Mali - Health Development Project : Credit 1422 - Credit Agreement - Conformed

OFFICIAL REDIT NUMBER 1422 MLI Development Credit Agreement (Health Development Project) between REPUBLIC OF MALI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1984 CREDIT NUMBER 1422 MLI DEVELOPMENT CREDIT AGREEKENT AGREEMENT, dated 0?A , 1984, between REPUBLIC OF MA (herein ter called the Borrower or Mali) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS the torrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit 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 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 Agreemerit, 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 following additional terms have the following meanings: (a) "Project Preparation Advance" means the project pre- paration advance granted by the Association to the Borrower pursuant to an exchange of letters dated June 9, 1980 and July 1, 1980 between the Borrower and the Association, pursuant to an exchange of letters dated January 13, 1982 and March 23, 1982 between the Borrower and the Association and pursuant to an exchange of letters dated November 3, 1982 and March 29, 1983, between the Borrower and the Association; -2- (b) "Special Account" means the account to be opened and thereafter maintained pursuant to Section 2.02 (c) of this Agree- ment; (c) "Project Account" means the account to be opened and thereafter maintained pursuant to Section 3.01 (b) of this Agree- ment; (d) "PPM" means the Borrower's Pharmacie Populaire du Mali; (e) "Mali Franc" and "MF" mean the currency of the Bor- rower; (f) "DNPFSS" means the Direction Nationale de la Planifi- cation et de la Formation Sanitaire et Sociale of the Borrower's Ministere de la Sante Publique et des Affaires Sociales; (g) "MSPAS" means the Borrower's Ministare de la Sante Publique et des Affaires Sociales; (h) "ADAUA" means Association pour le Developpement Naturel d'une Architecture et d'un Urbanisme Africains; (i) "Pharmaceutical Account" means the account to be opened and thereafter maintained pursuant to Section 3.08 (a) of this Agreement; (j) "PCU" means the Project Coordinating Unit referred to in Section 3.02 (a) of this Agreement; (k) "LPCU" means the Local Project Coordinating Unit re- ferred to in Section 3.02 (a) of this Agreement; (1) "Budget" means the Borrower's Budget d'Etat; (m) "Pharmaceutical Reform" means the activities to be carried out to enable Office Malien de Pharmacie to undertake the functions of an entity responsible for the production of drugs and for research in the fields of traditional medicine and pharmacy, to enable PPM to continue to operate as the national public entity in charge of drug purchasing and distribution, to establish a capability within MSPAS to plan and coordinate national pharmaceutical policy, and to establish a national pur- chasing commission to determine national annual drug purchasing programs and official sales prices; -3- (n) "District" means Cercle, the Borrower's territorial subdivision; (o) "Agency" means any entity participating in the execu- tion of the Project including, but not limited to, ministries, departments and agencies of the Borrower; and (p) "BDM" means Banque de Developpement du Mali. 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 currencies equivalent to fifteen million nine hundred thousand Special Drawing Rights (SDR 15,900,000). Section 2.02. (a) 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 Sche ule 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) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the prin- cipal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. (c) The Borrower shall, for the purposes of the Project, open and thereafter maintain in MF a Special Account in BDM on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 4 to this Agreement. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works 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 Agree- ment. Section 2.04. The Closing Date shall be March 31, 1990 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. 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 pjay 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 charges and service charges shall be payable semiannually on May 15 and November 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each May 15 and November 15 commencing May 15, 1994, and ending November 15, 2033, each installment to and including the installment payable on May 15, 2003, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.09. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Condi- tions. -5- ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appro- priate administrative, financial, engineering and health prac- tices, and shall provide, promptly as needed, the funds, facili- ties, services and other resources required for the purpose. (b) Without any limitation to the provisions of paragraph (a) of this Section, the Borrower shall for the purpose of the Project: (i) open, and thereafter maintain until not less than six months after the Closing Date, a Project Account in Mali Franc in BDM on terms and conditions satisfactory to the Association; (ii) deposit in such account, upon the opening thereof, an amount of MF 12,500,000; and (iii) ensure that the funds available in the Project Account shall, at the end of each calendar quarter, amount to no less than MF 12,500,000 and shall, at all times, be sufficient to permit the timely and efficient execution of the Project. Section 3.02. The Borrower shall: (a) establish and maintain, until the Project has been completed, a Project Coordinating Unit (PCU) and a Local Project Coordinating Unit (LPCU) with powers, responsibility, personnel and resources satisfactory to the Borrower and the Association; and (b) establish and maintain the following full-time posi- tions with PCU under terms of reference satisfactory to the Borrower and the Association and employ personnel to fill such positions whose qualifications and experience shall be satis- factory to the Borrower and the Association: (i) Directeur; (ii) Directeur Adjoint; (iii) Chef de la Division Administrative et Comptable; (iv) Administrateur; (v) Comptable; (vi) Chef de la Division Etudes et Controle Technique; (vii) Chef de la Section Etudes; and (viii) Chef de la Section Contr8le Technique. Section 3.03. The Borrower shall, not later than June 30, 1984, establish and, thereafter, maintain a Division of Pharmacy and Drugs within MSPAS's Inspectorate of Public Health and Social Affairs under terms and conditions satisfactory to the Borrower and the Association. - 6 - Section 3.04. In order to assist the Borrower in carrying out the Project, the Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Borrower and the Association, such consultants to be selected in accordance with principles and procedures satisfactory to the Association on the basis of 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 3.05. The Borrower shall, not later than Decem- ber 31, 1984, establish and, thereafter, maintain within DNPFSS the following full-time positions on terms of reference satisfac- tory to the Borrower and the Association and hire the following personnel to fill such positions whose qualifications and experi- ence shall be satisfactory to the Association: (i) a statisti- cian; (ii) a health planner; (iii) a training specialist; and (iv) an evaluation specialist. Section 3.06. The Borrower shall: (a) not later than December 31, 1987, submit to the Asso- ciation for its review and comments preinvestment studies re- ferred to in Part C (1) of the Project; and (b) not later than December 31, 1988 furnish to the Asso- ciation a plan of action satisfactory to the Borrower and the Association for the implementation of the recommendations emanat- ing from the studies referred to in paragraph (a) above. Section 3.07. The Borrower shall: (a) retain ADAUA's services to carry out Part D.3 of the Project on terms and conditions satisfactory to the Association; and (b) not later than March 31, 1984 assign and thereafter maintain on a full-time basis, within the Centre des Technologies Adapt9es, an expert whose qualifications and experience shall be satisfactory to the Borrower and the Association to: (i) verify construction progress under Part D.3 of the Project; (ii) certify ADAUA's payment request under such Part of the Project; (iii) prepare and furnish to the Association, not later than June 30, 1985, a plan for upgrading of health centers referred in Part D.4 of the Project, and (iv) coordinate selection of construction sites referred to in Section 3.11 of this Agreement. -7- Section 3.08. The Borrower shall: (a) not later than June 30, 1984 open and thereafter maintain a Pharmaceutical Account in MF in the BDM on terms and conditions satisfactory to the Borrower and the Association; (b) ensure that any receipts from the sale of drugs financed out of the Credit be deposited promptly into the Pharmaceutical Account; and (c) by the end of each calendar quarter, starting the calendar quarter ending on September 30, 1984 maintain in the Pharmaceutical Account a balance of not less than one hundred million Mali Franc (MF 100,000,000). Section 3.09. (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 Credit against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) 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 3.10. (a) The Borrower shall furnish to the Associa- tion, 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 Association 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 d-r4ved from it), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use in the Project; (ii) shall enable the Association's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association at regular intervals all such information as the Association shall reasonably request concerning the Project, its cost and, -8- where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Credit and 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 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. (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 Association, the Borrower shall prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably 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 Association of their respective obligations under the Development Credit Agreement and the accomplishment of the purposes of the Credit. Section 3.11. The Borrower shall, prior to commencement of construction of each of the health centers in the Districts of Kita, Bafoulabe and Kenieba and each of the health sub-centers in the Districts of Kita, Bafoulabe and Kenieba described in Part D.3 of the Project, furnish to the Association in respect to each such health center and sub-center, evidence satisfactory to the Borrower and the Association that: (a) all such land and rights in respect of land required for the construction and operation of such health centers and sub-centers has been acquired; and (b) all such land referred to in paragraph (a) above has permanent water supply required for construction and operation of health centers and sub-centers referred to in paragraph (a) above. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and separate accounts adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. -9- (b) Without limitation to the foregoing, the Borrower shall: (i) maintain or cause to be maintained separate accounts reflecting all expenditures on account of which withdrawals are requested from the Credit Account on the basis of statements of expenditure; (ii) retain, until one year after the Closing date, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing the expenditures on account of which withdrawals are requested from the Credit Account on the basis of statements of expenditure- and (iii) enable the Association's representatives to examine such records. (c) The Borrower shall: (i) have the Special Account, the Project Account, the Pharmaceutical Account and the separate accounts referred to in paragraphs (a) and (b) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Borrower and the Association; (ii) furnish to the Association, as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by such auditors, of such scope and in such detail as the Association shall have reasonably requested, including without limitation to the foregoing, a separate opinion by said auditors in respect of the expenditures and records referred to in paragraph (b) of this Section as to whether the proceeds of the Credit withdrawn from the Credit Account on the basis of statements of expenditure have been used for the purpose for which they were provided; and (iii) furnish to the Association such other information concerning said accounts, records and expenditures and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. (a) The Borrower shall maintain with due diligence and efficiency the buildings, furniture and equipment included in the Project and shall make all necessary renewals thereof and repairs thereto. (b) The Borrower shall operate the facilities included in the Project in accordance with appropriate administrative, health and training policies and practices and with due diligence and efficiency. (c) The Borrower shall provide the funds, facilities, services and other resources, including adequate staffing, required for purposes of paragraphs (a) and (b) above. - 10 - Section 4.03. (a) The Borrower shall prepare, in consulta- tion with the Association, and adopt, not later than December 31, 1984: (i) a list of essential drugs, to be provided at public health and village level facilities; and (ii) a drug formulary and a standardized prescribers treatment manual both in respect of such drugs. (b) The Borrower shall, not later than December 31, 1984, and not later than December 31 of each year, thereafter, present to the Association for its review and comments a study on the effectiveness of its Pharmaceutical Reform. Section 4.04. The Borrower shall: (a) not later than December 31, 1984 prepare and furnish to the Association for its review and comments a five year invest- ment plan for PPM; (b) not later than December 31, 1985 implement such mea- sures from the plan referred to in paragraph (a) above as shall have been agreed upon between the Borrower and the Association; (c) not later than December 31, 1984 furnish to the Asso- ciation a plan of action for strengthening management capability of PPM under Part B.1 of the Project satisfactory to the Associa- tion; (d) not later than March 31, 1985 implement such measures from the plan referred to in paragaraph (c) above as shall be agreed upon between the Borrower and the Association; and (e) not later than March 31 of each year, thereafter, review the effects of the measures referred to in paragraph (d) above in consultation with the Association. Section 4.05. The Borrower shall employ and thereafter maintain on terms and conditions satisfactory to the Borrower and the Association a consultant to assist MSPAS in setting up and implementing a Project accounting system satisfactory to the Borrower and the Association. Section 4.06. The Borrower shall ensure that for its fiscal year 1989, and for all fiscal years thereafter, the allocation in its Budget are sufficient to sustain the activities initiated under the Project, in a timely and efficient manner. - 11 - ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Special Aczount has been opened in accordance with the provisions of Section 2.02 (c) of this Agreement; (b) the Project Account has been opened in accordance with the provisions of Section 3.01 (b) of this Agreement; (c) PCU and LPCU have been established in accordance with the provisions of Section 3.02 (a) of this Agreement; (d) PCU staff referred to in Section 3.02 (b) of this Agreement has been employed in accordance with the provisions thereof; (e) the consultant referred to in Section 4.05 of this Agreement has been employed in accordance with the provisions thereof; and (f) ADAUA's services have been retained in accordance with the provisions of Section 3.07 (a) ,of this Agreement. Section 5.02. The date Y , is hereby specified for the- purposes 5f Section 12.04 of the General Conditions. Section 5.03. The obligations of the Borrower under Article IV of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 20 years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. The Minister responsible for finances of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. - 12 - 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 Bamako Republique du Mali Cable address: Telex: MINIFINANCES 972559 Bamako 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 MALI By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION Regional Vice President Western Africa - 13 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the' amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Civil works 5,210,000 100% (2) Equipment, furni- 1,610,000 100% ture, vehicles and materials (3) Technical assis- 100% tance: (a) consultants' 2,560,000 fees (b) training 290,000 (c) fellowships 570,000 (4) Training and 100,000 100% materials under Part E.1 of the Project (5) Studies under 290,000 100% Parts C.1 and F.3 of the Project - 14 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (6) Operating costs 670,000 (i) 95% up to the (including drugs moment the aggre- under Part D.1 gate amount of of the Project) disbursements under this Cate- gory reaches the equivalent of SDR 380,000; (ii) 60% up to the moment such aggregate amount reaches SDR 570,000; and (iii) 30% there- after (7) Drugs under 1,800,000 100% Part B.1 of the Project (8) Initial Deposit 950,000 Amount due under in Special Section 2.02 (c) Account of this Agreement (9) Refunding of 950,000 Amount due under Project Prepar- Section 2.02 (b) ation Advance of this Agreement (10) Unallocated 900,000 TOTAL 15,900,000 2. For the purposes of this Schedule the term "operating costs" means operating costs of the Agencies carrying out the Project and salaries and allowances for the Agencies' staff specifically recruited and employed for carrying out the Project as identified and budgeted in the approved annual plans of the PCU. - 15 - 3. The disbursement percentages have been calculated in com- pliance with the policy of the Association that the proceeds of the Credit shall not 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; on this basis, if the amount of any such taxes levied on or in respect of items in any Category decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such Category as required to be consistent with the aforemen- tioned policy of the Association. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of expenditures: (i) made prior to the date of this Agreement; and (ii) under Category (7) above, until the Association shall have received audited accounts of PPM satisfactory to the Association and the Borrower, covering the fiscal year preceding the year in which the first withdrawal application from the Credit Account under such Category is sub- mitted to the Association by the Borrower, and until consultant services satisfactory to the Borrower and the Association under Part B.1 of the Project shall have been retained by the Borrower. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 1 above, if the Association has reasonably esti-mated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Cate- gory may continue until all expenditures thereunder shall have been made. 6. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in t'is Agreement, no expen- diture 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 - 16 - under the Development Credit Agreement, by notice to the Bor- rower, 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. - 17 - SCBEDULE 2 Description of the Project The purposes of the Project are: (i) at the national level, to improve the quality of basic, field and in-service training and the supply and utilization of basic drugs, and to develop the planning and coordinating capability of MSPAS; and (ii) at the regional level, to strengthen the Borrower's primary health care services and related support services. At the national level, the Project consists of: Part A: Health Manpower Development Development of basic and in-service training of medical and paramedical personnel through the provision of technical assistance, materials and operating costs for curriculum develop- ment, field training, seminars and fellowships. Part B: Drug Supply and Utilization (1) Strengthening of the financial management capability of PPM through technical assistance, and through the provision of an initial supply of drugs and the esta- blishment thereafter of a Pharmaceutical Account. (2) Strengthening of MSPAS's capability in pharmaceutical planning and coordination, development of a national policy of payment for drugs and development of a public and health manpower information program on drug pre- scription and consumption through the establishment of a Division of Pharmacy and Drugs with MSPAS Inspec- torate of Public Health and Social Affairs, provision of technical assistance thereto and the acquisition thereafter and utilization thereby of office facilities and equipment and about two vehicles. Part C: Planning, Coordination and Health Education (1) Strengthening of health planning through the provision of office equipment and vehicles and through the provision of technical assistance, fellowships and preinvestment studies for (a) further improvements in health planning; (b) cost and feasibility analysis of a - 18 - nationwide primary health care program; (c) strengthen- ing primary health care activities, including maternal and child health/family planning and nutrition at the community level; and (d) development of a long-term national MSPAS in-service training program. (2) Establishment of a PCU and a LPCU and the provision of technical assistance, office materials, operating costs and vehicles thereto. (3) Strengthening of MSPAS's health education and document- ation services through the provision of technical assistance, equipment, materials and a center compris- ing office facilities and a library facility. At the regional level, the Project consists of: Part D. Development of Primary and Secondary Health Care in the Districts of Kita, Bafoulab4 and KLfnieba 1. Carrying out of an integrated program of health services through the acquisition of drugs and equipment and the provision of technical assistance to health centers and sub-centers in such District. 2. Retraining of MSPAS's medical and paramedical personnel who currently provide health services in such Districts. 3. Construction, furnishing and equiping of a health center in each of such Districts, and of about 18 health sub-centers. 4. Upgrading, refurnishing and re-equiping of 3 health sub- centers. 5. Acquisition and utilization of about 6 four-wheel drive vehicles, about 12 motorcycles, about 15 motorbicycles and about 18 bicycles. Part E. Village-level Health Education in the Districts of Kita, Bafoulabe and Kenidba Development of new skills and acquisition of new knowledge through: 1. Training of village-level health workers and promotion of innovative activities by community groups contributing to the improvement of the health status of the population. - 19 - 2. Preparation and evaluation of health-related literacy material through the provision of technical assistance and materials. 3. Development and support of functional literacy program field staff involved in village level health education through the provision of in-service training, incremental salaries and travel allowances, and one four-wheel drive vehicle, about six motor- cycles and about six radios. Part F. Monitoring and Evaluation 1. Strengthening of MSPAS's evaluation capability through the development of a monitoring and reporting system on the delivery of health services in the Districts referred to in Parts D and E of the Project, including provision of technical assistance thereto, and acquisition for MSPAS and utilization thereby of a microcomputer. 2. Carrying out of a survey to measure changes in the health status of the population in the aforesaid Districts. 3. Preparation of a study to evaluate the impact of the Project in the aforesaid Districts including an assessment of the effec- tiveness of primary health care in such Districts. The Project is expected to be completed by September 30, 1989. - 20 - SCHEDULE 3 Procurement 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 (Edition of July 1980) 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 biddin7, 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 a general procurement notice in such form and detail and containing such information as the Asso- ciation shall reasonably request; the Association 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 inter- aational 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 incidental to the delivery of the goods to the place of their use or installation shall be included. 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 - 21 - Republic of Mali 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 grante, 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 groiups: (1) Group A: bids offering goods manufactured in Mali if the bidder shall have established to the satisfaction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in Mali 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 evalu- ated 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 (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 - 22 - 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 civil works under Part D.3 of the Project may be awarded through direct contracting. 2. Contracts for civil works under Parts C.3 and D.4 of the Project estimated to cost less than sixty thousand .ollars ($60,000) equivalent each, but in the aggregate not to exceed two hundred thousand dollars ($200,000) equivalent may be awarded on the basis of competitive bidding advertised locally and in accordance with procedures satisfactory to the Association. 3. Contracts for goods estimated to cost less than fifty thousand dollars ($50,000) equivalent each, but in the aggregate not to exceed two hundred fifty thousand dollars ($250,000) equivalent may be awarded on the basis of competitive bidding advertised locally and in accordance with procedures satisfactory to the Association. 4. (i) Medical equipment and drugs may be procured through the United Nations International Children's Emergency Fund (UNICEF) or (ii) drugs may be purchased directly from the only existing supplier, provided that the Association shall give its prior agreement thereto. D. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for civil works estimated to cost the equivalent of one hundred thousand dollars ($100,000) or more, and all contracts for goods estimated to cost the equivalent of fifty thousand dollars ($50,000) 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 - 23 - require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Bor- rower shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, 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. (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 con- tract. 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 information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. 3. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an extension of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 10% of the original price, the Borrower shall inform the Association of the proposed modification, waiver, extension or change order and the reasons therefor. The Association, if it -- 24 - determines that the proposal would be inconsistent with the pro- visions of this Agreement, shall promptly inform the Borrower and state the reasons for its determination. - 25 - SCHEDULE 4 Special Account 1. For the purposes of this Schedule: (a) the term "Category" means a category of items to be financed out of the proceeds of the Credit as set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "Eligible Expenditures" means expenditures 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 allocated from time to time to Categories (1) through (6) in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Initial Deposit" means an amount in MF equivalent to the amount allocated to Category (8) and to be withdrawn from the Credit Account and deposited in the Special Account pursuant to the first sentence of paragraph 3 to this Schedule. 2. Payments out of the Special Account shall be made exclu- sively for Eligible Expenditures in accordance with the provi- sions of this Schedule. 3. The Association shall, at the request of the Borrower, withdraw on behalf of the Borrower from the Credit Account and deposit into the Special Account the Initial Deposit. Thereafter and on the basis of requests by the Borrower furnished to the Association at such intervals as the Association shall specify, the Association shall further so withdraw from the Credit Account and deposit into the Specia Account such amounts as shall be required to replenish the Special Account with amounts equal to payments made out of the Special Account for Eligible Expendi- tures, but only to the extent that the amount of any such deposit, together with any amount remaining on deposit in the Special Account as of the date of such request, shall not exceed in the aggregate the equivalent of the initial deposit. Except as the Association may otherwise agree, each such deposit after the Initial Deposit shall be withdrawn by the Association from the Credit Account under the respective Categories (1) through (6), and in the respective equivalent amounts, as shall have been justified by the evidence supporting the request for such deposit furnished pursuant to paragraph 4 of this Schedule. - 26 - 4. Prior to or at the time of each request by the Borrower for a deposit by the Association into the Special Account after the Initial Deposit, the Borrower shall furnish to the Associa- tion in respect of each payment made by the Borrower out of the Special Account such documents and other evidence as the Associa- tion shall reasonably request, showing that such payment was made for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Sched- ule, no further deposit into the Special Account shall be made by the Association: (a) when the Association shall have deter- mined at any time that all further withdrawals can be made directly by the Borrower from the Credit Account in accordance with the provisions of paragraph (a) of Section 2.02 of this Agreement, or (b) when the total unwithdrawn amount of the Credit allocated to Categories (1) through (6) for the Project, plus the amount of any qualified agreement to reimburse made by the Association and of any special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Project, shall be equal to the equivalent of twice the amount of the Initial Deposit, whichever shall be sooner. Withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to Categories (1) through (6) for the Project shall follow such procedures as the Association shall specify by notice to the Borrower and shall, except as the Association shall otherwise agree, be made only after and to the extent the Association shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice have been or will be utilized in making payments for Eligible Expenditures. 6. If the Association shall have determined at any time that: (a) any payment out of the Special Account: (i) was made for any expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedule, or (ii) was not justified by the evidence furnished pursuant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Association and unless otherwise agreed by the Association, prior to any further deposit into the Special Account by the Association, deposit into the Special Account or, if the Association shall so request, refund to the Association an amount equal to the amount of such payment or the portion thereof not so eligible or justified; or (b) any amount outstanding in the Special Account will not be required to cover further payments for Eligible Expenditures, - 27 - the Borrower shall, promptly upon notice from the Association, and unless otherwise agreed by the Association, refund to the Association such amount then outstanding in the Special Account. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the day of Tn Nv 198 FOR SECRETARY