INTERNATIONAL BANK FOR
•   RECONSTRUCTION AND DEVELOPMENT
    1818 H STREET, N.W., WASHINGTON     D, C. 20433   TELEPHONE:   EXECUTIVE   3-6360



                 Bank News Release No. 74/89                       November 27, 1974


                              $44 MILLION LOAN FOR PORT EXPANSION IN YUGOSLAVIA

                              Yugoslavia will be able to expand the capacity of the port
                 of Bar, on the southern Adriatic coast, with the help of a loan of $44
                 million from the World Bank.
                              The $78 million project represents a four-year slice (1974-77)
                 of an investment program for 1974-80 aimed at building the necessary port
                 capacity to handle the traffic demand after the opening of the Belgrade-
                 Bar railway.     Under the program, Bar's capacity will be increased four-
                 fold by 1980--from the present 1.2 million tons to about 5 million tons.
                 This is the Bank's first loan for port development in Yugoslavia.                Ten
                 previous loans have been devoted to the development of Yugoslav highways



•                and railways •
                              The Port of Bar was planned to serve a large area encompassing
                 most of eastern Yugoslavia.     However, due to inadequate road and railway
                 links, its service area is presently limited to Montenegro.               After the
                 Belgrade-Bar railway line is open to traffic by mid-1976, the servic~!
                 area will be greatly expanded.       The project being assisted by the Bank
                 is designed to meet the expected growth in traffic through 1980.                It
                 includes the completion of a dry cargo wharf, construction of two
                 general cargo berths, installation of cargo handling equipment and a
                 program to improve the ports management and operations.                It also includes
                 construction of related railway facilities outside the port area.
                              The project will provide the industrial centers in Serbia·and
                 Vojvodina with better access to a major port.           The proje~t will generate
                 savings in costs of overland transport and port operations, and net
                 revenues from transit traffic.       Such savings will amount to $6.6 million
                 a year.     In addition, the project will help to create employment
                 for 800 port workers.



•                             The Bank's loan is to the Port of Bar Enterprise (PBE), an auto-
                 nomous agency.     It will be guaranteed by the Governmen~ of Yugoslavia.
                 It is for a term of 25 years, including 4 years of grace, with interest
                 at the rate of 8% per annum.

                 Note:     Money-figures are expressed 'in US dollar equivalents.
                   T ECHNI CAL        DAT A
                                                                                     ••
PROJECT:                       Port

COUNTRY:                       Yugoslavia

TOTAL COST:                    $78 million

BANK FINANCING:                $44 million loan, for 25 years, including 4 years
                               of gr.ace with interest at 8% per annum.


OTHER FINANCING:               Grants from the Governments of Serbia and
                               Montenegro; loans from the Investment Bank
of Titograd and the Federal Directorate for Reserves of Food stuffs and internal
funds of the PBE and RTE, Belgrade.

IMPLEMENTING ORGANIZATION:    -Port of Bar Enterprise (PBE), Preduzece "Luka Bar"
                                 Bar, 81350 Bar, Yugoslavia.
                              -Zeleznicko transportno preduzece Beograd (RTE),
                               Nemanjina 6, 11000 Beograd, Yugoslavia.
PROJECT DESCRIPTION:           Completion of the dry bulk cargo wharf, construe_:    •.
                               tion o{ two general cargo berths. extension· of the
passenger ferry facilities; construction of transit and storage sheds, grain
silos and tanks for edible oil, installation of portal and mobile cranes,
transport bridges, fork-lift trucks, tractors, trailers and tug boats; a program
to improve PBE's management and operations; construction of railway facilities
outside the port area; compensation for about 250 houses on the land to be
developed; and construction of a hostel for 500 single workers and apartments
for 250 workers with families.



PROCUREMENT:                   Will be on the basis of international competitive
                               bidding in accordance with the Bank's guidelines
for procurement. The major infrastructure, service and storage items will be
procured through civil works contracts and wharf cranes, bulk handling equipment,
mobile mechanical handling equipment and tug boats, each with an initial stock
of spare parts, through supply contracts. For the purpose of bid comparison,
a preference of 15% of the CIF landed prices of imported goods or the actual
custom duty, whichever is lower, will be given to local manufacturer& who
qualify as preferred bidders.


CONSULTANTS:                   Will be employed for technical assistance to
                               assist PBE in the area of management, accounting



                                                                                     •
                               and detailed eng.ineering of port facilities.


ESTIMATED COMPLETION DATE:     December 31, 1977