Nepal - Bhairawa-Lumbini Groundwater Project : Credit 0654 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 654 NEP DEVELOPMENT CREDIT AGREEMENT (Bhairava-Lumbini Groundwater Project) between KINGDOM OF NEPAL and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated July 9, 1976 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 9, 1976, between THE KINGDOM OF NEPAL (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). -2- 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 March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agree- ments of the Association 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 addi- 'onal terms have the following meanings: (a) "ADBN" means the Agricultural Development Bank of Nepal, a body corporate established pursuant to the Borrower's Agricul- tural Development Bank Act, 1967, as amended, and includes any successor or successors thereto. (b) "AIC" means the Agricultural Inputs Corporation, a corporation established under the Borrower's Corporation Act, 1964, and includes any successor or successors thereto. (c) "DIHM" means the Department of Irrigation, Hydrology and Meteorology in the Borrower's Ministry of Food, Agriculture and Irrigation, and includes any successor or successors thereto. -3- (d) "Groundwater Resources Development Board" means the board of that name established by the Groundwater Resources Devel- opment Board (Formation) Order, 2031 (1974). (e) "NEC" means the Nepal Electricity Corporation, a cor- poration established under the Borrower's Nepal Electricity Cor- poration Act, 2019 (1962), and includes any successor or successors thereto. (f) "Project" and references to "Parts" thereof means the project and parts thereof described in Schedule 2 to this Agree- ment. Cg) "Project Area" means the area of about 20,000 hectares in the Rupandehi District of the Western Terai shown on the.Bank's map number IBRD-12075 (April 1976). -4- 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 currencies equiva- lent to nine million dollars ($9,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods or for civil works to be fi- nanced out of the proceeds of the Credit, shall be procured in accordance with the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1981 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. 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. 0 -5- Section 2.06. Service charges shall be payable semi-annually on March 15 and September 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each March 15 and September 15 commencing September 15, 1986, and ending March 15, 2026, each installment to and including the installment payable on March 15, 1996 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 Gen- eral Conditions. -6- ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project through the ADBN; AIC; the Department of Agriculture of the Min- istry of Food, Agriculture and Irrigation; DIHM; Ministry of Home and Panchayat and NEC with due diligence and efficiency and in conformity with appropriate agricultural, engineering and financial practices, and shall provide, promptly as needed, the funds, facili- ties, services and other resources required for the purpose. (b) The Borrower shall establish an office, hereinafter called the Bhairava-Lumbini Groundwater Project Office, within the DTHM which shall be sufficiently empowered, staffed and supported to implement Parts A, C, D (3), F (2) and F (3) of the Project and to coordinate the activities of other agencies of the Borrower in- volved in implementing other Parts of the Project. The Bhairawa- Lumbini Groundwater Project Office shall be directed by a suitably qualified and experienced Project Manager. (c) The Borrower shall take all such further action as may be required to ensure coordination of the activities of the agen- cies involved in implementing the Project, including the follow- ing: (i) The Borrower's Groundwater Resources Development Board shall decide finally any policy questions or disputes among agencies which may arise and shall approve Project implementation programs and budgets. Representatives of NEC and the Ministry of Home and Panchayat shall be added to such Board as members as required for purposes of dealing with Project issues. The Order referred to in Section 1,02 (d) of this Agreement shall not be substantially amended in such a manner as to diminish such Board's effectiveness in carrying out the foregoing functions, or revoked. (ii) The Borrower shall establish a project coordinat- ing committee which shall be chaired by the Chief District Officer, Rupandehi District, and shall include as members an NEC representative, Assistant District Agricultural Officer and the Project Manager. Such committee shall include, as ad hoc participants to be called as needed, the head of the Bhairawa Agriculture Research Station, district officer of the AIC, di,.rict manager of ADBN and representatives of the Soil Survey Division and of the Food and Agricultural Marketing Service Depart- ment of the Ministry of Food, Agriculture and Irri- gation. Such committee shall meet regularly to ad:vise and assist the Project Manager in coordinating implementation of the Project, siting tubewells and forming water-users groups. Section 3.02. In order to assist the Borrower in (a) procure- ment, construction, administration, operation and maintenance in connection with the Project and (b) carrying out the studies de- scribed in Parts F (2) and F (3) of the Project, the Borrower 8- shall amploy engineering, management and agricultural consultants whose qualifications, experience and terms and conditions of em- ployment shall be satisfactory to the Association. Section 3.03. (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 in- cident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any in- demnity shall be payable in a currency freely usable by the Bor- rover 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 3.04. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or addi- tions thereto, in such detail as the Association shall reasonably request. (b) The Borrower shall submit to the Association annually its detailed plans for implementing the Project in its next fiscal year, including estimates of the financial requirements of the agencies involved in implementing the Project, Without limitation to the generality of Section 3.01 (a) of this Agreement, the Bor- rover shall, on the basis of such estimates, make adequate budget- ary provision for such agencies to enable them to implement the Project. *) -9- (c) 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 pro- ceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited represen- tatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the pro- ceeds 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. (d) The Bhairawa-Lumbini Groundwater Project Office shall monitor the effect of the tubewells on the groundwater aquifers in the Project Area during implementation of the Project and for at least thirty years thereafter. The Assistant District Agriculture Development Officer referred to in Part E of the Project shall monitor agricultural production and Project benefits in the Project Area. Reports in respect of the foregoing shall be furnished to the Assoclition annually not later than December 31 of each year, and a bench-mark survey of agricultural production in the Project Area shall be furnished to the Association not later than December 31, 1976 or such later date as the Association may approve. Section 3.05. (a) The Borrower shall take 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 con- struction, installation and operation of the facilities included 1-10- in the Project and shall furnish to the Association if the Asso- ciation so requests, promptly after such acquisition, evidence satisfactory to the Association that such land and rights in re- spect of land are available for purposes related to the Project. (b) Except as the Association may otherwise agree, no civil works contract shall be awarded nor shall force account work be undertaken to construct civil works until all the land and rights in respect of land required for the civil works involved have been acquired by the Borrower or one of its agencies. Section 3.06. (a) Except as the Association may otherwise agree, a water users group, including as members all farmers receiving water from a tubewell, shall be organized and duly con- stituted in respect of each tubewell installed under the Project. Except as the Association may otherwise agree, no tubevell shall be drilled until farmers holding at least two thirds of the irriga- ble land within the area to be served by the well have joined such a group and agreed to pay water charges and to assist in maintain- ing irrigation works. (b) DIHM shall be responsible for constructing such facilities as are required to convey water from tubewells to turnouts serving service blocks of between two and nine hectares. The Borrower shall take all action as may be required to cause farmers in the Project Area to carry out the construction of small water courses from such turnouts and field drains and such land leveling as may be necessary for such farmers to receive the benefits of the Project. * -11 - (c) If any farmer within the Project Area shall not have carried out the on-farm development works contemplated by para- graph (b) of this Section within one year after the completion of the tertiary canals and drains in the Project serving his farm, the Borrower through the DIHM shall carry out such on-farm devel- opment works and shall recover the cost of such works from the farmer involved. (d) The Borrower shall ensure that irrigation water from tube-wells constructed under the Project is not released to any farm until the on-farm development works contemplated by paragraph (b) of this Section for such farm have been completed. - 12 0 ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall cause ADBN, AIC, DIHM and NEC to maintain separate records in respect of the Project adequate to reflect in accordance with consistently maintained sound accounting practices their respective operations in respect of the Project. (b) The Borrower shall cause ADBN, AIC, DIHM and NEC each to: (i) have such records in respect of the Project (balance sheets statements of income and expenses and related statements as applica- ble) 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 through DIHM as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of such records 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 -Arough DIHM such other information concerning its accounts and financial statements and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. (a) Except as the Association may otherwise agree, the Borrower shall, beginning not later than one year after comple- tion of the works for each tubewell, establish and collect water charges to enable the Borrower to recover from all farmers receiving water from such well (i) the operating costs of such well -- energy, -13 - operation and maintenance as they are incurred and annual contri- butions to a replacement reserve for pumps and motors -- and (ii) having due regard to the incentives and capacity of such farmers to pay, a reasonable portion of the investment cost of Part A of the Project in progressive steps over a reasonable period of time. (b) At least every three years following the initial imposi- tion of such water charges, the Borrower shall, in consultation with the Association, review the level of such charges and the procedures for their collection and shall make such changes therein as are required to comply with paragraph (a) of this Section and such other changes as may be agreed between the Borrower and the Association. (c) The Borrower shall ensure the proper maintenance of tubewell pumps, equipment and works in accordance with sound en- gineering and agricultural standards and shall provide funds as required for such purpose and to replace tubewell pumps and motors in the Project Area. Section 4.03. (a) The Borrower shall at all times make avail- able, or cause to be made available through AIC, adequate seed, fertilizers and other agricultural inputs to farmers in the Proj- ect Area. (b) The Borrower shall make arrangements through ADBN for the provision of agricultural credit to farmers in the Project Area in order to enable such farmers to achieve prompt and pro- ductive utilization of their land and of the water and other fa- cilities provided by the Project. - 14- ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) a Project Manager with qualifications and experience acceptable to the Association has been appointed; (b) the Project Coordinating Committee has been established; and (c) the Borrower has made arrangements satisfactory to the Association to employ a consulting firm for the purposes indi- cated in Section 3.02 of this Agreement. Section 5.02. The following is specified as additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely, that the Project is included within the defi- nition of "project" in Section 2 of the Order referred to in Sec- tion 1.02 (d) of this Agreement. Section 5.03. The date November 9, 1976, is hereby specified for the purposes of Section 12.04 of the General Conditions. - 15 - Section 5.04. The obligations of the Borrower under Article IV of this Agreement shall cease on the date on which the Develop- ment Credit Agreement shall terminate or on a date thirty years after the date of this Agreement, whichever shall be the earlier. - 16: - ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Secretary of the Ministry of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Secretary to His Majesty's Government Ministry of Finance Kathmandu Nepal Cable address: ARTHA Kathmandu 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 (WUl) -17 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment 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. KINGDOM OF NEPAL By /s/ P. B. Khatri Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Ernest Stern Regional Vice President South Asia -18- 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 the amount of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Construction mate- 2,700,000 rials, equipment, vehicles and spare parts: (a) imported 100% of foreign directly expenditures (b) locally pur- 95'O of local ex- chased from penditures local manu- facturer (c) otherwise 75% of local ex- locally penditures purchased - 19 - Amount cf the Credit Allocated % of (Exnressed in Expenditures Categoy Dollar Equivalent) to be Financed (2) Civil works (exclud- ing items listed in Category (1) above) done: (a) by force ac- 4o0,000 75% of local count exnenditures (b) under contract 2,400,000 100% of foreign expenditures and 75% of local ex- Denditures (3) Consulting services 1,400,000 100% of foreign exoenditires (4) Unallocated 2,100,000 TOTAL 9,000,000 - 20- 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower and for goods or services supplied from the territory of the Borrower. 3. The disbursement percentages have been calculated in compli- ance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or sunply thereof; to that end, if the amount of any such taxes levied on or in re- spect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 4. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 1 above, if the Association has reasonably estimated that the amount -21- of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all exnenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allo- cated to another Category and which in the opinion of the Associ- ation are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. 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 this Agreement, no expendi- tures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Crefit Agreement, by notice to the Borrower, can- cel 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. -22- SCHEDULE 2 Description of the Project The Project consists of the following Parts, each of which shall be implemented by the agency indicated: Part A: Tubewells (DIHM) (1) Installation of about 63 tubewells in the Project Area varying in depth from 120 to 200 meters, equipped with automatically controlled electric pumps capable of dis- charging 300 cubic meters per hour, all of which will be housed in brick buildings. Two drilling rigs will be provided to install the tubevells. (2) Construction of about 63 storage reservoirs with a capacity of at least 2,000 cubic meters each to store water from the tubewells. (3) Construction of irrigation and drainage networks with control structures to serve about 120 hectares around each tubewell. (4) Formation of, and provision of management assistance to, a water users group for each tubewell for the pur- pose of ensuring proper operation and maintenance. (5) Enlargement of DIHM's Bhairawa office. -23- Part B: Transmission Facilities (NEC) Construction of about 75 kilometers of 11 kilovolt transmis- sion lines with stepdown transformers to 0.4 kilovolts to deliver power from the existing 33 kilovolt Bhairawa-Butwal grid to the tubewells. Part C: Road Construction (DIHM) Construction of about 70 kilometers of gravel surfaced roads of 3.5 meters' width to link major villages in the Project Area to existing black-top roads. Part D: Credit, Input Supply and Marketing (1) Provision of seasonal production credit to farmers in the Project Area for farm inputs at level consistent with farmers' demand (ADBN). (2) Provision of agricultural inputs to farmers in the Project Area (AIC). (3) Construction by DIHM of a 1,000 ton grain store at Bhairawa. Part E: Extension Services and Research (Department of Agriculture) (1) Appointing an Assistant District Agriculture Develop- ment Officer for the Project Area who shall devote full time to the Project and increasing extension staff in - 24 -0 the Project Area by adding about one trained Panchayat level agricultural assistant for each tubewell installed and four subject matter specialists. (2) Enlargement of the Department of Agriculture office at Bhairava and construction of training and housing facil- ities for the training center at Bhairawa Research Farm. Part F: Miscellaneous (1) Provision of vehicles and equipment for construction supervision, Project administration and monitoring, tubewell operation and maintenance and agricultural re- search and extension work. (2) Preparing a feasibility study for a fifteen to twenty thousand hectare groundwater irrigation project in the vicinity of the Project Area (DIRM). (3) Preparing a study of existing water charges and recom- mending their future levels with the view to recovering full operation and maintenance costs and a reasonable portion of capital costs of projects, having due regard to the incentives and capacity of farmers to pay (DIHM). The Project is expected to be completed by December 31, 1980. -25- SCHEDULE 3 Procurement A. International Competitive Bidding Except as provided in Part B, contracts for the purchase of goods or for civil works shall be procured in accordance with procedures consistent with those set forth in Part A of the "Guide- lines for Procurement under World Bank Loans and IDA Credits" pub- lished by the Bank in August 1975 (hereinafter called the Guide- lines), on the basis of international competitive bidding. B. Other Procurement Procedures 1. Invitations to bid for contracts for irrigation and drainage works, buildings and roads need only to be advertised within Nepal. 2. Contracts estimated to cost less than $10,000 equivalent may be let pursuant to such competitive procedures as are appro- priate to the circumstances, provided that the aggregate cost of contracts so let shall not exceed $100,000 equivalent. 3. Drilling and development of Project tubewells may be done by force account by the DIHM. C. 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 procured pursuant to international competitive - 26 - bidding: (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 the Borrower 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 Nepal may be granted a margin of pref- erence in accordance with, and subject to, the following provi- sions: (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the infor- mation required to establish the eligibility of a bid for such preference and the following methods and stages that will be fol- lowed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Nepal if the bidder shall have established to the satis- faction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in Nepal equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Nepal. (3) Group C: 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 evalu- ated 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, 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 fur- ther comparison only, an amount equal to (i) the amount of cus- toms 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 bid from group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shall be selected. - 28- D. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for drilling rigs, well casings, pumps and motors: (a) 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 procedures as the Association shall reasonably re- quest. 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, the Bor- rower 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 shall furnish to the Association, in suf- ficient 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 recommen- dations for award of the said consultants and such other infor- mation as the Association shall reasonably request. The Associa- tion shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly in- form the Borrower and state the reasons for such determination. -29 - (c) The terms and conditions of the contract shall not, with- out the Association's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed conies of the contrdct shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for with- drawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract to be financed out of the pro- ceeds of the Credit and not governed by the preceding paragraph, the Borrower 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 the respective bids, recommendations for award and such other information as the Association shall rea- sonably request. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination.