India - Second Calcutta Urban Development Project : Credit 0756 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 756 IN Project Agreement (Second Calcutta Urban Development Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and CALCUTTA METROPOLITAN DEVELOPMENT AUTHORITY Dated January 6, 1978 CREDI NUMBER 756 IN PROJECT AGREEMENT AGREEMENT, dated January 6, 1978, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and CALCUTTA METROPOLITAN DEVELOPMENT AUTHORITY (hereinafter called the Authority). 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 eighty-seven million dollars ($87,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that the Authority agree to undertake such obligations toward the Association as hereinafter set forth; WHEREAS the Borrower has agreed to make available to the State of West Bengal the proceeds of the Credit provided for under the Development Credit Agreement; WHEREAS by an agreement of even date herewith between the Association and the State of West Bengal, the State of West Bengal has agreed to undertake certain obligations in respect of assist- ing the Authority in carrying out the Project described in Sched- ule 2 to the Development Credit Agreement; WHEREAS the proceeds of the Credit provided for under the Development Credit Agreement are to be made available by the State of West Bengal to the Authority under terms and conditions satisfactory to the Association; and WHEREAS the Authority, 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: -2- ARTICLE II Execution of the Project Section 2.01. The Authority shall carry out, or cause to be carried out, the Project described in Schedule 2 to the Develop- ment Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial and engi- neering practices. Section 2.02. In order to assist the Authority in carrying out Parts A, i and L (i) of the Project, the Authority shall employ suitable consultants on terms and conditions satisfactory to the Association. 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 the Schedule to this Agree- ment. Section 2.04. (a) The Authority 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 West Bengal 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 the Authority to replace or repair such goods. (b) Except as the Association may otherwise agree, the Authority shall cause all goods and services financed out of the proceeds of the Credit made available to it by West Bengal to be used exclusively for the Project. Section 2.05. (a) The Authority shall furnish to the Associa- tion, 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) The Authority: (i) shall maintain 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 -3- identify the goods and services financed out of the proceeds of the Credit made available to it by West Bengal, and to disclose their use in the Project; (ii) shall, without limitation upon the provisions of paragraph (d) of this Section, enable the Associa- tion's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of such proceeds 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, its cost and, where appropriate, the benefits to be derived from it, the expenditures of the proceeds of the Credit so made available to it and the goods and services financed out of such proceeds. (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 the Authority and the Association, the Authority shall prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execu- tion and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Authority and the Association of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Credit. (d) The Authority shall enable the Association's representa- tives to examine all plants, installations, sites, works, build- ings, property and equipment of the Authority and any relevant records and documents. Section 2.06. (a) The Authority 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 Agreement, and other matters relating to the purposes of the Credit. (b) The Authority 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 the Authority of its obligations under this Agreement. ARTICLE III Management and Operations of the Authority Section 3.01. The Authority shall take out and maintain with responsible 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. Section 3.02. The Authority undertakes to make administrative and financial arrangements for the efficient operation and main- tenance of area development schemes included in Part A of the Project until such schemes are transferred by West Bengal to local bodies. Section 3.03. The Authority shall install and operate: (i) a project budgeting and accounting system by April 1, 1979; (ii) a management information system by April 1, 1979; (iii) a project appraisal system by July 1, 1978; and (iv) a project monitoring system by April 30, 1978. ARTICLE IV Financial Covenants Section 4.01. The Authority shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 4.02. The Authority shall: (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 applied, by independent auditors acceptable to the Association; (ii) furnish to the Association 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 such other information concerning the accounts and financial statements of the Authority and the audit thereof as the Association shall from time to time reasonably request. Section 4.03. The Authority shall consult with the Associa- tion on any major changes proposed to its investment program for the period April 1, 1977 through March 31, 1982. -5- 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 the Authority 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 twenty 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 the Authority 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 Development Credit Agreement. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given 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 herein- after 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: -6 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 the Authority: The Secretary Calcutta Metropolitan Development Authority 3-A Auckland Place Calcutta-17, West Bengal, India Cable address: Telex: Calcutta Metropolitan Development CMDA-CA-7125 Authority Calcutta-17, India Section 6.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of the Authority may be taken or executed by the Secretary or such other person or persons as the Authority shall designate in writing. Section 6.03. The Authority shall furnish to the Association sufficient evidence of the authority and the authenticated speci- men signature of the person or persons who will, on behalf of the Authority, take any action or execute any documents required or permitted to be taken or executed by the Authority pursuant to any of the provisions of this Agreement. Section 6.04. This Agreement may be executed in several counterparts, each of which shall be an original, and all collec- tively but one instrument. -7- IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment 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 /s/ W. David Hopper Regional Vice President South Asia CALCUTTA METROPOLITAN DEVELOPMENT AUTHORITY By /s/ J.S. Baijal Authorized Representative -8- SCHEDULE Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, contracts for the purchase of goods or for civil works shall be procured in accor- dance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Cred- its" published by the Bank in March 1977 (hereinafter 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 K (i) of the Project shall be prequalified as described in paragraph 1.3 of Part A of the Guidelines. B. Other Procurement Procedures 1. Contracts for equipment to be financed under Category (2) (b) of Schedule 1 to the Development Credit Agreement may be let on the basis of competitive bidding advertised locally and in accor- dance with procedures acceptable to the Association. 2. Contracts for works other than those included in Part K (i) of the Project may be let on the basis of competitive bidding advertized on an all India basis in accordance with procedures acceptable to the Association, provided, however, that works estimated to cost less than $200,000 equivalent may be carried out by force account. 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. -9- 2. Goods manufactured in India 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 information 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 bias will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in India if the bidder shall have established to the satisfaction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in India equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in India. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excludin- 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 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 - 10 - 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. Evaluation and Comparison of Bids for Civil Works; Preference for Domestic Contractors With respect to any contract for civil works included under Category 1 (a) of the table set forth in Schedule 1 to the Development Credit Agreement and to be procured in accordance with the procedures described in Part A.1 of this Schedule, the Author- ity may grant a margin of preference of 7-1/2% to domestic con- tractors, in accordance with, and subject to, the following provisions: (a) Contractors shall be required to prequalify as provided in Part A of this Schedule and applicants for qualification applying also for such preference shall be asked to provide, as part of the data for qualification, such information, including details of ownership, as shall be required to determine whether, according to the classification established by the Borrower and accepted by the Association, a particular firm or group of firms qualifies for a domestic preference. The bidding documents shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. (b) After bids have been received and reviewed by the Authority, responsive bids will be classified into the following groups: (i) bids offered by domestic contractors eligible for preference; and (ii) bids offered by other contractors. For the purpose of evaluation and comparison of bids an amount equal to 7-1/2% of the bid amount shall be added to bids received under group (ii) above. E. Review of Procurement Decisions by the Association 1. Review of prequalification. The Authority shall, before qualification is invited, inform the Association in detail of the procedure to be followed, and shall introduce such modifica- tions in said procedure as the Association shall reasonably - 11 - request. The list of prequalified bidders, together with a state- ment of their qualifications and, where applicable, of their eligibility for domestic preference under Part D.1 ibove and of the reasons for the exclusion of any applicant for prequalifica- tion and for such eligibility shall be furnished by the Authority to the Association for its comments before the applicants are notified of the Authority's decision, and the Authority shall make such additions to, deletions from, or modifications in, the said list as the Association shall reasonably request. 2. Review of invitations to bid and of proposed awards and final contracts: - With respect to all contracts for equipment estimated to cost the equivalent of $500,000 or more or civil works estimated to cost the equivalent of $750,000 or more: (a) Before bids are invited, the Authority 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. (b) After bids have been received and evaluated, the Author- ity 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 evalua- tion and comparison of the bids received, and such other informa- tion as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsis- tent with the Guidelines or this Schedule, promptly inform the Borrower and the Authority and state the reasons for such deter- mination. (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 - 12 - the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. 3. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding para- graph, the Authority 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 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 the Authority and state the reasons for such determination.