Cameroon - Niete Rubber Estate Project : Credit 0574 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 574 CM Project Agreement (Ni6t6 Rubber Estate Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND SOCIETE HEVEA - CAMEROUN (HEVECAM) DATED JULY 30, 1975 PROJECT AGREEMENT AGREEMENT, dated July 30, 1975, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and SOCIETE HEVEA - CAMEROUN (HEVECAM) (hereinafter called HEVECAM). WHEREAS by the Development Credit Agreement of even date herewith between United Republic of Cameroon (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to sixteen million dollars ($16,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that HEVECAM agree to undertake such obligations toward the Association as hereinafter set forth; WHEREAS by a Project Financing Agreement to be entered into between the Borrower and HEVECAM, a portion of the proceeds of the credit provided for Linder the Development Credit Agreement will be made available to HEVECAM on the terms and conditions therein set forth; and WHEREAS HEVECAM, 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. HEVECAM shall carry out the Project, with the exception of Part G thereof, described in Schedule 2 to the Development Credit Agreement 4 with due diligence and efficiency and in conformity with appropriate administrative, financial, agricultural, industrial and engineering practices. Section 2.02. In order to assist HEVECAM in the execution and operation of the Project, HEVECAM shall employ, under a Management Services and Technical Assistance Contract satisfactory to the Association, management and technical assistance consultants whose qualifications and experience shall be satisfactory to the Association, and shall consult with the Association sufficiently in advance of terminating, modifying or amending the said contract so as to afford the Association a reasonable opportunity to comment thereon. Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods or for the carrying out of works or services (other than consultants' services) for the Project shall be awarded in accordance with the provisions of Schedule 1 to this Agreement. Section 2.04. (a) HEVECAM undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit made available 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 HEVECAM to replace or repair such goods. (b) Except as the Association may otherwise agree, HEVECAM shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclusively for the Project. Section 2.05. (a) HEVECAM shall furnish to the Association promptly upon their preparation, the plans, specifications, reports, 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) HEVECAM: (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 made available to it by the Borrower, and to disclose the use thereof in the Project; (ii) shall, without limitation upon the provisions of paragraph (c) of this Section, enable the Association's representatives to visit the facilities and construction sites included in the Project, and to examine 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 made available to it and the goods and services financed out of such proceeds. 5 (c) HEVECAM shall enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment of HEVECAM and any relevant records and documents. Section 2.06. HEVECAM shall duly perform all its obligations under the Project Financing Agreement. Except as the Association shall otherwise agree, HEVECAM shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Project Financing Agreement or any provision thereof. Section 2.07. (a) HEVECAM shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement, and other matters relating to the purposes of the Credit. (b) HEVECAM shall promptly inform the Association of any condition which interferes or threatens to interfere with, the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by HEVECAM of its obligations under this Agreement. Section 2.08. HEVECAM shall furnish from time to time to the Association for its review the training program included in Part F of the Project and shall revise the said program in consultation with the Association. ARTICLE II Management and Operations of HEVECAM Section 3.01. (a) HEVECAM shall at all times carry on its operations, manage its affairs, plan the future development of its business and undertaking, and maintain its financial position all in accordance with appropriate agricultural, financial and administrative practices, and under the supervision of experienced and competent management. (b) Without limitation upon the generality of paragraph (a) of this Section, HEVECAM shall at all times employ a Directeur G'neral and shall employ, as and when needed for the purposes of the Project, and thereafter maintain a Technical Manager, an Administrative Manager and an Industrial Manager whose qualifications, experience and tern-is and conditions of employment shall be satisfactory to the Association. (c) HEVECAM shall operate and maintain its plantation, equipment, properties and facilities and make all necessary renewals and repairs thereof, all in accordance with appropriate agricultural and management practices. 6 Section 3.02. HEVECAM 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. Section 3.03. HEVECAM shall not, without the consent of the Association, sell, lease, transfer, or otherwise dispose of any of its properties or assets which shall be required for the efficient carrying out of its business and undertaking, including the carrying out of the Project. Section 3.04. HEVECAM shall at all times take all steps necessary to maintain its corporate existence and right to carry on its operations, including the Project, and shall, except as the Association shall otherwise agree, take all steps necessary to acquire and to retain such land, interests in land and properties, and to acquire, maintain and renew such licenses, consents, franchises or other rights, as may be necessary or useful for the execution and operation of the Project and the conduct of its business and undertaking. Section 3.05. Except as the Association shall otherwise agree, HEVECAM shall obtain title to all goods financed in whole or in part with the proceeds of the Credit and the Caisse Centrale loan free and clear of all liens. ARTICLE IV Financial Covenants Section 4.01. HEVECAM shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 4.02. HEVECAM 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 HEVECAM and the audit thereof as the Association shall from time to time reasonably request. 7 Section 4.03. HEVECAM shall consult with the Association on proposals for its marketing arrangements before the adoption of such proposals by HEVECAM. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of HEVECAM 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 20 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 HEVECAM of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Development Credit Agreement. ARTICLE VI Miscellaneous Provisions Section 6.01. 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: 8 For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT), Washington, D.C. 248423 (RCA) or 64145 (WUI) For HEVECAM: Soci6t6 H6v6a - Cameroun (HEVECAM) B.P. 174 Kribi, Cameroon Cable address: HEVECAM Kribi, Cameroon Section 6.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of HEVECAM may be taken or executed by its Prsident di Conseil d'Administration or such other person or persons as he shall designate in writing. Section 6.03. HEVECAM 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 HEVECAM, take any action or execute any documents required or permitted to be taken or executed by HEVECAM pursuant to any of the provisions of this Agreement. Section 6.04. 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 9 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 / R. Chaufournier Regional Vice President Westem Africa SOCIETE HEVEA - CAMEROUN (HEVECAM) By /s / F. X. Tchoungui Authorized Represen tatih'e 10 SCHEDULE 1 Procurement A. General Procedures 1. Except as provided in Part A.3 hereof, contracts shall be let under procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in April 1972, as revised in October 1972 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. Bidders for the works included in Parts C and D of the Project shall be prequalified as described in Part 2.2 of the Guidelines. 3. (a) Land clearing, building of service roads and construction of housing and other facilities shall either be carried out by HEVECAM through force account or by contractor hand labor procured on the basis of competitive bidding advertised locally in accordance with local procedures. (b) Any other contract not exceeding $60,000 equivalent shall be procured on the basis of competitive bidding advertised locally in accordance with local procedures. B. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 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. (port of entry) 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 HEVECAM 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 Cameroon and in countries which are a party to Union Donanire des Etats de l'Afrique Centrale (hereinafter called UDEAC) may be granted a margin of preference in accordance with, and subject to, the following provisions: (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish 11 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 four groups: (1) Group A: bids offering goods manufactured in Cameroon if the bidder shall have established to the satisfaction of HEVECAM and the Association that the manufacturing cost of such goods includes a value added in Cameroon equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Cameroon. (3) Group C: bids offering goods manufactured in a country (other than Cameroon) which is a party to UDEAC and entitled to preferential tariffs thereunder. (4) Group D: bids offering any other goods. (c) 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 domestically, to determine the lowest evaluated bid of each group. Such lowest evaluated bids 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 or group D, all group C and group D bids shall be further compared with the lowest evaluated bid from group A after adding to the c.i.f. bid price of the imported goods offered in each group C and group D bid, for the purpose of this further comparison only, an amount equal to (i) the amount 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 or group D bid, or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid or a group C bid in such further comparison is the lowest, it shall be selected for the award. (e) If, as a result of the further comparison under paragraph (d) above, a bid from group D is the lowest, all group D bids shall be finally compared with the lowest bid from group C, as determined under paragraph (c) above, after adding 12 to the c.i.f. bid price of goods to be imported offered in each group D bid, for the purpose of this final comparison only, an amount equal to the smaller of (i) the difference between the amount of customs duties and other import taxes which would actually be payable for the importation of goods offered in such group D bid and for the importation of goods offered in the group C bid, or (ii) 15% of the c.i.f. bid price of goods to be imported offered in such group D bid. If the lowest bid in such comparison is the group C bid, it shall be selected for purposes of award; if not, the lowest bid from group D, as determined under paragraph (c) above, shall be selected for purposes of award. C. Evaluation and Comparison of Bids for Civil Works; Preferences for Domestic Contractors 1. With respect to any contract for civil works inluded under Category (1) of the table set forth in Schedule 1 to the Development Credit Agreement, except those referred to in Part A.3 hereof, HEVECAM may grant a margin of preference of 7-1/2% to domestic contractors, in accordance with, and subject to, the following provisions: (a) Contractors shall be required to prequalify as provided in Part A of this Schedule and applicants for qualification applying also for such preference shall be asked to provide, as part of the information for qualification, such information, including details of ownership, as shall be required to determine whether, according to the classification established by the Borrower and accepted by the Association, a particular firm or group of firms qualifies for a domestic preference. The bidding documents shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. (b) After bids have been received and reviewed by HEVECAM, responsive bids will be classified into the following groups: (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. Review of Procurement Decisions by Association 1. Review of prequalification. HEVECAM shall, before qualification is invited, inform the Association in detail of the procedure to be followed and shall introduce 0 13 such modifications in said procedure as the Association shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and, where applicable, of their eligibility for domestic preference under Part C.1 above and of the reasons for the exclusion of any applicant for prequalification and for such eligibility shall be furnished by HEVECAM to the Association for its comments before the applicants are notified, and HEVECAM shall make such additions to, deletions from, or modifications in, the said list as the Association shall reasonably request. 2. Review of invitation to bid and of proposed awards and final contracts. With respect to all contracts for civil works, equipment and materials estimated to cost the equivalent of $60,000 or more: (a) Before bids are invited, HEVECAM shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence * before it is issued to the prospective bidders. (b) After bids have been received and evaluated, HEVECAM shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and the reasons for the intended award and shall furnish to the Association, in sufficient time for its review, a detailed report, on the evaluation and comparison of the bids received, together with the recommendation for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform HEVECAM and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Association s concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. 3. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding paragraph, HEVECAM shaii furnish to 14 the Association, promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform HEVECAM and state the reasons for such determination.