Announcement of Six Million Loan to Paraguay for Highway Maintenance Program on January 7, 1970

FOR IMMED.fATE RELEASE IN1.ERNATl0Ni\L BANK FOR ''\ " · IRECONSTRUCTIQN AN.o DE::VELOPMENT ;\ I 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-9360 1---------------------------------------~--------------------------------------~. ----~---------------~ Dank Press Release No. 70/1 Subject: $6 million loan to Paraguay for January 7, 1970 highway maintenance program The World B9nk has approved a loan equivalent to$~ million to Paraguay to assist in financing a· four-year highway maintenance program. Roads are the main rnode of transport in Paraguay. A reduction of road transport costs, which are A'.'is ing because of inadequate maintenance, is therefore of primary importance. for. the ,.country's economy. The objective of the maintenti~ce program is tp~ develqp- · ment of a highway organization trained and equipped to provide adequate: maintenance ' on most of Paraguay's national roads. ' The loanc1will be for a term of 20 years, including a four-year grace period, with interest at 7%. Since the early 1950s, when Paraguay's road transport system was still rela- tively undeveloped, the Government has ai~ed at building up a basic transport ~ystem. The World Bank Group has played a major role in assisting this task by making five loans and credits totaling about $14 million for four projects in- volving roads and a port. The Bank also served as Executing Agency for a United Nations Development Programme study of the agricultural potential and road needs in eastern Paraguay. Since 1950 the road network has been expa~ded nearly eightfold to its present length of 3,900 miles. About four-fifths of these roads serve eastern Paraguay and radiate from the capital, Asuncion. ~oad construction, however, has not been matched by adequate maintenance. Most of the recently built 372 miles of paved ··1 ~ roads are in good condition, but earth and gravel roads, which constitute the /more  \l Bank B.R. No. 70/1 - Paraguay-Highway Maintenance () - 2 - bulk o·f the system, are in poor condition. They are either imp~ssable for long periods after rain or have to be closed until t~ey dry" tGt minimize., damage to· surfaces. ·~. ;;: An earlier road projec't financed by the Bank GrtJUP provided foi the purchas'e of urgently-needed maintenance equitpmept and for the pleparation of a mas~e,_r main·· ,, tenance plan. The four-year program now befhg financed was developed from this // ,1 <\ u 1 plan. lt will be carried out with the assistance of consultants and provides for -(1 ' • the improvement of maintenancE:! oper~tions, the purchase of maintenance: shop and - other equipment, the extension and improvement of workshops, and the training of local personnel. The total capital cost of the program is estimated at the equivalent of II ' $6.3 million. The Bank loan of $6 million will cover ,the foreig~ exchange re- quirements and the Government will finance the remainder. The Government will also provide the equivalent of about $7 mi,llion to meet, recurrent maintenance expenditures during the four years of the pr9gram. Execution of the p.roject will be the responsibility of the Ministry of Public Works and Connnunications through its National Highw.ay Department. - 0 -