Malagasy - Third Highway Project : Credit 0351 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 351 MAG Development Credit Agreement (Third Highway Project) BETWEEN MALAGASY REPUBLIC AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 17, 1973 CONFORMED COPY CREDIT NUMBER 351 MAG Development Credit Agreement (Third Highway Project) BETWEEN MALAGASY REPUBLIC AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 17, 1973 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated January 17, 1973, between MALAGASY REPUBLIC (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) The Borrower has also requested the International Bank for Reconstruction and Development (hereinafter called the Bank) to provide additional assistance towards the financing of the Project and by an agreement of even date herewith between the Borrower and the Bank (hereinafter called the Loan Agreement) the Bank is agreeing to provide such assistance in an aggregate principal amount equivalent to fifteen million dollars ($15,000,000) (hereinafter called the Loan); (C) The Borrower and the Association intend, to the extent practicable, that the proceeds of the Credit provided for in this Agreement be disbursed on account of expenditures on the Project before disbursements of the proceeds of the Loan provided for in the Loan Agreement are made; 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 hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated January 31, 1,969, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions): 4 (a) Section 2.01(9) is deleted and the following is substituted therefor: "9. The term 'Project' means the project or projects or program or programs for which the Credit is granted, as described in the Development Credit Agreement and as the description thereof shall be amended from time to time by agreement between the Borrower, the Association and the Bank." (b) Section 5.01 is deleted; (c) Section 6.02(b) is deleted and the following is substituted therefor: "(b) The Borrower shall have failed to perform any other obligation under the Loan Agreement or the Bonds (as such terms are defined in the Development Credit Agreement), or the Development Credit Agreement." (d) Section 6.02(h) is deleted and Section 6.02(i) becomes 6.02(h); (e) Section 7.01(c) is amended to read as follows: "(c) A default shall occur in the performance of any other obligation on the part of the Borrower under the Loan Agreement or the Bonds (as such terms are defined in the Development Credit Agreement), or the - Development Credit Agreement, or under any other loan agreement between the Borrower and the Bank, or inder any bond issued pursuant to any such agreement, or tinder any other development credit agreement between the Borrower and the Association, and such default shall continue for a period of 60 days after notice thereof shall have been given by the Bank to the Borrower, or the Association to the Borrower, as the case may be." Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings thercin set forth and the following additional terms have the following meanings: (a) "Loan Agreement" means the agreement of even date herewith between the Borrower and the Bank for the purpose of the Project, as such agreement may be amended from time to time; and such term includes the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 31, 1969, as made applicable to such agreement, all agreements supplemental to the Loan Agreement and all schedules to the Loan Agreement; (b) "Loan" means the loan provided for in the Loan Agreement; 5 (c) "Loan Account" means the account referred to in Section 2.02 of the Loan Agreement, (d) "Bonds" means the bonds provided for in the Loan Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to fifteen million dollars (S15,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule shall be amended from time to time, for expenditures made (0r, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed IUnder the Development Credit Agreement; provided, however, that, except as the Association shall otherwise agree, no withdrawal shall be made on account of expenditures in the territories of any country which is not a member of the Bank (other than Switzerland) or for goods produced in, or services supplied from, such territories. Section 2.03. Except as the Association shall otherwise agree. the goods and services (other than services of consultants) required for the Project and to be financed out of the proceeds of the Credit, shall be procured on the basis of international competition Under procedures consistent with the Guidelines for Procurement under World Bank Loans and IDA Credits, published by the Bank in Ap:il 1972, as revised in October 1972, and in accordance with, and subject to, the provisions set forth in Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be December 3 1, 1977 or such other date as shall be agreed between the Borrower and the Association. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of' 1'; per an num on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semi-annually on April 15 and October 15 in each year. 6 Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each April 15 and October 15 commencing April 15, 1983 and ending October 15, 2022, each installment to and including the installment payable on October 15, 1992 to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. 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. The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appropriate engineering, administrative and financial practices and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. (a) The Borrower shall employ consultants acceptable to the Association upon terms and conditions satisfactory to the Association for the following purposes: (i) for the supervision of construction under Parts A.3 and A.4 of the Project; and (ii) to carry out Parts B and C of the Project. (b) Except as the Association shall otherwise agree, the supervision of construction of the road segments on Route Nationale No. 44 and on Route Nationale No. I (Parts A.1 and A.2 of the Project) shall be carried out by the staff of the Borrower's Ministry of Public Works (Ministre de l'Amnagement du Territoire); provided, however, that if the Association after consultation with the Borrower determines that the said staff cannot satisfactorily carry out such supervision, the Borrower shall for such purpose employ consultants acceptable to the Association upon terms and conditions satisfactory to the Association. Section 3.03. In carrying out Part A of the Project, the Borrower shall employ contractors acceptable to the Association upon terms and conditions satisfactory to the Association. Section 3.04. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the 7 proceeds of the Credit against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Association shall otherwise agree, all goods and services financed out of the proceeds of the Credit shall be used exclusively for the Project until its completion. Section 3.05. (a) The Borrower shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules, for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited representatives to inspect the Project, the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. Section 3.06. The Borrower shall take all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out the Project and shall furnish to the Association, promptly after such acquisition, evidence satisfactory to the Association that such land and rights in respect of land are available for purposes related to the Project. Section 3.07. Except as the Association shall otherwise agree, the construction included under Part A of the Project shall conform to the design standards set forth in Schedule 4 to the Development Credit Agreement. ARTICLE IV Other Covenants Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained 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. 8 Section 4.02. (a) The Borrower shall at all times adequately maintain and repair or cause to be adequately maintained and repaired all roads for which the Borrower has presently or will assume maintenance responsibility, in accordance with appropriate engineering standards and with due regard to financial and economic requirements. (b) The Borrower shall take such steps as shall be necessary to ensure that the dimensions and axle-loads of vehicles using its highways shall be consistent with the structural and geometric design standards of such highways. (c) The Borrower shall collect and record in accordance with appropriate statistical methods and procedures such technical, economic and financial information as shall be reasonably required for proper planning of maintenance, improvements and extensions of its highway system. Section 4.03. The Borrower shall at all times make available its Ministry of Public Works (Ministre de l'AmMnagement du Territoire) a sufficient number of qualified and experienced technical personnel required to maintain the efficiency of its highway administration. Section 4.04. The Borrower shall carry out or cause to be carried out a study to determine the extent to which users of rural roads pay for the costs associated with the use of such roads. The said study shall be completed by a date not later than December 3 1 1973 or such later date as shall be agreed to by the Association. ARTICLE V Consultation, Information and Inspection Section 5.01. The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Borrower and the Association shall from time to time, at the request of either party: (a) exchange views through their representatives with regard to the performance of their respective obligations under the Development Credit Agreement, the administration, operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out any part of the Project, and other matters relating to the purposes of the Credit; and 9 (b) furnish to the other all such information as it shall reasonably request with regard to the general status of the Credit. On the part of the Borrower, such information shall include information with respect to financial and economic conditions in the territories of the Borrower, including its balance of payments, and the external debt of the Borrower, of any of its political subdivisions and of any agency of the Borrower or of any such political subdivision. Section 5.02. (a) The Borrower shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the administration, operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out any part of the Project. (b) The Borrower and the Association shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit, the maintenance of the service thereof or the performance by either of them of its obligations under the Development Credit Agreement. Section 5.03. The Borrower shall afford all reasonable opportunity for accredited representatives of the Association to visit any part of the territories of the Borrower for purposes related to the Credit. ARTICLE VI Taxes and Restrictions Section 6.01. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories. Section 6.02. The Development Credit Agreement shall be free from any taxes on or in connection with the execution, delivery or registration thereof, imposed under the laws of the Borrower or laws in effect in its territories. Section 6.03. The payment of the principal of, and service charges on, the Credit shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Bor .wer or laws in effect in its territories. 10 ARTICLE VII Remedies of the Association Section 7.01. If any event specified in Section 7.01 of the General Conditions shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continuance thereof, the Association, at its option, may by notice to the Borrower declare the principal of the Credit then outstanding to be due and payable immediately together with the service charges thereon and upon any such declaration such principal and service charges shall become due and payable immediately, anything to the contrary in the Development Credit Agreement notwithstanding. ARTICLE VIII Effective Date; Termination Section 8.01. The following event is specified as an additional condition to the effectiveness of the Development Credit Agreement within the meaning of Section 10.01(b) of the General Conditions, namely, that the Loan Agreement has become effective in accordance with its terms. Section 8.02. The date April 17, 1973, is hereby specified for the purposes of Section 10.04 of the General Conditions. Section 8.03. The obligations of the Borrower under Sections 4.01, 4.02, 4.03 and 5.02(a) of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty-five years after the date of this Agreement, whichever shall be the earlier. ARTICLE IX Representacive of the Borrower; Addresses Section 9.01. The Minister of Economy and Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. Section 9.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: Ministre de l'Economie et des Finances Tananarive Malagasy Republic 11 Cable address: MINECOFIN Tananarive For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. 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 to be delivered in the District of Columbia, United States of America, as of the day and year first above written. MALAGASY REPUBLIC By /s/ Henri Raharijaona Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / Bernard R. Bell Regional Vice President Eastern Africa 12 SCHEDULE I Withdrawal of the Proceeds of the Credit and of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit and of the Loan, the allocation of amounts of such proceeds to each Category and the percentage of eligible expenditures so to be financed in each Category: Amount of the Credit and of the Loan Allocated % of (Expressed in Expenditures CategorY Dollar Equivalent) to be Financed I. Civil works for 23,300,000 69% of total ex- Part A of the Proj- penditures ect (including re- lated laboratory work) II. Consultants' Services 100% of foreign (including vehicles expenditures and other equipment required) (a) Supervision of 930,000 construction for Part A of the Project. (b) Detailed en- 470,000 gineering for Part B of the Project. (c) Study for improv- 100,000 ement of traffic counting system for Part C of the Project. III. Unallocated 5,200,000 TOTAL 30,000,000 13 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures for goods produced in, or services supplied from, the territories, and in the currency, of any country other than the Borrower; and (b) the term "total expenditures" means the aggregate of foreign expenditures and of expenditures for goods produced in, or services supplied from, the territories of the Borrower. 3. Notwithstanding the provisions of paragraph I ibove, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement; (b) payments for taxes imposed under the laws of the Borrower or laws in effect in its territories on goods or services, or on the importation, manufacture, procurement or supply thereof. To the extent that the amount represented by the percentage set forth in the third column of the table in paragraph I above in respect of any Category would exceed the amount payable net of all such taxes, such percentage shall be reduced to ensure that no proceeds of the Credit or of the Loan will be withdrawn on account of payments for suLCh taxes; and (c) in addition, except as the Borrower, the Association and the Bank shall otherwise agree, and until all amounts of the Credit shall have been withdrawn or committed, no withdrawals shall be made from the Loan Account except under commitments entered into by the Bank pursuant to Section 5.02 of tile General Conditions referred to in Section 1.01 of the Loan Agreement. 4. Notwithstanding the allocation of an amount of the proceeds of the Credit and of the Loan set fortlh in the second column of tile table in palagraph I above: (a) if the estimate of the expenditures under any Category or subcategory shall decrease, the amoult of the proceeds of the Credit and of the Loan then allocated to such Category and no longer required therefor will be reallocated by the Association and by the Bank or, after full withdrawal of all amnIlts of tile Credit, by the Bank, by increasing correspondingly tile unallocated aIlount of the proceeds of the Credit and of the Loan: (b) if the estimate of the expenditures under any Category or subcategory shall increase, the percentage set forth in the third colunll of the table in paragraph 14 1 above in respect of such expenditures shall be applied to the amount of such increase, and a corresponding amount will be allocated by the Association and by the Bank or, after full withdrawal of all amounts of the Credit, by the Bank, at the request of the Borrower, to such Category from the unallocated amount of the proceeds of the Credit and of the Loan, subject, however, to the requirements for contingencies, as determined by the Association and by the Bank or, after full withdrawal of all amounts of the Credit, by the Bank, in respect of any other expenditures, and (c) if the Association or the Bank shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement and of the Loan Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit or of the Loan and the Association or the Bank may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement or of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Credit or of the Loan as in the Association's or the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit or of the Loan. 5. Notwithstanding the percentages set forth in the third column of the table set out in paragraph I above, if the estimate of total expenditures under Category I shall increase and no proceeds of the Credit and of the Loan are available for reallocation to such Category, the Association and the Bank or, after full withdrawal of all amounts of the Credit, the Bank, may, by notice to the Borrower, adjust the percentage then applicable to such expenditures in order that further withdrawals under any such Category may continue until all expenditures thereunder shall have been made. 15 SCHEDULE 2 Description of the Project The Project consists of the following Parts: A. Construction of about 417 km of primary roads and bridges, consisting of the following: 1. about 24 km on Route Nationale No. 44, between Vohidiala and Ambatondrazaka; 2. about 59 km on Route Nationale No. 1, between Arivonimamo and Analavory; and 3. about 334 km on Route Nationale No. 34, between: (a) Antsirabe and Betafo (about 21 km); (b) Betafo and Mandoto (about 81 kin); (c) Mandoto and Miandrivazo (about 118 kn); and (d) Miandrivazo and Malaimbandy (about 114 km). 4. twelve major bridges on the Miandrivazo-Malainbandy section of Route Nationale No. 34. B. Detailed engineering for about 200 km on Route Nationale No. 6, between Antsohihy and Ambanja. C. A study for improving the Borrower's traffic counting system. The Project is expected to be completed by June 30, 1977. 16 SCHEDULE 3 Procurement With respect to any contract for civil works for Part A of the Project: 1. Bidders shall be prequalified, and at least 45 days will be allowed for the submission of prequalification documents. The Borrower shall, before qualification is invited, inform the Association in detail of the procedure to be followed, including the text of the notice of invitation to prequalify, and shall introduce such modifications in said procedure as the Association shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequalification, shall be furnished by the Borrower to the Association for its comments before the applicants are notified and the Borrower shall make such additions to or deletions from the said list as the Association shall reasonably request. 2. (a) The civil works under the Project will be divided into seven lots, corresponding to Parts A.1, A.2, A.3(a), A.3(b), A.3(c), A.3(d) and A.4 of the Project. For bidding purposes, these seven lots will be formed into two Packages as follows: Package 1: Parts A. I and A.2 Package 2: Parts A.3(a), A.3(b), A.3(c), A.3(d) and A.4 (b) All lots in each Package shall be bid concurrently, and prequalified bidders shall be permitted to bid for any one or more lots or for all lots in a Package, subject only to limitations imposed as a result of the prequalification process. Contracts within each Package shall be awarded on the basis of the lower of (i) the lowest evaluated bid for the Package as a whole or (ii) the lowest combination of evaluated bids covering the whole of the works in the Package. All contracts will be awarded on a unit price basis. 3. Before bids are invited, the Borrower shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, and shall make such modifications in the said documents as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. A period of at least 90 days will be allowed for the submission of bids. 17 4. Bids will be accompanied by a bid bond or bank guarantee amounting to not less than 2% of the estimated contract value. 5. After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Association of the name of the bidder to whom it intends to award the contract and shall furnish to the Association, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, together with the reasons for the intended award. The Association shall, if it determines that the intended award would be inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement, promptly inform the Borrower and state the reasons for such determination. 6. The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. 7. Each successful bidder will furnish a bank guarantee in an amount not less than 10% of the contract price or a performance bond in an amount of not less than 100% of the contract price, which guarantee or bond shall remain in effect at least until provisional acceptance of the works provided for in the contract. 8. Each contract shali include: (i) a price escalation clause; (ii) a provision for retention, for a period of at least one year after provisional acceptance of the works by the Borrower, of not less than 10X of the amount payable to the contractor on monthly invoices, until the total amount retained shall have reached not less than 5(' of the total contract price, and for substitution at the option of the contractor of a bank guarantee for the amount so retained, in a like amount and for a like term; and (iii) a provision holding the contractor responsible for correcting defects in construction for a period of at least one year after provisional acceptance of the works by the Borrower. 9. Two conformed copies of each contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of any such contract. 18 10. Tender documents shall clearly indicate the requirements for payment of customs duties and other taxes. 19 SCHEDULE 4 Design Standards Antsirabe- Vohidiala- Arivonimnamo- Betafo- Mandoro- Miandrirazo- Roads Ambatondrazaka AnalavorY Mandoto Miandrivazo Malaimbandy Maximum design speed (km/h) 50 60 50 50 (25) 60 (45) Minimum radius for horizontal curves (m) 100 (60) 180 (80) 100 (60) 100 (60) 120 (60) Minimum radius for vertical curves (m): crest 1000 (750) 1000 (750) 1200 (800) 1200 (800) 1400 (750) sag 750 (500) 550 (500) 700 (400) 700 (400) 750 (500) Maximum grade per cent 8 (10) 8 (10) 10 (12) 10 (12) 8 (10) Transversal slope (percent): pavement 3 3 3 3 3 shoulders 4 4 4 4 4 Pavement width (m) 5.5 5.50(7.0 5.5 5.5 6.0 in ur- ban areas) Platform width (m) min.7.0 min.7.0 min.9.0 min.8.8 9.3 (8.5) Pavement design axle load (tons) 10 10 10 10 10 Type of pave- ment asphalt-paved asphalt-paved asphalt-paved asphalt-paved not paved (SST with -rades over 4':) Bridges Carriage-way width (in) 3.5 and 7.0 7.0 3.5 and 7.0 3.5 3.5 and 7.0 Carriage-way clearance horizontal (in) 5.0 5.0 5.0 5.0 5.0 Sidewalks: number ---------one on each side of carriageway-- - width (m) 0.75 to 0.75 0.75 0.5 0.5 1.0 (0.5 for one- lane bridges) Design load --in accordance with "Cahier des Prescriptions Communes"---