Bolivia - Santa Cruz Water Supply And Sewerage : Credit 0948 - Project Agreement - Conformed

기 __ _W_-_' OF MI! ii N WMINI CREDIT NUMBER 94 8 BO PROJECT,AGREEMENT AGREEMENT, dated July 27, 1979, between INTERNATIONAL DEVEL- OPMENT ASSOCIATION (hereinafter called the Association) and SERVICIOS DE AGUA POTABLE Y ALCANTARILLADO DE SANTA CRUZ (SAGUAPAQ (hereinafter called SAGUAPAC). WHEREAS by the Development Credit Agreement of even date herewith between Republic of Bolivia (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equiva- lent to nine million dollars ($9,000,000), on the terms - and conditions set forth In the Development Credit Agreement, but only on condition that SAGUAPAC agree to undertake such obligations toward the Association as are hereinafter set forth; and WHEREAS by a subsidiary loan agreement to be entered into between the Borrower and SAGUAPAC, the proceeds of the credit provided for under the Development Credit Agreement will be relent_-, to SAGUAPAC on the terms and conditions' therein set forth; and- WHEREAS SAGUAPAC, 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 de fined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth and the term "Fiscal Year" means the fiscal year of SAGUAPAC, which coincides with the calendar year. ARTICLE II Execution of the Project Section 2.01. SAGUAPAC shall carry out the Project described in Schedule 2 to the Development Credit Agreement with due -2- diligence and efficiency and in conformity with appropriate administrative, financial, public utility and engineering practices. Section 2.02. In order to assist SAGUAPAC in: (i) preparing bidding documents and eqvaluatIng and comparing the bids received for, and supervising th- exe#zution of, Parts A, B and C of the Pro ject; and (ii) carrying out Part E of the Pro ject, SAGUAPAC shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association; the consultants for Part E.1 of the Project to be retained not later than July 31, 1980, and the consultants for Part E.3 to be retained not later than January 1, 1980. Section 2.03. For purposes of carrying out Part E.4 of the Project, SAGUAPAC shall: (a) not later than December 31, 1979, prepare and furnish to the Association for approval a three- year training program to be commenced not later than March 31, 1980; (b) make such changes thereon as the Association shall reasonably request; and (c) carry out such Part of the Project in accordance with the program approved by the Association. Section 2.04. 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 2.05. Except as the Association shall otherwise agree, and for purposes of Part C of the Project: (a) SAGUAPAC shall, not later than January 1, 1980: (i) establish, on terms and conditions satisfactory to the Associa- tion, and maintain thereafter, a revolving fund which shall be used only to finance the installation of water and sewer lot lines, house connections, in-house plumbing facilities (each such installation hereinafter called the Works) and meters; and (ii) pay into such fund an initial amount equivalent to $50,000; (b) SAGUAPAC shall: (i) pay out of the proceeds of the fund referred to in (a) above, the cost of the Works; and (ii) bef ore making any payment pursuant to (i) above, (A) enter into a contract with the beneficiary of the Works whereby such benefi- ciary shall pay to SAGUAPAC the cost of the Works and meter over a -3- period of not more than ten years at a rate of interest of not less than 12% per annum on the unpaid balances of such cost and shall give SAGUAPAC the right to supervise the Works, and (B) ensure that the plumbing standards to be used for the Works are satisfactory to the Association and SAGUAPAC; (c) SAGUAPAC shall deposit into the fund: (i) all payments to SAGUAPAC on account of the cost of the Works and of interest on the unpaid balance of such cost; (ii) the proceeds of the Credit withdrawn from time to time under Category (3) of the table set forth in Part 1 of Schedule 1 to the Development Credit Agreement; and (iii) the amounts withheld by SAGUAPAC in accordance with the proviso to paragraph (b) of Section 3.01 of the Development Credit Agreement; and (d) SAGUAPAC shall from time to time review, and if required revise, the rate of interest set forth in paragraph (b) of this Section in order to ensure that the sum: (i) of the payments to be made to SAGUAPAC on account of the cost of Works financed by the fund plus the interest on the unpaid and outstanding balance of such cost; and (ii) of other resources readily usable by SAGUAPAC for purposes of future financng of Works (including the uncommit- ted proceeds of the Credit allocated to Category (3) of the table referred to in paragraph (c) (ii) of this Section and the amounts referred to in paragraph (c) (iii) of this Section), shall be, at all times substantially not lower than the equivalent in pesos of the aggregate of the proceeds of the Credit allocated from time to time to such Category (3). Section 2.06. (a) SAGUAPAC undertakes to insure, or make adequate provision for the insurance of, 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, trans- portation and delivery thereof to the place of use or installa- tion, and for such insurance any indemnity shall be payable in a currency freely usable by SAGUAPAC to replace or repair such goods. (b) Except as the Association may otherwise agree, SAGUAPAC 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 which shall be used exclusively for the Project only until its completion. -4- Section 2.07. (a) SAGUAPAC 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; progress reports on the execution of the Project to include monitoring indicators satisfactory to the Association. (b) SAGUAPAC: (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 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 representatives 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. (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 SAGUAPAC and the Association, SAGUAPAC 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 SAGUAPAC and the Associa- tion of their respective obligations under this Agreement and the accomplishment of the purposes of the Credit. (d) SAGUAPAC shall enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment of SAGUAPAC and any relevant records and documents. Section 2.08. SAGUAPAC shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Association shall otherwise agree, SAGUAPAC shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Loan Agreement or any provi- sion thereof. -5- Section 2.09. (a) 8AGUAPAC 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 under the Subsidiary Loan Agreement, and other matters relating to the purposes of the Credit. (b) SAGUAPAC 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 SAGUAPAC of its obliga- tions under this Agreement and under the Subsidiary Loan Agreement. Section 2.10. SAGUAPAC 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 Part B.1 of the Project and shall furnish to the Association, promptly after such acquisition, evidence satis- factory to the Association that such land and rights in respect of land are available for purposes related to the Project. ARTICLE III Management and Operations of SAGUAPAC Section 3.01. SAGUAPAC 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. (a) SAGUAPAC shall at all times manage its affairs, carry out its operations, plan the development of its business and maintain its financial position, all in accor- dance with sound public utility, financial and administrative practices under supervision of qualified and experienced manage- ment. (b) SAGUAPAC shall: (i) operate and maintain its plants, equipment, properties and facilities and shall, from time to time, promptly as needed, make all reasonable and necessary renewals and repairs thereof, all in accordance with sound engi- neering practices; and (ii) not sell, lease, transfer or otherwise dispose of any of its properties or assets required for the efficient carrying out of its business, including the carrying out -6- of the Project, except in the normal course of its business or with the prior agreement of the Association. Section 3.03. SAGUAPAC shall at all times take all reason- able steps necessary: (i) to maintain its right to carry on its operations, including the Project; and (ii) to acquire and retain such land and properties, and to acquire, maintain and renew such consents, franchises and other rights, as may be necessary or useful for the construction and operation of the Project and the conduct of its business. Section 3.04. SAGUAPAC shall inform the Association about any proposed appointment to the position of general manager of SAGUAPAC and afford the Association an adequate opportunity to comment on his qualifications and experience. Section 3.05. (a) SAGUAPAC shall: (i) not later than December 31, 1979, prepare and furnish to the Association a statement on SAGUAPAC's personnel policy; and (ii) not later than March 31, 1980, prepare and furnish to the Association a statement on the procedures to be followed for the internal auditing of SAGUAPAC's accounts and financial statements and corresponding auditing manuals. (b) SAGUAPAC shall afford the Association a reasonable opportunity to comment thereon. Section 3.06. SAGUAPAC shall establish and thereafter main- tain a planning unit and an engineering unit with such functions as shall be satisfactory to the Association. Section 3.07. (a) SAGUAPAC shall, not later than December 31, 1980: (i) survey the waste water disposal and sanitation problems in areas supplied with water by SAGUAPAC but lacking sewers; (ii) prepare and furnish to the Association a program, of such scope and in such detail as shall be satisfactory to the Association, to solve the problems identified pursuant to paragraph (a) above. (b) SAGUAPAC shall modify such program to take into account the Association's comments thereon and carry out such program, as so modified, promptly thereafter. -7- ARTICLE IV Financial Covenants Section 4.01. SAGUAPAC shall maintain records adequate to reflect in accordance with consistently maintained appro- priate accounting practices its operations and financial condi- tion. Section 4.02. SAGUAPAC 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 four 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 Associa- tion such other information concerning the accounts and financial statements of SAGUAPAC and the audit thereof as the Association shall from time to time reasonably request. Section 4.03. SAGUAPAC shall, not later than November 30, 1979, value its fixed assets in service and, thereafter, revalue such assets at the end of each Fiscal Year, all in accordance with valuation and revaluation principles and procedures accept- able to the Association. Section 4.04. Except as the Association and SAGUAPAC shall otherwise agree, SAGUAPAC shall take all such action as shall be required in respect of the water and sewerage charges to be paid by the users of SAGUAPAC's water supply and sewerage services as shall be required for SAGUAPAC to obtain: (a) by June 30, 1980, revenues averaging $b5 per cubic meter of water supplied and billed by SAGUAPAC; and (b) an annual- rate of return on the net values of SAGUAPAC's fixed assets in service, revalued in accordance with Section 4.03 of this Agreement, of not less than 1.5% in Fiscal Year 1980, 5% in Fiscal Year 1981, 5.5% in Fiscal Year 1982 and 6% in Fiscal Year 1983 and in each Fiscal Year thereafter. -8- For purposes of this Section: (i) the rate of return in respect of any Fiscal Year shall be calculated by dividing SAGUAPAC's net income from operations for that year by the average v of the net values of SAGUAPAC's fixed assets in service during that year revalued in accordance with Section 4.03 of this Agreement; (ii) "net income from operations" means gross operating revenues including every fixed charge collected from-users of SAGUAPAC's services, inter alia, those required by Section 4.05 of this Agreement, less all operating, administrative and overhead expenses including depreciation, taxes and levies, if any, or any payments in lieu thereof, but without deduction of interest and other charges on debt; and (iii) "average of the net values of fixed assets" means one-half of the sum of the value, at the beginning and at the end of the year, of SAGUAPAC's gross fixed assets in service revalv,ed in accordance with Section 4.03 of this Agreev nt less accumulated depreciation. Section 4.05. SAGUAPAC shall, at all times, charge, and col- lect from users of SAGUAPAC's water supply and sewerage services to be provided under new projects undertaken by SAGUAPAC (includ- ing the Project), the fixed charges such as derecho de matricula, derecho de suministro, derecho de desagUe, and cuota de agua y alcantarillado which shall have been accepted by the Association for purposes of Section 5.01 (d) (ii) of the Credit Agreement, and shall set and thereafter maintain such charges at levels which shall not be lower than the levels in effect as of the Effective Date. Section 4.06. Unless the Association shall otherwise agree, and until the Closing Date, SAGUAPAC shall not undertake any investment if , by undertaking such investment, the aggregate cost 'of SAGUAPAC's investments in any given year (other than invest- ments for purposes of the Project) shall exceed the equivalent of $500,000. Section 4.07. SAGUAPAC shall take all such action as shall be necessary to ensure that, at all times, its accounts receivable -9- for water and sewerage services provided by. SAGUAPAC shall not exceed the average amount of two months billings by SAGUAPAC for such services within the twelve-month period immediately preceding the date on which the calculation is made. 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 SAGUAPAC 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 SAGUAPAC of this event. Section 5.03. All. the provisions of this Agreement shall con- tinue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. 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 -10- 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: 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 SAGUAPAC: Servicios de Agua Potable y Alcantarillado de Santa Cruz Casilla de Correo 3284 Santa Cruz de la Sierra Bolivia Cable address: SAGUAPAC Santa Cruz, Bolivia 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 SAGUAPAC may be taken or executed by the General Manager of SAGUAPAC or such other person or persons as such General Manager shall designate in writing, and SAGUAPAC shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. 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 writtena INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Nicolås Ardito Barlet ta Regional Vice President Latin America and the Caribbean SERVICIOS DE AGUA POTABLE Y ALCANTARILLADO DE SANTA CRUZ (SAGUAPAC) By // Miguel Zalles Authorized Represent Ive ja -12- SCHEDULE Procurement A. International Competitive Bidding 1. Except as provided in Part C hereof, goods and civil works shall be procured under contracts awarded 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 March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. For goods and works to be procured on the basis of inter- national competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, SAGUAPAC shall prepare and forward to the. Association as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender or prequalification documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Association shall reasonably request; the Association will arrange for the publication of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods and works in question. SAGUAPAC shall provide the necessary information to update such notice annually so long as any goods or works remain to be procured on the basis of international competitive bidding. 3. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international com- petitive bidding, (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 SAGUAPAC of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A of this Schedule, goods manufactured in -13- Bolivia may be granted a margin of preference in accordance with, and subject to, the following provisions: 1. 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. 2. After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Bolivia if the bidder shall have established to the satisfaction of SAGUAPAC and the Association that the manufacturing cost of such goods includes a value added in Bolivia equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other domestic bids. (3) Group C: bids offering any other goods. 3. 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. 4. If, as a result of the comparison under paragraph 3 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 evaluated 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 shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph 3 is the lowest evaluated bid shall be selected. -14- C. Other Procurement Procedures 1. Subject to 3 below, contracts for civil works (other than those referred to in 2 below) estimated to cost less than $100,000 equivalent and contracts for goods estimated to cost less than $50,000 equivalent may be procured through competitive bidding on the basis of local advertising under procedures satisfactory to the Association; provided, however, that the aggregate estimated cost of the contracts for civil works and goods to be so procured does not exceed $1,000,000 equivalent. 2. Contracts for civil works for Parts A.2 and B.5 of the Project estimated to cost less than $10,000 equivalent may be procured, after SAGUAPAC has obtained quotations from not less than three contractors previously registered with SAGUAPAC, through direct negotiations between SAGUAPAC and one of such contractors; provided, however, that the aggregate estimated cost of the contracts so procured does not exceed $200,000. 3. Contracts for Part C of the Project may be awarded through normal commercial channels; provided, however, that the foregoing will not apply if such contracts do not give SAGUAPAC the right to supervise the works thereunder. 4. Data processing equipment included in Part D of the Project may be procured by SAGUAPAC by exercising its option to buy the data processing equipment which is presently being leased by SAGUAPAC; provided, however, that the foregoing will not apply if SAGUAPAC has not shown, in a manner satisfactory to the Associ- ation, that the use of such option is the least costly solution for SAGUAPAC. 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 goods estimated to cost the equivalent of $10,000 or more and to all contracts for civil works estimated to cost the equivalent of $50,000 or more: (a) Before bids are invited, SAGUAPAC 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 Aw -15- 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, SAGUAPAC 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, by the consul- tants referred to in Section 2.02 (i) of this Agreement, on the evaluation and comparison of the bids received, together with the recommendations for award of the said consultants 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 SAGUAPAC 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 delivery 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 not governed by the preceding paragraph, SAGUAPAC shall furnish to the Association, promptly after its execution and prior to the delivery 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 SAGUAPAC and state the reasons for such determination. 3. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an extension of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of 16 - extreme urgency) which would increase the cost of the contract by more than 10% of the original price, SAGUAPAC shall inform the the Association of the proposed modification, waiver, extension or change order and the reasons therefor. The Association, if it determines that the proposal would be inconsister-t with the provisions of this Agreement, shall promptly inform SAGUAPAC andi state the reasons for its determination. LA