Conformed Copy - C2798 - Private Sector Competitiveness Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2798 UG Project Agreement (Private Sector Competitiveness Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and PRIVATE SECTOR FOUNDATION Dated January 30, 1996 CREDIT NUMBER 2798 UG PROJECT AGREEMENT AGREEMENT, dated January 30, 1996, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and PRIVATE SECTOR FOUNDATION (PSF). WHEREAS (A) by the Development Credit Agreement of even date herewith between The Republic of Uganda (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to eight million three hundred thousand Special Drawing Rights (SDR 8,300,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that PSF agree to undertake such obligations toward the Association as are set forth in this Agreement; (B) by a Subsidiary Agreement to be entered into between the Borrower and PSF, the proceeds of the Credit provided for under the Development Credit Agreement will be made available as a grant to PSF on the terms and conditions set forth in said Subsidiary Agreement; and WHEREAS PSF, in consideration of the Association's entering into the Development Credit 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 Page 2 several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) PSF declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement, and, to this end, shall carry out the Project with due diligence and efficiency and in conformity with appropriate administrative, financial and business practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Association and PSF shall otherwise agree, PSF shall carry out the Project in accordance with the Implementation Program set forth in Schedule 2 to this Agreement. Section 2.02. Except as the Association shall otherwise agree, procurement of the goods and services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.03. (a) PSF shall carry out the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions (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; (b) PSF shall take all measures necessary to participate in the review of the Project as provided in Section 3.04 of the Development Credit Agreement; (c) Not later than sixty days prior to the review referred to in (b) above PSF shall prepare and furnish to the Association, for its comments, a report, in such detail as the Association shall reasonably request, on the progress and status of the Project, including an evaluation of the progress achieved in implementing the various components of the Project, and a draft plan containing proposals for remedying any identified deficiencies; and (d) Following such review, PSF shall promptly take any corrective action deemed necessary to remedy any shortcoming noted in the implementation of the Project, or to implement such other measures as may have been agreed upon between the parties in furtherance of the objectives of the Project. To this end, PSF shall: (i) prepare an action plan, satisfactory to the Association, based on the recommendations stemming from the aforementioned review, and (ii) adopt and implement such plan for the remainder of the Project implementation period. Section 2.04. PSF shall duly perform all its obligations under the Subsidiary Agreement. Except as the Association shall otherwise agree, PSF shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Agreement or any provision thereof. Section 2.05. (a) PSF shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement and under the Subsidiary Agreement, and other matters relating to the purposes of the Credit. Page 3 (b) PSF shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by PSF of its obligations under this Agreement and under the Subsidiary Agreement. ARTICLE III Management and Operations of PSF Section 3.01. (a) PSF shall carry on its operations and conduct its affairs in accordance with sound administrative, financial and business practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. (b) To that end, PSF shall retain: (i) at all times, an Executive Director whose qualifications and terms of reference shall be satisfactory to the Association, and (ii) until the completion of Project implementation, a Project Coordinator whose qualifications and terms of reference shall also be satisfactory to the Association. Section 3.02. PSF shall at all times operate and maintain its equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound financial and business practices. Section 3.03. PSF shall take out and maintain with responsible insurers, or make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. (a) PSF shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its operations and financial condition. (b) PSF shall: (i) have its records, accounts and financial statements, including those pertaining to the Project (balance sheets, statements of income and expenses and related statements), 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 six months after the end of each such year, (A) certified copies of its financial statements for such year as so audited, and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, accounts and financial statements as well as the audit thereof, as the Association shall from time to time reasonably request. ARTICLE V Effective Date; Termination; Cancellation and Suspension Page 4 Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of PSF thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) the date fifteen years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify PSF of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. 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 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) For PSF: Private Sector Foundation Plot 10 Kalitunsi Road P.O. Box 9113 Kampala, Uganda Cable address: Telex: 2236145 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 PSF may be taken or executed by the Executive Director or such other person or persons as Page 5 the Executive Director shall designate in writing, and PSF shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 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 By /s/ Edward V.K. Jaycox Regional Vice President Africa PRIVATE SECTOR FOUNDATION By /s/ Stephen K. Katenta-Apuli Authorized Representative SCHEDULE 1 Procurement and Consultants' Services Section I. Procurement of Goods Part A: General Goods shall be procured in accordance with the provisions of Section I of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in January 1995 (the Guidelines) and the following provisions of this Section, as applicable. Part B: International Competitive Bidding 1. Except as otherwise provided in Part C of this Section, goods shall be procured under contracts awarded in accordance with the provisions of Section II of the Guidelines and paragraph 5 of Appendix 1 thereto. 2. The following provisions shall apply to goods to be procured under contracts awarded in accordance with the provisions of paragraph 1 of this Part B: Grouping of contracts To the extent practicable, contracts for goods shall be grouped in bid packages estimated to cost $100,000 equivalent or more each. Page 6 Part C: Other Procurement Procedures 1. National Competitive Bidding (a) Vehicles, equipment, furniture, and materials estimated to cost $100,000 equivalent or less per contract up to an aggregate amount not to exceed $250,000 equivalent; and (b) printing and advertising contracts estimated to cost $100,000 equivalent or less per contract up to an aggregate amount not to exceed $300,000 equivalent; may be procured under contracts awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines. 2. Items, or group of items, required under Part C.1 of the Project, estimated to cost $100,000 equivalent or less per contract, up to an aggregate amount not to exceed $2,800,000 equivalent, shall be procured in accordance with the provisions of Part A.2 (a) (v) of Annex 2 to Schedule 2 to this Agreement. 3. International Shopping Goods estimated to cost $50,000 equivalent or less per contract up to an aggregate amount not to exceed $500,000 equivalent, may be procured under contracts awarded on the basis of international shopping procedures in accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. 4. National Shopping Goods estimated to cost $30,000 equivalent or less per contract up to an aggregate amount not to exceed $300,000 equivalent, may be procured under contracts awarded on the basis of national shopping procedures in accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. Part D: Review by the Association of Procurement Decisions 1. Procurement Planning Prior to the issuance of any invitations to prequalify for: bidding or to bid for contracts, the proposed procurement plan for the Project shall be furnished to the Association for its review and approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the Guidelines. Procurement of all goods and works shall be undertaken in accordance with such procurement plan as shall have been approved by the Association, and with the provisions of said paragraph 1. 2. Prior Review (a) With respect to each contract for: (a) vehicles, equipment, furniture, materials, printing and advertising, and (b) goods in part C of the Project, estimated to cost the equivalent of $100,000 or more, the procedures set forth in paragraphs 2 and 3 of Appendix 1 to the Guidelines shall apply. (b) Notwithstanding the provisions of paragraph 2 (a) above, PSF shall furnish to the Association, for its review, the draft bidding documents for the first three contracts for the procurement of goods. 3. Post Review With respect to each contract not governed by paragraph 2 of this Part, the procedures set forth in paragraph 4 of Appendix 1 to the Guidelines shall apply. Section II. Employment of Consultants 1. Consultants' services shall be procured under contracts Page 7 awarded in accordance with the provisions 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 (the Consultant Guidelines) and in accordance with the Project Implementation Plan. For complex, time-based assignments, such contracts shall be based on 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, other standard forms acceptable to the Association shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts shall not apply to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each, or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to: (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 3. Notwithstanding the provisions of paragraph 2 above, PSF shall furnish to the Association, for its review, the draft letters of invitation for the first three contracts for the employment of consultants under the Project. SCHEDULE 2 Implementation Program 1. PSF shall be responsible for the implementation of the Project under the overall guidance of a nine-member Project Steering Committee (PSC) which shall include all seven members of the Board of Directors of PSF, and two representatives to be appointed by the Borrower in accordance with Section 3.03 of the Development Credit Agreement. 2. Unless otherwise agreed with the Association, PSC shall in particular be responsible for (a) approving the annual Project work plans; and (b) reviewing the full report on each year's Project performance, including the duly audited financial and operational reports, and the implication of such reports. 3. PSF shall (a) prepare and adopt a detailed and comprehensive plan, satisfactory to the Association, for the implementation of all components of the Project, including detailed action plans for each Project component, (b) take all measures necessary to ensure that the Project is carried out in conformity with the PIP, and (c) not make any material amendment to the PIP without prior consultation with, and the consent of, the Association. 4. PSF shall, with effect from its 1996/97 financial year, review the action plans forming part of the PIP and, by not later than the first day of May preceding the financial year covered in the work plan, furnish to the Association a satisfactory annual work plan for each Project component. 5. In order to assist PSF in the implementation of Part B of the Project, PSF shall, under a contract which shall have been approved by the Association, appoint pursuant to the provisions of Section II of Schedule 1 to this Agreement by not later than Page 8 June 30, 1996, a management contractor who shall, inter alia: (a) have operational independence; (b) be responsible for ensuring full compliance with the rules and regulations set out in the PIP, and the eligibility criteria and the terms and conditions referred to in Annex 1 to this Schedule; and (c) prepare and furnish to PSF: (i) quarterly progress reports; and (ii) an annual report which shall serve as a basis for a formal annual performance review to be carried out jointly with the Borrower, PSF and the Association. 6. (a) In order to carry out Part C.1 of the Project, PSF shall enter into share subscription and shareholders