Conformed Copy - L2805 - Bahia Blanca I Port Project - Loan Agreement

Page 1 CONFORMED COPY LOAN NUMBER 2805 AR LOAN AGREEMENT (Bahia Blanca I Port Project) between THE ARGENTINE REPUBLIC and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated February 25, 1988 LOAN NUMBER 2805 AR LOAN AGREEMENT AGREEMENT, dated February 25, 1988, between THE ARGENTINE REPUBLIC (the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). 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 Bank to assist in the financing of the Project; (B) Parts B and C of the Project will be carried out by Administracion General de Puertos (AGP) and Junta Nacional de Granos (JNG), respectively, with the Borrower's assistance and, as part of such assistance, the Borrower will make available to AGP and JNG the proceeds of the Loan as provided in this Agreement; and WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to extend the Loan to the Borrower upon the terms and conditions set forth in this Agreement and in the Project Agreements of even date herewith between the Bank and AGP and between the Bank and JNG; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; definitions Page 2 Section 1.01. The General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the General Conditions) constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "ACP" means Administracion General de Puertos, the General Port Administration of the Borrower; (b) "AGP Project Agreement" means the agreement between the Bank and AGP of even date herewith, as the same may be amended from time to time, and such term includes all schedules and agreements supplemental to the AGP Project Agreement. (c) "Australes" means the currency of the Borrower. (d) "DNCPVN" ,means Direccion Nacional de Construcciones Portuarias y Vias Navegagles, the National Directorate of Port Construction and Navigable Waterways of MOSP; (e) "FA" means Ferrocarriles Argentinos, the Borrower's railways company; (f) "JNG" means Junta Nacional de Granos, the National Grain Board of the Borrower; (g) "JNG Project Agreement" means the agreement between the Bank and JNG of even date herewith, as the same may be amended from time to time, and such term includes 811 schedules and agreements supplemental to the JNG Project Agreement; (h) "JNG Subsidiary Loan Agreement" means the agreement to he entered into between the borrower and JNG pursuant to Sectlon 3.02 of this Agreement, as the same may he amended from time to time; (i) "MOSP" means Ministerio de Obras y Servicios Publicos, the Ministry of Public Works and Services of the Borrower; (j) "PCU" means a project coordinating unit to be established by the borrower the Effective date within MOSP pursuant to Section 3.01 (b) (ii) of this Agreement, to assist the Project Committee in the technical supervision and coordination of the execution of the Project; (k) "Prefectura Naval" means the maritime authority of the Ministry of Defense of the Borrower; (l) "Prior Loan" means Loan No. 1521-AR provided for under a Loan Agreement between the Bank and the Borrower dated January 25, 1984; (m) "Project Committee" means a committee to be established by the Borrower by the Effective Date for the general supervision and coordination of the execution of the Project pursuant to Section 3.01 (b) (i) of this Agreement; (n) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; (o) "SSD" means the Safety Services Department of JNG; (p) "ST" means the Secretariat of Transport of MOSP; and (q) "Subsidiary Loan Agreements" means, collectively, the AGP Subsidiary Loan Agreement and the JNG Subsidiary Loan Agreement. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Loan Agreement, an amount in various Page 3 currencies equivalent to fifty million dollars ($50,000,000). Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan 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 Bank, for expenditures made or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan. (b) The Borrower shall, for the purposes of the Project, open and maintain in dollars a special account in Banco Central de la Republica Argentina on terms and conditions satisfactory to the Bank. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 4 to this Agreement. Section 2.03. The Closing Date shall be December 31, 1993 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.04. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.05 (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time at a rate per annum for each Interest Period equal to one-half percent per annum above the Cost of Qualified Borrowings for the last Semester ending prior to the commencement of such Interest Period. (b) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower of the Cost of Qualified Borrowings for such Semester. (c) For purposes of this Section: (i) Interest Period" means the six-month period commencing on each date specified in Section 2.06 of this Agreement, including the Interest Period in which this Agreement is signed. (ii) "Cost of Qualified Borrowings" means the cost of the outstanding borrowings of the Bank drawn down after June 30, 1982, expressed as a percentage per annum, as reasonably determined by the Bank. (iii) "Semester" means the first six months or the second six months of a calendar year. Section 2.06. Interest and other charges shall be payable semiannually on February 1 and August 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Loan ln accordance with the amortization schedule set forth in Schedule 3 to this Agreement. 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 restriction upon any of its other obligations under the Loan Agreement, shall carry out the Project as follows: Part A (other than Part A (iii) and (vi)) through MOSP; Part A (iii) through MOSP, with the participation of FA; and Part A (vi) through the Prefectura Naval, all with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and ports practices, and shall provide, promptly as needed, the funds, facilities services and other resources required for carrying out such Parts of the Project; and (ii) cause AGP and JNG to perform in accordance with the provisions of the AGP Project: Agreement and the JNG Project Agreement, all the obligations of AGP and JNG therein set forth, shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable AGP and JNG to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) Without limitation to the provisions of paragraph (a) of this Section, Page 4 the Borrower shall, through MOSP: (i) establish and maintain until the completion of the Project, an inter-agency committee, with membership and functions satisfactory to the Bank, to coordinate and supervise the execution of the Project; and (ii) establish and maintain within MOSP until the completion of the Project, a project coordinating unit to assist the Project Committee in the technical supervision and overall coordination of the execution of the Project. (c) The Borrower shall ensure that the PCU, at all times: (i) is headed by a full-time professional, with qualifications and experience satisfactory to the Bank, assisted by qualified and experienced staff in adequate numbers; and (ii) carry out its activities under terms of reference which shall have been approved by the Bank. Section 3.02. (a) The Borrower shall on lend to AGP and JNG the proceeds of the Loan required by AGP and JNG for carrying out Part B and Part C of the Project, respectively, under subsidiary loan agreements to be entered into between the Borrower and AGP, and between the Borrower and JNG under the same terms and conditions as those applicable to the Loan. (b) The Borrower shall make available to FA, the amount of the proceeds of the Loan required by FA for the purpose of participating, under the supervision of MOSP, in the carrying out of Part A (iii) of the Project, under contractual arrangements satisfactory to the Bank, which shall provide inter alia, for the same financial terms and conditions as those applicable to the Loan. (c) The Borrower shall exercise its rights under the Subsidiary Loan Agreements, and the contractual arrangements referred to in the preceding paragraph, in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan and except as the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreements and contractual arrangements or any provision thereof. Section 3.03. (a) Except as the Bank 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 Loan shall be governed by the provisions of Schedule 5 to this Agreement. (b) As part of the foregoing, the Borrower shall, through MOSP: (i) hire consultants for the supervision of the execution of Part A (ii) of the Project prior to the award of construction contracts for such Part of the Project; and (ii) hire consultants to assist in the execution of Part A (iv) and (v) of the Project not later than December 31, 1988. Section 3.04. The Bank and the Borrower hereby agree that the obligations set forth in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of the General Conditions (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of Part B of the Project shall be carried out by AGP pursuant to Section 2.03 of the AGP Project Agreement, and in respect of Part C of the Project shall be carried out by JNG pursuant to Section 2.03 of the JNG Project Agreement. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained separate records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have the accounts referred to in paragraph (a) of this Section, including the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by the said auditors, of such scope and in such detail as the Bank shall have reasonably requested; Page 5 (iii) furnish to the Bank monthly certified statements of the Special Account; and (iv) furnish to the Bank such other information concerning said accounts and the audit thereof and said records as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals are requested from the Loan Account on the has is of statements of expenditure, the borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, separate records and accounts reflecting such expenditures; (ii) retain, or cause to be retained, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank's representatives to examine such records; and (iv) ensure that such separate accounts are lncluded in the annual audit referred to ln paragraph (b) of this Section and that the report thereof contains, in respect of such separate accounts, a separate opinion by the said auditors as to whether the proceeds of the Loan withdrawn in respect of such expenditures have been used for the purpose for which they were provided. Section 4.02. The Borrower shall: (a) prepare DNCPVN's annual investment program on the basis of economic criteria and evaluation methods satisfactory to the Bank; (b) furnish to the Bank for comments, not later than December 31 of each year, starting on December 31, 1988, DNCVPN's proposed investment program for the following year; (c) exchange views with the Bank on each such investment program; and (d) refrain from carrying out any investment project through DNCPVN estimated to cost more than the equivalent of $10,000,000 unless the Bank shall have been given a reasonable opportunity to express its views on any such investment project and on the methods utilized for, and the results of, its evaluation. Section 4.03. The Borrower shall, through MOSP: (a) continue to monitor the development of the costs of, and the tariffs charged for, tugboat services in the Borrower's ports; (b) furnish to the Bank the conclusions and recommendations arising out of such monitoring at least once every year, starting on June 31, 1988; and (c) not later than June 30, 1991, exchange views with the Bank on arrangements for the provision of tugboat services to be put into effect after the expiration of existing concession agreements. Section 4.04. (a) The Borrower, through DNCPVN, shall, as part of Part A (iv) of the Project, put into effect a cost accounting system, satisfactory to the Bank, not later than December 31, 1989. (b) The Borrower shall: (i) develop a mechanism for the recovery of dredging costs, satisfactory to the Bank, not later than December 31, 1989; (ii) prepare a plan of action satisfactory to the Bank for the implementation of such mechanism not later than December 31, 1990; and (iii) start to implement such action plan not later than June 30, 1991. ARTICLE V Remedies of the Bank Section 5.01. Pursuant to Section 6.02 (k) of the General Conditions, the following additional events are specified: (a) AGP or JNG shall have failed to perform any of its obligations under the AGP Project Agreement and the JNG Project Agreement, respectively; (b) as a result of events which have occurred after the date of the Loan Agreement, an extraordinary situation shall have arisen which shall make it improbable Page 6 that AGP or JNG will be able to perform its obligations under the AGP Project Agreement and the JNG Project Agreement, respectively; and (c) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of FA, AGP or JNG or for the suspension of its operations. Section 5.02. Pursuant to Section 7.01 (h) of the General Conditions, the following additional events are specified: (a) any of the events specified in paragraph (a) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower; and (b) the event specified in paragraph (c) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions: (a) the Subsidiary Loan Agreements and the contractual arrangements referred to in Section 3.02 (b) of this Agreement have been executed on behalf of the parties thereto; (b) the Project Committee has been established; (c) the PCU has been established and the head of the PCU has been appointed; and (d) the head of SSD, with qualifications and experience satisfactory to the Bank, and experts in silo safety in numbers adequate to make SSD fully operational, shall have been appointed. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the AGP Project Agreement has been duly authorized or ratified by AGP, and is legally binding upon AGP in accordance with its terms; (b) that the JNG Project Agreement has been duly authorized or ratified by JNG, and is legally binding upon JNG in accordance with its terms; (c) that the Subsidiary Loan Agreements and the contractual arrangements referred to in Section 3.02 (b) of this Agreement have been duly authorized or ratified by the parties thereto and are legally binding upon them, in accordance with their terms; and (d) that any action required on behalf of the Borrower in order to permit the procurement of goods and services to be financed out of the proceeds of the Loan in accordance with the provisions set forth or referred to in this Agreement has been taken. Section 6.03. The date May 25, 1988 is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of Economy of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: Page 7 For the Borrower: Ministerio de Economia Hipolito Yrigoyen 250 Buenos Aires Argentina Cable Address: Telex: MINISTERIO ECONOMIA 121952 AR Baires For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT), Washington, D.C. 248423 (RCA) or 64145 (WUI) 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. THE ARGENTINE REPUBLIC By /s/ Manuel Pedregal Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ S. Shah id Husain Regional Vice President Latin America and the Caribbean SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works 200,000 40% (2) Goods 29,500,000 100% of foreign expenditures and Page 8 100% of local expenditures (ex-factory cost) and 85% of local expenditures for imported goods locally procured (3) Consultants' 4,100,000 100% of foreign services (including expenditures and supervision of 80% of local construction) expenditures (4) Unallocated 7,000,000 50,000,000 TOTAL 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 (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. 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 $2,300,000 in respect of Parts A (i) and B (i) of the Project may he made on account of payments made for expenditures before that date but after November 1, 1985. SCHEDULE 2 Description of the Project The objectives of the Project are: (a) to facilitate the Borrower's grain exports by rehabilitating the grain-handling and shipping facilities of the Port of Bahia Blanca; and (b) to improve the institutional capabilities of the Borrower's port sub sector. The Project represents the first phase of the Borrower's program to rehabilitate the port's existing grain-handling facilities and to expand the capacity of the grain terminal, and consists of the following parts, subject to such modifications thereof as the Borrower and the Bank may agree upon from time to time to achieve such objectives: Part A: (i) Rehabilitation of the ship-loading gallery at berth 9 and construction of a temporary truck reception station. (ii) Reconstruction of, and improvements to, the grain elevator No. 5 complex, including all ancillary facilities, paving and repaving of operational areas, sewerage improvements and lighting. (iii) Rehabilitation of the ports railway's marshalling yard. (iv) Developing and implementing DNCPV's general and cost accounting, and management information systems, including the acquisition and utilization of equipment required for the purpose. (v) Strengthening DNCPVN's capabilities to provide maintenance services. (vi) Removal of a sunken dredger to restore the use of a mooring basin in the vicinity of the port's grain terminal. Part B: (i) Partial demolition of an out-of-service wharf and construction of two mooring Page 9 dolphins to facilitate the approach and berthing of large vessels at berth 9. (ii) Strengthening AGP's general and cost accounting, and management information systems, and developing a cost-based tariff structure, including the acquisition and utilization of equipment required for the purpose. Part C: (i) Improvement of the safety systems of grain elevator No. 3. (ii) Improvement of grain elevators' safety systems in the ports referred to in Section 2.06 of the JNG Project Agreement. (iii) execution of a pilot project consisting of the reorganization of JNG's repair and maintenance systems at the Rosario grain terminals. (iv) Carrying out the final engineering studies for a second phase of the Project. * * * The Project is expected to be completed by June 30, 1993. SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (Expressed in Dollars) On each February 1 and August 1 beginning February 1, 1991 2,085,000 through February 1, 2002 On August 1, 2002 2,045,000 Premiums on Prepayment The following premiums are specified for the purposes of Section 3.04 (b) of the General Conditions: Time of Prepayment Premium The interest rate (expressed as a percentage per annum) applicable to the balance outstanding on the Loan on the day of prepayment multiplied by: Not more than three year .20 before maturity More than three years but .40 not more than six years before maturity More than six years but .73 not more than 11 years before maturity More than 11 years but not .87 more than 13 years before maturity More than 13 years before 1.00 maturity SCHDULE 4 Page 10 Special Account 1. For the purposes of this Schedule: (a) the term Category means a category of items to he financed out of the proceeds of the Loan as set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term eligible expenditures means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan allocated from time to time to Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation means an amount equivalent to $3,000,000 to be withdrawn from the Loan Account and deposited in the Special Account pursuant to paragraph 3 (a) of this schedule. 2. Except as the Bank shall otherwise agree, payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Bank has received evidence satisfactory to the Bank that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account may he made as follows: (a) On the basis of a request or requests by the borrower for a deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit in the special Account such amount or amounts as the Borrower shall have requested. (b) The Borrower shall furnish to the Bank requests for replenishment of the Special Account at such intervals as the Bank shall specify. On the basis of such requests, the Rank shall withdraw from the Loan Account and deposit into the special Account such amounts as shall be required to replenish the Special Account with amounts not exceeding the amount of payments made out of the Special Account for eligible expenditures. Each such deposit shall be withdrawn by the Bank from the Loan Account under the respective Categories, and in the respective equivalent amounts, as shall have been justified by the evidence supporting the request for such deposit furnished pursuant to paragraph 4 of this Schedule. 4. For each payment made by the Borrower out of the Special Account for which the Borrower requests replenishment pursuant to paragraph 3 (b) of this schedule, the Borrower shall furnish to the Bank, prior to or at the time of such request, such documents and other evidence as the Bank shall reasonably request, showing that such payment was made for eligible expenditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Special Account shall be made by the Bank when either of the following situations first arises; (i) the Bank shall have determined that all further withdrawals can he made directly by the Borrower from the Loan Account in accordance with the provisions of paragraph (a) of Section 2.02 of this Agreement; or (ii) when the total unwithdrawn amount of the Loan allocated to Categories for the Project, minus the amount of any outstanding qualified agreement to reimburse made by the Bank and of any outstanding special commitment entered into by the Bank pursuant to Section 5.02 of the General Conditions with respect to the Project, shall be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal from the Loan Account of the remaining unwithdrawn amount of the Loan allocated to Categories for the Project shall follow such procedures as the Bank shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Bank shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice have been or will be utilized in making payments for eligible expenditures. 6. (a) If the Bank shall have determined at any time that any payment out of the Page 11 Special Account (i) was made for any expenditure or in any amount not eligible pursuant to paragraph 2 of this schedule, or (ii) was not justified by the evidence furnished pursuant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Bank, deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. No further deposit by the Bank into the Special Account shall be made until the Borrower has made such deposit or refund. (b) If the Bank shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Bank, refund to the Bank such outstanding amount for crediting to the Loan Account and immediate cancellation. SCHEDULE 5 Procurement and Consultant's Services Section I. Procurement of Works Part A: International Competitive Bidding 1. Except as provided in Part C hereof, goods and works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Section I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in August 1985 (the Guidelines). 2. Bidders for the works and equipment included in Part A (ii) of the Project shall be prequalified as described in paragraph 2.10 of the Guidelines. Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A.1 hereof, goods manufactured in Argentina may be granted a margin of preference in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraphs 1 through 4 of Appendix 2 thereto. Part C: Other Procurement Procedures 1. Civil works estimated to cost the equivalent of $2,000,000 or less, and equipment estimated to cost $300,000 or less, may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Bank, which shall include, inter alia, the following: (a) foreign contractors shall be allowed to participate in any such bidding; (b) foreign contractors shall not be required to associate with local contractors as a condition for their participation in the bidding process; (c) bids shall be evaluated on a CIF basis, taking into account the freight costs freely quoted by each bidder; and (d) no limitation shall be imposed or importation of goods quoted by bidders. 2. Components and spare parts for mechanical and electrical systems for silo safety under Part C (i) and (ii) of the Project may be procured under contracts awarded on the basis of price quotations solicited from a list of at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Bank. Part D: Review by the Bank of Procurement Decisions 1. Review of prequalification: With respect to the prequalification of bidders as provided in Part A.2 hereof, the procedures set forth in paragraph 1 of the Appendix 1 to the Guidelines shall apply. 2. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract estimated to cost more than the equivalent of $500,000, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Page 12 Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Bank pursuant to said paragraph 2 (d) shall be furnished to the Bank prior to the making of the first payment out of the Special Account in respect of such contract. (b) With respect to each contract not governed by the preceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, said procedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Bank pursuant to said paragraph 3 shall be furnished to the Bank as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 4 to this Agreement. (c) The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Bank has authorized withdrawals from the Loan Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agreement, Section 4.01 (c) (ii) of the AGP project Agreement and Section 4.01 (c) (ii) of the JNG Project Agreement. 3. The figure of 20% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower, AGP and JNG in carrying out their respective Parts of the Project, the Borrower, AGP and JNG, as the case may be, shall employ consultants and experts whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Such consultants and experts shall be selected in accordance with principles and procedures satisfactory to the Bank on the basis of the Guidelines for the Use of Consultants by World Bank Borrowers and by The World Bank as Executing Agency" published by the Bank in August 1981.