Conformed Copy - L2896 - Highways Maintenance and Rehabilitation Project - Loan Agreement

Page 1 LOAN NUMBER 2896 TUN Loan Agreement (Highways Maintenance and Rehabilitation Project) between REPUBLIC OF TUNISIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated January 15, 1988 LOAN NUMBER 2896 TUN LOAN AGREEMENT AGREEMENT, dated January 15, 1988, between REPUBLIC OF TUNISIA (the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS 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; 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; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions 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) "MEH" means Ministere de I'Equipment et de 1'Habitat, the Borrower's Ministry of Public Works, Housing and Transport; Page 2 (b) "DGPC" means Direction Generale des Ponts et Chaussees, the Highway Department in MEH; (c) "DRAL" means Direction de la Recherche Appliquee et du Laboratoire, the Central Laboratory and Applied Research Directorate in MEH; (d) "OFPP" means Office de la Formation et Promotion Professionnelle, the Borrower's institution responsible for vocational promotion and training; (e) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; and (f) "Fiscal Year" means the Borrower's fiscal year which runs from January 1 to December 31. 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 currencies equivalent to sixty-- three million dollars ($63,000,000). 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 (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, for expenditures made (or, if the Bank shall so agree, to be made) in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 its Central Bank 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 5 to this Agreement. Section 2.03. The Closing Date shall be June 30, 1995 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. Page 3 (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 June 1 and December 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, shall carry out the Project through DGPC with due diligence and efficiency and in conformity with appropriate financial, administrative and engineering practices, all in accordance with an action plan acceptable to the Bank, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. Section 3.02. The Borrower shall: (a) carry out a technical and economic evaluation of those sections of its road network it proposes to include for rehabili- tation under Part A (4) of the Project; (b) on the basis of said evaluation and in accordance with a methodology and criteria acceptable to the Bank select priority roads for rehabilitation under Part A (4) of the Project; and (c) prior to advertising the invitation to bid for any contract for works to be carried out under said Part A (4) of the Project, furnish to the Bank for its review and approval detailed information concerning the roads so selected. Section 3.03. For purposes of strengthening the personnel management and training systems of DGPC, the Borrower shall: (a) establish and maintain a Training Directorate to be headed by an experienced Director with qualifications satisfactory to the Bank and appoint and maintain qualified and experienced staff required for the purpose. Such Directorate shall be responsible inter alia, for: (i) liaising with, agencies outside of MEH in charge of training of personnel, vocational education and training institutions within the Borrower's territory as well as outside; (ii) organizing seminars and fellowship programs; and (iii) establishing and implementing a training monitoring system; and (b) establish and maintain a Steering Committee within DGPC. Such Steering Committee shall be responsible inter alia, for: (i) preparing the general outline of the Training Directorate's annual work program; (ii) approving the training plan and programs prepared by such Directorate and allocating the necessary resources; and (iii) reviewing the training actions undertaken and designing measures to improve such training. Section 3.04. For purposes of strengthening the maintenance and operation systems within MEH, the Borrower shall: (a) establish and maintain a Road Maintenance Organization and Method Unit to be chaired by an experienced manager with qualifications satisfactory to the Bank; and (b) appoint and maintain qualified and experienced staff required for the purpose. Such Unit shall be responsible inter alia, for: (i) improving the methods and guidelines for maintenance operations; and (ii) coor- dinating with the Equipment Maintenance Directorate and Training Page 4 Directorate and providing technical assistance at the regional level. Section 3.05. 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 4 to this Agreement. ARTICLE IV Financial Covenant Section 4.01. (a) The Borrower shall maintain or cause to be maintained 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 records and accounts referred to in paragraph (a) of this Section, including those for 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 nine months after the end of each such year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information con- cerning said records and 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 from the Loan Account were made on the basis 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, 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 records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. ARTICLE V Effective Date; Termination Section 5.01. 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: Page 5 (a) that the Training Directorate referred to in Section 3.03 (a) of this Agreement has been established and its Director has been appointed; (b) that the Steering Committee referred to in Section 3.03 (b) has been established; and (c) that the Road Maintenance Organization and Method Unit referred to in Section 3.04 (a) has been established and its head has been appointed. Section 5.02. The date one hundred twenty (120) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. The Ministry of Planning 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 purposes of Section 11.01 of the General Conditions: For the Borrower: Ministere du Plan 7, Place Ali Zouaoui Tunis Republic of Tunisia Cable address: Telex: MIPLAN MIPLAN 15117TN TUNIS 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. REPUBLIC OF TUNISIA By/s/ Habib Ben Yabin Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Page 6 By/s/ Kemal Dervis Acting Regional Vice President Europe, Middle East and North Africa 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: (a) under Part A (2) 1,000,000 38% of the Project (b) under Part A (4) 30,500,000 57% of the Project (c) under Part A (5) 6,200,000 63% of the Project (2) Equipment under 16,500,000 100% of Parts A (3) foreign Parts A (3), expenditures B (3) and C (5) and 78% of the Project local ex- penditures for items procured locally (3) Consultants' 1,450,000 83% services under Parts B (1) and C of the Project (4) Fellowships 450,000 100% under Part B (2) of the Project (5) Unallocated 6,900,000 ___________ TOTAL 63,000,000 ============ 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 (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. SCHEDULE 2 Page 7 Description of the Project The objective of the Project is to assist the Borrower in maximizing the use of available resources in the highway subsector, in particular through improving managerial and planning techniques. The Project includes a five-year action plan which is designed to, inter alia: (i) strengthen the Borrower's road maintenance and road rehabilitation capacity; (ii) provide training to DGPC personnel; and (iii) improve the organization and structure of the Borrower's highway sub-sector. The Project 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 objective: Part A: Road Maintenance and Rehabilitation 1. Carrying out of annual programs for the routine and periodic maintenance of the Borrower's roads. 2. Construction of workshop facilities. 3. Provision of road maintenance equipment, traffic equipment, workshop and laboratory equipment for the carrying out of main- tenance and rehabilitation programs. 4. Carrying out of annual programs for the rehabilitation, including pavement strengthening and road widening, of about 800 km of the Borrower's roads. 5. Carrying out of annual programs of asphaltic concrete overlays on about 225 km of the Borrower's roads. Part B: Human Resources Development 1. Strengthening the personnel management and training systems by: (i) The carrying out of annual programs for the training of DGPC staff in road maintenance and mechanical engineering; (ii) establishing a training directorate at DGPC; and (iii) establishing a steering committee and ad hoc technical panels at DGPC. 2. Provision of fellowships and overseas training for DGPC engineers, high level staff and instructors from institutions such as OFPP. 3. Provision of equipment and didactic materials for the training of DGPC staff. Part C: Institution Building and Studies 1. Establishing an Organization and Methods Unit at DGPC. 2. Strengthening the maintenance of mechanical equipment at DGPC. 3. Strengthening laboratory services at DRAL. 4. Carrying out economic and engineering studies for the implementation of the civil works rehabilitation program. 5. Provision of computer equipment and material. The Project is expected to be completed by September 30, 1994. Page 8 SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each June 1 and December 1 beginning June 1, 1992 through June 1, 2004 2,425,000 On December 1, 2004 2,375,000 ______________________ * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal. See General Conditions, Sections 3.04 and 4.03. 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 (ex- pressed as a percentage per annum) applicable to the balance outstanding on the Loan on the day of prepayment multiplied by: Not more than three years 0.18 before maturity More than three years but 0.35 not more than six years before maturity More than six years but 0.65 not more than eleven years before maturity More than eleven years but not 0.88 more than fifteen years before maturity More than fifteen years 1.00 before maturity Page 9 SCHEDULE 4 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A. International Competitive Bidding 1. Except as provided in Part B hereof, goods and works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines). 2. To the extent practicable, contracts for road rehabilitation under Part A (4) of the Project shall be grouped geographically in bid packages estimated to cost the equivalent of $4,000,000 or more each. Part B. Other Procurement Procedures 1. Small items and specialized equipment under Part A (3), B (3) and C (5) of the Project estimated to cost less than the equivalent of $100,000 per contract up to an aggregate amount not to exceed the equivalent of $500,000 may be procured under contracts awarded through limited international bidding proce- dures on the basis of evaluation and comparison of bids invited from a list of at least three qualified suppliers eligible under the Guidelines and in accordance with the procedures set forth in Sections I and II of the Guidelines (excluding paragraphs 2.8, 2.9, 2.55 and 2.56 thereof). 2. Civil works under Part A (2) and (5) of the Project may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Bank. Part C. Review by the Bank of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to all contracts under the Project except civil works contracts under Part A (2) and (5) of the Project and small items under Parts A (3), B (3) and C (5) of the Project, the procedures set forth in paragraphs 2 and 4 of Appendix I to the Guidelines shall apply. Where payments for such contract are to be made out of the 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 5 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. Page 10 2. The figure of 15% is hereby specified for purposes of para- graph 4 of Appendix I to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower in the execution of Parts B (1) and C (1), (2), (3) and (4) of the Project, the Borrower shall employ engineering, management and training consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Such consultants 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. SCHEDULE 5 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1) to (4) 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, works and services required for the Project and to be financed out of the proceeds of the Loan allocated from time to time to the eligible 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 it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account may be 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 Bank 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. All such deposits shall be withdrawn by the Bank from the Loan Account under the respective eligible 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. Page 11 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 should be made directly by the Borrower from the Loan Account in accordance with the provisions of Article V of the General Conditions and of paragraph (a) of Section 2.02 of this Agreement; or (ii) the total unwithdrawn amount of the Loan allocated to the eligible Categories, 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 the eligible Categories 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 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.