Thailand - Provincial Power Distribution Project : Loan 2312 - Loan Agreement - Conformed

OFFICIAL LOAN NUMBER 2312 TH DOUNMENTS Loan Agreement (Provincial Power Distribution Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and PROVINCIAL ELECTRICITY AUTHORITY Dated - vL/ , 1983 LOAN NURBER 2312 TH LOAN AGREEMENT AGREEMENT, dated Zi 4ZL/Lk, c< , 1983, between INTERNATIONAL BANK FOR RECSTRUCTION AND DEVELOPMENT (herein- after called the Bank) and PROVINCIAL ELECTRICITY AUTHORITY (hereinafter called the Borrower), a body established and opera- ting under the Provincial Electricity Authority Act, B.E. 2503 (1960) of the Kingdom-of Thailand (hereinafter called the Guaran- tor). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Kingdom of Thailand (hereinafter called the Guaran- tor) intends to contract from the Australian Development Assis- tance Bureau, an agency of the Australian Government, a grant in an amount equivalent to one million dollars ($1,000,000) to assist in financing Part B of the Project, and the Guarantor intends to make available to the Borrower the proceeds of such grant; and (C) the Bank has agreed on the basis, inter alia, of the foregoing to make the Loan 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 Loan ani Gua- rantee Agreements of the Bank, dated October 27, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agree- ments of the Bank being hereinafter called the General Condi- tions). 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 foi.owing meanings: -2- (a) "Normal Rural Electrification Program" means the pro- gram for electrification of villages under which participating villages make a contribution equivalent to about 30% of the cost of said electrification; (b) "Fiscal Year" means a financial year commencing October 1 and ending September 30; (c) "EGAT" means the Electricity Generating Authority of Thailand, a body established by the Electricity Generating Autho- rity of Thailand Act, B.E. 2511 (1968), of the Guarantor; (d) "MEA" means the Metropolitan Electricity Authority, a body established by the Metropolitan Electricity Authority Act, B.E. 2501 (1958), of the Guarantor; and (e) "Guarantor's Electricity Sector" and "Sector" mean the consolidated opei tions of the Borrower, EGAT and MEA. ARTICLE II The Loan Section 2.01. The Ban' grees to lend to the Borrower, on the terms and conditions set forth or referred to in this Loan Agreement, an amount in various currencies equivalent to thirty million six hundred thousand dbllars ($30,600,000). 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 time to time by agreement between the Borrower and the Bank, for expendi- tures made (or, if the Bank shall so agree, to be made) in res- pect of the reasonable cost of goods required for the Project and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, pro- curement of the goods required for the Project and to be financed out of the proceeds of the Loan shall be governed by the provi- sions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1987, or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of such later date. -3- Section 2.05. (a) The Borrower shall pay to the Bank a fee equivalent to seventy-six thousand three hundred and nine dollars ($76,309). (b) On or promptly after the Effective Date, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amount of the said fee in such currency or currencies as the Bank shall determine. Section 2.06. The Borrower shall pay to the Bank a commit- ment 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 2.07. (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time at a rate per annum for each Interest Period equal to one half percent per annum above the Cost of Qualified Borrowings for the last Semester ending prior to the commencement of such Interest Period. (b) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower and the Guarantor of the Cost of Qualified Borrowings for such Semester. (c) For purposes of this Section: (i) "Interest Period" means the six-month period com- mencing on each date specified in Section 2.08 of this Agreement, including the Interest Period in which this Agreement is signed. (ii) "Cost" of Qualified Borrowings means the cost, expressed as a percentage per annum, as reasonably determined by the Bank, provided that the amount of $8,520.5 million referred to in (iii) (B) here- under shall be reckoned at a cost of 10.93% per annum. (iii) "Qualified Borrowings" means (A) outstanding bor- rowings of the Bank drawn down after June 30, 1982; and (B) until July 1, 1985, the amount of $8;,520.5 million (representing borrowings of the Bank between July 1, 1981 and June 30, 1982) less any part thereof repaid earlier than July 1, 1985. -4- (iv) "Semester" means the first six months or the second six months of a calendar year. Section 2.08. Interest and other charges shall be payable semiannually on March 1 and September 1 in each year. Section 2.09. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and public utility practices. Section 3.02. (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 indem- nity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) The Borrower shall cause all goods financed out of the proceeds of the Loan to be used exclusively for the purposes of the Project. Section 3.03. (a) The Borrower shall furnish to the Bank, 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 Bank shall reasonably request. (b) The Borrower: (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 financed out of the proteeds of the Loan, and to disclose their use in the Project; (ii) shall enable the Bank's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed -5 - out of the proceeds of the Loan and any relevant records and documents; and (iii) shall furnish to the Bank at regular inter- vals all such information as the Bank 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 Loan and the goods financed out of the proceeds. (c) Upon the award by the Borrower of any contract for goods to be financed out of the proceeds of the Loan, the Bank may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) The Borrower shall enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of the Borrower and any relevant records and documents. (e) 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 rea- sonably 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 res- pective obligations under the Loan Agreement and the accomplish- ment of the purposes of the Loan. Section 3.04. The Borrower shall, in the event the grant referred to in recital (B) to this Agreement does not become available before September 30, 1983, promptly furnish to the Bank, but in any case not later than December 31, 1983, for com- ments by the Bank, a Plan of Action for the carrying out of Part B of the Project, which Plan shall include, if considered neces- sary, provision for the use of outside expertise; thereafter the Borrower shall carry out said Plan of Action in a timely manner, taking into account the Bank's comments thereon. Section 3.05. The Borrower shall ensure that the villages to be electrified under the Project will be selected in accordance with selection procedures and criteria satisfactory to the Bank. -6- ARTICLE IV Management and Operations of the Borrower Section 4.01. The Borrower shall carry on its operations and conduct its affairs in accordance with sound administrative, financial, engineering and public utility practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 4.02. The Borrower shall at all times operate and maintain its plants, machinery, equipment and other property, and from time to time, promptly as ieeded, make all necessary repairs and renewals thereof, all in acc,ordance with sound engineering, financial and public utility practices. Section 4.03. The Borrower shall take out and maintain with responsible insurers, or make other provision satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE V Financial Covenants Section 5.01. (a) The Borrower shall maintain records ade- quate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. (b) The Borrower shall ensure, through implementation of a sample monitoring program acceptable to the Bank, that appro- priate records are maintained in relation to the villages elec- trified under the Project to permit analysis of consumer demand, costs of providing services, effectiveness of various management and promotional procedures, and the impact of the Project, for villages in selected areas, on development of local agriculture, industries, commerce and living standards. Section 5.02. The Borrower shall: (a) 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 Bank; -7- (b) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year: (i) certified copies of its financial statements for such year as so audited; (ii) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (c) furnish to the Bank such other information concerning said accounts, financial statements, records and expenditures, as well as the audit thereof, as the Bank- shall from time to time reasonably request. Section 5.03. (a) The Borrower represents that at the date of this Agreement no lien exists on any of its assets as security for any debt. (b) The Borrower undertakes that, except as the Bank shall otherwise agree, (i) if the Borrower shall create any lien on any of its assets as security for any debt, such lien will equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan, and in the creation of any such lien express provision will be made to that effect, at no cost to the Bank; and (ii) if any statutory lien shall be created on any assets of the Borrower as security for any debt, the Borrower shall grant, at no cost to the Bank, an equivalent lien satis- factory to the Bank to secure the payment of the principal of, and interest and other charges on, the Loan; provided, however, that the foregoing provisions of this paragraph shall not apply to: (A) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property or as security for the payment of debt incurred for the purpose of financing the purchase of such property; or (B) any lien arising in the ordinary course of banking trans- actions and securing a debt maturing not more than one year after the date on which it 1s originally incurred. Section 5.04. Except as the Bank may otherwise agree: (a) the Borrower shall from time to time take all such measures (including, without limitation, seeking the Guarantor's authorization for adjustment of the strooture or levels of its electricity tariffs) as shall be required to permit the achieve- ment of an annual rate of return on the average current net value of the Borrower's fixed assets in se,vice consistent with the achievement of the Guarantor's obligations set forth in Section 3.02 of the Guarantee Agreement. -8- (b) For the purposes of this Section: (i) the annual rate of return shall be calculated by dividing the Borrower's net operating income for the Fiscal Year in question by one-half of the sum of the current net value of the Borrower's fixed assets in service at the beginning and at the end of that Fiscal Year, expressed as a percentage; (ii) the term "net operating income" means gross reve- nues from all sources related to the Borrower's electricity operations less all expenses of elec- tricity operations, including cost of purchased power and fuels, admfnistrative expenses, adequate maintenance and taxes or any payments in lieu of taxes, and provision for depreciation. Interest and other charges on debt are not considered to be operating expenses for the purposes of determining said net operating income; (iii) the term "average curr' .t net value of the Bor- rower's fixed assets in service" means the gross value of the Borrower's fixed assets in service for electriity operations less the amount of accumulated depreciation ond consumers' contri- butions, a 1 valued annually in accordance with the fixed capital formation deflator used for public investment in the Guarantor's annual accounts. (c) Except as the Bank shall otherwise agree, the Borrower shall, on the basis of realistic forecasts, r4view, not later than April 30 in each of its Fiscal Years, the adequacy of its tariffs to produce for the current and next following Fiscal Years the annual rates of return specified in Section 5.04 (a) above, and shall furnish to the Bank a copy of such review promptly upon its completion; and (d) Without limitation .or restriction upon the generality of paragraph (a) of this Section, except as the Bank shall other- wise agree, the Borrower shall at all times maintain in its tariff schedule a provision for fuel and poier purchase adjust- ments to increase or decrease the energy charges to its consumers to compensate for changes in the cost of all fuels and purchased power. -9- Section 5.05. Without limitation or restriction upon the provisions of Section 5.06 of this Agreement, except as the Bank and the Borrower shall from time to time otherwise agree, the Borrower shall not incur any debt if, after the incurring of such debt, the debt of the Borrower then incurred and outstanding would be greater than 1.5 times the capital and surplus of the Borrower. For the purpos-es of this Section: (a) "incurring of debt" includes, the assumption and guar- antee of debt and any renewal, extension or modification of the terms of the debt or of the assumption of guarantee thereof; (b) "debt" means any debt incurred by the Borrower; (c) debt shall be deemed to be incurred: (i) under a loan contract or agreement (including the Loan Agreement)' on the date such debt becomes outstanding and repayable in accordance with the loan contract, agreement or other instrument providing for such debt; and (ii) under a guarantee agreemovt, on the date the agreement providing for such guarantee is entered into; (d) whenever in connection with this Section it shall be necessary to value in terms of Baht debt payable in foreign currency, such valuation shall be made at the prevailing lawful rate of exchange at which such foreign currency is, at the time of such valuation, obtainable by the Borrower for the p"rposes of servicing such debt, or if such currency is not obtainable, at the rate of exchange reasonably determined by the Bank; and (e) "capital and surplus of the Borrower" means the aggre- gate of the unimpaired paid-up capital, surplus and free reserves of the Borrower including accumulated surpluses and deficits arising from the revaluation of net fixed assets, consumers' contribution and debt. Section 5.06. (a) Without limitation or restriction upon the provisions of Section 5.05 of this Agreement, except as the Bank and the Borrower shall from time to time otherwise agree, the Borrower shall not incur short- or medium-term debt, including overdraft arrangements and bonds, if by such incurrence the Borrower's total outstanding short- and medium-term debt would exceed 10% of all debt of the Borrower, including its short- and medium-term debt and the debt proposed to be incurred. (b) For the purposes of this Section: - 10 - (i) short- and medium-term debt means debt maturing by its terms within five years; and (ii) the provisions of paragraphs (a) through (d) of Section 5.05 shall apply. ARTICLE VI Remedies of the Bank Section 6.01. For the purpose of Section 6.02 of the General Conditions, the following additional event is specified pursuant to paragraph (k) thereof, namely, that the Provincial Electricity Authority Act, B.E. 2503 (1960), or the Electricity Generating Authority of Thailand Act, B.E. 2511 (1968), or the Metropolitan Electricity Authority Act, B.E. 2501 (1958), of the Guarantor, shall have been suspended, terminated or repealed, or materially amended, without the prior agreement of the Bank. ARTICLE VII Termination Section 7.01. The datey7f fG F') 1983, is hereby specified for the purposes of Section 12.04 of the General Condi- tions. ARTICLE VIII Addresses Section 8.01. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: 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) * C- 11 - For the Borrower: Provincial Electricity Authority 200 Ngam Wong Wan Road Bangkok 10900 Thailand Cable address: Telex: PEA 72224 PEA BKK TH Bangkok Thailand IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have cauged 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. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President East Asia and Pacific PROVINCIAL ELECTRICITY AUTHORITY By Authorized Representative - 12 - 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 expen- ditures 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) Equipment and 19,700,000 100% of foreign materials (other expenditures, than concrete 100% of local poles) expenditures (ex-factory) and 65% of local expen- ditures for other items procured locally (2) Concrete poles 7,800,000 47% (3) Fee 76,309 Amount due (4) Unallocated 3,023,691 TOTAL 30,600,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Guarantor for goods supplied from the territory of any country other than the Guarantor; and (b) the term "local expenditures" means expenditures in the currency of the Guarantor or for goods supplied from the terri- tory of the Guarantor. - 13 - 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 Guarantor on goods, or on the importa- tion, manufacture, procurement or supply thereof; on this basis, if the amount of any such taxes levied on or in respect of items in any Category decreases or increases, the Bank may, by notice to the Borrower, increaseor decrease the disbursement percentage then applicable to such Category 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 made for expen- ditures prior to the date of this Agreement. 5. Notwithstanding the allocation of an amount of the' Loan or the disbursement percentages set forth in the table in paragraph 1 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 Cate- gory, 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, reduce the disburse- ment percentage then applicable to such expenditures in order that 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 pro- curement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expen- ditures 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. - 14 - SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: The electrification of about 1,500 villages and the exten- sion of electrical services to 1,500 partially electrified villages over a three and a half -year period, commencing July 1, 1983, as part of the Borrower's Normal Rural Electrification Program. Part B: The strengthening of the Borrower's operations. The Project is expected to be completed by December 31, 1986. - 15 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each March 1 and September 1 beginning March 1, 1990 through March 1, 2003 1,095,000 On September 1, 2003 1,035,000 * The figures in this column represent dollar equivalents determinc- as of the respective dates of withdrawal; see General Coaditions, Section 3.04. - 16 - 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 3.04 (b) of the General Conditions: Time of Prepayment Premium The interest rate (ex- pressed as a percentage per annum) applicable to the balance outstanding on the Loan on the day of prepayment multiplied by: Not more than three years 0.15 before maturity More than three years but 0.30 not more than six years before maturity More than six years but 0.55 not more than 11 years before maturity More than 11 years but not 0.80 more than 16 years before maturity More than 16 years but not 0.90 more than 18 years before maturity More than 18 years before 1.00 maturity - 17 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Part D hereof, goods shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the current edition of 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 to be procured on the basis of international com- petitive bidding, and in addition to the requirements of para- graph 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 documents relating thereto, 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 in question. The Borrower shall provide the necessary information to update such notice annually so long as any goods remain to be procured on the basis of interna\ional 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 the imported goods, or the ex-factory price or off-the-shelf price of other goods offered in such bid; (ii) customs duties and other import taxes levied in connection with the importation, or the sales and simi- lar taxes levied in connection with the sale or delivery, pur- suant to the bid, of the goods shall not be taken into account in the evaluation of the bids; and (iii) the cost of inland freight and other expEnditures in,idental to the delivery of the goods to the place of their use or installation shall be included. - 18 - B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the proce- dures described in Part A of this Schedule, goods manufactured in ThWiland 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 Thailand 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 Thailand 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 have to pay for the importation of the goods offered in such group C bid; or - 19 - (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 Each contract for the supply of (i) concrete poles and (ii) other goods estimated to cost less than the equivalent of $100,000, up to an aggregate amount of $2,500,000 equivalent, may be awarded following local competitive bidding procedures of the Borrower satisfactory to the Bank. D. Review of Procurement Decisions by the Bank 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for goods (other than the concrete poles) estimated to cost the equivalent of $500,000 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 docu- ments 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 bid- ders. (b) After bids have been received and evaluated, the Borrower 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 deter- mines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. - 20 - (c) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification was invited. (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 Account 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 issu-- ing 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, 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 day of (198 . FOR SECRETARY