Announcement that the Bank Has Granted a Loan to India for 18.5 million US Dollars on April 18, 1950

/?'/ ,( THE. IN'l'EBNATIONAL :SAL"1K FOR BECONSTBUCTION AND ])EV~t.OP.MEN't°. Washington FORT~ PRESS FO:R IMMEDIA.1'E REW.SE Pr'1es Releae,~. N'b. 181 A;pril.18,· 19,0 \\, ' . • • . ,, <1 'l'he International Bank for ~econetruction and Dev1~lopinent -today ·1oa.n. of $18,500 ,ooo to India fqr · the further Q.«:tv~lopment of the 1 granted Q. Damod.ar River Valley, tlle- ce~t:ry 's. · most impor't~t ind:ua1;ri~l' ·~e,i. The· loan will be· ue.ed to finan~e pa.rt Q:f tb~ co$t/ ot the Bokaro ...Kcme.r project; which wi·ll ,include the largeilt eteBlJl electric ple.nt in Ind!e.. rhis p;roJe~t ie · the first stage· of Ind-ta' s unif;led scheme to develop the resources of the, • The loan is for a, term of tw<,nty yeax-s ·~d ce,~ie~J ,an interest ·rate of: 3%, plus conunieaion at the rate of 1% whicll, ·i°n a1Jcordance· with the Bankl3 Articles of Agreement, .is allo~ate~ to 1,.ts ape(:~al reserve f\Uld, · AmortizatioJl. paYJJlents, calc\.\l~te4 to retire the l,c;,e,n by me.t~ity, w11:L start on Apr;Ll ·15, 1955. 'l'hia 1a the third lof;Ul the In,te:rnflt 10?11;1,l ~ank ~as mfldEf to India. On AU8\\~t 18; 1949., fl lo·"11 of $34 ,ooo ,000 ;~a*3 gra.nted for t11,e ;reeon$t:ructio~ . alld dev~l,opment of tlle I~d;tan ~ai.lW*1.Y8, Ellld a loan Qf $],.O ,COO ,OOO"was JDade on Septe~ber ~9, l949, for the improve~ent of agr,icultural prqductio~. The tot·a1 C&J)it~l QO$t ot 'the Boltaro~KoJ;lar l)rOJeet is the equ.ivalent of .f.\bout $53,000,000, of which the BaJ'lk'·e ~oan,.wfll cover $l8,500,boo, Specifically; this loan will, r·inance 4ollar :payments :t'rogi Ja.nuary J,., 1950, I in the Un:1,t$d Stat~e and C~llda fo11 power houee eq,ui~,.,Jit fo,: the BQk~ro· • ther,JDal ( ste.aill) pla:nt; c.onst~ct ion ,~u.t:pment ·t~;r tbe Ko~r D~; c;o~ducto;r$  - 2 - and accessories for the transmission li·nes; equipment for the au\, .. stat·:lons; e.nd ocean freight and other ·expen~e=~ pay,l;)le in. dollfl.rs. The balanee of the coat of the project, ab~ut $34,500,000, which includes sterling, SWlae francs· and .rupeet1, "'1lld dollar P81lnents ~de before Janu~:rr l, 195r,, is being financed· out of lndi~•a own re~ourees. -!. ', A substantial 1ncrea$e 1n the availability of ()lect.i·ica'i ene:rgy in ;:~ tne Damodar Va.lley region w:l.ll °Qe ~ key facto~ in :rai$ ing I11dia 'a ·e·o~l output and in lowering the cost of coal produ~tion. T~e completion of the Bokaro-Konar project wili provide at reasonable rates the urgentlY needed electri~al ene1·gy fo:r ·tlle e~:pans ton ot eoa.l production and the further· electr:t.fica.tion of the c·Gal mines. 'J]he D~od~ Valley, with its ri.ch ~ineral. deposits, ~s a favora.bl.e site t~ a. n\ll!lber ot 'ij&avy.· inclust:r4es ,. ustng iron, steel fJ.nd other·~stc.re.w·materi.a;le. Deve}:op~ef\t' t;Yf t·hese and related· :J.n(lust:rie~ is likewise cle;pendent on an Q.deq~~t·e G'1PPlY· of e1·ectr,!cal ene;rgy. The· project will also supp·l.y· a a~ll. ~ount Qf vater f~rr irrigitton: in the lowEt:r. valley. tater tbe· proje'ct· wf1.l be · i?lttartted i~to the unifi'ed acheJne ot develQptnent ~drer whi.c{n tb$ the~IQS.l.. :pleJ1.!--, will :l.nsui-e ~~·1ffl\Ull ':'1 power pro.cluction, while the ~on2W reservoir will contribute to f:l,ood cont:roi, 1rrtg~tj.on, w~ter eu.;pply and power production. ihe- 150,000 kilowatt Bgltaro tb.erIQal plant wtll bee modern type ct power generating plant of conven.t1onal ·d~'etgn. 'l'hE.t bo:tier p;r$$sute., 850 pounds ~er square inc.h, wtll be tl1t:, ~igpest in. Ind~ @d the p~t w·tlt be 1 the ttret ~te~ plant in Ind.i(t. to UEJ~ pµlverhed coal, Complet1on.Qt .. tll,e proJe.ot is sebed1,1l;,d for· +954 ~t\ tt is· e~timated that by i9;7 -t·he ~nn\lal supply ot on~rgy ~:ve.ila.'ble fro~ tne Bolffiro th~r4al plae.t· 8Jld tll& lOrOOO kilo"! • lil~tt 1J14J-o'"!eleetric eta.ti.on· ~t tb~ iona.r :O~ w:t'll re~cp. 578 mill.t.C?>n .~11owiatt  -3- The proJect will be ex!cuted by the Damodax- Valley Corporation which the Government ot India eetabliahed in ci.948 to carry out the un:tfied e·cheme,> of development,i. ~he capital of the Corporation iij prQvided by the Central // ,,~Gov~rnm.ent and the governments of the states of Bihar 8.lld West Bengal. Revenues will be derived prinQipe.lly from the sale of power and water·• After a~proval by the Ban~~s Executive Directors, the Loa~ ~eement was· signed today by Vijaya Lakaluni Pandit, Ambaase.dor for India, on behalf of Ind!a; and by ~obert L. G:3.rner., Vice Prea!d,ent, on belie.it of the I11,ter- na.t"'.:~·:~.a1 .Bank for Re\;bnetruction and Development. A Project Agreement, conte.ihtng certain covenants by the DatllOd~r Valley Corporation with regard to the constructiQ:n and operation of tlle project and 'related matters, wcie si,gned by S ~ N. MozUJJ1dar, Cha:i.rman, on behalf pf the Corporation, a.nd by,, Robert L. Garner, on behalf of the Bank . • " - 4 - Supplementa.l Statement on the Loan to India for the - · -..-....-... Bokaro-Konar . Project'- ~ The Bokaro-Konar project ie the first stage in the unified scheme for the development of the Damod~ Valley to be undertaken by the Da~odar Valley Corporation. T!ie . De.mode.~ Ve.lle;r: The Pamodar IUver flows about three httn,dred:=milea in ~ general easterly direction throU:gh the southern parts of tbe States of ]3ihar and Wast ;Bengal and empties into the HooghlY Eiver about thirty miles below Calcutta. It h~s a drainage area of a'bout eight ·tllousand eqtia.re mile13. The population in th~ D~ocjar Valley totals about 3.3 million representing a density of about 415 per aq~are mile. The are~ exte~ding about 125 miles north and 100 miles south of the D~odar River is the richest mineral. and the most highly developed industrial region 1~ In~ia. It contains de~osits of workable coal eet1mated. at 15,500 million tons, b.igh grade iron ore estimated.. a.t 8,000 million tons and s~pstantial and workable de~oetta of mang~eae ore, copper orej limestone, mi<;a, bauxite, e,ebea.toa, kyanite, c;:~omium 1 vanadiam, gold, • fireclay, soapstone, siliqa, eand and gravel. AlJnoat al+ of ;India's .coal, ateel ~d mica prod,uctton, an(l a large part of her copper ore proquction come tr.om mines and pl~ts in this region, and many of India's heavy industries are located there. The present installed eleetri(:al. generat:J.ng ~apacity in the ;oamodar Valley is about 400,000 KW, excluding the 80,000 KW thermal pl.an~ now under construction at the Sindri Fertilize~ Plant. In addition tllere are about 460,000 KW of'~ateam e,nd internal ~ombuation. engines aupply;l.ng power for pur~oaes other than the generatton of electric~ty. Many of these installationa are in poor c;op.ditj.on and f;lhould be repl~eed. At the major ind11strial planta., the installations $re fa:l;rly well' ma;Lnta.iped bµt· the aupplY of powe:r is .not lare;e ,nough to permit e,cp~e:tqn of these plants o;r the ~eveloDm~nt of new 1nd~atriea. The Unified Scheme of Development of the Damodar Valley ~·.--1 •• ~ ,,, This scheme was to~mulated br ~he Central ,ecnnical Powe~ Board Qov~rninent of In4,ia end tl'le :Oamode.r Valley Corp~re.tion we.a e?lt.rueted cif: .the with c~ry1ng owt the p:rog:ra.m of Ulli:f'1~d c;i.evelopment. The f:uli p~~graJJi incl'ijqes t~e constr~ction of: · Eight flood co1l.trol atora$e dams with hydro•electrtc pl~ta hav!ng a total installed capacity of ia2,ooo K;W; Tvo a.q.dit;ton~l b.ydro·eleatric pla,ntEt without storage :tmving a tc,t~l :t.nste,lleg. c~pac i tr of 16, 750 R;W; A tbrerm0,l Pl~t (at ijQ-0,ro) of 200 ,ooo. I.tw \\lt . .te ca:pQ.city;  /1 • - 5 .- AbQU,\ Eoo niU.ea of t:ransmission lines; ~ aa~mile nayigation cane:t.,and ~ irrig~tion barrage to divert w~te:r into a. network of ~77 miles of tnain line and b;re.nch line canals, These canals would provide irrigation tor about 967.,000 acres,. including 185,0QO acres now irrigated trom &~isting canals only during the ~qnsoon ae.aeon. The total cQat c,f the entire unified scheme has been eetimated at the equiv~la~t of $142 million of which the foreign exche.nse costs would be abo~~ $40 m!llion. The ~ticipated benefits include: The control of tioods whieh ba.ve inflicted heavy dame.gee in th1$ ~ea. The Damodar River cuts acr-e>aa t~e ~in line r.,f coimnunicatton by road and rail between Calcutta ~nd North In~ia and the va11,y ineludes large nreaa of fe~tile agricui• tural land; The provision of 300,000 KW of tirm powe:r for mining,. industrial. and domeet 1c· use; • The s~pply of water· for industrial and domestic ~se; An additional means of traneportat!9n through the uee of a.r;. 80 m;tle navigation C8.llal eo~ecting the Damodar with the Hooghl.y ~iver about 30 miles above C-lc:utta, and \ ·' t \ A,n increase in food produetion by ~a.king yee,rTround cultiv~tion possiQle on the irrigated area of about l,000,000 acres and by the c~ltivatio1+ of fi~h in the re$ervoi+s. · · ~t!...P~~~~r. va·~;i.ey Cor;eorat i-on fl'.\e Damode.T Valley C9rporati~n, which was patterned after· t4e Tennese~e Valley Authority, wa~ ereated in Ma+cn 1948 ae a publtc corpora• tion to e~ecute. the untf'1ed schei.i,•· It is ,administered by a Board of Directors consisting ofa, Chairmeal and two other me::nbers., all of' whom ~e appointed by. the Central Govarrunent after eonsuttation with the gov~r~ents of the t.wo participat,i'ng ate.tee, Bil\~r ~d we,t Bengal. The Seerett;1,ry of . tll,e Corporation eind ~ts Financie1.+ Adviser are also ~ppoint~d 'b:r the Centra.l Gover~ent. Other employees ate a~po'inted by the_ Corporation .. While the Corporation.enjoys a lafge measure· of autQno~, un.der the ~ode.r ValJ.ey Act certai~ p·~were ere reserved to the Central ~d the two participating Gove1·nment's. · 'l'~e Ac·t provides that t~\e ca,pital requir~ments of t.lle Corporation are to be contrtbv.ted by the pe.rticipatinj 1ove:rNI1e.nts; the capitai eost-s of power are ah$r$d eq-µa,1ly by tl:le three ;par.ticil)at:f:ng gQver-nme~ts whil, the \::zapit·al coets of trrj.gaticpn are the respon.f.Jib-iltt1 •. Qt the State Governinents. 'l'he c~pit~:i. cost· pf flpo4 control, \\Jf to r.upees 11,1,0 milliQn (.e,~\lt 29.4 m!.lti~n d.ctl~e t't the ;preesent ret,te of e~chanse)· ts sl~eu-ed . . • .. 6 - e~ually between the Ce11tral atid Weat:'B9!1Se.l. ~ernm9nts; expend:t~ures'.f?r . flood control !bove rupees. l40 ··million are .the >1iaoility of the ;govefl.Jtieirt ot West ·:eengal,·the principal-beneficiary. -'The··net. profits of· the CorporatiQn are to be e:redi-ted ·to· the . participating· governments. in proponion,· to their contributions and '·net ·. deficits will be made goocl by· the· .pe,rti1:;ipating g~vernmente · i:n the $Ple ~roportion, excep\ that t.he. ne.t. de.· ficit tn·, respect of flood· contt~i is the,r.e.poneib.ilt-i,rot West Bengal. ·. Thtt;·'.aokaro-Ko.ne.r , . , . - ... • \..._v_> . • Project The tirat project to be undertaken by DVC is tbat for which th~ Bank's 1~ :\,g:, granted. The DVC, which has a v-i:rtual ·mQnopoly of' the supply of ele<A:rical energy in this regi.on, llas:given· this project the hig~est· priority:1n order to. meet'the urgent demB.J'ld for additi~nal power. In addition, the Ko~r reservoi~ will prQvide water tor industrial and domestic uee · and for irrigation. Later thfl;tse works will be ··Jntegated into the Uhttied $Che~e of developi:nent • . The-three main feature~ of the project are tne Bokar.o t~ermal plant, the Kons.:r·-Pam and the .tr~emission syste~. · ·{a) The· Bek~r6 ·T~ermal. ;Plant • The 150 ;·ooo KW Bokaro therJne.l p:J,ant -'will constitute a};)out 38% of the Ult1-te installed· c.apa~tty- contemplAted ·\ln.n~r the· un!fted· eet.1em.e. Thia pl.ant will be ~Jq>ected·to ~~tY the ·ba,ae·1cfid of the entire system fo:r· 37 weeks of,. ·t~e year, witp· the hydro-electric planta carrying the· b1&se load, during the·~onsoon season. The Bokaro Pl~t -will be a,$.t1.1e.ted 011 the, bank of the Kona:r IU.ver ~bout 4-i ~iles from the confl1.1enee of the Konar an9': Damoda~ Rivers and about 4! miles ftom the coal J.oading points of t~e m~ne ~hich will supply the coil·. :I' 'l'he· Bqk~o Plant will be the f:J.ra,t· therm~l plant in. ·India··to use pulv:erize4 eoa.l. 1he ·Mnu.al requir~men.ts of coal for the· plant with 150,000 KW installed are estimated at about 300.,000 tons. · The DVC p~ opo~es 9 to leaeie·-e:. l>art of the ad~aoent Berm9 Seam, ·containirm an estimated: JJ.0.,000,000 tone of eoe.l, and· to ·mine ·tile CQal by open C'1t methQds eit.b.e:r by cont;rtl,et or with its own facil.ities. · C-oal will be moved to the Plf!j,nt ·:by an o.erte.l. rop~way or, in eme:rs·enc1es, by rail. . .:whU.e the plant will be designed tor an ultimate 11i-sta;l:lation cH· · 200 ,ooo· KW, the 1n1~1a1 ··1~st~llat·ion·· wi'll be .150 ~ooo .KW e.onstating of t-hr.ee t-urbo-ge'neratcr \Ulits of 50 ,OOQ KW ee.ch.. Ee.oh· :'Q.nit w:ill consist · or a. $te,;ant· tutb'ine·. c\j:-iv:fng a ··generator· wht-el'cwill l)roqv.Qe ele...:trictty ·at ,. 13 ,eoo ·volts· anq. · 50 · c:y:eles. Three main sto.t ion trattsf'.oJnners ·wtll s.tep·--up the vo.lta$~ fi:,ozn 13,800 to· l32,000 voits •. For eaeb tµi'bo•ge~e:rator untt ther,·e · w1·u, be· ·t1ro·· botlerJ deeigne4· to. burn p1.1.tv~rtzed coal with· an .ash- eon.tent ·up ~o · 8ibou.t-··2?j. ·'.l'he· bQ4l~rs'·· w~ill fJen$r~te steam ~t 850. 'll?a·~ p·er sg,u.a;-e ;tncll preet'tire :$.t ·900· d8$r4'es Fe.lu."enhe:f.t.  - 7 -· The wate~ supply for the plant Will be obtained .from the Konar River, the flow of which will be ~egulated by the Konar Dam about 12 miles up&t~eam from the Bokaz:o pl~t. Since the Konar River has little or no flow. during the ~ s~aeon, it is ~seential the.~ provision fo:r adequate quantit.ies of cooling water be made. A~ the Konar Dam was scheduled to be constructed in any event as p~t of the unified acnemeT it w~e included in the fi;rst stage to eu.pply cooling w~ter· to Bokaro. A s~all b~rrage aboui 2,700 feet long wi~h a lift of 12 feet will be construc~ed at the site of the BokarQ pla~t. This will create a pool fTo~ which wat~r will be taken through ducts to the circulating pump~ by gravity and wil+ provide a emali am?~~t of etofase from which water Qe.n be drawn as requi:red. · AfteT the water has been ~tilized at the ther~al plant, it will }?e returned to t~e etl;"eam to 'be used in the lower v~lley. · (b) Kon9ir ... Dam __..... -.,, ... 'The Dam w11i pe an earth fill ~t;rµctv.re about 12,600 feet long with a maxt~um height of about 160 feet 1 'and the initie.l pydro ... ~lectric inatallati9n wtll be about l0,000 KW.· The reservo!:r will provide not·only cooling water for the Bot&ro ~hermal .Plant but wtli be used also to develop power at the Kopar lzy'dro-electric station. APDrQxi~tely 26,000,000 kwh are expected to be produced SlU+tte.lly from thi$ stat:ion. Tne reservoir will also contr;ibute water for industrial and domestic use and for the j.:rrig~~ion of about 40,000 acres in the ~Y aeaao~ through existing c~~ls and diat~ibutoriea • in West Bengal. · (c) The ire.nsmission System The eyatem will c;oneist of 350 milee of 132,000 volt d~uble circi,iit lines, 30 mtles of 66,000 volt single circuit lines and 90 miles of 33,000 volt do~ble circuit lines, together with nine 132,000 volt, five 66,~06 vol~ and ten 33,000 voit switcning and distribu~tng substations. 1he opn~uctora of the l32,000 volt lines w!ll be aluniin\lln ~d the towers ··will be st~el,; the c9nd~ctora of t~e 66,ooo volt and 33,000 volt lines will be copper :; carried on to~ere ~de t.x:o~ steel rails. T~e ~rea to be served by t~e 470 mtlea of trana~ission lines will be withi:p. the De.mod~ Valley wj.th the exception Qf the a~eaa to be served by · · 147 milee of the· i32,ooo volt double ,,circ\l:\t line of Khe.ragp\lr i~ Biha1:· and about 30 ·inu.~~ of the 13~, 000 volt l/Lne to B1,1rdwan in West Bengal" It 1$ propo~ed to eJ1;tend the tranemieston · lines to C'3.lcutt$. at a later s1;~ge of the development of the Damodar V~l.l~y. ~ . . , ., ~.. . ~~·· ..ot ~rojeot Schedule of Completion'. . . . . . . . ' ~ The en~i~e Bokaro~K9~~ project, e~cept for about 20% of the t~ana~is~ion syete~, is s~hedule4 for completion py the mjddl,e of 1953. Sin~e·th~ DVC pl~e to put.one 50,000 KW µn1~ of the Bota.ro plant into· operation by ~he mi4dle of 1952, the co~pletion of the Kona+ Dam to supply • the required cooling w~ter ~d the ~ompletion·of t4e necessary p~rt of t~e tx-ahsmiasion aystepi are aieo sc,h~dul.,$d for 'the mi,ddle Qf 1952. The re~tnder of the·t~a?1$.'mie~io~ li~es arid s~b-ata~io~a is schedql~d tor CO?P,pletiQ~ in 195.4. .