RAILWAY

closed

The Third Railways Project will provide loans to the Government of India to increase the capacity of the Indian Railways. Loans to the equivalent of $90 million were made by the Bank in July 1957 to help finance part of the Second Five-Year Plan. An appraisal was made in Report No. TO143. This is an update of the appraisal. Progress of the Railways' part of the Plan has been satisfactory, while other sectors of the Plan have fallen behind schedule. As a result the shortage of rail transport is less acute now than it was two years ago. The planned increase of capacity has been raised from 47 to 54 million tons, to bring the total freight capacity to 168 million tons by 1961. This is to be accomplished by an adjustment of rolling stock procurement to provide an additional 11,000 freight cars. Changes have been made in the Railways' Plan because of shortages of materials, foreign exchange problems, and rising prices. While these factors have caused shifts of emphasis and rephrasing of some works, and while the final investment in physical terms may be rather less than was planned, the Railways' program remains fundamentally sound.