Morocco - Fifth Education Project : Loan 2149 - Loan Agreement - Conformed

OFFIn,AL ~ LOAN NUMBER 2149 OR Loan Agreement (Fifth Education Project) between KINGDOki OF MOROCCO and INTERNATIONAL BANK FOR RECONSTRUCTION - AND DEVELOPMENT Dated IV , 1982 LOAN NUMBER 2149 MOR LOAN AGREEMENT AGREEMENT, dated ^^4LQ/ 'b , 1982, between KINGDOM OF MOROCCO (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (herein- after called the Bank). ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and 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 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 and in the Preamble to this Agreement have the respective meanings therein set forth and the term "Project Unit" means the Project Unit established within the Borrower's Ministry responsible for national education pursuant to Section 3.0.3 (a) of the Development Credit Agreement (Second Education Project) of August 18, 1971, between the Borrower and the International Development Association. 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 fifty million dollars ($50,000,000). 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 The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between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 and services required for the Project described in Schedule 2 to this Loan Agreement and to be financed out of the proceeds of the Loan. -2- Section 2.03. Except as the Bank shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be March 31, 1988 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later dt-ce. Section 2.05. Not later than the Effective Date, the Borrower shall pay to the Bank a fee equivalent to seven hundred thirty-eight thousand nine hundred sixteen dollars ($738,916). The fee shall be payable in such currency or currencies as the Bank shall specify. In the event that the Bank shall not have received full payment of the fee by the Effective Date, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account aid pay to itself the amount required for the full payment of the fee in the currency or currencies specified for the purpose. 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. The Borrower shall pay interest at the rate of eleven and three-fifths per cent (11-3/5%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.08. Interest and other charges shall be payable semiannually on January 15 and July 15 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. (a) The Borrower shall carry out the Project through the Project Unit with due diligence and efficiency and in conformity with appropriate administrative, financial, engineer- ing and educational practices, and shall provide, promptly as -3- needed, the funds, facilities, services and other resources required for the purpose. (b) The Borrower shall, until the Project is completed, maintain and operate the Project Unit (including its equipment Sub-Unit) with such powers, functions, staff and facilities as shall be required for the carrying out of the Project. Section 3.02. (a) The Borrower shall: (i) not later than January 1, 1983, or such later date as may be agreed with the Bank, employ educational experts to assist the Borrower in the carrying out of Part D (1) (a) of the Project; (ii) not later than January 1, 1983, or such later date as may be agreed with the Bank, employ educational experts to assist the Borrower in the carrying out of Part D (1) (c) of the Project; (iii) employ, as and when needed, consultants to assist in the carrying out of Part D (3) of the Project; and (iv) cause the Project Unit to employ a senior architect and senior engineers by July 1, 1985, and January 1, 1983, respectively, or by such later dates as the Bank may agree, to assist in the carrying out of Part D (2) of the Project. (b) The experts included in paragraph (a) of this Section shall have qualifications, experience and shall be selected and employed on terms and conditions satisfactory to the Bank 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 3.03. The Borrower shall, by January 1, 1983, or such later date as the Bank may agree, submit to the Bank for approval a list of candidates, including the candidates' qualifications, study programs, places of study and duration of studies, for all fellowships included in Part D (1) (b) and (c) of the Project. Section 3.04. (a) The Borrower shall establish, by Janu- ary 1, 1983, or such later date as the Bank may agree, a system satisfactory to the Bank for the distribution, storage and maintenance of the educational teaching and learning aids included in Part B of the Project; and (b) the Borrower shall submit to the Bank, by January 1, 1986, or such later date as the Bank may agree, a report satis- factory to the Bank on the implementation of the system for the -4- distribution, storage and maintenance of the educational teaching and learning aids included in Part B of the Project. Section 3.05. (a) The Borrower shall submit to the Bank for approval the job descriptions for the teacher training staff to be assigned to the institutes included in Part C of the Project and shall recruit by January 1, 1983, or such later date as the Bank may agree, said staff on the basis of the approved job descriptions. (b) The Borrower shall submit to the Bank for review and comment by September 1, 1984, or such later date as the Bank may agree the draft teacher training programs referred to in Part D (1) (a) of the Project. (c) The Borrower shall, by March 31, 1983, or such later date as the Bank may agree, submit to the Bank for approval the draft tender documents for the equipment to be procured for the institutes included in Part C of the Project. Section 3.06. (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) Except as the Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the Project. Section 3.07. (a) The Borrower shall furnish or cause to be furnished 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 cause the Project Unit to maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and, where appropriate, 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 S 5 - Bank's accredited representatives to visit the facilities and construction sites included in -he Project to examine the gcocs financed out of the proceeds of the Loan and any relevant reccrds and docaments; and (iii) shall -urnish or cause the Project Unit to furnish to the Bank ai regular intervals, and at le;,t ery six months, all such infcrmation 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 atd the goods and services financed out of such proceeds. (c) Upon the award by the Borrower of any contract for goods, works or services 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) 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, or cause the Project Unit to prepare, and furnish to the Bank a report, of such scope and in such detail as the Bank shall reasonably request, on the execution and initial operation of the Project, its cost and the benefits derived and to be derived from the performance by the Borrower and the Bank of their respective obligations under the Loan Agreement and the accomplishment of the purposes of the Loan. Section 3.08. The Borrower shall take or cause to be taken all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out the Project and shall furnish to the Bank, promptly after such acquisition, evidence satisfactory to the Bank that such land and rights in respect of land are avail- able for purposes related to the Project. ARTICLE IV Financial 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 oriority - 6 - 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 or such external debt in the allocation, realization or distribution of foreign exchange, such lien 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 assets 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 sub- division 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 other foreign exchange assets held by Banque du Maroc or any institution performing the func- tions of a central bank or exchange stabilization fund, or simi- lar functions, for the Borrower. Section 4.02 The Borrower shall cause the Project Unit to maintain separate accounts adequate to reflect in accordance with consistently maintained sound accounting practices the opera- tions, resources and expenditures in respect of the Project. Section 4.03. The Borrower shall cause the Project Unit to: (i) have the accounts referred to in Section 4.02 of this Agree- ment for each fiscal year audited in accordance with sound auditing principles consistently applied, by the Borrower's Ministry responsible for finance; (ii) furnish to the Bank, as -7- soon as available but in any case not later than six months after the end of such year, (A) certified copies of the Project Unit's accounts for such year as so audited and (B) the report of such audit by such Ministry, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.04. The Bcrrower shall, without any limitation or restriction to the provisions of Sections 3.02, 3.03, 3.04 and 3.05 of this Agreement, cause the institutions included in Parts A, B and C of the Project: (i) to be operated and maintained in conformity with appropriate administrative and educational policies and practices and with due regard to economy; and (ii) to be staffed in a timely fashion and in adequate numbers with teachers, instructors and administrators with appropriate qualifications and experience. ARTICLE V Termination Section 5.01. The date F 47// & , is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Minister of the Borrower at the time 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: Ministere des Finances Rabat Kingdom of Morocco -8- Cable address: Telex: MINISTERE FINANCES 31936 M Rabat, Morocco 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 respresentatives 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. KINGDOM OF MOROCCO By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEV'LOPMENT By /, 4 ~ ~'f Regional Vice President Europ Mi dle East and North Africa - 9 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of imported items to be financed out of the proceeds of the Loan and the allocation of amounts of the Loan to each Category: Amount of the Loan Allocated % of (Expresszd in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works 24,700,000 42% (2) Equipment and 14,400,000 100% of foreign furniture expenditures, 100% of local expenditures ex-factory and 85% of local expen- ditures for it, s procured locally off- the-shelf (3) Engineering 500,000 18% services (4) Technical assistance: (i) expert services 2,700,000 80% (ii) fellowships 900,000 100% of foreign expenditures (iii) preinvest- 2,900,000 80% ment studies under Part D (3) of the Project - 10 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (5) Fee 738,916 Amount due (6) Unallocated 3,161,084 TOTAL 50,000,000 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 goods or services supplied from the territory of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower. 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 made for expenditures 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 - 11 - finance the agreed percentage of all expenditures in -Taat 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 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. - 12 - SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: Construction of, and provision of furniture and equipment for, forty (40) rural primary schools together with teachers housing at locations agreed upon between the Borrower and the Bank. Part B: Provision of educational teaching and learning aids for seven hundred (700) existing primary schools selected in agreement between the Borrower and the Bank. Part C: Construction of, and provision of furniture and equipment for, four (4) senior secondary teacher training institutes at Casablanca, Fes, Agadir and Marrakech, together with construction of, and provision for furniture and equipment for, boarding facilities for enrolled students at such teacher institutes and construction and equipping of housing for resident staff. Part D: (1) (a) Preparation of teacher training programs for the teacher training institutes included in Part C of the Project and assistance in the training of future teachers through the provision of two hundred twelve (212) man/months of expert services; (b) training of experienced secondary school teachers selected to become teacher trainers at the teacher training institutes included in Part C of the Project through the provision of three hundred sixty (360) man/months of fellowships to enable said teachers to undertake post-graduate study in specialized pedagogical fields related to the needs of said teacher training institutes; and - 13 - (c) promotion of manual activities in primary education through the provision of twelve (12) man/months of expert services, of nine (9) man/months of fellowships to staff of the Borrower's Minist-v responsible for national education, and of short t -ning courses for primary school teachers. (2) Strengthening of the Project Unit through the provision of twenty-four (24) man/months of the services of a senior architect to the Project Unit, of thirty-six (36) man/months of services of senior engineers in regard of equipment to be procured under Parts A, B and C of the Project, and of short training courses and short-term fellowships to selected Project Unit staff. (3) Preparation of architectural, engineering and educational studies, and of design work and tender documents related to the preparation of future education projects through the provision of consultant services. The Project is expected to be completed by October 1, 1987. - 14 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each January 15 and July 15 beginning January 15, 1987 through January 15, 1999 1, 925,000 On July 15, 1999 1,875,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal; see General Conditions, Section 3.04. - 15 - 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 Not more than three years before maturity 2.05% More than three years but not more than six years before maturity 4.10% More than six years but not more than eleven years before maturity 7.50% More than eleven years but not more than fifteen years before maturity 10.25% More than fifteen years before maturity 11.60% - 16 - SCHEDULE 4 Procureneit A. International Competitive Bidding 1. Except as provided in Part C hereof, goods and civil works 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 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 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 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. Furniture and equipment shall be grouped, to the extent possible, to permit bulk procurement. 4. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international 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 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; 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. - 17 - 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 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 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 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 evaluated 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 - 18 - 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. Contracts for equipment and furniture estimated to cost $200,000 equivalent or less each may be awarded after competitive bidding advertised locally in accordance with procedures accept- able to the Bank provided that the aggregate cost of all contracts so awarded shall not exceed $1,500,000 equivalent. 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 civil works, and all contracts for equipment and furniture estimated to cost the equivalent of $200,000 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 bidders. (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 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. - 19 - (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 submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 3. 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. 4. 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 20% 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 5 L day of A&IL , 198. FOR SECRETARY