Algeria - Port Of Jijel Project : Loan 1427 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1427 AL Loan Agreement (Port of Jijel Project) between DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated September 30, 1977 LOAN NUMBER 1427 AL LOAN AGREEMENT AGREEMENT, dated September 30, 1977, between DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the foreign exchange cost of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Sociftg nationale de sidfrurgie (hereinafter called SNS) intends to construct, equip and operate the steel production facilities included in the Steel Complex within the framework of the economic use of the Port included in the Project; and WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan to the Borrower upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein, subject, however, to the following modification thereof (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank, as so modified, being hereinafter called the General Conditions): "Section 9.02. Financial and Economic Data. The member of the Bank which is the Borrower or the Guarantor shall furnish to the Bank all such information as the Bank shall reasonably request with respect to financial and economic conditions in its territory." Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Steel Complex" or "First Phase of the Steel Complex" means the first phase of an integrated steel complex to be built about 15 km east of the city of Jijel and comprising, except as the Borrower and the Bank may otherwise agree, the following: -3- (i) a pelletizing plant with an annual production capacity of about 2 million tons of pellets; (ii) three direct reduction units with an annual production capacity of about 1.2 million tons of sponge iron; (iii) four electric furnaces with an annual production capacity of about 800,000 tons of liquid steel; (iv) four continuous casting machines with a. annual production capacity of about 755,000 tons of billets; and (v) a ferroalloy plant with an annual production capacity of about 110,000 tons of different types of alloys. (b) "Steel Mills" means the following steel mills: (i) a special steel mill to be built at Ain M'Lila capable of consuming about 350,000 tons of the sponge iron produced annually by the Steel Complex; and (ii) rolling mills to be built at appropriate locations, capable of consuming all billets produced by the Steel Complex. -4- (c) "Power Station" means the power station tb be built by SONELGAZ adjacent to the steel Complex capable of supplying electricity as needed to the Steel Complex and the Port of Jijel, as well as natural gas as needed to the Steel Complex by tapping the trunk line feeding the Power Station. (d) "Second Phase of the Steel Complex" means the second phase of the Steel Complex expected to be completed, about 1995 and consisting of the extension of the production capacity of the Steel Complex. (e) "SNS Traffic Handling Equipment" means the port handling equipment to be installed by SNS at the Port of Jijel on the berths constructed to permit during each year the: (i) unloading of about 2.8 million tons of local iron ore, foreign iron ore, manganese ore, chrome ore, bentonite, coke, and scrap iron; and (ii) loading of about 1.7 million tons of pellets, sponge iron, billets and ferroalloys. (f) "Port of Jijel" means the new port to be constructed, equipped and operated under Part A of the Project. (g) "ONP" means Office national des ports, an office of the Borrower, established and operating pursuant to the Borrower's Ordonnance No. 71-29 of May 13, 1971. -5- (h) "SNS" means the Socigtd nationale de sid6rurgie referred to in the Preamble of this Agreement, a soci6t. nationale of the Borrower, established ond operating pursuant to the Borrower's Decree No. 64-276 of September 3, 1964. (i) "SONATRAM" means Soci6t6 nationale de travaux maritimes, a soci6t6 nationale of the Borrower, esteblished and operating pursuant to the Borrower's Ordonnance No. 70-47 of June 12, 1970. (j) "SONELGAZ" means Soci6t6 nationale de l'4lectricit6 et du gaz, a soci6t6 nationale of the Borrower, established and operating pursuant to the Borrower's Ordonnance No. 69-59 of July 28, 1969. (k) "CNAN" means Compagnie nationale alg6rienne de navigation, a soci6t6 nationale of the Borrower operating pursuant to the Borrower's Ordonnance No. 67-77 of May 11, 1967. (1) "SONAMA" means Soci6t6 nationale de manutention, a soci6t6 nationale of the Borrower operating pursuant to the Borrower's Ordonnance No. 71-16 of April 9, 1971. -6- ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to eighty million dollars ($80,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan 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 Bank, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Borrower and the Bank shall otherwise agree, contracts for civil works or for the purchase of goods required for the Project and to be financed out of the proceeds of the Loan, shall be procured in accordance with the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1982 or such other date as shall be agreed between the Borrower and the Bank. -7- Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of eight and two-tenths per cent (8.20%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annualy on May 15 and November 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. -8- ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out, or cause to be carried out, the Project with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources reqoired for the purpose. (b) Without limitation on the provision of paragraph (a) of this Section, the Borrower shall: (i) in the carrying out of Part A of the Project, provide or cause to be provided the necessary supplementary allocations of funds to ensure the timely execution thereof; and (ii) in the carrying out of Part C of the Project, make available to SONATRAM amounts in the equivalent of ten million dollars ($10,000,000). Section 3.02. (a) In order to assist the Borrower (i) in the preparation of plans, specifications and bidding documents, in the analysis of bids received and in the supervision of Part A of the Project, and (ii) in the carrying out of Part B of the Project, the Borrower shall employ or cause to be employed engineering and management consultants, respectively, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Borrower and the Bank. The said management consultants required for Part B of the Project shall be employed not later than June 30, 1978 or such other date as the Borrower and the Bank may agree. (b) The Borrower shall appoint qualified counterparts to the engineering consultants employed pursuant to paragraph (a) above for the supervision of the civil works under Part A of the Project. (c) In order to assist SONATRAM (i) in the preparation of bidding documents and in the analysis of bids received for Part C (1) of the Project, and (ii) in the carrying out of Part C (2) of the Project, the Borrower shall cause SONATRAM to employ, not later than December 31, 1.977, or such other date as the Bank may agree, marine engineering consultants and technical con- sultants, respectively, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Section 3.03. (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 Loan 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 the Borrower to replace or repair such goods. - 10 - (b) Except as the Borrower and the Bank shall otharwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the Project. (c) The Borrower shall take all necessary measures to ensure the safety and stability of the works referred to in Part A of the Project. Section 3.04. (a) The Borrower shall furnish or cause to be furnished to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifica- tions thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower: (i) shall maintain or cause to be main- tained records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Loan, and to disclose the use thereof in the Project; (ii) shall enable the Bank's accredited representatives to visit the facilities and construc- tion sites included in the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iii) shall furnish or cause to be furnished to the Bank all such information as the Bank shall reasonably request - 11 - concerning (A) the Project, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds, and (B) the steps to be taken pursuant to Section 4.02 of this Agree- ment. Section 3.05. The Borrower shall take or cause to be taken all such action as shall be necessary to assign as and when needed all such land and rights in respect of land as shall be required for the construction (and operation) of the facilities included in the Project and shall furnish to the Bank, promptly after such assignment, evidence that such land and rights in respect of land are available for purposes related to the Project. Section 3.06. Promptly when the individual facilities and equipment under Part A of the Project shall have become opera- tional, the Borrower shall charge ONP with the operation and management of such facilities and equipment in accordance with the Borrower's Ordonnance No. 71-29 of May 13, 1971. - 12 - ARTICLE IV Other Covenants Section 4.01. (a) The Borrower undertakes that, except as the Borrower and the Bank shall otherwise agree, no lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any subdivision thereof and of any entity owned or controlled by the Borrower or any such subdivision. Section 4.02. In order to ensure full operation of the Port of Jijel expected by June 30, 1982, and except as the Borrower and the Bank may otherwise agree, the Borrower shall: - 13 - (a) cause SNS: (i) to procure and to install the steel pro- duction facilities and equipment required for the First Phase of the Steel Complex and for the Steel Mills, and thereafter to operate and maintain the Steel Complex and the Steel Mills, all with due diligence and efficiency and in accordance with appropriate administrative, financial and industrial practices; (ii) to take all other necessary measures in order that the First Phase of the Steel Complex be fully operational not later than June 30, 1982 and in order to ensure the consumption of its pro- duction namely by the full operation, in a timely manner, of the Steel Mills; and (iii) to carry out the Second Phase of the Steel Complex in a timely manner; (b) cause SNS to provide and install the SNS Traffic Handl- ing Equipment not later than June 30, 1981; (c) cause SONELGAZ to take all necessary measures in order to provide in a timely manner, as the need arises, energy to the Steel Complex and the Port of Jijel, including the installation of the Power Station; (d) cause SONAMA to provide all necessary mobile general cargo handling equipment at the Port of Jijel as required; (e) cause all other equipment necessary for the operation of the Port of Jijel to be provided in a timely manner; and - 14 - (f) cause the existing road connecting Jijel to Constantine to be rehabilitated in order to sustain increased cargo .traffi, through the Port of Jijel by such time as the Port of Jijel shall have becae operational. Section 4.03. The Borrower shall take all reasonable measures to ensure that the construction, installation and operation of the Port of Jijel, the Steel Complex and the Power Station are carried out with due regard to the safeguarding of the environment and its biota, including but without limitation, prevention of pollution of the harbor from land and vessel sources and unfavorable alterations of the coastline resulting from changed current and tide patterns. Section 4.04. (a) The Borroweit shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained sound accounting practices the operations, resources and expenditures, in respect of the Project, of ONP and SONATRAM and of the departments or other agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall cause ONP to: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently - 15 - 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 reasonbly requested; and (iii) furnish to the Bank such other information concerning the accounts and financial statements of ONP and SONATRAM, from financial year 1977 on, and the audit thereof as the Bank shall from to time reasonably request. Section 4.05. The Borrower shall cause ONP to take all such measures, including but not limited to the introduction of dues, rates and other charges for services and facilities at the Port of Jijel, as shall be necessary to provide ONP with revenues from the said Port sufficient to make the payments referred to in Section 5.05 of this Agreement. Section 4.06. In order to permit rational utilization of the Port of Jijel, the Borrower shall take all necessary measures to ensure coordination of: (a) the activities of the Port of Jijel with those of its other ports; and (b) the construction and operation of the Port of Jijel with the construction and operation of the Steel Complex. - 16 - ARTICLE V Management and Operations of ONP and SONATRAM; Financial Covenants Section 5.01. (a) The Borrower shall cause ONP and SONATRAM at all times to carry on their operations, under the supervision of experienced and competent management, in accordance with appropriate administrative, financial and engineering practices. (b) The Borrower shall cause ONP and SONATRAM to acquire, maintain and renew all rights which are necessary or useful for the purpose of carrying out their obligations under this Agreement. (c) The Borrower shall cause ONP and.SONATRAM at all times: (i) to operate, maintain, renew and repair their facilities and equipment in accordance with sound management and engineering practices; and (ii) to maintain insurance against all risks as shall be consistent with appropriate business practices and shall make additional provision therefor to the extent necessary. (d) The Borrower shall ensure that no property or assets of ONP and SONATRAM shall be sold or transferred if such sale or transfer shall adversely affect the efficient operation of ONP or SONATRAM. - 17 - Section 5.02. (a) The Borrower shall cause ONP and SNS to enter into arrangements, satisfactory to the Borrower and the Bank, which shall establi7h tariffs applicable to SNS traffic through the Port of Jijel as well as other concession payments to be made by SNS to ONP irrespective of traffic volume, at such levels as shall enable ONP to achieve the rate of return on the assets at the Port of Jijel to be used for SNS traffic referred to in Section 5.03 of this Agreement. (b) The Borrower shall cause ONP to charge the tariffs applicable to general cargo traffic at the Port of Jijel as they shall have been determined in the manner set forth in Section 5.04 of this Agreement. Section 5.03. (a) Except as the Borrower and the Bank may otherwise agree, the Borrower shall take or cause ONP to take from time to time all necessary measures, including, but not limited to, the establishment of the tariffs and other payments referred to in Section 5.02 of this Agreement, as shall be required to enable ONP to yield: (i) an annual return of not less than 8-1/2% on the average net value of fixed assets at the Port of Jijel to be used for SNS traffic; and (ii) such annual return on the average net value of such fixed assets to be used for general cargo as shall be determined in the manner set forth in Section 5.04 of this Agreement. - 18 (b) For the purposes of this Section: (i) capital costs common to both categories of fixed assets referred to in sub-paragraphs (i) and (ii), respectively, of paragraph (a) above shall be allocated to each such category in accordance with a method to be agreed upon by the Borrower and the Bank. (ii) (A) the annual return with respect to such fixed assets to be used for SNS traffic shall be calculated by dividing ONP's operating income from SNS traffic for each fiscal year by one-half of the sum of the net value of said fixed assets in operation at the beginning and at the end of that year; and (B) the annual return with respect to such fixed assets to be used for general cargo handling shall be calculated by dividing ONP's operating income from general cargo traffic for each fiscal year by one-half of the sum of the net value of said fixed assets in operation at the beginning and at the end of that year. - 19 - (iii) the terms "operating income from SNS traffic" under paragraph (ii) (A) above and "operating income from general cargo traffic" under paragraph (ii) (B) above shall mean the difference between, respectively: (A) gross operating reveinue accruing from services provided by ONP to SNS and from ONP's services related to general cargo traffic; and (B) operating, maintenance and administrative expenses, including adequate provision for depreciation, but excluding interest and other charges on debt, and payments to the State referred to in Section 5.05 of this Agreement including income taxes, if any, as such expenses relate to assets referred to in paragraphs (ii) (A) and (ii) (B) above in accordance with the cost allocation method referred to in sub-paragraph (i) above. (iv) the term "net value of fixed assets in operation" means the gross book value of the assets referred to less the amount of accumulated depreciation, both as valued from time to time in accordance with appropriate valuation practices. - 20 - Section 5.04. (a) Without limitation on the provisions of Sections 5.02 and 5.03 of this Agreement, the Borrower shall carry out or cause to be carried out, not later than January 1, 1979, or such other date as the Bank may agree, a review of the Borrower's general port tariff structure, and rate levels to the extent necessary, taking account of the requirements of said Sections and promptly thereafter introduce and charge the appropriate tariffs. (b) The Borrower shall, on the basis of the review referred to in paragraph (a) of this Section, determine (i) an adequate rate of return to be achieved under sub-paragraph (ii) of para- graph (a) of Section 5.03 of this Agreement, and (ii) the level of tariffs to be introduced for the purpose with respect to general cargo traffic of the Port of Jijel. Section 5.05. The Borrower shall ensure that payments to be made by ONP to the State, including income taxes, if any, out of revenues from ONP's operations at the Port of Jijel, shall not exceed in any one year the sum of (i) its combined operating income from SNS traffic and from general cargo traffic from the Port of Jijel in that year, as such term is defined in Section 5.03 (b) (iii) of this Agreement, and (ii) the amount of deprecia- tion charged for the purpose of calculating said combined operat- ing income, less any amounts necessary to enable ONP to carry out its operations, and to meet its current obligations, at the Port of Jijel. - 21 - ARTICLE VI Remedies of the Bank Section 6.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof, namely, that the Borrower's Ordonnances referred to in paragraphs (g) and (i) of Section 1.02 of this Agreement, shall have been amended, suspended or abrogated so as to materially and adversely affect the management or operation of ONP and SONATRAM, respectively, or any action shall have been taken for the dissolution or disestablishment of ONP or SONATRAM or for the suspension of their operations. Section 6.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof, namely, that the events specified in Section 6.01 of this Agreement shall occur. - 22 - ARTICLE VII Termination Section 7.01. The date December 29, 1977, is hereby specified for the purposes of Section 12.04 of the General Conditions. - 23 - ARTICLE VIII Representative of the Borrower; Addresses Section 8.01. The 1inister responsible for Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 8.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Minist8re des Finances Palais du Gouvernement Alger Algeria Cable address: Telex: FINPLAN 52062 Alger 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) - 24 - 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. DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA By /s/ Seddik Ben Yahia Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Munir P. Benjenk Regional Vice President Europe, Middle East and North Africa - 25 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated Z of' (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works and 46,500,000 22% dredging under Part A of the Project (2) Equipment under 3,500,000 40% of foreign Part A of the Proj- expenditures ect (3) Consultants' ser- 2,200,000 40% of foreign vices for Part A expenditures of the Project (4) Technical assistance 600,000 40% of foreign and consultants' expenditures services for Part B of the Project (5) Equipment under 3,700,000 40% of foreign Part C of the expenditures Project (6) Technical assistance 300,000 40% of foreign and consultants' expenditures services for Part C of the Project (7) Unallocated 23,200,000 TOTAL 80,000,000 - 26 - 2. For the purposes of this Schedule, 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. 3. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the Loan 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 Loan decreases or increases, the Bank 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 Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to - 27 - finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreemeat, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 28 - SCHEDULE 2 Description of the Project The Project comprises the construction, equipment and operation of a port about 15 km east of the city of Jijel mainly to serve the Steel Complex, as well as the provision of assistance in port management, training and feasibility studies and support to the domestic civil works industry. The Project consists of the following: Part A: The Port 1. Construction of a main breakwater with a length of about 2,800 m reaching 17 m deep water at Mean Low Water Spring Tides (MLWST). 2. Construction of a secondary breakwater with a length of about 900 m reaching 13 m deep water at MLWST. 3. Construction of five berths to serve the Steel Complex, four berths for general cargo, two berths for roll-on/roll-off and one berth for container handling, the total berthing length aggregating approximately 2,100 m. 4. Construction of two transit sheds of a total area of approximately 25,000 m2 and of one container consolidating shed of an area of approximately 10,000 m2e 5. Construction of a shallow draft basin for harbor craft. - 29 - 6. Dredging the main channel and the turning circle to a depth of not less than 15.2 m, the general cargo and container basin to a depth of not less than 11 m, the Steel Complex basin to a depth ranging between 10.5 and 14.7 m and the harbor craft basin to a depth of not less than 7 m, the total volume of dredging to be carried out aggregating approximately 2.8 million m3. 7. Provision, construction or installation of facilities necessary for the operation of the port including, inter alia, navigation aids, access roads, potable water, sewage treatment, power and lighting, telecommunications, fire protection, and administrative and social buildings. 8. Provision of eight quay cranes for general cargo with a capacity of 6 to 10 tons each and one container crane. 9. Provision of four pilot boats. Part B: Technical Assistance for Port Management and Operations and TrAining. and Studies 1. Strengthening of ONP's management, administrative and operational capabilities in the fields of costing systems, internal control, internal audit and equipment maintenance. 2. Training of personnel at all levels of ONP, CNAN and SONAMA. - 30 - 3. Preparation of a new port cost accounting system and a new tariff structure for all ports in Algeria. 4. Preparation of a master plan study for the main Algerian commercial ports. Part C: Assistance to the Domestic Civil Works and Dredging Industry 1. Provision of port construction equipment to SONATRAM. 2. Technical assistance in construction yard organization, in dredging and in training of SONATRAM's personnel. Parts A and B of the Project are expected to be completed by June 30, 1982 and Part C of the Project by December 31, 1980. - 31 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each May 15 and November 15 beginning May 15, 1981 through November 15, 1993 2,965,000 On May 15, 1994 2,910,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equiva- lents determined as for purposes of withdrawal. - 32 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.45% More than three years but not more than six years before maturity 2.90% I,ore than six years but not more than eleven years before maturity 5.30% More than eleven years but not more than fifteen years before maturity 7.25% More than fifteen years before maturity 8.20% - 33 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. Contracts for the purchase of goods or for civil works shall be procured in accordance with procedures consistent with 1:hose set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (here- inafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. Bidders for the works included in Part A of the Project shall be prequalified as described in paragraph 1.3 of Part A of the Guidelines. B. Evaluation and Comparison of Bids for Goods 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; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically supplied goods, shall be excluded; and (iii) the cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. -34- C. Review of Procurement Decisions by the Bank 1. Review of prequalification. The Borrower shall, before qualification is invited, inform the Bank in detail of the pro- cedure to be followed, and shall introduce such modifications in said procedure as the Bank shall reasonably request. The list of prequalified bidders, together with a statement of their quali- fications and of the reasons for the exclusion of any applicant for prequalification shall be furnished by the Borrower to the Bank for its comments before the applicants are notified of the Borrower's decision, and the Borrower shall make such additions to, deletions from, or modifications in, the said list as the Bank shall reasonably request. 2. Review of invitations 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 to the Bank, the text of the invitations to bid and the specifica- tions and other bidding documents and any subsequent modifications thereof, 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 Bank shall reasonably request. - 35 - (b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Bank shall reasonably request. The Bank 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 Bank'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 Bank promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 3. With respect to each contract to be financed out of the proceeds of the Loan and not governed by the preceding paragraph, the Borrower shall furnish to the Bank, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such contract, - 36 - together with the analysis of the respective bids, recommendations for award and such other information as the Bank shall reasonably request. The Bank 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.