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RESTRICTED

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

LOAN OF OCTOBER 11,1951, FOR $Z8,OaO,Ooo EQUIVALENT

TO

YUGOSLAVIA

FIRST LOAN ADMINISTRATION REPORT

OCT(lBER 11,1951, TO DECEMBER 31, 1952

Department of Operations

Eur~pe, Africa and Australasia

I

January 29, 1953

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T ABtE .. 0F CO"'1'.Em'S

loan Qt October 11. 1951. for $28.000.000 Equivalent to

Yugoslavia

First Loan Admini:stratioll Report October 11. 1951. to December 31. 1952

IN'l'RODUCTlo~r • ~ . . • • • • • . . . . . . . . • • • • l' •

DISBURSEMEf.,~S tI

THE PROJECTS •

'. . . . • • • • •

. . . • • • •

.. . • • • • • . .. . . • • • . . • • • • • • • e

I. II. III. :rv • v. VI.' VII.

Electric Power Pro ject' • • • • • • • • • • • • • • • Coal 14inlng Project. ,tr • • • • • • • • •• • • • , •

l\loll-F'errous Metal ~eve1opnent Project •.••••••• Indus'try Project •. • • • • • • • • •• , • • • • • • Forest IToducts Project. • .• • • • • • • • • • • • • Agriculture and Fisheries •.••••• , •.•••••• Tra"sport. • ~ • • • • • • • • .' • • • • ., • •

CO~TCLUSIO'1S. • • • • • • • . . . . . . . . . • • ~ .

Table I Allocation of the L,oan by Pj."vject~ and C'arrencies

!3a. 1

2

J

:3 4 5 6 9

10 10

11

Table II Amounts AIIQcated. Disbursed and Outstanding on Letters of Credit

Table tIl Amounts Allocated. Orfe~s P~~ced and Deliveries

Table tv Production Data On CoaJ4 Mic'.r~~ Projects

Tab1e V Production Data on Othe~ Projects

•

p' I~lTRODUCTIO~T

1. On October 11. 1951. after more than two yearo of detailed dis<:tussions. an .. ~greement tor a loun ora,,· amount in various currencies equivalent to ~28~OOO.OOO was signed. The Loan Agreement provides. tor the payment ot i",terest $t the rate of 41% per annum a",d tor the repayment of principal in installments starting on April l5a 1955. and continuing until October 15. 1916. An unusual rin8~cial feature or the loan was the nrovision that the commit!Dent charge should be payableaa to 35~ in French frartcs.35% in Swiss fra~cs and 30% in sterling. the three principal currenc~es which the Ba:nk expected to disburse under the 10fl1'1. The LoaY" Agreement became effec­tive on December 28. 1951. The Closing Date is December 31. 1953. and will undoubtedly have to be extended since deliveri,s viII not be completed during 1953.

2, T~e purpose ot the loa~ was to provide part of the foreign exchange needed· by Yugoslavia to fin.ance imnorts of equipmeV)t to be used in thirty .. two 8ub":'projects making up seven projects: the exteJ1sion of the electric power system; the mode~1lat1on of coal mi~ing; the pro~ction of no~-ferrous metals; the e~~~~~ion of i~d~strial ~acillties; the utilizatio~ of forest products; the 'imlprovement of agrioulture a"d fisheries; SJ"d the modernization of tral"sportation. An allocation of the procee4$ of the loan by projects 8t'1d

currencies 1a shown in Table I.

3. Since Yugoslavla'~ present and "pi:c8pectlve trade pattern !s such that it can mOl~e easily 8491'Vice loans in E\1ropean curreY"cies thaJ"j in dollars. the Bal"k arra~ged to disburse the loan entirely in European currencie$. The Bank 1s financing purchases in France. the United Kingdom. Italy. Denmark and the Metherla"d$ out or ~nds released for the ~rpose from the capital subscriptions of these members • Purchases in Belgium are being final"ced partly ol1t of Belgium's capital subscriptlo". partly by releTldlng funds re­paid t~ the Bank on outsta"ding l08n$ or obtained by the $ale or Belgian fracc~,turlties. and the balance is expected to be covered by lending the Bank's earnings tn· Belgian franes and by t!le use of borrowed sterling. Pur­chases in Switzerland are being financed ,-~.th Swiss frc.ncs which the Bal"k has borrowed 1" Switzerland and purchases in the United States and Canada are being finance4 by the purepase of do~lars with borrowed Swiss fr$nc.. German purchases are being financed with sterling which the Ba~k has borrowed in th~ London market. Thus Yu:gos1avia vill not be burde~ed with any additional dollar debt as a result of this loan.

4. There were marked increases in oriees of equipment and supplies between the n~got1ations a1"!d the Effective Date. It tol8.S. therefore. necessary before any disbursement. \Jere made that the Ba"k and the Borrower should agree upon modifications in the -projects whichwuld bring the rore~gn exchange reqUire­ments in line with the amount of the 10.~! The principalcha!"ges thus made were the omission from the Electric Poyer Project of the provisio~ of equip­mel"t for the tra"8m1s~ion lines (whlc~ was supplied by the Borrower) and th9 dropping from the Forest Produet~ Project of four of the sub-projects. A"other ~rtant chal'ge made 1,laS t!-Je subst:~_tution of a project tor the installation of washing and drying eq"-lipmeilt, Sl. one of the lignite mil\eS -;-:~.l place of a projec~ for the erection of 8 copper cable and wire plant. Th:l.s was requested by the Yugoslavs because the cost of. ~he cable and wire plant

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was larger than the amount allocated. The Bay,·k agreed to the substitution because it had expected that, the lignite drying plant would be financed out or ~ugoslaviats own resources and when later it became clear that Yugoslavia would not be able to finance it. the Ba~k considered that its priority jus~ tified its inclusion in the loan.

5. These change~ and changes in the types and qua~tlties or equipment to be fina~ced permi~ted the necessary adjustments to be made i~ the allocation of currencies. In May 1952 all of these changes in the sub-projects were inQorporated into a revised Schedule 2 (Description of the Projects) to the Loan Agreement and a List of Goods for all pl~jects were agreed by the Bank -and the Borrower. At the same time the available currencies were re-allocated. A reserve of $1.)67.000 equivalent was set aside to provide funds to cover increases in prices ftot then foreseen. This reserve was established in large part by Yugoslavia's pre-fina"cing through a short-term credit of purchases totalling about ~~l.OOO.OOO f'or the coal mining project. It was understood that this amount would be reimbursed from the reserve if it were not needed fer ot.her projects -r The allocation of currencies required has been revised and the reserve reduced from time to time as the cost estimates bec~e firmer. The allooation of currencies required as at the end of 1952 is shoWn in Table I together with the estimates (sho~ in parentheses) used in the Tech­nical Report dated September 28 0 1951. upon which t~ amount of the loan was based.

DISBURSEMET-'I'J.'S

6. As it wtLS arranged that the Bank \IOu1d finance purchases in at least seven European co~tries. the Bank sent a mission ormembere of the Trea­surer's Oepartment to the princi-pal Europea" countries where purchases were to be made in order to discuss the Pank's procedures with local bankers. They left ~Jashington in the middle of ~Tovember 1951. 8:Yld ret~rned early in February 1952. They had discussions w~th commercial banks selected by the Yugoslav National Bank in London. Amsterdam. Parie. Copenhage~t Brussels. Frankfurt and Milan and agreed with the~ and with the Yugoslav authQrities in Belgrade on appropriate disbursement nrocedures.

7. The first withdrawal action under the loan was taken on February I. 1952. when the Bank guaranteed a letter of credit in favor or a U~ S. supplier of agricultural equipment. After that. the Borrower made requests for with­drawals and for guarantees ot letters or credit wi:thout delay. At the end of 195~. a year after the loan became effective. payme"ts totalling $11,671.000 eq!uivalent had been made and there was outstanding on letters of credit guar­anteed by the Bank the equivalent of ~13,877.000. In all. a total of $25,548.000 equivalent had been committed or l:6id out.

8. The Bank adapted its disbursement prooedures to suit cOl"lditions in the different countries wherepureha.ses iolere beling fi"ancea~ For the most part .. the Bank's disbursement operations fell into one or the other of two gener2J. catego:fies. i.e. I making an advaT'ee to the '!ITational Ba11k of Yugoslavia fOT e doYn payment of about 20% of the value of a contTact ~nd guaranteei"g to a

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commercial bank reimbursement of payments _de under a letter of credit to a supplier tor the balan(~e; or. in the case of s_11 orders. gUaranteeing a letter of credit for the entire amount. By the end of 1952 the Bank bad received over 450 anplications fQr withdrawals each ge~erally involving more thaI" one contract and more than one disbursement actilon by the Ba~k.

9. It is e~cted that about, 80% of the proceeds of the loan will have been disbursed by the Closing Date. December 31. 1953. The balance will be needed mostly for purchases for the Doboj pulp and kraft paper mill and for the electrolytic zinc plant at Sabac. proj~cts which are still in af' early stage. Table II shove the amounts allocated for each project in the Loa~ Account and the total amounts dlabursed and outstanding on letters of credit guaranteed by the Bank. . .

THE PROJECTS

10. The mission of the'Treasurer's 'Department referred to above arranged for the subtnlsion to the Bank of re1)Orts every t\lO MOJ"ths showing the progress' made with the projects. The first of these reoorts showing the position on December 31.1951. was received·inA-pril 1952. and the last one. 'which covers the period to October 31. 1952. was received on December 30. 1952. The last progress report is used as the basis for much ot the comment made in this report and. unless otherwise i.ndicated. the estimates of dates of deliveries of goods and complet~on of projects have been take~ from this report. The progress reports include. where BPullcable. B construction schedule comparing the actual progress wi th the original l)lan.8; a list of the orders placed. both those to be fina~ced out of the loa" and those to be fina~ced with other funds; a statement of cost estimate~ and expenditures in foreign ex.change and local c~rrency; and comments on ehan~es in the physical pla~s or the fina~cial estimates and other L~ortant matters which affect the development of the project. For those projects which call for the expartsion of existing pla~ts. the information given is less detailed. These reports e"able the Ba~k to watch how the projects are progressing. Member~' of the Treasurer's Department mission already me~tioned visited the sites of a "umber of the Ba~k-fina~ced projects and members of a"other Bank mission which was in Yugo­slavia from late July to early October 1952 inspected most of the larger projects. The Bank is satistied that the Borrower ie causing the projects to proceed with due diligence a"d efficiey,cy al1d in co"formity with sound e~gineering and financial practices. Tabl~ III ~~r!zes the amounts allo~ ca.ted for each project from the Loa" Account·~ the value, of Qrders pl£tced against these ~mounts and the value of BaT'k-flnanced goods delivered to Yugoslavia~ It will be not\9d that as of October 31. 1952. goods valued at $3.355,000 had been delivered to Yugoslavia~

I,. EJ.ect:r-ic. P()wer ::-'rojegt

11. This project is the extension of Yugoslavia's electric pol-fer system by the installation of circuit breakers. switch gear and other equipm~nt in twelve substations serving the 110,000 volt primary transmission net. the installation of similar equipment in seven substations serving the 35.000 volt secondary tra:nsmission. net. a.nd the insta.llation of circuit breakersl an instrument panel a"d accessories at the Konjscina steam power station near Zagreb.

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12. ,The Bank-fina"ced equipment for the substations has been ordered from FrA~ce and Italy. The Borrower has ordered from Austria transformers which are ~ot being fl~anced by the Bank. There have been some delays in the deliveries of these tra~sformers.

13. The Bank-ri~anced equinment for the K01"jscina Pover Station has been ordered from Germa"y. The Borrower has also ordered additional equi"f2l1e~.t from Austria alld Italy. Del!veries are bei~g mad~ satisfactorily. House traf'sformers. control boards. cables. storage batteries 8Y'd other items of equipment are be'ng supplied from local plants. If'c.1uoiT'fg the Rade Koncar Electrical Hachlnery Play,t. the expansion of which the ,Ba"k is financing under this loan~

14. The latest Progress Report cor.f'irJt..r earlier est_tes tha.t the Bank­financed equ~pment for the extersion of the ~ver system will be delivered and installed by the end of 1953.

II, ~oa~ Mi!,ing froject

15. This I)rojectconsi~:ts of the mod~r"ization of sever underground and Open cast coal mines by the i~stallatlon or modern eqUipment and accessories for mining. excavating. ,,,,ashing. drying. co"veying a"d li.andl1ng of bitum­inous coal . ., bro\o1Tl coal and 11gnite~

Mode",izn.tion

16. Bank-financed eqUipment for the modernization ~rogram has bee" ordered from the U. S •• Franoe. the U. K •• a"d Belgium. T'he seve", min~s which are beint~ modernized and the improvements which are be;~",ng u!"dertaken are:

Hi tuminou" Coal

17. Rasa Mi-11~. The expa!lslon of.' the existi" g mine. open ing a new pit. the ereetion of a washing plar.t and the replacement of worn out equipment,

~ 18. Kolubara Mi.ne. The introduction of heavy strlp~l"g and earth-moving equipment and materials handling equi~ent.

19. Kreka Hinf!. The mechaf'ization of coal cutting. loading and tral'!sport of coal and the installation of equipment for the dewatering and ve~tiiation of the mine.

20. Velenje Mine. The installation of breaking. loading and hauling equip~ ment and the installation of equipment for dewatering and lighti~g the mine.

21. Tito-Ba~ovici Coal Field. The instellaticn of dragli~e excavators, tha introduction of additio~a1 coal bandli"g and hauli"g equipment and the mecha"ization of coal cutting.

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22. Kakan' Coal Field. The introduction of equipment for the breaking, loading and hauling of coal. the installation of dewatering. ventilating and lighting eq'uipment. and the introduction of compressed-air actuated equipment. ~

23. Zagorje Mine. The installation of equl~nt for coal loading, tran8~ port and mine ve~tl1ation.

24. Ba~k-finnnced equi~ent for the modernization of these mines will be delivered and installed by the end of 1954. Coal production figures are shown in Table IV.

Koluba~a Hashing lind Dr~ring Plant

25l! This project is the installation in the Kolubara mine of a washing plant which will crush and scree~ lignite. wash it free of rock and then dry it under steam pressure.

26. The plant has been ordered from a French supplier which is ~lso respons­ible for assembling it~ The layIng of the foundations for the main building are complete. and a layer of concrete 15 to 20 cm. thick has been spread over the whole surface. The pla.nt will he in operation by February 1954.

III. Won-Ferrous Metal Develonment Pro'ect . i. - . .

27. This project consists of the development of the non-f'errous metals industry by the installation of additional machl~ery and equipment in the Bor Copper Hines and Smelter undertaking, and the erection of a new electro~ lytic zinc plant at Sabac with an a~nual capacity for the production of about 12,000 tons of zinc ingots (and 40 tons of cadmium as a by-prod~ct) by the electrolytic process.

28. Bor Conner Hines. Orders have be,~", placed in the U. S •• GermaJ"iY. Fra1"'ce. a"d the Ti. K. for the equir.>Jllent to be financed under the BaTIk's loan. In addition. orders for machine tools ay,d electr1c~1 and other machinery have been placed with domestic sunpllers. The additional machinery and equipment will be installed by the end of 1953. Production figures are shown in Ta.ble V.

29. Sabac Zing Plant, Shortly after the 10aTl became effective. the Bank agreed that the site of the electrolytic zinc plant might be moved from Trepca to Sabac where sulphuric acid was already being produced. The zinc concen­trates from Trepca will be trans'Corted some 200 miles by rail to the plant. This was considered more practicable than the installatioY" of equipmeT\t for the tra.Tlsportation of sulphuric acid.

)0. The firm of Singmaster and Breyer of Mew York has been e"'gaged by the Govel'T1men't for the design and engineerir;g of the pla.!"!t. The firm is also required to select the equiP.Jllent. specify and a-oprove the dral-Jin.gs. prepare purchase requests for all equinment necessary. to supervise c01"'struction work at Sabae and to furnish technical supervision for the start-up of the plant.

~.

31. The desigJ1ing of the lllal"t has bee" delayed. The latest estimates are that the desi~ing of the plant will be c6mplete by April 1953. The le'vel­ling or the ground was expected to be completed by the eTld of December 1952 af'd the erectiol't of the buildings by Uctober 1953. The installation of the equlpme"t is scheduled to be completed by December 1953. and the plant in opera,tion by August 1954. These estimates are considered optimistic by the Bar.k's e"gineering starr.

IV. Industrv Pro;lect

32. This project involves the eXP8.~sion of industry by the installation of' machinery and equipment in fifteen industrial nla1'\ts.

Metal 'trTorking Plants

33. RIde Koncar. Electriga! l11achinerv Plant..-Expa",sion of Capacity. The improvement undertaken with the Ba~k's loan 1s the installation of key maQhine tools to reduce the cost of production and increase the output of the plant. Ba1"k.rlrlal"ced orders hav'e been placed i" the {T. S., U. K.. and Italy. Orders for ele ctrical 8.J'ld other equipment have been placed locally, including some It.lth the plant itself.

34. In August 1952 one of the members of the engineering staff of the Ba~k and an e1"gineering co~sultant visited this plant. Their impression was that th~ workma",sh:i.p was good although a large part of it was .handwork rather than mechanical. They considered tha.t the small motor assembly line was inefficient by American sta"dards with a great deal of hand labor being used. They reported, however. that fine workma1"ship seemed to be do,.,e on the large electrical equioment a"d the machinery for doing this t~rpe of work was modern~ All of the buildings were of reinforced cOJ'lcrete and vere well designed and constructed. The expa,.,sion ~ll be completed by the end of 1953.

35. Complete production figures for Rade Koncar are not available. An ~~ndi­cation of production at the nlant can be obtained from the over.all figul~S of' the productioY"l of electrical machinery for which Rade Koncar 1s largely responsible. See Table V.

36. ~1t9stroj Mechanical Eng~n~eringEQvinment; ~~?-an~"7Ex~Tlsi=on of Capacity. The improvement to be ur.dertake~ is the' installation of key machine tools to reduce the cost of productio1" and increase the output of the plant~ Bank­fina1'\ced orders have been placed in the U. S.t U. K.~ Ita.ly. and orders have been placed locally for machine tools and othe'r equipment.

37. In August 1952. a member of the Ba~k's eY"lgineering stafr and one of the engineering c01"sultants to the Bank's mission visited this plant. Tbey found it well laId out 'With modern equipment .tor' making iro"and steel castings. The mold shops. pattern shops and metal Yorking equipment seemed to be operat­ing well and turning out good products. They reported that the workmanship in this p~'nt. particularly with machine tools. was excellent and that the castings which they sa\( seemed to be up to -American startdarde. The plaht includes a school for training appre"tices.· The Bank represeJ"tatives were favorably impressed with the trai,.,ing program. The

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equipment for the exoansion of this plant will be delivered and installed by the end of 1953.

38, Fra.nc Leskosek Hechanica1 Engineering EgyJpment P1ant--Expapsion of Cana­~. The improvement to be undertake" is the installation of key maohine tools for the mal"ufao'ture of highly fabrice. t\~d produots. particularly for the bydro~lectric industry\~

39. Orders for Bank-f'.nanoed equipment haVt~ \"jeeTl placed in France. and machine tools and other equipment are being supplied from domestic sources. Deliveri~s of the Bank-financed eq~i~ent are scheduled for August 1953.

40. In August 1952 one of the Ba"k's el"gineel-s ~l"d a1"l e"gincering consultant visited the plant. They reported that it did. large structural steel fabri­cattng and that it had good equipment. The work'l!rs seemed to be highly skilled and the housekeeping and ~neral appearaflce \Jere excellent. The equipment for the expaTlsion of this pla"t will be, delivered al"d ~nstalled by the end of 1\'53.

Cera.mic Plants " i I

41. Paracin HolloW ?l~s. PMnt~na"'8ion of 9.!!:mSitx. The improvements to be undertaken are the installation of three melting fUTt'laces. three feederst four automatic machines for making glass cont~lil'j\9r!! and tubes. three al'mealing lehrs and oth~r equi~ment.

42. Bank-finaneed orders have been plaeed in the U ,\ S.. FraY"ce and Belgium. The Yugoslav Gover!'lment is fina!'1ci,ng with other fUnds tb~ purchase of a bulb making plant from the United Statr.es. Orders hav'e beef\ placed with Yugoslav firms for machine tools a"d other equinment.

43. In Sep~~mber one of the Ba"k's e~gin~r8 visited the factory. He reported that the new section cf the plant appeared to be well laid out and that the flow of material through the ?la!'\t sho~ld be satisfactory. The expansion of the plant is being carried O\1t without any reduction i" the operations. He reported that the housekeeping anpeared to be relatively poor but he thought this might be attributed to tpe necessity for keeping the factory operating while constructio~ was in progress.

44~ The equipment needed ror the expa~sion progre~ will be delivered and installed by the end of 1954.

45. Pojs:S=no Cera.mie Plapt-Erection of a ~Tew PlaDt. 'ehe projeot is the con­struction of a'new pla~t to produce annually 2.500 metric tons of s&f\itaryware, 2.000 tons of bathroom and kitchen tiles and 1.000 tons of chinaware.

46ft The Ba,."k-~ina"ced equipment has bee" ordered fl"(!tll!t Germany and. in addi­tion. orders totalling $295.000 eqt.J.ivalent placed wi'b'b Germa" firms are bei!"g fina"eed by the borrower. Maehu,e tools, steam boil~;~tq!II.? generators. ventil­ating an,d other equipn;ent are being supplied dOllest:\.\:~~ally,

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47~ The latest Progress Report shows that at the end of Uctober 1952 it was expected that construction ot the main plant would be completed by the end of December 1952 and that the installation of the new machinery would be completed by July 1953.

Chemie!,l PlAnt!

48. Iuks.vac Soda-AshPlaDt-EJM"sloU of Capaeity •. The doUbling of the plant's capacity is to be accomplished'through the installation of a new Solvay unit (the original ~la"t was built by Solvay in 1896 a~d rebuilt in 1912). The new unit is to produce 200 tons of raw sodium bicarbonate daily. The p:t;"oject includes opening a new limestone quarry and'the erection of an aerial ropeway system for transporting limestone to the' '·turnacea. building two new lime fulTlaces for the oroauction of carbo"dloxide ··-anQ lime; erecting a Y"ew thermal electric station with its dlstributiol"t system; installing new pumps for brine af'd additional apparatus ard instrt,llDents.There viII also be several new butldings and imp~ovements 1n intra.plant trar.spQrta~ion.

49. All the Bank-rinaneedequi~nt has been ordered from FraI1ce4l' In addi­tion, equipment valued at almost $2.000.000 has besn ordered from Austris o

Electrical a~d other equipmer.t is being supplted domestically.

50. I" August 1952 Bank represe!"lt&tives visited the plaflt aJ"d fQuJ"d work on the expa"sion in progress and between 40% and 45% completed. The target date for oompletion was the end of 1953. which they considered optimistic without more adequate eor.struction eqUipment or more workers. The exparsion \Jork was under the supervision of a Yugoslav who had operated Solvay plants in Belgium a"d Switzer1a~d. They confirmed the view that the new facilities would improve processing efficiency and lowr eosts. ..

51. Product1.onfigures are shOlm itl Table V.

52. Tusa," Salt Nine stnd Clea"ing Plant. The project. calls for the opening of a new mine ~~th a capacity for ihe a~~ual prodUction of 300.000 to"S of crude salt. and the ereotion of a griJ"ldl1"g. cleartil"g and separation plant"

5.3~ Ba"k-final"ced orders have been nlaced in the U, S.. the U. K.. and Belgium.

54. The Qoring ~nd conereting of both the hoist.!n~ shaft and the vei'itilating shaft have been delayed. Comoletion of the ho~sti"g shaft is naY scheduled for mid~1954 aY'ld the ventilating shaft for June 1953. The separation building is exPected to be completed in December 1953.

55Q II1 August 1.952 Be.f,k rem-ese:ntatives visited the mine. They reported that vork on the mai!' shaft had beert delayed whe!' water \las struck during dri11~ng~ The shaft had beel" filled with bricks. sa!'d a~Q stone a~d groutad with cement. This had delayed the project but the inflow of water had bee~ stopped. Pro­ductiol" is l"10W expected to atart early iT' 1954 and capacity production is expected to be reached in mid-1954. This is one year later tha~ the estimate origlnal~y give" to the Ba"k. The Ba"k's eT'gineering staff cOf'siders these estimates to be reaso~able •.

Cement Plants-Expansion of CanaoiiJ at Eight Pla"t.

56. The projeot 1s the modernizatiof'l and expaJ'lsion of eight plants: Partizan, Prvoborac. Sar, Sloboda. Pula. lO-Kalovoz. Anhovo' and Beocin. Modernization 1s to be accomplished by the installation Ofl new equipment. the construction of new buildings. the exoBf'lsion of quarries and the repair and construction of roads and railway spur lines. I~t is estimat'ed that this stage of the expansion progr.am will result in an increase in production of 300,000 tons yearly.

57. The Ba~k-financed equipment has bee~ ordered from Def'lmark, FraJ'lce and Belgium. The Yugoslav Government has placed additional orders totalling about :l!>220.000 with a Belgian supplier~

58. There have been delays in deliveries under two co~traots. one with a Belgi~n supplier af'ld the other with a French supplier. The equipment for the modernization of the eight plants will be delivered by Haroh 1954.

59. Production figures are showp in Table V.

V. Forest Produgts ProJeot . , ... i

60. This project is for the better utilization of forest products by the erection of new olants tl'l'ld the installation of modern equipmel"t in a plywood pla"t.

61. Blazuj Plywood Plant. This oal1s for the erection of a new plant M:"ling s daily capacity of about 60,000 square feet of J-ply. one-fifth inch thick plywood. .

62. All the Ba"k-fina!)ced goods have been ordered from Germany. Steel structures. pumps and electrical a~d other equio~ent are being supplied from domestio sources.

63. The main building is complete and the no~,er plant almost c()mpll~te. The new plant will be finished On schedule i~ the spring of 1953.

64. Doboj Pulp and Kraft Paper Mill. This project calls for the erection of a new mill with capacity for the a~"ual production of 20,000 tons of sul­phate pulp and 18.000 tons of Kraft pa~er.

65. The BSl"k-r1na"eed goods have been ordered from Germany and Belgium. The Yugoslav Governme~t has ordered equipment oosting about $52.000 equivalent from Swede". Locomotivefj, cranes. conveyors. machine tools Bf'ld other eqUip­ment are being supplied from domestic sources.

66. In August 1952 Bank representatives visited the nlant. They reported that construction work had been under way for only two months and excellent progress had been made~ The plant is being designed and some of the equip­ment supplied by a Germa" firm which will super-lTise construction. bring in the necessary key technic1a~s. start up operations. guara"tee ~roduction and

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train Yugoslav workers. The schedule date of completion was the end of 1954. a year later than originally Kiven to the Bank. Full operation was expected to be achieved a year later. The construction work appeared to be efficie1"tly mal"laged and the revised schedu1ed·completion date appeared rea.sonable.

67. The latest Progress Report showed that the constru~tion of. the building works was not progressing satisfactorily because the contractor had not been able to get the necessary manpower, but it was expected that the delay would be made up by the end of Deee~ber.

68~ Lol8, R.ibar Plnrood Plant. This T,')roject calls for the renlacement of oJ"e item of eQuipment.' One order was olaced in France for an air-driven saw costing $6.900 equivalent. The saw has beeJ1 delivered to the plant<l

VI. Agrigulture a~d Fisheries

69. Agri.cul ture • This project is the improvement of agriculture by the im.?ortation of tractors ~Tld other machinery for use 1:)rimarily in the produc­tion of grain e.!'Id crops sui table for prooessing iJl in~:~~strial plants.

70. Bank-financed eqUipment consists of 1890 tractor-drawn ploughs ordered from the United States and France. and model machines for demonstration pur­poses ordered from the U"ited Statee. As of October 31. 1952. 1870 of the ploughs had hee~ delivered to Yugoslavia and 1117 distributed to cooperative an.d state sectors of Yugoslav agricult~re. t-lhel" the Bank's mission was in Yugoslavia in the sum..'!ler of 1952 it was i",formed that 2500 tractors had been j,mnorted in the past year.~lOO by the state and 400 through cooperatives. bringing the total number of tractors in the country to 8500.

71. Fisheries. Th~s program Is for the improvement of ~isheries by the imoortation of marine engines. radio and sound ~quipment for fishiTlg boats, and refrigeration and processing equipment for fish processing plants~

72. All the Bank-finay"ced orders were placed in Fra"ce and deliveries were almost complete at the e~d of October. The equi~ment will be distributed by the Ministry of Fishing in Croatia.

VII, . TrAnsport • • j

73. This project is for the modernization of transport by the importation of rolling stock, shop. handli"g and construction equipment for railways. cral"1es for handling freight. and miscellaneous equipment for the Belgrade Airport.

74. The BaT'lk-fi~aT'!ced equipmeJ"lt f'ot" the railways ha~ bee,., ordered in FraT'lce and the H1"ited States and is scheduled to be delivered by the eTld of 1953.

75. The B9.'nk-fiPla,.,ced e01l1pme"t for baY'\dling f~eight has bee·", ordered from the ~Tetherla1"ds, Fra1"ce and the U,.,ite<i States. Deliveries will be complete by September 1953..

76. The Ba,.,k-firHiT'ced equipmeYlt. crash tel",ders for the BelgTade Airport. has beeJ"l ordered from the U~ited KiJ"lgdom a~d will be delivered in March 1953.

... 11-

QOtlC LVS ION§.

77. Deliveries of equipment tinaf'ced out of' the Bank's loan (valued at $3,355,000 throug~\ October 31. 1952) are too small and too recent to have arty noticeable effect on production. The Bay,k· .. fins1"oed equilBent is, how ... ever~ being put to use as BOOn' 'as it is rece.ived 1n Yugoslavia.

?c.... The progress reports submitted by the Borrcuer and:tlhe reports of vls~.ts of Ba~k engineersahow that the projects are being executed satis­factorily. Problems. some or them of a technical nature. have caused delays but they have been solved 1n a b\1sineaslike IIBn1"er. The Baf',k is satisfied that the projects are proceeding efficiently a"d that the Borrower w111 deal promptly with al"Y diffioulties which threaten to ~elay the compl~tion ot the projects.

'l:ABLE I

Allocation of the Loan bl Pro,1ects and Currencies as of December 31.1 19r;2

Amounts Exp~d in $1000 Equivalents Allocated for Purchases in~

Pro.iects USA UK France Beleium Ita1l Germanl Denma.rk Holland Total

I. Electric Power 2102 900 94 3096 (Estimate in Technical B.,eport) ( 259L~} (500) (3094)

II. Coal Mining 2241 747 3787 121.5 7990 (Estimate in Technical Re'Port) (2600) (747) (1040} (1100) (5487)

III. Non-Ferrous Metal Development 1931 136 728 74 2869 (Estimate in Technical Report) (1744) (25) (908) (136) {57} (2870)

IV. Industry 715 4J3 3099 5.58 228 538 401 5972 (Estimate in Technical Report) (1070) (579) ( '..e63) (581) (241) (538) (400) (8272)

V. Forest Products 7 7(,8 4628 541)' (Estimate in Technica.l Report) (609) (787) (4160) (5556)

VI. Agriculture and Fisheries 290 817 1107 (Estimate in Technical Report) (300) (616) ( '-1-00) (1316)

VII. Transport 265 16 4l1-O 299 1019 (Estimate in Techni(~"al Report) (300) (400) (300) (lOCO).

TOTALS 541~1 1332 10,979 2551 1128 5334 401 299 221 46S (TOTALS in Technical Report) (6014) (1351) (11,030) (2604) (1141) (4755) (li-OO) ()oo) (27.S95)

Reserve 535 (Reserve in Technical Report) (405)-

TOT.iU. LOAN 28 1.000 (TOTAL LOAN) (28 1 000)

Figures have been rounded to the nearest $1000 and do not a1",rays add to the totals sho\,m.

'::ur.1f1ary oi' HrrtOunts Allocated, lJis 1ur sed ',. a!'\{; '1utE;tan(,i 11r: on Letters or Credit Guarante~d. by the Bank as .or Decembe~ 31, 1952

Amounts expressed in :~~10Q0 (equivalent) . outstanding on Pro,jeets

Allocated Disbursed Letters. or Credit

I~ Eleetric Power a) Transfornler Stations b) Konjscina Station

II 11 CoalHining ci) Modernization b) Koluba:ra Drying Plant

III.' Non-Ferrous Metal Development a) Bor 'Copper Mines " b) Sabac Zinc Plant

IV • Industry a) Metal Working Plant$

( i) Rade Koric~r (ii) Litostroj (ii1) Franc ~skosek

b) Ceramic Plants (i) Parae in (ii). Pojatno

c) Chemical

3096 3<r02

94

7990 ~ 2717

2869 ~ 2480

5972 ~

292 410 163

1)06 538

'('1) Lukavac Soda-Ash Plant 1601 (ii) Tusanj Salt Hine 659

d) Cerl1ent Plants

V. Forest Products Plants a) Bl~zuj Plywo¢ c). Doboj Pulp and Kraft Paper ! ) Lola Ribar

VI. Agriculture and Fisheriee a) AgricUlture t .-

b) Fisb,eries

VII. Transportation Ci) RailwaY$ b) Harbors c) Airport

Totals Reserve Total

1002

5413

707 4699

7

1101 -m 316

1019 ~

499 16

27,4~ 535

28,C()O

1371 mY

co 3$74 !SiC 1065

512 -m> ,252

2996

95 202

92

602 333

809 394

469

18h1 -,90

1244 7

986 m 26l

)91 ~ 18)

11,671

11,671

Figures have been rounded to the nearest $1000 and do not always add to the totals spawn.

i

1701 'iOO7

34

4112 ~ 1390

t80 ~ 652

2~65

197 208 n

698 205

791 265

S31

)5~

11'" 3455

........

120 ~

55

628 m 316 16

13,877

1),877

TABLE III . -

Summary or Amounts Allocated, Orders Placed and neliveriesof Bank.finallQetj equip.nt.

Projects

I. Electric PGWe~ a) Transformer Stations 'b) KODjscina Station

n. Coal Mim; i) .. IJoder ~zation b) Kolubara Drying Plant

III~Non-Ferroua .Metal ~velC)pment iLl . BOrCopper Mines ; b) Sabac Zinc Plant

IV • Industry a) Uetal1J!orking Plants

(i) Rade Koncar (ii) Litostroj (iii) Frane Leskosek

b) Ceramic Plants (i) Paracln' (i1) Pojat,nQ

Q) Chemical

309~ .. 94

7990 mJ 2711

~869 j~

(21180

S972 --,-

292 410 16)

1)06 5)8

(i) . Liikavac Soda Ash Plant 1601 (ii) 'Tusanj Salt l~ne 6S9

d) Cement Plants

v. Forest Products Plants .-a )- Blazuj Plywood e) Doboj ~t.p and Kraft Paper £) Lola Ribar Plywood

VI. A,riCUl ture . and Fisheries a Agz1.eulture ; . . b) Fisheries

VII. Transportation a)' Railways b) Harbors c) Airport

Totals Reserve Total

1002

SLlJ

707 4699

7

1107 -,c}O

316

1019 ~

499 16

27,L~ :535

$28,000

3012 'm8

94

7687 ~ 24SS

1292 Jmf

904

$961 --.-'

292 410 16)

1300 538

1600 659

1000

S41) -701

4699 7

1106 ~

316

1019 ~

499 16

2S;SG9 -$25,549

Figures have b~en ro~d~d to the nearest $1000 and do not always add to the totals ~hown~

768 "m' 13

104 Imi

986 -49

101

174 UB

80 20$

229

ill 128

41 7

1060 ~

316

sa ~ 2S

. 3,355 -$3,j$5

"r:

Rasa Kolubara Period, Bituminous Lignite

1949 825 4)0

1950 784 474

1951 667 424

Month11-A.vera~e 1951 Jan.-Oct. 55.4 J5.6

1952 It It 60.8 36.4

.~ Increase over 1951 rate 9 2

r

TABLE IV

Production Data Coal Mining Projects

Production in thousands of metric tons

Kreka Ve1enje T1to-!anovlc1 L1snlte Ll~nit~ ~rown Coal--

1,157 414 850

. 1,291 505 1.OTJ

1,184 517 1,318

95.8 1~3.3 108.1

116.3 4).6 126.4

21 16

Breza-Zeniea Kakanj

Brown Coal

1.465

1,513

1,451

119.1

126.8

5

Zagorje ~.

Bro~n Coal TOTAL National Coal Production

Index 489 5.690 10)

503" 6,103 '108

433 5,994 100

,6.2 49L~.1 100

37.4 547.7 102

) 11 2

Period

194' 1950 1951 ~n\hly Ayeragc: 1951 Jan.~ct. 1952 Jan.-Oct .• % Increase over 1951 rate

Period

1949 1950 1951 Monthly A~'6rage: 1951 Jan • .,.()et~ 1952 Jan.-Oct. % Increase (Decline)

1951 rate over

TABlE V

BOT COpper Mipes Blister Electrolytic

con~entrate Copper . Corner ~In thousands of metric ton8~'

954.4 1116.8 1173.2

94.8 10S,4 14

86.9 34.4 14.2 93.3 40.1 14.7 98.9 31.7 1.4.0

2.6 2.8 8

1.1 1.6

36

)lational .. ProQlaCtiopot Electric,1 Machinerv* RotAt1JJI MaCbtnes . i. ,

. .., Thousand Transformers lOOOKW Pieces 1000 'KVA Units

136.9 22.6 167.5 572 106.1 26.1 114.5 3cn U8.2 34.8 297.7' 964

8.2 2117 20.7 74 21.2 )l~9 13.5 70

160 44 61 (5)

* Complete production figures on. the Rade Koncar Electrical Machiner,y Plant are not available. An indicat~on of the production of the plant may be obtained from over.all figures' of the production of electrical machinery tor which Rade Koncar is largely responsible.

Period

1949 1950 1951 Monthly Average: 1951 Jari • ...oct. 1952 Jan.-Oct. % I~crease (Decline) over 1951 rate

* i , , t ",

Lukavac Soda-Ash Plant Soda Ash . Caustic Soda

(Thousands of metric tone) 35.0 16.3 31.9 15.9 )0.5 15.3

2.5 2.7 7

1.3 1.2

(5)

TABIE 'jV (coht1nued) ;

-2-

•

C!meDt. Pllll~S , ~""ltiQD""1D TbgU8,nda o'r·!1I~tric···~DS

, , Wational Pro-Kolo- Prvo- Parti ... Slo- Beo- Anh- duct10n

Perioej yo. bone za.n lmdA ~ ~·llUL. s:m.. T~AL 000 tons Index

"1949 179 156 144 166 107 21 203 110 1,0)7 1.288 111 1:.950 158 155 113 ~O 110 )0 172 113 974 1.219 98 1951 181 172 132 100 75 28 159 92 942 1.159 100 Msm~blvAv~ra£e : 1951 Jal'l.-Oet. 14.8 13.8 10.8 8.3 6.0 2.3 1.3.3 7.5 77.2 95 100 1952 Ja".-Oet. 16.0 15.4 12.0 9.2 7 •. ) 2.2 16.0 8.9 87~7 107 115 % Increase over

1951 rate 8 10 10 10 ~O~ ~O 18 1.3 15 15