India - Koyna Power Projects : Loan 0223 - Project Agreement - Conformed

LOAN NUMBER 223 IN Project Agreement (Koyna Power Project) BETWEEN THE STATE OF BOMBAY AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED APRIL 8, 1959 LOAN NUMBER 223 IN Project Agreement (Koyna Power Project) BETWEEN THE STATE OF BOMBAY AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED APRIL 8, 1959 AGREEMENT, dated April 8, 1959, between the STATE OF BOMBAY, acting by its Governor (hereinafter called Bom- bay) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAs by a loan agreement of even date herewith (hereinafter called the Loan Agreement) between India (hereinafter called the Borrower) and the Bank, the Bank has agreed to make to the Borrower a loan in various currencies equivalent to twenty-five million dollars ($25,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that Bombay agree to undertake certain obligations to the Bank as hereinafter in this Project Agreement set forth; and WHEREAS Bombay, in consideration of the Bank's enter- ing into the Loan Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; Now THEREFORE the parties hereto hereby agree as * follo0ws : ARTICLE I Definitions SECTION 1.01. Wherever used in this Project Agreement, unless the context shall otherwise require, the several terms defined in the Loan Agreement and in the Loan Regu- lations (as so defined) shall have the respective meanings therein set forth. ARTICLE II Particular Covenants of Bombay SECTION 2.01. (a) Bombay shall carry out the Project with due diligence and efficiency and in conformity with sound engineering and financial practices. (b) To assist it in carrying out the Project, during the 4 period of construction of the Project Bombay shall, where necessary, employ suitably qualified and competenat engi- neering consultants. The selection of the consultants and the nature and scope of their responsibilities shall be the subject of agreement between Bombay and the Bank. (c) Bombay shall furnish to the Bank, promptly upon their preparation, the plans and specifications and the con- struction schedule for the Project and any material modi- fications subsequently made therein, in such detail as the Bank shall from time to time request. (d) Bombay shall maintain or cause to be maintained records adequate to identify the goods financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect in accordance with con- sistently maintained sound utility accounting practices the operations and financial condition of the agency or agencies of Bombay responsible for the construction or operation of the Project or any part thereof; shall enable the Bank's representatives to inspect the Project, the goods and any relevant records and documents; and shall furnish to the Bank all such information as the Bank shall reasonably request concerning the expenditure of the proceeds of the Loan, the Project, the goods, and the operations and finan- cial condition of the agency or agencies responsible for the construction or operation of the Project or any part thereof. (e) Bombay shall keep or cause to be kept all records and accounts in respect of the Project and all records and accounts in respect of its operation separate and inde- pendent from any other records and accounts of Bombay or of the agency or agencies responsible for the construe- tion or operation of the Project. SECTION 2.02. (a) Bombay and the Bank shall cooperate fully to assure that the purposes of the Loan will be accom- plished. To that end, each of them shall furnish to the other all such information as it shall reasonably request. 5 (b) Bombay and the Bank shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Loan. Bombay shall promptly inform the Bank of any condition which interferes with, or threatens to interfere with, the accom- plishment of the purposes of the Loan or the performance by Bombay of its obligations under this Project Agreement or the obligations to be perforied by it pursuant to the provisions of the Loan Agreement, or which shall increase or threaten to increase materially the estimated cost of the Project. SECTION 2.03. Except as shall be otherwise agreed by Bombay and the Bank, Bombay shall import or cause to be imported into the territories of the Borrower all goods purchased with the proceeds of the Loan and shall use them there or shall cause them to be used there exclusively in the carrying out of the P'roject. Bombay shall obtain title to all such goods free and clear of all incumbrances. SECTION 2.04. Bombay shall not, without the prior con- sent of the Bank, sell or otherwise dispose of any goods purchased or paid for out of the proceeds of the Loan. SECTION 2.05. Bombay shall cause its plants, equipment and property to be operated and maintained and from time to time shall cause all necessary renewals and repairs thereof to be made, all in accordance with sound engineer- ing standards; and shall at all times cause its plants and equipment to be operated in accordance with sound busi- ness and public utility practices. SECTION 2.06. As and when the facilities included in the Project are commissioned for operation, Bombay shall transfer them to the Electricity Board (or to any other competent authority constituted for the purpose of operat- ing the Project), and shall take all steps necessary to ensure that such transfer is made on terms and conditions which 6 will enable Bombay to perform or cause to be performed its obligations under this Project Agreement in respect of the Project. SECTION 2.07. Bombay shall, satisfy the Bank that ade- quate arrangements have been made to insure the goods financed out of the proceeds of the Loan against risks inci- dent to their purchase anl importation into the territories of the Borrower, and to their delivery to the site of, and installation in, the Project. SECTION 2.08. Bombay shall cause the rates for the sale of electricity generated by the Project to be set and main- tained at such levels as may be necessary to ensure that the earnings of the Electricity Board (or of such other authority as Bombay shall have constiutied for the purpose of operating the Project) derived from the operation of the Project, after provision for all operating expenses including taxes, adequate depreciation anl interest, and repayment of all loans and advances ascribable to the Project insofar s this is not covered by depreciation, are sufficient to make a reasonable contribution towar(ls the cost of expansion of the power facilities of the Electricity Board (or of such other authority), including the expansion of the Project. ARTICLE III Effective Date; Termination SECTION 3.01. This Project Agreement shall come into force and effect on the Effective Date. If, pursuant to See- tion 9.04 of the Loan Regulations, the Bank shall terminate the Loan Agreement, the Bank shall promptly notify Bom- bay thereof and upon the giving of such notice, this Project Agreement and all obligations of the parties hereunder shall forthwith cease and determine. SECTION 3.02. If and when the entire principal amount of the Loan shall have been paid or caused to be paid by the Borrower (or shall have been cancelled), together with 7 the redemption premium, if any, on the redemption of all Bonds which shall have been called for redemption and all interest and other charges which shall have accrued on the Loan and the Bonds, this Project Agreement and all obliga- tions of Bombay and of the Bank hereunder shall forthwith terminate. ARTICLE IV Miscellaneous Provisions SECTION 4.01. No holder of any Bond other than the Bank shall by virtue of being the holder thereof be entitled to exercise any of the rights conferred, or be subject to any of the conditions or obligations imposed, upon the Bank under this Project Agreement. SECTION 4.02. Any notice, demand or request required or permitted to be given or made under this Project Agree- ment and any agreement between the parties contemplated by this Project 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 or radiograin to the party to which it is required or permitted to be given or made at its 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: (a) For Bombay: The Secretary, Public Works Department State of Bombay India Alternative address for cablegrams and radiograms: Bomworks Bombay 01 8 (b) For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D. C. United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D. C. SECTION 4.03. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Project Agreement on behalf of Bom- bay may be taken or executed by a Secretary to the Govern- ment of Bombay in the Public Works Department or such other person or persons as Bombay shall designate in writing. SECTION 4.04. Bombay shall furnish to the Bank sufficient evidence of the authority of the person or persons who will, on behalf of Bombay, take any action or execute any docu- ments required or permitted to be taken or executed by Bombay pursuant to any of the provisions of this Project Agreement and the authenticated specimen signature of each such person. SECTION 4.05. This Project Agreement may be executed in several counterparts, each of which shall be an original and all collectively but one instrument. IN WITNESS WHEREOF the parties hereto have caused this Project Agreement to be signed in their respe6five names by their representatives thereunto duly authorized and 9 delivered in the District of Columbia, ITrted States of America, as of the day and year first above written. THEiý STATE OF BOMBAY By S. G. BARVE iutiorize( Representative INTERNATIONAL BANK FOR RECONSTRITCTION AND DEVELOPMENT By W. A. B. TLIFF Vice President