Madagascar-Madagascar-Malagasy - Village Livestock And Rural Development Project : Credit 0506 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 506 MAG Development Credit Agreement (Village Livestock and Rural Development Project) BETWEEN MALAGASY REPUBLIC AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED AUGUST 21, 1974 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated August 21, 1974, between MALAGASY REPUBLIC (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). 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 (said General Conditions Applicable to Development Credit Agreements of the Association being hereinafter called the General Conditions). 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 therein set forth and the following additional terms have the following meanings: (a) "FAFIFAMA" means the Livestock Development Unit, an Etablissement Public d Caractere Industriel et Commercial of the Borrower responsible for livestock development in the Majunga Province, established under Decree No. 74-094 dated March 15, 1974 of the Borrower and includes any successor thereto; (b) "OMBY" means the Ranch State Farm OMBY, an Etablissement Public of the Borrower, established under Decree No. 69-017 dated January 16, 1969 of the Borrower. (c) "ODEMO" means Operation pour le D&eloppement du Moyen Ouest, an organisme d' intervention reigionale intggrge of the Borrower. (d) "FAFIFAMA Project Funds Agreement" means the agreement and its schedules to be entered into between the Borrower and FAFIFAMA pursuant to Section 3.01(c) of this Agreement, as the same may be amended from time to time with the approval of the Association. (e) "OMBY Financing Agreement" means the agreement and its schedules to be entered into between the Borrower and OMBY pursuant to Section 3.01(d) of this Agreement, as the same may be amended from time to time with the approval of the Association. 4 (f) "Project Area" means the Borrower's Majunga Province and the Tsiroanomandidy Sub-Prefecture in the Tananarive Province. 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 nine million six hundred thousand dollars ($9,600,000). 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 described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods, the carrying out of works or services (other than consultants' services) for the Project and to be financed out of the proceeds of the Credit, shall be awarded in accordance with the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1979 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 April 1 and October I in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each April 1 and October 1 commencing October 1, 1984, and ending April 1, 2024, each installment to and including the installment payable on April 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 States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. 5 ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out Parts A through D of the Project through FAFIFAMA, Part E of the Project through FAFIFAMA with the assistance of the Direction des Travaux Publics, Part F of the Project through OMBY with the assistance of ODEMO, and Parts G and H of the Project through its Ministries of Social Affairs and Rural Development, respectively, with due diligence and efficiency and in conformity with appropriate administrative, financial, agricultural and livestock practices, and shall provide, 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 the Development Credit Agreement, the Borrower shall cause: (i) FAFIFAMA to perform in accordance with the provisions of the FAFIFAMA Project Funds Agreement, and (ii) OMBY to perform in accordance with the provisions of the OMBY Financing Agreement, all the obligations therein set forth, shall take and cause to be taken all action necessary or appropriate to enable FAFIFAMA and OMBY to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (c) The Borrower shall make available to FAFIFAMA, under a project funds agreement to be entered into between the Borrower and FAFIFAMA, on terms and conditions which shall have been approved by the Association, an amount equivalent to such proceeds of the Credit as it shall withdraw from the Credit Account for the carrying out of Parts A through E of the Project. (d) The Borrower shall, out of the proceeds of the Credit, relend to OMBY: (i) an amount equivalent to two hundred and sixty thousand dollars ($260,000) for the execution of Part F(ii) of the Project, and (ii) an amount equivralent to three hundred thousand dollars ($300,000) for the execution of Part F(iii) of the Project, under a financing agreement to be entered into between the Borrower and OMBY, on terms and conditions which shall have been approved by the Association 6 (including inter alia an interest rate of seven and one-quarter per cent (7-1/4%) per annum and a repayment period of thirteen years including a grace period of three years with respect to Part F(ii) of the Project, and an interest rate of five per cent (5%) per annum and a repayment period of twenty years including a grace period of one year with respect to Part F(iii) of the Project) and, in addition, shall, out of the proceeds of the Credit, make available to OMBY as a grant an amount equivalent to five hundred and thirty thousand dollars ($530,000) for the execution of Part F(i) of the Project. (e) The Borrower shall exercise its rights under the FAFIFAMA Project Funds Agreement and the OMBY Financing Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the FAFIFAMA Project Funds Agreement or the OMBY Financing Agreement or any provision thereof. Section 3.02. (a) In order to assist (i) FAFIFAMA in the execution of intensive veterinary service and (ii) OMBY in the execudOon of the pilot pig program included in the Project, the Borrower shall cause FAFIFAMA to employ two senior veterinary advisors and one animal production advisor, and shall cause OMBY to employ a pig production advisor, all on terms and conditions satisfactory to the Association, and all said advisors having experience and qualifications satisfactory to the Association. (b) In order to assist OMBY in the execution of Parts F(ii) and F(iii) of the Project, the Borrower shall cause ODEMO to act as OMBY's technical execution agency on terms and conditions satisfactory to the Association. Section 3.03. Except as the Association shall otherwise agree, the Borrower shall cause FAFIFAMA, in carrying out the construction of boreholes included in Part C of the Project, to employ contractors acceptable to the Association on terms and conditions satisfactory to the Association. Section 3.04. The Borrower shall: (a) promptly assign and transfer to FAFIFAMA the facilities, personnel, budget and functions of its Provincial Livestock Service in Majunga Province in accordance with the provisions of Schedule 4 to this Agreement as such Schedule may be amended from time to time; (b) provide FAFIFAMA, during the execution of the Project, with qualified and experienced staff in accordance with a staffing plan as set forth in Schedule 4 to this Agreement; and 7 (c) ensure that a qualified and experienced person will be appointed to the position of General Manager of FAFIFAMA after consultation with the Association. Section 3.05. (a) The Borrower undertakes to insure, or make 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 by the Borrower 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 3.06. (a) The Borrower shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedule 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, and cause each of FAFIFAMA, OMBY and ODEMO to set up and 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 visit the facilities and construction sites included in the Project and to examine 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 3.07. The Borrower shall (i) repair the road linking Maintirano, Aorafenobe and Tsiroanomandidy before any access roads to said road are constructed or improved under the Project, (ii) carry out the construction, improvement and maintenance of the roads included in Part E of the Project, and (iii) maintain said roads after the completion of the Project. Section 3.08. The Borrower shall establish through its Ministry of Social Affairs the mobile health units included in Part G of the Project at eight centers in Majunga Province which shall be selected in consultation with FAFIFAMA, and shall provide the necessary equipment and staff. 8 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 appropriate 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. Section 4.02. (a) The Borrower shall cause FAFIFAMA to maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations and financial condition of FAFIFAMA. (b) The Borrower shall cause OMBY to maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition with respect to the parts of the Project carried out by OMBY. (c) The Borrower shall cause each of FAFIFAMA and OMBY to: (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 appropriate 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 six 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 FAFIFAMA, and of OMBY with respect to the parts of the Project carried out by OMBY, and the audit thereof as the Association shall from time to time reasonably request. Section 4.03. The Borrower shall cause each of FAFIFAMA and OMBY to take out and maintain with responsible insurers, or to make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practices. Section 4.04. The Borrower shall cause each of FAFIFAMA and OMBY at all times to manage its affairs, maintain its financial position, plan its future expansion and carry on its operations, all in accordance with appropriate 9 administrative, financial, agricultural and livestock practices and under the supervision of experienced and competent management assisted by qualified and competent staff. Section 4.05. The Borrower shall cause each of FAFIFAMA and OMBY at all times to take all such action as shall be necessary on its part to acquire, maintain and renew all rights, powers and privileges which are necessary or useful for the purpose of carrying out its obligations under the Project, and under the FAFIFAMA Project Funds Agreement and the OMBY Financing Agreement, respectively. Section 4.06. The Borrower shall cause each of FAFIFAMA and OMBY at all times to operate, maintain, renew and repair its facilities, equipment and machinery necessary or useful for the carrying out of the part of the Project for which it is responsible, in accordance with appropriate management practices. Section 4.07. The Borrower shall take all action necessary to (i) maintain vaccine production and research services at satisfactory levels of scientific competence, (ii) provide said services with adequately trained and experienced staff, and (iii) produce adequate quantities of vaccine to meet the needs of the Project without reducing the supplies required for other vaccination programs in the territory of the Borrower. Section 4.08. The Borrower shall furnish to the Association for approval the proposals and terms of reference for overseas training programs, Project related research, Project monitoring and evaluation, and preparation of follow-up projects included in Part H of the Project. Section 4.09. The Borrower shall through its Ministry of Mines provide FAFIFAMA with adequate technical support in addition to the engineer referred to in paragraph A.4 of Schedule 4, to enable FAFIFAMA to carry out the construction and maintenance of the water facilities included in Part C of the Project. Section 4.10. The Borrower shall provide through its Ministry of Education the teachers required for the schools established under the Project. Section 4.11. The Borrower shall from time to time, but not less than once each year, consult with the Association on its pricing, export quotas and other policies relating to the production, processing and marketing of beef cattle to encourage production and export of beef products and to ensure the financial viability of livestock producers. 10 Section 4.12. The Borrower shall formulate, in consultation with the Association, and promptly implement specific measures for the recovery of as large a portion of the costs of the various services provided by the Project as shall be reasonable having due regard to the incentives and capacity to pay of livestock producers. Section 4.13. The Borrower shall maintain the existing veterinary services in the eleven sub-prefectures of Majunga Province, not included in the intensive veterinary and extension service under Part A of the Project, at the operational level prevailing before the establishment of FAFIFAMA. 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) A default shall have occurred in the performance of any covenant, agreement or obligation on the part of the Borrower or FAFIFAMA under the FAFIFAMA Project Funds Agreement. (b) A default shall have occurred in the performance of any covenant, agreement or obligation on the part of the Borrower or OMBY under the OMBY Financing Agreement. (c) Decrees Nos. 74-094 and 69-017 of the Borrower shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the ability of FAFIFAMA or OMBY (i) to carry out their respective parts of the Project or (ii) to carry out any of their respective covenants, agreements and obligations set forth in the FAFIFAMA Project Funds Agreement or the OMBY Financing Agreement, respectively. (d) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of FAFIFAMA or OMBY or for the suspension of their respective operations. (e) An extraordinary situation shall have arisen which shall make it improbable that VAFIFAMA or OMBY will be able to perform their respective obligations under the Project. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified: e 4 11 (a) the events specified in paragraphs (a) and (b) of Section 5.01 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 and FAFIFAMA or OMBY, respectively; and (b) any event specified in paragraphs (c) and (d) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01(c) of the General Conditions: (a) the execution and dplivery of the FAFIFAMA Project Funds Agreement on behalf of the Borrower and FAFIFAMA, respectively, have been duly authorized or ratified by all necessary corporate and governmental action; (b) the execution and delivery of the OMBY Financing Agreement on behalf of the Borrower and OMBY, respectively, have been duly authorized or ratified by all necessary corporate and governmental action; and (c) the General Manager of FAFIFAMA has been appointed. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02(b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association: (a) that the FAFIFAMA Project Funds Ag.eement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and FAFIFAMA, respectively, and is legally binding upon the Borrower and FAFIFAMA in accordance with its terms; and (b) that the OMBY Financing Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and OMBY, respectively, and is legally binding upon the Borrower and OMBY in accordance with its terms. Section 6.03. The date November 19, 1974 is hereby specified for the purposes of Section 12.04 of the General Conditions. 12 Section 6.04. The obligations of the Borrower under Sections 4.01 through 4.13 of this Agreement and the provisions of paragraphs (a) through (e) of Section 5.01 of this Agreement and those of paragraphs (a) and (b) of Section 5.02 of this Agreement shall cease and determine on the date on which the Development Credit 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. The Minister of Economy and 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: Ministre de l'Economie et des Finances Tananarive Malagasy Republic 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. * 13 IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto 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. MALAGASY REPUBLIC By /s/ Henri Raharijaona Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Michael H. Wiehen Director, Country Programs Department Eastern Africa Regional Office 14 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 I. Vehicles and Equipment (a) Road Construc- 600,000 ) 100% of foreign tion and Main- ) expenditures or tenance ) 85% of local ex- ) penditures (b) Other 750,000 ) II. Civil Works (a) Boreholes 1,000,000 ) ) 75% (b) Wells and 850,000 ) Other III. Agricultural Inputs (a) Animal Vac- 180,000 ) cines, Drugs, ) Seeds ) 75% (b) Livestock 260,000 ) IV, Technical Services 410,000 100% of foreign expenditures and 80% of local ex- penditures 15 Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed V. Wages, Salaries, 1,800,000 65% Fuel and Other Operating Costs VI. Unallocated 3,750,000 TOTAL 9,600,000 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 Borrower, 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; and (b) expenditures in respect of Categories I(b), 11(b), 111(b) and IV on account of expenditures incurred for the pilot pig program until the Borrower has furnished to the Association detailed proposals for the organization of the 16 program and the rights ahd obligations of OMBY and the Kianjasoa Research Station thereunder. 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 such 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) 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. 17 SCHEDULE 2 Description of the Project The Project consists of a comprehensive program of assistance to village livestock and rural development in the Borrower's Majunga Province and Tsiroanmandidy Sub-Prefecture of Tananarive Province during a four year period commencing 1975. The Project includes the following parts: A. Development of an intensive veterinary and livestock extension service. B. Improvement of about 10,000 hectares of communal pasture in about 200 villages through the introduction of sub-tropical legume planting. C. Construction of water facilities for about 300 villages. D. Construction of 28 village schools and of an agricultural training center. E. Improvement or construction of about 170 kilometers, and maintenance of about 280 kilometers, of secondary and tertiary roads. F. Three pilot development programs in Madagascar's Middle West Zone: (i) an extension, veterinary, and community development service by OMBY; (ii) a beef-share-fattening program by OMBY with the assistance of ODEMO; and (iii) a pilot pig program by OMBY with the assistance of ODEMO. G. Purchase and utilization of eight mobile health units. H. Provision of technical services, training, Project monitoring and evaluation, Project related research, and preparation of follow-up projects. The Project is expected to he completed by June 30, 1979. 18 SCHEDULE 3 Procurement A. General Procedures 1. Except as provided in Part A.2 hereof, contracts 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) Items such as single tractors, single tractor attachments, spare parts, furniture, veterinary equipment and supplies shall be procured through negotiated purchases after solicitation of quotations from local suppliers. (b) Cattle and pigs shall be procured locally through regular commercial channels from responsible suppliers. (c) The construction of boreholes, piggeries and buildings for the pilot pig program shall be procured through bidding restricted to local firms on the basis of local procurement procedures. The management of the pilot pig program may, however, request the Association's concurrence to the execution of said works by force account. B. Procurement Without Contracting 1. The construction of cattle handling facilities, buildings, housing, schools, water ponds and planting of sub-tropical legumes shall be carried out directly by FAFIFAMA. 2. The construction of shallow wells may be carried out by the Borrower on force account with the assistance of its appropriate technical services. 3. The construction, improvement and maintenance of roads shall be carried out by the Borrower's Ministere de l'Amnagement du Territoire on force account. E. Review of Procurement Decisions by Association 1. Review of invitation to bid and of proposed awards and final contracts: With respect to all contracts for civil works and equipment estimated to cost the equivalent of $50,000 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) 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. (c) 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. (d) 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. 20 SCHEDULE 4 Livestock Development Unit - FAFIFAMA A. Organization and Operation 1. The Borrower shall assign to FAFIFAMA inter alia the following functions with respect to the Antsalova, Maintirano, Morafenobe, Marovoay, Mampikony, Majunga and Port Berge Sub-Prefectures of Majunga Province: (i) the livestock service, (ii) the administration of an intensive veterinary and extension service, (iii) the implementation of water development and pasture improvement programs, and (iv) the coordination and supervision of road improvement and school construction. 2. The Borrower shall provide FAFIFAMA inter alia with the following facilities, located in the aforementioned Sub-Prefectures: (i) farms, laboratories, offices, housing and other buildings, (ii) vehicles and equipment, (iii) veterinary and laboratory equipment, supplies and materials, medicines, vaccines and drugs, and (iv) livestock, and grant FAFIFAMA access to the Borrower's central laboratories in Tananarive in the same manner and under the same conditions as the Borrower grants to its Provincial Livestock Services. 3. The Borrower shall transfer to FAFIFAMA the staff of the Provincial Livestock Service, located in the aforementioned Sub-Prefectures, of Majunga Province, including professional, technical, and administrative personnel, tradesmen, maintenance men and manual labor. 4. A water department shall be established within FAFIFAMA for the execution of the water facilities included in the Project. The Borrower shall second to FAFIFAMA as head of said water department a water engineer from its Ministry of Mines. The water department shall construct about 100 ponds and shall organize and equip a two-man maintenance team for the ponds, and three five-man maintenance teams for the boreholes. 5. The Borrower shall second to FAFIFAMA an engineer from its Direction des Travaux Publics to assist FAFIFAMA in the execution of the road improvement and construction included in the Project. 6. The Borrower shall cause its various departments and agencies to cooperate closely with FAFIFAMA in the execution of the Project. 21 B. Staffing I. The Borrower shall cause FAFIFAMA to employ for the execution of the Project a staff substantially in accordance with the following table: Number of Staff Before Position Development* Year 1 2 3 4 Headquarters General Manager -1 1 1 1 Sociologist -1 1 1 1 Senior Accountant -1 1 1 1 Administrator -1 1 1 1 Engineer (civil) -1 1 1 1 Accountant -1 1 1 1 Clerk - 6 6 6 6 Storekeeper - 2 2 2 2 Typist - 7 7 7 7 Mechanic -I I I I Driver -2 2 2 2 Maintenance - 6 6 6 6 Veterinary and Extension Service Senior Veterinarian 1 2 2 2 2 Senior Veterinary Adviser* - 2 2 2 2 Animal Production Specialist* - 1 1 1 1 Extention Officer - 2 2 2 2 Assistance Veterinarian - 2 2 2 2 Veterinary and Extension Supervisor 10 10 10 10 10 Village Livestock Agent 30 80 100 100 100 Accountant 1 2 2 2 2 Clerk 2 4 4 4 4 Mechanic - 2 2 2 2 Driver 1 4 4 4 4 Maintenance Staff 3 6 6 6 6 *P Pasture Improvement Tractor Driver - 10 10 10 10 Mechanic 2 2 2 2 * Personnel of the Provincial Livestock Service who will be transferred to FAFIFAMA; other staff of FAFIFAMA are not listed. ** Internationally recruited. 22 2. The village livestock agents shall be appointed in consultation with the Fokonolona and shall be located in several villages. The Fokonolona shall be consulted with respect to the assessment of said agents performance. The Borrower shall furnish to the Association for its information all the documents, including decrees and plans relating to FAFIFAMA's organization, operation and staffing referred to herein and such other pertinent information as the Association shall reasonably request.