Morocco - Third Highway Project : Loan 1830 - Loan Agreement - Conformed

LOAN NUMBER 1830 MOR Loan Agreement (Third Highway Project) between KINGDOM OF MOROCCO and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , 1980 LOAN ?UMBER 1830 MOR LOAN AGREEMENT AGREEMENT, dated u, 1980, between the KINGDOM OF MOROCCO (hereinafteV called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). ARTICLE 1 General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank 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 have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "RD" means the department responsible for roads in the Borrower's ministry responsible for public works. (b) "MOT" means the Borrower's ministry responsible for transportation. (c) "LPEE" means the Laboratoire Public d'Essais et d'Etudes located in Casablanca. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to sixty two million dollars ($62,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from -2- time to time by agreement between the Borrower and the Bank, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan. Section 2.03. (a) Except as the Bank shall otherwise agree, procurement of the goods and civil works to be finance, out of the proceeds of the Loan, shall be governed by the p-ovisions of Schedule 4 to this Agreement. (b) Before bids for pavements works under the Project are invited, the Borrower and the Bank shall agree on the execu- tion of such pavement works on individual road sections as selec- ted on the basis of (i) an economic evaluation submitted to the Bank and prepared in accordance with a methodology and criteria agreed to between the Borrower and the Bank and (ii) a technical evaluation acceptable to the Bank. Section 2.04. The Closing Date shall be June 30, 1984, or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of eight and twenty-five hundredths per cent (8.25%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semiannually on April 15 and October 15 in each year. Section 2.08. The Borrower shall repay the prii. ipal amount of the Loan in accordance with the amortization s-iLedule set fo-rth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project through RD and MOT with due diligence and efficiency and in -3- conformity with appropriate administrative, financial and engi- neering practices, and shall provide, p-emptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. The Borrower shall, through RD: (i) carry out the pavement strengthening and road maintenance programs described in Parts A and B of the Project in accordance with an action plan as agreed to between the Borrower and the Bank; (ii) each year not later than September 30, beginning Septem- ber 30, 1980 and until completion of the action plan, submit to the Bank for its review and comments an annual program, consistent with the action plan and showing the pavement strengthening and road maintenance works to be carried out in the following year; and (iii) upon receipt of the Bank's comments promptly finalize such annual program and return it to the Bank for information. Section 3.03. (a) In order to assist: (i) RD in carrying out its road maintenance operations as described in Part C.1 of the Project and (ii) MOT in the development and implementation of recommendations on transportation planning and coordination as described in Part D of the Project, the Borrower shall, not later than July 1, 1981 employ consultants whose qualifications, experi- ence and terms and conditions of employment shall be satisfactory to the Bank. (b) In order to assist RD in the preparation of the pavement strengthening and preservation program as described in Part C.2 of the Project the Borrower shall retain the services of LPEE under terms and conditions acceptable to the Bank. Section 3.04. (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 Loan 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 Bank shall otherwise agree, all goods and services financed out of the proceeds of the Loan shall be used exclusively for the Project until its completion. Section 3.05. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, specifications, -4- reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (in- cluding its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Loan, and to disclose their use in the Project; (ii) shall enable the Bank's accredited representatives to visit the facili- ties and construction sites included in the Project and to examine the goods financed out of the proceeds of the Loan and any rele- vant records and documents; and (iii) shall furnish to the Bank at regular intervals all such information as the Bank shall reason- ably request concerning the Project, its cost and, where appro- priate, the benefits to be derived from it, the expenditure of the proceeds of the Loan 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 Bank, the Borrower shall prepare and furnish to the Bank a report, of such scope and in such detail as the Bank shall reason- ably 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 Bank of their respec- tive obligations under the Loan Agreement and the accomplishment of the purposes of the Loan. ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the alloca- tion, realization or distribution of foreign exchange, such lien -5- shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on a-sets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term public assets" means assets of the Borrower, of any political or administrative subdivision thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and foreign exchange assets held by Banque du Maroc or any institution performing the functions of a central bank or exchange stabilization fund, or similar func- tions, for the Borrower. Section 4.02. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with con- sistently maintained appropriate accounting practices the opera- tions, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. Section 4.03. (a) The Borrower shall cause its national highway network to be adequately maintained and shall cause all necessary repairs thereof to be made promptly, all in accord- ance with appropriate engineering practices, and shall provide or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the foregoing. (b) The Borrower shall adequately operate, maintain, renew and acquire as necessary, the machinery, equipment, spare parts, - 6 - workshops and other repair facilities required therefor, all in accordance with appropriate engineering and economic practices. Section 4.04. The Borrower shall continue to improve the collecting and recording, in accordance with appropriate statis- tical methods and procedures including regular and systematic traffic counts, of such technical, economical and financial information as shall be reasonably required for proper planning of maintenance, improvements and extensions of its public highway system. Section 4.05. The Borrower shall through the MOT take all reasonable measures, including the enforcement of appropriate limitations on size and weight of vehicles necessary to ensure the prorer use of its national highway system. ARTICLE V Effective Date; Termination Section 5.01. The date 0) \) 0 , is hereby specified for the purposes of Section 12.04 of the General Condi- tions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Minister of the Borrower responsible for finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Condi- tions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the, Borrower: Ministere des Finances Rabat Kingdom of Morocco -7- Cable address: Telex: Ministire Finances Rabat, Morocco 31936 M For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) 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 city of Rabat, Kingdom of Morocco, as of the day and year first above written. KINGDOM OF MOROCr'O By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By 1!~ U~~7tj Regional Vice President Europe, Middle East and North Africa - 8 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works 45,000,000 65% (2) Equipment 10,450,000 100% of foreign expenditures and 73% of local expenditures (3) Consultants' 850,000 85% Services (4) Road Laboratory 300,000 70% Services (LPEE) (5) Unallocated 5,400,000 TOTAL 62,000,000 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 goodt or services supplied from the territory of any country other than 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. -9- 3. The disbursement percentages have been calculated in com- pliance with the policy of the Bank that no proceeds of the Loan 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 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 Loan decreases or increases, the Bank 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 Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments iade for expendi- tures prior to the datc of this Agreement. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph I above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduc. the disbursement percentage then applicable to such expenditures in order chat further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank 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 proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 10 - SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: A three and a half-year phase of a long-term pavement strengthening and preservation program covering approximately 700 km of road sections to be strengthened and approximately 1,000 km of road sections to be resurfaced, all such sections to be selected in agreement with the Bank. Part B: A three and a half-year phase of RD's routine and periodic maintenance program for the Borrower's classified highway network including the acquisition of mechanical equipment. Part C: Strengthening the management of RD's road maintenance opera- tions by: (1) strengthening RD's cost accounting of routin? mainte- nance operations, management of road maintenance equipment and training of road maintenance personnel, all with the assistance of about 23 man-months of consultants' services; (2) assisting in the preparation of the pavement strengthen- ing and preservation program through the provision of advisory services by LPEE; and (3) equipping the Centre Nationale d'Auscultation des Chaussees with pavement testing equipment. Part D: Assistance to MOT in the development and implementation of recommendations on transportation planning and coordination through the provision of 64 man-months of consultants' services. - 11 - Part E: Provision of mobile weighing scales and fixed weighing stations to intensify the enforcement by MOT of legal maximum axle loads. The Project is expected to be completed by December 31, 1983. - 12 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each April 15 and October 15 beginning October 15, 1984 through October 15, 1998 2,065,000 On April 15, 1999 2,115,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. - 13 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.30% More than three years but not more than six years before maturity 2.60% More than six years but not more than eleven years before maturity 4.80% More than eleven years but not more than fourteen years before maturity 6.10% More than fourteen years but not more than seventeen years before maturity 7.40% More than seventeen years before maturity 8.25% - 14 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. Contracts for civil works, highway maintenance equipment and weighing scales shall be 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, the Borrower shall prepare and forward to the Bank 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, a general procurement notice, in such form and detail and containing such information as the Bank shall reasonably request; the Bank 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. The Borrower 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. Grouping of contracts - contracts for pavement works wherever practical, shall be grouped to form appropriate bid packages. Bidders shall be allowed to bid for one contract or a combination of contracts. 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. - 15 - 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 the Kingdom of Morocco 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 the Kingdom of Morocco if the bidder shall have established to the satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added in the Kingdom of Morocco 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. In order to determine the lowest evaluated bid of each group, all evaluated bids in each group shall first be compared among themselves, without taking into account customs duties and other import taxes levied in connection with the importation, and sales and similar taxes levied in connection with the sale or delivery, pursuant to the bids, of the goods. Such lowest eva- luated 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 - 16 - 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. C. Other Procurement Procedures 1. All goods required for Part C.3 of the Project may be procured on the basis of limited international tendering procedures acceptable to the Bank whereby bids shall be solicited from at least 5 selected reputable suppliers, from at least 3 different countries. 2. Bitumen shall be procured in accordance with standard procedures followed by the Borrower. D. Review of Procurement Decision by the Bank 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for civil works, highway maintenance equipment and weighing scales estimated to cost the equivalent of $100,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Bank, 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 Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Bor- rower shall, before a final decision on the award is made, inform the Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Bank shall reasonably request. The Bank shall, if it determines that - 17 - the intended award would be inconsistent with the Guidelines or 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 Bank's concurrence, materially differ from those on which bids were asked. (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the submis- sion to the Bank of the first application for withdrawal of funds from the Loan Acrount in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, the Borrower shall furnish to the Bank, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such con- tract, together with the analysis of the respective bids, recom- mendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower 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 25% of the original price, the Borrower shall inform the Bank of the proposed modification, waiver, extension or change order and the reasons therefor. The Bank, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform the Borrower and state the reasons for its determination. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this L day of ,19109. FOR SECRETARY