Mauritania - Small-Scale Irrigation Project : Credit 1571 - Project Agreement - Conformed

CREDIT NUMBER 1571 MAIJ DOCU MEN TS Project Agreement (Small-scale Irrigation Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and SOCIETE NATIONALE POUR LE DEVELOPPEMENT RURAL Dated , 1985 CREDIT NUM]BER 1571 MAU PROJECT AGREEMENT AGREEMENT, dated J 3 , 1985, between the INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and the SOCIETE NATIONALE POUR LE DEVELOPPEMENT RURAL (hereinafter called SONADER). WHEREAS (A) by the Development Credit Agreement of even date herewith between the Islamic Republic of Mauritania (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to seven million seven hundred thousand Special Drawing Rights (SDR 7,700,000), on the terms and condi- tions set forth in the Development Credit Agreement, but only on condition that SONADER agree to undertake such obligations toward the Association as are hereinafter set forth; (B) the Borrower has applied to the International Fund for Agricultural Development (hereinafter called the Fund) for a .oan (hereinafter called the Fund Loan) in an amount equivalent to three million five hundred thousand Special Drawing Rights (SDR 3,500,000) to assist in financing the Project described in the Development Credit Agreement on the terms and conditions set forth in an agreement (hereinafter called the Fund Loan Agree- ment) between the Borrower and the Fund; (C) the Fund will appoint the As,-ociation as Cooperating Institution to administer the Fund Loan in accordance with the provisions of the Development Credit Agreement; and WHEREAS SONADER, in consideration of the foregoing, 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 and in the General Conditions (as so defined) have the respective meanings therein set forth. -2- ARTICLE II Execution of the Project Section 2.01. SONADER shall carry out the Project described in Schedule 2 to the Development Credit Agreement with due dili- gence and efficiency and in conformity with appropriate adminis- trative, financial, engineering and agricultural practices. Section 2.02. In order to assist SONADER in supervising con- struction under Part A of the Project and in carrying out Part C thereof, SONADER 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 the principles and procedures satisfactory to the Association on the basis of "Guidelines for the Use of Consul- tants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works required for the Project to be financed out of the proceeds of the Credit, shall be governed by the provisions of the Schedule to this Agreement. Section 2.04. (a) SONADER undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit or the Fund Loan made available to it by the Borrower 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 SONADER to replace or repair such goods. (b) SONADER shall cause all goods and services financed out of the proceeds of the Credit or the Fund Loan made available to it by the Borrower to be used exclusively for the purposes of the Project. Section 2.05. (a) SONADER shall furnish to the Association and the Fund,. promptly upon their preparation, the plans, speci- fications, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. -3- (b) SONADER: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and, where appropriate, the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit or the Fund Loan, and to disclose their use; (ii) shall enable the Association's and the Fund's accredited representatives to visit the facilities and construc- tion sites included in the Project and to examine the goods financed out of the proceeds of the Credit or the Fund Loan 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, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Credit and the Fund Loan and the goods and services financed out of such proceeds. (c) Upon the award by SONADER 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 ma- be agreed for this purpose between SONADER and the Association, SONADER shall prepare and furnish to the Asso- ciation and the Fund 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 SONADER and the Association of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Credit and the Fund Loan. (e) SONADER shall enable the Association's and the Fuad's accredited representatives to examine all plants, installations, sites, works, buildings, property and equipment of SONADER and any relevant records and documents. Section 2.06. SONADER shall, not later than October 31 in each year, furnish to the Association, and to each other external agency providing financing for the Project, its proposed annual budget and financial plan for the coming year. -4- Section 2.07. (a) SONADER shall at the request of the Asso- ciation, exchange views with the Association and the Fund with regard to the progress of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit and the Fund Loan. (b) SONADER shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit or the Fund Loan, or the performance by SONADER of its obligations under this Agreement. Section 2.08. SONADER shall include in the bidding documents for the procurement of the pumping equipment required under Part A of the Project technical specifications satisfactory to the Association. Section 2.09. Under Part A of the Project, SONADER shall use the proceeds of the Credit to finance only perimeters the development of which has been approved by the Association. For the purpose of seeking such approval, SONADER shall furnish annually to the Association its annual work program showing for each perimeter: final designs, cost estimates, the participation agreement of the cooperative group concerned and, as appropriate, draft tender documents for the mechanical earthworks to be carried out by contract. Section 2.10. Beginning in 1986 and for each year during the execution of the Project, SONADER shall furnish to the Association: (i) not later than September 30, a Project Imple- mentation Report showing the physical and financial progress of the Project; and (ii) not later than December 31, an Agricultural Development Report on the approved perimeters and covering the preceding dry and rainy seasons. ARTICLE III Management and Operations of SONADER Section .3.01. SONADER shall carry on its operations and conduct its affairs in accordance with sound administrative, financial, and agricultural practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. -5- Section 3.02. SONADER shall at all times operate and main- tain 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 agricultural practices. Section 3.03. SONADER shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practices. ARTICLE IV Financial Covenants Section 4.01. (a) SONADER shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition, including, without limitation to the foregoing, separate accounts reflecting the operations, resources and expenditures in respect of the Project. (b) SONADER shall 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 or the Fund Loan Account on the basis of statements of expenditure, and shall enable the Association's and the Fund's representatives to examine such records. Section 4.02. SONADER shall: (a) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) including the separate accounts referred to in Section 4.01 (a), audited for each fiscal year, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (b) furnish to the Association and the Fund as soon as available, but in any case not later than six months after the end of each such year, (i) certified copies of its financial statements for such year as so audited, and (ii) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested, including, -6- without limitation to the foregoing, separate opinions by said auditors: (A) on the separate accounts referred to in Section 4.01 (a) of this Agreement; and (B) in respect of the expen- ditures and records referred to in Section 4.01 (b) of this Agreement, as to whether the proceeds of the Credit and the Fund Loan made available to it and withdrawn from the Credit Account and the Fund Loan Account, respectively, on the basis of state- ments of expenditure have been used for the purpose for which they were provided; and (c) furnish to the Association such other information concerning said accounts, financial statements, records and expenditures, as well as the audit thereof, as the Association shall from time to time reasonably request. Section 4.03. Beginning with the 1985-1986 season, SONADER shall sell inputs at their full cost. Section 4.04. SONADER shall prepare and furnish to the Association: (i) by December 31, 1985, a study on the feasibility of introducing during the 1986-1987 season charges to cover the full costs of maintenance and repairs of pumping equipment; and (ii) by December 31, 1988, a study on the feasibility of elimi- nating the subsidy on the price of replacement pumping equipment. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which either the Development Credit Agreement or the Fund Loan Agreement becomes effective, whichever shall be the earlier. Section 5.02. (a) This Agreement and all obligations of the Association and of SONADER thereunder shall terminate on the earlier of the following two dates: (i) the date on which both the Development Credit Agreement and the Fund Loan Agreement shall have terminated in accordance with their respective terms; or -7- (ii) a date fifteen years after the date of this Agree- ment. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify SONADER of this event. (c) If either the Development Credit Agrement, or the Fund Loan Agreement, terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section and the other Agreement remains in force, all obligations under this Project Agreement of SONADER and of the lender under that other Agreement shall remain in force. (d) If the Association shall notify SONADER that its appointment as Cooperating Institution under the Fund Loan Agree- ment has terminated, all references in this Agreement to the Fund, to the Fund Loan and to the Fund Loan Agreement shall, with respect to the responsibilities of the Association as such Cooperating Institution, be deemed to be deleted. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- tion or suspension under Article VI of 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 -8- Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For SONADER: B.P. 321 Nouakchott Mauritania Cable address: Telex: SONADER 807 MTN 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 SONADER or by SONADER on behalf of the Borrower under the Development Credit Agreement may be taken or executed by its Director General or such other person or persons as SONADER shall designate in writing, and SONADER 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 collectively but one instrument. -9- 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 o Regional Vice President Western Africa SOCIETE NATIONALE POUR LE DEVELOPPEMENT RURAL By /s/ 14)&chitJAW CA&d dad,44A Authorized Representative - 10 - SCHEDULE Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, goods and civil works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the current edition 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 bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, SONADER 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 or prequalification documents relating thereto, as the case may be, 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. SONADER shall provide the neces- sary information to update such notice annually so long as any goods or works remain to be procured on the basis of ternational competitive bidding. 3. For the purpose of preparing economical packages for bidding purposes, goods shall be grouped under individual contracts covering similar items. 4. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international competitive 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 similar taxes levied in connection with the sale or delivery, pursuant to the bid, of the goods shall not be taken into account in the evaluation of the bids; and (iii) the cost of inland - 11 - freight and other expenditures incidental to the delivery of the goods to the place of their use or installation shall be included. B. Other Procurement Procedures 1. Contracts for the works included in Part A of the Project, for the construction included in Part B thereof and for goods other than pumping sets grouped in lots estimated to cost over $50,000 equivalent, may be procured through limited international bidding, that is, on the basis of a reasonable number of bids received from selected potential suppliers. 2. Contracts for goods other than pumping sets valued at less than $50,000 equivalent may be procured on the basis of local procedures acceptable to the Association. C. Review of Procurement Decisions by the Association Review of invitations to bid and of proposed awards and final contracts: 1. With respect to all contracts for works or construction, and any contract for goods estimated to cost the equivalent of $100,000 or more: (a) Before bids are invited, SONADER 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 docu- ments or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospec- tive bidders. (b) After bids have been received and evaluated, SONADER 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 suf- ficient 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 incon- sistent with the Guidelines or this Schedule, promptly inform SONADER and state the reasons for such determination. - 12 - (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 or the Fund Loan Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph 1, SONADER shall furnish to the Association, promptly after its execution and prior to the submission to the Associa- tion of the first application for withdrawal of funds from the Credit Account or the Fund Loan 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 SONADER 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 20% of the original price, SONADER shall inform the Association of the proposed modification, waiver, extension or change order and the reasons therefor. The Association, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform SONADER and state the reasons for its determination. 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 q - 198 5. FOR SECRETARY