Lebanon - Reconstruction Project : Loan 1476 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1476 LE Loan Agreement (Reconstruction Project) between REPUBLIC OF LEBANON and TNTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated July 12, 1977 LOAN AGREEMENT AGREEMENT, dated July 12, 1977, between REPUBLIC OF LEBANON (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). -2- ARTICLE 1 General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Gviarantee Agreements of the Bank 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. -3- ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to fifty million dollars ($50,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between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 Bank, for expendi- tures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, contracts for the purchase of goods or for civil works to be financed out of the proceeds of the Loan, shall be procured in accordance with the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1979 or such later date as the Bank shall otherwise establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) -4- per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of eight and two-tenths per cent (8.20%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annually on March 15 and September 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. -5- ARTICLE III Execution of the Port Rehabilitation Component (Part A of the Project) Section 3.01. The Borrower shall carry out Part A of the Project, with the assistance of the Commission d'Extension et de Promotion du Port de Beyrouth (hereinafter called CEP) and of the Socift6 de Gestion et d'Exploitation du Port de Beyrouth (hereinafter called SGE) in accordance with the Convention of April 16, 1960, as amended, between the Borrower and SGE, or with the assistance of any other agency that the Borrower may select in agreement with the Bank, with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and port practices, and shall provide, promptly as needed, the funds, facilities and other resources required for the purpose. Section 3.02. In carrying out Part A.2 of the Project, the Borrower shall (i) employ experts in the fields of port operations and organization and (ii) cause SGE to employ experts in the fields of tariffs, port operations and related training and equip- ment maintenance, in such number and with such qualifications, experience and terms and conditions of employment as shall be satisfactory to the Bank. Section 3.03. The Borrower shall, in consultation and coordination with CEP and SGE: (i) prepare a site plan for the -6- Port of Beirut, including a traffic plan, and submit such plan to the Bank for its review not later than December 31, 1977 or such other date as the Bank shall agree; and (ii) prepare an adequate plan for the reconstruction of the City of Beirut. Section 3.04. The Borrower shall, on the basis, inter alia, of the recommendations of the experts referred to in Section 3.02 of this Agreement, review the efficiency and profitability of the Port of Beirut and prepare proposals with respect to the measures required to strengthen the port operation and administration in Beirut. Such proposals shall be submitted to the Bank for its comments not later than June 30, 1979 or such other date as the Bank may agree. -7- ARTICLE IV Execution of the Telecommunications Rehabilitation Component (Part B of the Project) Section 4.01. The Borrower shall carry out Part B of the Project through the Directorate General for Telegraph and Telephone of its Ministry of Post, Telegraph and Telephone (hereinafter called DGTT), or such other entity as shall be entrusted with responsibility for the telecommunications sector, with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and telecommunications practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 4.02. In ordeT to assist the Borrower (i) in the preparation of equipment lists and in the procurement required for Part B.1 of the Project, and (ii) in carrying out Part B.2 of the Project, the Borrower shall employ experts whose qualifications, experience and terms and conditions of employment.shall be satis- factory to the Bank. Section 4.03. Without limitation on the provisions of Section 4.01 of this Agreement, the Borrower shall take all necessary measures for the prompt settlement of all amounts owed with respect to equipment already supplied to DGTT. -8- Section 4.04. The Borrower shall, in carrying out Part B.2 of the Project, referred to in said Part of the Project, prepare pro- posals for the program referred to in said Part of the Project and submit such proposals to the Bank for its comments not later than June 30, 1979 or such other date as the Bank may agree, and thereafter promptly implement said program. -9- ARTICLE V Execution of the Water Supply and Sanitation Rehabilitation Component (Part C of the Project) Section 5.01. The Borrower shall carry out Part C of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and water supply practices, and shall provide, promptly as needed, the funds, facilities, services an6 other resources reAuired for the purpose. Section 5.02. (a) In order to assist the Borrower in (i) the preparation of a program for the carrying out of Part C.1 (a) of the Project and of related bidding documentation, (ii) carrying out Part C.1 (c) of the Project, (iii) procurement for Part C.2 of the Project and the preparation of a coordinated plan for solid waste collection in the Greater Beirut area, (iv) carrying out the study included in Part C.4 (a) of the Project, and (v) carrying out the studies included in Parts C.4 (b) through (e) of the Project, the Borrower shall employ experts whose qualifications, experience and terms and conditions of employment shall be satis- factory to the Bank. (b) Except as the Bank shall otherwise agree, the Borrower shall ensure that the experts referred to under subparagraphs (iv) and (v) of paragraph (a) of this Section shall be employed not later than December 31, 1977. - 10 - Section 5.03. (a) The Borrower shall establish, to the satisfaction of the Bank, a unit within its Conseil E%dcutif des Grands Projets de Beyrouth, and under the supervision of its Development and Reconstruction Council, for the purpose of direct- ing and supervising the execution of Part C of the Project and of preparing the program referred to in paragraph (b) of this Sec- tion. Said unit shall function under the responsibility of an experienced and qualified director. (b) The Borrower shall prepare and implement, not later than March 30, 1978 or such other date as the Bank may agree, and in consultation with the Bank, an information program addressed to the population of the Greater Beirut area for the conservation of available water supplies in order to meet the needs of the largest possible portion of the population. Section 5.04. (a) The Borrower shall ensure that the recommen- dations resulting from the study to be carried out under Part C.4 (a) of the Project, including proposals for (i) the reorganization of the water utility in the Greater Beirut area, and (ii) the introduction of progressive rates for water consumption in the Greater Beirut area which shall adequately reflect the financial and economic cost of water supply and distribution, be transmitted to the Bank for review and approval not later than December 31, 1978, or such other date as the Bank shall agree, and that such recommendations are duly implemented. - 11 - (b) Except as the Bank shall otherwise agree, the Borrower shall introdluce and implement, not later than December 31, 1977, rates at a level of not less than two hundred Lebanese pounds (LL200) per year for a water right of one cubic meter per day and maintain such rates until the progressive rates referred to in paragraph (a) of this Section shall have been introduced. - 12 - ARTICLE VI Carrying out of Other Studies (Part D of the Project) Section 6.01. (a) The Borrower shall carry out the studies included in Part D of the Project through its Development and Reconstruction Council, with due diligence and efficiency and in conformity with appropriate administrative, financial and engineer- ing practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) In order to coordinate the activities of the various departments and agencies of the Borrower in the carrying out of Parts D.1, D.2, D.3 and D.4 of the Project, the Borrower shall establish respectively four Coordination Committees whose composi- tion, powers and terms of reference shall be satisfactory to the Bank. Section 6.02. In order to assist the Borrower in carrying out the studies included in Part D of the Project, the Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. - 13 - ARTICLE VII Other Covenants Section 7.01. (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 Loan 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 Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the Project. Section 7.02. (a) The Borrower shall furnish to the Bank, 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 Bank 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 Loan, and to disclose the use thereof in the Project; (ii) shall enable the Bank's accredited representatives - 14- to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning the Project, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. Section 7.03. 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 Bank, promptly after such acquisition, evidence satisfactory to the Bank that such land and rights in respect of land are available for purposes related to the Project. Section 7.04. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any - 15 - external debt, which will or might result in a priority for the benefit of te creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative subdivision thereof and of any entity owned or controlled by, - 16 - or operating for the account or benefit of, the Borrower or any such subdivision, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section 7.05. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with con- sistently maintained sound 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. Section 7.06. The Borrower shall: (i) cause its assets at the Port of Beirut and DGTT's assets to be adequately maintained and shall promptly as needed cause all necessary repairs and renewals thereof to be made; and (ii) take out and maintain with respon- sible insurers, or make other provision satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 7.07. The Borrower shall, promptly upon their prepara- tion, transmit to the Bank for the Bank's review and comments copies of any reports and studies prepared by the experts to be employed pursuant to Sections 3.02, 4.02 and 5.02 of this Agreement. - 17 - ARTICLE VIII Termination Section 8.01. The date September 12, 1977, is hereby specified for the purposes of Section 12.04 of the General Conditions. - 18 - 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 11.03 of the General Conditions. Section 9.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Finance Beirut, Lebanon Cable address: MINISTRY OF FINANCE Beirut For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) - 19 - 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. REPUBLIC OF LEBANON By /s/ Najati Kabbani Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ A. David Knox Acting Regional Vice President Europe, Middle East and North Africa - 20 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed PORT REHABILITATION (Part A of the Project) (1) Civil works 4,500,000 50% (2) Equipment 15,000,000 100% of foreign expenditures and 100% of local expenditures ex- factory (3) Consultants' 800,000 100% of foreign services expenditures TELECOMMUNICATIONS REHABILITATION (Part B of the Project) (4) Equipment 14,100,000 100% of foreign expenditures and 100% of local ex- penditures ex- factory (5) Consultants' 400,000 100% of foreign services expenditures - 21 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed WATER SUPPLY AND SANITATION REHABILITATION (Part C of the Project) (6) Civil works 2,000,000 50% (7) Equipment for Parts 600,000 100% of foreign C.1 and C.3 of the expenditures Project and 100% of local expendi- tures ex- factory (8) Experts' services 3,740,000 67% OTHER STUDIES (Part D of the Project) (9) Urban reconstruction 300,000 67% (10) Rural development 300,000 67% (11) Industrial estates 150,000 67% (12) Public transportation 150,000 67% or other studies (13) UNALLOCATED 7,960,000 TOTAL 50,000,000 - 22 - 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 compliance with the policy of the Bank that no proceeds of the Loan 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 supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank 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 Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) expenditures for equipment under Categories (2) and (4) of paragraph 1 hereof, until the Borrower and the Bank shall have agreed on a list of such equipment; - 23 - (b) expenditures under Categories (6), (7) and (8) of paragraph 1 hereof, until the Borrower shall have established the unit referred to in paragraph (a) of Section 5.03 of this Agree- ment; and (c) payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $1,500,000, may be made in respect of Category (4) on account of payments made for such expenditures before that date but after March 8, 1977. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank 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. - 24 - 6. If the Bank shall have reasonably determined that the procure- ment of any item in any Category is inconsistent with the proce- dures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financ- ing out of the proceeds of the Loan. - 25 - SCHEDULE 2 Description of the Project The Project forms part of the Borrower's program of priority economic rehabilitation and development. The Project consists of the following: Part A: Port Rehabilitation Component 1. The provision and installation of urgently needed equipment and facilities to restore the traffic handling capacity of the Port of Beirut. 2. The provision of technical assistance for the restrengthening of the port operation and adminis- tration in Beirut, and other ports operated by the Borrower to be selected by agreements between the Borrower and the Bank. The equipment and facilities to be provided hereunder and expected to be financed out of the proceeds of the Loan shall be as set forth in Exhibit A to this Schedule, as such Exhibit may be modified from time to time by agreement between the Borrower and the Bank. The specific locations of said equipment and facilities shall be selected by agreement between the Borrower and the Bank. Part B: Telecommunications Rehabilitation Component 1. The provision and installation of urgently needed equipment and facilities to restore the Borrower's telecommunications service. - 26 - 2. The preparation of a program for the reorganization of the Borrower's telecommunications sector in accordance with commercial practices. The equipment and facilities to be provided hereunder and expected to be financed out of the proceeds of the Loan shall be as set forth in Exhibit B to this Schedule, as such Exhibit may be modified from time to time by agreement between the Borrower and the Bank. Part C: Water Supply and Sanitation Rehabilitation Component 1. The restoration of the water distribution system for the Greater Beirut area by: (a) the replacement of selected damaged portions of the water distribution system, (b) the provision of leak detection equipment, and (c) the training of leak detection personnel. 2. The rehabilitation of the solid waste incineration/ composting complex in Beirut. 3. The replacement of necessary equipment for the maintenance of the water supply and sewer system in the Greater Beirut area. 4. The following studies for related purposes: - 27 - (a) A comprehensive study of water utility organi- zation, management and financing in Lebanon. (b) Updating of a water supply feasibility study for the Greater Beirut area including a study of the physical feasibility of constructing a dam on the Awali River. (c) A study of the condition of the water distri- bution system of the Greater Beirut area for the purpose of establishing a program for reducing water losses. (d) A study of the water distribution system of the Greater Beirut area for the purpose of preparing a master plan for its reinforcement and extension. (e) A sewerage fesibility study for the city of Beirut. Part D: Other Studies Feasibility studies for the preparation of the following projects: 1. integrated reconstruction in Beirut for the most deprived population groups; - 28 - 2. integrated rural development with emphasis on expanding agricultural credit in the most deprived regions of Lebanon; 3. establishment of industrial estates in regions with high unemployment; and 4. improvement of public transportation along the coast or any other subject to be selected in agreement between the Borrower and the Bank. The Project is expected to be completed by June 30, 1979. - 29 - EXHIBIT A TO SCHEDULE 2 Equipment and Facilities to be provided under Part A (1) of the Project and expected to be financed out of the proceeds of the Loan. 1. Break-bulk cargo handling equipment. 2. Container and roll-on/roll-off equipment. 3. General uses equipment. 4. Transit sheds and warehouses. 5. Maintenance equipment. 6. Marine equipment. - 30 - EXHIBIT B TO SCHEDULE 2 Equipment and Facilities to be provided under Part B (1) of the Project. A. Local telephone service: 1. Switching equipment 2. Local network and subscriber plant B. Long distance service: 1. Switching equipment 2. Cables and aerial lines 3. Microwave equipment C. International service: 1. Switching equipment 2. Earth station 3. Submarine cable station D. Telex service: 1. Exchanges 2. Teleprinters E. Miscellaneous: 1. Power plants and air conditioning 2. Vehicles, tools 3. Maintenance equipment The equipment referred to under paragraphs A, B.2 and B.3, C.2, D and E is expected to be financed out of the proceeds of the Loan. - 31 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each March 15 and September 15 beginning March 15, 1981 through September 15, 1993 1,850,000 On March 15, 1994 1,900,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. - 32 - Premiums on Prepayment The following percentages are specified as the. premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.45% More than three years but not more than six years before maturity 2.90% More than six years but not more than eleven years before maturity 5.30% More than eleven years but not more than fifteen years before maturity 7.25% More than fifteen years before maturity 8.20% - 33 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. 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 "Guidelines for Procurement under World Bank Loans and IDA Cred- its" published by the Bank in March 1977 (hereinafter called the Guidelines) including the pertinent provisions of the General Introduction thereto, on the basis of international competitive bidding. 2. Bidders for the works included in Part A.1 of. the Project shall be prequalified as described in paragraph 1.3 of Part A of the Guidelines. B. Other Procurement Procedures Equipment referred to under paragraphs A.1, B.3, C.2 and D.1 of Exhibit B to Schedule 2 to this Agreement and which are pro- prietary in character may be procured through international shopping or through direct purchase, provided that in each such case the Bank shall have concurred with the purchase price and that the aggregate purchase price of goods so procured and to be financed out of the proceeds of the Loan shall not exceed the equivalent of $1,900,000. - 34 - 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 except those to be procured in accordance with local procedures: (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 Lebanon 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. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Lebanon if the bidder shall have established to the - 35 - satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added in Lebanon equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Lebanon. (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 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, 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 gzods 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 -36- 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. D. Review of Procurement Decisions by the Bank 1. Review of prequalification. The Borrower shall, before qualification is invited, inform the Bank in detail of the procedure to be followed, and shall introduce such modifications in said procedure as the Bank 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 Bank for its comments before the applicants are notified of the Borrower's decision, and the Borrower shall make such addi- tions to, deletions from, or modifications in, the said list as the Bank shall reasonably request. 2. Review of lists of Port equipment. Before bids are invited, the Borrower shall furnish to the Bank, for its review and approval, the lists of all items of equipment for Port rehabilitation to be financed out of the proceeds of the Loan, indicating specifications and estimated unit prices. - 37 - 3. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for equipment estimated to cost the equivalent of $200,000 or more and all contracts for civil works estimated to cost the equivalent of $500,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Bank, 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 Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank'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 Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. - 38 - (c) The terms and conditions of the contract shall not, without the Bank'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 Bank promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 4. With respect to each contract to be financed out of the proceeds of the Loan and not governed by the preceding paragraph, the Borrower shall furnish to the Bank, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan 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 Bank shall reasonably request. The Bank 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.