Haiti - Road Maintenance And Rehabilitation Project : Credit 2691 - Credit Agreement - Conformed

CREDIT NUMBER 2691-HA DEVELOPMENT CREDIT AGREEMENT (Road Maintenance and Rehabilitation Project) between REPUBLIC OF HAITI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated ,199_ CREDIT NUMBER 2691-HA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated , 199_3between REPUBLIC OF HAITI (the Borrower) and INTERN'ATIONAL DEVELOPMENT ASSOCIATION (the Association). 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 Association to assist in the financing of the Project; (B) the Borrower intends to contract from the Inter-American Development Bank (IDB) a loan (the IDB Loan) in an amount equivalent to $45,000,000 to assist in financing part of the Project on the terms and conditions set forth in an agreement (the IDB Loan Agreement) to be entered into between the Borrower and IDB; (C) the Borrower intends to contract from the European Union (EU) a grant (the EU Grant) in an amount equivalent to $20,000,000 to assist in financing part of the Project on the terms and conditions set forth in an agreement (the EU Grant Agreement) to be entered into between the Borrower and EU; and (D) the Borrower intends to contract from Kreditanstalt ffir Wiederaufbau (KfW) a loan (the KfW Loan) in an amount equivalent to $5,000,000 to assist in financing part of the Project on the terms and conditions set forth in an agreement (the KfW Loan Agreement) to be entered into between the Borrower and KfW; and WHEREAS the Association has agreed, on the basis, inter alia of the foregoing, to extend the Credit 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 Development Credit Agreements" of the Association, 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 -2- meanings therein set forth and the following additional terms have the following meanings: (a) "Annual Road Program" means any of the programs referred to in Section 3.06 (a) of this Agreement; (b) "Annual Road Programs Action Plan" means the action plan described in the letter from the Borrower to the Association of even date herewith (Supplemental Letter No. 1); (c) "Eligible Maintenance Subproject" means specific maintenance works to be: (i) carried out under Part B of the Project; (ii) financed out of the proceeds of the Credit; and (iii) included in the respective Road Program (as hereinafter defined); (d) "Eligible Rehabilitation Subproject" means specific rehabilitation works to be: (i) carried out under Part A of the Pioject; (ii) financed out of the proceeds of the Credit; and (iii) included in the respective Road Program (as hereinafter defined); (e) "Fiscal Year" means the Borrower's fiscal year, which begins on October 1 and ends on September 30 of each year; (f) "Ministry" means the Borrower's Ministry of Public Works, Transport and Communications; (g) "Ministry's Reorganization Plan" means the Ministry's reorganization plan described in the letter from the Borrower to the Association of even date herewith (Supplemental Letter No. 2); (h) "Project Coordinating Unit" means the unit referred to in Section 3.04 of this Agreement; (i) "Project Preparation Advance" means the Project preparation advance granted by the Association to the Borrower pursuant to an exchange of letters dated November 27, 1990 and December 11, 1990 between the Borrower and the Association; (j) "Road Maintenance Financing Mechanism" means the Borrower's financing mechanism to be prepared in accordance with the terms of reference described in the letter from the Borrower to the Association of even date herewith (Supplemental Letter No. 3); -3- (k) "Training Program" means the Borrower's program described in the letter from the Borrower to the Association of even date herewith (Supplemental Letter No. 4); and (1) "Twinning Arrangement" means the arrangement referred to in Section 3.13 of this Agreement. ARTICLE I The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to thirty-four million six hundred Special Drawing Rights (SDR 34,600,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Association 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 Credit. (b) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. Section 2.03. The Closing Date shall be December 31, 2001 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge on the principal amount of the Credit not withdrawn from time to time at a rate to be set by the Association as of June 30 of each year, but not to exceed the rate of one-half of one percent (1/2 of 1%) per annum. (b) The commitment charge shall accrue: (i) from the date sixty days after the date of this Agreement (the Accrual Date) to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or cancelled; and (ii) at the rate set as of the June 30 immediately preceding the Accrual Date and at such other rates -4- as may be set from time to time thereafter pursuant to paragraph (a) above. The rate set as of June 30 in each year shall be applied from the next date in that year specified in Section 2.06 of this Agreement. (c) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semiannually on January 1 and July 1 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each January 1 and July 1 commencing July 1, 2005 and ending January 1, 2035. Each installment to and including the installment payable on January 1, 2015 shall be one percent (1%) of such principal amount, and each installment thereafter shall be two percent (2%) of such principal amount. (b) Whenever: (i) the Borrower's gross national product per capita, as determined by the Association, shall have exceeded $790 in constant 1985 Dollars for five consecutive years; and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the Association may, subsequent to the review and approval thereof by the Executive Directors of the Association and after due consideration by them of the development of the Borrower's economy, modify the terms of repayment of installments under paragraph (a) above by requiring the Borrower to repay twice the amount of each such installment not yet due until the principal amount of the Credit shall have been repaid. If so requested by the Borrower, the Association may revise such modification to include, in lieu of some or all of the increase in the amounts of such installments, the payment of interest at an annual rate agreed with the Association on the principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the judgment of the Association, such revision shall not change the grant element obtained under the above-mentioned repayment modification. -5- (c) If, at any time after a modification of terms pursuant to paragraph (b) above, the Association determines that the Borrower's economic condition has deteriorated significantly, the Association may, if so requested by the Borrower, further modify the terms of repayment to conform to the schedule of installments as provided in paragraph (a) above. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. 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, shall carry out the Project, through the Ministry, with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and environmental practices, and shall provide, promptly as needed, the funds, facilities, services and qther r.sources required for the Project. (b) Without limitation or restriction upon the provisions of paragraph (a) of this Section, the Borrower shall ensure that not less than the equivalent of $500,000, $1,000,000, $2,000,000 and $1,500,000 are allocated in the Borrower's budgets for Fiscal Years 1995-1996, 1996-1997, 1997-1998 and 1998-1999, respectively, to defray maintenance expenditures of the Borrower's road network. (c) Without limitation or restriction upon the provisions of paragraph (a) of this Section, the Borrower shall carry out the Project in accordance with the Ministry's Reorganization Plan, the Performance Indicators and the Training Program. Section 3.02. Except as the Association 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 shall be governed by the provisions of Schedule 3 to this Agreement. Section 3.03. Without limitation upon the provisions of Article IX of the General Conditions, the Borrower shall: (a) prepare and furnish to the Association, not later than six (6) months after the Closing Date or such later date as may be agreed for this purpose between the -6- Borrower and the Association, a plan, of such scope and in such detail as the Association shall reasonably request, for the continued achievement of the objectives of the Project; (b) afford the Association a reasonable opportunity to exchange views with the Borrower on said plan; and (c) thereafter, carry out said plan with due diligence and efficiency and in accordance with appropriate practices, taking into account the Association's comments thereon. Section 3.04. The Borrower shall maintain, until the establishment of the directorate referred to in Section 3.05 (a) (i) of this Agreement, a Project coordinating unit under the supervision of the Ministry's general directorate, to manage the implementation of the Annual Road Programs, such unit to be staffed by professionals with qualifications and experience satisfactory to the Association, assisted by other qualified staff in adequate numbers. Section 3.05. (a) As a part of the Ministry's Reorganization Plan, the Borrower shall, not later than December 31, 1996: (i) establish, within the Ministry: (A) a central road directorate separate from the central transport directorate, such directorate to be responsible for coordinating and overseeing the road units within the Ministry's nine regional departments and the special department for the metropolitan region of the city of Port-au-Prince; and (B) an environmental unit within the Ministry; and (ii) replace the Ministry's public works central directorate by a central urban directorate, responsible for coordinating and overseeing the urban units within the Ministry's regional departments referred to in subparagraph (a) (i) above, including the special department for the metropolitan region of the city of Port-au-Prince. (b) The Borrower shall ensure that the Ministry's directorates, departments and units referred to in paragraph (a) above will have functions and responsibilities satisfactory to the Association. Except as the Association shall otherwise agree, the -7- Borrower shall maintain the aforesaid administrative arrangements until completion of the Project. Section 3.06. (a) Not later than June 30 of the first three years of the execution of the Project, the Borrower shall prepare and furnish to the Association, for its approval, an annual road program, such program: (i) to be prepared on the basis of the economic, environmental, technical, institutional and financial criteria described in the Annual Road Program Action Plan; (ii) to comprise all road maintenance and rehabilitation works scheduled for the following Fiscal Year, including proposals for Eligible Rehabilitation Subprojects and Eligible Maintenance Subprojects, based upon a rolling plan for the three subsequent years, satisfactory to the Association; (iii) to take into account the implementation experience under previous Annual Road Programs, if any; (iv) to be linked to the budgetary process of the Borrower for the following Fiscal Year; and (v) to define clearly the volume of works to be executed by private contractors and by force account. (b) The Borrower shall carry out the works not financed under the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and environmental practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for such works. (c) For the purposes of paragraph (a) above, the Association shall only approve the Annual Road Programs, and the corresponding proposals for Eligible Rehabilitation Subprojects and Eligible Maintenance Subprojects if the Borrower has: (i) allocated the amounts set forth in Section 3.01 (b) of this Agreement for the corresponding Fiscal Years; and (ii) complied with the criteria described in the Annual Road Program Action Plan for the respective Fiscal Year. - 8- Section 3.07. (a) Prior to undertaking any investment in the transport sector estimated to cost the equivalent of more than $5,000,000, the Borrower shall: (i) carry out the required economic analyses and environmental assessments; (ii) determine the appropriate arrangements for future maintenance; and (iii) furnish to the Association, for its review and approval, the corresponding proposal. (b) For the purposes of subparagraph (a) (iii) above, the Association shall only approve investments which shall have been proven economically and environmentally sound, pursuant to methodologies satisfactory to the Association. Section 3.08. (a) The Borrower shall retain, at all times until completion of the Project, the services of: (i) a procurement advisory services firm to assist the Ministry at all stages of the bidding process of works to be financed out of the proceeds of the Credit; (ii) a firm of professional accountants to assist the Ministry in the withdrawal of the proceeds of the Credit and in the compliance with the financial covenants set forth in Article IV of this Agreement; and (iii) a road maintenance expert to assist the Ministry in the preparation and implementation of the Annual Road Programs. (b) The Borrower shall ensure that the firms and the professionals referred to in paragraph (a) above will have qualifications and experience satisfactory to the Association and will be assisted by other qualified staff in adequate numbers. Section 3.09. The Borrower shall: (a) not later than June 30, 1996, complete the execution of Part D.2 (a) of the Project; -9- (b) not later than September 30, 1996, furnish to the Association copy of the findings and recommendations of such study, together with the respective Borrower's comments; and (c) not later than March 31, 1997, implement the recommendations of the study commented by the Borrower, taking into account the Association's comments thereon. Section 3.10. Without limitation or restriction upon the provisions of Section 3.01 (b) of this Agreement, the Borrower shall maintain, at all times until completion of the Project user charges for its road network at levels sufficient, in the opinion of the Association, to defray at least the corresponding maintenance expenditures. Section 3.11. Not later than December 31, 1996, the Borrower shall furnish to the Association the Borrower's transport master plan, including a transport policy framework and investment program, and a traffic master plan for the metropolitan region of the city of Port-au-Prince, prepared under terms of reference satisfactory to the Association. Section 3.12. Not later than June 30, 1997, the Borrower shall enter into a twinning arrangement, under terms and conditions satisfactory to the Association, with a road department from a country acceptable to the Association, aimed at providing a long- term technical assistance program, including on-the-job training for the Ministry's staff. Section 3.13. With regard to the training activities to be carried out under the Training Program, other than those to be carried out under the Twinning Arrangement, the Borrower shall: (a) prepare and furnish to the Association, for its review and approval, the contents, schedule and selection criteria for the respective training activity; (b) carry out such training activity in accordance with the contents, schedule and selection criteria approved by the Association; and (c) furnish to the Association a report, of such scope and in such detail as the Association shall request, on the results of each such training activity and the benefits to be derived therefrom. Section 3.14. With regard to the services of the consultants to be hired under the Project, the Borrower shall: - 10 - (a) promptly after the completion of each service, furnish to the Association copy of the consultants' findings and recommendations, together with the respective Borrower's comments; (b) afford the Association a reasonable opportunity to comment on such findings and recommendations; and (c) implement the recommendations of such consultants commented by the Borrower, taking into account the Association's comments thereon. Section 3.15. (a) Without limitation or restriction upon the provisions of Section 3.07 of this Agreement, the Borrower shall: (i) carry out environmental impact assessments with regard to all Eligible Rehabilitation Subprojects and Eligible Maintenance Subprojects, under terms of reference satisfactory to the Association; (ii) review, jointly with the Association, the findings and recommendations of such assessments; and (iii) implement the recommendations of the environmental impact assessments, taking into account the Association's comments thereon. (b) The environmental impact assessments referred to in subparagraph (a) above shall take into account the findings and recommendations of the studies carried out under part D.3 of the Project, which shall include, inter alia, the following aspects: (i) specification of the actions required to correct erosion and sedimentation problems, at the short and long terms; (ii) comparative analysis of the various alternative proposals for such purpose; and (iii) incorporation of the selected proposals in the corresponding engineering designs and bidding documents. Section 3.16. Without limitation or restriction upon the provisions of Section 9.07 of the General Conditions, not later than March 31 and September 30 of each year, until completion of the Project, the Borrower shall prepare and furnish to the Association, for - 11 - its review, reports of such scope and in such detail as the Association may reasonably request, on the progress achieved by the Borrower in the carrying out of the Project, the Annual Road Programs, the Ministry's Reorganization Plan, the Performance Indicators and the Training Program during the previous calendar semester. Section 3.17. (a) Without limitation or restriction upon the provisions of Section 9.01 of the General Conditions, not later than July 31 of each year during the execution of the Project, starting in 1996, the Borrower shall review, in conjunction with the Association, the progress achieved in the implementation of the Project, the Annual Road Programs and the Ministry's Reorganization Plan, the Performance Indicators and the Training Program during the previous calendar year. (b) If, as a result of any of the above reviews, the Association determines that the progress in the execution of the Project or in the achievement of its objectives is not satisfactory, the Borrower shall promptly take all such action, satisfactory to the Association, as shall be necessary for the efficient execution of the Project or the overall achievement of its objectives. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and separate 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 for each Fiscal Year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association, as soon as available, but in any case not later than four months after the end of each such year, a certified copy of the report of each such audit by said auditors, of such scope and in such detail as the Association shall have requested; and - 12 - (iii) furnish to the Association such other information concerning said records and accounts as well as the audit thereof as the Association shall from time to time request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paraigraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received all the required audits for the Fiscal Year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association's representatives to examine such records; and (iv) ensure that such records and accounts are included in the corresponding 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 the Fiscal Year corresponding to the audit in question, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. ARTICLE V Remedies of the Association Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) any of the legislative, regulatory or administrative provisions pertaining to the implementation of the Ministry's Reorganization Plan or the Road Maintenance Financing Mechanism or its administration shall have been enacted, issued, amended, suspended, abrogated, repealed or waived so as to affect, in the opinion of the - 13 - Association, materially and adversely the ability of the Borrower to perform any of its obligations under this Agreement; and (b) (i) subject to subparagraph (ii) of this paragraph: (A) The right of the Borrower to withdraw the proceeds of any grant or loan made to the Borrower for the financing of the Project, including the IDB Loan, the KfW Loan and the EU Grant, shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor; or (B) any such loan, including the IDB Loan and the KfW Loan, shall have become due and payable prior to the agreed maturity thereof; (ii) subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement; and (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. Section 5.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional events are specified: (a) any event specified in paragraph (a) of Section 5.01 of this Agreeme-t shall occur; and (b) any event specified in paragraph (b) (i) (B) of Section 5.01 of this Agreement shall occur, subject to the proviso of paragraph (b) (ii) of that Section. - 14 - ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) that the Borrower shall have established and staffed, to the satisfaction of the Association, the Project Coordinating Unit; (b) that the Borrower shall have employed the consultants required for the carrying out of Part D.2 (a) of the Project; (c) that not less than the equivalent of $350,000 and $1 0,000 have been allocated in the Borrower's budget for Fiscal Year 1994-1995, for the carrying out of Parts B.1 and B.2 of the Project, respectively; and (d) that the Borrower shall have contracted the services of the professionals referred to in Section 3.08 of this Agreement. Section 6.02. The date 1(3,, / is hereby specified for the purposes of Section 12.04 of th eneMl Conditions. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. Except as provided by Section 2.09 of this Agreement, the Minister of Economy and Finance 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: - 15 - For the Borrower: Ministry of Economy and Finance Palais des Minist&res Port-au-Prince Haiti Telex: 20347 FINANCE For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 197688 (TRT), Washington, D.C. 248423 (RCA), 64145 (WUI) or 82987 (FTCC) 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. - 16 - REPUBLIC OF HAITI By / & ) Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By/ Regional Vice President Latin America and the Caribbean - 17 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Civil works under Parts A and B of the Project, including super- vision thereof: (a) Eligible Rehabi- 17,120,000 100% litation Sub- projects under Part A.1 of the Project (b) Eligible Rehabi- 3,650,000 100% litation Sub- projects under Part A.2 of the Project - 18 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (c) Eligible Main- 1,760,000 100%, until with- teriance Sub- drawals under projects under this Category Part B.1 of have reached an the Project aggregate amount equivalent to $1,000,000; 80%, until withdrawals under this Category have reached an aggregate amount equivalent to $2,000,000; and 60%, thereafter (d) Eligible Main- 990,000 100%, until with- tenance Sub- drawals under projects under this Category Part B.2 of have reached an the Project aggregate amount equivalent to $1,000,000; 80%, until withdrawals under this Category have reached an aggregate amount equivalent to $1,500,000; and 60%, thereafter (2) Goods 1,210,000 100% of foreign expenditures - 19 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (3) Consultants' 5,590,000 100% services (4) Refunding of 500,000 Amount due pur- Project Prepara- suant to Section tion Advance 2.02 (c) of this Agreement (5) Unallocated 3,740,000 TOTAL 34,600,000 2. For the purposes of this Schedule 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. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement; and (b) payments made for expenditures under Category 1 of the table set forth in said paragraph 1, unless the respective Eligible Rehabilitation Subproject or Eligible Maintenance Subproject is included in anI Annual Road Program approved by the Association, pursuant to the provisions of Section 3.06 of this Agreement. 4. The Association may require withdrawals from the Credit Account to be made on the basis of statements of expenditure for expenditures under contracts: (a) for works not exceeding $200,000 equivalent; and (b) for goods not exceeding $25,000 equivalent; - 20 - under such terms and conditions as the Association shall specify by notice to the Borrower. - 21 - SCHEDULE 2 Description of the Project The objectives of the Project are: (i) to assist the Borrower in implementing the Annual Road Programs; (ii) to strengthen road sub-sector management through the Ministry's Reorganization Plan; (iii) to foster private sector and community participation in road works; and (iv) to assist the Borrower in increasing its financing of road maintenance. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: Road Rehabilitation 1. Rehabilitation of approximately 250 kilometers of the Borrower's interurban roads network, including periodic maintenance. 2. Rehabilitation of approximately 35 kilometers of the metropolitan region of the city of Port-au-Prince streets network, including periodic maintenance. Part B: Road Maintenance 1. Maintenance (other than periodic maintenance) of approximately 2,000 kilometers of the Borrower's interurban roads network. 2. Maintenance (other than periodic maintenance) of approximately 140 kilometers of the metropolitan region of the city of Port-au-Prince street network. Part C: Equipment and Tools Acquisition and utilization of maintenance equipment and handtools, including spare parts therefor and provision of repair services for such equipment and hand tools, aimed at: (a) assisting maintenance works by village communities; (b) providing a minimum pool of equipment to support maintenance by force account and a small in-house capacity in the Ministry for emergency intervention; -22- (c) repairing the telecommunications network of the Ministry; (d) providing the logistical support for the planning and supervision units of the Ministry; and (e) repairing existing traffic signals and providing approximately 20 additional traffic signals for the metropolitan region of the city of Port-au-Prince. Part D: Institutional Strengthening 1. Provision of technical assistance to strengthen the capacity of the Ministry in the implementation of the Project and the Annual Road Programs. 2. Carrying out of studies for: (a) the establishment and operation of the Road Maintenance Financing Mechanism; (b) the preparation of the Borrower's transport master plan; and (c) the preparation of the traffic master plan for the metropolitan region of the city of Port-au-Prince. 3. Carrying out of environmental studies on identification of erosion and sedimentation problems that may affect all rehabilitated roads. 4. Carrying out of studies for the development of a plan for the promotion of the local road construction sector and for the establishment of an equipment rental scheme. 5. Carrying out of the Ministry's Reorganization Plan. & & * The Project is expected to be completed by June 30, 2001. - 23 - SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A: International Competitive Bidding 1. Except as provided in Part D 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 1992 (the Guidelines). (a) When contract award is delayed beyond the original bid validity period, such period may be extended once, subject to and in accordance with the provisions of paragraph 2.59 of the Guidelines, by the minimum amount of time required to complete the evaluation, obtain necessary approvals and clearances and award the contract. The bid validity period may be extended a second time only if the bidding documents or the request for extension shall provide for appropriate adjustment of the bid price to reflect changes in the cost of inputs for the contract over the period of extension. Such an increase in the bid price shall not be taken into account in the bid evaluation. With respect to each contract made subject to the Association's prior review in accordance with the provisions of Part F. 1 (a) of this Section, the Association's prior approval will be required for: (i) a first extension of the bid validity period if the period of extension exceeds sixty (60) days; and (ii) any subsequent extension of the bid validity period. (b) In the procurement of goods and works in accordance with this Part A, the Borrower shall use the relevant standard bidding documents issued by the Bank, with such modifications thereto as the Association shall have agreed to be necessary for the purposes of the Project. Where no relevant standard bidding documents have been issued by the Bank, the Borrower shall use bidding documents based on other internationally recognized standard forms agreed with the Association. 2. Bidders for works and goods under Part A.1 hereof shall be prequalified as provided in paragraph 2.10 of the Guidelines. 3. To the extent practicable, contracts for works and goods shall be grouped into bid packages estimated to cost the equivalent of $1,000,000 and $100,000 or more, respectively. - 24 - Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A hereof, goods manufactured in Haiti 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: Preference for Domestic Contractors In the procurement of works in accordance with the procedures described in Part A hereof, the Borrower may grant a margin of preference to domestic contractors in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraph 5 of Appendix 2 thereto. Part D: Other Procurement Procedures 1. Civil works under Part A of the Project estimated to cost the equivalent of $1,000,000 or less per contract, up to an aggregate amount equivalent to $4,000,000, may be procured under contracts awarded to pre-qualified contractors, on the basis of competitive bidding, advertised locally, in accordance with procedures acceptable to the Association. 2. Civil works under Part B.1 of the Project estimated to cost the equivalent of $200,000 or less per contract, up to an aggregate amount equivalent to $5,000,000, may be procured under contracts awarded: (a) to pre-qualified contractors, on the basis of competitive bidding, advertised locally, in accordance with procedures acceptable to the Association; or (b) through direct negotiations with local communities, in accordance with procedures acceptable to the Association. 3. Civil works under Part B.2 of the Project estimated to cost the equivalent of less than $100,000 per contract, up to an aggregate amount equivalent to $500,000, may be procured under contracts awarded to pre-qualified contractors on the basis of competitive bidding, advertised locally, in accordance with procedures acceptable to the Association. 4. Goods estimated to cost the equivalent of less than $100,000 but more than $25,000 per contract, up to an aggregate amount equivalent to $200,000, may be procured under competitive bidding, advertised locally, in accordance with procedures acceptable to the Association. - 25 - 5. Goods estimated to cost the equivalent of $25,000 or less, up to an aggregate amount equivalent to $100,000, may be procured on the basis of comparison of price quotations solicited from a list of at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Association. 6. Contracts for equipment repair services estimated to cost the equivalent of $25,000 or less, up to an aggregate amount of $200,000, may be procured through direct negotiations with local shops, in accordance with procedures acceptable to the Association. Part E: Standard Bidding Documents In the procurement of goods and works in accordance with Parts D.1, D.2 (a), D.3 and D.4 hereof, the Borrower shall use standard bidding documents satisfactory to the Association. Part F: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to: (i) each contract for civil works estimated to cost the equivalent of more than $200,000; (ii) each contract for goods estimated to cost the equivalent of more than $25,000; and (iii) the first contract awarded under Parts D.1, D.2 (a), D.2 (b), D.3 and D.4 hereof, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. (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. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which withdrawals from the Credit Account are to be made on the basis of statements of expenditure. 2. The figure of 10% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. - 26 - Section II. Special Provisions Without limitation or restriction upon any other provisions in this Agreement, the following special provisions shall govern all procurement of works and goods referred to in Part D.1, D.2 (a), D.3 and D.4 of Section I hereof: (a) foreign contractors and suppliers shall be allowed to bid on all contracts and shall not be required to be associated with local contractors or suppliers; (b) except for the use of unskilled labor, there shall not be any restriction on sources of labor; (c) there shall not be any restriction on sources of materials; (d) no reference, minimum or maximum prices shall be used for purposes of evaluation of bids for the supply of goods; (e) bids shall be opened in public and their prices shall be read aloud; and (f) contracts shall be awarded to the bidder whose bid was evaluated as the lowest and responsive, in accordance with criteria clearly set forth in the standard bidding documents. Section M. Employment of Consultants In order to assist the Borrower in carrying out the Project, the Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with princ.iples and procedures satisfactory to the Association 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. For complex, time- based assignments, the Borrower shall employ such consultants under contracts using the standard form of contract for consultants' services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with the Association. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. F SECRETNRY