Cameroon - Semry Rice Project : Credit 0302 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 302 CM Project Agreement (SEMRY Rice Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND SOCIETE D'EXPANSION ET DE MODERNISATION DE LA RIZICULTURE DE YAGOUA (SEMRY) DATED APRIL 26, 1972 CONFORMED COPY CREDIT NUMBER 302 CM Project Agreement (SEMRY Rice Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND SOCIETE D'EXPANSION ET DE MODERNISATION DE LA RIZICULTURE DE YAGOUA (SEMRY) DATED APRIL 26, 1972 PROJECT AGREEMENT AGREEMENT, dated April 26, 1972, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and SOCIETE D'EXPANSION ET DE MODERNISATION DE LA RIZICULTURE DE YAGOUA (hereinafter called SEMRY). WHEREAS by a development credit agreement of even date herewith between the Federal Republic of Cameroon (hereinafter called the Borrower) and the Association (hereinafter referred to as the Development Credit Agreement), the Association has agreed to make available to the Borrower an amount in various currencies equivalent to three million seven hundred thousand dollars ($3,700,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that SEMRY agree to undertake such obligations toward the Association as hereinafter set forth; and WHEREAS by a Project Financing Agreement to be entered into between the Borrower and SEMRY, the proceeds of the Credit provided for under the Development Credit Agreement will be made available to SEMRY on the terms and conditions therein set forth; and WHEREAS SEMRY, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the 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. SEMRY shall carry out the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in 4 conformity with sound administrative, financial and engineering practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 2.02. In order to assist SEMRY in the preparation of plans, specifications and bidding documents for the Project and in the supervision of the construction of the Project, SEMRY shall employ a firm of engineering consultants acceptable to the Association upon terms and conditions satisfactory to the Association. Section 2.03. In carrying out Part A of the Project, SEMRY shall employ contractors acceptable to the Association upon terms and conditions satisfactory to the Association. Section 2.04. 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 August 1969, as revised in May 1971, and in accordance with, and subject to, the provisions set forth in Schedule 1 to this Agreement. Section 2.05. (a) SEMRY undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit made available to it by the Borrower 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 SEMRY to replace or repair such goods. (b) Except as the Association may otherwise agree, SEMRY shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclusively for the Project until its completion. Section 2.06. (a) SEMRY shall furnish to the Association promptly upon their preparation, the plans, reports, specifications, 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) SEMRY: (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 made available to it by the Borrower, 5 and to disclose the use thereof in the Project; (ii) shall enable the Association's representatives to inspect the Project, the goods financed out of such proceeds 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 made available to it and the goods and services financed out of such proceeds. Section 2.07. SEMRY shall duly perform all its obligations under the Project Financing Agreement. Except as the Association shall otherwise agree, SEMRY shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Project Financing Agreement or any provision thereof. ARTICLE III Management and Operations of SEMRY Section 3.01. SEMRY shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with sound practice. Section 3.02. (a) SEMRY shall, at all times, conduct its operations and affairs under competent and experienced management mutually acceptable to the Association and SEMRY assisted by an adequate number of competent and experienced staff. (b) Without limiting the generality of the foregoing SEMRY shall provide, for a period of not less than ten years after the date of this Agreement, technical services to farmers within the Project Area at a level satisfactory to the Association. Section 3.03. Before SEMRY shall undertake or execute, for its own account or for the account of any third party or parties, any new major project or development other than the Project, it shall first have satisfied the Association that such action would not interfere with its obligations under this Agreement. For the purpose of this Section, the term "major project or development" means any project or development involving an investment of more than the equivalent of fifty million CFAF or such other amount as shall be agreed from time to time between the Association and SEMRY. Section 3.04. SEMRY shall not, without the consent of the Association, contract any debt maturing more than one year after the date on which it is incurred. 6 Section 3.05. (a) SEMRY shall, except as the Association shall otherwise agree, take all steps necessary to acquire, maintain and renew all rights, powers and franchises which are necessary or useful for the purpose of carrying out its obligations under this Agreement and the Project Financing Agreement and the cahier des charges. (b) Except as the Association shall otherwise agree, SEMRY shall not create or acquire any subsidiary. (c) SEMRY shall not take any action for amending, suspending, abrogating, terminating, waiving, or assigning the cahier des charges without the prior approval of the Association. Section 3.06. SEMRY shall at all times manage its affairs, installations and rice mill and maintain its financial position in accordance with sound financial management practices and in particular, shall adequately maintain its equipment and fixed assets and promptly make all necessary renewals and repairs thereof. ARTICLE IV Financial Covenants Section 4.01. SEMRY shall maintain records adequate to reflect in accordance with consistently maintained sound accounting practices its operations and financial condition. Section 4.02. (a) SLMRY shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound 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 four 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 the accounts and financial statements of SEMRY and the audit thereof as the Association shall from time to time reasonably request. (b) SEMRY shall complete a reorganization of its accounting system, on terms and conditions satisfactory to the Association, by a date not later than July 1, 1972. 7 Section 4.03. Except as the Association shall otherwise agree, SEMRY shall not declare or pay any dividends to its shareholders prior to June 30, 1982. Section 4.04. SEMRY shall call for the payments of the capital subscription of its shareholders promptly as needed for the carrying out of the Project. ARTICLE V Consultation, Information and Inspection Section 5.01. The Association and SEMRY shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Association and SEMRY shall from time to time, at the request of either party, exchange views through their representatives with regard to the performance of their respective obligations under this Agreement, the administration, operations and financial condition of SEMRY and other matters relating to the purpose of the Credit. Section 5.02. The Association and SEMRY 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 performance by either of them of its obligations under this Agreement or the perforiance by the Borrower and SEMRY of their respective obligations under the Project Financing Agreement. Section 5.03. SEMRY shall enable the Association's representatives to inspect all plants, sites, works, properties and equipment of SEMRY and any relevant records and documents. ARTICLE VI Effective Date; Termination; Cancellation and Suspension Section 6.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 6.02. (a) This Agreement and all obligations of the Association and of SEMRY 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 8 (ii) a date twenty five 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 SEMRY of this event and, upon the giving of such notice, this Agreement and all obligations of the parties thereunder shall forthwith terminate. Section 6.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Development Credit Agreement. ARTICLE VII Miscellaneous Provisions Section 7.01. 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: Indevas Washington, D.C. For SEMRY: Socidt6 d'Expansion et de Modernisation de la Riziculture de Yagoua B.P. 46 Yagoua Federal Republic of Cameroon 9 Cable address: SEMRY Yagoua Section 7.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of SEMRY may be taken or executed by the President du Conseil d'Adninistration or such other person or persons as he shall designate in writing. Section 7.03. SEMRY shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of SEMRY, take any action or execute any documents required or permitted to be taken or executed by SEMRY pursuant to any of the provisions of this Agreement. Section 7.04. 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 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. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / Simon Aldewereld Vice President SOCIETE D'EXPANSION ET DE MODERNISATION DE LA RIZICULTURE DE YAGOUA By /s / Franqois-Xavier Tchoungui Authorized Representative 10 SCHEDULE 1 Procurement 1. In respect of any contract for civil works for items 1, 2, 3, 4, 5, 6 and 7 of Part A of the Project, estimated to cost the equivalent of $75,000 or more: (a) If bidders are required to prequalify, the Borrower shall, before qualification is invited, inform the Association in detail of the procedure to be followed 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 or deletions from the said list as the Association shall reasonably request. (b) 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, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedure 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. (c) 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 2.04 of this Agreement, promptly inform the Borrower and state the reasons for such determination. (d) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. (e) Two conformed copies of the 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 Loan Account in respect of any such contract. 11 2. With respect to the goods and services included in Part D of the Project, items to be procured shall be grouped together in amounts sufficient to attract international competitive bidding as specified in Section 2.04 of this Agreement. No international competitive bidding will be required for such minor items or groups of items expected to cost less than $5,000 each; provided, however, that the aggregate total cost of such items does not exceed $50,000 equivalent. 3. In respect of any contract for civil works expected to cost less than $75,000 and in respect of any contract for the procurement of goods and services expected to cost less than the equivalent of $10,000, the Borrower shall furnish 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 Loan Account in respect of any such contract, two conformed copies of such contract, together with the analysis of bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract is not consistent with the procedures set forth or referred to in Section 2.04 of this Agreement, promptly inform the Borrower and state the reasons for such determination. 4. Provided that the aggregate cost of such item will not exceed $55,000 equivalent, civil works contracts under item 8 of Part A of the Project shall be subject to local competitive bidding in accordance with the regulations in effect in the territories of the Borrower.