INTERNATIONAL BANK FOR
•   RECONSTRUCTION AND DEVELOPMENT
    t818 H STREET, N.W., WASHINGTON   D. C. 20433     TELEPHONE:   EXECUTIVE   3-6360




            Bank Press Release No. 71/47            Subject:       $18.7 million loan to Malaysia
            June 14, 1971                                          for telecommunications


                 The World Bank has approved a $18. 7 million loan to Malaysia for a

            $94 million telecommunications project to improve and extend local and
            long distance telephone and telex services and expand international services.

                 The project is part of the Second Malaysia Plan (1971-75).                It is a

            continuation of earlier telecommm1.ications expansion and improvement, under

            the First Malaysia Plan (1966-70), which the Bank assisted with a $4.4 mil-



•           lion loan •
                 The project includes facilities and equipment for about 80,000 additional

            subscribers' lines, extension of the long distance network by some 100,000

            circuit miles, new and replacement intemational UHF and WF systems for

            service to Kalimantan (Borneo) and Sumatra, extension of international multi-

            plexing and switching facilities, connection of about 500 additional telex

            subscribers and public telegraph services, and extension of the public

            telegraph and leased circuit networks.        In addition, headquarters and stos~es

            buildings will be constructed and vehicles and miscellaneous items purchased.

                 The Malaysian Government has given a high priority to improving the

            tel~.~ounntmications network.   Adequate communi.cations links are becoming
            increasingly important because of growing economic activity -- reflected




•
            in a gross national product rise of about 6% annually for the past few years •


                                                                                        /more
~-~,%k P.R. No .. 71/'+7 - Malaysia - telecommunJ.c:.itlons


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     Although the service in West Malaysia is satisfactory, telephone
                                                                                      •
facilities are generally overloaded during business hours and subscriber

waiting lists continue to grow.       In East Malaysia, service is very limited

except in the main population centers.        Demand for local service in Malaysia.

as a whole has grown by 11% a year and long-distance and international serv:f.ce

usage has increased by more than 15% annually.

     The Bank loan is being madt? to the Government of Malaysia to cover

part of the project's $47.3 w~llion foreign exchange cost.        It is for 20

years, with a five-year grace period, at 7~% interest.

     The project will be implemented by the Telecommunications Department

of Malaysia, (Jalan Bukit Nanas, Kuala Lumpur, Malaysia).        It is scheduled

for completion in 1975.

     Two financial institutions are participating in the Bank loan for a

total amount of $200,000:     Crocker-Citizens National Bank, San Francisco, enc
                                                                                      •
The Riggs National Bank of Washington, D.C.



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