Announcement of Sixteen Million US Dollars Loan in Colombia for Telecommunications on June 9, 1967

• 1818 H .STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 6ii28 §~ubject: $16 million loan in Colombia June 9, 1967 for teleconnnunications The World Bank has approved a loan equivalent to $16 million to Empresa Nacio1 de Telecomunieaeioaes (TELECOM) of Colombia to help finance the Agency's 1967-70 improvement and expansion program. Major emphasis during these years will be given to improving TELE~OM's national long-distance telephone service. The existing systL has become inadequate for this traffic; the number of calls has more than doubled siuce 1960, a.veraging an annual increase of 15%. Nearly half the calls were for purposes of conunerce and industry. A satisfactory standard of telephone service should therefore contribute toward more efficient operation of private and govern- • ment organizationss Four conmercial banks have agreed to participate in the loan for a total amount of $350,000, representing tee first maturity and part of the second maturity which fall due between October 15, 1971 and April 15, 1972. The participants will be City National Bank of Detroit; Crocker-Citizens National Bank, San Francisco; Detroit Bank & Trust Company; and The First Pennsylvania Banking and Trust Ca:1pany, Phila- delphia. TELECOM is a government enterprise which provides almost the ell,tire long- distance public teleconmunication services of Colombia and all the international services; it also furnishes local telephone service in 350 small localities. The telephone networks of the larger cities are owned and operated by municipalities and are connected to TELECOM 1 s long-distance system. •• TELECOM now operates the following facilities: a very high frequency (VHF) network with about 90,000 miles of teLephone circuits, which interconnects 27 cities an extensive system of pole lines carrying about 40,000 miles of open-wire circuits  - 2 - with long-distance telephone connections to nearly 600 cities and towns; a modern te):~x network comprising 27 switching centers and about 2,000 teleprinters with dialing facilities for both local and long-distanc~ connections; small exchanges, mainly manual, in 350 towns with less than 10,000 telephones (compared to a total • of over 400,000 in the whole country); and about 1,300 telegraph offices. In order to improve long-distance service, the 1967-70 program provides for the installation of new high-capacity micro-wave systems interconnecting the prin- cipal cities, short coaxial and vo.ice frequency cable systems, and the recovery of the existing VHF radio equipment and its reinstallation on routes with less traffic. With the increase in the number of long-distance circuits, a corresponding increase will .be made int.he links between terminals and the local telephone offices of the municipalities; this will be mainly automatic equipment to provide direct dialing. Some of the small manual exchanges in the towns where TELECOM provides local ser- vice will be converted to automatic operation and the corresponding outside networks enlarged tq provide for growth. To improve international service, TELECOM will in- stall five additional high fr.r:quency radio transmitters and accompanying equipment, • each with four telephone circuits; it will also establish a new receiver station some 30 miles from Bogota at a site less subject to interference. The program in- cludes some improvements in telegraph and telex services. The program will be executed by TELECOM with the technical assistance of its consultants. The specifications for the major construction works, such as the micro-wave systems and coaxial cable, include provisions that the equipment sup- pliers will provide maintenance during the initial period of operation and train TELECOM's maintenance staff. The total cost of the program is estimated at the equivalent of $27.6 million. The foreign exchange requirements of $19.7 million will be covered by the $16 mil- lion Bank loan and suppliers' credits of $3.7 million. TELECOM will finance the local currency costs from its own resources. All contracts financed by the Bank • loan are being awarded on the basis of international competitive bidding. The Bank loan will be for a term of 20 years and bear interest at the rate of 6CZ per annum • .A~ortization will commence in April 1971. The loan will be guaranteed by the Republic,of Colombia.