India - Gujarat Urban Development Project : Credit 1643 - Credit Agreement - Conformed

CREDIT NUMBER 1643 IN OFFICIAL DOCUMENTS Development Credit Agreement (Gujarat Urban Development Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated / , 1986 CREDIT KUMBER 1643 IN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated , 1986, between INDIA, acting by its Presid t (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; (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 provided in this Agreement; 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 set forth in this Agreement 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 General Conditions Applicable to Develop- ment Credit Agreements of the Association, dated January 1, 1985, with the modification set forth below (the General Conditions) constitute an integral part of this Agreement: The last sentence of Section 3.02 is deleted. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions have the respec- tive meanings therein set forth and the following additional terms have the following meanings: (a) "Gujarat" means the State of Gujarat acting by its Governor, a State of India, and includes any successor thereto; (b) "Project Agreement" means the agreement between tie Association and Gujarat of even date herewith, as the same may be -2- amended from time to time, and such Lerm includes all schedules and agreements supplemental to the Project Agreement; (c) "Implementing Agencies" means the Gujarat Housing Board, the Municipal Corporations of Ahmedabad, Jamnagar, Rajkot, Surat and Vadodara, the municipalities of Ankleshwar, Palanpur and Jetpur, and shall include any Department of Gujarat respon- sible for carrying out any Part of the Project; (d) "AMC" means the Ahmedabad Municipal Corporation established under the Bombay Provinical Municipal Corporations Act, 1949; and (e) "Subsidiary Loan Agreement" means the agreement to be entered into between Gujarat and AMC pursuant to Section 2.02 (a) of the Project Agreement, as the same may be amended from time to time, and such term includes all schedulcs to the Subsidiary Loan Agreement. 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 the Development Credit Agreement, an amount in various currencies equivalent to fifty eight million five hundred thousand Special Drawing Rights (SDR 58,500,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule I 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. The Closing Date shall be December 31, 1992 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 -3- of 1%) per annum on the principal amount of the Credit not withdrawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agreement 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 2.05. 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 2.06. Commitment charges and service charges shall be payable semiannually on April 1 and October 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each April 1 and October 1 commencing April 1, 1996, and ending October 1, 2035. Each installment to and including the installment payable on October 1, 2005 shall be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter shall be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower 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 -4- with the provisions of the Project Agreement all the obligations of Gujarat therein set forth, shall take and cause to be iaken 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 developmental assistance to the States of India. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 1 to the Project Agreement. Section 3.03. The Borrower and the Association hereby agree that the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions (relating to in- surance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) shall be carried out by Gujarat pursuant to Section 2.04 of the Project Agreement. ARTICLE IV Remedies of the Association Section 4.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) Gujarat shall have failed to perform any of its obligations under the Project Agreement. (b) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situation shall have arisen which shall make it improbable that Gujarat will be able to perform its obligations under the Project Agreement. Section 4.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional event is specified, namely, that the event specified in paragraph (a) of Section 4.01 of this -5- Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower. ARTICLE V Effective Date; Termination Section 5.01. The following event is specified as an additional condition to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely, that the Subsidiary Loan Agreement has been executed on behalf of Gujarat and AMC. Section 5.02. The following are specified as additional matters, 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: (a) that the Project Agreement has been duly authorized or ratified by Gujarat, and is legally binding upon Gujarat in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by Gujarat and AMC and is legally binding upon Gujarat and AMC in accordance with its terms. Section 5.03. The date 90 days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.04. The provisions of Section 4.02 of this Agree- ment shall cease and determine on the date on which the Develop- ment Credit Agreement shall terminate or on the date 20 years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. Any Secretary, Additional r-.retary, Joint Secretary, Director, Deputy Secretary or Under Secretary of the Department of Economic Affairs in the Ministry of Finance of the Borrc!qer is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. -6- Section 6.02. The following addresses are specified for the purposes 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 Cable address: ECOFAIRS New Delhi 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. -7- IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, 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 Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President South Asia SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets fortti the Categories of items to be financed out of the proceeds of tiie 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 0quivalent) to be Financed (1) Civil works 25,700,000 39% (2) Equipment and 25,900,000 100% of foreign materials expenditures, 100% of local expenditures (ex-factory cost) and 39% of local ex- penditures for other items procured locally (3) Home improve- 1,200,000 39% ment loans (4) Consultants' 2,900,000 100% services and training (5) Unallocated 2,800,000 TOTAL 58,500,000 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 -9- goods or services supplied from the territory of any country other than that of the Borrower; and (b) the term "local expendicures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower. 3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made 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 900,000, may be made in respect of Categories (1) and (4) on account of payments made for expenditures before that date but after September 1, 1984. - 10 - SCHEDULE 2 Description of the Project The objectives of the Project are to improve the management and financing of urban growth and to strengthen the administra- tion, planning and fin,ncial management of local governments and state-level agencies in the urban sector of Gujarat. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: Area Development Development of about 14,400 serviced residential and small business plots with shelter loans and community facilities, totaling about 100 hectares. Part B: Town Planning Schemes Carrying out of 6 town planning schemes for land readjust- ment with provision for community facilities and infrastructure. Part C: Slum Upgrading Upgrading of about 250 hectares of slums, including pro- vision of tenure, improved infrastructure, home improvement loans and community facilities. Part D: Solid Waste Management Acquisition and utilization of equipment for the collection and disposal of solid waste in five cities. Part E: Urban Infrastructure Provision of storm drainage in Vadodara and Surat, a trunk sewer and treatment facility and investments in water supply and sewerage facility, and augumentations of the sewerage system in Ahmedabad. - 11 - Part F: Institutional Strengthening The strengthening of the Implementing Agencies through the utilization of consultants' services, and the provision of equipment, training and start-up cost. The Project is expected to be com1leted by December 31, 1991. 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 198 4. FOR SECRETARY