Senegal - Public Sector Technical Assistance Project : Credit 0764 - Development Credit Agreement - Conformed

 CONFORMED COPY CREDIT NUMBER 764 SE Development Credit Agreement (Para-Public Sector Technical Assistance Project) between REPUBLIC OF SENEGAL and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated March 17, 1978  CREDIT NUMBER 764 SE DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated March 17, 1978, between REPUBLIC OF SENEGAL (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated March 15, 1974, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said General Conditions Applicable to Development Credit Agree- ments of the Association, as so modified, 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: - Terms Related to the Control Organs of the Borrower (a) "FCP" means the Contr8leur Financier de la Presidence, an office established within the General Secretariat of the Presidency of the Republic pursuant to the Borrower's Ordonnance No. 59-043, dated March 31, 1959, and Decree No. 67-150, dated February 10, 1967; (b) "BOM" means Bureau Organisation et Methodes, an office established within the General Secretariat of the Presidency of the Republic pursuant to the Borrower's Decree No. 70-231, dated February 26, 1970; (c) "CEP" means Centre des Etablissements Publics, an office established within the Borrower's Ministry of Finance pursuant to Decree No. 66-413, dated June 10, 1966; (d) "COF" means Contr8leur des Op6rations Financieres, an office established within the Borrower's Ministry of Finance  -2- whose responsibilities are defined pursuant to Law No. 77-89, dated August 10, 1977 of the Borrower and Decree No. 66-413, dated June 10, 1966; (e) "ACC" means l'Agent Central Comptable, an office estab- lished within the Borrower's Ministry of Finance, whose responsi- bilities are defined pursuant to the Borrower's Law No. 74-89, dated August 10, 1977 and the Borrower's Decree No. 66-413, dated June 10, 1966; (f) "CVCCEP" means Commission de Verification des Comptes et de Contr8le des Etablissements Publics, a para-judicial body related to the Borrower's Supreme Court, whose responsibilities are defined pursuant to the Borrower's Law No. 77-89, dated August 10, 1977 and the Borrower's Decree No. 77-902, dated October 19, 1977; (g) "GESP" means the Groupe d'Etude du Secteur Para-Public, a body established under the Borrower's Prime Minister's authority pursuant to the Prime Minister's Arrete No. 5155 PM/SGG/EC2, dated May 11, 1976; (h) "Project Management Unit" means the unit referred to in Section 3.08 (a) of this Agreement; - Terms Related to the Para-Public Sector (i) "Para-Public Sector" means the Borrower's etablissements publics a caractere industriel et commercial, the Societes Nationales and the Societes d'Economie Mixte, in which the Borrower owns directly or indirectly 50% or more of the capital; (j) "ONCAD" means Office National de Coopgration et d'Assistance au Developpement, an etablissement public a caractere industriel et commercial established and operating pursuant to the Borrower's Law No. 66-60, dated June 30, 1966 as amended by the Borrower's Decree No. 75-515, dated May 14, 1975, as amended; (k) "OPT" means Office des Postes et T61communications du Senegal, an etablissement public a caractere industriel et com- mercial established and operating under the laws and regulations of the Borrower pursuant to the Borrower's Ordonnance No. 66-22 MTT, dated October 3, 1960, Law No. 77-30, dated February 22, 1977 and Decree No. 77-364, dated April 29, 1977;  - 3 - (1) "SAED" means the Societe d'Amenagement et d'Exploitation des Terres du Delta du Fleuve S6n6gal, an 6tablissement public a caractere industriel et commercial, established and operating, pursuant to Law No. 65-001 of the Borrower, dated January 20, 1965, and Decree No. 65-026 of the Borrower, dated January 20, 1965; (m) "SOMIVAC" means "Societ6 pour la Mise en valeur de la Casamance, an 6tablissement public a caractere industriel et commercial, established and operating pursuant to the Borrower's Law No. 76-69, dated July 2, 1976 and the Borrower's Decree No. 76-836, dated July 24, 1976; (n) "Etablissement Public" means the Etablissements Publics a Caractere Industriel et Commercial referred to in Article 3 of the Borrower's Law No. 77-89, dated July 28, 1977; (o) "Societe d'Economie Mixte" means the industrial, com- mercial or artisan corporations in which the Borrower or a poli- tical subdivision of the Borrower owns directly or indirectly a portion of the share capital; and (p) "Societe Nationale" means an industrial or commercial corporation established in the form of stock corporations whose capital is wholly subscribed by the Borrower or by other political subdivisions of the Borrower, if applicable. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equiva- lent to six million three hundred thousand dollars ($6,300,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Associ- ation, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit.  -4- Section 2.03. Except as the Association shall otherwise agree, procurement of goods to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1982, or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semiannually on June 1 and December 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each June 1 and December 1 commencing June 1, 1988, and ending December 1, 2027, each installment to and including the installment payable on December 1, 1997, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Condi- tions. ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project through its GESP and the Project Management Unit and through its departments and agencies as specified in Schedule 2 to this Agreement with due diligence and efficiency and in conformity with appropriate financial, administrative and accounting practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. In order to assist the Borrower in carrying out the Project, the Borrower shall employ the consultants and experts listed in paragraphs A, C and E of Schedule 4 to this Agreement on  -5- or before the respective dates specified in said Schedule, and shall employ in accordance with a timetable acceptable to the Association the auditors listed in paragraph D of Schedule 4 to this Agreement, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 3.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards 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 Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.04. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, specifications, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (in- cluding 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 the use thereof in the Project; (ii) shall enable the Association's accredited representatives to visit the facilities 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 information as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. (c) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Association, the Borrower shall prepare and furnish to the  - 6 - Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution and results of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Associa- tion of their respective obligations under the Development Credit Agreement and the accomplishment of the purposes of the Credit. Section 3.05. (a) The Borrower shall at all times maintain its FCP, BOM, CVCCEP and CEP each with such powers and organiza- tion as shall be acceptable to the Association, respectively, under the supervision of qualified and experienced civil servants assisted by qualified and experienced staff in adequate numbers. (b) Without limitation or restriction to the generality of the provisions of the foregoing paragraph (a) of this Section, the Borrower shall carry out in accordance with a timetable acceptable to the Association a recruitment program for the staffing of FCP acceptable to the Association. (c) The Borrower undertakes to train the FCP personnel through BOM under Part C of the Project. Section 3.06. The Borrower shall, for the purpose of carrying out Part B (i) of the Project, cause ONCAD, OPT, SAED and SOMIVAC to employ in accordance with a timetable acceptable to the Associ- ation, the experts referred to in paragraph B of Schedule 4 to this Agreement whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association, and shall cause each one of them: (i) to have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, and to prepare for each fiscal year an economic evaluation report, in accordance with appropriate auditing principles consistently applied, by independent experts acceptable to the Association; (ii) to furnish to the Association as soon as available, but in any case not later than twelve months after the end of the fiscal year 1978, not later than ten months after the end of the fiscal year 1979 and not later than eight months after the end of the fiscal year 1980: (A) certified copies of its financial statements for such year as so audited, and (B) the report of such audit and evaluation by said experts, of such scope and in such detail as the Association shall have reasonably requested; and (iii) to furnish to the Association such other information concerning its accounts and financial statements, and the audit thereof, and its economic evaluation reports, as the Association shall from time to time reasonably request.  -7- Section 3.07. In carrying out Part B (iii) of the Project, the Borrower shall by March 31, 1978 or such other date as the Association may agree, exchange views with the Association on the identity of the three mixed companies to be selected for purposes of Part B (iii) of the Project and shall cause each of such companies: (i) to 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 indepen- dent auditors acceptable to the Association; (ii) to furnish to the Association as soon as available, but in any case not later than six 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 Association shall have reasonably requested; and (iii) to furnish to the Association such other information concerning its accounts and financial statements and the audit tnereof as the Association shall from time to time reasonably request. Section 3.08. (a) The Borrower shall at all times maintain the GESP and the Project Management Unit with such powers and organization as shall be acceptable to the Association. Without limitation to the foregoing: (A) the GESP shall: (i) be at all times headed by a qualified and experienced president, reporting directly to the Borrower's Prime Minister, and with such responsi- bilities and powers as shall be acceptable to the Association assisted by a qualified and experienced deputy director, and (ii) be responsible for the coordination 'nd the execution of the Project; and (B) such Project Management Unit shall (i) be main- tained within the Borrower's Prime Minister's Office under the supervision of GESP assisted by said deputy director of said GESP and with such responsibilities and powers as shall be acceptable to the Association and assisted by qualified and experienced staff in adequate numbers, and (ii) be responsible for the adminis- tration and management of the Project and shall submit to the Association quarterly and annual reports on the carrying out of the Project. (b) The Borrower shall submit to the Association by March 31 of each year an annual evaluation report on the progress of the Project which shall be prepared with the assistance of consul- tants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association.  - 8 - Section 3.09. The Borrower shall provide the consultants and experts referred to in Schedule 4 to this Agreement with adequate support staff, equipment and appropriate offices and storage space. Section 3.10. The Borrower shall cause the vehicles, mate- rials and equipment provided under the Project to be adequately maintained and promptly, as required, all necessary repairs and renewals thereof to be made, all in accordance with appropriate engineering practice. ARTICLE IV Other Covenants Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consis- tently maintained appropriate 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 4.02. Without limitation or restriction to the generality of the provisions of Section 3.01 of this Agreement the Borrower shall (a) submit by December 31, 1978 a permanent plan acceptable to the Association for financing the outside auditing work of the CVCCEP, and (b) cause CVCCEP to comment each year on the quality of all audits made in the Para-Public Sector of the Borrower no later than three months after receipt of such audits. ARTICLE V Termination Section 5.01. The date June 15, 1978, is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.02. The obligations of the Borrower under Sections 3.05, 3.06 and 4.02 of this Agreement shall cease and determine on the date on which the D;velopment Credit Agreement shall terminate or on a date ten years after the date of this Agreement, whichever shall be the earlier.  - 9 - ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. 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 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministere des Finances et des Affai7es Economiques Rue Charles Latne B.P. 4017 Dakar, Senegal Cable address: MINIFINANCES Dakar For the Association! International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) 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  - 10 - District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF SENEGAL By /s/ A. Coulbary Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ X. de la Renaudiere Acting Regional Vice President Western Africa  - 11 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Salaries and allow- 2,110,000 100% of for- ances of advisors eign expendi- (including recruit- tures ment costs) (2) Consulting services 800,000 100% of for- eign expendi- tures (3) Auditing services 1,630,000 90% (4) Equipment, materials 310,000 90% and vehicles (5) Training and scholar- 650,000 100% of for- ships eign expendi- tures (6) Unallocated 800,000 TOTAL 6,300,000 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; provided, however, that if the currency of the Borrower is also that of another country from the territory of which goods or services are  - 12 - supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures". 3. The disbursement percentages have been calculated in com- pliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or 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 Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expen- ditures prior to the date of this Agreement, except that with- drawals, in an aggregate amount not exceeding the equivalent of $25,000 may be made in respect of Categories (2), (3) and (5) under Parts B (ii) and C (i) of the Project on account of payments made for such expenditures before that date but after July 1, 1977. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the Lable in para- graph 1 above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expendi- tures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds  - 13 - of the Credit and the Association may, without in any way re- stricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Associ- ation's reasonable opinion, represents the amount of such expendi- tures which would otherwise have been eligible for financing out of the proceeds of the Credit.  - 14 - SCHEDULE 2 Description of the Project The Project is part of the Borrower's three-year program aimed at strengthening and improving Government control organiza- tions with respect to, and performance of, the para-public sector as a whole and of certain key mixed companies and public enter- prises. The Project consists of the following Parts: Part A: Strengthening of Government Control Organizations (i) Financial Controller of the Presidency (a) Development within FCP of an appropriate follow-up and control system to meet medium- and long-term targets of the Para-Public Sector. (b) Development of management tools to plan, analyze and monitor the development and day-to-day management of the Para-Public Sector in order to meet the objectives described in paragraph (a) above. (ii) Center for Public Enterprises Improvement of systems and procedures under the CEP's formal control, including: (a) review of CEP's system of a priori and a posteriori financial controls and study on the possibility to extend the autonomy of the Etablissements Publics within the framework of the legal obligations of the COF and of the ACC; (b) review of the management and control struc- ture, systems and procedures of key Etablis- sements Publics and proposal of measures to make them more effective in their relations with the CEP; (c) on-the-job training of the local staff responsible for supervising the Etablissements  - 15 - Publics and preparation of recommendations for further training to the BOM; and (d) establishment of procedures within the Etablissements Publics to carry out the recommendations of external auditors and consultants on management and operational reform. Part B: Auditing, and Preparation of Financial and Economic Reports (i) Carrying out of annual financial and economic audits, reorganization of budget, financial and accounting procedures of, and training of accoun- tants in, ONCAD, OPT, SAED and SOMIVAC. (ii) Improvement of accounting systems and procedures of, and study on the possible introduction of analytical accounting in, Etablissements Publics carried out by the ACC in the CEP. (iii) Carrying out under the supervision of CVCCEP of one major audit and one follow-up audit each for three important Societes d'Economie Mixte to be determined by agreement between the Borrower and the Association. Part C: Training A training program (to improve, inter alia, accounting skills, decision making and organization of effective meetings through scholarships and workshops) to be carried out through the Borrower's BOM: (i) for the staff of FCP, CEP and CVCCEP to be selected by their chiefs and to be made available during the period of training in the respective specialized fields; and (ii) for the Borrower's representatives on boards of direc- tors of Para-Public Sector companies. The Project is expected to be completed by June 30, 1982.  - 16 - SCHEDULE 3 Procurement A. Competitive bidding Except as the Association shall otherwise agree, contracts for the purchase of equipment, materials and vehicles shall be procured following competitive bidding through advertisement of bid invitations in accordance with the Borrower's local proce- dures, such procedures to be satisfactory to the Association. B. Other Procurement Procedures Notwithstanding the provisions of paragraph A above, con- tracts for goods estimated to cost less than the equivalent of $10,000 may be procured following local shopping, provided, however, that: (i) the Borrower has obtained quotations from at least three suppliers; and (ii) the aggregate cost of contracts so procured shall not exceed the equivalent of $50,000. C. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for materials, equipment and vehicles estimated to cost the equivalent of $20,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably 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, the Bor- rower shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, in  - 17 - sufficient time for its review, a detailed report on the evalu- ation and comparison of the bids received, and such other infor- mation as the Association shall reasonably request. The Associ- ation shall, if it determines that the intended award would be inconsistent with this Schedule, promptly inform the Borrower 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 fur- nished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding para- graph, the Borrower shall furnish to the Association, promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract was not consistent with this Schedule, promptly inform the Borrower and state the reasons for such determination.  - 18 - SCHEDULE 4 List of Consultants' and Specialists' Services A. Consultants and expatriate experts required to assist FCP and CEP in carrying out Part A (i) of the Project. (i) Four expatriate experts to assist FCP for Part A (i) of the Project consisting of: (a) a management specialist to be employed by June 30, 1978, or such other date as the Association may agree; (b) an economist with experience in agriculture and agro-industry to be employed by June 30, 1978, or such other date as the Association may agree; (c) a financial analyst with experience in indus- try and mining to be employed by June 30, 1978, or such other date as the Association may agree; and (d) a financial and accounting specialist to be employed by June 30, 1978, or such other date as the Association may agree. (ii) A management specialist to reinforce CEP's manage- ment assistance unit for purposes of carrying out Part A (ii) of the Project to be employed by June 30, 1978, or such other date as the Associa- tion may agree. B. Auditors required to assist each of ONCAD, OPT, SAED and SOMIVAC in carrying out Part B (i) of the Project to be employed in accordance with a timetable acceptable to the Association. C* An accounting expert to assist the Central Accounting Agent in CEP to carry out Part B (ii) of the Project to be employed by June 30, 1978, or such other date as the Association may agree.  - 19 - D. Auditors to assist CVCCEP in carrying out Part B (iii) of the Project to be employed in accordance with a timetable acceptable to the Association. E. Consultants and expatriate experts required to assist BOM in carrying out Part C (i) of the Project. Two specialists including: (i) one specialist in applied Modern Management Tech- niques to be employed by June 30, 1978, or such other date as the Association may agree; and (ii) one senior specialist in company management to be employed by June 30, 1978, or such other date as the Association may agree.