Conformed Copy - C2646 - Tax Administration Modernization Project - Amendment

Page 1 July 23, 1998 His Excellency Mr. Arben Malaj Minister of Finance Ministry of Finance and Economy Bulevardi "Deshmoret e Kombit" Albania Re: ALBANIA: Credit 2646-ALB (Tax Administration Modernization Project) Amendment to the Development Credit Agreement Excellency: We refer to the Credit Agreement (Tax Administration Modernization Project) dated August 22, 1994, between Albania (the Borrower) and the International Development Association (the Association). We also refer to your letter, dated January 5, 1998 requesting that the Credit Agreement be amended. We are pleased to inform you that the Association agrees to the above request and the Credit Agreement is amended as follows: 1. Paragraph 1 of Schedule 1 is modified and the proceeds of Credit now reads as follows: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed 1. Civil works 430,000 100% 2. Goods 1,390,000 100% of foreign expenditures, 100% of local expenditures (ex-factory cost) and 85% of local expenditures for other items procured locally 3. Refunding of Project 95,240 Amounts due Preparation Advance pursuant to Section 2.02 (c) of this Agreement. 4. Unallocated 65,760 5. Civil Works 430,000 80% TOTAL 2,830,000 2. The following is a modified Part C to be inserted in Schedule 2: "Part C: Establishment of Pilot Units Establishment of about nine pilot units of which one will be in Tirana to implement a computer-based system for monitoring compliance with basic tax obligations 3. The following is a new Part E to be added in Schedule 2 : "Part E : Improvement of Tirana Tax Office The carrying out of works and the provision of equipment for an annex to the Tirana Tax Office. Page 2 4.. The completion date for the Project, indicated in Schedule 2 of the Agreement is changed to December 31, 1999. 5. In Schedule 3, the word " works " is added to Section 1, the aggregate amounts in paragraphs (1) and (2) of Part C are increased to $750,000 and $150,000 respectively, and the following paragraphs (3) and (4) are added to Part C of the Schedule: "Part C: 3. Works estimated to cost less than $500,000 equivalent per contract, up to an aggregate amount not to exceed $500,000 equivalent, may be procured under contracts awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines." "Part C: 4. Works estimated to cost less than $20,000 equivalent per contract, up to an aggregate amount not to exceed $70,000 equivalent, may be procured under lump-sum, fixed-price contracts awarded on the basis of quotations obtained from three (3) qualified domestic contractors in response to written invitation. The invitation shall include a detailed description of the works, including basic specifications, the required completion date, a basic form of agreement acceptable to the Association, and relevant drawings, where applicable. The award shall be made to the contractor who offers the lowest price quotation for the required work, and who has the experience and resources to complete the contract successfully." Please confirm your agreement to the foregoing amendment by signing, dating and returning to us the attached copy of this letter. This amendment shall become effective upon our receipt of the countersigned copy of this amendment letter. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Julius Varallyay Acting Country Director Albania and Croatia Country Unit Europe and Central Asia Region CONFIRMED: ALBANIA By /s/ Arben Malaj Authorized Representative Date: July 30, 1998