Bolivia - Urban Development Project : Loan 1489 - Project Agreement - 1 - Conformed

CONFORMED (OPY LOAN NUMBER 1489 BO Project Agreement (Urban Development Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and CONSEJO NACIONAL DE VIVIENDA Dated November 30, 1977 LOAN NUMBER 1489 BO PROJECT AGREEMENT AGREEMENT, dated November 30, 1977, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and CONSEJO NACIONAL DE VIVIENDA (hereinafter called CONAVI). WHEREAS (A) by the Loan Agreement of even date herewith between Republic of Bolivia (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to seventeen million dollars ($17,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition inter alia that CONAVI agree to undertake such obligations toward the Bank as hereinafter set forth; (B) by a subsidiary loan agreement between the Borrower and CONAVI, part of the proceeds of the loan provided for under the Loan Agreement will be made available to CONAVI on the terms and conditions therein set forth; and WHEREAS CONAVI, in consideration of the Bank's entering into the Loan 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 Loan Agreement, the Preamble to this Agreement and the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of Parts A and E.1 of the Project Section 2.01. (a) CONAVI shall carry out Parts A and E.1 of the Project described in Schedule 2 to the Loan Agreement and in -2- Schedule 1 to this Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and urban development practices. (b) For the carrying out of Part A of the Project, CONAVI shall establish a special team whose staffing and organization shall be satisfactory to the Bank. CONAVI shall cause such team to design the detailed engineering and prepare the tender docu- ments for the sites and community facilities included in Part A of the Project and such off-site infrastructure works which are directly related thereto. Section 2.02. In order to assist CONAVI in the carrying out of Part E.1 of the Project, CONAVI shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Section 2.03. Except as the Bank shall otherwise agree, contracts for the purchase of goods or for civil works to be financed out of the proceeds of the Loan, shall be procured in accordance with the provisions of Schedule 4 to the Loan Agreement. Section 2.04. (a) In allotting residential and commercial plots developed under Part A of the Project to prospective purchasers, CONAVI shall employ procedures acceptable to the Bank and designed to insure adequate publicity of each step of the allotting process and random selection of purchasers from among qualified applicants. The term "qualified applicant" in relation to residential plots, means applicants for plots meeting criteria set forth in Schedule 2 to this Agreement. (b) CONAVI shall enter into an individual contract with each purchaser selected, setting forth the terms and conditions for the repayment of the prorated capital costs of land and on-site infrastructure, the costs of the residential dwelling or commercial unit, as the case may be, and, if applicable, the amount of the construction materials credit. Such terms and conditions shall be satisfactory to the Bank and shall include those set forth in paragraph 1 of Schedule 3 to this Agreement. - 3 - (c) CONAVI shall make credits for construction materials and contracted labor to purchasers of residential plots developed under Part A of the Project, on terms and conditions satisfactory to the Bank, including those set forth in paragraph 2 of Schedule 3 to this Agreement. (d) CONAVI shall, not later than March 31, 1978 or such later date as the Bank shall agree, furnish to the Bank for its approval a standard form of the contract to be used for the purposes referred to in paragraphs (b) and (c) of this Section. Section 2.05. (a) CONAVI undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan made available to it by the Borrower against hazards incident to the acquisition, trans- portation and delivery thereof to the place of use or instal- lation, and for such insurance any indemnity shall be payable in a currency freely usable by CONAVI to replace or repair such goods. (b) Except as the Bank may otherwise agree, CONAVI shall cause all goods and services financed out of the proceeds of the Loan made available to it by the Borrower to be used exclusively for Parts A and E.1 of the Project. Section 2.06. (a) CONAVI shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, con- tract documents and construction and procurement schedules for Part A of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) CONAVI: (i) shall maintain records adequate to record the progress of Parts A and E.1 of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Loan made available to it by the Borrower, and to disclose the use thereof in Parts A and E.1 of the Project; (ii) shall, without limitation upon the provisions of paragraph (c) of this Section, enable the Bank's representatives to visit the facilities and construction sites included in Part A of the Project and to examine the goods financed out of such proceeds and any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request -4- concerning the Project, the expenditure of the proceeds of the Loan so made available to it and the goods and services financed out of such proceeds. (c) CONAVI shall enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of CONAVI and any relevant records and documents. Section 2.07. CONAVI shall duly perform all its obliga- tions under the CONAVI Subsidiary Loan Agreement. Except as the Bank shall otherwise agree, CONAVI shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the CONAVI Susidiary Loan Agreement or any provision thereof. Section 2.08. (a) CONAVI shall, at the request of the Bank, exchange views with the Bank with regard to the progress of Parts A and E.1 of the Project, the performance of its obliga- tions under this Agreement and under the CONAVI Susidiary Loan Agreement, and other matters relating to the purposes of the Loan. (b) CONAVI shall promptly inform the Bank of any con- dition which interferes or threatens to interfere with, the progress of Parts A and E.1 of the Project, the accomplishment of the purposes of the Loan, or the performance by CONAVI of its obligations under this Agreement and under the CONAVI Susidiary Loan Agreement. Section 2.09. CONAVI shall take all such action as shall be necessary to acquire, not later than December 31, 1977 or such later date as the Bank shall agree, at least 20 hectares of land, adjacent to the Rio Seco and Villa Adela sections of the El Alto area of La Paz and acceptable to the Bank, as shall be required for the construction of about 1,277 sites for dwelling and indus- trial plots, respectively, included in Part A of the Project and shall furnish to the Bank, promptly after such acquisition, evidence satisfactory to the Bank that such land is available for purposes related to Part A of the Project. -5- ARTICLE III Management and Operations of CONAVI Section 3.01. (a) CONAVI shall at all times maintain its corporate existence and right to carry on its operations and shall take all steps necessary to acquire, maintain and renew all rights, powers, privileges, concessions and franchises which are necessary or useful in the conduct of its business. (b) CONAVI shall at all times operate and maintain its equipment and property, the equipment and property held by CONAVI on behalf of the Borrower, public entities and local collectivi- ties, and from time to time make all necessary renewals and repairs thereof, all in accordance with appropriate engineering, construction and urban development practices. Section 3.02. CONAVI shall at all times manage its affairs, plan the future expansion of its operations and maintain its financial position, all in accordance with appropriate business, financial and urban development principles and practices and under the supervision of experienced and competent management. Section 3.03. CONAVI shall take out and maintain with respon- sible insurers, or make other provisions satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.04. CONAVI shall, not later than December 1, 1977 or such later date as the Bank shall agree, furnish to the Bank for its review a detailed investment plan for the three ensuing years. ARTICLE IV Financial and Other Covenants Section 4.01. CONAVI shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices, its operations and financial condition. -6- Section 4.02. CONAVI shall: (i) have its accounts and finan- cial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accor- dance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case 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 Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning the accounts and financial statements of CONAVI and the audit thereof as the Bank shall from time to time reasonably request. Section 4.03. CONAVI shall, not later than March 31, 1978 or such later date as the Bank shall agree, make contractual arrangements with SAMAPA satisfactory to the Bank for the provi- sion of adequate amounts of water to the areas included in Part A of the Project. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Loan Agreement becomes effective. Section 5.02. This Agreement and all obligations of the Bank and of CONAVI thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Loan Agreement. ARTICLE VI Miscellaneous Provisions Section 6.01. 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 - 7 - 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 p.rmitted 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 Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For CONAVI: Consejo Nacional de Vivienda (CONAVI) Casilla 1141 La Paz, Bolivia Cable address: CONAVI La Paz Section 6.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of CONAVI may be taken or executed by its Director Ejecutivo or such other person or persons as he shall designate in writing. Section 6.03. CONAVI shall furnish to the Bank sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of CONAVI, take any action or execute any documents required or permitted to be taken or executed by CONAVI pursuant to any of the provisions of this Agreement. -8- Section 6.04. This Agreement may be executed in several counterparts, each of which shall be an original, and all collec- tively 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 BANK FOR RECONSTRUCTION AND DEVELOPMENT By Is/ Suitbertus M. L. van der Meer Acting Regional Vice President Latin America and the Caribbean CONSEJO NACIONAL DE VIVIENDA By /s/ Juan Careaga Osorio Authorized Representative -9- SCHEDULE 1 Description of Parts A and E.1 of the Project I. Sites and Services (Part A of the Project) 1. Development of about 5,525 urbanized plots in the El Alto area of La Paz on sites already owned by CONAVI and on approximately 20 hectares of additional adjacent land to be acquired by CONAVI. 2. Provision of a core dwelling selected from among 3 different types to about 85% of said plots. 3. Provision of basic essential services (water, electri- city, sewerage, access roads). 4. Construction of about 5.5 km of water trunk line expan- sions connecting the sites included in Part A of the Project with the main water supply retwork of La Paz. 5. Construction of about seven new elementary schools and of an appropriate refuse disposal facility, and building of two community centers by mutual-aid. 6. Provision of credits for construction materials and contracted labor to purchasers wishing to develop, expand, or improve their initial dwellings by self-help. 7. Development of about 142 additional plots, adjacent to those set forth in No. 1 hereof, for artisans and small-scale enterprises, primarily labor-intensive and simple technology enterprises. II. Technical Assistance (Part E.1 of the Project) Provision of about 24 man-months of technical assistance by foreign and local experts and acquisition of necessary equipment to support CONAVI to: (i) convert some of its administrative and accounting procedures to a mechanized and computerized system; and (ii) complete the development and formalization of a package of new design and construction standards for low-cost housing pro- grams in coordination with HAM. - 10 - SCHEDULE 2 Selection Criteria for Prospective Purchasers of Residential Plots developed under Part A of the Project 1. Prospective purchasers will be selected according to their economic capacity, family size, skills and capabilities, present housing conditions, and subject to the requirement of having been residents of La Paz for at least two years immediately preceding their application for a plot. 2. In particular, the prospective purchaser will have to meet the following criteria: (a) have a family consisting of at least three members; (b) not own any real estate in any city in Bolivia; (c) have the income and paying capacity corresponding to the particular core dwelling option selected; (d) not have income above the level set by CONAVI for the particular core dwelling option selected; (e) undertake to expand by self-help the dwelling purchased; and (f) make a commitment to contribute his labor to the mutual- aid elements included in the Project. 3. Plots will be allocated to the purchasers selected through a system of drawing lots. 4. A maximum of 40% of the plots will be sold to purchasers who are members of CONAVI, a maximum of 35% of plots will be sold to purchasers who are members of other housing councils, and a minimum of 25% of the plots will be sold to purchasers who are not members of any housing council. - 11 - SCHEDULE 3 Terms and Conditions of the Purchase of Plots and of Credits for Construction Materials and Contracted Labor 1. ~Purchase of Plots (a) Residential Plots: (i) Amount: Sum of prorated capital costs of land and on-site infrastructure, costs of residential dwelling, and costs of design, supervision and administration of such infrastructure and dwelling. (ii) Interest: 10% per annum (iii) Repayment period: Ranging from 15 to 20 years, provided that the final maturity will not exceed the final maturity of the Loan. (iv) Security: Such security as CONAVI shall reasonably request. (v) Down payment: Purchasers will be required to make a minimum down payment of 10% of the amount referred to in (i) hereof either in cash or through mutual help labor credits. For the purpose of this Schedule, the term "mutual help labor credits" means credits given by CONAVI to purchasers for work performed on site infrastructure or superstructure prior to the purchase of the plots. - 12 - (b) Commercial Plots: (i) Amount: Sum of prorated capital costs of land and on-site infrastructure, costs of commercial unit, and costs of design, supervision and administration of such infrastructure and unit, plus a surcharge to defray part of the costs of infrastructure for the residential plots. (ii) Interest: 10% per annum (iii) Repayment period: A maximum of 7 years. (iv) Security: Such security as CONAVI shall reasonably request. 2. Credits for Construction Materials and Contracted Labor (i) Amount: A maximum of the equivalent of $500. (ii) Disbursement: Credit recipients will receive only the construc- tion materials; payments for contracted labor will be made directly to the contractor by CONAVI. (iii) Interest: 10% per annum (iv) Repayment period: From 1 to 5 years. (v) Security: Such security as CONAVI shall reasonably request.