India - Second Railway Project : Loan 0170 - Loan Agreement - Conformed

LOAN NUMBER 167 IN LOAN NUMBER 168 IN LOAN NUMBER 169 IN LOAN NUMBER 170 IN Loan Agreement (Second Railway Project) BETWEEN INDIA AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JULY 12, 1957 LOAN NUMBER 167 IN LOAN NUMBER 168 IN LOAN NUMBER 169 IN LOAN NUMBER 170 IN Loan Agreement (Second Railway Project) BETWEEN INDIA AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JULY 12, 1957 wnan Agrerment AGREEMENT, dated July 12, 1957, between INDIA, acting by its President (hereinafter called the Borrower) and INTERNATIONAL BANK FOR, RECONSTRUCTION AND DEVEL- OPMENT (hereinafter called the Bank). ARTICLE I Loan Regulations; Special Definitions SECTION 1.01. The parties to this Loan Agreement ac- cept all the provisions of Loan Regulations No. 3 of the Bank dated June 15, 1956, subject, however, to the modifi- cations thereof set forth in Schedule 3 to this Agreement (said Loan Regulations No. 3 as so modified being herein- after called the Loan Regulations), with the same force and effect as if they were fully set forth herein; and the Loan Regulations shall be applicable to each of the Loans herein provided for. SECTION 1.02. Except where the context otherwise re- quires, the following terms have the following meanings wherever used in this Agreement or in the Schedules hereto or in the Loan Regulations: (1) The term "loans" means all of the several loans pro- vided for in this Loan Agreement and the term "Loan" means each or any one of the loans as the context may re- quire. (2) The term "bonds" means Bonds representing the principal amount of the loans executed and delivered by the Borrower pursuant to this Agreement. (3) The term "yen" and the sign "Y" mean yen in the currency of Japan. (4) The term "pounds sterling" and the sign "t" mean pounds in the currency of the United Kingdom of Great Britain and Northern Ireland. (5) The term "lire" and the sign "lit." mean lire in the currency of the Republic of Italy. 4 (6) The term "Program" means the program, which is included in the Borrower's Second Five-Year Plan, for the rehabilitation, modernization and expansion of the Railways owned and operated by the Borrower. ARTICLE II The Loans SECTION 2.01. The Bank agrees to make loans to the Borrower, on the terms and conditions in this Agreement set forth or referred to, as follows: 1. Eight thousand six hundred and forty million yen (Y8,640,000,000) or the equivalent thereof in currencies other than yen. 2. Six million eight hundred and twenty-five thousand pounds sterling (E6,825,000) or the equivalent thereof in currencies other than pounds sterling. 3. Seven thousand million lire (lit. 7,000,000,000) or the equivalent thereof in currencies other than lire. 4. Thirty-five million seven hundred thousand dollars ($35,700,000) or the equivalent thereof in currencies other than dollars. SECTION 2.02. The Bank shall open a Loan Account on its books in the name of the Borrower in respect of each Loan and shall credit to each such Account the amount of such Loan. The amount of each Loan may be withdrawn from the Loan Account as provided in, and subject to the rights of cancellation and suspension set forth in, the Loan Regulations. SECTION 2.03. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 Of 11o) per annum on the principal amount of each Loan not so withdrawn from time to time. Such commitment 5 charge shall accrue from a date sixty days after the date of this Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the relative Loan Account as provided in Article IV of the Loan Regulations or shall be cancelled pursuant to Article V of the Loan Regulations. SECTION 2.04. The Borrower shall pay interest at the rate of five and five-eighths per cent (55/;%) per annum on the principal amount of each Loan so withdrawn and out- standing from time to time. SECTION 2.05. Except as the Borrower and the Bank shall otherwise agree, the charge payable for special com- mitments entered into by the Bank at the request of the Borrower pursuant to Section 4.02 of the Loan Regulations shall be at the rate of one-half of one per cent ( of 1%) per annum on the principal amount of any such special commitments outstanding from time to time. SECTION 2.06. Interest and other charges shall be pay- able semi-annually on January 1 and July 1 in each year. SECTION 2.07. The Borrower shall repay the principal of each Loan in accordance with the amortization schedule applicable to that Loan set forth in Schedule 1 to this Agreement. ARTICLE III Use of Proceeds of the Loans SECTION 3.01. The Borrower shall cause the proceeds of the loans to be applied exclusively to financing the cost of goods required to carry out the Project described in Schedule 2 to this Agreement. The specific goods to be financed out of the proceeds of the loans and the methods and procedures for procurement of such goods shall be determined by agreement between the Borrower and the 6 Bank, subject to modification by further agreement between them. SECTION 3.02. The Borrower shall cause all goods financed out of the proceeds of the loans to be used in the territories of the Borrower exclusively in the carrying out of the Project. ARTICLE IV Bonds SECTION 4.01. The Borrower shall execute and deliver Bonds representing the principal amount of each Loan as provided in the Loan Regulations. SECTION 4.02. A Secretary to the Government of India in the Ministry of Finance is designated as the authorized representative of the Borrower for the purposes of Section 6.12 of the Loan Regulations. ARTICLE V Particular Covenants SECTION 5.G1. (a) The Borrower shall cause the Project to be carried out, and the operations of the Railways to be conducted, with due diligence and efficiency and in con- formity with sound engineering and financial practices. (b) The Borrower shall cause to be furnished to the Bank, promptly upon their preparation, the plans and specifications for the Project and any material modifica- tions subsequently made therein, in such detail as the Bank shall from time to time request. (c) The Borrower shall maintain or cause to be main- tained records adequate to identify the goods financed out of the proceeds of each Loan, to disclose the use thereof in the Project, and to record the progress of the Project (including the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of the agency or agencies 7 of the Borrower responsible for the execution or operation of the Project or any part thereof; shall enable the Bank's representatives to inspect the Project, the works included in the Program, the goods and any relevant records and documents; and shall furnish to the Bank all such informa- tion as the Bank shall reasonably request concerning the expenditure of the proceeds of each Loan, the Project, the Program and the goods, and the operations and financial condition of the agency or agencies of the Borrower re- sponsible for the execution or operation of the Project or any part thereof and the Program. SECTION 5.02. (a) The Borrower and the Bank shall cooperate fully to assure that the purposes of the loans will be accomplished. To that end, each of them shall furnish to the other all such information as it shall reasonably request with regard to the general status of the loans. On the part of the Borrower, such information shall include information with respect to financial and economic condi- tions in the territories of the Borrower and the interna- tional balance of payments position of the Borrower. (b) The Borrower and the Bank shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the loans and the maintenance of the service thereof. The Borrower shall promptly inform the Bank of any condition which inter- feres with, or threatens to interfere with, the accomplish- ment of the purposes of the loans or the maintenance of the service thereof. (c) The Borrower shall afford all reasonable opportu- nity for accredited representatives of the Bank to visit any part of the territories of the Borrower for purposes related to the loans. SECTION 5.03. It is the mutual intention of the Borrower and the Bank that no other external debt shall enjoy any priority over the loans by way of a lien on governmental S 8 assets. To that end, the Borrower undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower or of any of its political subdivisions or of any agency of the Borrower or of any such political subdivision as security for any ex- ternal debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the loans and the bonds, and that in the creation of any such lien express provision will be made to that effect; provided, however, that the foregoing provisions of this Section 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; (b) any pledge of commercial goods to secure debt maturing not more than one year after its date and to be paid out of the proceeds of sale -f such commercial goods; or (c) any pledge by the Reserve Bank of India of any of its assets in the ordinary course of its banking business to secure any indebtedness maturing not more than one year after its date. SECTION 5.04. The principal of, and interest and other charges on, the loans and the bonds shall be paid without deduction for, and free from, any taxes (including duties, fees or impositions) imposed under the laws of the Bor- rower or laws in effect in its territories; provided, however, that the provisions of this Section shall not apply to taxa- tion of, or duties or fees or impositions levied upon, pay- ments under any bond to a holder thereof other than the Bank when such bond is beneficially owned by an individual or corporate resident of the Borrower. SECTION 5.05. The Loan Agreement and the bonds shall be free from any taxes (including duties, fees or imposi- tions) that shall be imposed under the laws of the Borrower or laws in effect in its territories on or in connection with the execution, issue, delivery or registration thereof and the Borrower shall pay all such taxes, (including duties, fees or impositions) if any, imposed under the laws of the coun- 9 try or countries in whose currency the loans and the bonds are payable or laws in effect in the territories of such coun- try or countries. SECTION 5.06. The principal of, and interest and other charges on, the loans and the bonds shall be paid free from all restrictions imposed under the laws of the Borrower or laws in effect in its territories. ARTICLE VI Remedies of the Bank SECTION 6.01. (i) If any event specified in paragraph (a) or paragraph (b) of Section 5.02 of the Loan Regula,- tions shall occur and shall continue for a period of thirty days, or (ii) if any event specified in paragraph (c) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the continuance thereof, the Bank, at its option, may declare the principal of the loans and of all the bonds then outstanding to be due and payable im- mediately, and upon any such declaration such principal shall become due and payable immediately, anything in this Agreement or in the bonds to the contrary notwithstanding. ARTICLE VII Miscellaneous SECTION 7.01. The Closing Date shall be December 31, 1958. SECTION 7.02. A date 60 days after the date of this Agreement is hereby specified for the purposes of Section 9.04 of the Loan Regulations. SECTION 7.03. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: S 10 For the Borrower: The Secretary to the Government of India Ministry of Finance New Delhi India Alternative address for cablegrams and radiograms: Finance Ministry New Delhi For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D. C. United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D. C. SECTION 7.04. A Secretary to the Government of India in the Ministry of Finance is designated for the purposes of Section 8.03 of the Loan Regulations. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respective names and delivered in the District of Columbia, United 11 States of America, as of the day and year first above written. INDIA By G. L. MEHTA Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By EUGENE R. BLACK President 12 SCHEDULE 1-AMORTIZATION SCHEDULES Amortization Schedule applicable to the Loan denominated in yen Payment of Principal Date Payment Due (expressed in yen)* July 1, 1961 Y 272,160,000 January 1, 1962 279,720,000 July 1, 1962 287,640,000 January 1, 1963 295,920,000 July 1, 1963 304,200,000 January 1, 1964 312,840,000 July 1, 1964 321,480,000 January 1, 1965 330,480,000 July 1, 1965 339,840,000 January 1, 1966 349,560,000 July 1, 1966 359,280,000 January 1, 1967 369,360,000 July 1,1967 379,800,000 January 1, 1968 390,600,000 July 1, 1968 401,400,000 January 1, 1969 412,920,000 July 1, 1969 424,080,000 January 1, 1970 436,320,000 July 1, 1970 448,560,000 January 1, 197 461,160,000 July 1, 1971 474,120,000 January 1, 1972 487,440,000 July 1, 1972 501,120,000 * To the extent that any part of said Loan is repayable in a currency other than yen (see Loan Regulations, Section 3.02), the figures in this column represent yen equivalents determined as for purposes of with- drawal. 13 Amortization Schedule applicable to the Loan denominated in pounds sterling Payment of Principal (expressed in pounds Date Payment Due sterling)* July 1, 1961 £216,000 January 1, 1962 221,000 July 1, 1962 227,000 January 1, 1963 234,000 July 1, 1963 240,000 January 1, 1964 247,000 July 1, 1964 254,000 January 1, 1965 261,000 July 1, 1965 269,000 January 1, 1966 276,000 July 1, 1966 284,000 January 1, 1967 292,000 July 1, 1967 300,000 January 1, 1968 308,000 July 1, 1968 317,000 January 1, 1969 326,000 July 1, 1969 335,000 January 1, 1970 345,000 July 1, 1970 354,000 January 1, 1971 364,000 July 1, 1971 374,000 January 1, 1972 385,000 July 1, 1972 396,000 * To the extent that any part of said Loan is repayable in a currency other than pounds sterling (see Loan Regulations, Section 3.02), the figures in this column represent pounds sterling equivalents determined as for purposes of withdrawal. S 14 Amortization Schedule applicable to the Loan denominated in lire Payment of Principal Date Payment Due (expressed in lire)* July 1, 1961 lit. 220,625,000 January 1, 1962 226,875,000 July 1, 1962 233,125,000 January 1, 1963 239,375,000 July 1, 1963 246,250,000 January 1, 1964 253,125,000 July 1, 1964 260,625,000 January 1, 1965 268,125,000 July 1, 1965 275,625,000 January 1, 1966 283,125,000 July 1, 1966 291,250,000 January 1, 1967 299,375,000 July 1, 1967 307,500,000 January 1, 1968 316,250,000 July 1, 1968 325,000,000 January 1, 1969 334,375,000 July 1, 1969 343,750,000 January 1, 1970 353,125,000 July 1, 1970 363,125,000 January 1, 1971 373,750,000 July 1, 1971 384,375,000 January 1, 1972 395,000,000 July 1, 1972 406,250,000 * To the extent that any part of said Loan is repayable in a currency other than lire (see Loan Regulations, Section 3.02), the figures in this column represent lire equivalents determined as for purposes of with- drawal. 15 Amortization Schedule applicable to the Loan denominated in dollars Payment -f Principal Date Payment Due (expressed in dollars)* July 1, 1961 $1,125,000 January 1, 1962 1,157,000 July 1, 1962 1,189,000 January 1, 1963 1,222,000 July 1, 1963 1,257,000 January 1, 1964 1,292,000 July 1, 1964 1,329,000 January 1, 1965 1,366,000 July 1, 1965 1,404,000 January 1, 1966 1,444,000 July 1, 1966 1,484,000 January 1, 1967 1,526,000 July 1, 1967 1,569,000 January 1, 1968 1,613,000 July 1, 1968 1,659,000 January 1, 1969 1,705,000 July 1, 1969 1,753,000 January 1, 1970 1,803,000 July 1, 1970 1,854,000 January 1, 1971 1,905,000 July 1, 1971 1,959,000 January 1, 1972 2,014,000 July 1, 1972 2,071,000 * To the extent that any part of said Loan is repayable in a currency other than dollars (see Loan Regulations, Section 3.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 16 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of the principal amount of any Loan pursuant to Section 2.05 (b) of the Loan Regulations or on the redemption of any Bond prior to its maturity pursuant to Section 6.16 of the Loan Regulations: Time of Prepayment or Redemption Premium Not more than 3 years before maturity '/2 of 1% More than 3 years but not more than 6 years before maturity ............ 2% More than 6 years but not more than 11 years before maturity .. 32% More than 11 years but not more than 13 years before maturity ...... . 41/2 % More than 13 years before maturity . . 5%% 17 SCHEDULE 2 Description of Project The Project is part of the Program and consists of the acquisition by the Borrower, and use in furtherance of the objectives of the Program, of locomotives, rolling stock, spare parts and other railway materials and equipment. 18 SCHEDULE 3 Modifications of Loan Regulations No. 3 For the purposes of this Agreement the provisions of Loan Regulations No. 3 of the Bank, dated June 15, 1956, shall be deemed to be modified as follows: (a) By the deletion of Section 2.02. (b) By the insertion, in Sections 2.05 (a), 3.02, 5.05 and 6.06, after the words "amortization schedule", where those words occur, of the words "applicable to the Loan as set forth in Schedule 1". (c) By the deletion, in the third line of subparagraph (b) of Section 2.05, of the words "amortization schedule" and the substitution therefor of the words "Schedule 1 to the Loan Agreement". (d) By the deletion, in the third line from the end of Section 3.01, of the words "for the purposes of this Ar- ticle,'. (e) By the deletion, in subparagraphs (a) and (c) of Section 5.02, of the words "the Bonds" and the substitu- tion therefor, in each such subparagraph, of the words "bonds representing the principal amount of any of the Loans". (f) By the deletion, in the last line of subparagraph (a) of Section 6.16, of the words "the amortization schedule" and the substitution therefor of the word and figure "Sched- ule 1 ". (g) By the deletion, in Sections 7.01, 7.03, 8.02 and 9.02, of the word "Bonds", where that word occurs, and the sub- stitution therefor of the word "bonds". (h) By the deletion of Section 9.05 and the substitution therefor of the following new Section: " SECTION 9.05. Termination of Loan Agreement on Full Payment. If and when the entire principal amount 19 of the loans and of the bonds and the premium, if any, on the prepayment of the loans and on the redemption of all bonds called for redemption (as the case may be) and all interest and other charges which shall have accrued on the loans and the bonds shall have been paid, the Loan Agreement and all obligations of the parties thereunder shall forthwith terminate." (i) By the deletion of paragraph 4 of Section 10.01 and the substitution therefor of the following new paragraph, namely: "4. The term 'the Loan' means the particular loan to which these Regulations are applicable as provided in the Loan Agreement." (j) By the insertion, in the first line of paragraph 9 of Section 10.01, after the word "bonds" of the words "repre- senting the principal amount of the Loan". (k) By the insertion, at the end of the first sentence of the second paragraph of each of the forms of Bond set forth in Schedule 1 and Schedule 2, of the words "which Loan Agreement provides also for the issue of bonds in the aggre- gate principal amount of ........... and ......... (or the equivalents thereof payable in other currencies)."