India - Tamil Nadu Water Supply And Sanitation Project : Credit 1454 - Project Agreement - Conformed

OFFICIAL CREDIT NUMBER 1454 IN DOCUMENTS Project Agreement (Tamil Nadu Water Supply and Sanitation Project) among INTERNATIONAL DEVELOPMENT ASSOCIATION and INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL FUND established with funds contributed by certain members of the International Development Association and TAMIL NADU WATER SUPPLY AND DRAINAGE BOARD Dated / - ,1984 CREDIT NUMBER 1454 IN PROJECT AGREEMENT AGREEMENT, dated / , 1984, between IATERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association), INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINI- STRATOR of the SPECIAL FUND established with funds contributed by certain members of the International Development Association (hereinafter called the Administrator), and TAMIL NADU WATER SUPPLY AND DRAINAGE BOARD (hereinafter called TWAD). WHEREAS (A) by the Development Credit Agreement of even date herewith between India, acting by its President (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to thirty-five million three hundred thou- sand Special Drawing Rights (SDR 35,300,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that TWAD agree to undertake such obligations toward the Association as are hereinafter set forth; and (B) by the Special Fund Credit Agreement of even date here- with between the Borrower and the Administrator, the Administra- tor has agreed to make available to the Borrower an amount in various currencies equivalent to thirty-five million three hun- dred thousand Special Drawing Rights (SDR 35,300,000), on the terms and conditions set forth in the Special Fund Credit Agree- ment, but only on condition that TWAD agree to undertake such obligations toward the Administrator as are hereinafter set forth; and WHEREAS TWAD, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement, in the Special Fund Credit and in the General Conditions (as so defined) have the respective mean- ings therein set forth and the term "Association" means also the -2- International Development Association acting as Administrator of the Special Fund referred to in the Preamble to the Special Fund Credit Agreement. ARTICLE II Execution of the Project Section 2.01. TWAD declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement and Schedule 2 to the Special Fund Credit Agree- ment, and, to this end, shall carry out the Project described in said Schedules with due diligence and efficiency and in conform- ity with appropriate administrative, financial, engineering and public utility practices. Section 2.02. In order to facilitate the carrying out of the Project, TWAD shall by December 31, 1984: (a) establish and continue to maintain a Project team with an organizational structure satisfactory to the Association; and (b) appoint an engineering director, a finance director, a chief accountant and a chief auditor, all with appropriate qualifications and expe- rience, to serve on a full-time basis. Section 2.03. In order to assist TWAD in the carrying out of the Project, TWAD shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satis- factory to 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 Con- sultants by World Bank Borrowers and by the World Bank as Exe- cuting Agency" published by the Bank in August 1981. Section 2.04. TWAD shall, by June 30, 1985, complete a study of the training needs of the water supply and sewerage sector in accordance with terms of reference agreed with the Association. Section 2.05. 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 the Develop- ment Credit Agreement, and procurement of the goods and civil works required for the Project and to be financed out of the pro- ceeds of the Special Fund Credit shall be governed by the provi- sions of Schedule 3 to the Special Fund Agreement. -3- Section 2.06. (a) TWAD undertakes to insure, or make ade- quate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit and of the proceeds of the Special Fund Credit, respectively, made available to it by Tamil Nadu against hazards incident to the acquisition, trans- portation and delivery thereof to the place of use or installa- tion, and for such insurance any indemnity shall be payable in a currency freely usable by TWAD to replace or repair such goods. (b) TWAD shall cause all goods and services financed out of the proceeds of the Credit and the proceeds of the Special Fund Credit, respectively, made available to it by Tamil Nadu to be used exclusively for the purposes of the Project. Section 2.07. (a) TWAD shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or addi- tions thereto, in such detail as the Association shall reasonably request. (b) TWAD shall: (i) maintain records and procedures ade- quate to record and monitor the progress of the Project (includ- ing its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit and the proceeds of the Special Fund Credit, and to disclose their use in the Project; (ii) enable the Association's repre- sentatives to visit the facilities and construction sites includ- ed in the Project and to examine the goods financed out of the proceeds of the Credit and the proceeds of the Special Fund Cre- dit and any records and documents relevant to the Project; and (iii) furnish to the Association at regular intervals all such information as the Association shall reasonably request concern- ing the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditures of such proceeds and the goods and services financed out of such proceeds. In particular, TWAD shall annually review and update the implementation of the Action Plan in consultation with the Association. (c) Upon the award by TWAD of any contract for goods, works or services to be financed out of the proceeds of the Credit and the proceeds of the Special Fund 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. -4- (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 Associa- tion and TWAD., TWAD 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 TWAD and the Association of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Credit. (e) TWAD shall enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment of TWAD and any records and documents relevant to the Project. Section 2.08. (a) TWAD shall, at the request of the Associa- tion, exchange views with the Association with regard to the pro- gress of the Project, the performance of its obligations under this Agreement, and other matters relating to the purposes of the Credit. (b) TWAD shall promptly inform the Association of any con- dition which interferes or threatens to interfere with the pro- gress of the Project, the accomplishment of the purposes of the Credit, or the performance by TWAD of its obligations under this Agreement. Section 2.09. (a) In order to ensure the achievement of the objectives of the Project and the proper operation and mainten- ance of the facilities provided thereunder, TWAD shall enter into an agreement with each of the Local Authorities, on terms and conditions satisfactory to the Association providing, inter alia, for: (i) the transfer to such Authority of the facilities to be provided under the Project within the area of its jurisdiction and the arrangements for payments by such Authority of the cost of the facilities so provided; (ii) the arrangements for the pro- vision of appropriate services to be provided by TWAD to such Authority to assist it in the proper operation and maintenance of the facilities so provided and in the improvement of its manage- ment, operations and finances; and (iii) the arrangements for payments by such Authority of the cost of the services to be so provided by TWAD; and -5- (b) TWAD shall exercise its rights under each of the agree- ments entered into pursuant to paragraph (a) of this Section in such a manner as to accomplish the purposes of the Credit, and except as the Association may otherwise agree, TWAD shall not assign, amend, abrogate or waive any of the said agreements or any provision thereof. Section 2.10. In the implementation of Part E of the Project, TWAD shall construct low cost sanitation units in accordance with specifications agreed with the Association. ARTICLE III Management and Operations of TWAD Section 3.01. TWAD shall carry on its operations and conduct its affairs in accordance with sound administrative, financial, engineering and public utility practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. TWAD shall at all times operate and maintain its plant, machinery, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and public utility practices. Section 3.03. TWAD shall take out and maintain with respon- sible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Other Covenants Section 4.01. (a) TWAD shall maintain records and accounts adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. (b) TWAD shall: (i) have its accounts and financial state- ments (balance sheets, statements of income and expenses and relhted statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by -6- independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than nine months after the end of each such year, (A) cer- tified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have rea- sonably requested; and (iii) furnish to the Association such other information concerning its accounts and financial state- ments and the audit thereof as the Association shall from time to time reasonably request. Sectio 4.02. (a) TWAD shall provide the Association by December 31, 1984, with: (i) a debt maturity schedule for 1985/86-1995/96; (ii) an annual program for debt retirement beginning from fiscal year 1985/86; and (iii) an annual program to reduce outstanding receivables from the fiscal year 1985/86 so that, by the fiscal year 1988/89 and thereafter, such receivables are not more than one and one-half times the value of work-in progress. (b) Beginning from the fiscal year 1985/86, TWAD shall implement the annual program of debt retirement and reduction of outstanding receivables provided under the preceding paragraph of this Section. (c) For the purpose of this Section the following terms have the following meanings: (i) "outstanding receivables" means monies owed to TWAD by any other party for works either completed or being constructed by TWAD on behalf of such party; and (ii) "debt retirement" means such amounts which TWAD shall pay upon the maturity of its debts. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement and the Special Fund Agreement become effective. -7- Section 5.02. (a) This Agreement and all obligations of the Association and of TWAD thereunder shall Merminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement and the Special Fund Agreement shall terminate in accordance with their terms; or (ii) a date 20 years after the date of this Agreement. (b) If the Development Credit Agreement and the Special Fund Agreement terminates in accordance with their terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify TWAD of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- tion or suspension under the General Conditions. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. -8- For TWAD: Managing Director Tamil Nadu Water Supply and Drainage Board 31, Kamaraj Salai, Chepauk Madras 600 005 India Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of TWAD may be taken or executed by the Mana- ging Director or such other person or persons as the Managing Director shall designate in writing, and TWAD shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all col- lectively but one instrument. 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. INTERNATIONAL DEVELOPMENT ASSOCIATION By Ali, Regiona Vice President South Asia TAMIL NADU WATER SUPPLY AND DRAINAGE BOARD By orized Representative 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 VQ vte< 198 . FOR SECRETARY