This latest loan for EUR 500 million(1) advanced to Treno Alta Velocità (TAV) for constructing the Milan-Bologna stretch of this company's high-speed rail network confirms the commitment of the European Investment Bank (EIB), the European Union's long-term financing institution, to this advanced transport system in Italy. The finance contract, covering a maximum term of 30 years, was signed today in Rome by EIB President Philippe Maystadt, Giancarlo Cimoli, Managing Director of Ferrovie dello Stato, and Antonio Savini Nicci, Managing Director of TAV.

"This contract underscores the EIB's support for taking forward a key component of Italy's and Europe's railway network" stated Philippe Maystadt, adding that "the existing Milan-Bologna section runs through one of the most densely populated areas and is close to saturation point".

As part of its policy of underpinning development of trans-European transport, energy and telecommunications networks (TENs), the EIB has from the outset provided backing for construction of Italy's high-speed network through two loans, totalling EUR 1 652 million, for the Rome-Naples and Florence-Bologna sections. Aggregate EIB financing approved for TEN transport projects within the European Union during the period 1995-1999 amounted to EUR 28 billion.

Today's loan to TAV will contribute towards construction of 182 km of track between Bologna and Milan, allowing for trains to travel at speeds of up to 300 kph. The extra capacity along the north-south route served by TAV and linking Turin to Naples via Milan and Rome will allow for more than 200 inter-city trains a day, without affecting local passenger or freight traffic. Forecast traffic volumes are put at between 36 million and 45 million passengers per annum, with the Bologna-Milan section set to account for about a quarter of this traffic. TAV, a wholly-owned subsidiary of Ferrovie dello Stato (FS) SpA, is in charge of coordinating and seeing through the works.

Construction of the Milan-Bologna section, scheduled for completion in 2006, is expected to create, throughout the length of the works in question, temporary employment of the order of 7 000 jobs a year.

The EIB was founded in 1958 with the remit of financing investment contributing to European integration, particularly as regards regional development, trans-European transport, telecommunications and energy networks, industrial competitiveness, SMEs, environmental protection and security of energy supplies. The Bank also helps to implement the Community's cooperation and development aid policies outside the EU. The EIB, whose shareholders are the EU Member States, raises its resources on the capital markets, where it commands the finest terms by virtue of its AAA rating.

(1) 1 EUR = ITL 1 936.27; 0.613400 GBP.