Conformed Copy - C2486 - Third Telecommunications Project - Amendment

Page 1 August 12, 1996 His Excellency Simon Mbilinyi Minister of Finance Ministry of Finance P.O. Box 9111 Dar es Salaam, Tanzania Dear Sir: Re: Credit 2486 - TA -(Third Telecommunications Project) Amendment to Development Credit Agreement We refer to the Development Credit Agreement (the Agreement) dated July 26, 1993, between United Republic of Tanzania (the Borrower) and International Development Association (the Association), as amended to date, and to discussions held during the recent supervision mission of the Association. To facilitate the carrying out of the Project, the Association proposes that the Agreement be further amended as follows: 1. Section 1.02 is amended as follows: (a) the deletion of definition (c) "Subsidiary Loan Agreement" and the substitution therefor of the following new definition: "(c) 'Subsidiary Loan Agreement' means the agreement entered into between the Borrower and TPTC pursuant to Section 3.01 (d) of this Agreement, as the same may be amended from time to time, and such term includes any schedules to the Subsidiary Loan Agreement and any amendments substituting TPTC's successor entity, TTCL as a party to the Subsidiary Loan Agreement;'; (b) the deletion of definition (d) "TTCL" and the substitution therefor of the following new definition: "(d) 'TPTC' means the former Tanzania Posts and Telecom- munications Corporation, established pursuant to the Tanzania Posts and Telecommunications Act, No. 15 of 1977 as replaced by TCC, TTCL and TPC or other successor entity or entities established by the Borrower to carry out the functions and responsibilities of TPTC;'. (c) the deletion of the word "and" occurring immediately after definition (k): "Program"; and (d) the addition of the following new definitions immediately after definition: (l) "Donors": (m) "TCC" means the Tanzania Communications Commission, a statutory body established pursuant to the Tanzania Communications Commission Act, No 18 of 1993; (n) "TTCL" means the Tanzania Telecommunications Company Limited, a limited liability company established under the Companies Ordinance, pursuant to the Tanzania Telecom- munications Company Limited Act No 20 of 1993; (o) "TPC" means the Tanzania Postal Corporation, a statutory body established pursuant to the Tanzania Posts Corporation Act No. 19 of 1993; (p) "the Relevant Acts" means: (i) the Tanzania Communica- tions Commission Act 1993; (ii) the Tanzania Telecommunica- tions Company Limited Act 1993; and (iii) the Tanzania Posts Act 1993; and 2. Paragraph (b) of Section 2.02 (b) is deleted and following new paragraph is substituted: Page 2 "(b) The Borrower shall, for the purposes of the Project, open and maintain in its central bank in dollars three special deposit accounts, namely: (i) Special Account A for TCC with respect to Parts A.1-3 and A. 5-6; (ii) Special Account B for TTCL with respect to Parts A.4, B.1-6 and C.1-6; and (iii) Special Account C for TPC with respect to Parts B.7 and C.7 of the Project, on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure or attachment."; 3. Section 2.09 is deleted and the following new Section is sub- stituted: "Section 2.09. TCC, TTCL and TPC with respect to their respective Parts of the Project, shall be designated as representative of the Borrower for the purposes of any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions."; 4. Section 3.01 (a) and (b) are deleted and the following is substituted: "Section 3.01. (a) The Borrower declares its commitment to the objectives of the Program and the Project as set forth in Schedule 2 to this Agreement and to this end shall cause TCC and TPC respectively to carry out Parts A.1-3, A.5-6, and B.7 and C.7 respectively of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial and telecommunications practices and shall provide, promptly as needed, the funds, facilities, services and other resources required for such Parts of the Project. (b) Without any limitation or restriction upon any of its other obligations under this Agreement, the Borrower shall, cause, TTCL to perform in accordance with the provisions of the Project Agreement, all the obligations of, TTCL 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 TTCL to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance." 5. Paragraph (d) of Section 5.01 is deleted and the following new paragraph substituted: "(d) Any of the Relevant Acts shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of TCC, TTCL or TPC, as the case may be, to perform any of its obligations under the Project Agreement."; 6. The table in paragraph 1 of Schedule 1 to the Agreement is amended to read as in Attachment 1 to this letter. 7. Schedule 2 is amended by the deletion of Part A.2 and the sub- stitution of the following: "2. Establishment of a regulatory body to regulate telecommunications activities, including licensing, tariffs and frequency management, and the acquisition of vehicles and equipment to support such activities." 8. Schedule 3 is amended by the addition of what appears in Attachment 2 to this letter before "Consultants' Services". 9. Paragraph 1(a) of Schedule 4 is deleted and the following new paragraph is substituted: Page 3 (a) the term "eligible Categories" means Categories (2)(a), (3)(a) and (4)(a) for Special Account A, Categories (1), (2)(b), (3)(b) and (4)(b) for Special Account B and Categories (2)(c), (3)(c) and (4)(c) for Special Account C set forth in paragraph 1 of Schedule 1 to this Agreement;'; 10. Paragraph 1 (c) of Schedule 4 is deleted and the following new paragraph is substituted: (c) the term "Authorized Allocation" means an amount to be withdrawn from the Credit Account and deposited into a Special Account pursuant to paragraph 3 (a) of this Schedule equivalent in the case of: (i) Special Account A to $500,000; (ii) Special Account B to $4,000,000; and (iii) Special Account C to $500,000.' All other provisions of the Agreement, except as amended herein, shall remain in full force and effect. Please confirm your agreement to the amendments by countersigning, dating and returning to us the enclosed copy of this letter. This amendment shall become effective as the date of countersignature. Sincerely, Thomas Allen Acting Director Tanzania, Uganda Attachment CONFIRMED: UNITED REPUBLIC OF TANZANIA By : Peter Ngumbullu Authorized Representative Date: September 4, 1996 cc: The Director General Tanzania Communications Commission P.O. Box 474 Dar es Salaam Managing Director Tanzania Telecommunications Company Limited P.O. Box 9070 Dar es Salaam Postmaster General Tanzania Postal Corporation P.O. Box 9551 Dar es Salaam Attachment 2 The table in paragraph 1 of Schedule 1 to the Agreement is amended to read as follows: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Equipment and 38,800,000 100% of foreign installation under expenditures Page 4 Parts C.1-3 of the Project (2) Vehicles, computers 100% of foreign and office equipment: expenditures (a) for Part A.2 240,000 of the Project (b) for Parts C.4 and 4,850,000 6 of the Project (c) for Part C. 7 1,200,000 of the Project (3) Training: 100% of foreign expenditures and 90% of local expenditures (a) for Part A.5 370,000 of the Project (b) for Parts B.4-6 550,000 of the Project (c) for Part B.7 350,000 of the Project (4) Consultants' services 100% (a) for Parts A.2, 480,000 A.3 and A.6 of the Project (b) for Parts A.4, 2,400,000 and B.1 through 4 of the Project (c) for Part B.7 350,000 of the Project (5) (a) Postal equipment 290,000 100% of foreign and vehicles expenditures for Part C.7 of the Project (b) Consultants' 190,000 100% services and training for Part B. 7 of the Project (6) Project 520,000 Refunding of Preparation Amounts due Advance pursuant to Section 2.02 (c) of this Agreement (7) Unallocated 3,010,000 __________ TOTAL 53,600,000 ========== Attachment 2 Procurement and Consultant's Services Section I: Procurement of Goods Page 5 Part A: International Competitive Bidding 1. Except as provided in Part C hereof, goods 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 1992 (the Guidelines). For fixed price contracts, the invitation to bid referred to in paragraph 2.13 of the Guidelines shall provide that, when contract award is delayed beyond the original bid validity period, the successful bidder's bid price will be increased for each week of delay by two predisclosed correction factors acceptable to the Association, one to be applied to all foreign currency components and the other to the local currency component of the bid price. Such an increase shall not be taken into account in the bid evaluation. 2. To the extent practicable, contracts for goods shall be grouped into bid packages. 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 Tanzania 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 Items or groups of items for goods estimated to cost the equivalent of $100,000 or less per contract, up to an aggregate amount equivalent to $400,000, may be procured under contracts awarded on the basis of comparison of price quotations obtained from at least three suppliers from three countries eligible under the Guidelines, in accordance with procedures acceptable to the Association. Part D: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract for goods estimated to cost the equivalent of $250,000 or more, the procedures set forth in para- graphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to 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 Association pursuant to said paragraph 2 (d) shall be furnished to the Associa- tion prior to the making 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 made out of the Special Account, such 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 Association pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 3 to the Development Credit Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which withdrawals form the Credit Account are to be made on the basis of statements of expenditure. 2. The figure of 15% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Page 6