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WASHINGTON, D.C., June 22 -- The International Finance Corporation (IFC) has approved a US$50 million investment in the Bangkok Mass Transit System Corporation Limited (BTSC) to design, construct, and operate an urban mass transit rail system in Bangkok. IFC has played a major role in evaluating the regulatory framework and in structuring the project which will have no government guarantees. The transit system is likely to have a significant developmental impact on the regional economy by reducing traffic congestion in the central business district of Bangkok, by helping to relieve problems relating to pollution, health, and excess fuel consumption, and by freeing up Government resources for other activities. The transit system is estimated to cost US$1.65 billion, of which US$500 million is expected to be raised in equity and US$1.15 billion in debt financing. IFC's investment, a US$50 million loan for its own account, is expected to mobilize additional financing from international and local banks and financ
ial institutions. A US$400 million bond issue in the U.S. is also being planned and will be led by Salomon Brothers. "This project is the first limited recourse financing of a mass transit system done by the private sector in the developing world and is expected to have a significant demonstration effect in the emerging markets which have enormous needs for transportation infrastructure," said Mr. Everett J. Santos, Director of IFC's Infrastructure Department. "IFC's experience in arranging financing for complex infrastructure deals worldwide makes its participation central to the overall financing of the project and to raising additional resources in the international capital markets." The project is structured under a 30 year Build-Operate-Transfer (BOT) Concession Contract with the Bangkok Metropolitan Authority. A consortium, comprising Siemens of Germany and Ital-Thai, a large Thai construction company, will build the transit system on a turn-key basis (fixed price, fixed delivery date, and guaranteed pe
rformance). (More) Press Release No. 95/119, page 2 of 2 The transit system will be entirely elevated and located above the existing main roads. It will run about 15 miles (23 km) along a route that will optimize public access. The trains will be powered by electric motors fed by an electrified third rail. Safety, always a key concern, has been built into the design. The transit system will have two inter-connected lines, the Silom and Sukhumvit Lines, and a maximum carrying capacity of about 50,000 passengers per hour per direction. BTSC has conducted an extensive public information program on the environmental features of the transit system. The company has designed a plan for noise, air quality, and other potential environmental impacts, as well as for waste management practices. IFC will monitor ongoing compliance with World Bank environmental, health, and safety guidelines. IFC is the private sector arm of the World Bank Group and is the largest source of equity and loan financing for private sector proj
ects in developing countries. In financial year 1994, IFC approved new infrastructure investments for its own account of about US$560 million (estimate for financial year 1995 is about US$650 million) contributing to projects totalling US$1.3 billion.
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