Lesotho - Education Project : Credit 0497 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 497 LSO Development Credit Agreement (Education Project) BETWEEN KINGDOM OF LESOTHO AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JULY 25, 1974 CONFORMED COPY CREDIT NUMBER 497 LSO Development Credit Agreement (Education Project) BETWEEN KINGDOM OF LESOTHO AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JULY 25, 1974 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 25, 1974, between the KINGDOM OF LESOTHO (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 January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the deletion of Sections 5.01 and 6.02(h) thereof and to the renumbering of Section 6.02(i) into 6.02(h) thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, 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) "Project Unit" means the project unit referred to in Section 3.01(a) of this Agreement; (b) "UBLS" means the University of Botswana, Lesotho and Swaziland or any successor thereto; (c) "LTI " means the Lerotholi Technical Institute of the Borrower or any successor thereto; and (d) " LIBA" means the Lesotho Institute of Business and Administration that is to be established by the Borrower or any successor thereto. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, oil the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to four million dollars ($4,000,000). 4 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 The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule shall be amended from time to time, for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 (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 under 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 April 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 March 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 May I 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 November 1, 1984, and ending May 1, 2024, each installment to and including the installment payable on May 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. Section 2.09. The Project Director of the Project Unit is designated as representative of the Borrower for the purposes of taking any action required or 5 permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall promptly establish the Project Unit described in Schedule 4 to this Agreement and appoint a Project Director, a Project Accountant and a Procurement Officer whose qualifications and experience shall be mutually acceptable to the Borrower and the Association and thereafter, during the execution of the Project, maintain and operate such Project Unit with the responsibilities, powers and staff, set forth in the said Schedule which shall not be amended or terminated without the prior consent of the Association. (b) The Borrower shall carry out the Project through its Project Unit with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and educational practices; shai provide, promptly as needed, the funds, facilities, services and other resources required for this purpose; and in particular shall cause its Ministry of Works promptly to assist the Project Unit in the coordination of and liaison with the architectural and engineering consultants referred to in Section 3.02 of this Agreement, whenever such assistance is requested by the Project Unit. Section 3.02. In order to assist the Project Unit in the design and the supervision of the construction of the civil works included in the Project, the Project Unit shall employ architectural and engineering consultants acceptable to the Association upon terms and conditions satisfactory to the Association. Section 3.03. In carrying out the civil works included in the Project, the Project Unit 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 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 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. 6 Section 3.05. (a) The Borrower shall cause the Project Unit to furnish to the Association, promptly upon their preparation, the plans, specifications, contract documents and work 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 cause the Project Unit to 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 examine the Project, the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish or cause to be furnished 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 or cause to be taken 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 the construction (and operation) of the facilities included in the Project. Section 3.07. The Borrower shall establish, within twelve months of the date of this Agreement and thereafter maintain in existence, an Education Evaluation Committee which will include staff from its Ministry of Education, its Central Planning and Development Office and other relevant agencies, to evaluate the progress and effectiveness of the Borrowers' program of educational reforms on a continuing basis and to recommend changes or improvements in such programs and the Borrower will cause the said Education Evaluation Committee to furnish its draft operational procedures to the Association for its comments, within eighteen months of the date of this Agreement. Section 3.08. The Borrower shall establish, within twelve months of the date of this Agreement and thereafter maintain in existence, a Consultative Committee for the LTI, under the chairmanship of the Director of the LTI, that is responsible for making recommendations on the courses to be given by the LTI, to ensure that they are related to employer's needs and will consult the Association regarding (i) the qualifications, experience and selection of any future candidate for the position of Director of the LTI; and (ii) the qualifications, experience and selection of the other members of the said Consultative Committee. 7 ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall cause the Project Unit to maintain records adequate to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of the Project Unit. (b) The Borrower shall cause the Project Unit 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 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 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 the Project Unit and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. The Borrower shall take all such action as is necessary to ensure that the public service training center and the business and commercial training center of the LIBA are each responsible to the principal officer of the LIBA. Section 4.03. The Borrower undertakes (i) to furnish to the Association, by June 30, 1977, or such other date as may be agreed with the Association, a draft program for rural education and to take into account the Association's comments on such draft program before it is made final; and (ii) to establish, within six months of the date of this Agreement, an Interministerial Rural Development Council and notify the Association of its membership, powers and responsibilities. Section 4.04. The Borrower undertakes that within twelve months of the date of this Agreement, or such other date as the Association may agree (i) it will furnish to the Association draft curricula for its proposed secondary school practical studies program and will take into account the Associations' comments on such draft curricula before they are made final; and (ii) that it will have recruited the teachers required to carry out the said program of secondary school practical studies and will be training them for this purpose. Section 4.05. The Borrower shall cause the Project Unit to take out and maintain with responsible insurers, or to make other provision satisfactory to the 8 Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. 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 of the Project Unit and, 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 (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 Bdrrower 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 of the Project Unit and, 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. 9 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 Borrower or laws in effect in its territories. 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 events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 10.01(b) of the General Conditions: (a) The Project Unit shall have been established and the initial appointments to fill the positions of Project Director and Project Accountant specified in Sub-section 3.01(a) of this Agreement shall have been made; and 10 (b) The architectural consultants specified in Section 3.02 of this Agreement shall have been appointed. Section 8.02. The date October 24, 1974 is hereby specified for the purposes of Section 10.04 of the General Conditions. Section 8.03. The obligations of the Borrower under Sections 3.01, 3.07 and 3.08 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 25 years after the date of this Agreement, whichever shall be the earlier. ARTICLE IX Representative of the Borrower; Addresses Section 9.01. The Minister of 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: Minister of Finance P.O. Box 395 Maseru Lesotho Cable address: FINMIN MASERU 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. KINGDOM OF LESOTHO By /s/ E. T. Manare Authorized Reprfsen tatile INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ S. Shahid Husain Regional Vice President Eastern Africa 12 SCHEDULE I Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categolies of items to be financed out of the proceeds of the Credit, the allocation of amounts of the Credit to each Category and the percentage of eligible expenditures 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 1,670,000 80% of total expenditures 2. Furniture 140,000 (a) Directly 100% of foreign imported expenditures (b) Locally manu- 100% of local factured (ex- expenditures factory cost) 3. Equipment 450,000 100% of foreign expenditures 4. Consultants 170,000 80% of total Services expenditures 5. Project Operation, 310,000 80% of total Maintenance and expenditures Local Transporta- tion 6. Contingencies 1,260,000 TOTAL 4,000,000 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; provided, however, that if the currency of the Borrower is also that of another country in the territories of which goods are produced or from the territories of which services are supplied, expenditures in such cucrency for such goods or services shall be deemed to be "foreign expenditures"; (b) the term "local expenditures" means expenditures for goods produced in, or services supplied from, the territories of the Borrower; and (c) 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 above, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement, except that withdrawals may be made in respect of Categories 1, 4 and 5 on account of expenditures incurred after April 1, 1974 in amounts not exceeding the equivalent of $17,600, $114,400 and $88,000 respectively; and (b) payments for taxes imposed directly 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 will be withdrawn on account of payments for such taxes. 4. Notwithstanding the allocation of an amount of the Credit set forth in the second column of the table in paragraph I above: (a) if the estimate of the expenditures under any Category shall decrease, the amount of the Credit then allocated to such Category and no longer required therefor will be reallocated by the Association by increasing correspondingly the unallocated amount of the Credit; 14 (b) if the estimate of the expenditures under any Category shall increase, the percentage set forth in the third column of the table in paragraph I 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, at the request of the Borrower, to such Category from the unallocated amount of the Credit, subject, however, to the requirements for contingencies, as determined by the Association, in respect of any other expenditures; and (c) 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 Section 2.03 of 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. 5. Notwithstanding the percentages set forth in the third column of the table in paragraph 1 above, if the estimate of total expenditures under Categories 1, 4 and 5 shall increase and no proceeds of the Credit are available for reallocation to such Category, the Association may, by notice to the Borrower, adjust the percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 15 SCHEDULE 2 Description of the Project The Project includes (A) the design, construction, extension, furnishing and equipping of educational and training institutions in the Kingdom of Lesotho and (B) the provision of technical assistance and consultants services. The purposes of the Project are to assist the Borrower's plans to expand and improve vocational, technical and commercial education; to establish an extension college for the continuing education of youths and adults; to introduce practical subjects and non-formal educational programs for youths and adults in secondary schools; staff development and program planning within the Borrower's Ministry of Education, and, to provide technical assistance required for the implementation of the Project. The Project consists of the following parts: Part A. Educational and Training Facilities, Furniture and Equipment Construction of new facilities for, extensions to, and/or provision of equipment for, training institutions, and the carrying out of education and training programs, as follows: (1) Vocational and Technical Education The expansion and improvement of the Lerotholi Technical Institute to provide equipment, furniture and facilities required to educate and train students at the craft and technician levels in various specialities, these facilities to include student hostels, staff housing and the required communal services. (2) Commercial Education and Training Construction of, and equipment and furniture for, an institute of business and administrative training including provision for staff housing and communal facilities. (3) Continuing Education Construction of, and equipment, furniture and staff housing for the establishment of the National Extension College administration and service facilities, which will become the headquarters for the Lesotho national adult education program. 16 (4) Secondary Schools Additional buildings, furniture and equipment for the provision of pre-vocational, agricultural, handicrafts and domestic science training in six selected secondary schools (Butha Buthe, Holy Names, Eagles Peak, St. Stephens, Sacred Heart and Lesotho High School). One staff house will be provided for each of these secondary schools. The planned capabilities and the approximate areas of the physical facilities listed above shall be as set forth in Annex A to this Schedule, subject to modification by agreement between the Borrower and the Association. Part B. Technical Assistance and Consultants Services The provision of seven man-years of technical assistance for the Project Unit together with a contribution towards its operational expenses and consultants services. The Project is expected to be completed by October 1, 1978. 17 ANNEX A TO SCHEDULE 2 List of Educational Institutions Estimated Estimated Additional Approximate Area of Additional Total Boarding Staff New Construction (m2) Institutions Places Places Places Houses Renovate New Total Vocational/Technical Education Lerotholi Technical Institute 240 360 176 19 1,756 4,432 6,188 Commercial Education Lesotho Institute of Business and Administration 130 200 80 6 0 1,250 1,250 Continuing Education Lesotho National Extension College 4,000 4,000 0 6 0 840 840 Six Secondary Schools 1. Butha Buthe 169 468 0 1 60 1,307 1,367 2. Holy Names 190 468 0 1 0 1,214 1,214 3. Eagles Peak 178 468 0 1 435 784 1,219 4. St. Stephens 201 432 0 1 150 1,080 1,230 5. Sacred Heart 195 468 0 1 220 660 880 6. Lesotho High School 147 468 0 1 175 1,050 1,225 Total m2 Secondary Schools 7,135 Total n2 provided 15,403 18 SCHEDULE 3 Procurement A. Preferences for Domestic Civil Works Contractors 1. With respect to any contract for civil works included under Category I of the table set forth in Schedule I to the Development Credit Agreement, the Project Unit may grant a margin of preference to domestic contractors, as determined by the Project Unit, in accordance with, and subject to, the following provisions: (a) Contractors shall be required to prequalify. The Director of the Project Unit 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. Applicants applying for preference shall be asked to provide such information, including details of ownership, as the Project Unit shall require to determine whether according to the Borrower's established classification a particular firm or group of firms qualifies for a domestic preference. A list of prequalified bidders identifying those eligible for preference, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequalification or eligibility for preference, shall be furnished by the Project Unit to the Association for its comments and the Project Unit shall make such additions to or deletions from the said list as the Association shall reasonably request before the applicants are invited to bid. (b) Before bids are invited the Project Unit 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. The bidding documents shall, inter alia, specify that a bidder may submit bids in respect of individual educational institutions included in the invitation to bid or a group of them, together with related facilities or any combination thereof, the bids therefor to be opened simultaneously and the Project Unit to have the option of awarding one contract in respect of all such institutions and facilities, or separate contracts in respect of several such institutions and facilities. The bidding documents shall also clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. 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 reviewed by the Project Unit, responsive bids will be classified into the following groups: 19 (i) bids offered by domestic contractors eligible for preference; and (ii) bids offered by other contractors. For the purpose of evaluation and comparison of bids an amount equal to 7-1/2% of the bid amount shall be added to bids received under group (ii) above. (d) After bids have been evaluated, the Project Unit 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 the Project Unit and state the reasons for such determination. (e) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. (f) 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 any such contract. B. Contracts for Furniture and Equipment 1. With respect to any contract for furniture and equipment estimated to cost the equivalent of $20,000 or more. (a) Before inviting bids, the Director of the Project Unit shall send to the Association for its approval, the lists of all items of furniture and equipment required for the Project showing the specifications and the estimated unit and total price. Items shall be indexed, coded and numbered for identification regarding the respective educational institution and the spaces for which they are required. Insofar as practicable, contracts for such items shall be for not less than the equivalent of $75,000. Amendments to such lists which may be made from time to time shall also be submitted to the Association for approval. (b) Before bids are invited, the Project Unit 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 20 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. (c) Procurement shall be limited to those items of furniture and equipment which are specified in the approved lists mentioned in sub-paragraph B(a) above and which shall be identified in contract documents by the same indexes, codes and numbers as in such lists. (d) The Project Unit shall send to the Association, after bids have been evaluated, a summary and analysis thereof, and obtain the Association's approval before awarding a contract. In case of a contract to be awarded to other than the lowest bidder, the Project Unit shall send to the Association a brief justification of the proposed 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 2.03 of this Agreement, promptly inform the Borrower and the Project Unit and state the reasons for such determination. 2. With respect to any contract for furniture or equipment estinmted to cost less than the equivalent of $20,000, the Project Unit may procure such goods under such contracts on a competitive basis in accordance with the normal procurement procedures of the Borrower, provided that the aggregate cost of the goods to be procured in accordance with this procedure shall not exceed the equivalent of $100,000. 3. Contracts for books shall be procured at the publishers price plus a handling commission which would be established by obtaining quotations from suitable suppliers. C. Procurement of Goods; Supplemental Rules on Bid E&aluation and Comparison 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. (Maseru) 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 Project Unit 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 the Kingdom of Lesotho may be granted a margin of preference in accordance with, and subject to, the following provisions: 0 21 (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: (I) Group A: bids offering goods manufactured in the Kingdom of Lesotho if the bidder shall have established to the satisfaction of the Project Unit and the Association that the manufacturing cost of such goods includes a value added in the Kingdom of Lesotho equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in the Kingdom of Lesotho. (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 othfer import taxes on goods to be imported and any sales or similar taxes oil 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, all1 group C bids shall be furtier compared witll tile 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, all aIlount equal to (i) the amounit 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, if said customs duties and taxes exceed 15% of the c.i.f. price of such goods (ii) 15% of the c.i.f. bid price of such goods. 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. 22 SCHEDULE 4 The Project Unit 1. The Project Unit shall be responsible for the implementation of the Project and shall have, inter alia, the following functions, powers and responsibilities: (a) the coordination of the work of the various Ministries of the Borrower and the other agencies concerned with the development of the institutions included in the Project; (b) the selection, briefing, coordination and supervision of the consultants and contractors referred to in Sections 3.02 and 3.03 of this Agreement; (c) the approval of the civil works design of the educational institutions included in the Project; (d) the preparation of detailed lists of the furniture, equipment and books required for the Project; (e) the procurement of civil works, furniture, equipment and books including the preparation of bidding documents, the analysis of bids and consulting with the Association regarding the award of contracts; (f) the regular inspection of all construction work and acceptance of the consultants' certification of completion work; (g) the keeping of records, including financial records, of the execution of the Project, and the preparation of regular reports to the Association; and (h) the coordination of arrangements for the technical assistance provided for in Part B of the Project. 2. The Project Unit shall consist of: (a) a full-time Project Director, who is to be the Unit's legal representative and have overall responsibility for the direction and coordination of its work; (b) a full-time Project Accountant; * 23 (c) a full-time Procurement Officer; and (d) Such administrative, secretarial and other staff as may be required for the carrying out of Project Unit's responsibilities.