Announcement of Loan for Calcutta Port on July 7, 1961

FOR IMMEDIATE RELEASE WO R L • I NTERf,JATiONAL BAN RECONSTRUCTi()N D VELO 1818 H STREET,,'N.W., WASHINGTON 25, D. C. TELEPHONE: EXE'.CUTIVE3-6360 Pres• Release No. 701 SUBJEnT: Loan for Calcutta Port July 7, 1961 The Executive Directors ot the World Bank have approved a loan equiva- lent to $21 million to the Colllllissioners or the Port of Calcutta. The loan will help to finance dredges and other floating craft to ~aintain navigation on the Hooghly Rive!' approach to Calcutta, and equipment and works to improve the efficiency or the Port. The loan will also finance the foreign exchange 'i costs ot a hydraulic study ot the Hooghly River to help solve the problem of • siltation in the river and t.o determine the feasibility bulk cargo vessels. or deep-water satellite port farther down the river at Haldia to accommodate establishing a Calcutta as a port is vital to the econonJY' of India since the hinter- land it serves is India's largest industrialized region. Calcutita is also Ci the center or the tea and jute tr ad.es, which together account for over a third of India's export earnings. and is rising in importa.nce as a cen·ter for the manufacture or engineering a.nd metal goods. The volume or ~~go handled by the Port is now 10 million tons a year and is expected to increa.se by abput J million tons over the next four years. Because or its location, some 120 miles from the Bay of Bengal on a changing and treacherous river, the Port of Calcutta needs a large fleet of dredging and navigational craft. Access to the Port is hampered by sand • banks in the estuary and 11 large sand bars in the meandering rj.ver stretches.  - 2 - ~.irtherrnore, shipping in the river is subjected to hazardous bore tides during most of the year. Due to increased siltation navigation for ships drawing 26 feet has been severely restricted most days pf the ye?r in the last three ~ years; thus, modern ships of 10,000 deadweight tons or more cannot enter the Port when fully loaded. Part of the proceeds of a i29 million loan made by the Bank in June of 1958 for various improvements at the Port was used to pur- chase additional dredges required to alleviate acute siltation. The greater part of the current Bank loan will be used for the purchase of about 20 floating craft, of which four will be large dredges and six1 auxiliary dredging vessels. With this addition to their dredging fleet~ the Commissioners shoul& be able to achieve their objective of maintaining access to the Port the year round for vessels of 26-foot draft. The works to be • undertaken to improve the Port itself include the extension of the western arm in King George's Dock to provide holding space for four ships &nd four dolphin berths for ships undergoing repairs; the installation of a water re- circulation scheme in Kidderpore Docks to help eliminate the siltation problem in the docks, and the replacement of a 70-year old swing bridge. Cranes, foz:k-lift trucks, tractors and trailers will be added t,w~~t,he mechanical cargo- handling equipment of the Port. Repair and maintenance facilities are to be improved by the installation of modern plant and machinery in the Port•s work- shops and shipyards. The Commissioners of the Port of Calcutta and the Bank attach great im- portance to the hydraulic studies to be lllldertaken of the Hooghly River. In order to assure that these studies are promptly initiated, and carried out' on • a continuing basis, the Commissioners will establish a Hydraulic Study Depart- ment marmed by Indian h1drologi sts and assisted by highly qualifief £;reign  0 • • - 3 - experts supported by the leading hydraulic laboratories abroad. The total cost of the equipment, the study and works included in the project is estimated at th, equivalent of ~31 million. The Bank lo~ will cover the foreign exchange requirements and the local currency costs will be provided by the Comr.d.ssioners of the Port of Calcutta. Equipment to be fin- anced by the B~ loan will be procured on the basis of international com- petitive bidding. The Bank loan is for a term of 25 years and bears interest at the rate of 5-3/4% per annum including the 1% connnission which is allocated to the Bank's Special Reserve • .Amortization will begin }'lay 15, 1966. The loan is guaranteed by India. • The loan documents have been sent to India for execution by the Com- missioners of the Port of Calcutta. Subsequently the Loan Agreement will be returned to Washington for signature by the Bank, and the Guarantee \\Agreement will be signed by·the Bank and by the Government of India.