Tanzania - National Maize Project : Credit 0606 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 606 TA Development Credit Agreement (National Maize Project) BETWEEN UNITED REPUBLIC OF TANZANIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 29, 1976 CONFORMED COPY CREDIT NUMBER 606 TA Development Credit Agreement (National Maize Project) BETWEEN UNITED REPUBLIC OF TANZANIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 29, 1976 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated January 29, 1976, between UNITED REPUBLIC OF TANZANIA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) The Borrower intends to contract from the Arab Bank for Economic Development in Africa (hereinafter called BADEA) a loan (hereinafter called the BADEA Loan) in an amount of five million dollars ($5,000,000) to assist in financing part of the Project on the terms and conditions set forth in an agreement (hereinafter called the BADEA Loan Agreement) to be entered into between the Borrower and BADEA; WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements of the Association 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 and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Crop production year" means a period of 12 months starting on July 1 of one calendar year and ending on June 30 of the following calendai year; 4 (b) "Incremental cost of maize production inputs" means the cost of purchasing and delivering, ti the villages included in Part A of the Project, in any of the crop production years starting in 1976/7, such additional quantities and types of the maize production inputs included in Part H of the Project as shall exceed the quantities of such inputs purchased and delivered in the previous year, such additional quantities to be determined by the annual work programs referred to in Section 3.05 of this Agreement; (c) "TRDB" means Tanzania Rural Development Bank; (d) "Subsidiary Loan Agreement" means the Agreement to be entered into between the Borrower and TRDB pursuant to Section 3.01(b) of this Agreement, as the sane may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement; (e) "Maize production inputs" means maize seed, fertilizers, insecticides and herbicides; (f) "Maize Production inputs Account" means the account referred to in paragraphs (b) and (c) of Section 3.02 of this Agreement; (g) "Project Regions" means the regions of Arusha, Dodoma, Iringa, Kilimanjaro, Lindi, Mara, Mbeya, Morogoro, Mtwara, Rukva, Ruvuma, Tabora and Tanga; (h) "Project Servicing Unit" means the Project Servicing Unit included in Part E of the Project; and (i) "Project Steering Committee" means the Project Steering Committee referred to in Section 3.04 of this Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to eighteen million dollars ($18,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule may be amended from time to time by agreement between the 5 Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, the goods, works and services (other than consultants' services) for the Project to be financed out of the proceeds of the Credit, shall be procured in accordance with the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1980 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of I 9) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semi-annually on February I and August 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each February I and August I commencing February 1, 1986, and ending August 1, 2025, each installment to and including the installment payable on August 1, 1995 to be one-half of one per cent (1/2 of 1) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/21) of such principal amount. Section 2.08. The currency of the United Kingdom of Great Britain and Northern Ireland is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project, or cause the Project to be carried out, through its Ministry of Agriculture and through its regional authorities in charge of the Project Regions, with due diligence and efficiency and in conformity with appropriate administrative, agricultural and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. 6 (b) The Borrower shall cause TRDB to carry out Part C of the Project and shall relend to TRDB such portion of the proceeds of the Credit as the Association shall disburse for the purpose, all under a subsidiary loan agreement to be entered into between the Borrower and TRDB under terms and conditions which shall have been approved by the Association and which shall without limitation provide (i) for the amounts so relent to carry interest at the rate of four per cent (4%) per annum on the principal amount withdrawn and outstanding from time to time and to be repaid to the Borrower over a period of 20 years (including a grace period of 5 years), (ii) for the sub-loans to be made by TRDB Linder Part C of the Project to carry interest at the rate of eight and one-half per cent (8-1/2%) per annum on the principal amount withdrawn and outstanding from time to time and to be repaid to TRDB over a period of (A) 10 years in the case of sub-loans for storage facilities and (B) 3 years in the case of sub-loans for trucks, (iii) for TRDB to maintain a separate account to be used exclusively for the recording of all of its payments and receipts under Part C of the Project, and (iv) for TRDB to cause the National Milling Corporation, the cooperative unions and the village cooperatives receiving sub-loans under Part C of the Project to maintain appropriate accounts. (c) The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.02. In carrying out Part A of the Project, the Borrower shall: (a) sell and deliver the maize production inputs at such prices as the Borrower, after consultation with the Association, shall from time to time determine; (b) without restriction or limitation upon the provisions of paragraph (a) of Section 3.01 of this Agreement, open and maintain an account (hereinafter called the Maize Production Inputs Account) to be used exclusively to make payments for the purchase and delivery of the maize production inputs under Part A of the Project. The Borrower shall deposit into the Maize Production Inputs Account such amounts as shall be from time to time required to permit such payments to be made, promptly as needed, out of the Maize Production Inputs Account, and the Maize Production Inputs Account shall be maintained until all such payments shall have been made; (c) without restriction or limitation upon the provisions of paragraph (b) of this Section, deposit into the Maize Production Inputs Account (i) all proceeds 7 from the sale and delivery of maize production inputs under Part A of the Project and (ii) any such further amounts as shall be required to ensure that on the first day of each calendar quarter there shall be available in such Account amounts sufficient to meet payments for total expenditures for the purchase and delivery of maize production inputs under Part A of the Project expected to be made during such quarter in accordance with the contractual procurement schedules as such schedules may be established from time to time by the Borrower after consultation with the Association; and (d) authorize the Project Servicing Unit to make such withdrawals at such times from the Maize Production Inputs Account as shall be required to make promptly any payments for expenditures for the purchase and dclivery of maize production inputs under Part A of the Project. Section 3.03. The Borrower shall cause maize seed to he made available in varieties, qualities and quantities adequate to timely meet the requirements of the Project. Section 3.04. The Borrower shall establish, and maintain a Project Steering Committee to approve the annual work programs referred to in Section 3.05 A- hereinafter and to give general guidance to, and ensure the adequate coordination among, all agencies of the Borrower involved in carrying out the Project. The Committee shall include the Principal Secretary, Ministry of Agriculture; and representatives from the Prime Minister's Office and the Ministry of Finance and Planning: the Commissioner for Rural Development; the Project Manager serving as head of the Project Servicing Unit; and such other members as the Borrower shall from time to time determine. Section 3.05. The Borrower shall submit to the Association, not later than March 31 of each year, for its approval the annual work programs and cost estimates for all Project activities prepared by the Project Servicing Unit and approved by the Project Steering Committee. Section 3.00. In order to assist the Borrower in carrying out Part D of the Project, the Borrower shall employ agricultural and engineering consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 3.07. (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 Credit against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance 8 any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Association shall otherwise agree, all goods and services financed out of the proceeds of the Credit shall be used exclusively for the Project until its completion. Section 3.08. (a) The Borrower shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association 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 Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. Section 3.09. The Borrower shall make arrangements satisfactory to the Association to ensure that, not later than April 1, 1976, (a) the Farm Management Specialist included in Part E.1 of the Project takes LIP his duties, or (b) a qualified consultant or a qualified official of the Borrower's Ministry of Agriculture is employed or assigned to temporarily carry out the duties of such Farm Management Specialist. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall cause TRDB to maintain records adequate to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of TRDB. (b) The Borrower shall cause TRDB to: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case 9 not later than six months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of TRDB and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. The Borrower (i) shall cause to be audited for each fiscal year the accounts of the cooperative unions and village cooperatives receiving sub-loans under Part C of the Project, and (ii) shall furnish to the Association, upon its request, the reports of such audits by said auditors as well as such other information relating thereto as the Association shall reasonably request. ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) TRDB shall have failed to perform any of its obligations under the Subsidiary Loan Agreement, (b) an extraordinary situation shall have arisen which shall make it improbable that TRDB will be able to perform its obligations under the Subsidiary Loan Agreement; (c) the organization, powers and responsibilities of TRDB shall have been altered in such a way as to affect materially and adversely the execution of Part C of the Project or the efficient operation of TRDB, and (d) (i) subject to subparagraph (ii) of this paragraph: (A) The right of the Borrower to withdraw the process of the BADEA Loan made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated i. whole or in part, pursuant to the terms of the BADEA Loan Agreement, or (B) the BADEA Loan shall have become dlue and payable prior to the agreed maturity thereof. 10 (ii) subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement, and (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following events are specified pursuant to paragraph (d) thereof: (a) any event specified in paragraphs (a), (b) and (c) of Section 5.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower; and (b) the event specified in paragraph (d)(i)(B) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01(b) of the General Conditions: (a) the execution and delivery of the Subsidiary Loan Agreement on behalf of the Borrower and TRDB, respectively, have been duly authorized or ratified by all necessary corporate and governmental action: (b) (i) the execution and delivery of the BADEA Loan Agreement on behalf of the Borrower and BADEA, respectively, have been duly authorized or ratified by all necessary corporate and governmental action, and all conditions precedent to the effectiveness of such agreement or the right to make withdrawals thereunder, except only the effectiveness of said loan agreement, shall have b-,en fulfilled; and (ii) the Borrower shall have entered into a subsidiary loan agreement with TRDB providing foi the on-lending of such portion of the BADEA Loan as shall be disbursed to assist in the financing of expenditures for Part C of the Project: 11 (c) the Project Servicing Unit shall have been established and the staff members thereof specifically set forth in Part E.1 of the Project (except the Farm Management Specialist) shall have been appointed and shall have taken up their duties; (d) the Regional Maize Project Coordinators and the District Maize Project Supervisors included in Part B. 1 of the Project shall have been appointed; (e) the Maize Production Inputs Account shall have been established; and (f) the Project Steering Committee referred to in Section 3.04 iereof shall have been established. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02(b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely, that the BADEA Loan Agreement, the Subsidiary Loan Agreement and the agreement referred to in paragraph (b)(ii) of Section 6.01 of this Agreement have been duly authorized or ratified by, and executed and delivered on behalf of, the respective parties thereto and are legally binding upon such parties in accordance with their respective terms. Section 6.03. The date May 3, 1976, is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.04. The obligations of the Borrower under Sections 4.01, A.02 and 5.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty-five years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Represe,itative of the Borrower; Addresses Section 7.01. The Ainister of the Borrower at the time responsible for Finance is designated as re presentative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. TI.e following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: The Principal Secretary The Ministry of Finance and Planning P.O. Box 9111 Dar es Salaam United Republic of Tanzania 12 Cable address: TREASURY Dar es Salaam For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. UNITED REPUBLIC OF TANZANIA By /s / Paul Bomani Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / S. Shahid Husain Regional Vice President Eastern Africa 13 SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Incremental cost of maize produc- tion inputs re- quired for crop production years 1976/7 on: (a) imported ) 100% of foreign ) expenditures ) 5,500,000 (b) locally ) 80% procured ) (2) Equipment and ma- terials: (a) imported ) 100% of foreign ) expenditures ) 2,600,000 (b) locally ) 80% procured ) (3) Construction of 3,200,000 80% National Milling Corporation's, and regional, storage facilities as well as offices for Pro- ject Servicing Unit Staff 14 Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (4) Consultants' serv- 1,100,000 100% of foreign ices and remunera- expenditures tion of Project Servicing Unit staff (5) Salaries of Proj- 3,100,000 80% ect Servicing Unit's supporting staff and of staff included in Part B.1 of the Project; operation and main- tenance of vehicles used by Project Servicing Unit's staff and by staff included in Part B.1 of the Proj- ect; and local staff training (6) Unallocated 2,500,000 TOTAL 18,000,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower and for goods or services supplied from the territory of the Borrower. 3. The disbursement percentages have been calculated in compliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on 15 goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 4. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of expenditures prior to the date of this Agreement, except that withdrawals may be made in respect of Categories (2), (3), (4) and (5) on account of expenditures incurred after July 1, 1975 in an aggregate amount not exceeding the equivalent of $300,000. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph I above. if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Boirower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 16 SCHEDULE 2 Description of the Project The Project is the 1975/6-1978/9 portion of the Borrower's National Maize Production Program and consists of the following Parts: Part A: Maize Production Inputs The sale and delivery by the Borrower, through the regional authorities, of maize production inputs to village cooperatives in about 950 villages in the Project Regions during the crop production years 1975/6 through 1978/9. Part B. Strengthening of Extension Services The strengthening of extension services provided by the Borrower, through the regional authorities, to maize farmers in the Project Regions by the following means: 1. The employment, in each Project Region, of a fulltime Regional Maize Project Coordinator, and in each district within each Project Region, of a full-time District Maize Project Supervisor, as well as of the necessary field extension staff. 2. The training of the staff included in paragraph I above in maize agronomy and management. 3. The provision, to the staff included in paragraph I above, of adequate transport and of extension aids as well as of the inputs required to carry out demonstrations in improved maize husbandry. 4. The acquisition and production of suitable maize production films and the provision and operation, in each Project Region, of one mobile film unit to show such films in villages in the respective Project Region. 5. The production, and the distribution in the Project Regions, of maize production leaflets and of a monthly agricultural newspaper. Part C Transportation and Storage 1. The provision by TRDB, on terms and conditions acceptable to the Association, of sub-loans to the National Milling Corporation, regional 17 cooperative unions as well as village cooperatives to assist them in financing the acquisition of trucks as well as the construction of regional and local storage facilities, all for the purpose of improving the transportation and the storage, in the Project Regions, of maize production inputs as well as of maize grain produced in such Regions. 2. The acquisition, by TRDB, of 2 four-wheel drive vehicles. Part D: Research and Studies 1. The carrying out, by or inder the supervision of the Borrower's Ministry of Agriculture, of (a) suitable field trials in maize production in all Project Regions, and (b) a detailed review of all aspects of maize agronomy in the major maize growing areas of Tanzania, including the development of recommendations for the formulation of a national adaptive maize research program. 2 The preparation of detailed investment proposals (including a review of the Borrower's existing plans for the purpose) for (a) the establishment of a national grain reserve, and (b) the expansion and modernization of the milling and storage facilities of the National Milling Corporation. 3. The preparation of investment proposals for a national agricultural development program. including the Project. 4. A pilot scheme to develop methods to improve oxen utilization in agriculture, in about 20 Project villages and in about 4 mechanized agriculture centers that are being established with the assistance of United Nations Development Programme and United Nations Food Agriculture Organization. Part E: Project Servicing Unit 1. The establishment and operation, within the Crop Production Division of the Borrower's Ministry of Agriculture, of a Project Servicing Unit to be responsible for overall Project implementation, coordination and supervision, such Unit to include a Project Manager as head of the Unit, an Extension Specialist, a Financial Controller, a Farm Management Specialist, a Procurement and Distribution Officer (all of whom shall be appointed after consultation with the Association) as well as the necessary supporting staff. 18 2. The provision to the Project Servicing Unit of the necessary offices, equipment and vehicles, including a light aircraft. * * * * P The Project is expected to be completed by January 31, 1980. 19 SCHEDULE 3 Procurement A. General Procedures 1. Except as provided in Part A.3 hereof, goods, works and services shall be procured under contracts to be awarded in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in August 1975 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. (a) Contracts shall be grouped into economic bid packages. (b) Bidders for the construction of regional storage facilities shall be required to prequalify as described in part 1.3 of the Guidelines. 3. (a) Contracts for maize seeds, film vans as well as for goods and services estimated to cost less than the equivalent of $120,000 shall be awarded in accordance with the Borrower's usual procurement procedures. (b) If in the view of the Project Servicing Unit and the regional authorities of the Borrower, the construction of the local storage facilities included in Part C of the Project would be facilitated by procuring the necessary materials through normal commercial channels close to the place of use of such materials, they shall be so procured, and the Borrower shall procure an equivalent additional amount of such materials in accordance with the procedures referred to in paragraph I hereof. B. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers I. For the purpose of evaluation and comparison of bids for the supply of goods: (i) 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 domestically-manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically-supplied goods, shall be excluded; and (iii) the cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. 2. Goods manufactured in Tanzania may be granted a margin of preference in accordance with, and subject to, the following provisions: 20 (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and. comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Tanzania if the bidder shall have established to the satisfaction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in Tanzania equal to at least 20'/ of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Tanzania. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes on goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evaluated bid of each group. Such lowest evaluated bids shall then be compared with each other, and if. as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. (d) If, as a result of the comparison under paragraph (c) above, the lowest bid is a bid from group C. all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid, or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 1 5% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for tile award; if not, the bid from group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shail be selected. C. Evaluation and Comparison of' Bids fbr Ciil Works; Preferences fbr Domestic Con tractors With respect to any contract for civil works included under Category (3) of the table set forth in Schedule 1 to the Development Credit Agreement, a margin 21 of preference of 7-1/2% may be granted to domestic contractors, in accordance with, and subject to, the following provisions: (a) Contractors shall be required to prequalify as provided in Part A.2(b) of this Schedule and applicants for qualification applying also for such preference shall be asked to provide, as part of the information for qualification, to submit together with their bids, such information, including details of ownership, as shall be required to determine whether, according to the classification established by the Borrower and accepted by the Association, a particular firm or group of firms qualifies for a domestic preference. The bidding documents shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. (b) After bids have been received and reviewed by the Borrower, responsive bids will be classified into the following groups: (i) bids offered by domestic contractors eligible for preference, and (ii) bids offered by other contractors. For the purpose of evaluation and comparison of bids an amount equal to 7-1/2% of the bid amount shall be added to bids received under group (ii) above. D. Review of Procurement Decisions by the Association 1. Review of prequalification. The Borrower shall, before qualification is invited, inform the Association in detail of the procedure to be followed and shall introduce such modifications in said procedure as the Association shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and, where applicable, of their eligibility for domestic preference under Part C above and of the reasons for the exclusion of any applicant for prequalification and for such eligibility shall be furnished by the Borrower to the Association for its comments before the applicants are notified, and the Borrower shall make such additions to, deletions from, or modifications in, the said list as the Association shall reasonably request. 2. Review of invitation to bid and of proposed awards and final contracts. With respect to all contracts for goods, works and services estimated to cost the equivalent of $300,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Association. for its comments, the text of the invitations to bid and the specifications and 22 other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and the reasons for the intended award and shall furnish to the Association, in sufficient time for its review, a detailed report, by the consultants referred to in Section 3.06 of this Agreement, on the evaluation and comparison of the bids received, together with the recommendation for award of the said consultants and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination.