Cameroon - Railway Project : Loan 0687 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 687 CM Loan Agreement (Railway Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND REGIE DES CHEMINS DE FER DU CAMEROUN DATED JUNE 9, 1970 CONFORMED COPY LOAN NUMBER 687 CM Loan Agreement (Railway Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND REGIE DES CHEMINS DE FER DU CAMEROUN DATED JUNE 9, 1970 AGREEMENT, dated June 9, 1970, between INTERNA- TIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (here- inafter called the Bank) and REGIE DES CHEMINS DE FER DU CAMEROUN (hereinafter called the Borrower). WHEREAS the Borrower has requested the Bank to assist in financing a railway project more particularly described in Schedule 1 to this Agreement; and WHEREAS the Bank is willing to provide such assistance upon the terms and conditions hereinafter set forth, but only on condition that the Federal Republic of Cameroon (here- inafter called the Guarantor) guarantee such loan upon the terms and conditions of a guarantee agreement of even date herewith between the Guarantor and the Bank; Now THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions SECTION 1.01. The parties to the Loan Agreement ac- cept all the provisions of the General Conditions Appli- cable to Loan and Guarantee Agreements of the Bank dated January 31, 1969, with the same force and effect as if they were fully set forth herein (said General Conditions Ap- plicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). SECTION 1.02. Wherever used in the Loan Agreement, unless the context otherwise requires, the several terms de- fined in the General Conditions have the respective mean- 4 ings therein set forth and the following additional terms have the following meanings: (a) "Decree No. 367" means the Guarantor's Decree No. 65/DF/367 of August 18, 1965, amended by Decrees No. 65/DF/553 of December 16, 1965 and No. 69/DF/439 of October 20, 1969, together with the Cahier des Charges Financi'res et Techniques of the Borrower of even date therewith, providing for the establishment of the Borrower, as the same may be amended from time to time; (b) "Railways" means the railways operated by the Borrower and includes all railway property, equipment and materials of, or operated by, the Borrower. ARTICLE II The Loan SECTION 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to five million two hundred thousand dollars ($5,200,000). SECTION 2.02. (a) 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. (b) The amount of the Loan may be withdrawn from the Loan Account as provided in, and subject to the rights of cancellation and suspension set forth in, the Loan Agree- ment and in accordance with the allocation of the proceeds of the Loan set forth in Schedule 2 to this Agreement, as such allocation shall be modified from time to time pursu- ant to the provisions of such Schedule or by further agree- ment between the Bank and the Borrower. SECTION 2.03. (a) The Borrower shall be entitled to withdraw from the Loan Account in respect of the reason- able cost of goods or services required for the Project and to be financed under the Loan Agreement: 5 (i) such amounts as shall have been paid (or, if the Bank shall so agree, as shall be required to meet payments to be made) for goods or services in- cluded in Categories III, IV and V of the allocation of the proceeds of the Loan referred to in Section 2.02 of this Agreement; and (ii) the equivalent of seventy-five per cent (75o) of such amounts as shall have been paid (or, if the Bank shall so agree, of such amounts as shall be required to meet payments to be made) for goods or services included in Categories I and II of such allocation of proceeds, which percentage represents the foreign exchange component of the cost of such goods or services estimated at the date of the Loan Agreement; provided, however, that if there shall be an increase in the estimate of such payments for goods or services included in any of such Categories I and II, the Bank may by notice to the Borrower adjust the stated percentage applicable to such Cate- gory as required in order that withdrawals of the amount of the Loan then allocated to such Category and not withdrawn may continue pro rata with the payments remaining to be made for goods or serv- ices included in such Category. (b) The Borrower shall also be entitled to withdraw from the Loan Account such amounts as shall be required to meet payments to be made to the Bank for interest and other charges on the Loan accrued on or before Decem- ber 14, 1973 or such other date as may be agreed between the Borrower and the Bank. SECTION 2.04. (a) It is hereby agreed, pursuant to Sec- tion 5.01 of the General Conditions, that withdrawals from the Loan Account may be made on account of payments in CFA Francs: (i) under Categories I and II of the allocation of the proceeds of the Loan referred to in Section 2.02 of this Agreement, for goods or services, whether or not pro- duced, or supplied from, outside the territories of the Guar- antor; and (ii) under Categories III, IV and V of such 6 allocation of proceeds, for goods produced, or services supplied from, outside such territories. (b) No withdrawal from. the Loan Account shall be made on account of payments for taxes imposed by the Guar- antor or any of its political subdivisions on, or in connec- tion with the importation or supply of, goods or services included in any of the Categories III, IV and V of the allocation of the proceeds of the Loan referred to in Section 2.02 of this Agreement. SECTION 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (34 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. SECTION 2.06. The Borrower shall pay interest at the rate of seven per cent (7%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. SECTION 2.07. Interest and other charges shall be pay- able semi-annually on June 15 and December 15 in each year. SECTION 2.08. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Use of Proceeds of the Loan SECTION 3.01. The Borrower shall apply the proceeds of the Loan in accordance with the provisions of the Loan Agreement to expenditures on the Project, described in Schedule 1 to this Agreement. SECTION 3.02. Except as the Bank shall otherwise agree, (i) the goods and services to be financed out of the proceeds of the Loan shall be procured on the basis of international 7 competitive bidding in accordance with the Guidelines for Procurement under World Bank Loans and IDA Credits, published by the Bank in August 1969 and in accordance with such other procedures supplementary thereto as are set forth in Schedule 4 to this Agreement or as shall be agreed between the Bank and the Borrower and (ii) con- tracts for the procurement of all goods and services to be financed out of the proceeds of the Loan shall be subject to the prior approval of the Bank, except as otherwise pro- vided in such Schedule 4. SECTION 3.03. Except as the Bank may otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively in carry- ing out the Project. ARTICLE IV Bonds SECTION 4.01. If and as the Bank shall from time to time request, the Borrower shall execute and deliver Bonds rep- resenting the principal amount of the Loan as provided in Article VIII of the General Conditions. SECTION 4.02. The Directeur of the Borrower and such other person or persons as he shall appoint in writing are designated as authorized representatives of the Borrower for the purposes of Section 8.10 of the General Conditions. ARTICLE V Particular Covenants SECTION 5.01. (a) The Borrower shall carry out the Project, described in Schedule 1 to this Agreement, with due diligence and efficiency and in conformity with sound ad- ministrative, financial and railway engineering practices. (b) In carrying out Part B of the Project, the Borrower shall employ competent and experienced consultants accept- 8 able to the Bank, upon terms and conditions (including terms of reference) which shall have been approved by the Bank. (c) In carrying out Part A(2) of the Project, the Bor- rower shall employ competent and experienced contractors acceptable to the Bank, upon terms and conditions which shall have been approved by the Bank. (d) The Borrower shall furnish to the Bank, promptly upon their preparation, the reports, plans, specifications, contract documents, and work and procurement schedules, for the Project, and any material modifications subsequently made therein, in such detail as the Bank shall reasonably request. SECTIoN 5.02. The Borrower shall use its best efforts to obtain other loans or other financing under terms and conditions acceptable to the Bank from sources outside Cameroon and shall apply the proceeds of such loans or financing to meet such expenses required to carry out the Project as are not financed out of the proceeds of the Loan. SECTION 5.03. (a) The Borrower shall at all times man- age its affairs, maintain its financial position, plan its future expansion and carry on its operations, all in accordance with sound business, financial and engineering practices and under the supervision of competent and experienced management. (b) The Borrower shall promptly take all steps necessary to acquire, maintain and renew all licenses, consents and other rights which are necessary or useful in the conduct of its business. (c) The Borrower shall at all times operate and maintain its lines, workshops, telecommunication system, rolling stock, machinery, equipment and other property, and make promptly all necessary repairs and renewals thereof, in accordance with sound engineering practices, with due re- gard to economic and financial considerations. 9 (d) Except in the normal course of business, the Bor- rower shall not, without the prior approval of the Bank, sell, transfer or otherwise dispose of any of its property or assets which shall be required for efficient operations. (e) The Borrower shall obtain title to all goods financed in whole or in part out of the proceeds of the Loan, free and clear of all encumbrances. (f) The Borrower shall have its accounts audited and its financial statements (balance sheet and related statement of earnings and expenses) certified annually by a qualified in- dependent auditor acceptable to the Bank and shall promptly after their preparation and not later than six months after the close of the Borrower's fiscal year to which they apply transmit to the Bank certified copies of such statements and a signed copy of the auditor's report. SECTION 5.04. (a) The Borrower shall: (i) at all times maintain or cause to be maintained records adequate to identify the goods and services financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost there- of), and to reflect in accordance with consistently main- tained sound accounting practices the operations and finan- cial condition of the Borrower and all financial transactions between the Guarantor and the Borrower with respect to the Project; and (ii) shall enable the Bank's representa- tives to inspect the Project, the goods financed out of the proceeds of the Loan, all other property, equipment or machinery owned or operated by the Borrower and any relevant records and documents; (b) The Borrower shall furnish to the Bank all such information as the Bank shall reasonably request concern- ing the Project, the administration, operations and finan- cial condition of the Borrower, the expenditure of the proceeds of the Loan, and the goods and services financed out of such proceeds. 10 SECTION 5.05. (a) The Bank and the Borrower shall co- operate fully to assure that the purposes of the Loan will be accomplished. To that end, the Bank and the Borrower shall from time to time, at the request of either party, ex- change views through their representatives with regard to the performance by the Borrower of its obligations under the Loan Agreement, the administration, operations and financial condition -' the Borrower, and any other matters relating to the purposes of the Loan and the maintenance of the service thereof. (b) The Borrower shall promptly inform the Bank of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Loan, the maintenance of the service thereof or the performance by the Borrower of its obligations under the Loan Agreement. SECTION 5.06. The Borrower undertakes that, except as the Bank shall otherwise agree: (a) if the Borrower shall create any lien on any of its assets as security for any debt, such lien will 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 ex- press pi 4 ision will be made to that effect; and (b) if any lien shall be created on any assets of the Borrower, other than under paragraph (a) above, as security for any debt, the Borrower shall grant to the Bank an equivalent lien satisfactory to the Bank; provided, however, that the fore- going provisions of this Section shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; or (ii) any lien arising in the ordinary course of banking transactions and securing a debt matur- ing not more than one year after its date. SECTION 5.07. Except as the Bank and the Borrower shall otherwise agree, the Borrower undertakes to have the imported goods to be financed out of the proceeds of the 11 Loan insured against marine, transit and other hazards incident to the acquisition, transportation and delivery thereof to the place of delivery thereof and for such in- surance any indemnity shall be payable in a currency freely usable to replace or repair such goods. SECTION 5.08. The Borrower shall assess the economic justification and the appropriate pricing of its services by line and by commodity on a continuing basis. To that end, the Borrower shall, not later than July 1, 1971, institute a costing system satisfactory to the Bank, which shall there- after be maintained. SECTION 5.09. Until completion of the Project the Bor- rower shall not undertake, or incur any debt in respect of, any works not included in the Project estimated to cost in the aggregate more than the equivalent of one million dollars without the prior approval of the Bank. SECTION.5.10. The Borrower shall not carry out, or cause to be carried out, or incur any debt in respect of, the realignment of the Douala to Yaounde main-line, unless the Guarantor is satisfied, after consultation with the Bank, that such works are economically and technically sound. SECTION 5.11. (a) Except as the Bank shall otherwise agree, the Borrower shall take such measures satisfactory to the Bank (including but not limited to adjustments in tariffs) as shall be required to enable the Borrower to ob- tain in the fiscal year starting July 1, 1972 and in each fiscal year thereafter, a rate of return of at least four percent (4o) on its net fixed assets in operation. (b) For the purposes of this Section: (i) the annual rate of return shall be calculated by relating the net operating revenue for the year in question to the average of the value of the 12 Borrower's net fixed assets in operation at the beginning and at the end of each year; (ii) the term "value of net fixed assets in opera- tion" shall mean the gross book value of such assets, less the amount of accumulated depre- ciation, as revalued from time to time in accord- ance with sound and consistently maintained methods of valuation acceptable to the Bank; (iii) the term "net operating revenue" shall mean the difference between: (A) gross operating revenues accruing from the Borrower's services; and (B) operating and administrative expenses of the Borrower, including adequate mainte- nance and depreciation and taxes (if any) but excluding interest and other charges on debt. SECTION 5.12. (a) Except as the Bank shall otherwise agree, the Borrower shall not incur any debt other than for money borrowed for financing the Project, unless its net cash generation from operations for the fiscal year next preceding such incurrence or for a later twelve-month period ended prior to such incurrence, whichever is the greater, shall, until the end of the fiscal year starting July 1, 1974, be not less than 0.7 times the maximum debt serv- ice requirements for any succeeding fiscal year on all debt including the debt to be incurred, during the fiscal years starting July 1, 1975 and 1976, not less than 1.0 times such maximum debt service and during the fiscal year starting July 1, 1977 and in all fiscal years thereafter, not less than 1.2 times such maximum debt service. (b) For the purposes of this Section: (i) The term "debt" means all debt of the Bor- rower, including debt for the service of which the Borrower is responsible, maturing by its 13 terms more than one year after the date on which it is originally incurred. (ii) Debt shall be deemed to be incurred on the date of execution and delivery of a contract, loan agreement or other instrument providing for such debt. (iii) The term "net cash generation from opera- tions" means gross revenues from all sources, adjusted to take account of the Borrower's tariffs in effect at the time of the incurrence of debt even though they were not in effect during the fiscal year or twelve-month period to which such revenues relate, less all expenses of op- erating and maintaining the facilities of the Borrower, including taxes, if any, but excluding provisions for depreciation and debt service requirements. (iv) The term "debt service requirements" means the aggregate amount of amortization of, and interest and other charges on, debt. (v) Whenever for the purposes of this Section it shall be necessary to value, in terms of the currency of the Guarantor, debt payable in another currency, such valuation shall be made on the basis of the prevailing lawful rate of exchange at which such other currency is, at the time of such valuation, obtainable for the pur- poses of servicing such debt or, if such other currency is not so obtainable, at the rate of exchange that will be reasonably determined by the Bank. SECTION 5.13. In each fiscal year, the Borrower shall maintain its working cash (including available bank over- draft facilities) at a level at least equal to eight percent 14 (8O) of its estimated operating expenditures for such fiscal year. SECTION 5.14. The Borrower shall pay or cause to be paid all taxes, if any, imposed under the laws of the Guar- antor or laws in effect in the territories of the Guarantor on or in connection with the execution, issue, delivery or registration of the Loan Agreement, the Guarantee Agree- ment or the Bonds, or the payment of principal, interest or other charges thereunder; provided, however, that the provisions of this Section shall not apply to taxation of payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an indi- vidual or corporate resident of the Guarantor. SECTION 5.15. The Borrower shall pay or cause to be paid all taxes, if any, imposed under the laws of the coun- try or countries in whose currency the Loan and the Bonds are payable or laws in effect in the territories of such country or countries on or in connection with the execution, issue, delivery or registration of the Loan Agreement, the Guarantee Agreement or the Bonds. ARTICLE VI Remedies of the Bank SECTION 6.01. If any event specified in Section 7.01 of the General Conditions or in Section 6.02 of this Agreement shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continu- ance thereof, the Bank, at its option, may by notice to the Guarantor and the Borrower declare the principal of the Loan and of all the Bonds then outstanding to be due and payable immediately together with the interest and other charges thereon and upon any such declaration such prin- cipal, interest and charges shall become due and payable immediately, anything to the contrary in the Loan Agree- ment or in the Bonds notwithstanding. 15 SECTION 6.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is speci- fied, namely, that Decree No. 367 and any other legislation or regulation of the Guarantor governing the establish- ment, organization and powers of the Borrower shall, with- out the prior approval of the Bank, have been amended, suspended, abrogated, repealed, waived, or shall cease to be enforced, so as to materially affect the operations and finan- cial condition of the Borrower or the performance by the Borrower of its obligations under the Loan Agreement, and such event shall continue for a period of sixty days. ARTICLE VII Miscellaneous SECTION 7.01. The date September 15, 1970 is hereby specified for the purposes of Section 11.04 of the General Conditions. SECTION 7.02. The Closing Date shall be June 30, 1974 or such other date as shall be agreed between the Bank and the Borrower. SECTION 7.03. The following addresses are specified for the purposes of Section 10.01 of the General Conditions: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Intbafrad Washington, D.C. 16 For the Borrower: Regie des Chemins de Fer du Cameroun B.P. 304 Douala Cameroun Cable address: Regifercam Douala IN WITNESS WHEREOF the parties hereto, acting through their representatives thereunto duly authorized, have caused the Loan Agreement to be signed in their respective names and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ S. ALDEWERELD Vice President REGIE DES CHEMINS DE FER DU CAMEROUN By /s/ M. Koss EPANGUE Authorized Representative 17 SCHEDULE 1 Description of the Project The Project is composed of items from the first three years of the Third Railway Development Plan of the Bor- rower, and consists of the following parts: A. Equipment and existing lines works: (1) The acquisition and introduction in service of six locomotives (each about 3600 HP) or the equivalent, 90 box cars, 95 flat cars for the transport of timber, 6 trailers, 1 rail car, 4 shunting engines and various service and track maintenance vehicles. (2) The construction of a new Japoma single track bridge over the Dibamba River near the present bridge, including approaches. (3) The relaying of approximately 55 kilometers of track on the Douala to Yaound6 main-line and the reha- bilitation of approximately 90 additional kilometers of track on such main-line. (4) The construction of a new Douala passenger and freight station. (5) Miscellaneous works and equipment. (6) The construction of additional administrative, class- room and dormitory buildings for the training school at Douala and the procurement of training tools and machine tools to enable the training school to receive up to about 240 trainees. B. The study of the economic justification of the proposed realignment of the Douala to Yaound6 main-line. The Project is expected to be completed by December 31, 1973. 18 SCHEDULE 2 Allocation of the Proceeds of the Loan Amounts Expressed Category in Dollar Equivalent I. Ballast, rail welding material, concrete sleepers and fastenings for 55 track kilometers 575,000 II. Bridge construction, including materials, for Part A(2) of the Project 690,000 III. Rails and fastenings (about 4,500 tons) for 55 track kilometers 690,000 IV. Rolling stock (about 190 freight cars and six trailers) 2,175,000 V. Consulting services for Part B of the Project 50,000 VI. Interest and other charges on the Loan accrued on or before December 14, 1973 612,000 VII. U5nallocated 408,000 Total 51200,000 Reallocation Upon Change in Cost Estimates 1. If the estimate of the expenditures under any of the Categories I to VI shall decrease, the amount then allo- cated to, and no longer required for, such Category will be reallocated by the Bank to Category VII. 2. If the estimate of the expenditures under any of the Categories I to VI shall increase, an amount equal to the portion, if any, of such increase to be financed out of the proceeds of the Loan (or, in the case of Categories I and II, an amount equal to 75% of such increase) will be al- located by the Bank, at the request of the Borrower, to such Category from Category VII, subject, however, to the re- quirements for contingencies, as determined by the Bank, in respect of the cost of the items in the other Categories. 19 SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* June 15, 1975 60,000 December 15, 1975 60,000 June 15, 1976 65,000 December 15, 1976 65,000 June 15, 1977 65,000 December 15, 1977 70,000 June 15, 1978 70,000 December 15, 1978 75,000 June 15, 1979 75,000 December 15, 1979 80,000 June 15, 1980 85,000 December 15, 1980 85,000 June 15, 1981 90,000 December 15, 1981 90,000 June 15, 1982 95,000 December 15, 1982 100,000 June 15, 1983 100,000 December 15, 1983 105,000 June 15, 1984 110,000 December 15, 1984 115,000 June 15, 1985 115,000 December 15, 1985 120,000 June 15, 1986 125,000 December 15, 1986 130,000 June 15, 1987 135,000 December 15, 1987 140,000 June 15, 1988 145,000 December 15, 1988 150,000 June 15, 1989 155,000 December 15, 1989 160,000 June 15, 1990 165,000 December 15, 1990 170,000 June 15, 1991 175,000 December 15, 1991 185,000 June 15, 1992 190,000 December 15, 1992 195,000 June 15, 1993 205,000 December 15, 1993 210,000 June 15, 1994 215,000 December 15, 1994 225,000 June 15, 1995 230,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 20 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any por- tion of the principal amount of the Loan pursuant to Sec- tion 3.05(b) of the General Conditions or on the redemption of any Bond prior to its maturity pursuant to Section 8.15 of the General Conditions: Time of Prepayment or Redemption Premiumn Not more than three years before maturity 3/4% More than three years but not more than six years before maturity ....... ...... 2 More than six years but not more than eleven years before maturity .......... . 3/4% More than eleven years but not more than sixteen years before maturity ......... 14% More than sixteen years but not more than twenty-one years before maturity ...... 5 % More than twenty-one years but not more than twenty-three years before maturity 61/2% More than twenty-three years before maturity ........................... 7o 21 SCHEDULE 4 Procurement The goods and services to be financed out of the proceeds of the Loan will be procured on the basis of international competitive bidding in accordance with the procedures set forth in the Guidelines referred to in Section 3.02 of this Agreement and in the following supplementary provisions; provided, however, that, because of the smallness of the con- tract or on grounds of standardization, the contracts for the procurement of goods and services included in Category I of the allocation of the proceeds of the Loan referred to in Section 2.02 of this Agreement, or for the procurement of track materials included in Category II of such alloca- tion of proceeds, expected to amount in the aggregate to less than 600,000 dollars, will be awarded on a negotiated basis (de gre a grg). 1. In respect of contracts other than under Category I of such allocation of the proceeds of the Loan amounting to the equivalent of 100,000 dollars or more: (a) one copy of the invitation to bid, the bid advertise- ments to be published, the draft form of contract, the specifications, and all other bid documents, together with a complete description of the advertising pro- cedure to be used (including list of publications in which the advertisement will appear and the time allowed for bid preparation) will be submitted to the Bank for its review and approval before bids are invited. (b) After bids have been received and analysed, one copy of the analysis of bids and recommendation for the contract award, together with the reasons for such recommendation, will be furnished to the Bank for its review and approval prior to the award of the contract or the issuance of a letter of intent. (c) If the proposed final contract differs materially from the terms and conditions contained in the respective 22 documents approved by the Bank under subpara- graph (a) or (b) above, then the text of the proposed changes will be submitted by the Borrower to the Bank for its review and approval prior to the execu- tion of the contract. (d) The Borrower will furnish the Bank with a signed copy of the final contract or letter of intent promptly after its execution or issuance and prior to the sub- mission to the Bank of the first application for with- drawal of funds from the Loan Account in respect of any such contract or letter of intent. 2. Contracts amounting to less than 100,000 dollars equiva- lent will not be subject to the Bank's approval; however, all bidding documents including the bid evaluation report and a signed copy of the final contract, will be submitted to the Bank promptly after execution and prior to the submission to the Bank of the first application for with- drawal of funds from the Loan Account in respect of any such contract. 3. Foreign bids for the procurement of goods included in Categories III and IV of the allocation of the proceeds of the Loan referred to in Section 2.02 of thl Agreement will be compared on a basis which shall consist of the c.i.f. (Douala) price plus an amount corresponding to the actual rate of customs duties and similar taxes paid or to be paid. 4. Bids in respect of the construction of the Japoma bridge, including materials, will be compared on the basis of the total price quoted by each of the bidders. 5. If bids incorporate a price escalation clause, a statement of an upper limit of the escalation percentage must be required from bidders and bids which do not meet this requirement must be rejected. Such upper limit will be fully added to the price for purposes of comparison between bids.