India - National Cooperative Development Corporation Project : Credit 0871 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 871 IN Project Agreement (National Cooperative Development Corporation Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and NATIONAL COOPERATIVE DEVELOPMENT CORPORATION Dated February 2, 1979 CREDIT NUMBER 871 IN PROJECT AGREEMENT AGREEMENT, dated February 2, 1979, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and NATIONAL COOPERATIVE DEVELOPMENT CORPORATION (hereinafter called NCDC). 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 thirty million dollars ($30,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that NCDC agree to undertake such obligations toward the Association as are hereinafter set forth; WHEREAS by financial arrangements to be entered into between the Borrower and NCDC, the proceeds of the credit provided for under the Development Credit Agreement will be made available to NCDC on the terms and conditions therein set forth; and WHEREAS NCDC, 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 2.01. NCDC shall carry out the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices. -2- Section 2.02. In order to assist NCDC in carrying out the Project, NCDC shall employ and shall cause participating SCBs to employ such consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Associa- tion and NCDC. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Credit, shall be governed by the provisions of the Schedule to this Agreement. Section 2.04. (a) NCDC undertakes to insure, or make adequate provision for the insurance of, or caused to be insured, the imported goods to be financed out of the proceeds of the Credit relent 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 NCDC to replace or repair such goods. (b) Except as the Association may otherwise agree, NCDC shall cause all goods and services financed out of the proceeds of the Credit relent to it by the Borrower to be used exclusively for the Project. Section 2.05. (a) NCDC shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) NCDC: (i) shall maintain and shall cause to be main- tained records and procedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use in the Project; (ii) shall enable the Association's accredited represen- tatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association at regular intervals all such information as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditures of such proceeds and the goods and services financed out of such proceeds. -3- (c) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between NCDC and the Association, NCDC shall prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by NCDC and the Association of their respec- tive obligations under the Credit Agreement and the accomplishment of the purposes of the Credit. (d) NCDC shall enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment and any relevant records and documents pertaining to the Project. Section 2.06. NCDC shall at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agree- ment and other matters relating to the purposes of the Credit. Section 2.07. NCDC shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by NCDC of its obligations under this Agreement. Section 2.08. NCDC shall ensure that only SCBs which satisfy standards of eligibility mutually agreed between the Association and NCDC, are permitted to participate in the Project. Section 2.09. NCDC shall cause a participating SCB to: (a) apply criteria mutually agreed upon between the Associ- ation and NCDC in the participating SCB's appraisal of a Sub- project to be refinanced under the Project; (b) make a Sub-loan to a cooperative for a Sub-project proposed to be refinanced by a NCDC-loan under the Project, upon relending terms and conditions mutually agreed upon between the Association and NCDC; (c) furnish to NCDC audited accounts and reports of the participating SCB with respect to each Sub-project refinanced by a NCDC-loan under the Project, within six months of the end of each financial year of the participating SCB; and -4- (d) strengthen the staff of the participating SCB in accor- dance with a program mutually agreed upon between the Association and NCDC. Section 2.10. NCDC shall apply criteria acceptable to the Association, in its review of Sub-projects proposed by partici- pating SCBs to be refinanced under the Project. Section 2.11. NCDC shall make loans, from the proceeds of the Credit, to participating SCBs for the purpose of refinancing Sub-loans made by participating SCBs to cooperatives, upon terms and conditions satisfactory to the Association. Section 2.12. NCDC shall make loans, from resources other than the proceeds of the Credit, on NCDC normal lending terms, to Haryana, Orissa and Uttar Pradesh to be used by Haryana, Orissa and Uttar Pradesh for adequate capital or grant contributions to participating cooperatives. Section 2.13. NCDC shall ensure, through contractual and other appropriate means, that building designs, specificntions and other construction standards for civil works in the Project are acceptable to the Association. Section 2.14. NCDC shall furnish or cause to be furnished to the Association the annual work programs, annual budgets and quarterly progress reports prepared by NCDC and participating SCBs in regard to Sub-projects, as soon as those documents become available. ARTICLE III Management and Operations of NCDC Section 3.01. NCDC shall take out and maintain with respon- sible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. NCDC shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. -5- Section 4.02. NCDC shall, in respect of the Project: (i) have its accounts ard financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors accept- able to the Association; (ii) furnish to the Association 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 Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of NCDC and the audit thereof as the Association shall from time to time reasonably request. 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 Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of NCDC thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agree- ment shall terminate in accordance with its terms; or (ii) a date 25 years after the date of this Agree- ment. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify NCDC of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. - 6 - 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 partias 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: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For NCDC: National Cooperative Development Corporation Eros Apartments 56 Nehru Place New Delhi - 110019 Cable address: Telex: COPCORP 3559 ND New Delhi Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of NCDC may be taken or executed by its Managing Director or such other person or persons as NCDC shall -7- designate in writing, and NCDC shall furnish to the Associa- tion sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. 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 DEVELOPMENT ASSOCIATION By Is/ W. David Hopper Regional Vice President South Asia NATIONAL COOPERATIVE DEVELOPMENT CORPORATION By /s/ Nani A. Palkhivala Authorized Representative -8- SCHEDULE Procurement A. Civil Works Contracts for civil works shall be awarded on the basis of local competitive bidding in accordance with procedures acceptable to the Association. B. Equipment and Vehicles Equipment and vehicles shall be procured on the basis of local competitive bidding or through prudent shopping in accor- dance with local procedures acceptable to the Association. C. Technical Assistance Technical assistance services shall be procured in accordance with local procedures acceptable to the Association. D. Review of Procurement Decisions by the Association With respect to all procurement decisions, copies of invita- tions to bid, specifications, evaluations, contracts and other relevant procurement documents need not be submitted to the Association, but NCDC shall cause the said documents to be retained for periodic inspection by representatives of the Association.