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INTERNATIONAL BANK FOR .j RECONSTRUCTION A.ND DEVELOPMENT 1818 H STREET, N.W .. WASl41NGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Public Disclosure Authorized

Bank Presa Release Ro. &/42 Subject: $70 IDillion loan for December 11, 1964

T'ue World Bank today made a loan equivalent to $70 million tor the ~derniza- . - ! tion and improvement of railways in . The loan Will help to finance electrification and a mdern signalling system on three ma.inlines which are the

' . /; most important for q.omestic and .. international freight traffic and the const1ruc.;;:.

Public Disclosure Authorized tion and improvement 'of six main marshalling yards. These installations are the

items of highest priority in a railway program "being carried out to in.crease (

. -·- - ·-----'!'- -;:"'·---- .. ,... ! the most heavily 1.ndustrialized and populated area of Yugoslavia and provide faster • and safer service. Three commercial. banks are participat~lng in the loan, without the World Bank's guarantee, for a total equivalent to $575,000, representing part of the first matur­ Public Disclosure Authorized ity which falls due in March 1970. The participants are Girard Trust Bank, Phila- 11 delphia; Bayerische Bypotheken- und Wechselbank, Munich; and The Pirst Pennsylvania Banking and Trust Company, Philadelphi~. The Yugoslav railways form the backbone ot the country's tran~portation system; they carry roore tban 70'fo of freight traffic and (:n/o of passenger traffic. The mai11- lines run northwest to southeast along the Save-Danube Valley serving the principal . agricultural and dndustrial areas of the country. In the west and north the railway

Public Disclosure Authorized system bas.been developed almost to western European standards, but in the south

development did not really begin until the establishment of the Yugoslav state in ,. 1919. The system now comprises some 7,250 route-miles ot which 1,625 miles ~e narrow gauge. l) I ?

- 2 - The railways have formulated a program which will cost the equivalent of $1 bil­ lion'" over a seven-ye:ar period. It is desigued to eliminate -~he deficiencies in the • 1: system and provide the additional capacity needed to handle growing traffic; by 1970 freight traffic is expected to have increased by more than a third, from 11 to 15.3 billion ton-mil~~ and passenger traffic from 6.6 to 8.5 billion passenger­ miles.

'), The project being assisted by the Bank loan forms an important part of tl:\is \ program. The three mainlines involved connect the six largest cities -- , Zagreb, Sar!Qjevo; Sk9pje, Ljubljan~and Rijeka, and the area. they serve encompasses about two-thirds of' the country's economy and half its population. In close proxi­ mity to the lines are enterprises which produce about 6o% of th~ country's industrial o,utput. The most important industrial ce~ters incl~d~ coal mines which account for more than half total production, nearly all tnajor steel works and oil refineries, . and major producers of cement, fertilizer, lumber and agricultural products. In • 1963, these three lines carrled nearly half the country's total freight traffic; it included about five million tons of imports and exports and 3.5 million tons of transit goods • The project consists of the installa~ion of electric tract.ion on 986 route­ miles of the three mainlines; the installation of modern signalling and telecommuni­ cations systems over the lines and of a~tomatic block systems on those sections with the heaviest traffic loads; the construction of four new marshalling yards at Bel­ grade, Zagreb, and Skopje, an~ the extension and modernization of existing yards at Nis and Doboj. The Bank loan was made to the Yugoslav Investment Bank which is the ma.in channel used by the Federal Government for foreign development loans. The Invest- ment Bank Will re-lend the proceeds of the loan to the agencies responsible for the • If

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• - 3 - execution of,the p~Ject: the Communities of Railway Enterprises in Belgrade, • Zagreb, Ljubljana and Sarajevo and th~ Railway Transport Enterprise at Skopje.

The:1 purchase of all th~ equipment for electrification, signalling and: tele­ communications and some specialized equipment for the marshalling yards and the \, award of most of the contracts for installation, as well as one for earthworks at th~ Belgrade marshalling yard, will be on the basis of international competi­ tive bidding. All work is scheduled for completion by the end of 1968 at a to·tal estimated cost e~uivalent to $185 million. The Bank's loan is for a term of 25 years and bears interest at the rate of

5~ per annum. Amortization will begin on March 1, 1970. The loan is guaranteed by the Socialist Federal Republic of Yugoslavia. Today',s loan is the :third ma~e by· the Bank for the improvement of transpor.­ ,--- -t:."t:lon in Yugoslavia. Loans of $35 million each were made earlier for the Central • aud Adriatic Highways and for the conversion of the Sar~jevo-Ploce railroad, one of tl'le few routes through the mountains to the Adriatic coast, to a sta.ndard-gaui,ge e·lectrified line •

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YUGOSLAVIA RAILWAY SYSJEM I H u N y r.J ) 'i. ..../ __ .,...../·

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-v <:::) -5> \ ~ Sci it H -v .>- / C' D I • LINES IN OPERATION

--- Standard gauge,double track <.!) Standard gauge,singl.e track ..S' c:; ~ ...J :I=** +++ E],ecrified lines -

II. RECOUSTRUCTION and MODERNIZATION PROGRAM,1964-68 m Lines to be electrified and equipped *** ...... with new signalling installations ~ AC Alternating current, 25,000 volts,50 cycles

DC Direct current,3000 volts < ~+¥;· ex> ~ ,....._ Lines to be equipped with automatic block C Marshalling yards to be constructed or ~ extended z III. SARAJEVO-PLOCE PROJECT,Loan No.361-Yu ! 0 20 40 60 80 100 ~ Electrified line ~ith automatic bloc~ l::::::=:!===l::=:::::l===±=::::I under cons true tion KILOMETERS ~ IV. OTHER 20 40 60 80 100 Other lines under construction MILES E Planned line construction

OCTOBE,< 1964 Il!RD-1402R

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