India - Drought Prone Areas Project : Credit 0526 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 526 IN Development Credit Agreement (Drought Prone Areas Project) BETWEEN INDIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 24, 1975 CONFORMED COPY S CREDIT NUMBER 526 IN Development Credit Agreement (Drought Prone Areas Project) BETWEEN INDIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 24, 1975 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated January 24, 1975, between INDIA, acting by its President (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) By agreements of even date herewith between the Association and the States of Andhra Pradesh, Karnataka, Rajasthan (acting by their respective Governors and hereinafter respectively called Andra Pradesh, Karnataka and Rajasthan) and an agreement of even date herewith between the Association and the Governor of the State of Maharashtra, (hereinafter called Maharashtra), Andhra Pradesh, Karnataka, Rajasthan and Maharashtra have each agreed to undertake certain obligations in respect of the carrying out of the Project. (C) The Association is willing to make the Credit available upon the terms and conditions set forth hereinafter and in the agreements referred to in Recital (B) above; 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 March 15, 1974, with the same force and effect as if they were fully set forth herein, subject, however, to the following modification thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions), namely, in Section 2.01, the following paragraph is substituted for paragraph 5: "5. The term Borrower means India, acting by its President." Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective 4 meanings therein set forth and the following additional terms have the following meanings: (a) "Andhra Pradesh" means the State of Andhra Pradesh, a state of India, or any successor thereof; (b) "Karnataka" means the State of Karnataka, a state of India, or any successor thereof; (c) "Rajasthan" means the State of Rajasthan, a state of India, or any successor thereof; (d) "Maharashtra" means the State of Maharashtra, a state of India, or any successor thereof; (e) "the States" means Andhra Pradesh, Karnataka, Rajasthan and Maharashtra; (f) "Andhra Pradesh Project Agreement" means the agreement between the Association and Andhra Pradesh of even date herewith as the same may be amended from time to time; (g) "Karnataka Project Agreement" means the agreement between the Association and Karnataka of even date herewith as the same may be amended from time to time; (h) "Rajasthan Project Agreement" means the agreement between the Association and Rajasthan of even date herewith as the same may be amended from time to time; (i) "Maharashtra Project Agreement" means the agreement between the Association and the Governor of Maharastra of even date herewith as the same may be amended from time to time; (j) "the States Project Agreements" means the agreements defined in (f) to (i) of this Section and referred to in Recital (B) of this Agreement and "the respective State Project Agreement" means in relation to any one of the States, any such agreement to which that State is a party; (k) "ICAR" means Indian Council of Agricultural Research; (1) "Drought Prone Areas Program", "Program" or "DPAP" means Drought Prone Areas Program established by the Borrower during its Fourth Plan Per:od; 5 (m) "Project Area" means the districts of Anantapur in Andhra Pradesh, Bijapur in Karnataka, Jodhpur and Nagaur in Rajasthan and Ahnednagar and Sholapur in Maharashtra and such additional areas as India and the Association shall determine; (r) "DDA" means the District Development Authority established or to be established in each district included in the Project Area and shall in the case of Maharashtra include the Project Executive Committee of the District Planning and Development Councils for the districts of Ahmednagar and Sholapur referred to in Section 3.01 of the Maharashtra Project Agreement and shall in the case of Karnataka include the Drought Prone Area Development Authority; (o) "Project Implementation Units" means the units in the Project Area which are to carry out those portions of the Project for which the States under the States Project Agreements respectively have responsibility, as agreed by the Borrower and the Association; (p) "ARC" means Agricultural Refinance Corporation, a corporation established by law of the Borrower; (q) "Rs" means rupees in the currency of the Borrower; and (r) "Central DPAP Unit" means the unit in the Borrower's Ministry of Agriculture concerned with the DPAP. 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 amouit in various currencies equivalent to thirty five million dollars ($35,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time, for expenditures made (or, 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 out of the proceeds of the Credit. Section 2.03. (a) Except as the Association shall otherwise agree, the goods works and services (other than consultants' services) for the Project to be financed 6 out of the proceeds of the Credit, shall be procured in accordance with the provisions of Schedule 3 to this Agreement. (b) When, with respect to any contract for goods described in paragraph (a) above, the lowest evaluated bid falls under Group C (as defined in paragraph B(2)(b) of Schedule 3 to this Agreement), the Borrower shall immediately grant permission to import the goods covered by the contract, and no reviews of such permission to import shall be made by the Borrower or by any of its agencies, and all foreign exchange required therefor shall be promptly made available. When, with respect to any contract, the lowest evaluated bid falls under Group A or under Group B (as defined in paragraph B(2)(b) of Schedule 3 to this Agreement), the Borrower shall: (i) promptly upon receipt of the appropriate applications, issue, or cause to be issued, such import licenses as shall be required to implement the contract; (ii) make available, or cause to be made available, promptly as needed, all foreign exchange which shall be required therefor; and (iii) with respect to locally produced materials which are subject to allocation, make, or cause to be made, allocations of such materials promptly and in such quantities as shall be required for such contract. Section 2.04. The Closing Date shall be June 30, 1980 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 annum 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 May 1 and November I in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each May I and November 1 commencing May 1, 1985 and ending November 1, 2024, each installment to and including the installment payable on November 1, 1994 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 Kingdom of Great Britain and Northern Ireland is hereby specified for the purposes of Section 4.02 of the General Conditions. 7 ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project, or cause the Project to be carried out, with due diligence and efficiency and in conformity with sound financial, administrative 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. (b) Without any limitation or restriction upon any of its other obligations under this Agreement, the Borrower shall take and cause all its agencies to take all action which shall be necessary on their part to enable the States to perform all of their obligations under the States' Project Agreements and shall not take or permit to be taken any action which would prevent or interfere with such performance. (c) In order to assist the States in carrying out Parts A through H and K of the Project, the Borrower shall make available to the States the proceeds of the Credit under Categories (1), (2) and (3) of Schedule 1, in accordance with the Borrower's standard arrangements for assistance to the States of India for development. Section 3.02. In order to assist the Borrower in advising the States in carrying out Parts C, E, F, I, and J of the Project, the Borrower shall employ a pasture development advisor, an advisor for calf rearing centers, a senior pasture agronomist and an agro-meteorologist, and, in order to assist the Borrower in advising Maharashtra, in carrying out Part G of the Project, the Borrower shall employ a bagasse treatment specialist, all with qualifications, experience and terms and conditions of employment satisfactory to the Association. Section 3.03. The Borrower undertakes to ensure that at all times prior to the Closing Date, the following positions shall be filled by persons with qualifications and experience satisfactory to the Association: (i) the Senior Agricultural Economist of the All-India Coordinated Research Project for Dryland Farming of ICAR; (ii) the three senior specialists in soil conservation and dry farming, irrigation and economics in the Central DPAP Unit. Section 3.04. The Borrower shall in carrying out any research project under Part I of the Project finalize the terms of reference for such research project in consultation with the Association. 8 Section 3.05. (a) The Borrower shall ensure the preparation of a banking plan by ARC for each of the districts included in the Project Area and shall furnish such banking plans to the Association for its comments. (b) The Borrower shall ensure that ARC undertakes the appraisal and sanctioning of proposals received from the States for institutional financing under the Project in such phasing and volume as shall facilitate the implementation by the States of the Project. Section 3.06. (a) The Borrower shall insure, or cause to be insured, or make, or cause to be made, adequate provision for the insurance of, the imported goods to be financed out of the 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 to replace or repair such goods. (b) Except as the Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.07. The Borrower shall: (i) maintain in its Central DPAP Unit (A) records adequate to record the progress of Parts I and J of the Project to be carried out by the said Central DPAP Unit (including the cost thereof), to identify the goods and services financed out of the proceeds of the Credit under the said Parts of the Project, and (B) separate summary accounts for each district included in the Project Area, for ICAR and for the Central DPAP Unit, said summary accounts to be based on summaries furnished by the DPAP Units of the States and by ICAR, or summaries available at the Central DPAP Unit (ii) maintain in ICAR records adequate to (A) record the progress of Part I of the Project (including the cost thereof), (B) identify the goods and services financed out of the proceeds of the Credit under the said Part of the Project; (iii) enable the Association's representatives to visit the facilities and construction sites included in the Project, and to examine the goods financed out of such proceeds and any relevant records and documents; and (iv) 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 3.08. The Borrower shall take all steps as shall be necessary on its part to ensure that farmers in the districts included in the Project Area in which dry farming is to be carried out under the Project, receive fertilizer in such quantities and at such times as are recommended by extension services. 9 ARTICLE IV Other Covenants Section 4.01. In order to coordinate the execution of the Drought Prone Areas Program, to review the performance of the sub-sectors involved in the Program, to ensure consistency of technical norms with those of other programs, and to advise officials of departments concerned with the execution of the Program, the Borrower shall establish an Interdepartmental Coordination Committee, under the chairmanship of the Secretary of the Department concerned with the DPAP. Section 4.02. 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 and agencies of the Borrower responsible for carrying out the Project or any part thereof. Section 4.03. The Borrower and the Association shall exchange views through their representatives with regard to the performance of the obligations of the States and the Association under the States Project Agreements and shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the performance of the said obligations by the States and the Association. ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) any of the States shall have failed to perform any covenant, agreement or other obligation of such State under the respective State Project Agreement; and (b) an extraordinary situation shall have arisen which shall make it improbable that any of the States shall be able to perform its obligations under the respective State Project Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified namely, that, any event specified in Section 5.01(a) of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower. 10 ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an additional condition to the effectiveness of this Agreement within the meaning of Section 12.01(b) of the General Conditions, namely, the submission to the Association by the Borrower of evidence that the three senior specialists in soil conservation and dry farming, irrigation and economics in the Central DPAP Unit have been appointed in accordance with Section 3.03 of this Agreement. Section 6.02. The date May 30, 1975 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.03. The obligations of the Borrower under Article IV of this Agreement and the provisions of Section 5.01 of this Agreement and those of Section 5.02 of this Agreement shall cease and determine on the date on which this Agreement shall terminate or on a date twenty years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. Any Secretary, Additional Secretary, Joint Secretary, Director or Deputy Secretary to the Government of India in the Ministry of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: ECOFAIRS New Delhi 11 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 'iereunto duly authorized, 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. INDIA By /s / T. N. Kaul Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s!/ M. L. Weiner Regional Vice President South Asia 12 SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works: (a) Andhra Pradesh 1,300,000 ) (b) Karnataka 3,700,000 ) 95% (c) Maharashtra 3,500,000 ) (d) Rajasthan 1,200,000 ) (2) Machinery, equip- ment, vehicles and livestock: ) 100% of foreign )nP0 expenditures (a) Andhra Pradesh 4000 ) (c.i.f.) for im- (b) Karnataka 400,000 ) ported items and (c) Maharashtra 700,000 ) 80% of local ex- (d) Rajasthan 1,100,000 ) penditures for ) locally procured ) items (3) Operating costs of DDAS and Proj- ect Implementa- tion Units: (a) Andhra Pradesh ,400,000 ) (b) Karnataka 1 ,300,000 ) 60% (c) Maharashtra 2,200,000 ) (d) Rajasthan 2,000,000 (4) Technical assis- 1,300,000 100% tance and research under Parts C, E, F G I and J of the Project (5) Unallocated 14,500,000 TOTAL 35,000,000 13 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures for goods or services supplied from the territory, and in the currency, of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrowe:, and for goods or services supplied from the territory of the Borrower. 3. The disbursement percentages have been calculated in compliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if any event occurs which shall affect the amount of any such taxes included in the cost of any item to be financed out of the proceeds of the Credit, the Association may, by notice to the Borrower, correspondingly adjust the disbursement percentage then applicable to such item. 4. Notwithstanding the provisions of paragraph I above no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement; (b) more than 47.5% of expenditures under Category (1) relating to the construction of any tank included in Part A of the Project until the Association is furnished with a certificate of the Project Manager of the DDA in the district concerned showing that development has started in the command area of the said tank in accordance with plans consistent with those approved by the Association for the district; and (c) expenditures relating to the portion of the Project to be carried out by a State unless and until the Association notifies the Borrower that it has been furnished with: (i) evidence satisfying it that the execution and delivery of the respective State Project Agreement have been duly authorized or ratified by all necessary governmental action, (ii) an opinion or opinions of counsel acceptable to the Association showing that the respective State Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the State concerned and is legally binding upon such State in accordance with its terms, and (iii) evidence showing that a DDA has been established in each district forming part of the Project Area in the State concerned and a Project Manager with the rank of Additional Collector appointed to such a DDA. 14 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph I above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category to the extent required to meet the estimated shortfall proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures, and (ii) with respect to Categories (1), (2): local expenditures, (3) and (4) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as in the Association's reasonable opinion represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 15 SCHEDULE 2 Description of the Project The Project, which is part of the Borrower's Drought Prone Areas Program, is designed to increase and stabilize the production from agriculture and related activities in the Project Area. The portion of the Project to be carried out in each of the States is set forth in the Schedule to the respective State Project Agreement. The Project in the aggregate consists of the following Parts: A. The construction of minor irrigation works including dug wells, tubewells, and tanks, with a total command area of about 20,000 hectares. B. Command area development of about 12,000 hectares irrigated by the tubewells and tanks to be constructed under Part A of the Project. C. Watershed management and related works including: (i) land use capability surveys; (ii) soil and moisture conservation works to protect about 370,000 hectares of arable land and about 80,000 hectares of non-arable public and village common pasture land; (iii) the establishment of improved grasses on the above-mentioned 80,000 hectares as well as on about 10,000 hectares of private land; (iv) afforestation of about 16,000 hectares of public lands, the establishment of about 2,000 hectares of public village woodlots and about 1,200 kilometers of roadside and boundary windbreaks, plus farm woodlots and boundary plantings; and (v) the stabilization of about 1,000 hectares of sand dunes. D. A dry farming development program to extend improved technology to about 37,500 farmers who cultivate around 200,000 hectares. E. The improvement of sheep and wool production by the establishment of about 370 sheep growers co-operatives to manage the improved pasture on village common lands referred to in Part C(iii) of the Project, distribution of crossbred rams and expansion of animal health services. F. The development of dairy production through the establishment of producers cooperatives and milk collection systems, the establishment and staffing of mobile veterinary units and calf rearing centers and the establishment or expansion of artificial insemination units. G. Fodder banking and of a pilot project for cane bagasse treatment to increase its fodder value. 16 H. The preparation and execution of diversification projects in sericulture, horticulture, and inland fisheries. I. Pasture development agrometeorology and agroeconomic research on dryland farming. J. The training of Project staff. K. Measures to improve the flow of agricultural credit. The Project is expected to be completed by March 31, 1980. 17 SCHEDULE 3 Procurement A. General Procedures 1. Contracts for drilling equipment shall be let under procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in April 1972, as revised in October 1972 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. (a) Contracts estimated to cost $12,500 or more for the construction of tanks and for the procurement of machinery, equipment and vehicles, shall be let after competitive bidding based on local advertising. (b) Contracts estimated to cost less than $12,500 for the procurement of machinery, equipment and vehicles shall be let on the basis of prudent shopping. (c) For any contracts for imported bulls included in Category 2, quotations shall be invited from at least three countries free from foot-and-mouth disease, to be selected in agreement with the Association. All such contracts shall be subject to approval by the Association as regards age, price, quality, source and suitability of bulls. (d) Civil works to be executed by the States (other than tank construction) shall be carried out by force account or, at the option of a State, after competitive bidding based on local advertising. B. Evaluation and Comparison of Bids for Goods; Preference fbr Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the supply of goods: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for domestically-manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically-supplied goods, shall be excluded; and (iii) the cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. 2. Goods manufactured in India may be granted a margin of preference in accordance with, and subject to, the following provisions: 18 (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in India if the bidder shall have established to the satisfaction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in India equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in India. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes on goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evaluated bid of each group. The lowest evaluated bid of each group shall then be compared with each other, and if, as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. (d) If, as a result of the comparison under paragraph (c) above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid, or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the lowest evaluated bid from group C shall be selected. C. Review of Procurement Decisions by the Association I. Review of invitation to bid and of proposed awards and final contracts: With respect to all contracts for equipment and materials estimated to cost the equivalent of $100,000 or more: 19 (a) 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 procedures 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. (b) Promptly after the bids have been received, the Borrower shall inform the Bank of the names of the bidders and the respective amounts of the bids. (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 which it intends to award the contract and the reasons for the intended award 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 recommendation for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, 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 or prequalification invited. (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 Credit Account in respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding paragraph, 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 Credit Account in respect of 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 was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination.