FOR IMMEDIATE RELEASE                   .



World Bank
1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234



      BANK NEWS RELEASE NO. 88/68                                            Contact: Leandro V. Coronel
                                                                                      (202) 477-3641



                      INDIA INVESTING $1.2 BILLION TO MODERNIZE RAIL TRANSPORT


            WASHINGTON, May 9, 1988 -- India is investing $1.2 billion to modernize
      its railway system, a major means of transport in the country. The World Bank
      is supporting the project with a $390 million loan.

            The project will upgrade 4,000 track kilometers located in the main routes
      linking the country's four major cities--New Delhi, Bombay, Madras and Calcutta.
      These routes cover only about 20 percent of the tracks but account for
      75 percent of the total passenger and freight traffic.

            Demand for railway transport is expected to almost double by the year
      2000.  In 1987, Indian Railways carried 3.6 billion passengers and 278 million
      tons of freight, including coal, foodgrains and fertilizers. Traffic is
      expected to grow each year between 4 and 5 percent.

            By modernizing existing trains and providing for better maintenance,
      technical assistance and staff training, the project is expected to result in
      more efficient use of locomotives and rolling stock, and savings on fuel and
      maintenance costs.

             The government is providing $816 million to complete the project's
       financing.

            The World Bank loan is for 20 years, including a five-year grace period,
      with a variable interest rate, currently 7.72 percent, linked to the cost of the
      Bank's borrowings. It also carries an annual commitment charge of 0.75 percent
      on the undisbursed balances.

      NOTE:     Money figures are in U.S dollar equivalents.