Thailand - National Agricultural Extension Project : Loan 1393 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1393 TH LOAN AGREEMENT (National Agricultural Extension Project) between KINGDOM OF THAILAND and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated May 17, 1977 LOAN AGREEMENT AGREEMENT, dated May 17, 1977, between KINGDOM OF THAILAND (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS the Borrower intends to contract from the United States Agency for International Development, a loan in an amount of three million dollars ($3,000,000) to assist in financing Part E of the Project described in Schedule 2 to this Agreement on the terms and conditions set forth in an agreement to be entered into between the Borrower and the United States Agency for International Development; and WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to make the Loan to the Borrower upon terms and condi- tions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: - 2 - ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guar- antee 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 Guarantee 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 and the following additional terms have the following meanings: (a) "DAE" means the Department of Agricultural Extension, a department of the Borrower's Ministry of Agriculture and Coopera- tives; and (b) "Project Provinces" means the Provinces of the Borrower enumerated in Schedule 5 to this Agreement. -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 re- ferred to, an amount in various currencies equivalent to twenty- eight million dollars ($28,000,000). 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 The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between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 Proj- ect 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, con- tracts 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, 1982 or such later date as the Bank shall 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%) 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 one-half per cent (8-1/2%) 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 1 and September 1 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 Project Section 3.01. The Borrower shall carry out the Project through DAE with due diligence and efficiency and in conformity with appro- priate administrative, agricultural, engineering, financial, train- ing and extension practices, and shall provide, promptly as needed, the funds, facilities, staff, services and other resources required for the purpose. Section 3.02. The Borrower shall establish and maintain a project organization acceptable to the Bank to be responsible for the execution and operation of the Project. Section 3.03. In order to assist the Borrower in carrying out the Project, the Borrower shall cause DAE to employ consultants and specialists whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank, as follows: (i) a firm of consultants to provide the services of five extension specialists; (ii) a firm of consultants to design and supervise civil works under Part C.1 of the Project; (iii) consultants to assist in monitoring the Project as referred to in Section 3.08 of this Agreement; and - 6 - (iv) consultants to assist in implementing the training program included under Parts D and E of the Project. Section 3.04. The Borrower shall ensure that in carrying out Part B of the Project, the required incremental staff positions are authorized in accordance with the implementation schedule set forth in the Annex to Schedule 2 to this Agreement. Section 3.05. (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 re- place 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 3.06. (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 pro- ceeds of the Loan, and to disclose the use thereof in the Project; (ii) shall enable the Bank's accredited representatives 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 3.07. 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 carrying out 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 re- lated to the Project. Section 3.08. The Borrower shall cause to be established and maintained a program to monitor and evaluate the Project in accor- dance with procedures satisfactory to the Bank. Section 3.09. The Borrower shall make arrangements satisfactory to the Bank for the effective coordination of DAE extension activi- ties with related activities of other agencies of the Borrower and, in this connection, shall establish and maintain in each of the Proj- ect Provinces as and when such Province is brought into the Project: (a) a Provincial Agricultural Extension Coordinating Committee to coordinate the activities of the provincial agricultural extension service with those of other agriculture-related agencies; and -8- (b) a Provincial Technical Advisory Panel to formulate and recommend a package of extension activities for the following crop season and to recommend areas of research to agricultural research institutions. Section 3.10. The Borrower shall make motorcycles financed under the Project available to DAE Extension Agents and other eligible staff under procedures satisfactory to the Bank. Section 3.11. The Borrower shall: (i) before commencing civil works under Part C.1 (b) of the Project, review existing extension facilities to decide whether to utilize such facilities or construct new ones, and (ii) furnish to the Bank the results of aforesaid re- views. -9- ARTICLE IV Other Covenants Section 4.01. (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 for- eign 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 external debt, which will or might result in a priority for the benefit of the 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 per- mitting the creation of such lien, shall make express provision to that effect; provided, however, that, if fo-., 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 admini- strative 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 satisfac- tory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely - 10 - as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking trans- actions 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 subdi- vision thereof and of any entity owned or controlled by, or oper- ating 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 barnk or exchange stabilization fund, or similar functions, for the Borrower. Section 4.02. The Borrower shall cause DAE to operate and maintain all equipment and facilities provided under the Project in accordance with standards acceptable to the Bank and shall pro- vide promptly as needed the funds needed for that purpose. Section 4.03. (a) 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 carry- ing out the Project or any part thereof. (b) The Borrower shall cause DAE to maintain one account covering all expenditures related to the Project incurred at both DAE headquarters and Provincial levels. - 11 - Section 4.04. With regard to the Project account referred to in Section 4.03 (b) of this Agreement, the Borrower shall cause DAE to: (i) have said account and related financial 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 six months after the end of each such year, 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 DAE and the audit thereof as the Bank shall from time to time reasonably request. - 12 - ARTICLE V Termination Section 5.01. The date August 23, 1977, is hereby specified for the purposes of Section 12.04 of the General Conditions. - 13 - ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Minister of Finance of the Borrower is des- ignated as representative of the Borrower for the purposes of Sec- tion 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: Minister of Finance Ministry of Finance Bangkok, Thailand Cable address: Telex: MINANCE TH-2823 Bangkok 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) - 14 - 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 THAILAND By /s / Arun Panupong Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Is/ S. Shahid Husain Regional Vice President East Asia and Pacific - 15 - 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 ex- penditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil Works 10,700,000 85% (including con- tractor mobili- zation) (2) Equipment, furni- 11,000,000 ture, vehicles and materials (a) directly 100% of foreign imported expenditures (b) imported and 65% procured locally (c) manufactured 100% (ex-factory) locally (3) Consultants, training, 3,800,000 100% fellowships and study tours (4) Unallocated 2,500,000 TOTAL 28,000,000 - 16 - 2. For the purposes of this Schedule the term "foreign expendi- tures" 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. 3. The disbursement percentages have been calculated in compli- ance 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 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 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 - 17 - 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 appli- cable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the pro- curement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expen- ditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or lim- iting 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 financing out of the proceeds of the Loan. - 18 - SCHEDULE 2 Description of the Project The Project, as the first phase of a national program, is de- signed to strengthen agricultural extension services in the Project Provinces, and consists of the following Parts: Part A: Organizational Program Implementation of a program to strengthen the head- quarters organization of DAE and establish an improved organizational structure for the provision of agricultural extension services from the National level through the Regional and Provincial to the District level. Part B: Staffing Program Implementation of a staffing program to increase the number of trained agricultural extension staff in the Project Provinces to about 4,300 including about 3,100 DAE Extension Agents and about 270 Subject Matter Specialists. Part C: Buildings and Equipment 1. (a) Construction of three regional training centers at Songkhla, Rayong and Nakhon Pathom; - 19 - (b) Construction, rehabilitation or expansion of about 30 provincial extension centers in the Project Prov- inces, and 285 district extension centers; and. (c) Construction of about 600 housing units for DAE Ex- tension Agents. 2. (a) Provision of equipment and furniture for the build- ings referred to in Parts C.1 (a) and (b) hereinabove; (b) Provision of vehicles for transporting staff and materials, and about eight audio-visual units. Part D: Extension Methodology Introduction and implementation of & sound extension methodology in the Project Provinces, with particular emphasis on continuous training of extension workers and regular farm visits. Part E: Training and Fellowships Implementation of a training program for extension workers including overseas fellowships and study tours. * * * * The Project is expected to be completed by December 31, 1981. - 20 - ANNEX TO SCHEDULE 2 Implementation Schedule for Incremental Staff under Part B of the Project Designation FY 1977* FY 1978 FY 1979 FY 1980 Total Head Office Staff 10 6 5 5 26 Deputy Regional Extension Officers 2 4 4 2 12 Deputy Provincial Extension Officers 4 4 4 4 16 Provincial Training Officers 4 11 10 8 33 Subject Matter Specialists 25 70 65 50 210 Assistant Provincial Training Officers 8 22 20 16 66 District Extension Officers 11 30 27 22 90 Extension Agents 300 825 750 625 2,500 Support Staff 150 4oo 350 300 1,200 TOTAL 514 1,372 1,235 1,032 4,153 * FY means the Borrower's fiscal year. - 21 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each March 1 and September 1 beginning March 1, 1982 through September 1, 1996 905,000 On March 1, 1997 850,000 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 equiva- lents determined as for purposes of withdrawal. - 22 - Premiums on Prepayment The following percentages are specified as the premiums pay- able 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 1.25% More than three years but not more than six years before maturity 2.55% More than six years but not more than eleven years before maturity 4.65% More than eleven years but not more than sixteen years before mturity 6.80% More than sixteen years but not more than eighteen years before maturity 7.65% More than eighteen years before maturity 8.50% - 23 - SCHEDULE 4 Procurement A. General Procedures 1. Except as provided in paragraphs 4 and 5 hereof, contracts for the purchase of goods or for civil works shall be procured in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in August 1975 (hereinafter called the Guide- lines), on the basis of international competitive bidding as des- cribed in Part A of the Guidelines. 2. For bidding purposes, contracts for civil works shall be grouped to the extent practicable to form appropriate bid packages each estimated to cost the equivalent of about $500,000. 3. For bidding purposes, contracts for vehicles, equipment, furniture and material shall be grouped to the extent practicable to form appropriate bid packages each estimated to cost the equiv- alent of about $300,000. 4. Notwithstanding the provisions of paragraphs 1 and 2 above: (a) Contracts for civil works under Parts C.1 (b) and (c) of the Project may: (i) be grouped to the extent practicable to form appropriate bid packages estimated to cost the equivalent of $250,000 or more, and (ii) be awarded on the basis of competitive bidding after local Edvertising and in accordance with procedures satisfactory to the Bank. - 24 (b) Certain miscellaneous items including seeds, fertilizers, agro-chemicals, darkroom equipment, drawing sets, cafeteria equip- ment and field-experiment and home-economics equipment estimated to cost the equivalent of about $1,000,000, and furniture estimated to cost the equivalent of about $800,000, may be purchased on the basis of competitive bidding after local advertising and in accordance with procedures satisfactory to the Bank. 5. Notwithstanding the provisions of paragraphs 1, 3 and 4 above, contracts for vehicles, equipment, furniture and material with unit prices not exceeding the equivalent of $10,000 each may be purchased on the basis of prudent shopping after solicitation of at least three Price quotations, provided that the aggregate expenditure of items so purchased shall not exceed the equivalent of $250,000. B. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the supply of goods except those to be procured in accordance with local procedures: (i) bidders shall be required to state in their bid the c.i.f. (Thailand 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. - 25 - 2. Goods manufactured in Thailand may be granted a margin of preference in accordance with, and subject to, the following pro- visions: (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 Thailand if the bidder shall have established to the satis- faction of the Borrower and the Bank that the manu- facturing cost of such goods includes a value added in Thailand equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Thailand. (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 - 26 - 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. C. Review of Procurement Decisions by the Bank 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for civil works estimated to cost the equivalent of $200,000 or more and all contracts for vehicles, equipment, furniture and material estimated to cost the equivalent of $75,000 or more: - 27 - (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 docu- ments 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, together with the recommendations for award of the consultants referred to in Section 3.03 of this Agreement 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. (c) The terms and conditions of the contract shall not, with- out 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 submis- sion to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. - 28 - 2. With respect to each contract to be financed out of the pro- ceeds of the Loan and not governed by the preceding paragraph, the Borrower shall furniEh to the Bank, promptly after its execu- tion and prior to the submission to the Bank of the first applica- tion 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 re- quest. 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 de- termination. - 29 - SCHEDULE 5 Project Provinces North Eastern Region 1. Ubon Ratchathani 2. Yasothon 3. Roi-Et 4. Kalasin 5. Khon Kaen 6. Sisaket 7. Buriram 8. Chaiyaphum 9. Nakhon Ratchasima Northern Region 10. Nakhon Savan 11. Uthai Thani 12. Phitsanulok 13. Phichit 14. Lampang 15. Sukhothai 16. Chiang Mai Central Region 17. Sara Buri 18. Lop Buri 19. Sing Buri 20. Chainat 21. Ang Thong Western Region 22. Suphan Buri 23. Nakhon Pathom 24. Ratchaburi 25. Prachuab Khiri Khan - 30 - Eastern Region 26. Prachin Buri 27. Chacheongsao 28. Chon Buri Southern Region 29. Surat Thani 30. Phatthalung 31. Songkhla 32. Nakhon Si Thammarat 33. Pattani Any change in the Project Provinces is subject to further agreement between the Borrower and the Bank.