Senegal - Eastern Senegal Livestock Project : Credit 0633 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 633 SE DEVELOPMENT CREDIT AGREEMENT (Eastern Senegal Livestock Project) between REPUBLIC OF SENEGAL and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated June 17, 1976 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 17, 1976, between REPUBLIC OF SENEGAL (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower has requested the Association, the Arab Bank for Economic Development in Africa (hereinafter called BADEA), and the Kuwait Fund for Arab Economic Development (here- inafter called the Kuwait Fund) to assist in the financing of the Project described in Schedule 2 to this Agreement; (B) By an agreement dated April 19, 1976 between BADEA and the Borrower (hereinafter called the BADEA Loan Agreement), BADEA has agreed to assist the Borrower in financing Part A (3) of the Project by making to the Borroer a loan (hereinafter called the BADEA Loan) in an amount equivalent to one million six hundred thousand dollars ($1,600,000); and (C) By an agreement to be entered into between the Kuwait Fund and the Borrower (hereinafter called the Kuwait Fund Loan Agreement), the Kuwait Fund intends to assist the Borrower in financing Part A (2) of the Project by making to the Borrower a loan (hereinafter called the Kuwait Fund Loan) in an amount of one million two hundred thousand Kuwaiti Dinars (KDI,200,000); and -2- 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: -3- 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 Agree- ments 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 ad- ditional terms have the following meanings: (a) "SODEFITEX" means the Societ pour le Dfveloppement des Fibres Textiles, a corporation (Socigt6 anonyme d'Economie Mixte) organized and operating under the laws of the Borrower; (b) "Project Area" means an area of about 59,600 km2 in the east of the territory of the Borrower; (c) "Project Unit" or "PU" means the unit to be established by and within SODEFITEX pursuant to Section 3.03 (a) of this Agree- ment; -4- (d) "Pastoral Service" means the service to be established within the Project Unit pursuant to Section 3.03(b)(iii) of this Agreement for the purpose of day-to-day implementation of Part A of the Project; (e) "RAHS" means the Regional Animal Health Service in Eastern Senegal, a service of the Department of Animal Health and Production of the Borrower's Ministry of Rural Development and Hydraulics; (f) "URHD" and "RED" mean the Urban and Rural Hydraulics Department and the Rural Equipment Department, respectively, of the Borrower's Ministry of Rural Development and Hydraulics; and (g) "SSHR" means the State Secretariat for Human Resources of the Borrower's Ministry of Education. -5- 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 four million two hundred thousand dollars ($4,200,000). 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 by agreement between the 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 re- quired 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 or 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 set forth or referred to in Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1982 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 ser- vice charge at the rate of three-fourths of one per cent (3/4 of 1%) -6- per annum on the principal amount of the Credit withdrawn and out- standing from time to time. Section 2.06. Service charges shall be payable semi-annually on April 15 and October 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each April 15 and October 15 commencing October 15, 1986 and ending April 15, 2026, each installment to and including the installment payable on April 15, 1996 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 French Republic is hereby specified for the purposes of Section 4.02 of the General Condi- tions. -7- ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall cause the Project to be carried out by SODEFITEX with due diligence and efficiency and in conformity with appropriate administrative, financial, livestock, agricultural and engineering practices. (b) The Borrower shall provide, promptly as needed, the funds, facilities and other resources required for the purpose; the funds required by SODEFITEX for the Project, including the proceeds of the Credit, shall be provided in the form of a grant under an agreement satisfactory to the Association, under which SODEFITEX is charged with the responsibility for carrying out the Project. (c) Without limitation or restriction upon the above provi- sions.of this Section, the Borrower shall assist SODEFITEX in car- rying out Parts A (2) and (3) and E, and A (5), and Part B of the Project by making available to SODEFITEX, as and when required, the services of URHD and RED, of SSHR, and of RAHS, respectively. More specifically, the Borrower shall ensure that: (i) qualified URHD staff shall be provided to assist in defining the sites of the wells to be construct- ed and in carrying out an inventory of watering facilities in the Project Area; (ii) qualified RED staff shall be provided to assist in the construction of firebreaks and for the -8- preparation of plans, specifications and bidding documents with respect to Part E of the Project and for the supervision of said Part of the Proj- ect; and (iii) a qualified SSHR pedagogue with experienced assis- tants shall be provided, as and when required, to assist in the carrying out of Part A (5) of the Project. For the purpose, the Borrower shall second to SODEFITEX suit- ably qualified senior and middle-level staff in adequate numbers to meet SODEFITEX's needs for Project staff; SODEFITEX will be en- titled to reject or return to their respective administrations those of such staff which in SODEFITEX's judgment would be unsuit- able for the Project. (d) (i) The Borrower shall cause SODEFITEX to carry out Part A of the Project in four successive Phases, Phase I to include the development of about fif- teen individual grazing areas, Phase II about fifteen additional such areas, Phase III about fifteen additional such areas and Phase IV the twenty additional such areas. (ii) Except as the Association shall otherwise agree, the Borrower shall cause SODEFITEX not to carry out or permit to be carried out (1) Phase I of the construction works included in Parts A (2) and (3) of the Project unless (A) individual -9- grazing areas have been topographically surveyed and have been demarcated, (B) the locations of, and the specifications for, said construction works have been determined in agreement with the Association, (C) the respective pastoral groups referred to in Part A(1) of the Project have been organized and have indicated their agreement on the terms and conditions on which they shall re- ceive user rights on said grazing areas and (D) a land use plan for each grazing area has been prepared; and (2) Phase II, III and IV of said construction works unless the results of the de- velopment and operation of the grazing scheme referred to in Part A of the Project, during the preceding Phase, shall have been found satisfac- tory by the Borrower, the Association and SODEFITEX. Section 3.02. (a) The Borrower shall take all necessary mea- sures, including the publication of a decree upon terms substan- tially similar to those set forth in the draft thereof furnished by the Borrower to the Association, for the purposes of granting to SODEFITEX the sole authority to organize the grazing scheme referred to in Part A of the Project, including inter alia the authority to grant and withdraw exclusive user rights to pastoral groups on the grazing and watering facilities of individual graz- ing areas. (b) For the purpose of granting to pastoral groups the user rights referred to in paragraph (a) of this Section, the Borrower shall cause SODEFITEX to enter into contracts with individual pastoral groups on terms and conditions substantially similar to - 10 - those set forth in the form of contract furnished by the Borrower to the Association. (c) The Borrower shall cause the appropriate authorities within the Project area to exercise, in consultation with or on the advice of SODEFITEX, such grazing control activities as shall be required in carrying out Part A of the Project. Section 3.03. The Borrower shall ensure that: (a) For the purpose of the carrying out of the Project, SODEFITEX shall establish and thereafter maintain within SODEFITEX, a project unit, to be located at Tambacounda, having such structure, powers and specific responsibilities as are set forth in Schedule 4 to this Agreement, as such Schedule may be amended by agreement be- tween the Borrower and the Association, and shall provide said unit with suitably qualified staff, as shall be required to enable it to efficiently carry out its functions. (b) As part of PU's staff, SODEFITEX shall appoint and main- tain (i) a Project Director, (ii) a Deputy Project Director, (iii) a Range Management Specialist to head a pastoral service to be es- tablished within PU for the purpose of day to day implementation of Part A of the Project, (iv) a Community Development Officer who shall be responsible to the above mentioned head of the Pastoral Service and who shall, inter alia, have specific responsibility for Part A(5) of the Project, (v) a Hydrogeologist who shall, inter alia, have specific responsibility for Part A (2) of the Project and (vi) an Accountant, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. - 11 - (c) In order to assist SODEFITEX in carrying out, under Part D of the Project, an evaluation of the effects of the Project, SODEFITEX shall employ, not later than nine months after the date of this Agreement or such other date as the Association may agree, consultants whose qualifications, experience and terms and condi- tions of employment shall be satisfactory to the Association, and whose timetable for carrying out said evaluation shall be submitted to the Association for approval prior to such employment. (d) In order to assist SODEFITEX in the identification and preparation, under Part D of the Project, of follow-up livestock projects, SODEFITEX shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satis- factory to the Association. Section 3.04. Without any limitation or restriction upon the provisions of Section 3.09 (b) of this Agreement, the Borrower shall cause SODEFITEX to furnish to the Borrower and the Associa- tion, not later than a date fifteen months after the Effective Date, and thereafter by the same date in each year, or such other date as the Association may agree, during the execution of the Project, the report on the effects of the Project prepared by the consultants referred to in paragraph (c) of Section 3.03 of this Agreement. Section 3.05. Except as the Association may otherwise agree, the Borrower shall ensure that: (a) SODEFITEX shall, not later than one year after the date of this Agreement, submit to the Association for approval a de- - 12 - tailed plan for the implementation of the Credit program referred to under Part A (4) of the Project, including forms of contract setting forth the terms and conditions of the credits. (b) Such Credit program shall assist: (i) two to three hundred pastoralist families in the acquisition of breeding animals by: (A) providing long-term credit to cover about eighty percent of the purchase price of two to five breeding animals per family, totalling about 950 heifers or cows and 50 bulls, for a term of twelve years includ- ing four years of grace and at an interest rate which shall exceed by at least two percentage points the preferential redis- count rate of the Borrower's central bank in effect on the date of execution of the respective credit agreement, and to be guaranteed by the pastoral group to which the beneficiaries shall belong; and (B) introducing a compulsory insurance scheme for the above cattle; (ii) about five hundred pastoralist families in the acquisition of supplementary feed inputs by providing short-term credits to cover the entire costs of such inputs for a total of about five - 13 - thousand cattle annually, for a term of twelve months at the annual interest rate referred to in sub-paragraph (i) above; and (iii) about thirty pastoralist families in the acquisi- tion of equipment by providing medium-term credits to cover about eighty percent of the purchase price of such equipment for a term of five years at the annual interest rate referred to in sub-paragraph (i) above. Section 3.06. The Borrower shall furnish or cause to be fur- nished to the Association for approval, within one year after the date of this Agreement, or such other period as the Association may agree, a detailed plan for the implementation of the function- al literacy program referred to under Part A (5) of the Project, including the manpower support required from SSHR. Section 3.07. The Borrower shall cause RARS (i) to submit to PU for approval, not later than July 31, 1976 or such other date as the Association may agree, its budget of investment and operating expenses and its staffing and operating plans for the first vaccina- tion campaign (November 1976 - May 1977) under Part B of the Proj- ect; (ii) to submit to PU for approval, not later than July 31 in each subsequent year, the budgets as well as the plans for its subsequent campaign and to furnish to PU, by the same dates, a comprehensive report, including accounts, on the previous cam- paigns; and (iii) to submit progress reports on the campaigns to PU at the end of each calendar year. - 14 - Section 3.08. (a) The Borrower shall make or cause SODEFITEX W to make adequate provision for the insurance of the goods to be financed out of the proceeds of the Credit against hazards inci- dent to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any in- demnity shall be payable in a currency freely usable by SODEFITEX to replace or repair such goods. (b) Except as the Association may otherwise agree, the Bor- rower shall ensure or cause SODEFITEX to ensure that all goods and services financed out of the proceeds of the Credit be used ex- clusively for the Project. Section 3.09. (a) The Borrower shall cause SODEFITEX to fur- nish to the Association promptly upon their preparation, the plans, specifications, contract documents and construction 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 cause records to be maintained, 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 Proj- ect; (ii) shall enable the Association's 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 or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the Project, S- 15 - the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. - 16 - ARTICLE IV Other Covenants Section 4.01. The Borrower shall cause SODEFITEX: (i) to maintain separate records and accounts adequate to reflect in accordance with consistently maintained appropriate accounting practices, its operations, resources and expenditures in respect of the Project; (ii) to have such accounts for each fiscal year audited, in accordance with appropriate auditing principles con- sistently applied, by independent auditors acceptable to the Association; (iii) to furnish to the Association, as soon as available, but in any case not later than five months after the end of each such year, (A) certified copies of such accounts 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 (iv) to furnish to the Association such other information concerning such accounts and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. (a) The Borrower shall cause SODEFITEX at all times: (i) to manage its affairs, maintain its financial position, plan its future expansion and carry on its operations, all in accordance with sound business, financial, agricultural and livestock practices and under the supervision of experi- enced and competent management, assisted by qualified staff in adequate numbers; and w' - 17- (ii) to operate and maintain its installations, equip- ment and other property, and promptly as required make all necessary repairs and renewals thereof, all in accordance with sound business and engi- neering practices. (b) The Borrower shall cause and enable SODEFITEX to ensure, after the completion of the Project, the continuation of the opera- tions of its Pastoral Service and to maintain adequate staff in its Pastoral Service, and shall provide, promptly as needed, the resources required for the purpose, on conditions satisfactory to the Association. (c) The Borrower shall ensure that SODEFITEX shall not re- cover more than the actual cost incurred in carrying out the Proj- ect and in exercising its Pastoral Service activities. Section 4.03. The Borrower shall: (a) within eighteen months from the date of this Agreement, afford the Association a reasonable opportunity to coment on the level and methods of livestock owners' participation into the costs of animal health protection activities of the Animal Health and Production Services throughout the Borrower's territories dur- ing the execution of the Project; (b) take all such actions as may be necessary to entrust RAHS, not later than two years after the date of this Agreement, or such other date as the Association may agree, with the imple- mentation of the measures for livestock owners' participation into the costs of animal health protection activities in the Project Area; - 18 - (c) consult with the Association with respect to any modi- fication in the level of said participations; (d) take 3teps in order to achieve a uniform level of par- ticipations in respect of animal health protection throughout the Borrower's territories; and (e) take immediate steps in order to ensure the continued control of major animal infectious diseases throughout the Bor- rower's territories after the completion of the Project. Section 4.04. (a) The Borrower shall adopt pricing and trade policies for live cattle with sufficient incentives to promote livestock production and to safeguard the interests of livestock producers in the Borrower's territories. (b) The Borrower shall, from time to time, afford the Association a reasonable opportunity to comment on its cattle and meat pricing and trade policy. Section 4.05. (a) The Borrower shall ensure that its live- stock fiscal policies would promote livestock production and safeguard the interests of livestock producers. (b) The Borrower shall give all due consideration to the best means of recovering the cost of the Project and shall, for this purpose, exchange views with the Association at the request of either Party to this Agreement. - 19 - Section 4.06. The Borrower shall ensure that the wells and firebreaks provided for under Parts A (2) and (3), respectively, of the Project, shall at all times be operated, maintained, re- newed and repaired, in accordance with appropriate engineering and management practices. Section 4.07. The Borrower shall cause SODEFITEX to take out and maintain with responsible insurers, or to make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appro- priate practice. Section 4.08. The Borrower and the Association shall exchange views on the details and the timing for the transfer of SODEFITEX's authority and rights referred to in Section 3.02 (a) of this Agree- ment to "Communautes rurales" to be established in the Project Area. Section 4.09. Except as the Association shall otherwise agree, the Borrower shall not take any action, or sell, transfer or other- wise dispose of any substantial part of its holdings of the stock of SODEFITEX if as a result of any such action, or sale, transfer, or other disposal, the Borrower would lose effective control of SODEFITEX. - 20 - 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) The Borrower or any authority having jurisdiction shall have dissolved or disestablished SODEFITEX or have suspended its operations, unless the Borrower shall have taken such steps as shall be necessary to ensure the due carrying out of all obliga- tions under this Agreement. (b) The Statuts of SODEFITEX shall have been amended, sus- pended, terminated or repealed so as to affect adversely the due carrying out of the Project and the performance by the Borrower of its other obligations under this Agreement. (c) SODEFITEX shall have become unable to pay its debts as they mature or any action or procedure shall have been taken by SODEFITEX or by others whereby any of the assets of SODEFITEX shall or may be distributed among its respective creditors. (d) (i) Subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower to withdraw the proceeds of the BADEA Loan or the Kuwait Fund Loan shall have been suspended, can- celled or terminated in whole or in part, #e - 21 - pursuant to the terms of the BADEA Loan Agreement or the Kuwait Fund Loan Agree- ment, or (B) any such loan shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satis- faction of the Association that: (A) such suspension, cancellation, termina- tion or prematuring is not caused by the failure of the Borrower to perform any of its obligation under such agreements, and (B) adequate funds for the Project are avail- able 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 additional 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 - 22 - (b) any event specified in paragraph (d) (i) (B) of Section 5.01 of this Agreement shall occur. - 23 - ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Borrower and SODEFITEX have entered into the agree- ment referred to in Section 3.01 (b) of this Agreement; (b) the BADEA Loan Agreement and the Kuwait Fund Loan Agreement have been duly signed Id conditions precedent to initial disbursements, if any, under such agreements, save for the effectiveness of this Agreement, have been fulfilled; (c) the decree referred to in Section 3.02 (a) of this Agreement has been enacted and entered into force; and (d) the Project Director and Deputy Director referred to in Section 3.03 (b) of this Agreement have been employed. Section 6.02. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be fur- nished to the Association, namely that the agreement referred to in paragraph (a) of Section 6.01 of this Agreement has been duly authorized or ratified and signed on behalf of the Borrower and of SODEFITEX and is legally binding upon the Borrower and SODEFITEX in accordance with its terms. - 24 - Section 6.03. The date October 15, 1976 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.04. The obligations of the Borrower under Article IV of this Agreement and the provisions of paragraph (a) of Sec- tion 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 years after the date of this Agreement, whichever shall be the earlier. - 25 - 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: Minist4re des Finances Rue Charles L&ing Botte Postale 4017 Dakar, Sinegal Cable address: MINIFINANCES Dakar 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. - 26 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment 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. REPUBLIC OF SENEGAL By Is/ Andrd Coulbary Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Is/ Roger Chaufournier Regional Vice President Western Africa - 27 - 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 (Expresse;I in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works (ex- 500,000 70% of total cluding works expenditures under Part A (2) and (3) of the Project) (2) Vehicles and 350,000 100% of foreign equipment expenditures or 65% of total expenditures for items pro- cured locally (3) Expatriate per- 570,000 100% of foreign sonnel and con- expenditures sultants' ser- vices, fellow- ships and study tours abroad (4) Livestock credit 220,000 75% of total expenditures - 28 - Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (5) Operating expenses 1,440,000 75% of total (excluding RANS expenditures staff salaries) (6) Unallocated 1,120,000 TOTAL 4,200,000 - 29 - 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; provided, however, that if the currency of the Borrower is also that of another country from the territory of which goods or services are supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures"; and (b) the term "total expenditures" means the aggregate of foreign expenditures and of expenditures for goods produced in, or services supplied from, the territories of the Borrower. 3. The disbursement percentages have been calculated in compli- ance 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 re- spect 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 with- drawals shall be made in respect of: (a) expenditures prior to the date of this Agreement, ex- cept that withdrawals, in an aggregate amount not exceeding the - 30 - equivalent of $300,000 may be made on account of expenditures before that date but after April 15, 1976; and (b) expenditures in respect of Category (4) until the plan to be submitted pursuant to Section 3.05 (a) of this Agreement shall have been approved by the Association. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 1 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 expendi- tures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent re- quired 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 expen- ditures, and (ii) if such reallocation cannot fully meet the es- timated shortfall, reduce the disbursement percentage than appli- cable to such expenditures in order that further withdrawals under such Category may continue until all expenditures there- under 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 expen- ditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restrict- ing or limiting any other right, power or remedy of the Associa- tion under the Development Credit Agreement, by notice to the - 31 - Borrower, cancel such amount of the Credit as, in the Associa- tion's reasonable opinion, represents the amount of such expen- ditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 32 - SCHEDULE 2 Description of the Project The Project is a five-year (mid-1976-mid-1981) program of the Borrower to assist livestock production in the Project Area through the development and operation of a grazing scheme and the provision of effective animal health, livestock extension, livestock credit and training. The Project will assist about 30,000 livestock owners in the Project Area. The Project consists of the following Parts: Part A. The development and operation of a grazing scheme by the Pastoral Service on about 1.4 million ha of understocked grazing land in the northern part of the Project Area, including: (1) The organization of about 6,500 predominantly pas- toralist families into about 65 pastoral groups, each of which shall receive user rights on an in- dividual grazing area. (2) The construction of about 100 wells with a depth of approximately 45 to 75 m. (3) The construction of about 2,400 km of firebreaks. (4) A credit program to assist herders in acquiring livestock production factors, including breeding animals, supplementary feed and equipment. U w 33 (5) The d'esign and development of a functional literacy program for pastoralists and the evaluation of the results thereof. Part B. A program to provide improved animal health services by making available to RAHS: (i) 9 veterinary posts, (ii) 40 vaccination yards, (iii) necessary transport, veterinary and laboratory equipment, and (iv) incre- mental operating funds. Such program shall consist principally of vaccination campaigns against rinder- pest, contagious bovine pleuropneumonia, anthrax, blackleg, and bovine and ovine haemorrhagic septi- caemia. Part C. (1) Provision of in-service training for SODEFITEX ex- tension officers to assist in the execution of Part A of the Project and of special training in basic livestock production practices for SODEFITEX exten- sion officers assigned to the southern part of the Project Area. (2) Provision of overseas fellowships for selected pro- fessionals in range management. (3) Provision of study tours for local SODEFITEX staff and pastoral group leaders to ongoing livestock projects in Eastern Africa. - 34 Part D. Monitoring activities including, inter alia, the evalua- tion of the progress of the Project and its effects on the population and ecology of the Project Area, and the identification of follow-up livestock projects. Part E. The expansion of SODEFITEX's facilities at Tambacounda for the purpose of accommodating PU and the provision of other facilities required for carrying out the Project. * * * * The Project is expected to be completed by June 30, 1981. - 35- SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, goods, works and ser- vices shall be procured under contracts to be awarded in accor- dance with procedures consistent with those set forth in Part A of 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 competi- tive bidding. G 2. Contracts shall be grouped so as to permit bulk procurement consistent with appo..priate technical standards and procurement practices. B. Other Procurement Procedures 1. Any contract for buildings, vehicles and equipment and for the construction of vaccination yards and extension outposts, or any bulk contracts for such items, estimated to cost less than $50,000 equivalent, may, up to an aggregate amount of $400,000 equivalent to be financed out of the proceeds of the Credit, be awarded on the basis of competitive bidding advertised locally and in accordance with local procedures acceptable to the Association. - 36 - 2. Furniture and equipment for staff houses and offices, and office supplies, estimated to amount to less than $10,000 equiv- alent, may, up to an aggregate amount of $80,000 equivalent to be financed out of the proceeds of the Credit, be purchased after having obtained quotations from local suppliers. C. 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) cus- toms duties and other import taxes on imported goods, and sales and similar taxes on domestically-supplied goods, shall be ex- cluded; 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 Senegal 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: - 37 - (1) Group A: bids offering goods manufactured in Senegal 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 Senegal equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manu- factured in Senegal. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first com- pared 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 fur- ther comparison only, an amount equal to (i) the amount of cus- toms duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in - 38 - 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. D. Review of Procurement Decisions by the Association 1. Review of invitation to bid and of proposed awards and final contracts. With respect to all contracts estimated to cost the equiva- lent of $100,000 or more: (a) Before bids are invited, the Borrower shall furnish or cause to be furnished 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 or cause to be made such modifications in the said documents or procedures as the Association shall reasonably request. Any further modifica- tion 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 Bor- rower shall, before a final decision on the award is made, inform the Association or cause the Association to be informed of the name of the bidder to which it intends to award the contract and shall furnish or cause to be furnished to the Association, in -39 - sufficient time for its review, a detailed report on the evalua- tion and comparison of the bids received, and such other infor- mation as the Association shall reasonably request. The Associa- tion shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly in- form 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. (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 with- drawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract to be financed out of the pro- ceeds of the Credit and not governed by the preceding paragraph, the Eorrower shall furnish or cause to be furnished to the Asso- ciation, 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 consis- tent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. - 40 - SCHEDULE 4 Project Unit For the purpose of providing coordination for the carrying out of the Project and overall management of Parts A, C, D and E of the Project, a Project Unit (PU) shall be established and main- tained within SODEFITEX and shall be located at Tambacounda, with the following key staffing, powers and responsibilities: 1. Key staffing of PU (a) a Project Director, a Senegalese national to be respon- sible through the Director-General of SODEFITEX to the Minister of Rural Development and Hydraulics; the Project Director shall be the manager and coordinator of the Project and, in that capa- city, he would be responsible for the Project to proceed according to projected time schedules and to desired standards; the Project Director shall also enter, on behalf of SODEFITEX, into the con- tracts referred to in Section 3.02(b) of this Agreement; (b) a Deputy Project Director, a graduate In agricultural economy, animal production or veterinary science, to be recruited internationally, for a five-year period, and to be responsible under the direction of the Project Director, for the financial and economic aspects of the Project including: (i) preparation and supervision of investment plans; (ii) preparation of proposals for project monitoring and evaluation; (iii) cooperation with RARS, SSHR, URD and RED; (iv) preparation of curricula for in-service training, approval of training programs, and proposals for overseas training; (v) implementation and supervision of the livestock credit program; and (vi) identification and preparation of follow-up livestock projects; (c) a Hydrogeologist, to be recruited internationally, for a three-year period, and to be responsible, under the direction of the Project Director, for: (i) identification of sites for the wells to be built under Part A(2) of the Project; (ii) preparation of detailed plans, specifications and bidding documents for well con- struction; (iii) supervision of well construction; (iv) carrying out an inventory of wells in Eastern Senegal, including their need for repair; and (v) advising of the Regional Hydraulic Service on priorities for well construction and repair; (d) a Range Management Specialist, to be recruited interna- tionally, for a five-year period, and to be responsible, under the direction of the Project Director, for heading a Pastoral Service to develop and operate the grazing scheme referred to under Part A of the Project, including responsibility for: (i) land use planning of the entire graziag scheme's area; (ii) survey and demarcation of individual grazing areas; (iii) selection of pastoral groups and their assignment to individual grazing areas; (iv) provision of technical support to said grazing areas; (v) administration of livestock credit; and (vi) training of extension staff and pastoral group leaders; (e) a Community Development Officer, a Senegalese graduate in social science or in education, or having a long experience as a rural extension officer, to be responsible, under the direction of the Project Director and Range Management Specialist, for: 41S - 42- (i) evaluation of social organizations and attitudes in the grazing scheme areas; (ii) design, implementation and evaluation of types of cooperative organizations for the grazing scheme; and (iii) liai- son with SSHR in designing, testing and evaluating a functional literacy program for pastoralists; and (f) a qualified and experienced Senegalese Accountant to be responsible for PU's accounts. 2. Powers and responsibilities of PU PU's responsibilities shall include, inter alia: (a) PU shall ensure that no investment plans shall be financed under the Project unless such plans have been evaluated and approved% by PU as to their technical, financial and economic viability; (b) PU shall, with the assistance of the proper authorities within the Project area, supervise the proper implementation by individual pastoral groups of the contracts referred to under para- graph (b) of Section 3.02 of this Agreement; (c) PU shall establish and maintain or cause to maintain accounts which shall properly reflect the application of funds to the various components of the Project; (d) PU shall supervise and assist in the carrying out of the Project operations, in particular: I - 43 - (i) make available to RAHS nine veterinary posts, 40 vaccination yards, transport, veterinary and laboratory equipment, and incremental operating funds principally for the operation of vehicles and the purchase of drugs, medicaments and vaccines; (ii) make in cooperation with MRD an inventory of the wells in the Project Area, including their need for repair; (iii) prepare in cooperation with RED the plans, specifications and bidding documents of PU's offices, staff houses, vaccination yarde and other buildings and constructions under the Project (with the exception of wells); (iv) design, develop and evaluate in cooperation with SSHR a functional literacy program for pastoralists; (e) PU shall assist the Borrower in the timely selection of qualified and experienced staff to be employed for carrying out the Project; (f) PU shall organize, in consultation with the Association, the training activities referred to under Part C of the Project; (g) PU shall prepare and submit semi-annual progress reports to the Ministry of Rural Development and Hydraulics, for transmit- tal to the Association; - 44- (h) PU shall prepare a plan, detailed terms of reference and the timetable for monitoring and evaluation activities under Part D of the Project; and (i) PU shall carry out studies to identify and prepare possi- ble follow-up livestock projects under Part D of the Project.