $6 mil- • 'lion; the local currency costs of $6oO,OOO will be met by the Government of Colombia..  6 - 3 - • The loan is for a term of 15 years and bears interest o:f' 5-3/4'fa per annum, including the lo/o commission which is allocated to the Bank's Special Reserve. Amortization will begin in May 1962. The loan is guaranteed by the Republic of Colombia. The Bank has· now made 17 loans totaling $178. 6 million in Colombia. The loans have been for the development of Colombia's railways and highways, and of electric power and agriculture. After having been approved by the Bank's Executive Directors, the loan documents were signed by His Excellency Dr. t::arlos Sanz de santamaxia, Ambassador of Colombia in Washington, on behalf of the Government of Colombia, and by Dr. Jorge Pena Polo, New York Representative of the Colombian National Railroads, on behait of the borrower • • / I •