Mauritania - Gorgol Irrigation Project : Credit 1068 - Project Agreement - Conformed

CREDIT NUMBER 1068 MAU Project Agreement (Gorgol Irrigation Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and SOCIETE NATIONALE POUR LE DEVELOPPEMENT RURAL Dated , 1980 CREDIT NUMBER 1068 MAU PROJECT AGREEMENT AGREEMENT, dated cqverorv- ' .L , 1980, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and SOCIETE NATIONALE POUR LE DEVELOPPEMENT RURAL (hereinafter called SONADER). WHEREAS (A) by the Development Credit Agreement of even date herewith between Islamic Republic of Mauritania (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to eleven million four hundred thousand Special Drawing Rights (SDR 11,400,000), on the terms and condi- tions set forth in the Development Credit Agreement, but only on condition that SONADER agree to undertake such obligations toward the Association as are hereinafter set forth; (B) the Borrower has applied to the International Fund for Agricultural Development (hereinafter called the Fund) for a loan (hereinafter called the Fund Loan) in an amount equivalent to seven million six hundred thousand Special Drawing Rights (SDR 7,600,000) to assist in financing the Project on the terms and conditions set forth in an agreement (hereinafter called the Fund Loan Agreement) between the Borrower and the Fund; (C) the Fund has appointed the Association as Cooperating Institution to administer the Fund Loan in accordance with the provisions of this Agreement and of the Development Credit Agree- ment, and the Association has accepted such appointmen't; (D) the proceeds of the credit provided for under the Development Credit Agreement and of the Fund Loan will be made available to SONADER on the terms and conditions therein set forth; and WHEREAS SONADER, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in -2- the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) SONADER shall carry out the Project des- cribed in Schedule 2 to the Development Credit Agreement through GPD, with due diligence and efficiency and in conformity with appropriate administrative, agricultural, economic, financial and engineering practices. (b) For purposes of carrying out and operating the Project, SONADER shall create and thereafter maintain a Gorgol Project Directorate (GPD) within SONADER with a separate budget and accounts; the responsibilities and organization of said Director- ate shall be established by SONADER in consultation with the Association. Section 2.02. In order to assist GPD in carrying out the Project, SONADER shall employ specialists and consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association, as provided in Schedule 2 to this Agreement. Section 2.03. Except as the Association and the Fund shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Credit or the Fund Loan shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.04. (a) SONADER undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit or of the Fund Loan made available to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by SONADER to replace or repair such goods. (b) Except as the Association may otherwise agree, SONADER shall cause all goods and services financed out of the proceeds of the Credit or of the Fund Loan made available to it by the Bor- rower to be used exclusively for the Project. -3- Section 2.05. (a) SONADER shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, reports, contract documents and construction, 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) SONADER: (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 or of the Fund Loan, and to disclose their use in the Project; (ii) shall enable the Association's and the Fund's accredited representatives to visit the facilities and construc- tiDn sites included in the Project and to examine the goods financed out of the proceeds of the Credit or of the Fund Loan 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 expenditure of the proceeds of the Credit and of the Fund Loan and the goods and services financed out of such proceeds, includ- ing, without limitation to the foregoing and until completion of the Project, quarterly progress reports on the execution and operation of the Project. (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 SONADER and the Association, SONADER shall prepare and furnish to the Association and the Fund 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 SONADER and the Association of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Credit and the Fund Loan. (d) SONADER shall enable the Association's and the Fund's accredited representatives to examine all plants, installations, sites, works, buildings, property and equipment of SONADER and any relevant records and documents. Section 2.06. (a) SONADER shall, at the request of the Asso- ciation, exchange views with the Association with regard to the -4- progress of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit and the Fund Loan. (b) SONADER 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 Fund Loan, or the performance by SONADER of its obligations under this Agreement. -Section 2.07. In providing credit to farmers under Part C (iii) of the Project, SONADER shall continue to apply the practices and policies established for purposes of its current credit operations and shall from time to time review with the Association and the Fund any modifications of such practices and policies required in view of the experience acquired under said Part of the Project. ARTICLE III Management and Operations of SONADER Section 3.01. (a) SONADER shall at all times carry on its operations, manage its affairs, plan its future development and maintain its financial position in accordance with appropriate economic, financial, commercial, administrative, agricultural and engineering practices, and under an experienced and qualified management assisted by competent staff in adequate number. (b) Without limitation or restriction upon SONADER's obliga- tions under paragraph (a) of this Section, SONADER shall: (i) employ a Director of GPD whose qualifications and experience shall be satisfactory to the Associa- tion; and (ii) operate and maintain its equipment, machinery, water storage and irrigation works and other facilities, and make all necessary repairs thereof, in accordance with appropriate agricultural, engineering and management practices. (c) Without limitation or restriction upon SONADER's obliga- tions under paragraphs (a) and (b) of this Section, SONADER shall, under arrangements satisfactory to the Association, cause the dam -5- and related intake/outlet structures constructed under Part A of the Project to be periodically inspected in accordance with sound engineering practice in order to determine whether there are any deficiencies in the condition of such dF.m and structures or in the quality and adequacy of maintenance .3r methods of operation of such dam and structures which may endanger their safety. To this end, SONADER shall: (i) propose to the Association appropriate arrangements for such inspections for the Association's review no later than one year before the expected completion of said facil- ities; and (ii) furnish to the Association, at least once every year, a report on the structural behavior of such facilities prepared in accordance with sound engineering practice. Section 3.02. SONADER shall take out and maintain with re5ponsible 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 3.03. SONADER shall operate the facilities included in the Project in accordance with the recommendations of the health study financed under the First Credit in order to prevent the propagation of waterborne diseases due to the Project. ARTICLE IV Financial Covenants Section 4.01. For the purpose of carrying out and thereafter operating the Project, SONADER shall: (a) open and thereafter maintain, in BMDC or another bank in the Borrower's territory acceptable to the Association and on terms and conditions satisfactory to the Association, an account (the Operating Account) in the name of GPD to be used exclusively by GPD for meeting expenditures under Part C of the Project and, after its completion, the operation of the Project facilities and the further provision of credit and services to farmers in the Project area; and (b) deposit or cause to be deposited in the Operating Account: (i) any amount of the proceeds of any loan or grant made for the financing of the Project (including those listed in Schedule 3 to the Development Credit Agreement) which shall be withdrawn to reimburse SONADER for expenditures paid out of the Operating Account; provided, however, that at the completion of -6- the Project the aggregate amount provided by the Borrower to SONADER pursuant to Section 4.02 of the Development Credit Agree- ment shall be reimbursed directly to the Borrower; (ii) all receipts from farmers in the Project area for the payment of services provided by SONADER (including the water charges referred to in Section 4.04 of this Agreement and repayments of credit made available to such farmers by SONADER as well as interest and other charges on such credit); and (iii) all receipts from sales of rice, paddy or other produce from the Project area by SONADER. Section 4.02. (a) SONADER shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition, including separate accounts reflecting the operations, resources and expenditures in respect of the Project (the Project Accounts). (b) SONADER shall, until one year after the Closing Date, retain all records (orders, invoices, bills, receipts and other documents) evidencing the expenditures for the Project on account of which withdrawals are requested from the Credit Account or the Fund Loan Account on the basis of certificates of expenditure, and shall enable the Association's and the Fund's accredited repre- sentatives to inspect such records. Section 4.03. (a) SONADER shall: (i) have its accounts, including the Project 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 and the Fund as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its financial statements, including separate financial statements of the Project Accounts, 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, including the Project Accounts, and financial statements of SONADER and the audit thereof as the Association shall from time to time reasonably request. (b) Without any limitation or restriction upon any of its other obligations under this Section, SONADER shall furnish to the Association and the Fund, not later than three months after the end of each half year until the Closing Date, an opinion by the -7- auditors referred to in paragraph (a) (i) of this Section: (i) in respect of the expenditures and records referred to in Section 4.02 (b) of this Agreement, as to whether the proceeds of the Credit and of the Fund Loan made available to SONADER and with- drawn from the Credit Account or the Fund Loan Account during such half year on the basis of certificates of expenditure have been used for the purpose for which they were provided; and (ii) on the justification and records in respect of any other expendi- tures financed through cash withdrawals from the Special Account or the Operating Account during such half year. Section 4.04. SONADER shall collect water charges from farmers using irrigation water from the Project facilities at a level sufficient to cover: (i) the cost of maintaining all facili- ties constructed under Parts A (ii) and B of the Project; (ii) salaries and wages of GPD staff operating such facilities; and (iii) ten percent (10%) of other operating expenditures of GPD. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which either the Development Credit Agreement or the Fund Loan Agreement becomes effective, whichever shall be the earlier. Section 5.02. (a) This Agreement and all obligations of the Association and of SONADER thereunder shall terminate on the earlier of the following two dates: (i) the earliest date on which both the Development Credit Agreement and the Fund Loan Agreement shall have terminated in accordance with their respective terms; or (ii) a date twenty-five years after the date of this Agreement. (b) If the Develop6ent Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify SONADER of this event. -8- (c) If either the Development Credit Agreement or the Fund Loan Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section and the other Agreement remains in force, all obligations under this Project Agreement of SONADER and of the lender under that other Agreement shall remain in force. (d) If the Association shall notify SONADER that its appointment as Cooperating Institution under the Fund Loan Agree- ment has terminated, all references in this Agreement to the Fund, to the Fund Loan, to the Fund Loan Account and to the Fund Loan Agreement shall be deemed to be deleted; provided, however, that such deletion shall apply only with respect to the responsibili- ties of the Association as the Cooperating Institution. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. 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 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: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) -9- For SONADER: Societ6 Nationale pour le Developpement Rural B.P. 321 Nouakchott Islamic Republic of Mauritania Cable address: Telex: SONADER 807 MTN Nouakchott Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement or under Section 3.09 of the Development Credit Agreement on behalf of or by SONADER may be taken or executed by its Director General or such other person or persons as the Director General of SONADER shall designate in writing, and SONADER 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 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 / 4tVe.-e J- I~ & e:*- PC-J;lge. A *4 Regional Vice President Western Africa SOCIETE NATIONALE POUR LE DEVELOPPEMENT RURAL By/Au Athoerize Repre sent Authorized Representative - 10 - SCHEDULE 1 Procurement A. International Competitive Bidding 1. Except as provided in Parts B and D hereof, goods and civil works shall be procured under contracts awarded in accor- dance 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, and in addition to the requirements of paragraph 1.2 of the Guidelines, SONADER 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. SONADER 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. To the extent feasible, contracts for the purchase of ferti- lizer and pesticides shall be grouped for purposes of bidding so as to permit bulk procurement. 4. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international competitive bidding: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for the imported goods, or the ex-factory price or off-the-shelf price of other goods, offered in such bid; and (ii) customs duties and other import taxes levied in connection with the importation, or the sales and similar taxes levied in connection with the sale or delivery, pursuant to the bid, of the goods shall not be taken into account in the evaluation of the bids. - 11 - B. Other Procurement Procedures Contracts for the purchase of goods estimated to cost less than the equivalent of $50,000 each may be procured on the basis of local procedures acceptable to the Association. C. 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 estimated to cost the equivalent of $50,000 or more: (a) Before bids are invited, SONADER 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, SONADER 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 SONADER 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 with- drawal of funds from the Credit Account or the Fund Loan Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, SONADER shall furnish to the Association, promptly - 12 - after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account or the Fund Loan 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 SONADER 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 extreme urgency) which would increase the cost of the contract by more than 15% of the original price, SONADER shall inform 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 inconsistent with the provisions of this Agreement, shall promptly inform SONADER and state the reasons for its determination. D. Procurement Without Contracting Civil works under Part B (ii) of the Project (including land clearing and on-farm works) may be carried out by force account through GPD. - 13 - SCHEDULE 2 Technical Assistance (Section 2.02 of the Project Agreement) Except as the Association may otherwise agree, SONADER shall employ the following specialists and consultants: A. Specialists 1. 1 agro-economist as Assistant Director of GPD; 2. 1 agronomist as Assistant Director of GPD's production department; 3. 1 irrigation engineer as Assistant Director of GPD's works department; 4. 2 agronomists and 1 sociologist for GPD's production department; 5. 2 mechanical engineers, 1 for the rice mill and 1 for the workshop to be constructed under Part B (iv) of the Project; and 6. 1 accountant for GPD's administrative department. B. Consulting Services 1. Engineering consultants to assist in the supervision of the construction of Parts A and B of the Project. 2. Short-term consultants to assist in the carrying out of Part C of the Project. 3. Short-term consultants as required to meet SONADER's obligations under Section 3.01 (c) of the Project Agreement. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the LA/ day of JIL, 198 LL. FOR SECRETARY