India - Uttar Pradesh Water Supply And Sewerage Project : Credit 0585 - Uttar Pradesh Agreement - Conformed

CONFORAIED COPY CREDIT NUMBER 585 IN Uttar Pradesh Agreement (Uttar Pradesh Water Supply and Sewerage Project) BETWEEN THE STATE OF UTTAR PRADESH AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED SEPTEMBER 25, 1975 CONFORMED COPY CREDIT NUMBER 585 IN Uttar Pradesh Agreement (Uttar Pradesh Water Supply and Sewerage Project) BETWEEN THE STATE OF UTTAR PRADESH AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED SEPTEMBER 25, 1975 UTTAR PRADESH AGREEMENT AGREEMENT, dated September 25, 1975, between THE STATE OF UTTAR PRADESH acting by its Governor (hereinafter called Uttar Pradesh) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS by the Development Credit Agreement of even date herewith between India, acting by its President (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to forty million dollars ($40,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Uttar Pradesh agree to undertake such obligations toward the Association as hereinafter set forth; WHEREAS Uttar Pradesh, 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 Particular Covenants Section 2.01. (a) Uttar Pradesh and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, Uttar Pradesh and the Association shall from time to time, at the request of each party, exchange views through their representatives with regard to the performance of their respective obligations under the Uttar Pradesh Agreement, the performance by the Jal Nigan of its obligations under the Project Agreement, the management, 4 structure, administration, operations, resources and expenditures of the Jal Nigam and the Jal Sansthans and other matters relating to the purpose of the Credit. (b) Uttar Pradesh shall take all action which shall be necessary on its part to enable the Jal Nigam to perform its obligations under the Project Agreement and shall not take or permit to be taken any action which would prevent or interfere with the performance of any such obligation of the Jal Nigam. Section 2.02. Uttar Pradesh shall make available to the Jal Nigam: (i) funds equivalent to the proceeds of the Credit made available to it by the Borrower; and (ii) an amount of RslO0,000,000. Such funds shall be made available to the Jal Nigam on the following terms: (a) a grant in an amount of Rsl80,000,000; (b) a loan in an amount of Rs240,000,000, to be repayable over not less than 18 years, including a 3 year grace period, and bearing interest at a rate not exceeding that charged by the Borrower in the standard arrangements for development projects, on the balance outstanding from time to time; and (c) each disbursement under the said loan and grant to be made available to the Jal Nigam shall be made promptly as required to enable the Jal Nigam to meet its expenditures in respect of the Project in a loan/grant ratio of 4:3. Section 2.03, Uttar Pradesh shall cause each Jal Sansthan to make regulations on the maintenance of accounts and the preparation of final accounts and balance sheets, prescribing a commercial-type and accruals accounting system, not later than three months after the date of establishment of such Jal Sansthan, or such other date as the Association shall agree. Uttar Pradesh shall cause to be furnished to the Association for its comments the drafts of said regulations before they are formally adopted by any Jal Sansthan. Section 2.04. Uttar Pradesh shall use its best endeavours to ensure the equitable valuation of property for tax purposes (including water and sewerage charges) in the areas of jurisdiction of the Jal Sansthans. Section 2.05. In the event that Uttar Pradesh instructs the Jal Nigam or any Jal Sansthan to hire staff in excess or in advance of the requirements referred to in paragraph (b) of Section 2.04 of the Project Agreement, Uttar Pradesh shall furnish to the Jal Nigam or to such Jal Sansthan through the Jal Nigam grants in amounts sufficient to cover the salaries and emoluments of such excess staff. 5 Section 2.06. Without limitation or restriction upon any other provision of this Agreement, Uttar Pradesh undertakes to review the functioning of the Jal Nigam, and pursuant to such review, to make available to the Jal Nigam funds sufficient to cover the difference, if any, between the recoveries made by the Jal Nigam from its operations and the funds required by the Jal Nigam to meet its statutory obligations. Section 2.07. Uttar Pradesh shall provide to any Jal Sansthan through the Jal Nigam upon its establishment sufficient working capital, including cash to finance its initial operations. Section 2.08. Uttar Pradesh shall cause the Jal Nigam and each Jal Sansthan to: (i) have an annual audit satisfactory to the Association made of its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year in accordance with sound auditing principles consistently applied by independent and qualified auditors; (ii) furnish to the Association as soon as available, but in any case not later than nine months after the end of each such year, (A) certified copies of the 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 Jal Nigam and of each Jal Sansthan and the audit thereof as the Association shall from time to time reasonably request. ARTICLE III Effective Date; Termination; Cancellation and Suspension Section 3.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 3.02. (a) This Agreement and all obligations of the Association and of Uttar Pradesh 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-five years after the date of this Agreement. 6 (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 Uttar Pradesh of this event. Section 3.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Development Credit Agreement. ARTICLE IV Miscellaneous Provisions Section 4.01. 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, 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 Uttar Pradesh: Secretary, Local Self Government Department Government of Uttar Pradesh Lucknow INDIA Cable address: SECRETARY LSG Lucknow 7 Section 4.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under .this Agreement on behalf of Uttar Pradesh may be taken or executed by the Secretary, Local Self Government Department or such other person or persons as Uttar Pradesh shall designate in writing. Section 4.03. Uttar Pradesh 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 Uttar Pradesh, take any action or execute any documents required or permitted to be taken or executed by Uttar Pradesh pursuant to any of the provisions of this Agreement. Section 4.04. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 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. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Mervyn L. Weiner Regional Vice President South Asia THE STATE OF UTTAR PRADESH By /s/ T. N. Kaul Authorized Representatie