Thailand - Northwest Thailand Irrigation Improvement Project : Credit 0461 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 461 TH Development Credit Agreement (Northeast Thailand Irrigation Improvement Project) BETWEEN KINGDOM OF THAILAND AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED FEBRUARY 19, 1974 CONFORMED COPY CREDIT NUMBER 461 TH Development Credit Agreement (Northeast Thailand Irrigation Improvement Project) BETWEEN KINGDOM OF THAILAND AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED FEBRUARY 19, 1974 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated February 19, 1974, between KINGDOM OF THAILAND (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 oi 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) "Guidelines for Procurement" means the Guidelines for Procurement under World Bank Loans and IDA Credits, published by the Bank in April 1972, as revised in October 1972. (b) "Project Area for Part A" means the following combined net irrigable areas: the entire command area of 9,100 ha in the Lam Phra Plerng Project, an area of 16,000 ha, commanded by the right bank canal, and an area of 2,200 ha commanded by the left bank canal of the Lam Pao Project, and an area of 14,700 ha commanded by the left bank canal of the Nam Pong Project. (c) "RID" means the Royal frrigation Department within the Borrower's Ministry of Agriculture and Cooperatives. 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 cu-rencies equivalent to seven million dollars ($7,000,000). 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 tne 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, 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 June 30, 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 January 1 and July 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each January I and July 1 commencing July 1, 1984, and ending January 1, 2024, each installment to and including the installment payable on January 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. ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appropriate agricultural, engineering, 5 economic and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. In order to assist the Borrower in (i) the preparation of final designs and contract documents, supervision of construction, establishing maintenance procedures, organizing extension services, and in the implementation of Project works, (ii) the detailed preparation of other irrigation works in the second stages of the Lam Pao and Nam Pong projects and in areas served by The Lam Takhong reservoir, and (iii) engineering of rural development works in selected provinces of Northeast Thailand, the Borrower shall employ engineering and agricultural consultants acceptable to the Association upon terms and conditions satisfactory to the Association. Section 3.03. In carrying out Parts A and B of the Project, the Borrower shall employ or cause to be employed contractors acceptable to the Association upon terms and conditions satisfactory to the Association. Section 3.04. In carrying out Part A of the Project, the Borrower sl.: (a) employ three Project Engineers acceptable to the Association for Lam Phra Plerng, Lam Pao and Nam Pong irrigation schemes, respectively, to be responsible for supervision of all construction and the implementation of improvements in the operation and maintenance of the irrigation systems: (b) employ three Project Extension Officers acceptable to the Association for the Lam Phra Plerng, Lain Pao, and Nan Pong irrigation schemes, respectively, to be responsible for the agricultural extension aspects of the Project; (c) appoint the Deputy Director General, Operations and Maint'enance of RID to serve as Project Director (Irrigation); (d) appoint a senior officer of RID acceptable to the Association to serve as Project Manager (Irrigation); (e) appoint a senior officer of the Department of Agricultural Extension acceptable to the Association to serve as Project Director (Extension); (f) appoint a Project Coordinator acceptable to the Association within the office of the Under-Secretary of State for Agriculture and Cooperatives, (g) constitute three coordination committees for the Lam Phra Plerng, Lam Pao and Nam Pong irrigation schemes respectively. 6 Section 3.05. In carrying out Part B of the Project, the Borrower shall: (a) appoint the Director General of its Department of Agriculture to serve as Project Director; (b) appoint a Pioneer Project Coordinator acceptable to the Association within the Department of Agriculture. Section 3.06. The Borrower shall designate an agency of the Ministry of Interior acceptable to the Association to carry out Part C of the Project. Section 3.07. (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, all goods and services financed out of the proceeds of the Credit shall be used exclusively for the Project until its completion. Section 3.08. (a) The Borrower 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) The Borrower: (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, 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 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 3.09. (a) 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 and shall furnish to the Association, promptly 7 after such acquisition, evidence satisfactory to the Association that such land and rights in respect of land are available for purposes related to the Project. (b) The Borrower shall take all such action as shall be necessary to ensure that title deeds to farmers in the Project Area for Part A shall be promptly issued. Section 3.10. The Borrower shall ensure that its Rural Roads Program is implemented so as to improve village access roads in the Project Area for Part A. Section 3.11. The Borrower shall operate and maintain the Lam Phra Plerng, Lam Pao and Ubolratna reservoirs and the Nong Wai diversion dam, and main canals as well as the irrigation and drainage networks, roads and all the facilities constructed under the Project in accordance with standards acceptable to the Association and shall provide promptly as needed such funds for that purpose. ARTICLE IV Other Covenants Section 4.01. (a) 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. (b) The Borrower shall: (i) cause all accounts for Part A of the Project including expenditures and receipts related to operations, maintenance and extension to be consolidated under the Project Coordinator referred to in Section 3.04(f) to this Agreement and all similar accounts for Part B to be consolidated under the Pioneer Project Coordinator referred to in Section 3.05(b) to this Agreement; (ii) have such accounts and financial statements related thereto for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Association; (iii) furnish to the Association for its review as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of such financial statements for such year as so audited and (B) the report of such audit by such auditors, of such scope and in such detail, as the Association shall have reasonably requested; and (iv) furnish to the Association such other information concerning such accounts and financial statements and the audit thereof as the Association shall from time to time reasonably request. 8 Section 4.02. In accordance with its policy of recovering all operational and maintenance costs and a reasonable proportion of investment costs from the beneficiaries of irrigation projects, the Borrower shall: (a) promptly carry out a cost recovery study for Part A of the Project and on the basis of such study, prepare within two years of the date of this Agreement, or such other time limit as the Borrower and the Association shall agree, appropriate levels of charges and collection procedures; (b) review the proposals of such study with the Association; and (c) impose and commence to collect such charges, in the Project Area for Part A, within two years after completion of the Project or such other time limit as the Borrower and the Association shall agree. Section 4.03. The Borrower shall cause its Bank for Agriculture and Agricultural Cooperatives to provide adequate staff in the Project Area for Part A and to make available such funds, both short-term and long-term, as shall be needed to adequately meet the credit requirements of the farmers served by the Project. ARTICLE V Consultation, Information and Inspection Section 5.01. The Borrower and the As,ociation 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 this Agreement, the administration, operations, 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 Borrower or of any such political subdivision. 9 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 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. ARTICLE VI Taxes and Restrictions Section 6.0 1. The principal of, aitd 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 Develcpment Crdit 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 10 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 Borrower shall have employed the Consultants for Part A of the Project referred to in Section 3.02 to this Agreement; (b) the Borrower shall have complied with the provisions of Sections 3.04, 3.05 and 3.06 to this Agreement. Section 8.02. The following are specified as additional matters, within the meaning of Section 10.02(b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely the conditions referred to in Section 8.01(a) and (b) to this Agreement. Section 8.03. The date May 20, 1974 is hereby specified for the purposes of Section 10.04 of the General Conditions. Section 8.04. The obligations of the Borrower under Sections 4.01, 4.02 and 4.03 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date thirty 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 Ministry of Finance Bangkok 2, Thailand 11 Cable address: MINANCE Bangkok 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 THAILAND By /s/ Anand Panyarachun Authorized Representatihe INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Mervyn L. Weiner Director, Regional Projects Department Asia Regional Office 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 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 Part A of the Project I. Civil Works 2,400,000 50% of total expenditures II. Consulting Serv- 1,600,000 100% of foreign ices (including expenditures mapping) III. Vehicles and 700,000 Equipment (a) Directly 100% of foreign Imported expenditures (b) Manufactured 100% of total Locally expenditures (ex-factory) (c) Imported but 65% of total Procured Lo- expenditures cally Part B of the Project IV. Civil Works 170,000 50% of total expenditures V. Technical 300,000 100% of foreign Assistance and expenditures training VI. Vehicles and 550,000 Equipment (a) Directly 100% of foreign Imported expenditures (b) Manufactured 100% of total Locally expenditures (ex-factory) (c) Imported but 65% of total Procured Lo- expenditures cally 13 Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed Part C of the Project VII. Consulting Serv- 300,000 100% of foreign ices expenditures VIII. Unallocated 980,000 TOTAL 7,000,000 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; (b) the term "local expenditures" means expenditures in the currency of the Borrower, or for goods produced in, or services supplied from, the territories of the Borrower; and (c) the term "total expenditures" means the aggregate of foreign and local expenditures. 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; 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: 0I 14 (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; (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 ai-v 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 I above, if the estimate of total expenditures under Categories I and IV 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 is part of the Borrower's program for agricultural and rural development in Northeast Thailand and consists of the following three main components: Part A: Irrigation Improvement (To be carried out by the Royal Irrigation Department in cooperation with the Department of Agricultural Extension) consists of: (i) construction of additional control structures, and modifications to existing structures to ensure efficient water control throughout the existing main canals and laterals; (ii) enlargement of main canals and laterals at Lam Phra Plerng to increase the capacity of the system by about 40%; (iii) construction of approximately 330 km of canal service roads to make the systems accessible to operating personnel and agricultural supporting services; (iv) rehabilitation of about 900 km of existing tertiary canals and construction of approximately 350 km of new tertiary canals and about 560 km of drains; (v) establishment of efficient procedures for operating and maintaining the irrigation systems to ensure timely and adequate deliveries of irrigation water; (vi) strengthening of agricultural extension services and establishment of extension centers and agricultural demonstration areas; (vii) provision of consulting services to assist the Government in project implementation and in the training of operating personnel and extension workers; (viii) provision of consulting services for detailed preparation of the second stages of the Lam Pao and Nam Pong projects and for irrigation development in areas served by the existing Lam Takhong reservoir; and 16 (ix) preparation of topographic maps based on up-to-date aerial photography for the sub-projects, the second stages of Lam Pao and Nam Pong, and the service area of the Lam Takhong project. Part B: Rainfed Rice (To be carried out by the Department of Agriulture in cooperation with the Department of Agricultural Extension) consists of: (i) provision of farm equipment, research equipment and vehicles to Ubon, Phi Mai, Khon Kaen, Chumphae, Sakhon Nakhon and Surin stations; (ii) provision of seed processing equipment to Ubon and Phi Mai stations; (iii) establishment of training facilities for extension workers, rural credit agents and farmers at Ubon and Phi Mai stations; (iv) land development at Ubon station; (v) establishment of outgrower schemes in the vicinity of Ubon and Phi Mai stations; (vi) establishment of a revolving fund of B/250,000 per outgrower scheme for the purchase of outgrowers' production, with the funds to be administered by the Bank for Agriculture and Agricultural Cooperatives (BAAC); (vii) expansion of rice breeding facilities at Khon Kaen station; (viii) provision of vehicles to the extension services in the provinces of Ubon Ratchatani and Nakhon Ratchasima; (ix) technical assistance in project implementation; and (x) provision of overseas training for project staff. Part C: Rural Development (To be carried out by the Ministry of Interior) consists of: 17 provision of consulting services to assist the Government in the engineering of rural development works including roads and village water supply in provinces of Northeast Thailand to be selected by the Ministry of Interior in consultation with the Association. The Project is expected to be completed by December 31, 1978. 0 18 SCHEDULE 3 Procurement A. Contracts Governed by Guidelines 1. With respect to any contract for vehicles and equipment estimated to cost the equivalent of $50,000 or more and with respect to any contract for civil works estimated to cost the equivalent of $100,000 or more: (a) If bidders are required to prequalify, the Borrower shall, before qualification is invited, inform the Association in detail of the procedure to be followed and shall introduce such modifications in said procedure as the Association shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequalification, shall be furnished by the Borrower to the Association for its comments before the applicants are notified and the Borrower shall make such additions to or deletions from the said list as the Association shall reasonably request. (b) Before bids are invited, the Borrower shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedure as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (c) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Association of the name of the bidder to whom it intends to award the contract and shall furnish to the Association, in sufficient time for its review, a detailed report, by the consultants referred to in Section 3.02 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 2.03 of this Agreement, promptly inform the Borrower and state the reasons for such determination. (d) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. 19 (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, vehicles and equipment, the Borrower 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 2.03 of this Agreement, promptly inform the Borrower and state the reasons for such determination. 3. Notwithstanding the provisions referred to in Section 2.03 of this Agreement or included in the foregoing sub-paragraphs of this Schedule, the Association may accept (i) that off-the-shelf items costing less than $5,000 equivalent each may be procured in accordance with the Borrower's usual procurement procedures, provided, however, that the aggregate cost of such items does not exceed $50,000 equivalent for Part A and $100,000 for Part B; and (ii) that, pursuant to the provisions of paragraph 1.2 of the Guidelines for Procurement, the construction works under Parts A and B of the Project may be subject to contracting procedures acceptable to the Association. B. Supplemental Rules on Bid Evaluation and Comparison I. 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 to goods manufactured in Thailand in accordance with, and subject to, the following provisions: 20 (a) After evaluation, responsive bids will be classified in one of the following groups: (1) Group A: bids offering goods manufactured in Thailand 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 Thailand equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: bids offering goods manufactured in Thailand 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 in 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.