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PRESS RELEASE July 29, 1966

World Bank Provides Additional Financing for Expressway Japan

The World Bank has approved a loan equivalent to $100 million to provide additional financing for the construction of the 333-mile Tokyo-Kobe Expressway in Japan. Including this loan, the Bank will have made six loans over the past six years totaling $380 million for the Expressway. It is scheduled for completion ever its entire length in April 1969 at a total cost equivalent to nearly $1.5 billion.

The loan was made to the Nihon Doro Kodan (Japan Highway Public Corporation), a government agency responsible for the construction, operation and maintenance of many of Japan's toll facilities which include highways, tunnels, bridges and ferries.

The Tokyo-Kobe Expressway is its largest undertaking. The western end of the Expressway, extending 114 miles from Kobe to Nagoya, has been open to traffic since 1964.

The current loan will complement a $75 million loan made in September 1963 for the 100-mile section of the Expressway between Tokyo and Shizuoka. The Tokyo-Shizuoka region is Japan's most important center of commerce and industry, as well as the center of the national government. It contains more than a quarter of the country's businesses, and nearly a third of the country's total production originates there. The one existing highway traversing the area is heavily congested and completely inadequate to handle the rapidly growing vehicular traffic.

The number of motor vehicles throughout Japan as a whole has increased fivefold in the past 11 years to a total of 8,000,000. The Tokyo-Shizuoka region accounts for nearly half the passenger cars and nearly a quarter of the trucks.

Major construction work on the Tokyo-Shizuoka expressway began in 1965 and contracts have been let for about half the work. Construction contracts yet to be awarded on the basis of international bidding are valued at the equivalent of $120 million. Because of the relative priority of the two extreme sections, Tokyo Atsugi and Yoshiwara-Shizuoka, work started earlier on these sections than on the mountainous middle section, and they are scheduled to be open to traffic in September 1968. The 21-mile section between Tokyo and Atsugi will be six-lane and the remainder of the expressway four-lane. Design speeds range from 75 miles per hour in level terrain to 50 miles in mountainous areas.

The Tokyo-Kobe Expressway and urban expressways in Tokyo and Kobe which the Bank has also helped to finance are part of Japan's Five-Year Road Improvement Program under which the equivalent of $11.4 billion is to be spent for the construction, improvement and maintenance of roads by March 1969. Japan's road network, excluding municipal roads, exceeds 93,750 miles in length, but less than 20% is paved. Most roads are narrow and winding, with little or no shoulders. Traffic normally operates under congested conditions and, as a consequence, vehicle operating costs are high and accident rates are heavy. The general objectives of the road program are to double the length of paved roads by 1969, and to increase the expressway network from 52.5 miles in 1964 to 491 miles in 1969.

The total cost of the Tokyo-Shizuoka section of the Expressway is estimated at the equivalent of $640 million. The Bank loan, together with the earlier loan of $75 million, will cover about 27% of the total costs. Toll revenues are expected to pay back the entire investment costs, including interest, in about 22 years.

The Bank loan will be for a term of 15 years and bear interest at the rate of 6-5/8% per annum. Amortization will begin in August 1969. The loan will be guaranteed by the Government of Japan.