India - Integrated Cotton Development Project : Credit 0610 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 610 IN Haryana Project Agreement (Integrated Cotton Development Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND THE STATE OF HARYANA DATED FEBRUARY 26, 1976 PROJECT AGREEMENT AGREEMENT, dated February 26, 1976, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and THE STATE OF HARYANA (hereinafter called Haryana). WHEREAS by the Development Credit Agreement of even date herewith between India, acting by its President (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to eighteen million dollars ($18,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Haryana agrees to undertake such obligations toward the Association as hereinafter set forth; and WHEREAS Haryana, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.0 1. (a) Haryana shall carry out or cause to be carried out in the Project Area Parts A, B, C and E(l) of the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial, agricultural and engineering practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. 4 (b) Haryana shall assist ARDC in carrying out Part D of the Project. Section 2.02. (a) Haryana shall strengthen, expand and reorganize in a manner satisfactory to the Association the agricultural extension service (in this Agreement called the Cotton Development Service) which Haryana's Department of Agriculture operates in the Project Area. (b) The Cotton Development Service shall be responsible for implementing Parts B, C and E(l) of the Project at the level of cotton growers and marketers. (c) The Cotton Development Service shall be headed by a Project Director with the rank of Joint Director of Agriculture. He shall be responsible for the management and supersivion of the staff and programs of CDS and for liason with agencies of Haryana in the Project Area and shall, with respect to his functions under the Project, be required to report to the Director of the Dupartment of Agriculture of Haryana. Section 2.03. (a) Haryana shall establish a committee (in this Agreement called the Project Management Committee) which shall be organized and operated in a manner satisfactory to the Association. (b) The Project Management Committee shall be responsible for the management and coordination in Haryana of the Project. The Committee's membership shall include the Secretary of Haryana's Department of Agriculture as Chairman, a senior representative each of Haryana's Departments of Agriculture, Cooperation and Industry, the Project Director of CDS, one representative each of the Haryana Agricultural University, the Haryana Seeds Development Corporation and ARDC. Section 2.04. Haryana shall cause the Project Directors of CDS to establish for the Project Area a committee (in this Agreement called the Project Area Committee) which shall ensure that the necessary degree of coordination and cooperation prevails among the institutions and agencies in the Project Area concerned with the Project. Section 2.05. (a) Haryana shall cause Haryana Agricultural University to carry out Part A, and to assist with the carrying out of Parts B and E of the Project. To this end Haryana shall cause the University to (i) implement a cotton research program prepared by the University and agreed to by the Indian Council of Agricultural Research; (ii) assist CDS in preparing the cotton production program for the Project Area; (iii) participate in field trials, demonstration, operational research and the training of staff of CDS and cotton growers; and (iv) produce 5 the Breeder and Foundation Seeds which Haryana's Seeds Development Corporation and others will require. (b) Haryana shall cause the Haryana Agricultural University to designate a supervisor and staff section leaders who shall be responsible for cotton research, seed production, operational research, field testing and CDS training functions under the Project. Section 2.06. Haryana shall cause to be produced and distributed to cotton growers under production, processing and distribution programs satisfactory to the Association the amounts of Certified Seed which will suffice to plant the Project Area. Section 2.07. Haryana shall take action satisfactory to the Association to prescribe and maintain the seed quality standards required of cotton seeds produced or distributed for planting in Haryana and shall in particular establish a Seeds Certification Agency which shall inter alia be responsible for ensuring compliance with the seed quality standards prescribed for cotton seeds distributed for planting. Haryana shall provide the Agency with such staff, laboratories, equipment and other facilities as it would require to carry out its functions. Section 2.08. Haryana shall take action satisfactory to the Association to: (i) specify the varieties of cotton permitted for planting in the Project Area; (ii) impose mandatory control of noxious weeds, cotton plant residues, insect and plant diseases in the Project Area with provision for Haryana to carry out such control and charge the cost to defaulting land occupiers; (iii) prohibit the blending of different varieties of kapas before or during the ginning and baling processes and require appropriate identification and labelling of cotton bales: and (iv) control the movement and utilization of cottonseed into and within the Project Area. Section 2.09. 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 the Development Credit Agreement. Section 2.10. (a) Haryana undertakes to insure, or make adequate provision for the insurance of, any imported goods to be financed out of the proceeds of the Credit made available to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by Haryana to replace or repair such goods. 6 (b) Except as the Association may otherwise agree, Haryana shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclusively for Parts A, B, C and E(l) of the Project. Section 2.1 1.(a) Except as the Association shall otherwise agree, Haryana shall furnish to the Association promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for Parts A, B, C and E(1) of the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) Haryana: (i) shall maintain or cause to be maintained records adequate to record the progress of Parts A, B, C and E(1) of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit made available to it by the Borrower, and to disclose the use thereof in the Project; (ii) shall enable the Association's representatives to visit the facilities and construction sites included in the Project, and to examine the goc -s financed out of such proceeds 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 so made available to it and the goods and services financed out of such proceeds. Section 2.12. (a) Haryana shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project in Haryana, the performance of its obligations under this Agreement and other matteis relating to the purpose of the Credit. (b) Haryana shall promptly inform the Association of any condition which interferes or threatens to interfere with, the progress of the Project in Harya:ut, the accomplishment of the purposes of the Credit, or the performance by Haryana of its obligations under this Agreement. ARTICLE III Other Covenants Section 3.01. Haryana shall maintain, and cause CDS and Haryana Agricultural University to maintain. records adequate to reflect in accordance with consistently maintained appropriate accounting practices their respective operations and financial conditions. Section 3.02. Haryana shall: (i) have its own accounts and financial statements for the Project (balance sheets, statements of income and expenses and I 7 related statements) and those of CDS and Haryana Agricultural University, for each fiscal year audited, in accordance with sound auditing principles consistently applied, by the Accountant General of Haryana; (ii) furnish, and cause CDS and Haryana Agricultural University to furnish, to the Association as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of their respective 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 and cause CDS and Haryana Agricultural University to furnish, to the Association such other information concerning the accounts and financial statements of Haryana or the University (as the case may be) and the audits thereof as the Association shall from time to time reasonably request. Section 3.03. Haryana shall at all times cause the facilities, plant, equipment and machinery required for Parts A, B and E( I) of the Project to be operated, maintained, renewed and repaired in accordance with appropriate engineering and management practices. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the (late upon which the Development Credit Agreement becomes effective. Section 4.02. (a) This Agreement and all obligations of the Association and of Haryana thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date twenty years after the late of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the late specified in paragraph (a)(ii) of this Section, the Association shall promptly notify Haryana of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any partial cancellation or suspension under the Development Credit Agreement. 1 8 ARTICLE V Miscellaneous Provisions Section 5.0 1. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: 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. For Haryana: Secretary to Government Haryana Agriculture Department Chandigarh, India Cable address: AGRISEC, Haryana Chandigarh, India Section 5.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of Haryana may be taken or executed by the Secretary to the Government of Haryana (Agriculture Department) or such other person or persons as Haryana shall designate in writing. 9 Section 5.03. Haryana shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of Haryana, take any action or execute any documents required or permitted to be taken or executed by Haryana pursuant to any of the provisions of this Agreement. Section 5.04. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 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. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / Ernest Stern Regional Vice President South Asia THE STATE OF HARYANA By /s / T. N. Kaul Authorized Representatibe