India - Gujarat Medium Irrigation II Project : Credit 1496 - Credit Agreement - Conformed

CREDIT NUMBER 1496 IN Development Credit Agreement (Gujarat Medium Irrigation II Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated 1984 CREDIT NUMBER 1496 IN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated c , 1984, between INDIA, acting by its Pres'd nt (hereinaftr called the Borrower) and INTERNATIONAL DEVELOPM NT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower 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; (B) the Project will be carried out by the State of Gujarat with the Borrower's assistance and, as part of such assistance, the Borrower will make available to the State of Gujarat the proceeds of 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 and in the Project Agreement of even date herewith between the Association and the State of Gujarat; 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 Appliable to Development Credit Agreements 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 and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms Live the following meanings: (a) "Gujarat" means the State of Gujarat, a State of India; (b) "Project Agreement" means the agreement between the Association and the State of Gujarat of even date herewith, as -2- the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; (c) "Sub-project" means each of the irrigation schemes included in Schedule 3 to this Agreement; (d) "Village Service Area" and the acronym "VSA" mean the cultivable command area within a Sub-project of about 200 to 500 ha; (e) "Chak" means the cultivable command area within a VSA of about 30 to 60 ha; (f) "CADA" means a Command Area Development Authority; (g) "CWC" means the Borrower's Centval Water Commission; (h) "Project Area" means the total area of the Sub-pro- jects; (i) "Rs" means Rupees, the currency of the Borrower. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, an amount in various currencies equivalent to one hundred sixty-four million three hundred thousand Special Drawing Rights (SDR 164,300,000). 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 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. 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 - 3 - shall be governed by the provisions of the Schedule to the Project Agreement. Section 2.04. The Closing Date shall be December 31, 1989 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 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 charges and service charges shall be payable semiannually on March I and September 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 1 and September 1 commencing September 1, 1994, and ending March 1, 2034, each installment to and including the installment payable on March 1, 2004, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to b3 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, -4- ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, without any limitation or restric- tion upon any of its other obligations under the Development Credit Agreement, shall cause Gujarat to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable Gujarat to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall make the proceeds of the Credit available to Gujarat in accordance with the Borrower's standard arrangements for development assistance to the States of India. (c) Without limitation to the provisions of Section 3.01 of this Agreement, the Borrower shall issue, or cause to be issued, not later than six months prior to completion of each Sub-project under Parts A (i) and B of the Project, all the necessary authorization and permits to enable Gujarat to carry out Part E of the Project in respect of such Sub-project. Section 3.02. The Borrower undertakes to cause CWC to moni- tor and evaluate the progress of each Sub-project in accordance with procedures satisfactory to the Association. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the Gen- eral Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) Gujarat shall have failed to perform any of its obliga- tions under the Project Agreement. (b) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situa- tion shall have arisen which shall make it improbable that -5- Gujarat will be able to perform its obligations under the Project Agreement. Section 4.02. For the purposes of Section 7.01 of the Gen- eral Conditions, the following additional event is specified pur- suant to paragraph (d) thereof, namely, that the event specified in paragraph (a) of Section 4.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower. ARTICLE V Effective Date; Termination Section 5.01. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely, that the Project Agreement has been duly authorized or ratified by Gujarat, and is legally binding upon Gujarat in accordance with irs terms. Section 5.02. The date, 0d4'1"f/V, 1984 is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Any Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary and Under Secretary of the Department of Economic Affairs in the Ministry of Finance of the Borrower 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 purpose of Section 11.01 of the General Conditions: For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India -6- Cable address: Telex: ECOFAIRS 953-313546 New Delhi 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. INDIA By/S Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President South Asia - 7 - 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) (a) Civil works 100,280,000 50% under Parts A and B of the Project (ex- cluding field channels and field drains) (b) Civil works for 28,650,000 100% of com- field channels pleted works and field drains under Parts A and B of the Project (c) Civil works 4,780,000 100% under Part I of the Proj- ect (2) Equipment and 12,420,000 100% of foreign vehicles expenditures, 100% of local expenditures (ex-factory cost) and 70% of local ex- penditures for other items pro- cured locally -8- Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (3) Rotational 5,730,000 Rs 350/ha for water supply incremental management areas system under Part C of the Project (4) Training, pilot 2,870,000 100% operations, studies, moni- toring and evaluation, and salaries for incremental staff under Parts D, F, G (i), G (ii), G (iii), G (v), H and I of the Project (5) Unallocated 9,570,000 Total 164,300,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; (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; (c) the term "completed works" means completion to full operational status of field channels and drainage from the 8 hectare outlet to serve individual farm holdings, or to serve 1 hectare of aggregated farm holding, whichever is larger; -9- (d) the term "incremental staff" means Gujarat's additional staff employed after the date of this agreement for purposes of carrying out Parts D, F, G (i), G (ii), G (iii), G (v), H and I of the Project; and (e) the term "incremental areas" means those areas in which a rotational water supply management system is being applied in accordance with Schedule 4 to the Project Agreement. 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: (a) in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equivalent of SDR 14,400,000, may be made on account of expenditures made before that date but on or after February 1, 1984; (b) in respect of expenditures under Categories (1), (2) and (3) of the Table set forth in paragraph 1 of this Schedule for the Zankhari Sub-project, until at least eight Sub-projects under Part A (i) of the Project have been completed, and a rotational water supply management system has been applied during one cropping season to all of them, pursuant to the provisions of this Agreement; and (c) in respect of expenditures under Categories (1), (2) and (3) of the table set forth in paragraph 1 of this Schedule for the following Sub-projects: Hadaf, Sukhi, Deo, Kalubhar, Watrak, Guhai, Und, Sipu and Dantiwada, until Gujarat adopts for such Sub-projects the detailed rehabilitation and resettlement plans, in accordance with the provisions of Section 2.12 (d) of the Project Agreement. - 10 - 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 1 above, if the Association has reasonably estimated 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 this Agreement, no expenditure 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 Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Asso- ciation's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 11 - SCHEDULE 2 Description of the Project The objectives of the Project are to introduce an efficient, reliable and equitable water management system in each of the Sub-projects, and to enhance crop production and farmers' income in the Project Area. The Project consists of the following parts: Part A: (i) Completion of the 21 on-going Sub-projects set forth in paragraph 1 of Schedule 3 to the Devel- opment Credit Agreement, including dams, lined canals and distribution irrigation systems up to the 8 ha outlet, field channels, drainage chan- nels, and related structures. (ii) Partial construction of the 2 on-going Sub- projects set forth in paragraph 2 of Schedule 3 to the Development Credit Agreement, including dams, lined canals and distribution irrigation systems up to the 8 ha outlet, field channels, drainage channels, and related structures. Part B: Completion of the modernization of the 6 Sub-projects set forth in paragraph 3 of Schedule 3 to the Develop- ment Credit Agreement, including modernization and lining of canal and distributary systems up to the 8 ha outlet, field channels, drainage channels and related structures. Part C: Introduction of a rotational water supply management system in the Project Area. Part D: (i) Training of mechanical technicians of Gujarat's Irrigation Department in modern methods of operation and maintenance of construction plant. (ii) Training of farmers in the Project Area, and of Project-related staff of Gujarat's Irrigation Department in rotational water supply management system. (iii) Water Management study tours. - 12 - Part E: Improvement of the telecommunication network in the Project Area, including the provision and utilization of radio relay and telephone equipment. Part F: Strengthening of Gujarat's Irrigation Department capability to plan, design and manage irrigation schemes. Part G: Carrying out of the following studies: (i) Monitoring and evaluation studies. (ii) Design improvements of the Zankhari Sub-project. (iii) Fisheries potential in the reservoir under the Project. (iv) Evaluation of the rehabilitation process in the following Sub-projects: Und, Watrak, Guhai, Sipu and Deo. (v) Effectiveness of rotational water supply manage- ment system in three Sub-projects. Part H: Monitoring and evaluation of the activities under the Project. Part I: Rehabilitation of the displaced persons under the Project, including vocational training and infrastruc- tural works. The Project is expected to be completed by June 30, 1989. - 13 - SCHEDULE 3 1. Sub-projects under Part A (i) of the Project: PANAM MACHHANNALA HADAF BHADAR (P) AMLI (VER II) JHUJ KELIA SUKHI DEO KALUBHAR SUKHBHADAR MACHHUNDRI UBEN WATRAK GUHAI MAZAM VENU II UND DEMI II AJI II AJI III 2. Sub-projects under Part A (ii) of the Project: ZANKHARI SIPU 3. Sub-projects under Part B of the Project: DANTIWADA (MOD) FATEHWADI (MOD) KHARICUT (MOD) BHADAR (MOD) SHETRUNJI (MOD) MACHHU I (MOD) 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 Kin day of 198 . FOR SECRETARY