Announcement of Nine Million Eight Hundred Thousand Dollars Lent to Ceylon for Highways on October 16, 1968

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT • 1818 H INTERNATIONAL DEVELOPMENT ASSOCIATION ST~EET, NW WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 68/56 Subject: $9.8 million lent to Ceylon IDA Press Release No. 68/26 for highways October 16, 1968 A project to improve Ceylon's public roads will be undertaken with the help of $9.8 million from the World Bank and its affiliate, the International Develop- ment Association (IDA). The project involves rehabilitation and maintenance works, replacement of bridges, reorganization of highway administration and studies of future highway investment possibilities. A highway system in good condition is vital to Ceylon to assure efficient distribution of its rapidly • expanding agricultural production, particularly rice, and to expedite the move- ment to ports of its export crops on which the economy is still largely dependent. Ceylon has an extensive road system -- 13,000 miles of public roads, of which 10,000 miles are paved. However, the roads have deteriorated mainly because of lack of adequate maintenance. This is particularly serious for paved roads which, if allowed to break up, are more exp~nsive to rehabilitate than gravel roads. A three-year program of road maintenance and rehabilitation will be under- taken on a pilot basis to introduce mechanized procedures so that training and operations appropriate to Ceylon may be determined before being applied through- out the country. The pilot area will be the Southern Division of the Public Works Department in which there are 1,500 miles of roads of all types. Equipment will also be provided for a new central workshop which is being built in Colombo, the capital. This workshop will carry out major repairs and overhaul of the country's • maintenance equipment • /more  Bank No. 68/56-Ceylon-Highways • IDA No. 68/26 - 2 - Many of the bridges on the main roads were not built to withstand ~resent- day traffic. Under the project, 19 of these bridges will be replaced. Feasi- bility studies will be undertaken for five sections of roads totaling about 250 miles; three are the main routes into Colombo, one is a heavily traveled road in the hills nearby and one is a road along the east coast in an area wI1ere agricultural production is expanding rapidly. A limited study will be made of Colombo to determine the major routes to and from the city. Subse- qu~ntly about 100 miles of high priority roads will probably be selected for detailed engineering. Management and advisory services will be provided to assist the Government in transport coordination, in the reorganization of its highway activities, and in the execution of the maintenance and rehabilita- • tion program. Both the Bank loan of $4.9 million and the IDA credit of $4.9 million will be made to the Goverument of Ceylon. The Bank loan will be for a term of 30 years, includiug 10 years of grace, with interest at 6-l/2%e The IDA ~redit will be for a term of 50 years. It will be free of interest but a service charge of 3/4 of 1% will be made to meet IDA's administrative costs. - 0 - •