India - Godavari Barrage Project : Credit 0532 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 532 IN Project Agreement (Godavari Barrage Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND THE STATE OF ANDHRA PRADESH DATED MARCH 7, 1975 PROJECT AGREEMENT AGREEMENT, dated March 7, 1975, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and the STATE OF ANDHRA PRADESH acting by its Governor (hereinafter called Andhra Pradesh). 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-five million dollars ($45,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Andhra Pradesh agree to undertake such obligations toward the Association as hereinafter set forth; WHEREAS Andhra 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 Execution of the Project Section 2.01. Andhra Pradesh shall carry out Parts A and B of 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 carrying out Part A of the Project, Andhra Pradesh shall employ contractors satisfactory to the Association upon terms and conditions satisfactory to the Association. 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 to be financed out of the proceeds of the Credit, shall be awarded in accordance with the provisions of Schedule 1 to this Agreement. Section 2.04. (a) Andhra Pradesh 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 Andhra Pradesh to replace or repair such goods. (b) Except as the Association may otherwise agree, Andhra Pradesh 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 until its completion. Section 2.05. (a) Andhra Pradesh shall furnish to the Association promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for Parts A and B of, the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) Andhra Pradesh: (i) shall maintain records adequate to record the progress of Parts A and B 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 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 Parts A and B of 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. Section 2.06. (a) Andhra Pradesh shall, at the request of the Association: (i) exchange views with the Association with regard to the progress of the Project, 5 the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit; and (ii) furnish to the Association all such information as the Association shall reasonably request in respect of the Project. (b) Andhra Pradesh shall promptly inform the Association of any condition which interferes or threatens to interfere with, the progress of Parts A and B of the Project, the accomplishment of the purposes of the Credit, or the performance by Andhra Pradesh of its obligations under this Agreement. ARTICLE III Management and Operations of Project Facilities Section 3.01. (a) Andhra Pradesh shall cause all works and facilities included in the Project or necessary to the proper and efficient operation thereof to be operated, maintained and repaired in accordance with sound engineering practices and standards and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for that purpose. (b) Without limiting the generality of the preceding paragraph, Andhra * Pradesh shall, under arrangements satisfactory to the Association, cause the barrage constructed under the Project to be periodically inspected not less frequently than once every five years, in accordance with sound engineering practices in order to determine whether there are any deficiencies or potential deficiencies in the condition of such structures and earthworks, or in the quality and adequacy of maintenance or methods of operation of such structures and earthworks which may endanger the safety of such structures and earthworks. Section 3.02. Andhra Pradesh shall at all times during the execution of the Project stockpile such materials, and maintain such equipment, at the site of the existing weir, as shall be necessary to make emergency repairs to such weir. ARTICLE IV Financial Covenants Section 4.01. Andhra Pradesh shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations and financial condition of PWD with respect to Part A and the Command Area Development Department of Andhra Pradesh with respect to Part B of the Project. 6 Section 4.02. Andhra Pradesh shall: (i) have the accounts and financial statements (balance sheets, statements of income and expenses and related statements) of PWD with respect to Part A and the Command Area Development Department of Andhra Pradesh with respect to Part B of the Project for each fiscal year audited, in accordance with sound auditing principles consistently applied, by the Accountant General of Andhra Pradesh; (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 the said 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 PWD with respect to Part A and the Command Area Development Department of Andhra Pradesh with respect to Part B of the Project and the audit thereof as the Association shall from time to time reasonably request. Section 4.03. Andhra Pradesh undertakes to make such arrangements as shall be necessary to levy and collect from beneficiaries of the facilities constructed under Part A of the Project all investment costs of the Project including interest of not less than 5% per annum thereon over a period of not more than fifteen years. 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 Andhra 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 fifteen 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 Andhra Pradesh of this event. 7 Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any suspension or partial cancellation 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: 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 Andhra Pradesh: Secretary to the Government of Andhra Pradesh, Public Works Department (Projects Wing) Hyderabad 22 India Cable address: PROJECTS Hyderabad 22 India 8 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 Andhra Pradesh may be taken or executed by the Secretary to the Government of Andhra Pradesh in PWD or such other person or persons as he shall designate in writing. Section 6.03. Andhra 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 Andhra Pradesh, take any action or execute any documents required or permitted to be taken or executed by Andhra Pradesh pursuant to any of the provisions of this Agreement. Section 6.04. This Agreement inay 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 / M. L. Weiner Regional Vice President South Asia THE STATE OF ANDHRA PRADESH By /s / T. N. Kaul Authorized Representative 9 SCHEDULE Procurement A. General Procedures 1. Except as provided in Part A.3 hereof, contracts for civil works, equipment and materials 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 equipment included in Part A of the Project shall be prequalified as described in Part 2.2 of the Guidelines and bidders for the works included in the said Part A shall be considered for award only if qualified in accordance with the requirements for prequalification described in the said part 2.2 of the Guidelines. 3. Materials and equipment estimated to cost less than the equivalent of $50,000 shall be procured through the normal procedures of Andhra Pradesh, provided that the aggregate cost of such items shall not exceed the equivalent of $600,000. B. Evaluation and Comparison of Bids for the Manufacture and Erection of Gates; Preference for Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the manufacture and erection of the gates: (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 Andhra Pradesh 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 India 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 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. 10 (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in India 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 India equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in India. (3) Group 4: 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. 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, all group C 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 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 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 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. C. Evaluation and Comparison of Bids for Civil Works; Preferences for Domestic Contractors 1. With respect to any contract for civil works included under Category (1) of the table set forth in Schedule 1 of the Development Credit Agreement, Andhra Pradesh 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 qualify as provided in Part A of this Schedule and applicants for qualification applying also for such preference shall * 11 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 Andhra Pradesh, 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. Procurement Without Contracting Construction work on the Project until June 30, 1975, as well as works * for the dismantling of the crest of the existing weir at the Project site following installation of the gates on the Project barrage, shall be executed through force account. E. Review of Procurement Decisions by the Association 1. Review of prequalification of bidders for equipment contracts. Andhra Pradesh 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 Andhra Pradesh to the Association for its comments before the applicants are notified, and Andhra Pradesh 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: (a) With respect to all contracts for equipment estimated to cost the equivalent of $50,000 or more: (i) before bids are invited, Andhra Pradesh shall furnish to the Association, for its comments, the text of the invitations to bid 12 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; (ii) promptly after the bids have been received, Andhra Pradesh shall inform the Association of the names of the bidders and the respective amounts of the bids; and (iii) after bids have been received and evaluated, Andhra Pradesh 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 of this Schedule, promptly inform the Borrower and Andhra Pradesh and state the reasons for such determination. (b) With respect to all contracts for civil works estimated to cost the equivalent of $50,000 or more: (i) before bids are invited, Andhra Pradesh shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, including the requirements for qualification and eligibility for the preference under Part C. 1, 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; (ii) promptly after the bids have been received, Andhra Pradesh shall furnish to the Association the list of all bidders, a statement 13 of their qualifications, and, where applicable, of their eligibility for domestic preference under Part C.1 above and the reasons for the exclusion of any applicant for qualification and for such eligibility, for the Association's comments and Andhra Pradesh shall make such additions to, deletions from, or modifications in, the said list as the Association shall reasonably request; and (iii) Andhra Pradesh shall evaluate the bids from qualified bidders and, before a final decision on the award is made, inform the Association of the name of the bidders 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 the Borrower and Andhra Pradesh and state the reasons for such determination. (c) With respect to each contract governed by (a) or (b) above: (i) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were invited. (ii) 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, Andhra Pradesh shall furnish 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, 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 Andhra Pradesh and the Borrower and state the reasons for such determination.