India - Composite Agricultural Extension Project : Credit 0862 - Project Agreement - 3 - Conformed

CONFORMED COPY CREDIT NUMBER 862 IN Project Agreement (Composite Agricultural Extension Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and STATE OF GUJARAT Dated February 16, 1979 CREDIT NUMBER 862 IN PROJECT AGREEMENT AGREEMENT, dated February 16, 1979, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and STATE OF GUJARAT, acting by its Governor (hereinafter called Gujarat). 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 cur- rencies equivalent to twenty-five million dollars ($25,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Gujarat agree to undertake such obligations toward the Association as are hereinafter set forth; and WHEREAS Gujarat, in consideration of the Association's enter- ing 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 and the term "District Agricultural Officer" means the officer in each district responsible for execution of agricultural develop- ment programs in such district. ARTICLE II Execution of the Project Section 2.01. Gujarat shall carry out Part B of the Project described in Schedule 2 to the Development Credit Agreement as said Part applies to Gujarat with due diligence and efficiency and in conformity with appropriate agricultural, administrative, financial and engineering practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, ser- vices and other resources required for the purpose. - 2 - Section 2.02. 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 Schedule 3 to the Developm.nt Credit Agreement. Section 2.03. (a) Gujarat undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit made available to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or instal- lation, and for such insurance any indemnity shall be payable in a currency freely usable by Gujarat to replace or repair such goods. (b) Except as the Association may otherwise agree, Gujarat shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclu- sively for the Project. Section 2.04. (a) Gujarat shall furnish to the Association through DAE, promptly upon their preparation, the plans, specifi- cations, reports, contract documents and work and procurement schedules for its Part of the Project, and any material modi- fications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) Gujarat: (i) shall maintain records and procedures adequate to record and monitor the progress of its Part of the Project (including its cost and, where appropriate, the bene- fits 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 said Part of the Project; (ii) shall enable the Associa- tion's accredited representatives to visit the facilities and construction sites included in said Part of the Project and to examine the goods and services financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association through DAE, at regular intervals all such information as the Association shall reasonably request concerning the said Part of the Project, its cost and, where appropriate, the benefits to be derived from it, the expt iditures of such proceeds and the goods and services financed out 'f such proceeds, and all such other information as the Borrower, through DAE, shall reasonably request in order to enable the Borrower to carry out its obligations under Section 3.04 of the Development Credit Agreement. - 3 - (c) Promptly after completion of its Part 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 the Association and Gujarat, Gujarat shall prepare and furnish to the Association, through DAE, a report, of such scope and in such detail as the Association shall reasonably request, on the execu- tion and initial operation of the said Part of the Project, its cost and the benefits derived and to be derived from it, the performance by the Association and Gujarat of their respective obligations under this Agreement and the accomplishment of the purposes of the Credit. Section 2.05. (a) Gujarat shall at the request of the Asso- ciation, exchange views with the Association with regard to the progress of its Part of the Project, the performance of its obligations under this Agreement, and other matters relating to the purposes of the Credit. (b) Gujarat shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of its Part of the Project, the accomplishment of the purposes of the Credit, or the performance by Gujarat of its obligations under this Agreement. Section 2.06. Gujarat shall: (a) establish procedures, satisfactory to the Association, for carrying out effective monitoring and evaluation of its Part of the Project, and carry out such monitoring and evaluation in accordance with said pro- cedures; and (b) prepare and furnish to the Association, through DAE, annual summaries of the results of such monitoring and evaluation. Section 2.07. Gujarat shall ensure that: (a) all extension positions assigned to the administrative control of the District Agricultural Officer or DOA under this Project shall be used exclusively for agricultural extension and retained under administrative control of the District Agricultural Officer or DOA, respectively, during Project execution; and (b) staff assigned to carry out extension work under the Project shall not be adversely affected, in respect of their entitlement to emoluments, benefits and promotional prospects, by reason alone of such assignment. -4- Section 2.08. Gujarat shall ensure that village extension workers and agricultural extension officers will live in or near the areas assigned for their operations and, to this end, shall provide said workers and officers with such low cost housing or rental allowances as may be necessary for such purpose. Section 2.09. Gujarat shall furnish to the Association, through DAE, at regular intervals all such information as the Association shall reasonably request concerning the progress in locating sites for the houses and offices to be financed out of the proceeds of the Credit. Section 2.10. In order to ensure the mobility of staff engaged in extension work under the Project, Gujarat undertakes to make available: (a) to all eligible staff who are in need of credit for the purchase of motorcycles or bicycles, such credit on terms and conditions designed to provide incentive for the purchase of said motorcycles or bicycles; and (b) such financial incentive, including appropriate travel- ling allowances, as required to encourage optimum use of the motorcycles and bicycles purchased pursuant to paragraph (a) above. Section 2.11. For the purpose of faciiitating more effective coordination between agricultural research and extension, Gujarat shall: (i) by November 30, 1979, review and, where appropriate, strengthen arrangements for close cooperation between DOA and SAU and (ii) thereafter, from time to time as the Association shall reasonably request, discuss with the Association the adequacy of said arrangements. ARTICLE III Financial Covenants Section 3.01. Gujarat undertakes that DOA will maintain separate records adequate to reflect in accordance with consis- tently maintained appropriate accounting practices the operations, resources and expenditures of DOA in respect of the Project. Section 3.02. Gujarat undertakes that DOA will: (i) have its accounts and financial statements in respect of the Project -5- 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, through DAE, as soon as available, but in any case not later than nine 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, through DAE, such other information concerning said accounts and financial statements and the audit thereof as the Association shall from time to time reasonably request. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 4.02. (a) This Agreement and all obligations of the Association and of Gujarat thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date 20 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accor- dance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify Gujarat of this event. Section 4.03. All the provisions of this Agreement shall con- tinue in full force and effect notwithstanding any cancellation or suspension under the Development Credit Agreement. ARTICLE V Miscellaneous Provisions Section 5.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between -6- the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have des- ignated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. For Gujarat: Secretary to the Government of Gujarat Agriculture, Forests and Co-operation Department Sachivalaya Gandhinagar Gujarat India Cable address: AGRICOPSEC Gandhinagar Section 5.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of Gujarat may be taken or executed by the Secretary to the Government of Gujarat, Department of Agricul- ture or such other person or persons as Gujarat shall designate in writing, and Gujarat shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. -7- Section 5.03. This Agreement may be executed in several coun- terparts, each of which shall be an original, and all collectively but one instrument. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By Is! W. David Hopper Regional Vice President South Asia STATE OF GUJARAT By /s/ N.A. Palkhivala Authorized Representative