El Salvador - Second Education Project : Loan 1007 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1007 ES Loan Agreement (Second Education Project) BETWEEN REPUBLIC OF EL SALVADOR AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JUNE 14, 1974 CONFORMED COPY LOAN NUMBER 1007 ES Loan Agreement (Second Education Project) BETWEEN REPUBLIC OF EL SALVADOR AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JUNE 14, 1974 LOAN AGREEMENT AGREEMENT, date.d June 14, 1974, between REPUBLIC OF EL SALVADOR (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION A ND DEVELOPMENT (hereinafter called the Bank). ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the deletion of Section 5.01 thereof and, in Section 6.02(i) thereof, of the words "or in the Loan Agreement for the purposes of Section 7.01" (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank, as so modified, being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have tht following meanings: (a) "DAE" means Direcci6n de Arquitectura Educativa of the Ministry of Education of the Borrower; (b) "FOCCO" means Programa de Fomento y Cooperaci6n Comunal por Esfuerzo Propio y Ayuda Mutua, a development agency of the Borrower; (c) "FSVM" means Fundaci6n Salvadoreha de Desarrollo y Vivienda Minima, a private, non-profit institution established in June 1970 to promote lower-income housing in the territories of the Borrower; (d) "General Basic Education Curriculum" means the curriculum for geneial basic education emphasizing manual arts, industrial arts and home economics as established under an internal rego ion of the Ministry of Education of the Borrower dated March 15, 1974; 4 (e) "ODEPOR" means Oficina de Planeamiento y Organizaci6n of the Ministry of Education of the Borrower; (f) "Rural Area" means the area of an administrative subdivision known as canton with less than 5,000 inhabitants; and (g) "Urban Area" means any other area not included in subparagraph (f) hereof. ARTICLE H The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to seventeen million dollars ($17,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule shall be amended from time to time, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed under the Loan Agreement; provided, however, that, except as the Bank shall otherwise agree, no withdrawal shall be made on account of expenditures: (a) in the territories of any country which is not a member of the Bank (other than Switzerland) or for goods produced in, or services supplied from, such territories; and (b) under Categories I and IV(a) of Schedule 1 to this Agreement until the staff referred to in Section 3.07(c) hereof have been appointed and commenced their assignments. Section 2.03. Except as the Bank shall otherwise agree, the goods and services (other than services of consultants) required for the Project and to be financed out of the proceeds of the Loan, shall be procured on the basis of international competition under procedures consistent with the Guidelines for Procurement under World Bank Loans and IDA Credits, published by the Bank in April 1972, as revised in October 1972, and in accordance with, and subject to, the provisions set forth in Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1978 or such other late as shall be agreed between the Borrower and the Bank. 5 Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of seven and one-fourth of one per cent (7-1/4%). per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annually on June 1 and December 1 in each year. Section 2.08. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. Section 2.09. If and when the Bank shall from time to time request, the Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in Article VIII of the General Conditions. Section 2.10. The Ministro de Hacienda of the Borrower and such other person or persons as he shall appoint in writing are designated as authorized representatives of the Borrower for the purp6ses of Section 8.10 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project through its Ministry of Education with due diligence and efficiency and in conformity with appropriate administrative, financial, educational, architectural and engineering practices and with due regard to economy, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. The Borrower shall: (a) use the student capacity of the basic education schools included in the Project on a double-shift basis; and (b) expand teacher training enrollment in accordance with a plan to be furnished to the Bank, for review, within three months after the date of this Agreement or such other date as the Bank shall agree. Section 3.03. Unless the Bank agrees to later dates, the Borrower shall furnish to the Bank for review: 6 (a) within six months after the date of this Agreement (i) the syllabi for the General Basic Education Curriculum; and (ii) a plan for the carrying out of Part C of the Project, including the selection of candidates for fellowships, the award of such fellowships and the program of studies for the recipients of such fellowships; and (b) within twelve months after the date of this Agreement, a plan for the carrying out of Part B. 1 of the Project. Section 3.04. In carrying out Parts B.l and 2 of the Project the Borrower shall: (a) evaluate on a full-time basis the implementation and results of the non-formal rural training program; (b) furnish to the Bank, for review, semi-annual reports of such evaluation; (c) offer such program during its pilot phase in the Departamentos of San Miguel and Morazdn until December 31, 1977, or such other date as the Bank shall agree, and, thereafter, extend the content of such program and its application to all the territories of the Borrower on the basis of the preceding evaluation; and (d) cause Direcci6n de Educaci6n Permanente y de Adultos of the Ministry of Education to collaborate closely with FOCCO. Section 3.05. Except as the Bank shall otherwise agree, the Borrower shall, in the carrying out of the Project: (a) employ (i) consultants to supervise the - construction of the buildings for the educational institutions included in the Project, and (ii) educational specialists to provide the technical assistance under Part C of the Project, all acceptable to the Bank, and to an extent and upon terms and conditions satisfactory to the Bank; and (b) assign qualified staff in adequate numbers to work as counterparts and support the services of such specialists, on terms and conditions satisfactory to the Bank. Section 3.06. (a) In carrying out Part A of the Project, the Borrower shall employ contractors acceptable to the Bank upon terms and conditions satisfactory to the Bank. (b) The Borrower shall carry out the construction works in accordance with standards appropriate to the specific functions of the educational facilities included in Part A of the Project. Section 3.07. During the carrying out of the Project the Borrower shall: (a) maintain DAE and ODEPOR with the functions and responsibilities specified in Schedule 5 to this Agreement; (b) maintain in DAE a procurement section adequately staffed and organized; 7 (c) assign, on a full time basis: (i) to DAE a Director, a Chief Procurement Officer, a Chief Architect and a Senior Educator seconded by Direcci6n de Tcnico Pedag6gico of the Ministry of Education of the Borrower, and (ii) to ODEPOR a Project Coordinator, all appointed in consultation with the Bank upon terms and conditions satisfactory to the Bank; and (d) provide DAE and ODEPOR with such powers, facilities (including transport and communication facilities) and resources as shall be required by them to fulfill their duties in respect of the Project. Section 3.08. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the Project. Section 3.09. (a) The Borrower shall furnish to the Bank, for approval, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Loan, and to disclose the use thereof in the Project; (ii) shall enable the Bank's accredited representatives to examine the Project, the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning the Project, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. Section 3.10. The Borrower shall construct the Project schools in the locations chosen in accordance with the criteria set forth in Schedule 6 to this Agreement, and specified in the list of even date herewith agreed between the Borrower and the Bank, as such list may be amended from time to time in accordance with such criteria and with the prior concurrence of the Bank. 8 Section 3.11. The Borrower shall: (a) unless the Bank shall otherwise agree, select sites for the Project schools in accordance with the criteria specified in Schedule 7 to this Agreement; and (b) take all such action as shall be necessary to acquire all such land and rights in respect of land as shall be required for the construction (and operation) of the Project schools before commencing final design work for such schools and shall furnish to the Bank, promptly after such acquisition, evidence satisfactory to the Bank that such land and rights in respect of land are available for purposes related to the Project. Section 3.12. The Borrower shall: (a) implement the General Basic Education Curriculum; and (b) provide all Project schools with adequate equipment, including TV sets in the number required for the carrying out of subparagraph (a) hereof. Section 3.13. The Borrower shall take all such action, including the granting of all such necessary authorizations, foreign exchange permits and other approvals as shall be necessary to ensure the timely importation of the goods required for the carrying out of the Project. Section 3.14. Unless the Bank shall otherwise agree, the Borrower shall: (a) not later than June 30, 1975, construct at least 30 of those housing units included in Part A.4 of the Project; (b) before starting construction work under Part A.1 and 2(a) of the Project, furnish to the Bank: (i) the criteria to select the locations for the housing units referred to in sub-paragraph (a) hereof, and (ii) the principles and procedures for evaluating the benefits of such housing units, all satisfactory to the Bank; (c) during construction of the first 300 schools included in Part A.1 and 2(a) of the Project evaluate in accordance with the principles and procedures referred to in sub-paragraph (b)(ii) hereof the benefits of such housing units; (d) not later than December 31, 1976 furnish to the Bank, a report of such evaluation satisfactory to the Bank; (e) until confirmation that such report has been received by the Bank, not start construction work for the remaining schools included in Part A.1 and 2(a) of the Project; and (f) if the findings of such report so justify it, construct the other housing units included in Part A.4 of the Project, giving priority to the communities where schools included in Parts A.1 and 2(a) of the Project are located. 9 ARTICLE IV Other Covenants Section 4.01. (a) It is the mutual intention of the Borrower and the Bank that no other external debt shall enjoy any priority over the Loan or the Bonds by way of a lien on governmental assets. (b) To that end the Borrower (i) represents that at the date of this Agreement no lien exists on any governmental assets as security for any external debt except as otherwise disclosed in writing by the Borrower to the Bank, and (ii) undertakes that, except as the Bank shall otherwise agree, if any such lien shall be created, it will ipso facto equally and ratably, and at no cost to the Bank or the holders of the Bonds, secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds and in the creation of any such lien express provision will be made to that effect. The Borrower shall promptly inform the Bank of the creation of any such lien. (c) The foregoing representation and undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (d) As used in this Section, the term "governmental assets" means assets of the Borrower or of any of its political subdivisions or of any agency of the Borrower or of any such political subdivision, including the Banco Central de Reserva de El Salvador or any institution performing the functions of a central bank for the Borrower. Section 4.02. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained sound accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. Section 4.03. (a) The Borrower shall operate, or cause to be operated, the educational institutions and facilities included in the Project in accordance with sound administrative and educational policies and practices and with due regard to economy. 10 (b) The Borrower shall at all times employ, or cause to be employed, qualified administrators and teachers in adequate numbers to staff the educational institutions included in the Project. Section 4.04. The Borrower shall: (a) adequately maintain or cause to be maintained the buildings, furniture and equipment of the educational institutions included in the Project and make or cause to be made all necessary repairs and renewals thereof in accordance with sound technical and administrative practices; and (b) provide or cause to be provided, promptly as needed, the funds, facilities, services and other resources (including teaching materials and text books) required for the foregoing. Section 4.05. In connection with its undertaking under Sections 3.01(a) and 4.03(a) of this Agreement, and except as the Bank shall otherwise agree, the Borrower shall within the second year after the date of this Agreement and every year thereafter until completion of the Project, review and promptly send to the Bank for its comments: (a) the enrollment plans and targets for: (i) the basic and secondary education levels in order to ensure that such plans and targets are within the Borrower's financial capacity and that the objectives of enrollment expansion in Rural Areas and improvement in quality and efficiency of education at these levels are achieved; and (ii) pre-service and in-service courses in teacher training programs for basic and secondary education, to fulfill the Borrower's objectives of meeting additional teacher requirements and quality improvement of the teaching force in the most efficient manner; and (b) an evaluation of the effectiveness of the schools in Rural Areas in performing their function as centers for community activities and rural services, such as health and agricultural extension, provided by the Borrower. Section 4.06. The Borrower shall compensate equitably local communities participating in the construction of Project schools. The criteria to determine such compensation shall be formulated by the Borrower in consultation with the Bank before construction of Project schools starts. ARTICLE V Consultation, Information and Inspection Section 5.01. The Borrower and the Bank shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end, the Borrower and the Bank shall from time to time, at the request of either party: 11 (a) exchange views through their representatives with regard to the performance of their respective obligations under the Loan Agreement, the administration, operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out any part of the Project, and other matters relating to the purposes of the Loan; and (b) furnish to the other all such information as it shall reasonably request with regard to the general status of the Loan. On the part of the Borrower, such information shall include information with respect to financial and economic conditions in the territories of the Borrower, including its balance of payments, and the external debt of the Borrow-r, of any of its political subdivisions and of any agency of the Borrower oi any such political subdivision. Section 5.02. (a) The Borrower shall furnish or cause to be furnished to the Bank all such information as the Bank shall reasonably request concerning the educational system of the Borrower, and the administration, operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out any part of the Project. (b) The Borrower and the Bank shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Loan, the maintenance of the service thereof or the performance by either of them of its obligations under the Loan Agreement. Section 5.03. The Borrower shall afford all reasonable opportunity for accredited representatives of the Bank to visit any part of the territories of the Borrower for purposes related to the Loan. ARTICLE VI Taxes and Restrictions Section 6.01. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories; provided, however, that the foregoing shall not apply to taxation of payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Borrower. Section 6.02. The Loan Agreement and the Bonds shall be free from any taxes on or in connection with the execution, issue, delivery or registration thereof 12 imposed under the laws of the Borrower or laws in effect in its territories and the Borrower shall bear the cost of any such taxes, if any, imposed under the laws of the country or countries in whose currency the Loan and the Bonds are payable or laws in effect in the territories of such country or countries. Section 6.03. The payment of the principal of, and interest and other charges on, the Loan and the Bonds shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories. ARTICLE VII Remedies of the Bank Section 7.01. If any event specified in Section 7.01 of the General Conditions shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continuance thereof, the Bank, at its option, may by notice to the Borrower declare the principal of the Loan and of all the Bonds then outstanding to be due and payable immediately together with the interest and other charges thereon, and upon any such declaration such principal, inter-st and chaiges shall become due and payable immediately, anything to the contrary in the Loan Agreement or in the Bonds notwithstanding. ARTICLE VIII Termination Section 8.01. The date August 13, 1974, is hereby specified for the purposes of Section 11.04 of the General Conditions. ARTICLE IX Representative of the Borrower; Addresses Section 9.01. The Ministro de Hacienda and the Ministro de Educacion of the Borrower are designated as representatives of the Borrower for the purposes of Section 10.03 of the General Conditions. Section 9.02. The following addresses are specified for the purposes of Section 10.01 of the General Conditions: 13 For the Borrower: Ministerio de Hacienda 3a Avenida Norte y 13a Calle Poniente San Salvador El Salvador and Ministerio de Educaci6n Biblioteca Nacional San Salvador El Salvador Cable address: Ministro de Hacienda San Salvador and Ministro de Educaci6n San Salvador For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed 14 in their respective names and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF EL SALVADOR By /s / Francisco Bertrand Galindo Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s / Gunter Wiese Acting Regional Vice President Latin America and the Caribbean 15 SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of eligible expenditures so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed I. Civil works 62% of total expenditures (a) Part A. 1 1,600,000 (b) Part A.2, 5,300,000 3(a) and 5 (c) Part A.4 400,000 II. Equipment and 3,900,000 100% of foreign furniture under expenditures, Parts A and D of and 85% of local the Project expenditures III. Technical assis- 400,000 85% of total ex- tance venditures IV. (a) Project admin- 800,000 ) istration, pro- ) fessional serv- ) ices and Part ) E of the Proj- ) 62% of total ect ) expenditures (b) Special pro- 300,000 ) grams under ) Parts B.1 and ) 3 of the Proj- ) ect V. Unallocated 4,300,000 TOTAL 17,0000 16 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures for goods produced in, or services supplied from, the territories, and in the currency, of any country other than the Borrower; (b) the term "local expenditures" means expenditures in the currency of the Borrower, or for goods produced in, or services supplied from, the territories of the Borrower; and (c) the term "total expenditures" means the aggregate of foreign and local expenditures. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement, except that withdrawals may be made in respect of Categories II and III on account of expenditures incurred after May 1, 1974 in an aggregate amount not exceeding the equivalent of $200,000; and (b) payments for taxes imposed under the laws of the Borrower or laws in effect in its territories on goods or services, or on the importation, manufacture, procurement or supply thereof. To the extent that the amount represented by the percentage set forth in the third column of the table in paragraph I above in respect of any Category would exceed the amount payable net of all such taxes, such percentage shall be reduced to ensure that no proceeds of the Loan will be withdrawn on account of payments for such taxes. 4. Notwithstanding the allocation of an amount of the Loan set forth in the second column of the table in paragraph I above: (a) if the estimate of the expenditures under any Category shall decrease, the amount of the Loan then allocated to such Category and no longer required therefor will be reallocated by the Bank by increasing correspondingly the unallocated amount of the Loan; (b) if the estimate of the expenditures under Categories I(a) and (c), II, III and IV shall increase, and if in the case of Category I(b) such increase shall be caused by price escalation, the percentage set forth in the third column of the table in paragraph I above in respect of such expenditures shall be applied to the amount of such increase, and a corresponding amount will be allocated 17 by the Bank, at the request of the Borrower, to such Category from the unallocated amount of the Loan, subject, however, to the requirements for contingencies, as determined by the Bank, in respect of any other expenditures; and (c) if the Bank shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. 5. Notwithstanding the percentages set forth in the third column of the table in paragraph 1 above, if the estimate of total expenditures under Categories I or IV shall increase and no proceeds of the Loan are available for reallocation to such Category, the Bank may, by notice to the Borrower, adjust the percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 180 SCHEDULE 2 Description of the Project The Project will provide basic education to Rural Areas; expand teacher training capacity; replace basic education schools and help introduce the General Basic Education Curriculum in Urban and Rural Areas; and establish a non-formal rural training program. The Project consists of the following parts: A. Design, construction, furnishing and equipping of: 1. New schools in Rural Areas about 130 schools (for the first four grades of basic education) with an aggregate capacity for about 10,400 student places; about 13 schools (for up to nine grades of basic education) with an aggregate capacity for about 1,600 student places. 2. Replacement schools (a) in Urban and Rural Areas about 194 schools (for the first four grades of basic education) with an aggregate capacity for about 15,500 student places; about 99 schools (for up to nine grades of basic education) with an aggregate capacity for about 17,500 student places; (b) in Urban Areas about 6 schools (for up to nine grades of basic education) with an aggregate capacity for about 3,900 student places located in the settlements built by FSVM. 3. Extensions to existing schools in Urban and Rural Areas (a) about 99 workshops, and laboratories, and about 79 classrooms with an aggregate capacity of about 7,100 student places for about 121 basic education schools; and (b) about 146 workshops with a total capacity of about 2,900 student places for about 146 basic education schools. 19 4. Housing units for school staff in Rural Areas where adequate housing facilities for such staff are not available. 5. Six classrooms, four laboratories and four workshops at Ciudad Normal with an aggregate capacity for about 500 student places. B. Special programs 1. Establishment, operation and evaluation of a non-formal rural training program during its pilot phase in the Departamentos of San Miguel and Morazdn. 2. Expansion of such non-formal rural training program. 3. Establishment and operation of an in-service teacher training program. C. Engagement of specialist services and provision of fellowships as detailed in the attached Exhibit for: (a) improvement in curricula and school administration; (b) upgrading of educators and administrators of the educational system; and (c) assisting the Borrower in the establishment, operation and evaluation of the non-formal rural training program, and in the training abroad of supervisors for such program. D. Purchase and utilization of equipment for Part B.1 and 2 hereof. E. Preparation of a project to assist the Borrower in the further implementation of structural reforms of the educational system. The Project is expected to be completed by June 30, 1978. 20 Exhibit to Schedule 2 Specialist Services and Fellowships and Approximate Period of Services Specialists Fellowships Field Man-Years Number Man-Years (estimated) 1. Teacher Training 13 6-1/2 Science Teaching 2 Industrial Arts 2 Practical Subjects 2 Teaching To be determined by I agreement between the Borrower and the Bank 2. Non-Formal Rural Training 20 5 Principal Advisor 4 Evaluation Techniques 1/2 Artisan Techniques 3 To be determined by 1 agreement between the Borrower and the Bank 21 SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* December 1, 1984 195,000 June 1, 1985 200,0 December 1, 1985 210,000 June 1, 1986 215,000 December 1, 1986 225,000 June 1, 1987 235,000 December 1, 1987 240,0 June 1, 1988 250,000 December 1, 1988 260,000 June 1, 1989 270,000 December 1, 1989 280,000 June 1, 1990 290,000 December 1, 1990 300,000 June 1, 1991 310,000 December 1, 1991 320,000 June 1, 1992 335,00 December 1, 1992 345,000 June 1, 1993 360,000 December 1, 1993 370,000 June 1, 1994 385,000 December 1, 1994 400,000 June 1, 1995 415,00 December 1, 1995 430,00 June 1, 1996 445,000 December 1, 1996 460,000 June 1, 1997 475,000 December 1, 1997 495,000 June 1, 1998 510,000 December 1, 1998 530,00 June 1, 1999 550,000 December 1, 1999 570,000 June 1, 2000 590,00 December 1, 2000 610,000 June 1, 2001 630,000 December 1, 2001 655,0 June 1, 2002 680,000 December 1, 2002 705,000 June 1, 2003 730,0 December 1, 2003 755,000 June 1, 2004 770,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 22 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05(b) of the General Conditions or on the redemption of any Bond prior to its maturity pursuant to Section 8.15 of the General Conditions: Time of Prepayment or Redemption Premium Not more than four years before maturity 3/4% More than four years but not more than eight years before maturity 2-1/4% More than eight years but not more than fourteen years before maturity 3% More than fourteen years but not more than twenty years before maturity 4-1/2% More than twenty years but not more than twenty-six years before maturity 5-3/4% More than twenty-six years but not more than twenty-eight years before maturity 6-3/4% More than twenty-eight years before maturity 7-1/4% 23 SCHEDULE 4 Procurement I. Contracts Subject to International Competitive Bidding A. Contracts for Civil Works 1. Whenever practicable, the civil works shall be grouped to form one or more economic bid packages. 2. With respect to any contract for civil works estimated to cost the equivalent of $100,000 or more: (a) Contractors shall be prequalified. The Borrower shall, before qualification is invited, inform the Bank in detail of the procedure to be followed and shall introduce such modifications in said procedure as the Bank shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequalification, shall be furnished by the Borrower to the Bank for its comments before the applicants are notified and the Borrower shall make such additions to or deletions from the said list as the Bank shall reasonably request. (b) Before bids are invited, the Borrower shall furnish to the Bank, for 4 its comments (i) a list of all contracts for civil works required for carrying out the Project, indicating the estimated value of each contract and the forecast timetable for bids and awards of such contracts. The Borrower shall have the option of awarding to one contractor one contract in respect of some or all the institutions and facilities, or separate contracts in respect of the various institutions and facilities to different contractors; (ii) the text of the invitations to bid and the specifications and other bidding documents; and (iii) a description of the advertising procedures to be followed for the bidding. The Borrower shall make such modifications in the said documents or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. (c) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Bank of the name of the bidder to whom it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report, on the evaluation and comparison of the bids received, together with the reasons for the intended award. The Bank shall, if it determines that the intended award would be inconsistent with the procedures 24 set forth or referred to in Section 2.03 of this Agreement, promptly inform the Borrower and state the reasons for such determination. (d) If the contract shall be awarded over the Bank's reasonable objection, or its terms and conditions shall, without the Bank's concurrence, materially differ from those on which bids were asked, no expenditures thereunder shall be financed out of the proceeds of the Loan. (e) Two certified copies of the contract shall be furnished to the Bank promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. (f) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked, provided that any proposed change in a contract involving a price increase of 10% or more of the contract sum or more than $25,000 equivalent, whichever is less, shall be deemed to be a material change for purposes of this subparagraph (f). 3. In respect to any contract for civil works estimated to cost less than $100,000 equivalent, the Borrower shall furnish to the Bank promptly after the execution of any such contract and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of any such contract, two conformed copies of such contract, together with the analysis of bids, recommendations for award and such other information as the Bank shall reasonably request. B. Contracts for Furniture and Equipment 1. Items shall be grouped so as to permit bulk procurement as shall be consistent with appropriate technical and procurement practices. Insofar as practicable, contracts for such items shall be for not less than $5,000 equivalent. 2. Before inviting bids, the Borrower shall send to the Bank for its approval the following: (a) lists of all items required for the Project and the proposed grouping thereof, showing the specifications and the estimated unit price of each item and the total price of each category of items. The list shall identify all items. Items shall be indexed, coded and numbered for identification with the educational institution, courses and space for which they are required. Amendments to such list shall also be sent to the Bank for approval; and 25 (b) draft standard documents for inviting tenders, forms of contracts and a description of the method to be used for inviting bids on an international basis, including the proposed advertising procedures. Bidding documents shall specify that bidders must bid for at least 85%, or such other percentage as shall be agreed with the Bank, of each package, and that the Borrower may make awards for less than one package if judged more economical. 3. The Borrower shall send to the Bank, after bids have been evaluated, a summary and analysis thereof, and obtain the Bank's approval before awarding a contract. In case of a contract to be awarded to other than the lowest bidder, the Borrower shall send to the Bank a brief justification by DAE of the proposed award. 4. Promptly after bids have been evaluated and the contract has been awarded, the Borrower shall furnish the Bank with the following: (a) a certificate signed by the Director of DAE that the goods contracted for are in accordance with the quantities and specifications in the list apploved by the Bank under paragraph B.2 above; and (b) two conformed copies of the contract awarded, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. C. Supplemental Rale on Bid Evaluation and Comparison 1. For the purpose of evaluation and comparison of bids, customs duties and other import taxes on imported goods, and sales and similar taxes on locally supplied goods, shall be excluded, except to the extent hereinafter provided. Bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for locally manufactured goods. The cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their distribution, use or installation shall be taken into account in the evaluation of bids in accordance with paragraph 4.7 of the Guidelines for Procurement. 2. For the purpose of evaluating bids for goods included in Categories I and II of the table set forth in paragraph I of Schedule 1 to this Agreement, price shall be determined and compared in accordance with the following rules: (a) the term "Central American Bid" means a bid submitted by a manufacturer established in the territories of the member countries of the Central 26 American Common Market for goods manufactured or processed to a substantial extent (as reasonably determined by the Bank) in such territories; any other bid shall be deemed to be a "Non-Central American Bid"; (b) the price under a Central American Bid shall be the sum of the following amounts: (i) the ex-factory price of such goods; and (ii) freight, insurance and other costs of delivery of such goods to the place of their distribution, use or installation; (c) for the purpose of comparing any Non-Central American Bid with any Central American Bid, the price under a Non-Central American Bid shall be the sum of the following amounts: (i) the c.i.f. (port of entry) price of such goods; (ii) half the amount of any taxes on the importation of such goods into the territories of the Borrower which generally apply to non-exempt importers, or 15% of the amount specified in (i) above, whichever shall be the lower; and (iii) freight, insurance and other costs of delivery of such goods from their port of entry to the place of their use or installation. 3. The invitations to bid shall clearly indicate the margin of preference to be granted. II. Contracts not subject to International Competive Bidding In respect to any contract for furniture and equipment for less than $5,000 equivalent, the Borrower may procure such goods under such contracts in accordance with the normal procurement procedures of the Borrower. The aggregate cost of the goods to be so procured shall not exceed $300,000 equivalent. The Borrower shall submit to the Bank for its approval prior to the execution of any such contract, a list of the goods to be procured thereunder and shall make such modifications in the said lists as the Bank shall reasonably request. The Borrower shall furnish to the Bank, promptly after the execution of any such contract and prior to the submission to the Bank of the first application of withdrawals of funds from the Loan Account in respect of such contract, two conformed copies of the contract. 27 SCHEDULE 5 Functions and Responsibilities of ODEPOR and DAE ODEPOR will be responsible for, inter alia: (a) coordination with all the agencies of the Borrower in respect of the execution of all aspects of the Projrct; (b) overall planning and programming of Project execution and monitoring progress against plans; (c) selection, briefing, administration, coordination and supervision of the technical assistance program under Part C of the Project including the provision of counterparts and support services; (d) supervision and coordination of the execution of Parts B and E of the Project by the responsible entities of the Ministry of Education of the Borrower; (e) supervision and coordination of the preparation of the plans and syllabi referred to in Section 3.03 of this Agreement; (f) supervision and coordination of the preparation of detailed lists of the furniture and equipment required for Parts A and D of the Project; (g) supervision and coordination of pre-service training, appointment and in-service training of teachers for the facilities included in the Project; (h) monitoring the supervision of the implementation of the General Basic Education Curriculum in the schools included in Part A of the Project; and (i) preparation of quarterly progress reports for the Bank. 2. DAE will be responsible for, inter alia: (a) planning and programming the execution of Parts A and D of the Project, and monitoring progress against plans; (b) exploration and promotion of community participation in the construction and operation of the Project schools in Rural Areas; 28 (c) selection and acquisition of sites for the facilities to be constructed under Part A of the Project; (d) selection, briefing, coordination and supervision of the consultants referred to in Section 3.05(a)(i) of this Agreement; (e) briefing and coordination of the architects and engineers for, and review and approval of the design of, the facilities to be constructed under Part A of the Project; (f) award of contracts for civil works, furniture and equipment, including the preparation of bidding documents, the analysis of bids and the making of recommendations regarding the award of such contracts; (g) coordination and supervision of receipts, distribution, delivery and installation of the furniture and equipment under Parts A and D of the Project in consultation with the respective executing entities; (h) coordination of the work of the consultants in charge of supervising all civil works and acceptance of the completion certificates for these works; (i) keeping of records, including financial records of the execution of the Project, and preparation of quarterly progress reports on its activities related to the Project for the Bank; (j) preparation of guidelines on use and maintenance of school buildings, furniture and equipment, including teaching materials, included in the Project; and (k) management of funds for the Project, authorization of payments and preparation of applications for withdrawal of the proceeds of the Loan. 29 SCHEDULE 6 Criteria for the Location of Basic Education Schools 1. Criteria for the establishment of new schools in Rural Areas (Part Al of the Project) (a) the catchment area of a proposed new school will contain at least 50 children of age seven or a total population of at least 1,600 within a walking distance of three kilometers from the proposed school location; and (b) no other basic education school, which is not being fully utilized, will exist within a walking distance of four kilometers of the proposed site for a new school. 2. Criteria for the replacement of schools (Part A2 of the Project) Schools that are rented or in bad condition will be replaced by new facilities when their replacement is economically justified. 3. Criteria for the extension of existing schools (Part A3 of the Project) (a) extensions of schools in Urban Areas will be limited to workshops and laboratories; (b) extensions of schools in Rural Areas will consist of at least one workshop and laboratory or two classrooms; (c) a school will be extended by a workshop and a laboratory, only when the total enrollment in grades 7-9 of basic education is at least 100 in 1975, and when this enrollment can be expected to increase in future years; and (d) the schools proposed for extension will be selected in such a way that in each of the ten school zones of the Borrower at least ten workshops and ten laboratories will be established. For the purposes of this sub-paragraph "school zone" means an administrative division established by the Borrower for school supervision. 30 SCHEDULE 7 Criteria for the Selection of Sites for Basic Education Schools 1. Location Sites will be centrally located with regard to the catchment area, offer acceptable receipt of educational TV programs of the Borrower, be serviced by, or of easy connection to, water and electricity networks, and be well ventilated and far from possible sources of noise. Preference will be given to a location adjacent or close to other facilities used for community development, and due consideration will be given to the possibility of locating facilities for rural development agencies of the Borrower on or near the school premises. 2. Size Sites in Rural Areas will measure not less than 1,500 m2 for two or three-classroom schools, and not less than 4,000 m2 for a nine-grade school. Ratio between length and width of a site will be not more than three to one. 3. Con tourlines Sites will preferably be flat. If such sites are not available, due consideration will be given to contourlines in view of cost of site development and sun protection. 4. Accessibility Sites will be easily accessible by road or pathway, and due consideration will be given to geographic features such as rivers, streams or mountains. Sites for nine-grade schools will preferably be serviced by public transportation.