Morocco - Meknes Agricultural Development Project : Credit 0555 - Credit Agreement - Conformed

f7 T-3 CONFORMED COPY CREDIT NUMBER 555 MOR Development Credit Agreement (Meknes Agriculture Development Project) BETWEEN KINGDOM OF MOROCCO AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 11, 1975 CONFORMED COPY CREDIT NUMBER 555 MOR Development Credit Agreement (Meknes Agriculture Development Project) BETWEEN KINGDOM OF MOROCCO AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 11, 1975 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 11, 1975, between KINGDOM OF MOROCCO (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). 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 have the respective meanings therein set forth and the following additional terms have the following meanings: (a) " Project Area" means communes rurales of Dir, Ain Taoujdat, Sebaa Aioun and Tizguit; and (b) "Services Provinciaux" means the sub-division of the Borrower's Ministry of Agriculture and Agrarian Reform responsible inter alia for the Project Area. 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 fourteen million dollars ($14,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost 4 of goods and services required for the Project described in Schedule 2 to this Agreement 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 March 31, 1981 or such later date as the Association shall establish. The Association shall promptly notify the .orrower 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 1%) 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 April I and October 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each April 1 and October 1, commencing October 1, 1985, and ending April 1, 2025, each installment to and including the installment payable on April 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 (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appropriate agricultural, engineering, financial and administrative practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. (a) Unleqs the Borrower and the Association shall otherwise agree, in order to assist the Borrower in preparing the land reform plans included in Part B of the Project and in other aspects of the execution of the Project, the Borrower shall employ a land capability classification consultant and such other 5 consultants as shall be required, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. (b) In carrying out Part K of the Project, the Borrower shall, in its Ministry of Interior, employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 3.03. (a) The Borrower shall establish the position of Deputy to the Chief of the Services Provinciaux of Meknes, to be responsible to the said Chief for the execution of the Project and shall ensure that the said position shall be filled at all times by a person with such qualifications and experience as shall be required for the successful carrying out of the Project. (b) The Borrower shall ensure that the said Services Provinciaux are at all times staffed with personnel with adequate qualifications and experience and in sufficient number to ensure the successful execution of the Project. Section 3.04. The Borrower shall furnish to the Association not later than September 30, 1975 or such other date as the Association shall agree, a plan acceptable to the Association, for the reorganization of the Services Provinciaux. Section 3.05. In carrying out the land reform included in Part B of the Project, the Borrower shall: (a) determine the size of holdings to be distributed by using as a criterion a net farm income potential during the first year after distribution of DH 6,000 such income to be based on land productivity assessed by methods acceptable to the Association; and (b) undertake a detailed survey of incomes of members of cooperatives receiving land under the said Part B and analyze data on the income of such cooperative members. Section 3.06. Before carrying out Part H of the Project, the Borrower shall survey the existing irrigation system of the Betit are to: (i) provide the basis for design of the rehabilitation and extension of the said system; and (ii) to verify the quantity and quality of the water to be used in the operation of the extension of the said system. 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 6 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 Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.08. (a) The Borrower shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and work 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 thec..,mof) 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. ARTICLE IV Other Covenants Section 4.01. The Borrower shall establish: (i) in the Services Provinciaux not later than December 31, 1975, or such other date as the Borrower and the Association shall agree, an accounting system, acceptable to the Association, and maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project except Part K, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof except the said Part K; such records shall include, inter alia, the amounts collected from farmers receiving land in the Project Area, actual operation, maintenance and capital costs of the irrigation works located in the Betit area and the amount of charges collected for repayment of capital costs, and for operation and maintenance of irrigation works located in the Betit area; and (ii) in its Ministry of Interior, records adequate to reflect the operations, resources and expenditures in respect of the said Part K. The Borrower shall have such accounts audited and shall furnish such accounts, 7 together with a report of such audit, not later than four months after the end of each fiscal year. Section 4.02. (a) The Borrower shall prepare and furnish to the Association not later than March 31, 1976 or such other date as the Borrower and the Association shall agree, in-service training programs for agricultural assistants, agricultural agents and clerks, acceptable to the Association, and shall start implementation of such programs not later than December 31, 1976, or such other date as the Borrower and the Association shall agree. (b) The Borrower shall appoint to each Cooperative Group Center in the Project Area a clerk trained under the program referred to in paragraph (a) of this Section, or under a similar training program, promptly upon the establishment of each such Center. Section 4.03. The Borrower shall ensure that additional pumping is allowed only if the Borrower is satisfied that such pumping shall not be detrimental to prior users of the local water of the phreatic aquifer as well as to the beneficiaries of the Project. Section 4.04. The Borrower shall at all times operate and maintain, or cause to be operated and maintained, the plants, machinery, equipment and other property required for the Project, and shall make or cause to be made all necessary repairs and renewals thereof, in accordance with sound engineering and economic practices. Section 4.05. (a) The Borrower shall charge beneficiaries of the program of distribution of State land located in the Project Area the fair market value of the land so distributed. (b) The Borrower shall take such steps as shall be necessary to ensure that: (i) farmers benefiting from the existing irrigation works in the Betit Area and farmers benefiting from the extension of the said works included in Part H of the Project, are charged for the full cost of operation and maintenance of the said works and that farmers benefiting from the said extension be charged with a reasonable proportion of the capital costs of the said extension and of the rehabilitation of the said existing irrigation works; and (ii) that all such charges shall be billed and collected within a reasonable time. Section 4.06. The Borrower shall cause the Caisse Nationale de Credit Agricole and its Caisses Locales to make available adequate credit to farmers in 8 the Project Area. Such credit shall be conditioned upon the farmers' acceptance of such particular cropping practices and weed control measures as may be recommended from time to time by the Services Provinciaux. 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, namely, that Dahir portant loi No. 1-72-277 of December 29, 1972 of the Borrower, 'relatif a l'attribution d des agriculteurs de terres agricoles ou a vocation agricole faisant partie du domaine prive de l'Etat', Dahir portant loi No. 1-72-278 of December 29, 1972 of the Borrower 'relatif aux cooperatives agricoles d'attributaires de lots domaniaux et/ou d'attributaires de lots constitues sur d'anciens immeubles collectifs', Dahir No. 1-69-25 of July 25, 1969 of the Borrower, 'formant Code des Investissements Agricoles', the Dahir 'organisant la Tutelle administrative des collectiviites et rglementant la gestion et 'alienation des biens collectifs', dated April 27, 1919, the ArrOte viziriel reglementant la gestion des biens collectifs ayant fait l'objet d'un partage en jouissance perpetuelle', dated August 14, 1945, the Lois particulie'res or Dcrets d'application promulgated in connection therewith or any provision thereof, shall have been materially amended, suspended, abrogated, repealed or waived so as to affect the Project adversely and such event shall continue for a period of 60 days. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely, any event specified in 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: that the Borrower has (i) published the decree declaring the Project Area "zone de remembrement" in accordance with the provisions of Article 6 of Dahir No. 1-62-105 relatif au remembrement rural, dated June 30, 1962; (ii) established the commission de remembrement for the Project Area pursuant to Article 8 of the said Dahir No. 1-62-105; and (iii) established the commission referred to in Article 7 of Dahir portant loi No. 1-72-277 relatif a l'attribution d des agriculteurs de terres agricoles ou a' 9 vocation agricole faisant partie du domaine prive de l'Etat dated December 29, 1972, for the Project Area. Section 6.02. The date September 11, 1975 is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministere des Finances Rabat Morocco Cable address: Ministfre Finances Rabat 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 10 in their respective names in the District of Columbia, United States of America, as of the day and year first above written. KINGDOM OF MOROCCO By /s / Abdelhadi Boutaleb Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / M. P. Bart Acting Vice President EMENA Region 11 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) Civil works 47% (a) under Parts 4,310,000 A and B of the Project (b) under Parts 3,560,000 C through G of the Project (c) under the 3,060,000 other Parts of the Project (2) Equipment and 740,000 100% of foreign vehicles expenditures (c.i.f.) or 70% of local ex- penditures (ex-factory) (3) Consultants' 500,000 100% of foreign services expenditures or 80% of total expenditures (4) Unallocated 1,830,000 TOTAL 14,000,000 12 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; (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; and (c) the term "total expenditures" means the aggregate of foreign expenditures and local expenditures. 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 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 1 above, no withdrawals shall be made in respect of expenditures prior to the date of this Agreement. 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 Borrower: (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) with regard to Category (1) and to local expenditures under Category (2), if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withd1rawals 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 13 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. 14 SCHEDULE 2 Description of the Project The Project is designed to increase agricultural production in the Project Area and to extend the benefits of such production more widely, through improved management and agricultural practices. The Project consists of the following Parts: Part A Aerial photography of about 200,000 ha to a scale of 1:12,500. Part B Soil, topographic, cadastral, and socio-economic surveys of about 135,000 ha and preparation of maps to a scale of 1:5,000 followed by preparation of plans for, and implementation of, a land reform program. Part C Destoning of about 5,000 ha of cultivable land. Part D Construction of about 160 km of earth access roads. Part E Construction of wells to provide potable water for new cooperatives and installation of pumps, storage tanks and distribution systems to stand pipes. Part F Construction of stores for group centers serving about four cooperatives where adequate storage buildings do not already exist. Part G Construction of small irrigation systems to serve about 600 ha on newly established cooperatives utilizing surplus water available from wells constructed for potable water supply. Part H Rehabilitation of the existing irrigation and drainage system serving about 3,500 ha in the Betit Area and extension of the system to serve an additional 500 ha approximately. Part I Construction, equipping and staffing of offices needed for Project administration and construction and equipping of staff housing for agricultural extension agents. Part J Provision of equipment and vehicles for Project administration and agricultural services in the Project Area. 15 Part K A reconnaissance study of tribal collective land throughout Morocco to facilitate future development of such land. * * * * The Project is expected to be completed by September 30, 1980. 16 SCHEDULE 3 Procurement A. General Procedures 1. Except as provided in Part A.2 hereof, contracts shall be let under procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in April 1972, as revised in October 1972 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. Contracts for construction of access roads, wells, potable water systems, irrigation works other than those in the Betit Area, stores for cooperatives, administrative offices and staff housing and destoning shall be awarded on the basis of the Borrower's local procurement procedures for such contracts. B. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 1. 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 (ii) 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 Morocco may be granted a margin of preference in accordance with, and subject to, the following provisions: (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 Morocco if the bidder shall have established to the satisfaction of the Borrower and the Association that the manufacturing cost of such goods I 17 includes a value added in Morocco equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Morocco. (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 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shall be selected. C. Review of Procurement Decisions by Association 1. Review of invitation to bid and of proposed awards and final contracts. With respect to all contracts subject to the provisions of Part Al of this Schedule estimated to cost the equivalent of $50,000 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 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 18 intended award and shall furnish to the Association, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, together with the recommendation for award 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. (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. 3. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding paragraph, the Borrower shall furnish to the Association, promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination.