India - Bombay Urban Development Project : Credit 1544 - Credit Agreement - Conformed

OYFIGIAL CREDIT NUMBER 1544 IN Development Credit Agreement (Bombay Urban Development Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated ( t/ , 1985 CREDIT NUMBER 1544 IN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated -4mek , 1985, between INDIA, acting by its President (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT 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 Maharashtra with the Borrower's assistance and, as part of such assistance, the Borrower will make available to the State of Maharashtra 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 State of Maharashtra; 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 Applicable 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 have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Maharashtra" means the State of Maharashtra acting by its Governor, a State of India and includes any successor thereto; -2- (b) "Project Agreement" means the agreement between the Association and Maharashtra of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supple- mental to the Project Agreement; (c) "BMRDA" means the Bombay Metropolitan Region Development Authority established by the Bombay Metropolitan Region Development Authority Act, 1974 of Maharashtra; (d) "MHADA" means the Maharashtra Housing and Area Development Authority established under the Maharashtra Housing and Area Development Act, 1976 of Maharashtra; (e) "CIDCO" means the City and Industrial Development Corporation of Maharashtra Limited, a government company registered under the Companies Act, 1956 of the Borrower; (f) "BMC" means the Bombay Municipal Corporation estab- lished under the Bombay Municipal Corporation Act, 1888; (g) "CIDCO Subsidiary Loan Agreement" means the agreement to be entered into between Maharashtra and CIDCO pursuant to Section 2.01 (b)(i) of the Project Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement; (h) "BMC Subsidiary Loan Agreement" means the agreement to be entered into between Maharashtra and BMC pursuant to Section 2.01 (b)(i) of the Project Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement; (i) "KMC" means Kalyan Municipal Corporation, established by Maharashtra under the Bombay Provincial Municipal Corporations Act, 1949, pursuant to its Notification dated September 26, 1983; (j) "TMC" means the Thane Municipal Corporation, estab- lished by Maharashtra under the Bombay Provincial Municipal Corporations Act, 1949, pursuant to its Notification dated September 22, 1982; (k) "NBMC" means New Bombay Municipal Corporation, being established by Maharashtra under the Bombay Provincial Municipal Corporations Act, 1949, pursuant to its Preliminary Notification dated November 18, 1983; -3- (1) "BMR" means the area in Bombay metropolitan region as specified in Schedule 1 of the Bombay Metropolitan Region Development Authority Act, 1974 of Maharashtra; and (m) "Implementing Agencies" means BMC, BMRDA, CIDCO, KMC, MHADA, NBMC and TMC. 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 thirty-seven million seven hundred thousand Special Drawing Rights (SDR 137,700,000). Section 2.02. 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 shall be governed by the provisions of Schedule 1 to the Project Agreement. Section 2.04. The Closing Date shall be September 30, 1990 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. -4- (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 January 1 and July 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Jan- uary 1 and July 1 commencing July 1, 1995 and ending January 1, 2035, each installment to and including the installment payable on January 1, 2005, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be 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. 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 Cre- dit Agreement, shall cause Maharashtra 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 Maharashtra to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. -5- (b) The Borrower shall make the proceeds of the Credit available to Maharashtra in accordance with the Borrower's standard arrangements for developmental assistance to the States of India. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) Maharashtra 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 Maharashtra will be able to perform its obligations under the Project Agreement. (c) Maharashtra or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of any Implementing Agency or for the suspension of its operations. Section 4.02. Fo-r the purposes of Section 7.01 of the Geheral Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) the event specified in paragraph (a) of Section 4.01 of tli -kgreement shall occur and shall continue for a period of 60 days after notice thereof shall nave been given by the Associa- :ion to the Borrower and Maharashtra; and (b) the event specified in paragraph (c) of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: -6- (a) the CIDCO Subsidiary Loan Agreement has been executed on behalf of Maharashtra and CIDCO; and (b) the BMC Subsidiary Loan Agreement has been executed on behalf of Maharashtra and BMC. 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 fur- nished to the Association: (a) that the Project Agreement has been duly authorized or ratified by Maharashtra, and is legally binding upon Maharashtra in accordance with its terms; (b) that the CIDCO Subsidiary Loan Agreement has been duly authorized or ratified by Maharashtra and CIDCO and is legally binding upon Maharashtra and CIDCO in accordance with its terms; and (c) that the BMC Subsidiary Loan Agreement has been duly authorized or ratified by Maharashtra and BMC in accordance with its terms. Section 5.03. The date. , 1985 is hereby specified for the purposes of tion 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 a date 20 years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Any Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary or 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: -7- 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. 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 Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION B Regional Vice President South Asia -8- SCHEDULE 1 Withdrawal of the Proceeds of the Credit i 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) Civil works 91,780,000 50% (2) Plant, equipment 9,230,000 100% of foreign and vehicles expenditures, 100% of local expenditures (ex-factory cost) and 75% of local expenditures for other items pro- cured locally (3) Home Improvement 28,040,000 75% of amounts Loans disbursed (4) Consultants' 1,650,000 100% services and training (5) Unallocated 7,000,000 TOTAL 137,700,000 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; and -9- (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. 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 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 7,000,000, may be made in respect of Categories (1) and (4) on account of payments made for expenditures before that date but after January 1, 1984. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 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 Category 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 - 10 - 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 increase the public supply of affordable land, infrastructure and shelter particu- larly for low income families within BMR and to help strengthen the Implementing Agencies to plan, implement, finance and main- tain shelter facilities and municipal services. The Project con- sists of the following: Part A: Land and Infrastructure Servicing Program The development of about 85,000 serviced residential, com- mercial and small industrial plots, including community facili- ties, core housing, and home improvement loans on about 15 sites covering about 700 hectares, with implementation responsibilities as follows: (i) CIDCO - the whole program on sites within the proposed area of NBMC; (ii) MHADA - all on-site infrastructure in BMR other than in NBMC; all off-site infrastructure in BMR other than under the jurisdiction of NBMC and BMC; and (iii) BMC - all off-site infrastructure in the jurisdiction of BMC. Part B: Slum Upgrading Program The upgrading of about 300 hectares of slum areas, including provision of tenure, improved infrastructure, services, home improvement loans and community facilities with implementation responsibilities as follows: (i) MHADA - on-site infrastructure; and (ii) BMC - all off-site infrastructure in the jurisdiction of BMC; on-site infrastructure on BMC owned sites. Part C: Municipal Services The carrying out of a program of improvement in maintenance of roads, drains and services, and collection and disposal of refuse in municipal areas, to be implemented as follows: - 12 - (i) BMC - in the jurisdiction of BMC; (ii) TMC - in the jurisdiction of TMC; (iii) KMC - in the jurisdiction of KMC; and (iv) Maharashtra - in the proposed area of NBMC. Part D: Technical Assistance and Training The carrying out of a program to provide technical assist- ance and staff training to improve the capacity of Implementing Agencies, as follows: (i) MHADA - design and implementation of organization, management and finance system and training; (ii) BMRDA - advisors for the Technical Committee of BMRDA and staff training; (iii) TMC - (a) review of development control and building regulations, (b) design and implementation of organiza- tion, management and finance systems, (c) technical review of service delivery systems, and (d) staff training. (iv) such other technical assistance and training as the Borrower, Maharashtra and the Association may agree during the implementation of the Project. The Project is expected to be completed by March 31, 1990. 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 FOR SECRETARY