Jordan - Northeast Ghor Irrigation And Rural Development Project : Credit 0498 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 498 JO Project Agreement (Northeast Ghor Irrigation and Rural Development Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND JORDAN VALLEY COMMISSION DATED JULY 25, 1974 CONFORMED COPY CREDIT NUMBER 498 JO Project Agreement (Northeast Ghor Irrigation and Rural Development Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND JORDAN VALLEY COMMISSION DATED JULY 25, 1974 PROJECT AGREEMENT AGREEMENT, dated July 25, 1974, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and JORDAN VALLEY COMMISSION (hereinafter called JVC). WHEREAS by the Development Credit Agreement of even date herewith between the Hashemite Kingdom of Jordan (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to seven million five hundred thousand dollars ($7,500,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that JVC agree to undertake such obligations toward the Association as hereinafter set forth; WHEREAS JVC, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. JVC shall carry out the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. 4 Section 2.02. In order to assist JVC in the design of project works, procurement of project goods and supervision of project execution, JVC shall employ a firm of engineering consultants, as well as marketing, grading and accounting consultants all acceptable to the Association upon terms and conditions satisfactory to the Association. Section 2.03. In carrying out Parts A and B of the Project, JVC shall employ contractors acceptable to the Association upon terms and conditions satisfactory to the Association. Section 2.04. Except as the Association shall otherwise agree, the goods and services (other than services of consultants) required for the Project and to be financed out of the proceeds of the Credit, shall be procured on the basis of international competition under procedures consistent with the Guidelines for Procurement, and in accordance with, and subject to, the provisions set forth in Schedule 1 to this Agreement. Section 2.05. (a) JVC undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit relent to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by JVC to replace or repair such goods. (b) Except as the Association may otherwise agree, JVC shall cause all goods and services financed out of the proceeds of the Credit relent to it by the Borrower to be used exclusively for the Project. Section 2.06. (a) JVC shall furnish to the Association promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) JVC: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit relent to it by the Borrower, and to disclose the use thereof in the Project; (ii) shall, without limitation upon the provisions of Section 5.03 of this Agreement, enable the Association's representatives to examine the Project, the goods financed out of such proceeds and any relevant records and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit so relent to it and the goods and services financed out of such proceeds. 5 ARTICLE III Management and Operations of JVC Section 3.01. JVC shall at all times be staffed by adequate, qualified and experienced personnel and shall consult with the Association prior to making any changes in its organizational structure. Section 3.02. JVC shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. JVC shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 4.02. JVC shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of JVC including separate accounts for the Project and the audit thereof as the Association shall from time to time reasonably request. ARTICLE V Consultation, Information and Inspection Section 5.01. The Association and JVC shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Association and JVC shall from time to time, at the request of either party, exchange views through their representatives with regard to the performance of their respective obligations under this Agreement, the administration, operations and financial condition of JVC and other matters relating to the purpose of the Credit. 6 Section 5.02. The Association and JVC shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit, or the performance by either of them of its obligations under this Agreement. Section 5.03. JVC shall enable the Association's representatives to examine all plants, sites, works, properties and equipment of JVC and any relevant records and documents. ARTICLE VI Effective Date; Termination; Cancellation and Suspension Section 6.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 6.02. (a) This Agreement and all obligations of the Association and of JVC thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date twenty years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a)(ii) of this Section, the Association shall promptly notify JVC of this event. Section 6.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Development Credit Agreement. ARTICLE VII Miscellaneous Provisions Section 7.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, 7 telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. For JVC: Jordan Valley Commission P.O. Box 1970 Amman, Jordan Cable address: JOVACO Amman Section 7.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of JVC may be taken or executed by President of JVC or such other person or persons as the President shall designate in writing. Section 7.03. JVC shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of JVC, take any action or execute any documents required or permitted to be taken or executed by JVC pursuant to any of the provisions of this Agreement. Section 7.04. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 8 IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ M.P. Benjenk Regional Vice President Europe, Middle East and North Africa JORDAN VALLEY COMMISSION By /s/ Abdullah Salah Authorized Representative 9 SCHEDULE I Procurement A. Contracts Governed by Guidelines for Procurement 1. With respect to any contract for equipment and materials estimated to cost the equivalent of $1 0,000 or more and with respect to any contract for civil works estimated to cost $200,000 or more: (a) If bidders are required to prequalify, JVC shall, before qualification is invited, inform the Association in detail of the procedure to be followed and shall introduce such modifications in said procedure as the Association shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequalification, shall be furnished by JVC to the Association for its comments before the applicants are notified and JVC shall make such additions to or deletions from the said list as the Association shall reasonably request. (b) Before bids are invited, JVC shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedure as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (c) After bids have been received and evaluated, JVC 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, by the consultants referred to in Section 2.02 of this Agreement, on the evaluation and comparison of the bids received, together with the recommendations for award of the said consultants, and the reasons for the intended award. The Association shall, if it determines that the intended award would be inconsistent with the procedures set forth or referred to in Section 2.04 of this Agreement, promptly inform JVC and the Borrower, and state the reasons for such determination and advise JVC of any cancellation pursuant to the provisions of paragraph 4(c) of Schedule 1 to the Development Credit Agreement. (d) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. 10 (e) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the delivery to the Association of the first application for withdrawal of funds from the Credit Account in respect of any such contract. 2. With respect to any other contract for civil works and equipment JVC shall furnish to the Association, promptly after its execution and prior to the delivery to the Association of the first application for withdrawal of funds from the Credit Account in respect of any such contract, two conformed copies of such contract, together with the analysis of bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract is not consistent with the procedures set forth or referred to in Section 2.04 of this Agreement, promptly inform JVC and the Borrower, and state the reasons for such determination and advise JVC of any cancellation pursuant to the provisions of paragraph 4(c) of Schedule 1 to the Development Credit Agreement. 3. Notwithstanding the provisions referred to in Section 2.04 of this Agreement or included in the foregoing sub-paragraphs of this Schedule, the Association may accept (i) that contracts for equipment and materials costing less than $10,000 equivalent each may be procured in accordance with the Borrower's usual procurement procedures, provided, however, that the aggregate cost does not exceed $100,000, and (ii) that, pursuant to the provisions of paragraph I.2 of the Guidelines for Procurement, the construction works for Parts B2, 3, 4, 5 and 6 of Schedule 2 to the Development Credit Agreement may be subject to local competitive bidding in accordance with the contracting procedures acceptable to the Association. B. Supplemental Rules on Bid Evaluation and Comparison 1. For the purpose of evaluation and comparison of bids, customs duties and other import taxes on imported goods, and sales and similar taxes on locally supplied goods, shall be excluded, except to the extent hereinafter provided. 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 locally manufactured goods. 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 taken into account in the evaluation of bids in accordance with paragraph 4.7 of the Guidelines for Procurement. 2. For goods included in the table set forth in paragraph I of Schedule 1 to the Development Credit Agreement, the Borrower may grant a margin of preference 11 to goods manufactured in Jordan in accordance with, and subject to, the following provisions: (a) After evaluation, responsive bids will be classified in one of the following groups: (1) Group A: bids offering goods manufactured in Jordan 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 Jordan equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: bids offering goods manufactured in Jordan other than bids classified in Group A. (3) Group. C: bids offering any other goods. (b) 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 locally, to determine the lowest evaluated bid of each group. The lowest evaluated bids 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 purposes of award. (c) If, as a result of the comparison under paragraph (b) above, the lowest bid is a bid from Group C, all Group C bids shall be further compared with the lowest bid from Group A, as determined under paragraph (b) above, after adding to the c.i.f. bid price of goods to be imported offered in each Group C bid, for the purpose of this further comparison only, an amount equal to the smaller of (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of goods offered in such Group C bid, or (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 purposes of award; if not, the lowest bid from Group C, as determined under paragraph (b) above, shall be selected for purposes of award. 3. The bidding documents shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the methods and stages that will be followed in the evaluation and comparison of bids to give effect to such preference.