Conformed Copy - C2930 IND - Environmental Management Capacity Building Technical Assistance Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2930 IN Project Agreement (Environmental Management Capacity Building Technical Assistance Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and GUJARAT Dated March 14, 1997 CREDIT NUMBER 2930 IN PROJECT AGREEMENT AGREEMENT, dated March 14, 1997, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and GUJARAT acting by its Governor, (hereinafter referred to as "Project State"); WHEREAS (A) by the Development Credit Agreement of even date herewith between India (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to thirty four million seven hundred thousand Special Drawing Rights (SDR 34,700,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that the Project State agrees to undertake such obligations toward the Association as are set forth in this Agreement; and WHEREAS the Project State, 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 several terms defined in the Development Credit Agreement, the Preamble to Page 2 this 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) The Project State 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, or cause to be carried out, Parts A(4), B(2), C(3) and F of the Project with due diligence and efficiency and in conformity with appropriate environmental, management, administrative, financial and economic practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for Parts A(4), B(2), C(3) and F of the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Association shall otherwise agree, the Project State shall carry out Parts A(4), B(2), C(3) and F of the Project in accordance with the Implementation Program set forth in Schedule 1 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 3 to the Development Credit Agreement. Section 2.03. (a) The Project State shall carry out the obli- gations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions applicable to the Development Credit Agreement (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 and Parts A(4), B(2), C(3) and F of the Project. (b) prepare, on the basis of guidelines acceptable to the Association, and furnished 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 Association and the Project State, a plan designed to ensure the continued achievement of the objectives of Parts A(4), B(2), C(3) and F of the Project; and (c) afford the Association a reasonable opportunity to exchange views with the Borrower on the plan referred to in Section 2.03(b) above. Section 2.04. (a) The Project State shall, at the request of the Association, exchange views with the Association with regard to the progress of Parts A(4), B(2), C(3) and F of the Project, the performance by it of its obligations under this Agreement, and other matters relating to the purposes of the Credit. (b) The Project State 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 of its obligations under this Agreement. ARTICLE III Financial Covenants Section 3.01. (a) The Project State shall maintain records and accounts, adequate to reflect in accordance with sound accounting practices, its operations, resources and expenditures in respect of activities related to Parts A(4), B(2), C(3) and F of the Project, of the departments or agencies responsible for carrying out Parts A(4), B(2), C(3) and F of the Project. (b) The Project State shall: (i) have the records and accounts referred to in paragraph Page 3 (a) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors accept- able 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, certified copies of 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 the audit thereof, as the Association shall from time to time reasonably request. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 4.02. (a) This Agreement and all obligations of the Association and of the Project State 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 twenty (20) 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 the Project State of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions applicable to the Development Credit Agreement. ARTICLE V Miscellaneous Provisions Section 5.01. 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 197688 (TRT), Washington, D.C. 248423 (RCA), 64145 (WUI) or Page 4 82987 (FTCC) For Gujarat: Chief Secretary to the Government of Gujarat Gandhinagar, India Section 5.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of the Project State may be taken or executed by its Chief Secretary or such other person or persons as the Chief Secretary shall designate in writing and the Project State shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 5.03. This Agreement may be executed in several counter- parts, 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/ Mieko Nishimizu Regional Vice President South Asia GUJARAT By /s/ Sudhakar Rao Authorized Representative SCHEDULE 1 Implementation Program Project Management 1. The Project State shall establish by August 31, 1997 and maintain a Project Implementation Cell in GDFE with responsibility to supervise the implementation of Parts A(4), B(2), C(3) and F of the Project, with membership and terms of reference satisfactory to the Association. NGO Environmental Action Fund 2. The Project State shall establish and operate commencing August 31, 1997, an NGO environmental action fund under Part C(3) of the Project in accordance with arrangements and a time schedule satisfactory to the Association. SEAP 3. The Project State shall, by March 31, 1999, prepare a State Environment Action Program (SEAP) satisfactory to the Association. Environmental Indicators Page 5 4. The Project State shall, in collaboration with the Borrower, by December 31, 1998: (i) prepare environmental indicators; and (ii) apply, or cause to be applied, such indicators in the evaluation of investment projects commencing April 30, 1999. 5. The Project State shall take necessary action to ensure that, commencing April 30, 1999, annual environment status reports are published by GDFE based on indicators and indices developed under Part A(4) of the Project. Project Implementation Plan 6. The Project State shall carry out Parts A(4), B(2), C(3) and F of the Project in accordance with an implementation plan satisfactory to the Association. Annual Work Plans and Budget; Mid-Term Review 7. The Project State shall: (a) review annually with the Association progress in the implementation of Parts A(4), B(2), C(3) and F of the Project and Credit disbursements over the preceding twelve months; (b) discuss with the Association by March 31 of each year, annual work plans and budgets for the next twelve months; (c) carry out with the Association mid-term review of Parts A(4), B(2), C(3) and F of the Project no later than March 31, 1999; and (d) duly take into account the comments offered by the Association during such mid-term review in the course of further implementation of Parts A(4), B(2), C(3) and F of the Project. Performance Monitoring Indicators 8. The Project State shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with the following indicators the carrying out of Parts A(4), B(2), C(3) and F of the Project and the achievement of the objectives thereof: For Project Implementation: 1. GDFE training completed; 2. Draft database for environmental indicators and indices in Gujarat completed; 3. Draft ICMAMP prepared; 4. State of Environment in Gujarat Report completed; and 5. First two Phases of SEAP completed. For Project Impact/Outcome: 1. Increased effectiveness of GDFE in maintaining environmental concerns in state plans, programs and projects. 2. (a) Improved information and outreach of State Government to NGOs on environmental issues. (b) prepare, under terms of reference satisfactory to the Association, and furnish to the Association, at the mid-term review referred to in paragraph 7 (c) above, a report integrating the results of the monitoring and evaluation activities performed pur- suant to paragraph (a) of this Section, on the progress achieved in the carrying out of Parts A(4), B(2), C(3) and F of the Project during the period preceding the date of said report and setting Page 6 out the measures recommended to ensure the efficient carrying out of Parts A(4), B(2), C(3) and F of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Association, during the mid-term review referred to in paragraph 7(c) above or such later date as the Association shall request, the report referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of Parts A(4), B(2), C(3) and F of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Association's views on the matter.