China - Dalian Port Project : Credit 1875 - Project Agreement - Conformed

OFFICIAL CREDIT NUMBER 1875 CHA LOAN NUMBER 2907 CHA Project Agreement (Dalian Port Project) among INTERNATIONAL DVELOPMENT ASSOCIATION and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and PORT OF DALIAN AUTHORITY Dated , 1988 CREDIT NUMBER 1875 CHA LOAN NUMBER 2907 CHA PROJECT AGREEMENT AGREEMENT, dated 7 , 1988, among INTERNATIONAL DEVELOPMENT ASSOCIATTON (the Association), INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and PORT OF DALIAN AUTHORITY (the Port Authority). WHEREAS (A) by the Development Credit Agreement of even date herewith between the People's Republic of China (the Borrower) and the Association, the Association has agreed to lend to the Borrower an amount in various currencies equivalent to eighteen million two hundred thousaInd Special Drawing Rights (SDR 18,200,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that the Port Authority agree to undertake such obligations toward the Association as are set forth in this Agreement; (B) *by the Loan Agreement of even date herewith between the Borrower and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to seventy-one million dollars ($71,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Port Authority agree to undertake such obligations toward the Bank as are set forth in this Agreement; (C) by a subsidiary loan agreement to be entered into between the Borrower and the Port Authority, the proceeds of the Credit and the Loan provided for under the Development Credit Agreement and the 'Loan Agreement, respectively, will be made available to the Port Authority on the terms and conditions set forth in said Subsidiary Loan Agreement; and WHEREAS the Port Authority, in consideration of the Associa- tion's entering into the Development Credit Agreement with the Borrower, and the Bank's entering into the Loan Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the Development Credit Agreement and in -2- the General Conditions (as so defined) and in the Loan Agreement and the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) The Port Authority declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement, and, to this end, the Port Authority shall carry out Parts A, C and D of the Project with the Borrower's assistance, and shall assist the Borrower in carrying out Part B of the Project, with due diligence and.effi- ciency and in conformity with appropriate administrative, finan- cial, engineering and port practices, and shalloprovide, or cause to be provided, promptly as needed, the funds, facilities, ser- vices and other resources required for Parts A, C and D of the Project. (b) Without Jimitation upon the provisions of paragraph (a) of this Section and except .the Association, the Bank and the 'Port Authority shall otherypise. agree, the Port Authority shall carry out Part C of the Project in accordance with the Imple- mentation Program set forth in the Schedule to this Agreement. Section 2.02. Except as the Association and 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 Credit and of the Loan shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. Section 2.03. The Port Authority shall carry out the obli- gations set forth in Sections 9.03, 9.04, 9.05, 9,06, 9.07 and 9.08v of the General Conditions applicable to the Development Credit Agreement and in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of, the General Conditions applicable to the Loan Agreement (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of the Project Agreement and Parts A, C and D of the Project. Section 2.04. The Port: Authority shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Association and the Bank shall otherwise agree, the Port Autho- rity shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Sub- sidiary Loan Agreement or any provision thereof. Section 2.05. (a) The Port Authority shall, at the request of the Association or the Bank, exchange views with the Associa- tion or the Bank with regard to the progress of Parts A, C and D of the Project, the performance of its obligations under this Agreement and under the Subsidiary Loan Agreement, and other matters relating to the purposes of the Credit and the Loan. (b) The Port Authority shall promptly inform the Associa- tion and the Bank of any condition which interferes or threatens to interfere with the progress of Parts A, C and D of the Project, the accomplishment of the purposes of the Credit and the Loan, or the performance by the Port Authority of its obligations under this Agreement and under the Subsidiary Loan Agreement. ARTICLE III Nanagement and Operations of the Port Authority Section 3.01. The Port Authority shall carry on its opera- tions and conduct its affairs in accordance with sound adminis- trative, financial and port practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. The Port Authority shall at all times operate and maintain 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 port practices. Section 3.03, The Port Authority shall take out and maintain with responsible insurers, or make other provision satisfactory to the Association and the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.04. Except as the Association and the Bank may otherwise agree, the term "Port Authority" shall include all enterprises and units which are under the control of the Port Author'lty. -4- ARTICLE IV Financial and Other Covenants Section 4.01. (a) The Port Authority shall maintain, or cause to be maintained, records and accounts adequate to reflect in accordance with sound accounting practices: (i) its operations and financial condition; and (ii) the operations, resources and expenditures in respect of Parts A, C and D of the Project. (b) The Port Authority shall: i have said records, accounts and financial state- ments (balance sheets, statements of income and of sources and application of funds), for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association and the Bank; (ii) furnish to the Association and the Bank as soon as available, but in any case not later than six months after the end of each such year, (A) certi- fied copies of its financial statements for such year as so audited and (B) the report of such audit by s-id auditors of such scope and in such detail as the Association and the Bank shall have reasonably requested; and (iii) furnish to the Association and the Bank such other information concerning said records, accounts and financial statements as well as the audit thereof and said records, as the Association and the Bank shall from time to time reasonably request. Section 4.02. (a) Except as the Association and the Bank shall otherwise agree, the Port Authority shall from time to time take, or cause to be taken, all such measures (including, without limitation, adjustments of the levels of its tariffs as deter- mined by the Borrower) as shall be required to produce, for each of its fiacal years after its fiscal year ending on December 31, 1988 total revenues equivalent to not less than the sum of (i) its total operating expenses, and (ii) the amount by which its financial obligations exceed the provision for depreciation and any other non-cash operating expenses. -5- (b) For the purposes of this Section: (i) The term "total revenues" means the sum of reve- nues from all sources related to port operations and net non-operating income. (ii) The term "total poerating expenses" means the sum of all expense related to port operations, including maintenance, administration, and depre- ciation. (iii) The term "financial obligations" means interest and other charges on debt, repayment of loans (including sinking fund payments, if any), all taxes or payments in lieu of taxes, allocations to special funds and other cash distributions of surplus (including mandatory transfers to the Borrower), and any other cash outflows (other than capital expenditures) related to port operations. Section 4.03. The Port Authority shall: (a) by April 30 of each year, commencing April 30, 1989, prepare and furnish to the Association and the Bank a financial plan containing, inter alia, projected traffic, revenues, costs, capital expenditures and a financing plan for the current year and each of the next four years. (b) exchange views annually with the Association, the Bank and the Borrower on such financial plans. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which both the Development Credit Agree- ment and the Loan Agreement become effective. Section 5.02. (a) This Agreement and al -obligations of the Association, the Bank and the Port Authority thereunder shall terminate on the earlier of the following dates: (i) the date on which both the Development Credit Agreement and the Loan Agreement shall have terminated; or -6- (ii) the date twenty years after the date of this Agreement. (b) If the Development Credit Agreement or the Loan Agree- ment or both of said Agreements terminate in accordance with their respective terms before the date specified in paragraph (a) (ii) of this Section, the Association or the Bank or both, as the case may be, shall promptly notify the Port Authority of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- tion or suspension under the General Conditions applicable to the Development Credit Agreement or the Loan Agreement.' 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 Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) -7- 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) For the Port Authority: Port of Dalian Authority 1 Gangwan Street Zhongshan District Dalian People's Republic of China Cable address: Telex: 3155 86246DHAB CN 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 the Port Authority, or by the Port Authority on behalf of the Borrower under the Development Credit Agreement or the Loan Agreement, may be taken or executed by its Director or such other person or persons as its Director shall designate in writing, and the Port Authority shall furnish to the Association and the Bank sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. As long as the Bank has not given notice to the contrary to the Port Authority, and so long as the Develop- ment Credit Agreement shall not have terminated prior to the termination of the Loan Agreement: (a) the obligations of the Port Authority to consult with, and to furnish information, documents, plans, reports, records and statements to, the Bank shall be satisfied to the extent performance in respect of such obligations is rendered to the Association; -8- (b) the obligations of the Bank to consult with, and to furnish information to the Port Authority shall be satisfied to the extent such obligations are fulfilled by the Association; and (c) all actions taken (including the giving of approvals or the granting of waivers) by the Association pursuant to the Development Credit Agreement shall be deemed to be taken pursuant to both the Development Credit Agreement and the Loan Agreement, and in the name and on behalf of both the Association and the Bank. Section 6.04. 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 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. INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ByIy Regional Vice President Asia PORT OF DALIAN AUTHORITY By Authorized Representative - 10 - SCHEDULE Implementation Program 1. The Port Authority shall carry out the training under Part C (1) of the Project in accordance with a program agreed with the Association and the Bank. 2. The Port Authority shall carry out Part C (2) of the Project in accordance with terms of reference and timing agreed with the Association and the Bank, complete it by December 31, 1989 and exchange views with the Bank on the findings and recommendations arising therefrom. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Bank for Reconstruction and Development and the International Development Associatidn. FOR SECRETARY