Announcement of Thailand Highway Loan on June 11, 1963

W O R L Ci 8; A· IN, K(, • INTERNA·1:_iONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON 25 1 D. C. TELEPHONE: EXECUTIVE3-6360 Bank Press Release No. 63/21 Subject: Thailand Highway Loan '"Tune 11, 1963 The World Bank today made a loan equivalent to .$35 million to Thailand for the development of the national highways. The loan will assist in financing the improvement or new construction of sections of three national highways, in northern, central and southern Thailand. It will also finance the purchase of road maintenance and other equipment, engineerj.ng services and the technical training of' Thai personnel. The project has b.i~en given high priority in the • Government's long-range program to improve the national highway system so that it can adequately serve the needs of agriculture, trade and industry, and facili- tate communications between widely separated communities. Six commercial banks are participating in the loan, without the World Bank's guarantee, for a total amount of $895,000 representing the first maturity and part of the second maturity which fall due between July 1968 and January 1969. The parf.:iicipating banks are The Chase Manhattan Bank, New York; Bank of America, National Trust and Savings Association, San Francisco; First National City Bank, New York; Irving Trust Company, New York; The Bank of Tokyo Trust Company, New York; a.nd the New York Agency of The Mitsui Bank, Limited. Geographically and economfoally, Thailand is divided into four reg:tons: the Northern, With mountain ranges running roughly north-south is rich in agricul- • tural products) timber and minerals; the Northeastern, a relatively flat plateau, is largely underdeveloped although it is well populated and produces a substantial ,:.  0 ·• ,, - 2 - .quantity of mixed' agricultural products and livestock; the c7ntral, which includes • ,/ the-wet lowland plains of the Chao Phya River, constitutes one of the major rice- producing areas of the wqrld; and the Southern, which includes most of the isthmus linking Thailand with Malaya and produces large quantities of tin and rubber. Thailand's impressive economic gains of the past decade, charae:terized by a more varied e~gricultur~l pattern and inqreased manufactu:ring, has put an additional burden on the country's t;~~~-portation facilities -~- railways, roads, inland wat~r- :, ways and coastal shipping~ -~ There is part ~cular ~ need for better roads to accomodate 1 tb.e growing traffic. About three-quarters of the national higl~W'ay -· system, ,, com:.. (, prising ~ome (i 5,60Q mile13 of roads ts unpaved, a typical road having a narrow, -' <· loose laterite surfa,ce,,, with poo:r alignment and timber bridges. The Gov~rnment is' now-embarking on its first comprehensive highway development program, which (; • ......., ', ,;; p~ovides for the improvement of about 2~500 miles of existing highways and the k construction .of 950 miles of new roads. j, '/ The ~a.nk loan w'i.11 assist in financing the improvement~or new construction of 394 miles of ri~a.s and feasibility studies and en:gineering of five additional sections of highway having a total length of (, 650 miles. The three project roads are in widely separated parts of Thailand. The one ~ ,-1n the northern region runs 66 miles from Chiengmai to La~pang via Lampoon. Chi~ng- mai is the second largest. c:i.ty in Thailand and a.u important agricultural, com- mercial and. cultural center. It is separated by mountain ranges ,tr,om the partially ~completed trunk route leading northward from Bangkok. The stretch between Chieng- mai and·Lampoon will be improved, and a new section will be built through the mountains to Lampang to connE~ct with the trunlt route. The road in the Central region i{3 sq:uth of Bangkok and. will extend 167 miles so'~thwards f1"om Nakorn Fathom to Prajuab. The existing higliway linking Bangkok with areas to the southwest is • • _inadequate for the heay.Y' traffic using it. 3 The project road will extend the road improvement work being done in this area wit? assistance from the United States. The road in the southern par~, gf Thailand will run 161 miles from Songkhla to ~~~. Na.radhiwa.t via Klang Ngae. It will serve three thriving community centers and seaports which are now lacking goad road links \rith thbir hinterlands. The project is being carried out by the Department of Highways," and will in.elude the services of consulting engineers who will . assist the Department in •.\ (; 'the constr"Uction work and in the reorganization of operational and maintenance \C, procedures. Also included in the project is a training program abroad tor Thai personnel. Thes'e aspects of the project will shorten the time whichu would other- wise• be required to bring about a substantial improvement in the highway SY('Jtem, ·and.increase the capacity of' the Department of':Highways to undertake further • improvement wo;l{s Bf·~ '·...._,.'1 to maintain the improved highway system to adequate standards . The total cost of the project is estimated at the equivalent of $62 million. The Bank loan will cover the foreign exchange costs and the local·.· currency costs will be met by the Government of Thailand. It is expected tha:t construction will be completed in about 4! years. Contracts for the construction work and purchases of equipment will be let on the basis of international"competitive bidding. The loan is f'or a term of 20 years and bears interest oi' ~ per annum, in- cluding the l'fo commission which is allocated to the Bank's Special Reserve. :Amortiz~tion will begin in July 1968 • • ()  .......s······ ·;),, :·· :···............... Fong .. :·······...: ~ I.. •::·~·... 4 .... ······: ········· { ··-;, ......... • ··: •·...... \ \\ CJ) C. Chong ~ """- Mek': I~ Dej-U- •• • _.., ,, Dom ~ ---cttOri' Kontolok .: ····· ..... :~;~!'::......~··· "\.t·::: ,• :.. 111•···· ..... ... CAMl:3,00 A • ............. ····~ Gu If of Siam 0 THAILAND 0 NATIONAL HIGHWAY SYSTEM 0 ~ ,!) EXISTING NATIONAL HIGHWAYS - - - - Primary Primary, under construction or proposed - - - - Secondary PROJECT ROADS Construction and improvement • • • • •,••• Study and engineering RAILWAYS MAY 1963 0 0 25 25 50 50 75 75 IOOKm IOOMI I BRD-1082R I •