(    FOR IMMED1f TE RELEASE
:~                                                                         WORLD



,.'. INTERNATIONAL BANK FOR
     RFCCJNSTR CT!ON AND DEVELOP~l1ENT
     1818 H STREET,   N.W., WASHINGTON 25, D. C.   TELEPHONE: EXECUTIVE3-6360




            PRESS RELEASE No. 590                  SUBJECT:    $11.6 ·million transport loan
            June 10, 1959                                      to South .Africa.


                  The World. Bank today made a loan equivalent to $11. 6 million to the
             Union of South Africa.     The funds will help to carry out a railway expan-
             sion program that has been one of the chief objects of public investment

             in the Union ever since the program was fi.rst begun, soon after the end of

             World W2.r II.   This is the Bank's sixth loan for the improvement of rail-



•            way services, and brings the total it has lent for that purpose to nearly

             $137 million.
                  Twelve banks are participating in the loan, without the World Bank's

             guarantee, for a total a.mount of $2,484,000, representing the first three

             maturities and parts of the fourth and fifth maturities which fall due

             between December 1961 and December 1963.      Among the participating banks

             are the :Bank of America, Continental Illinois National Bank and Trust Com-

             pany, The Philadelphia National Bank, The New York Trust Company, Morgan

             Guaranty Trust Company of New York, National Shawmut Bank of Boston, The

             First National Bank of Chicago, The Chase Manhattan Bank, First National

             City Bank of New York, The Northern Trust Company and the SWiss Bank Cor-

             poration (Ba.sle}.


.;                The railway program is being executed by the South African B.ailways

             and Harbours Administration.     During the two years ending March 31., 1960,

             the Administration intends to spend the equivalent of $484 million on
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    railway improvement ~J;   the Bank loan made today, like the loan of $25

    :million it made in December 1958, will be applied. to the foreign exchange

    costs of the program during this two-year period.

            Although the capacity of the South African railways has been greatly

    increased nnd they are now carrying two-thirds more freight than at the end

    of the war, they have not been able to meet the demands of the economy.

    The Govf)rnment has accelerated its railway investment program with the ob-

    jective of enabling the railways to handle all freight ~ffered by 1962.

    This involves completion of ·much of the program four years earlier than was

    originally scheduled..

            T:!:le work being undertaken in the current two-year period includes the

    improvement of some 410 ·miles of line, the electrification of 640 miles of




•
    track, and new construction of 160 ·miles of branch and surburban lines .

    Some 530 locomotives - electric, diesel and steam - and a large quantity

    of rolling stock, principally freight cars, will also be purchased.         The

    proceeds of the Bank loan will be used to pay for imports of locomotives

    and freight cars, permanent way and electrification materials.       All equip-

    ·ment is being purchased on the basi~~ of international competitive bidding

    in accordance with the Administration's normal practice.
            The loan is for a term of 10 years and bears interest of   6%   including

    the 1% commission which is allocated to the Bank's Special Reserve.

    Amortization will begin in December 1961.
            In addition to the transport loans, the Bank has lent $60 million for

    electric power ~xpansion in South Africa,.bringing total Bank lending in

    that country to $196,800,000, of which $43 million has been repaid •



•           .kfter having been approved by ~he Bank's Executive Directors the loan

    documents were signed by :Mr. A.M. Grobler, First Secretary of the Embassy

    of the Union of South Africa in Washington, on behalf of th~ Union ..

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