Thailand - Railways Project : Loan 0035 - Loan Agreement - Conformed

LOAN NUMBER 35 TH Loan Agreement (Railways Project) BETWEEN KINGDOM OF THAILAND AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED OCTOBER 27, 1950 PRESS OF BYRON S. ADAMS loan fgrumtnt AGREEMENT, dated October 27, 1950, between the KINGDOM OF THAILAND (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVEL- OPMENT (hereinafter called the Bank). ARTICLE I The Loan SECTION 1.01. The Bank agrees to lend to the Bor- rower, on the terms and conditions hereinafter in this Agreement set forth or referred to, the sum of three million dollars ($3,000,000), or the equivalent in currencies other than dollars. SECTION 1.02. The parties to this Agreement accept all the provisions of Loan Regulations No. 3 of the Bank, dated August 15, 1950 (hereinafter called the Loan Regu- lations), a copy of which has been furnished to the Bor- rower, with the same force and effect as if they were fully set forth herein. Each of the parties hereto agrees to per- form all the obligations on its part to be performed under the Loan Regulations. SECTION 1.03. The Bank shall open a Loan Account on its books in the name of the Borrower and shall credit to such Account the amount of the Loan. The amount of the Loan may be withdrawn from the Loan Account as pro- vided in, and subject to the rights of cancellation and sus- pension set forth in, the Loan Regulations. Copies of forms of withdrawal applications have been delivered to the Borrower. SECTION 1.04. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per- 4 cent (34%o) per annum on the principal amount of the Loan not so withdrawn from time to time. Such commitment charge shall accrue from the Effective Date or from Feb- ruary 15, 1951, whichever shall be the earlier. SECTION 1.05. The Borrower shall pay interest at the rate of three and three-fourths percent (33/4%o) per annum on the principal amount of the Loan so withdrawn and outstanding from time to time. SECTION 1.06. Interest and commitment charge shall be payable semi-annually on April 15 and October 15 in each year. SECTION 1.07. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. ARTICLE II Use of Proceeds of the Loan SECTION 2.01. The Borrower shall cause the proceeds of the Loan to be applied exclusively to the cost of goods which will be required for the carrying out of the Project as described in Schedule 2 to this Agreement. The specific goods to be purchased out of the proceeds of the Loan shall be determined by agreement between the Bank and the Bor- rower, and the list of such goods may be modified from time to time by agreement between them. SECTION 2.02. The Borrower shall cause all goods pur- chased in whole or in part with the proceeds of the Loan to be used in the territories of the Borrower exclusively in the carrying out of the Project. 5 ARTICLE III Bonds SECTION 3.01. The Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. The Minister of Finance of the Borrower and such person or persons as he shall appoint in writing are designated as the authorized representatives of the Borrower for the purposes of See- tion 6.12 of the Loan Regulations. ARTICLE IV Particular Covenants SECTION 4.01. (a) The Borrower shall cause the Project to be carried out and completed with due diligence and ef- ficiency and in conformity with sound e-.gineering practice. (b) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans and specifications for the Project and any material modifications subsequently made therein. (c) The Borrower shall cause to be maintained records showing the use made of the goods and the progress of the Project (including the cost thereof); shall enable the Bank's representatives to examine the Project, the goods and any relevant records and documents; and shall fur- nish to the Bank all such information as the Bank shall reasonably request concerning the goods and the Project. SECTION 4.02. (a) The Bank and the Borrower will co- operate fully to assure that the purposes of the Loan shall be accomplished. To that end, each of them shall furnish to the other all such information as it shall reasonably re- quest with regard to the general status of the Loan. On the part of the Borrower, such information shall include information with respect to financial and economic condi- 6 tions in the territories of the Borrower and the interna- tional balance of payments position of the Borrower. (b) The Borrower and the Bank will from time to time exchange views through their representatives with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof. The Borrower will promptly inform the Bank of any condition that shall in- terfere with, or threaten to interfere with, the accomplish- ment of the purposes of the Loan or the maintenance of the service thereof. (c) If the Borrower or any of its political subdivisions or any agency of the Borrower or of any such political sub- division shall propose to incur any substantial external debt, the Borrower will promptly inform the Bank of the proposal and, before the proposed action is taken, will afford the Bank all opportunity which is reasonably prac- ticable in the circumstances to exchange views with the Bor- rower with respect thereto, provided, however, that the provisions of this paragraph (c) shall not apply to: (i) the incurring of additional external debt through utilization, in accordance with the terms of any credit established prior to the date of this Agreement, of any unused amounts avail- able under such credit and (ii) the entering into interna- tional payments or similar agreements the term of which is not more than one year and under which the transactions on each side are expected to balance over the period of the agreement. (d) The Borrower will afford all reasonable epportunity for accredited representatives of the Bank to visit any part of the territories of the Borrower for purposes related to the Loan. SECTION 4.03. It is the mutual intention of the Borrower and the Bank that no other external debt shall enjoy any priority over the Loan by way of a lien on governmental assets. To that end, the Borrower undertakes that, except 7 as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower or any of its political subdivisions or any agency of the Borrower or of any such political subdivision as security for any external debt, such lien shall equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds, and that in the creation of any such lien express provision shall be made to that effect, provided, however, that this, Section shall not apply to any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property. SECTION 4.04. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid without deduction for and free from any taxes imposed by the Bor- rower or any taxing authority thereof or therein and free from all restrictions of the Borrower and its political sub- divisions and agencies. The foregoing provisions of this Section shall not apply to taxes on payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Borrower. The Loan Agreement and the Bonds shall be free of any issue, stamp or other tax im- posed by the Borrower or any taxing authority thereof or therein. SECTION 4.05. The Borrower shall satisfy the Bank that it has made adequate arrangements to insure the goods financed with the proceeds of the Loan against risks in- cident to their purchase and importation into the territories of the Borrower. SECTION 4.06. The Borrower shall engage an engineer- ing consultant satisfactory to the Bank to advise with re- spect to the rebuilding and re-equipping of the Makkasan Workshops and, unless the Bank shall otherwise agree, the 8 Borrower shall be entitled to make withdrawals from the Loan Account only with respect to those items of equip- ment for said Workshops which are recommended by such consultant. Copies of any recommendations made by such consultant shall be promptly forwarded to the Bank. SECTION 4.07. The Borrower will provide or cause to 11a provided the funds necessary to meet the costs of the Proj- ect as and when required. ARTICLE V Remedies of the Bank SECTION 5.01. If any event specified in paragraph (1) or (2) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of thirty days or if any event specified in paragraph (3) of Section 5.02 of the Loan Reg- ulations shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the continuance thereof, the Bank, at its option, may declare the principal of the Loan and of all the Bonds then out- standing to be due and payable immediately, and upon any such declaration such principal shall become due and pay- able immediately, anything in this Agreement or in the Bond-, to the contrary notwithstanding. ARTICLE VI Miscellaneous SECTION 6.01. The Closing Date shall be December 31, 1953. SECTION 6.02. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: Minister of Finance, Ministry of Finance, Bangkok, Thailand. 9 For the Bank: International Bank for Reconstruction and Development, 1818 H Street, N. W., Washington 25, D. C., United States of America. SECTION 6.03. A date 120 days after the date of this Agreement is hereby specified for the purposes of Sec- tion 9.04 of the Loan Regulations. SECTION 6.04. The Minister of Finance of the Borrower in office at the time in question is designated for the pur- poses of Section 8.03 of the Loan Regulations. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. KINGDOM OF THAILAND by /s/ WAN WAITHAYAKON Authorized RT?epresentative INTERNATIONAL BANK FOR RECON- STRUCTION AND DEVELOPMENT by /s/ EUGENE R. BLACK President 10 Schedule 1 Amortization Schedule Payment Principal of Amount Outstanding Date Payment Due Principal After Each Payment October 15, 1953 ........ $3,000,000 April 15, 1954 $ 95,000 2,905,000 October 15, 1954 97,000 2,808,000 April 15, 1955 99,000 2,709,000 October 15, 1955 101,000 2,608,000 April. 15, 1956 103,000 2,505,000 October 15, 1956 104,000 2,401,000 April 15, 1957 106,000 2,295,000 October 15, 1957 108,000 2,187,000 April 15, 1958 110,000 2,077,000 October 15, 1958 112,000 1,965,000 April 15, 1959 115,000 1,850,000 October 15, 1959 117,000 1,733,000 April 15, 1960 119,000 1,614,000 October 15, 1960 121,000 1,493,000 April 15, 1961 123,000 1,370,000 October 15, 1961 126,000 1,244,000 April 15, 1962 128,000 1,116,000 October 15, 1962 131,000 985,000 April 15, 1963 133,000 852,000 October 15, 1963 135,000 717,000 April 15, 1964 138,000 579,000 October 15, 1964 141,000 438,000 April 15, 1965 143,000 295,000 October 15, 1965 146,000 149,000 April 15, 1966 149,000 ........ 11 Premiums on Prepayment and, Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 2.05 (b) of the Loan Regulations or on the redemption of any Bond prior to its maturity pursuant to Section 6.16 of the Loan Regulations: Time of Prepayment or Redemption Premium Not more than 5 years before maturity 1/2% More than 5 years but not more than 10 years before maturity 1% More than 10 years before maturity 1%7 12 Schedule 2 Description of Project The Project consists of the rehabilitation, improvement and increase in capacity of the Royal State Railways of the Borrower. The part of the Project to be financed with the proceeds of the Loan consists of: (a) Procurement of spare parts for repairs of rolling stock; (b) Procurement and installation of mechanical signal- ing equipment; (c) Re-equipping the Makkasan Workshops. The Project also comprises the establishment on or be- fore April 30, 1951 of an autonomous, functioning author- ity satisfactory to the Bank, as a separate agency of the Borrower, which will be responsible for the management, operation and development of the Royal State Railways and which will have such organization, financial resources and procedures, and legal status and powers as are re- quired to enable such authority to carry out its responsi- bilities efficiently. Such authority will carry out its func- tions in accordance with sound management principles.