Bolivia - Educational And Vocational Training Project : Loan 1404 - Project Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1404 BO PROJECT AGREEMENT (Education and Vocational Training Project) betwe-7 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and SERVICIO NACIONAL DE FORMACION DE MANO DE OBRA (FOMO) Dated May 11, 1977 PROJECT AGREEMENT AGREEMENT, dated May 11, 1977, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and SERVICIO NACIONAL DE FORMACION DE MANO DE OBRA (hereinafter called FOMO). WHEREAS by the Loan Agreement of even date herewith between Republic of Bolivia (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to fifteen million dollars ($15,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that FOMO agree to undertake such obligations toward the Bank as hereinafter set forth; and WHEREAS FOMO, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: -2- ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Loan Agreement, the Preamble to this Agreement and the General Conditions (as so defined) have the respective meanings therein set forth. - 3 - ARTICLE II Execution of Part B of the Project Section 2.01. FOMO shall carry out Part B of the Project described in Schedule 2 to the Loan Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial and educational practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 2.02. (a) In order to assist FOMO in the execution of Part B of the Project, FOMO shall: (i) employ education specialists whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank; and (ii) promptly provide suitable staff counterparts to work with such specialists. (b) FOMO shall establish, not later than six months after the date of this Agreement or such later date as the Bank shall agree, and maintain during the execution of Part B of the Project, special technical committees to review all architectural designs and equipment and furniture lists and specifications for Part B of the Project before their presentation to the Bank and to certify that such designs, lists and specifications meet economic and functional standards and the cost and educational objectives of each institution included in Part B of the Project. -4- 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 the Loan Agreement. Section 2.04. (a) FOMO undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the ptoceeds of the Loan 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 FOMO to replace or repair such goods. (b) Except as the Bank may otherwise agree, FOMO shall cause all goods and services financed out of the proceeds of the Loan made available to it by the Borrower to be used exclusively for Part B of the Project. Section 2.05. (a) FOMO shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for Part B of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. - 5 - (b) FOMO: (i) shall maintain records adequate to record the progress of Part B of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Loan made available to it by the Borrower, and to disclose the use thereof in Part B of the Project; (ii) shall, without limitation upon fhe provisions of paragraph (c) of this Section, enable the Bank's representatives to visit the facilities and construction sites included in Part B of the Project and to examine the goods financed out of such proceeds and any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning Part B of the Project, the exp,nditure of the proceeds of the Loan so made available to it and the goods and services financed out of such proceeds. (c) FOMO shall enable the Bank's representatives to examine all installations, sites, works, buildings, property and equipment of FOMO and any relevant records and documents. Section 2.06. (a) FOMO shall, at the request of the Bank, exchange views with the Bank with regard to the progress of Part B of the Project, the performance of its obligations under this Agreement, and other matters relating to the purposes of the Loan. - 6 - (b) FOMO shall promptly inform the Bank of any condition which interferes or threatens to interfere with, the progress of Part B of the Project, the accomplishment of the purposes of the Loan, or the performance by FOMO of its obligations under this Agreement. Sectin 2.07. FOMO shall select the recipients of the fellowships provided under Part B.4 of the Project and determine the place of their training in consultation with the Bank. Section 2.08. FOMO shall establish, not later than twenty-four months after the date of this Agreement or such later date as the Bank shall agree, an in-plant training unit to help enterprises diagnose training needs and carry out on-the-job training programs for employees requiring skill upgrading. Section 2.09. FOMO shall begin to introduce, not later than twelve months after the date of this Agreement, the use of occupational analysis and modular instruction techniques in its courses for the mining sector and of a system of trade testing and certification in such sector. Section 2.10. FOMO shall begin to introduce, not later than twenty-four months after the date of this Agreement, training materials relying on audio-visual aids designed for illiterate workers. - 7 - Section 2.11. FOMO shall establish, not later than twelve months after the date of this Agreement or such later date as the Bank shall agree, a guidance and placement service and ensure close cooperation of such service with the employment services of the Borrower. Section 2.12. FOMO shall establish, not later than twenty-four months after the date of this Agreement or such later date as the Bank shall agree, a management consulting and training unit for the purpose of raising productivity of enterprises in urban and rural sectors through management training, consultancy, organization of local research, establishment of an information service and in-plant career development schemes. Section 2.13. FOMO shall make available to the Bank, not later than eighteen months after the date of this Agreement or such later date as the Bank shall agree, the report and recommendations of the preinvestment study to be executed under Part B.3 of the Project. -8- ARTICLE III Management and Operations of FOMO Section 3.01. FOMO shall at all times maintain its corporate existence and right to carry on its operations, and shall take all steps necessary to acquire, maintain and renew all rights, powers, privileges, concessions and franchises which are necessary or useful in the conduct of its business. Section 3.02. FOMO shall operate and maintain its institutions, equipment and property, and from time to time make all necessary renewals and repairs thereof, all in accordance with appropriate engineering and educational practices. Section 3.03. FOMO shall at all times carry on its operations, manage its affairs, maintain its financial position, and plan the future expansion of its educational institutions, all in accordance with appropriate business, financial and educational practices and under the supervision of experienced and competent management assisted by adequate competent staff. Section 3.04. FOMO shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. - 9 - Section 3.05. FOMO shall afford the Bank a reasonable opportunity for consultations before making any replacement in the following positions: (1) Director Ejecutivo, (2) Project Architect and (3) Project Vocational Training Specialist. Section 3.06. FOMO shall, during the calendar years 1977 through 1981, prepare, for review with the Bank, annual evaluation reports monitoring and assessing the qualitative and quantitative impact of Part B of the Project. Section 3.07. FOMO shall furnish to the Bank, not later than three months after the Closing Date or such other later date as the Bank shall agree, a report providing a preliminary assessment of Part B of the Project, the results achieved by it and the experience gained during its execution. - 10 - ARTICLE IV Financial Covenants Section 4.01. FOMO shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 4.02. FOMO 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 appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank 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 Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning the accounts and financial statements of FOMO and the audit thereof as the Bank shall from time to time reasonably request. - 11 - 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 Loan Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Bank and of FOMO thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Loan Agreement. - 12 - 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 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) For FOMO: Servicio Nacional de Formaci6n de Mano de Obra Casilla 288 La Paz, Bolivia - 13 - Cable address: FOMO Avenida Arce 2180 La Paz 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 FOMO may be taken or executed by its Director Ejecutivo or such other person or persons as he shall designate in writing. Section 6.03. FOMO shall furnish to the Bank sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of FOMO, take any action or execute any documents required or permitted to be taken or executed by FOMO 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. - 14 - 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 BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Gunter K. Wiese Acting Regional Vice President Latin America and the Caribbean SERVICIO NACIONAL DE FORMACION DE MANO DE OBRA (FOMO) By /s/ Juan L. Cariaga Authorized Representative