Haiti - Highway Maintenance Project : Loan 0141 - Loan Agreement - Conformed

LOAN NUMBER 141 HA Loan Agreement (Highway Maintenance Project) BETWEEN REPUBLIC OF HAITI AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED MAY 7, 1956 AGREEMENT, dated May 7, 1956, between REPUBLIC OF HAITI (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS the Borrower and the Bank have reviewed together the requirements for a program of economic devel- opment in the Republic of Haiti; WHEREAS the Borrower and the Bank have agreed that the success of plans for the development of the economy of the Borrower depends on the most efficient use of the Borrower's resources; and that in order to assure such use the three functions of (1) financing, (2) engineering design and supervision and (3) contracting for the construction of a project must be kept separate; WHEREAS the establishment and the maintenance of a modern highway system is of the utmost imnortance for the economiL levelopment of the Borrower; WHEREAS the Borrower has submitted to the Bank a Project for the rehabilitation, repair and maintenance of its existing highway system, the execution of such Project being a prerequisite of further expansion of the economy of the Borrower; WHEREAS the Bank has indicated its willingness in prin- ciple to participate in financing highway development in the territory of the Borrower, the extent of such participa- tion to be determined from time to time by agreement be- tween the Bank and the Borrower in the light of all relevant considerations including inter alia progress in the execution of the Project, progress in the preparation of sound highway construction projects, and the evolution of the Haitian eco- nomic situation; WHEREAS the Bank has agreed to assist in the financing of the Project submitted by the Borrower for the rehabilita- 4 tion, repair and maintenance of the existing highway system; Now THEREFORE the parties hereto agree as follows: ARTICLE I Loan Regulations SECTION 1.01. The parties to this Loan Agreement accept all the provisions of Loan Regulations No. 3 of the Bank dated February 15, 1955 (said Loan Regulations No. 3 being hereinafter called the Loan Regulations), with the same force and effect as if they were fully set forth herein. ARTICLE II The Loan SECTION 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in this Agreement set forth or referred to, an amount in various currencies ejquivalent to two million six hundred thousand dollars ($2,600,000). SECTION 2.02. The Bank shall open a Loan Account on its books in the name of the Borrower and shall credit to such Account the amount of the Loan. The amount of the Loan may be withdrawn from the Loan Account as provided in, and subject to the rights of cancellation and suspension set forth in, the Loan Regulations. SECTION 2.03. The Borrower shall pay to the Bank a com- mitment charge at the rate of three-fourths of one per cent (/4 of 1o) per annum on the -principal amount of the Loan not so withdrawn from time to time. SECTION 2.04. The Borrower shall pay interest at the rate of four and one-half per cent (41/2 %) per annum on the principal amount of the Loan so withdrawn and outstand- ing from time to time. 5 SECTION 2.05. Except as the Borrower and the Bank shall otherwise agree, the charge payable for special commitments entered into by the Bank at the request of the Borrower pursuant to Section 4.02 of the Loan Regulations shall be at the rate of one-half of one per cent ( of 1 %) per annum on the principal amount of any such special com- mitments outstanding from time to time. SECTION 2.06. Interest and other charges shall be payable semi-annually on January 1 and July 1 in each year. SECTION 2.07. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. ARTICLE III Use of Proceeds of the Loan SECTION 3.01. The Borrower shall cause the proceeds of the Loan to be applied exclusively to financing the cost of goods required to carry out the Project described in Sched- ule 2 to this Agreement. The specific goods to be financed out of the proceeds of the Loan shall be determined by agree- ment between the Borrower and the Bank, subject to modi- fication by further agreement between them. SECTION 3.02. The Borrower shall cause all goods financed out of the proceeds of the Loan to be used in the territories of the Borrower exclusively in the carrying out of the Project. ARTICLE IV Bonds SECTION 4.01. The Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. 6 SECTION 4.02. The Secretary of State for Finance of the Borrower and such person or1 persons as lie shall appoint in writing are desigiiated as authorized representatives of the Borrower for the purposes of Section 6.12 of the Loan Regulations. ARTICLE V Particular Covenants SECTION 5.01. (a) The Borrower shall cause the Project to be carried out with due diligence and efficiency and in conformity with sound engineering and financial practices. To that end the Borrower shall employ engineering consult- ants mutually acceptable to the Borrower and the Bank on terms and conditions mutually satisfactory to the Borrower and the Bank. (b) The Borrower shall at all times make available for disbursement promptly as they are needed the funds re- quired for the carrying out of the Project. (c) The Borrower shall cause to be fnrnished to the Bank, promptly upon their preparation, the plans, specifica- tions and contracts for the Project and any material modi- fications subsequently made therein. (d) The Borrower shall maintain or cause to be main- tained records adequate to ideutify the goods financed out of the proceeds of the Loan, to disclose the use thereof in the Project, and to record the progress of the Project (in- cluding the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices the fi- nancial condition and operations of the agency or agencies of the Borrower responsible for the construction or opera- tion of the Project or any part thereof; shall enable the Bank's representatives to inspect the Project, the goods and any relevant records and documents; and shall furnish to the Bank all such information as the Bank shall rea.son- ably request concerning the expenditure of the proceeds of 7 the Loan, the Project, and the goods, and the financial con- dition and operations of the agency or agencies of the Bor- rower responsible for the construction or operation of the Project or any part thereof. SECTION 5.02. (a) The Borrower and the Bank shall co- operate fully to assure that the purposes of the Loan will be accomplished. To that end, each of them shall furnish to the other all such information as it shall reasonably request with regard to the general status of the Loan. On the part of the Borrower, such information shall include information with respect to financial and economic condi- tions in the territories of the Borrower and the interna- tional balance of payments position of the Borrower. (b) The Borrower and the Bank shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof. The Borrower shall promptly inform the Bank of any condition which inter- feres with, or threatens to interfere with, the accomplish- ment of the purposes of the Loan or the maintenance of the service thereof. If the Borrower or any of its political subdivisions or any agency of the Borrower shall propose to undertake or cause to be undertaken any public works project to be fi- nanced by incurring external debt, or shall otherwise pro- pose to incur any substantial external debt, the Borrower will inform the Bank of the proposal and, before the taking of the proposed action will afford the Bank an opportunity to exchange views with the Borrower with respect thereto; provided, however, that the foregoing provisions of this sentence shall not apply to: (i) the incurring of additional external debt through utilization, in accordance with the terms of any credit established prior to the date of this Agreement, of any unused amounts available under such credit; (ii) the entering into international payments or similar agreements the term of which is not more than one 8 year and under which the transactions on each side are expected to balance over the period of the agreement; or (iii) the incurring by the Banque Nationale de la Republique d'Haiti in the ordinary course of its banking business of any indebtedness maturing not more than two years after its date. (c) The Borrower shall afford all reasonable opportun- ity for accredited representatives of the Bank to visit any part of the territories of the Borrower for purposes related to the Loan. SECTION 5.03. It is the mutual intention of the Borrower and the Bank that no other external debt shall enjoy any priority over the Loan by way of a lien on governmental assets. To that end, the Borrower undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower as security for any external debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds, and that in the creation of any such lien express provision will be made to that effect, provided, however, that the foregoing provisions of this Section shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; (ii) any lien on commercial goods to secure a debt maturing not more than one year after the date on which it is originally incurred and to be paid out of the proceeds of sale of such commercial goods; or (iii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. The term "assets of the Borrower" as used in this Sec- tion includes assets of the Borrower or of any of its politi- cal subdivisions or of any agency of the Borrower or of any such political subdivision, including assets of the Banque Nationale de la Republique d 'Haiti. 9 SECTION 5.04. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid without deduction for, and free from, any taxes or fees imposed under the laws of the Borrower or laws in effect in its terri- tories; provided, however, that the provisions of this Section shall not apply to taxation of, or fees upon, pay- ments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individ- ual or corporate resident of the Borrower. SECTION 5.05. The Loan Agreement and the Bonds shall be free from any taxes or fees that shall be imposed under the laws of the Borrower or laws in effect in its territories on or in connection with the execution, issue, delivery or registration thereof and the Borrower shall pay all such taxes and fees, if any, imposed under the laws of the country or countries in whose currency the Loan and the Bonds are payable or laws in effect in the territories of such country or countries. SECTION 5.06. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid free from all restrictions imposed under the laws of the Borrower or laws in effect in its territories. SECTION 5.07. The Borrower shall satisfy the Bank that adequate arrangements have been made to insure the goods financed with the proceeds of the Loan against risks incident to their purchase and importation into the territories of the Borrower. SECTION 5.08. In order to assure the efficient coordina- tion of the Project with the financing of and planning for other highway projects and to make available the Bank's experience in the financing and planning of projects to the Borrower, the Bank agrees to review any proposal for the construction or reconstruction of highways together with the Borrower, and in order to benefit by such common 10 review the Borrower shall undertake or execute any high- way construction or reconstruction only after such pro- posed construction or reconstruction has been reviewed and mutually agreed upon by the Borrower and the Bank. SECTION 5.09. (a) The Borrower shall cause all its ma- chinery and equipment for highway maintenance and con- struction to be adequately maintained and repaired, and shall cause suitable workshops to be maintained in suitable places for that purpose. (b) The Borrowor shall cause the highways set forth in Schedule 2 to this Agreeement to be adequately maintained and shall cause all necessary repairs thereof to be made, all in accordance with sound engineering practices. ARTICLE VI Remedies of the Bank SECTION 6.01. (i) If any event specified in paragraph (a) or paragraph (b) of Section 5.02 of the Loan Regula- tions shall occur and shall continue for a period of thirty days, or (ii) if any event specified in paragraph (c) of Sec- tion 5.02 of the Loan Regulations shall occur and shall con- tinue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the continuance thereof, the Bank, at its option, may declare the principal of the Loan and of all the Bonds then outstanding to be due and payable immediately, and upon any such declaration such principal shall become due and payable immediately, anything in this Agreement or in the Bonds to the contrary notwith- standing. 11 ARTICLE VII Effective Date; Termination SECTIoN 7.01. The following events are specified as addi- tional conditions to the effectiveness of this Agreement within the meaning of Section 9.01 (a) (ii) of the Loan Regulations: the Borrower shall have employed engineer- ing consultants pursuant to Section 5.01 (a) hereof. SECTION 7.02. A date sixty days after the date of this Agreement is hereby specified for the purposes of Section 9.04 of the Loan Regulations. ARTICLE VIII Miscellaneous SECTION 8.01. The Closing Date shall be June 30, 1959. SECTION 8.02. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: Secr'taire d'Etat des Finances Palais des Finances Port-au-Prince, Haiti For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D.C. United States of America SECTION 8.03. The Secretary of State for Finance of the Borrower is designated for the purposes of Section 8.03 of the Loan Regulations. 12 IN WITNES3 WHEREOR, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF HAITI by M. ZEPHIRIN Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT by EUGENE R. BLACK President 13 SCHEDULE 1 Amortization Schedule Principal Payment Amount Outstanding of Principal After Each Payment Date (expressed (expressed Payment Due in dollars) * in dollars) * January 1, 1959 $2,600,000 July 1, 1959 $134,000 2,466,000 January 1, 1960 138,000 2,328,000 July 1, 1960 141,000 2,187,000 January 1, 1961 144,000 2,043,000 July 1, 1961 148,000 1,895,000 January 1, 1962 152,000 1,743,000 July 1, 1962 156,000 1,587,000 January 1, 1963 159,000 1,428,000 July 1, 1963 163,000 1,265,000 January 1, 1964 168,000 1,097,000 July 1, 1964 172,000 925,000 January 1, 1965 176,000 749,000 July 1, 1965 180,000 569,000 January 1, 1966 185,000 384,000 July 1, 1966 190,000 194,000 January 1, 1967 194,000 To the extent that any part of the Loan is repayable in a currency other than dollars (see Loan Reguations, Section 3.02), the figures in these columns represent dollar equivalents determined as for purposes of withdrawal. 14 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 2.05 (b) of the Loan Regulations or on the redemption of any Bond prior to its maturity pursuant to Section 6.16 of the Loan Regulations: Time of Prepayment or Redemption Premium Not more than 1 year before maturity.... 1/2% More than 1 year but not more than 3 years before maturity.................... 3/4% More than 3 years but not more than 5 years before maturity..................... 1% More than 5 years but not more than 7 years before maturity .................... 11/2 More than 7 years before maturity......... .2% 15 SCHEDULE 2 Description of Project The Project consists of a three-year Highway Mainte- nance Program which is to be carried out by the Public Works Department and includes (a) the reorganization and development of the Maintenance Section of the High- way Service of the Public Works Department and (b) the rehabilitation, repair and maintenance of approximately 1,160 kilometers of primary and secondary roads of the existing highway system of Haiti. The program shall be under the technical direction of the consultants selected pursuant to Section 5.01 (a) of this Agreement, and all op- erating policies and procedures shall be decided on and carried out in consultation and agreement with such con- sultants. A. The Maintenance Section The Maintenance Section of the Highway Service will be so organized, staffed and equipped, consistently with the recommendations of the consultants, as to be capable of efficiently carrying out the continuous and adequate main- tenance of public highways and roads in the territories of the Borrower. Personnel will be selected and trained to fill the technical, administrative and supervisory positions created in the Maintenance Section. A program will also be carried out for the training of skilled labor at all levels in the proper methods of maintenance of highways, and in the operation, servicing and repair of equipment. B. The Rehabilitation, Repair and Maintenance of High- ways Approximately 1,160 kilometers of primary and second- ary highways will be rehabilitated, repaired and main- tained. This work includes the restoration of base, pave- ment and surface; the widening and building up of shoulders; the strengthening, widening and reconditioning 16 of bridges; the replacement, repair and cleaning of culverts and ditches; and the taking of measures to prevent erosion. Where necessary, to provide greater safety, the roads will be widened and given limited realignment. The specific highways and the classes of work to be per- formed on each are as follows: Highway Approx. Length (in kilometers) 1. Rehabilitation and Subsequent Routine Maintenance (a) Carrefour Joffre-Port-de-Paix-Anse & Foleur.. 98 (b) Plaisance-Pilate ............................ 16 (c) Limb&-Le Borgne ........................... 33 (d) Carrefour M6nard-Bahon ..................... 17 (e) Carrefour M6nard-St. Raphael-Hinche- Thomonde ................................ 85 (f) Carrefour Peye-P. de Riviere de L'Artibonite- Dessalines ........................... 34 (g) Las Cahobas-Bellad6re Carizol .............. 33 (h) Pont Sonde--La Chapelle ...................... 46 (i) Croin des Bouquets-Malpasse ................. 47 (j) Jacmel-Marigot ............................ 24 (k) MiragoAne-Anse A Veau ...................... 34 (1) Cayes-Port Salut ........................... 32 (m) Camp Perrin--JHr6mie-Dame Marie-Anse d'Hainault ............................... 140 (n) Jrmie-A6roport ........................... 8 Total - 647 2. Special Maintenance and Subsequent Routine Main- tenance (a) Port-au-Prince--Pont L'Estre-Cap Haitien- (Fort Libert) -Ouanaminthe ............... 327 (b) Carrefour La Mort-Milot ..................... 12 (c) Carrefour Barri6re Battant-Carrefour M6nard. 6 (d) Port-au-Prince-Beudet-Mirebalais-Las Cahobas .................................. 80 (e) Carrefour-Barrage P6ligre ................... 12 (f) Port-au-Prince-Kenscoff-Obl6on .............. 28 (g) Carrefour Laboule-Boutiller .................. 3 (h) Pont Rouge-Delmas-P6tionville .............. 9 (i) Carrefour SHADA-Croix des Bouquets-Beudet. 10 (j) Carrefour des Ruisseaux-Miragoane ............ 2 (k) Cayes-Camp Perrin ......................... 23 Total _-------_512 GRAND TOTAL 1,159 17 The estimated annual cost of the Project at current prices is as follows: Year Foreign Currency Local Currency (in U.S. dollars) (in gourdes) 1956 800,000 1,900,000 1957 950,000 2,300,000 1958 850,000 2,700,000 Total 2,600,000 6,900,000