Thailand - Northern Agricultural Development Project : Credit 0929 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 929 TH Development Credit Agreement (Northern Agricultural Development Project) between KINGDOM OF THAILAND and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated June 28, 1979 CREDIT NUMBER 929 TH DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 28, 1979, between KINGDOM OF THAILAND (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS 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; 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 Agree- ments 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) "MOAC" means the Borrower's Ministry of Agriculture and Cooperatives; (b) "MOI" means the Borrower's Ministry of Interior; (c) "MOE" means the Borrower's Ministry of Education; (d) "MPH" means the Borrower's Ministry of Public Health; (e) "LDD" means the Land Development Department within MOAC; -2- (f) "DAE" means the Department of Agricultural Extension within MOAC; (g) "RFD" means the Royal Forestry Department within MOAC; (h) "PWD" means the Public Welfare Department within MOI; (i) "BAAC" means the Bank for Agriculture and Agricultural Cooperatives established pursuant to the Borrower's Bank for Agriculture and Agricultural Cooperatives Act, B.E. 2509 (1966); (j) "NESDB" means the National Economic and Social Develop- ment Board within the Borrower's Prime Minister's office; (k) "OUSMI" means the Office of the Under-Secretary of State of MOI; (1) "OUSMA" means the Office of the Under-Secretary of State of MOAC; (m) "Upland" means about 50,000 ha located in various sites of the Project Area consisting of rolling terrain up to approximately 500 meters elevation; (n) "Highland" means about 172,000 ha located in various sites of the Project Area consisting of steep-walled valleys and exceeding approximately 500 meters elevation; (o) "Project Area" means the set of Upland and Highland sites covering a total of about 222,000 ha; and (p) "Baht" means the currency of the Borrower. 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 equiva- lent to twenty five million dollars ($25,000,000). 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 -3- 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, 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 this Agreement. Section 2.04. The Closing Date shall be December 31, 1985 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. 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 semiannually on March 1 and September 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 1 and September 1 commencing September 1, 1989, and ending March 1, 2029, each installment to and including the installment payable on March 1, 1999, to be one-nalf 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. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project through LDD, PWD, RFD, NESDB, OUSMI and OUSMA with due diligence and efficiency and in conformity with appropriate administrative, financial, agricultural, forestry and engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. -4- (b) In carrying out Part A.2 of the Project, the Borrower shall ensure that LDD is provided with all such technical assis- tance from RFD as may be required. Section 3.02. (a) In order to assist: (i) LDD in carryinL out Part A.1 of the Project, (ii) PWD in carrying out Part B.1 of the Project, and (iii) RFD in carrying out Part B.3 (d) of the Project, the Borrower shall cause LDD, PWD and RFD, respectively, to appoint, in consultation with the Association, agricultural and engineering consultants, whose qualifications, experience, terms of reference and terms and conditions of employment shall be agreed upon between the Borrower and the Association. (b) In order to assist LDD, PWD, RFD and NESDB in imple- menting Part C of the Project, the Borrower shall cause NESDB: (i) not later than September 30, 1979, or such later date as the Borrower and the Association shall otherwise agree, to appoint consultants whose qualifications, experience and terms and condi- tions of employment shall be satisfactory to the Borrower and to the Association; and (ii) not later than January 31, 1980, or such later date as the Borrower and the Association shall otherwise agree, submit to the Association for its review and comment the consultant's report on the design of the Project monitoring and evaluation system under Part C of the Project. (c) In order to assist the Borrower in implementing Parts D, E and F of the Project, the Borrower shall cause OUSMI, NESDB and OUSMA, respectively, to employ development planning, project preparation and agriculture consultants whose qualifications, experience, terms of reference (including detailed work programs), and terms and conditions of employment shall be satisfactory to the Borrower and to the Association. Section 3.03. (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 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, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. -5- Section 3.04. (a) The Borrower shall furnish to the Associa- tion, 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 shall: (i) maintain and cause LDD, PWD, RFD, OUSMI, OUSMA and NESDB to maintain records and procedures adequate to record, monitor and evaluate 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) enable and cause LDD, PWD, RFD, OUSMI, OUSMA and NESDB to enable the Association's accredited representa- tives 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) furnish and cause LDD, PWD, RFD, OUSMI, OUSMA and NESDB to 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 expenditure of the proceeds of the Credit 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 Borrower and the Association, the Borrower 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 the Borrower and the Association of their respective, obligations under the Development Credit Agreement and the accomplishment of the purposes of the Credit. Section 3.05. The Borrower shall cause LDD, PWD, OUSMI, OUSMA and RFD, respectively, to prepare and furnish to the Association for its review and comment, not later than July 1 of each year and until the completion of the Project, an annual work program for the execution of their respective parts under the Project for the next succeeding fiscal year. -6- Section 3.06. The Borrower shall take all such measures, for allocation of land and issuance of land use permits, as may be required: (i) to enable and cause LDD to determine, under Part B.1 of the Project, the areas within each Highland site which are suitable for stable agriculture and thereupon allocate such areas for such use; and (ii) to ensure that RFD issues and grants, promptly upon receipt of the relevant information from PWD, land use permits for plots within the areas delineated pursuant to subparagraph (i) above, to persons or groups of persons who shall have been certified and registered as permanent residents and Project beneficiaries by PWD. Section 3.07. (a) For the purposes of implementing Part A.1 (c) (i) of the Project, the Borrower shall cause LDD to provide, for a period of approximately three consecutive years, all such advisory services as may be required, including without limita- tion, assistance to farmers, individually, (i) in forming farmers' groups and applying appropriate conservation farming practices, (ii) in applying for production credit from BAAC, and (iii) in entering into annual contracts, to be executed by private contrac- tors under LDD's supervision, for the ploughing of fields. (b) The Borrower shall cause LDD to coordinate its activi- ties under Part A.1 (c) (i) during the three year period pursuant to subparagraph (a) of this section with DAE, and provide DAE's extension agents with adequate training in conservation farming practices, and thereafter transfer to DAE the responsibility for such activities upon expiration of said three year period. (c) For the purposes of implementing Part A.1 of the Project, the Borrower shall cause LDD to ensure that the contour banks and access tracks (including waterways) are adequately maintained. Section 3.08. (a) For the purposes of implementing Parts B.1 and B.2 of the Project and at least until the completion of the Project, the Borrower shall cause PWD to provide farmers with all such agriculture, education and health services as shall be -7- required, and thereafter ensure the timely transfer of the respon- sibility for providing such services to the relevant agencies within MPH, MOE or MOI, and MOAC as such agencies may be respec- tively responsible and as such agencies shall be adequately staffed and trained for providing said services. (b) Upon completion of the construction works carried out under Parts B.1 (a) (ii), B.1 (b) and B.3 (d) of the Project, the Borrower shall cause PWD and RFD to ensure that such works are thereafter adequately maintained. Section 3.09. (a) The Borrower shall take all such measures as shall be required to ensure that maximum collaboration and coordination is achieved between PWD and RFD with respect to the identification of areas released from shifting agriculture and made available for village woodlots and forest rehabilitation under Parts B.1 (a) and B.3 (a) and (c) of the Project. (b) For the purposes of implementing Part B.3 of the Project, the Borrower shall cause RFD: (i) to employ local labor to the maximum extent possible for the establishment and opera- tion of woodlots, (ii) to provide villagers with the necessary assistance in forming and operating village woodlot associations until such time as said associations are adequately staffed and trained, and thereafter (iii) to transfer to said village woodlot associations the responsibility for the management of the woodlots under RFD's guidance. Section 3.10. The Borrower shall cause LDD, PWD and RFD, respectively, to: (a) expand their professional Project staff by such numbers of new staff and according to such schedule as shall be agreed between the Borrower and the Association; and (b) appoint, in consultation with the Association, a Project Manager to implement their respective components under the Project. Section 3.11. The Borrower shall not later than September 1, 1979, establish and thereafter maintain a Project Execution Committee with membership, powers, functions and procedures acceptable to the 'Association. -8- ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain and cause LDD, PWD, RFD, OUSMI, OUSMA and NESDB, respecti-ely, to main- tain separate records adequate to reflect in accordance with consistently maintained appropriate accounting practices their operations and financial condition with respect to the Project. (b) The Borrower shall and shall cause LDD, PWD, RFD, OUSMI, OUSMA and NESDB to: (i) have their respective Project accounts and financial 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 six months after the end of each such year, (A) certified copies of their respective financial statements for such year as so audited and (B) the reports of such audits 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 their respective Project accounts and financial statements and the audits thereof as the Association shall from time to time reasonably request. Section 4.02. The Borrower shall cause LDD, PWD and RFD to take out and maintain with responsible insurers, or to make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 4.03. In order to meet the Project beneficiaries' requirements under Part A.1 of the Project, the Borrower shall take all such measures as may be required to ensure that: (a) BAAC shall provide farmers with adequate and timely short-term production credit to meet their requirements for production inputs, including tractor services; (b) BAAC shall provide suppliers of tractor services with adequate and timely medium-term credit to enable such suppliers to procure tractor sets (including reversible plows) and reversible plows; and -9- (c) All short- and medium-term credit provided by BAAC pursuant to paragraphs (a) and (b) above shall be subject to LDD's prior confirmation to BAAC that such farmers and suppliers are eligible to receive such credit from BAAC and that the items to be financed out of the proceeds of such credit are consistent with the implementation of Part A.1 of the Project. ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional event is specified pursuant to paragraph (h) thereof, namely that the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution, disestablishment of LDD, PWD, RFD, OUSMI, OUSMA or NESDB or for the suspension of their respective operations unless arrangements acceptable to the Association shall have been made to replace LDD, PWD, RFD, OUSMI, OUSMA or NESDB by departments which will assume and perform all the obligations of LDD, PWD, RFD, OUSMI, OUSMA and NESDB, respectively, under this Agreement upon said dissolution, disestablishment or suspension. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely that any event specified in Section 5.01 of this Agreement shall occur. ARTICLE VI Termination Section 6.01. The date September 26, 1979 is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. The Minister of Finance 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: - 10 - For the Borrower: Ministry of Finance Bangkok 2 Thailand Cable address: Telex: MINANCE TH 2823 Bangkok 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) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have causef 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. KINGDOM OF THAILAND By /s/ Klos Visessurakarn Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Is/ S. Shahid Husain Regional Vice President East Asia and Pacific - 11 - 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 amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) For LDD under Parts A and B (1) (a) (i) of the Project: (a) civil works 6,570,000 60% of total expenditures (b) vehicles and 1,170,000 100% of foreign equipment expenditures for directly imported goods, 65% of expenditures for goods procured locally off-the- shelf, and 100% of the ex-factory cost for locally manufactured goods (c) consultants and 80,000 100% of total training expenditures (2) For PWD under Parts B (1) and B (2) of the Project: (a) civil works 1,990,000 70% of total expenditures - 12 - Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (b) vehicles and 660,000 100% of foreign equipment expenditures for directly imported goods, 65% of ex- penditures for goods procured locally off-the- shelf, and 100% of the ex-factory cost for locally manufactured goods (c) consultants and 120,000 100% of total training expenditures (d) incremental 1,130,000 70% of total operation and expenditures maintenance (3) For RFD under Part B (3) of the Project: (a) civil works 1,760,000 50% of total expenditures (b) vehicles and 920,000 100% of foreign equipment expenditures for directly imported goods, 65% of ex- penditures for goods procured locally off-the- shelf, and 100% of the ex-factory cost for locally manufactured goods (c) consultants and 30,000 100% of total training expenditures - 13 - Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (4) For NESDB under Part C of the Project: (a) vehicles and 30,000 100% of foreign equipment expenditures for directly imported equipment, 65% of expenditures for goods procured locally off-the- shelf, and 100% of the ex-factory cost for locally manufactured goods (b) consultants, 40,000 100% of total training and expenditures data processing services (5) For OUSMI under 2,000,000 100% of total Part D of the expenditures Project: Provin- cial planning and training (6) For NESDB under 3,000,000 100% of total Part E of the expenditures Project: Project prepaiation (7) For OUSMA under Part F of the Project: (a) civil works 1,300,000 50% of total expenditures - 14 - Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1b) vehicles and 700,000 100% of foreign equipment expenditures, for directly im- ported equipment, 65% of expendi- tures for goods procured locally off-the-shelf, and 100% of the ex-factory cost for locally manu- factured goods (c) training, con- 1,000,000 100% of total sultant and expenditures data processing services (8) Unallocated 2,500,000 TOTAL 25,000,000 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 com- pliance 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 - 15 - 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 expendi- tures prior to the date of this Agreement, and no withdrawals under Categories (5), (6) or (7) shall be made in respect of payments made for expenditures prior to approval by the Associa- tion of proposals for provincial planning and training, project preparation and pilot operations, respectively. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 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 ex- penditures 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 pro- ceeds 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 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 financ- ing out of the proceeds of the Credit. - 16 - SCHEDULE 2 Description of the Project The purpose of the Project is to increase and thereafter stabilize the income of farmers, to help replace shifting agricul- ture with stable agriculture, to conserve water, soil and forest resources and to improve rural infrastructure in the Borrower's northern region; to improve agriculture in rainfed areas in the Borrower's northern and northeastern regions; to identify and prepare future high priority projects, and to strengthen provin- cial planning and provide training in project preparation. The Project consists of the following Parts: Part A: Agriculture and Forestry Development in Upland Areas 1. Agriculture (a) Farm development comprising: (i) a land classification survey encompassing approx- imately 50,000 ha, and socio-economic, boundary and conservation works surveys for about 30,000 ha to be developed for agriculture; (ii) acquisition of anchor chains, clearing blades, brush rakes, root rippers and harrows; and (iii) land clearing, root ripping, stick removal and construction of contour banks and initial culti- vation on about 30,000 ha. (b) Expansion of the road network through the design, layout and construction of about 750 km of access track with waterways; (c) Provision of (i) advisory services to farmers on conser- vation farming systems, (ii) seed production, and (iii) conservation farming research; (d) acquisition of miscellaneous farming equipment and vehicles, and construction of offices and housing. 2. Forestry (a) Establishment of about 90 woodlots and production of sufficient seedlings therefor; - 17 - (b) Construction of about 720 km of firelines and acquisi- tion of about 90 sets of fire fighting equipment; and (c) Provision of t:Thnical services and training to assist farmers in organizing village woodlot associations, managing nurseries, constructing firelines, and con- trolling fires. Part B: Agriculture, Social and Forestry Development in Highland Areas 1. Agriculture (a) Farm development comprising: (i) a land classification survey encompassing approxi- mately 172,000 ha and a socio-economic survey and registration of about 6,500 project beneficiary families and issuance of land use permits thereto; (ii) establishment of about 800 ha of irrigation for food crops, construction of about 1,300 ha of bench terraces for rainfed annual crops and con- struction of about 1,300 ha of bench terraces for coffee plantations; (b) Expansion of the road network through the construction or rehabilitation of about 500 km of access track with drainage ditches; (c) Provision of advisory services to farmers on agricul- tural and social development; and (d) acquisition of miscellaneous farming equipment and vehicles, and construction of offices and housing. 2. Social Infrastructure Construction of small social infrastructure works, including about 80 schools and about 30 health posts. 3. Forestry (a) Rehabilitation of about 4,600 ha of degraded forest through: - 18 - (i) plantation of about 1,600 ha of broadleaf species and about 3,000 ha of pine; and (J,i) establishment of about 56 nurseries; (b) Construction of about 1,730 km of firelines and acquisi- tion of fire-fighting equipment; (c) Establishment and management of about 3,100 ha of village woodlots; (d) Construction of about 345 km of access tracks; (e) Provision of advisory services to farmers on management of village woodlots and fire control; and (f) Acquisition of miscellaneous farming equipment and vehicles, and construction of offices and housing. Part C: Monitoring and Evaluation Design of a Project monitoring and evaluation system and collection and analysis of data on Project inputs, outputs and impact. Part D: Provincial Planning and Training 1. Provision of technical assistance to evaluate and strengthen planning and development management capabilities at provin- cial level. 2. Training in Project preparation at provincial, district and sub-district levels. Part E: Project Preparation Provision of technical assistance to identify and prepare future high priority agricultural and rural development projects. Part F: Pilot Operations Formulation and implementation of small scale pilot opera- tions for agricultural development in rainfed areas of the north - 19 - and northeast regions including development of typical small watersheds and comprising the construction of small civil works and the provision of vehicles, materials, equipment, training, and consultant and data processing services. The Project is expected to be completed by June 30, 1985. - 20 - SCHEDULE 3 Procurement A. General Procedures 1. Except as provided in Parts A.3 and A.4 hereunder, goods and civil works shall be procured under contracts awarded on the basis of local competitive bidding in accordance with procedures mutually acceptable to the Borrower and the Association. 2. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of local competitive 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 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. 3. Miscellaneous civil works, including small irrigation schemes, small buildings, nurseries, rehabilitation plantations, and village woodlots, which in the aggregate do not exceed the equivalent of US$5,000,000 may be executed by force account. 4. (i) Small construction works, (ii) small equipment, or (iii) materials specialized in nature or needed urgently, which do not exceed the equivalent of US$15,000 each and which do not exceed, in the aggregate, the equivalent of US$500,000, may be procured locally by prudent shopping off the shelf or on the basis of negotiated contracts involving, in each case and whenever possible, a minimum of 3 quotations. B. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all bids estimated to amount to the equiva- lent of US$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 - 21 - 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 Borrower shall, before a final decision on th 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 Associa- tion, in sufficient time for its review, a detailed report, on the evaluation and comparison of the bids received, together with the recommendations for award 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 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 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 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 t-ke Association shall reasonably request. The Association shall, if it determines that the award of the contract was not consistent with procedures agreed to pursuant to this Schedule, promptly inform the Borrower and state the reasons for such determination.