India - Gujarat Irrigation Project : Credit 0808 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 808 IN Project Agreement (Gujarat Irrigation Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and STATE OF GUJARAT Dated July 17, 1978 CREDIT NO. 808 IN PROJECT AGREEMENT AGREEMENT, dated July 17, 1978, between INTERNATIONAL DEVEL- OPMENT ASSOCIATION (hereinafter called the Association) and STATE OF GUJARAT, acting by its Governor (hereinafter called Gujarat). WHEREAS by the Development Credit Agreement of even date herewith between India, acting by its President (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to eighty-five million dollars ($85,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Gujarat agrees to undertake such obligations toward the Association as are hereinafter set forth; and WHEREAS Gujarat, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. Gujarat shall carry out, or cause to be carried out, the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial, agricultural and engineering practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. -2- Section 2.02. (a) Gujarat undertakes: (i) that each MIP to be financed under the Project shall be prepared, designed and constructed in accordance with technical and economic criteria agreed with the Association; and (ii) that provisions shall be made for funds sufficient to complete the MIPs started under the Project in accordance with said criteria. (b) For the purpose of carrying out each MIP under the Project, Gujarat shall establish a Project Preparation Committee headed by the District Development Officer and consisting, inter alia, of the concerned Executive Engineer and District Officers from the Departments of Agriculture, Cooperation, Revenue, Forestry and Fisheries of Gujarat. (c) Gujarat shall establish an irrigated demonstration plot in the area covered by each MIP. (d) Gujarat shall prepare a layout for each eight-hectares block served by an irrigation outlet, showing the design of water courses, field channels and land shaping, and shall assist the farmers in construction of water courses, field channels and drains, and land shaping. (e) Gujarat shall adhere to the appraisal and progress monitoring procedures for MIPs as set forth in Schedule 3 to the Development Credit Agreement. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Credit, shall be governed by the provisions of the Schedule to this Agreement. Section 2.04. (a) Gujarat undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit made available to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or instal- lation, and for such insurance any indemnity shall be payable in a currency freely usable by Gujarat to replace or repair such goods. (b) Except as the Association may otherwise agree, Gujarat shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclu- sively for the Project. -3- Section 2.05. (a) Gujarat shall furnish t - the Association, promptly upon their preparation, the plan&, specifications, reports, contract documents and construction ai.d procurement schedules for the Project, and any material modifications thereof or additions thereto, to such extent and in such detail as the Association shall reasonably request. (b) Gujarat: (i) shall maintain or cause to be maintained records and procedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use in the Project; (ii) shall enable the Association'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 Credit and any relevant records and documents; and (iii) shall furnish to the Association at regular intervals all such informa- tion as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditures of such proceeds and the goods and services financed out of such proceeds. (c) Promptly after completion of the Project, but .n any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between Gujarat and the Association, Gujarat shall prepare, or cause to be prepared, and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execu- tion and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by Gujarat and the Association of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Credit. Section 2.06. (a) Gujarat shall at the request of the Asso- ciation, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit. (b) Gujarat shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by Gujarat of its obligations under this Agreement. -4- ARTICLE III Particular Covenants Section 3.01. Gujara. shall cause its departments and other agencies and authorities responsible for carrying out the Project or any part thereof to maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices their operations and financial condition related to to the Project. Section 3.02. Gujarat shall cause its departments and other agencies and authorities responsible for carrying out the Project or any part thereof to: (i) have their accounts and financial statements related to the Project for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than nine 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 Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements and the auait thereof as the Association shall from time to time reasonably request. Section 3.03. With the objective of ensuring recovery of annual operation and maintenance costs, and to the extent possible, cost of infrastructure investment, having regard inter alia to incentives for, and payment capacity of, farmers, Gujarat undertakes to: (i) review the water and water-related charges in Gujarat by not later than December 31, 1982, and (ii) implement an appropriate system of water and water-related charges based on recommendations arising from said review after paying due regard to the Association's comments, if any, on such recommendations. Section 3.04. In executing the Project, Gujarat shall promptly take necessary measures to minimize the risk of malaria and other water-related diseases in the areas covered by the MIPs. Section 3.05. Gujarat shall maintain staffing of its agricul- tural extension services in each MIP area in conformity with the statewide standards to be agreed upon between the Association and Gujarat. -5- Section 3.06. Gujarat shall, under arrangements satis- factory to the Association, cause the dams and related structures constructed under the Project to be periodically inspected in accordance with sound engineering practice in order to determine whether there are any deficiencies in the condition of such structures, or in the quality and adequacy of maintenance or methods of operations of the same, which may endanger their safety. To this end, Gujarat shall propose to the Association not later than December 31, 1978 appropriate arrangements for the Association's review. Section 3.07. Gujarat undertakes to provide adequate funds at all time, to operate and maintain in accordance with sound engineering standards the facilities completed under the Project. Section 3.08. In order to meet the increasing needs of irrigated farming for the MIPs constructed under the Project, Gujarat shall, if necessary, strengthen the credit, input supply, storage and marketing facilities available to farmers in MIP areas. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 4.02. (a) This Agreement and all obligations of the Association and of Gujaret thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date twenty years after the date of this Agree- ment. (b) If the Development Credit Agreement terminates in accor- dance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify Gujarat of this event. -6- Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any partial cancellation or suspension under the General Conditions. ARTICLE V Miscellaneous Provisions Section 5.01. 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 des- ignated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. For State of Gujarat: Secretary Public Works Department Government of Gujarat Sachivalaya Gandhinagar Gujarat 382010, India Cable address: WORKSEC Gandhinagar -7- Section 5.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of Gujarat may be taken or executed by a Secretary to the Government of Gujarat or such other person or persons as Gujarat shall designate in writing, and Gujarat shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 5.03. This Agreement may be executed in several coun- terparts, each of which shall be an original, and all collectively but one instrument. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this 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. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ W. David Hopper Regional Vice President South Asia STATE OF GUJARAT By /s/ N.A. Palkhivala Authorized Representative -8- SCHEDULE Procurement A. Except as provided in Part B hereof, contracts for the pur- chase of equipment and vehicles, and civil works may be let on the basis of competitive bidding advertised locally under procedures satisfactory to the Association. B. 1. Contracts for works included under Part A of the Project may be let on unit price basis to the local contractors provided, however, that the aggregate of such contracts shall not exceed 30% of works under Part A of the Project. 2. Contracts for works included under Part B of the Project may be let on unit price basis to the local contractors. 3. Works under Parts A and B of the Project for which safety or quality considerations, or the use of heavy machinery, are required, may be carried out by force account provided, however, that the aggregate of said force account works shall not exceed 10% of all civil works under Parts A and B of the Project, respectively. C. 1. With respect to all contracts estimated to cost the equivalent of $750,000 or more: (a) Before bids are invited, Gujarat 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 request. 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, Gujarat 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 suffi- cient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Association shall reasonably request. The Association shall, if it -9- determines that the intended award would be inconsistent with this Schedule, promptly inform Gujarat and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for with- drawal of funds from the Credit Account in respect of such con- tract. 2. With respect to each contract to be financed out of the pro- ceeds of the Credit and not governed by the preceding paragraph, Gujarat shall furnish to the Association, promptly after its exe- cution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in resnect 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 reasonably request. The Association shall, if it determines that the award of the contract was not consistent with this Schedule, promptly inform Gujarat and state the reasons for such determina- tion.