Uganda - Second Reconstruction Program : Credit 1252 - Credit Agreement - Conformed

CREDIT NUMBER 1252 UG Development Credit Agreement (Second Reconstruction Program) between REPUBLIC OF UGANDA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1982 CREDIT NUMBER 1252 UG DEVjPMENT CREDIT AGREEMENT AGREEMENT, dated , 1982, between REPUBLIC OF UGANDA (hereinaf called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIA ON (hereinafter called the Association). ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated June 30, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agree- ments of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Bank of Uganda" means the bank established by the Bank of Uganda Act 1966 for the time being responsible for the admin- istration of foreign exchange pursuant to the Exchange Control Act, Cap. 158; (b) "Central Tender Board" means the board established by the Public Finance (Tender Boards) Regulations, 1977, pursuant to the Public Finance Act, Cap. 149, which is responsible to the Minister of Finance for the review and supervision of procurement by Government ministries; (c) "Central Tender Board Procedures" means the procurement procedures set forth in the Public Finance (Tender Boards) Regu- lations, 1977; (d) "Recovery Program" means the program for high priority investment and recurrent expenditures covering the 1982-1983 and 1983-1)84 fiscal years adopted by the Borrower on April 12, 1982; (e) "Project Account" means the account to be established at the Bank of Uganda pursuant to Section 3.02 of this Agreement; -2- (f) "SITC" means the United Nations Standard International Trade Classification, 1974 Revision (SITC, Rev. 2), published in Commodity Indexes for the Standard International Trade Classifi- cation, Revised, Statistical Papers, Series M. No. 34/Rev. 2 (1975); and (g) "Uganda Advisory Board of Trade" means the board estab- lished by the Uganda Advisory Board of Trade Decree No. 9 of 1974, which is responsible to the Minister of Commerce for the licensing of all external procurement other than by Government ministries. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various curren- cies equivalent to sixty two million nine hundred thousand Special Drawing Rights (SDR 62,900,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. (b) The Borrower shall cause the coordination and collec- tion ot relevant documentation and the preparation of withdrawal applications under the Credit to be undertaken on its behalf by the Bank of Uganda. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1983 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. -3- Section 2.05. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.06. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.07. Commitment and service charges shall be paya- ble semiannually on February 15 and August 1S in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Febru- ary 15 and August 15 commencing August 15, 1992, and ending February 15, 2032, each installment to and including the install- ment payable on February 15, 2002, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment there- after to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.09. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project with due diligence and efficiency. -4- (b) The Borrower shall take such action as may be required to ensure that: (i) the Bank of Uganda shall make available to approved importers, promptly as needed, such amounts of foreign exchange as shall be required to import goods so financed; (ii) the timely importation of such goods shall be facilitated; (iii) applications shall be made in appropriate form to the Central Tender Board or the Uganda Advisory Board of Trade for procurement approval in respect of all goods to be financed out of the proceeds of the Credit; (iv) approval shall be granted only in respect of applications satisfying such criteria as to the import priority of the goods required, their pro- posed utilization, the operational and financial qualifications of the applicant, and otherwise, as the Borrower and the Association may agree; and (v) such financial and administrative measures are adopted and implemented as are necessary to ensure that all goods financed out of the proceeds of the Credit are utilized for the purpose for which the relevant approval was given, and in accordance with the terms of such approval. Section 3.02. (a) The Borrower shall cause the Bank of Uganda to open and thereafter maintain a project accont in the name of the Borrower, and to credit to the Project Account, upon each withdrawal from the Credit Account, the equivalent in Ugandan Shillings of the currency or currencies withdrawn from the Credit Account (such equivalent to be determined as of the respective dates of such withdrawals). (b) Except as the Association may otherwise agree, with- drawals shall be made from the Project Account exclusively to finance the local currency capital or recurrent costs of develop- ment projects included in the Borrower's Recovery Program. Section 3.03. In order to assist the Central Teider Board in the carrying out of the functions set forth in Section 3.01 (b) -5- (iii) of this Agreement, the Borrower shall employ experts whose selection, qualifications, experience and terms and conditions of employment shall be satisfactory to the Association in accordance with the principles and procedures described in the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. Section 3.04. (a) The Borrower shall ensure that the imported goods to be financed out of the proceeds of the Credit shall be insured, or that adequate provision shall be made for their insurance, against hazards incidental to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be paya- ble in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the purposes of the Project. Section 3.05. (a) The Borrower: (i) shall cause the Bank of Uganda to 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 serv- ices financed out of the proceeds of the Credit, and to disclose their use for the purposes of the Project; (ii) shall enable the Association's representatives to examine the goods financed out of the proceeds of the Credit and any relevant records and docu- ments; and (iii) shall furnish to the Association at regular in- tervals 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 pro- ceeds of the Credit and the goods and services financed out of such proceeds. (b) Upon the award by the Borrower of any contract for goods or services to be financed out of the proceeds of the Credit, the Association may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (c) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such -6- later date as may be agreed for this purpose between the Borrower and the Association, the Borrower shal-Y prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the carrying out of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Association of their respective obligations under the Development Credit Agreement and the accowplishment of the purposes of the Credit. ARTICLE IV Other Covenants Section 4.01. The Borrower shall carry out the actions set forth in Schedule 4 to this Agreement. Section 4.02. In order to ensure that the actions set forth in Schedule 4 to this Agreement are accomplished, the Borrower and the Association shall exchange views on the progress achieved in carrying out said actions by not later than September 30, 1982, or such later date as the Borrower and the Association may otherwise agree upon. Section 4.03. The Borrower shall periodically exchange views with the Association on the operation of its annual foreign exchange budgets and its foreign exchange budget guidelines for the duration of the Recovery Program. Section 4.04. The Borrower shall seek the views of the Asso- ciation on the terms of reference of, and the timetable for the completion of, the production or updating, as appropriate, of audited accounts and financial statements, statements of affairs and other financial analyses of parastatal organizations in the agriculture, public utility, industrial and commercial sectors. Section 4.05. 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 Bank of Uganda, the Central Tender Board and the Uganda Advisory Board of Trade. Section 4.06. The Borrower shall cause the Bank of Uganda to: -7- (a) register in the Project Account all receipts and pay- ments for and in connection with the carrying out of the Project, in accordance with appropriate accounting principles and proce- dures consistently applied; and (b) (i) have the Project Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Borrower and the Association, as soon as available, but in any case not later than four months after the end of the fiscal year, the report of such audit by .aid auditors, of such scope and in such detail as the Associa- tion shall have reasonably requested; and (iii) furnish to the Association such other information concerning the Project Account and the audit thereof as the Association shall from time to time reasonably request. ARTICLE V Termination Section 5.01. The date is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. The Min'ster of the Borrower for the time being responsible for Finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Secretary to the Treasury Ministry of Finance P.O. Box 8147 Kampala, Uganda Cable address: Telex: FINSEC 61170 Kampala -8- For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D,C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused 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. REPUBLIC OF UGANDA By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By 0 Regional Vice President Eastern Africa -9- SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. All goods (including contractual services for the forward- ing, transportation and clearance of goods through customs) imported into the Republic of Uganda may be financed out of the proceeds of the Credit, except that no withdrawals shall be made in respect of: (a) expenditures for goods to be supplied under a contract which a national or international financing institution (including the Association) or any other agency shall have financed or agreed to financea; (b) expenditures for goods intended for a military or para-military purpose or for luxury consumption; (c) without limitation to the foregoing paragraph (b), expenditures for items iacluded in the following SITC groups or sub-groups: Group Sub-group Description of Items 112 - Alcoholic beverages 121 - Tobacco, unmanufactured tobacco refuse 122 - Tobacco, manufactured 667 - Pearls, precious and semi-precious stones, unworked or worked 688 - Uranium depleted in U235 and thorium, and their alloys, unwrought or wrought, and articles therefrom, n.e.s.; waste and scrap of uranium depleted in U235 and of thorium - 10 - Group Sub-group Description of Items 718.7 Nuclear reactors, and parts thereof, n.e.s. 897.3 Jewelry of gold, silver or binum group metals (except watches and watch cases) and goldsmiths' or silversmiths' wares (in- cluding set gems) 971.0 Gold, non-monetary (ex- cluding gold ores and concentrates) (d) payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggre- gate amount not exceeding the equivalent of $7,000,000 may be made on account of payments made for such expenditures before that date but after April 1, 1982; (e) expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower; (f) payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importa- tion, manufacture, procurement or supply thereof; and (g) expenditures for goods procured under invoices costing less than $10,000 equivalent each. 2. Without limitation or restriction upon any other provisions of this Schedule, no withdrawal shall be made and no commitment be entered into to pay amounts to the Borrower or others in respect of expenditures to be financed under this Agreement after the amount of the proceeds of the Credit withdrawn from the Credit Account and the amount of commitments entered into by the Association upon the Borrower's request in respect of expendi- tures to be financed under the Credit shall have reached, in the aggregate, the equivalent of $40,000,000, unless the Borrower shall have taken the actions set forth in Schedule 4 to this Agreement. * - 11 - 3. If the Association shall have reasonably determined that the procurement of any item 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 Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Devel- opment Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 12 - SCHEDULE 2 Description of the Project The purpose of the Project is to assist the Borrower in increasing agricultural exports and domestic production and to strengthen, inter alia, its administration, planning and foreign exchange allocation capacities. It consists of the provision of the requisite foreign ex- change for the importation into the territory of the Borrower of part of the essential capital and intermediate goods and raw materials included in the Recovery Program. The Project is expected to be completed by June 30, 1983. - 13 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part B 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 competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, the Borrower 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 notifica- tion 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 international competitive bidding. 3. Contracts for procurement of goods shall be bulked whenever reasonably practicable. 4. 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 incidental to the delivery of the goods to the place of their use or installation shall be included. - 14 - B. Other Procurement Procedures Goods to be procured under contracts of a value not exceed- ing US$1,000,000 equivalent shall be procured under contracts awarded: (i) in the case of goods to be procured by ministries of the Borrower, and in the case of all other entities with respect to goods having a value of more than US$20,000, in accordance with Central Tender Board Procedures; and (ii) in the case of all other goods to be procured, on the basis of price and quality review by the Uganda Advisory Board of Trade and otherwise in accordance with procedures satisfactory to the Association. C. Review of Procurement Decisions by the Association Review of invitations to bid and of proposed awards and final contracts: 1. With respect to all contracts estimated to cost the equiva- lent of $1,000,000 or more: (a) Before bids are invited, the Borrower 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, the Borrower 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 Associa- tion, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with the 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 Association's concurrence, materially differ from those on which bids were asked or prequalification was invited. - 15 - (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 in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, the Borrower shall furnish to the Association, promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other infor- mation as the Association shall reasonably request. The Associa- tion 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. - 16 - SCHEDULE 4 1. The Borrower shall: (i) establish a unit within its admin- istration to analyze domestic and international costs, prices and supply trends of its major agricultural export crops and to make recommendations on the level of agricultural producer prices; and (ii) shall prepare and consult with the Association on the terms of reference and staffing required therefor. 2. In order to strengthen the administrative, managerial and planning capacities of its Ministries of Finance and of Planning and Economic Development, the Borrower shall prepare, and consult with the Association on, a program outlining, inter alia, steps to obtain priority technical assistance. 3. The Borrower shall prepare and consult with the Association on a program to improve the monitoring and management of its external debt. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional D,velopment Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the day of , 1980-. FOR SECRETARY