Sri Lanka - Mahaweli Ganga Development Project II : Credit 0701 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 701 CE Development Credit Agreement (Mahaweli Ganga Development Project II) between REPUBLIC OF SRI LANKA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated June 27, 1977 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 27, 1977, between REPUBLIC OF SRI LANKA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) the Borrower has contracted from Canada acting through the Canadian International Development Agency a loan (hereinafter called the CIDA Loan) in an amount equivalent to six million Canadian dollars (Can$6,000,000) to assist in financing part of the Project on the terms and conditions set forth in an agreement (hereinafter called the CIDA Loan Agreement) entered into between the Borrower and Canada, acting through the Canadian International Development Agency; (C) the Borrower intends to contract from the Kingdom of the Netherlands a loan (hereinafter called the Netherlands Loan) in an amount equivalent to thirteen million Dutch Guilders (fl3,000,000) to assist in financing part of the Project on the terms and conditions set forth in an agreement (hereinafter called the Netherlands Loan Agreement) to be entered into between the Borrower and the Kingdom of the Netherlands; - 2 - (D) the Borrower intends to contract from the United Kingdom of Great Britain and Northern Ireland a grant (hereinafter called the UK Grant) in an amount equivalent to four million five hundred thousand Pounds (E4,500,000) to assist in financing part of the Project on the terms and conditions set forth in an agreement (hereinafter called the UK Grant Agreement) to be entered into between the Borrower and United Kingdom of Great Britain and Northern Ireland. (E) the Borrower intends to contract from the United States of America through its Agency for International Development a loan (hereinafter called the USAID Loan) in an amount equivalent to five million dollars ($5,000,000) to assist in financing part of the Project on the terms and conditions set forth in an agreement (hereinafter called the USAID Loan Agreement) to be entered into between the Borrower and the United States of America, acting through its Agency for International Development; and 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: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "MDB" means the Mahaweli Development Board, a body corporate established pursuant to the legislation referred to in Section 5.01 (a) of this Agreement, as such legislation may be amended from time to time, and includes any successor thereto; 4 (b) "Project Area" means an area of land located in the Anuradhapura, Kurunegala and Matale districts in the north-central part of the territories of the Borrower and comprising an area of approximately 106,000 acres, which area shall be further defined by a map to be agreed upon between the Borrower and the Association; (c) "Areas under Development" means the areas of land amounting to about 24,600 acres in the Project Area to be defined by a map to be agreed upon between the Borrower and the Association; (d) "Main Project Area" means an area of approximately 40,300 acres in the Project Area, not including the areas under development, to be defined by a map to be agreed between the Borrower and the Association; (e) "Implementing Agencies" means the departments, organizations, agencies and enterprises of the Borrower responsible for carrying out activities related to the Project; and (f) "SLTC" means the Sri Lanka Trading (Tractor) Corporation, a corporation established and operating under the laws of the Borrower. -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 nineteen million dollars ($19,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time 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 required for the Project and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods or for civil works to be financed out of the proceeds of the Credit, shall be procured in accordance with the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1983 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. - 6 - Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semi-annually on May 1 and November 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each May 1, and November 1 commencing May 1, 1987, and ending November 1, 2026, each installment to and including the installment payable on November 1, 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 United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. - 7 - ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out all Parts of the Project except Part B (i) and (ii) through MDB, Part B (i) of the Project through its Department of Agriculture and Part B (ii) through its Paddy Marketing Board, with due diligence and efficiency and in conformity with appropriate administrative, engineering, agricultural and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without limitation or restriction upon the provisions of paragraph (a) of this Section, the Borrower undertakes to: (i) furnish to the Association, not later than November I of each year, a detailed plan for the implementation of the Project together with the financial requirements for the Project for the following fiscal year; and (ii) make available the funds as required, to cover all expenditures under the Project in accordance with such plan. Section 3.02. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards incident to the acquisition, transportation and delivery thereof - 8 - to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Association shall otherwise agree, all goods and services financed out of the proceeds of the Credit shall be used exclusively for the Project until the construction of civil works under the Project has been completed, provided, however, that all equipment needed thereafter, as shall be agreed between the Borrower and the Association, for the operation and maintenance of the Project shall be retained by MDB and shall be used exclusively for this purpose. Section 3.03. (a) The Borrower shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and such costs of the Project as are recovered and to identify the goods and services financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited representatives to visit the facilities -9- and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit, such costs of the Project as are recovered and the goods and services financed out of such proceeds. Section 3.04. The Borrower shall take or cause to be taken all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out the Project and shall furnish to the Association, upon its request, evidence satisfactory to the Association that such land and rights in respect of land are available for purposes related to the Project. Section 3.05. The Borrower shall continue to maintain a project advisory committee chaired by the Resident Project Manager for the Project Area, and consisting also ef the three Deputy Resident Project Managers for the Project Area, senior government officers from the Anuradhapura district and farmers' representatives from the Project Area, to advise the Borrower on the implementation of the Project. - 10 - Section 3.06. The Borrower shall cause MDB to employ, not later than January 1, 1978 or such other date as may be agreed between the Borrower and the Association, for a period of three years: (i) an Implementation Advisor, to work directly for the chairman of MDB and to assist in planning, scheduling and management of all aspects of the Project; and (ii) an On-farm Development Specialist to advise the MDB on the irrigation of upland crops, to assist in developing suitable farm lay-out models and to establish operational criteria for the irrigation system in the Project Area. Section 3.07. The Borrower shall maintain its Mahaweli Coordination Committee and the working level technical subcommittees, all already established in agreement with the Association. Section 3.08. The Borrower shall settle each section of the Project Area not earlier than three months prior to the expected date for the delivery of water to such section. Section 3.09. In accordance with the Borrower's resource mobilization program and except as the Borrower and the Association shall otherwise agree, the Borrower shall: (a) complete, not later than January 1, 1978, all such measures as shall be sufficient to enable the Borrower promptly to begin to assess, impose and collect appropriate charges in all publicly financed development projects; and - 11 - (b) recover from beneficiaries under the Project charges adequate to ensure the recovery of the operation and maintenance costs and of as much as possible of the construction costs of the Project, after taking into account the ability of the beneficiaries to pay, in accordance with a cost recovery plan acceptable to the Borrower and the Association. - 12 - ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause the Implementing Agencies to maintain separate records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations and financial condition, in respect of the Project, of the Implementing Agencies. (b) The Borrower shall cause the Implementing Agencies to: (i) have their accounts and financial statements (balance sheets, statements of income and expenses and related statements), in respect of the Project, for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later Lhan six months after the end of each such year, (A) certified copies of their 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 to the Association such other information concerning the accounts and financial statements of the Implementing Agencies and the audit thereof as the Association shall from time to time reasonably request. - 13 - Section 4.02. The Borrower undertakes to adopt and implement an appropriate procedure for monitoring the incidence of malaria in the Project Area, and for taking necessary preventive and remedial measures as required in that respect. Section 4.03. The Borrower shall take or cause to be taken all such measures as are required to maintain irrigation works, roads and buildings in the Project Area in accordance with appropriate engineering practices and to maintain the agricultural extension services instituted under the Project in the Project Area. Section 4.04. The Borrower shall ensure that schools and medical centers in the Project Area are adequately staffed not later than one year after such schools and centers are required to serve settlers, and continue to be so staffed. Section 4.05. The Borrower shall reorganize the boundaries of the jurisdiction of the Agricultural Productivity Committees and Cultivation Committees in the Project Area in such a way that they conform to the commands and sub-commands of the irrigation system. - 14 - 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) Act No. 14 of 1970 of the Borrower establishing MDB and any other legislation or regulation of the Borrower governing the establishment, organization and powers of MDB shall have been amended, suspended, abrogated, repealed, waived, or shall cease to be enforced, so as to materially affect the operations of MDB or the Project; (b) any action shall have been taken to materially modify the organization structure of MDB; and (c) (i) Subject to subparagraph (ii) of this paragraph: (A) The right of the Borrower to withdraw the proceeds of any grant or loan made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor, or - 15 - (B) any such loan shall have become due and payable prior to the agreement maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement, and (B) adequate funds for the Project are available 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) and (b) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower; and (b) any event specified in paragraph (c) of Section 5.01 of this Agreement shall occur. - 16 - ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) That the CIDA Loan Agreement, the Netherlands Loan Agreement, the UK Grant Agreement, and the USAID Loan Agreement, have been duly authorized or ratified by, and executed and delivered on behalf of, the parties thereto and are legally binding upon the parties thereto in accordance with their terms, and all conditions precedent to the effectiveness of such Agreements or the right to make withdrawals thereunder, except for the effectiveness of this ,greement, have been fulfilled; and (b) That the Additional General Manager (Operations) of MDB has been appointed. Section 6.02. The date September 30, 1977 is hereby specified for the purposes of Section 12.04 of the General Conditions. -- 17 - Section 6.03. The obligations of the Borrower under Sections 4.01 through 4.05 of this Agreement and the provisions of paragraph (a) of Section 5.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date thirty years after the date of this Agreement, whichever shall be the earlier. - 18 - ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. The Secretary, Ministry of Planning and Economic Affairs 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: The Secretary Ministry of Planning and Economic Affairs Colombo Sri Lanka Cable address: SECMINPLAN Colombo, Sri Lanka 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. - 19 - IN WITNESS WHEREOF, the parties thereto, 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. REPUBLIC OF SRI LANKA By /s/ Neville Kanakaratne Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Ernest Stern Regional Vice President South Asia - 20 - 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 amount of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil Works: (a) Irrigation 8,500,000 25% infrastruc- ture, land development, roads and associated works (b) Social in- 4,700,000 47% frastructure, including buildings and works (2) Equipment, vehicles 2,500,000 and spare parts: (a) directly 100% of foreign imported expenditures (b) imported 50% but locally procured - 21 - Amount Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (c) manufactured 100% of local locally expenditures (ex-factory) (3) Technical Assis- 700,000 100% of foreign tance (including expenditures monitoring Pro- gram) (4) Unallocated 2,600,000 TOTAL 19,000,000 - 22 - 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; and (b) the term "local expenditures" means expenditures in the currency of the Borrower and for goods or services supplied from the territory of the Borrower. 3. The disbursement percentages have been calculated in compliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then.applicable to such item as required to be consistent with the aforementioned policy of the Association. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. - 23 - 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 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 expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures, and (ii) 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 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 expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice - 24 - to the Borrower, cancel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 25 - SCHEDULE 2 Description of the Project A. Irrigation and Land Development Works (i) Completion of Kalawewa Right Bank Main Canal (about 10 miles) and the improving of four major tanks along the canal; (ii) Construction of branch canals (about 31 miles), distributory canals (about 250 miles), field channels (about 400 miles) and structures serving the Main Project Area; (iii) Improving of natural drains (about 10 miles) and construction of secondary (about 100 miles) and tertiary drains (about 110 miles) serving the Main Project Area; (iv) Clearing and preparation of about 40,300 acres of land in cle Main Project Area; and (v) Provision of vehicles and equipment and a construction workshop for the construction, operation and maintenance of the above works. B. Production Support (i) Reorganization and strengthening of agricultural extension services in the Project Area and provision of buildings, vehicles and equipment for this purpose; - 26 - (ii) Provision of storage and processing complex in the Project Area for the Borrower's Paddy Marketing Board; (iii) Provision of other storage, marketing and processing facilities in the Project Area; (iv) Provision of about 1,200 two-wheel and 300 four-wheel tractors with implements, about 50 power sprayers and about 1,300 hand sprayers for an area of about 71,000 acres within the Project Area; and (v) Improvement of about 50 miles of existing roads and construction of about 25 miles of new roads in the Main Project Area. C. Social Infrastructure (i) Provision of additional buildings and equipment for schools in the Main Project Area and the area under development; (ii) Provision of additional medical facilities in the Main Project Area and the area under development; (iii) Provision of community development facilities in the Main Project Area and the area under development; (iv) Construction of about 1,235 village wells in the Main Project Area; and - 27 - (v) Construction of about 200 miles of roads in the villages in the Main Project Area. D. Other Project Components (i) Settlement of about 15,300 families in the Main Project Area; (ii) Provision of consultants' services to assist the MDB in the planning, design and implementation of Parts A through C of the Project; and (iii) Studies, surveys, structures and supporting vehicles and equipment and consultants' services necessary to monitor irrigation efficiencies and assess the agricultural, economic and social impacts of the Project. - 28 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, contracts for the purchase of goods shall be procured in accordance with procedures consistent with those set forth in 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 competitive bidding as described in Part A of the Guidelines. B. Other Procurement Procedures 1. Procurement of small off-the-shelf items costing less than $10,000 each and with an aggregate value not exceeding $250,000 may be procured in accordance with procedures of the Borrower acceptable to the Association. 2. Civil works for the Project may be carried out under contracts awarded in accordance with the normal procedures of the Borrower or by force account or under negotiated contracts with agencies of the Borrower under arrangements acceptable to the Association. - 29 - 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 except those to be procured in accordance with local procedures: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for domestically-manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically-supplied goods, shall be excluded; and (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 the Republic of Sri Lanka 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 informarion required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in the Republic of Sri Lanka if the bidder shall - 30 - have established to the satisfaction of the Republic of Sri Lanka and the Association that the manufacturing cost of such goods includes a value added in the Republic of Sri Lanka equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in the Republic of Sri Lanka. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes on goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evaluated bid of each group. Such lowest evaluated bids shall then be compared with each other, and if, as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. (d) If, as a result of the comparison under paragraph (c) above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this further - 31 - comparison only, an amount equal to: (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid; or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shall be selected. D. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for civil works, equipment, vehicles and spare parts estimated to cost the equivalent of $100,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. - 32 - (b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding paragraph, the Borrower shall furnish to the Association, promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account - 33 - in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination.