.INTERNATIONAL DEVELOPMENT ASSOCIATION
    1818 H STREET, N.W., WASHINGTON    0. C. 20433    TELEPHONE: EXECUTIVE 3.6360




        IDA Preas Release No. 74/46                      Subject:     $24. 0 million credit to Burma for
        July 15, 19 74                                                fores try p roj ec t


                The International Development Association (IDA), an affiliate of the World
         Bank, approved a credit of $24a0 million to assist in the rehabilitation and improve-
         ment of Burma's timber extraction operations.
                The credit's immediate objective is to increase foreign exchange earnings by
         removing from the project area the 250,000 log tons of teak, to main-
         tain teak extraction at an annual cut of 65,000 log tons level and to triple the
         extraction of other hardwoods to 143,000 log tons a year.
                Burma, with 95 million acres of tropical forests, is second only to Indonesia
         in forest area in South East Asia.    In recognition of the potential of the forestry



•        sector in Burma's economy, the government in its current 1974- 78 pl.an gives high
         priority to increasing the production and export of forest products.
                IDA's credit will cover the foreign exchange cost of the project and assist
         mainly in the procurement of equipment for: timber extraction, transport, road con-
        struction and maintenance, rehabilitation of sawmills, and inspection vehicles for
         the Forest Department; training of key personnel of the Timber Corporation, the
         Government Agency responsible for implementing the project; and feasibility studies
         for the further development of the forestry sector.
                Burma's forests are capable of sustaining a substantially higher annual cut
        than at present and no adverse environmental effect is          foreseen.
                The Food and Agriculture Organization of the United Nations (FAO) joined IDA
        in identifying and preparing the project under the joint Bank/FAO cooperative pro gram.
                The IDA credit is made to the Government of Burma for a term of 50 years, in-
         cluding 10 years of grace;   It is interest free except for a 3/4 of 1% service charge
        to cover administrative expenses.


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•       Note:    M:>ney figures are expressed in US dollar equivalents.
                                                    July 15, 1974



PROJECT:

COUNTRY:
                           Forestry

                           Burma
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TOTAL COST:                $35. 8 million

IDA FINANCING:             $24.0 million, 50 years term including 10 years of
                           grace, interest free except for a service charge of
                           3/4 of 1%

OTHER FINANCING:           Government financing equivalent to $11. 8 million

IMPLEMENTING ORGANIZATION: Special tmit within the Timber Corporation (TC) with
          assistance of a project planning committee, representatives from the
          Ministries of Planning and Finance, Agriculture and Forests and other
          specialists.

PROJECT DESCRir'I'ION:     Rehabilitation and improvement of timber extraction
          operations in South Central Burma. The project includes: equipment for
          the construction and upgrading of access and feeder roads; equipment
          for log extraction, opening of skid-tracks and spare parts; loading/
          unloading equipment, trucks for road haulage and tugs for river transpor-
          tation of log rafts., rehabilitation of sawmills, inspection vehicles
          for the Forest Department; buildings for project headquarters, a central.
          store and workshop and workshop machinery; supervision vehicles, training
          of "TC" key personnel; and feasibility studies.

PROCUREMENT:               Intemat ional competitive bidding except for spares
          for some existing equipment amounting to $1. 4 million

CONSULTANTS:               Consultants will be retained for engineering, management
          and feasibility studies.

ESTIMATED COMPLET~ON DATE: 1981




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