Ghana - Third Highway - Emergency Maintenance Project : Credit 1029 - Credit Agreement - Conformed

OFFICIA i CREDIT NUMBER 1029 GH OCUMENTS Development Credit Agreement (Third Highway - Emergency Maintenance - Project) between REPUBLIC OF GHANA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated S 27 , 1980 CREDIT NUMBER 1029 GH DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated A"A^6- 27 , 1980, between REPUBLIC OF GHANA (hereinafter called the Borrower) and INTER- NATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Associa- tion). WHEREAS (A) The Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 of this Agreement by extending the Credit as hereinafter provided; (B) Parts A, B and F of the Project referred to in Sched- ule 2 to this Agreement will be carried out by the Borrower's Ghana Highway Authority and Parts C, D and E of the Project will be carried out by the Bank for Housing and Construction, and the Borrower will make available to the Ghana Highway Authority and to the Bank for Housing and Construction the proceeds of the Credit as hereinafter provided; and (C) the Association is willing to make the Credit available upon the terms and conditions set forth hereinafter and in the Project Agreement of even date herewith between the Association and the Bank for Housing and Construction; NOW THEREFORE the parties hereto hereby agree as follows: 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): (a) The following subparagraph is added to Section 2.01: "13. The term 'Project Agreement' has the meaning set forth in paragraph (b) of Section 1.02 of the Development Credit Agreement." -2- (b) The words "and for Investment Projects" are added before the period at the end of Section 5.03. (c) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03. Cancellation by the Association. If (a) the right of the Borrower to make withdrawals from the Credit Account shall have been suspended with respect to any amount of the Credit for a continuous period of thirty days or (b) by the date specified in Section 2.02 (e) of the Project Agreement no applications for approval or requests for authorization to withdraw from the Credit Account in respect of any portion of the Credit allocated to Part C of the Project shall have been received by the Asso- ciation, or having been so received, shall have been denied or (c) after the Closing Date an amount of the Credit shall remain unwithdrawn from the Credit Account, the Association may, by notice to the Borrower, terminate the right to request such approvals and authorizations or to make with- drawals from the Credit Account, as the case may be, with respect to such amount or portion of the Credit. Upon the giving of such notice such amount or portion of the Credit shall be cancelled." (d) The words "and the Project Agreement" are added after the words "the Development Credit Agreement" in Section 6.06. (e) The words "or the Project Agreement" are added after the words "the Development Credit Agreement" in Section 10.02. 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) "GHA" means Ghana Highway Authority, a body corporate with perpetual succession and common seal, established and oper- ating under Ghana Highway Authority Decree, 1974 (N.R.C.D. 298) of the Borrower, as such Decree may be amended from time to time; (b) "BHC" means Bank for Housing and Construction, esta- blished pursuant to the Bank for Housing and Construction Decree, -3- 1972 (N.R.C.D. 135) of the Borrower (hereinafter called the BHC Decree), as such Decree may be amended from time to time; (c) "Project Agreement" means the agreement of even date herewith between the Association and BHC, as such agreement may be amended from time to time; (d) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and BHC pursuant to Section 3.03 (b) of this Agreement; (e) "Administration Agreement" means the agreement to be entered into between the Borrower and BHC pursuant to Section 3.03 (c) of this Agreement; (f) "Sub-loan" means a loan made or proposed to be made by BHC to an Investment Enterprise for an Investment Project out of the equivalent of the proceeds of the Credit allocated to Part C of the Project relent to BHC under the Subsidiary Loan Agreement, and "free-limit Sub-loan" means a Sub-loan, as so defined, which qualifies as a free-limit Sub-loan pursuant to the provisions of Section 2.03 (b) of this Agreement; (g) "Investment Enterprise" means an enterprise to which BHC proposes to make or has made a Sub-loan; (h) "Investment Project" means a specific development project to be carried out by an Investment Enterprise utilizing the proceeds of a Sub-loan; (i) "Cedis" and "0" mean the currency of the Borrower; (j) "foreign currency" means any currency other than the currency of the Borrower; (k) "Bye-laws" means the bye-laws of BHC, approved by the Board of Directors on November 29, 1973, as amended from time to time; (1) "Subsidiary" means any company of which a majority of the outstanding voting stock or other proprietary interest is owned or effectively controlled by BHC or by any one or more of its subsidiaries; (m) "Plant Pool" means Plant Pool, Ltd., a Subsidiary of BHC; -4- (n) "Road Maintenance Program" means the Borrower's planned road maintenance program for the years 1981 and 1982; (o) "Special Import Facility" means the facility to be established and administered under Part D of the Project; (p) "Import Plan" means a specific import plan to be entered into by BHC and a motor trading company and to be carried out under the Special Import Facility; (q) "Motor Trading Company' .eans a motor trading company operating in Ghana with which BHC has or proposes to have an Import Plan; (r) "fiscal year" means the fiscal year of the Borrower; and (s) "periodic maintenance" means resealing or resurfacing of paved roads, or regravelling of truck or feeder roads, exclud- ing minor construction works. 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 equiv- alent to twenty-five million dollars ($25,000,000). 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 Associa- tion: (a) 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 Parts B, E and F of the Project and to be financed out of the proceeds of the Credit; (b) for any Investment Project included in Part C of the Project, provided, however, that no withdrawal shall be made in respect of a Sub-loan unless: (i) the Sub-loan shall have been -5- approved by the Association; or (ii) the Sub-loan shall be a free-limit Sub-loan for which the Association shall have autho- rized withdrawals from the Credit Account; and (c) for any Import Plan included in Part D of the Project, provided, however, that no withdrawal shall be made in respect of an Import Plan unless the Import Plan shall have been approved by the Association. Section 2.03. A free-limit Sub-loan shall be a Sub-loan for an Investment Project in an amount to be financed out of the proceeds of the Credit which shall not exceed the sum of: (i) $200,000 equivalent, when added to any other outstanding amounts financed or proposed to be financed out of the proceeds of the Credit for such Investment Project; or (ii) $2,000,000 equivalent, when added to all other free-limit Sub-loans financed or proposed to be financed out of the proceeds of the Credit, the foregoing amounts being subject to change from time to time as determined by the Association after consultation between the Association and BHC. (b) Except as the Association shall otherwise agree, no withdrawals shall be made on account of: (i) expenditures made by an Investment Enterprise prior to the date of this Agreement; or (ii) expenditures made in respect of a Sub-loan subject to the Association's approval, more than ninety days prior to the date on which the Association shall have received the application and information required under Section 2.02 (b) of the Project Agree- ment; or (iii) expenditures made in respect of a free-limit Sub-loan more than ninety days prior to the date on which the Association shall have received the request and information required by Section 2.02 (c) of the Project Agreement. Section 2.04. 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 set forth or referred to in Schedule 3 to this Agreement. Section 2.05. BHC is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions-of Section 2.02 of this Agreement and Article V of the General Conditions in respect of Parts C, D and E of the Project. -6- Section 2.06. The Closing Date shall be June 30, 1983 or such later date as the Association shall establish. The Association shall promptly notify the Borrower and BHC of such later date. Section 2.07. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) jper annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.08. Service charges shall be payable semiannually on March 15 and September 15 in each year. Section 2.09. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 15 and September 15 commencing September 15, 1990, and ending March 15, 2030, each installment to and including the installment payable on March 15, 2000, 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 2.10. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. The Borrower shall cause GHA and BHC to cooperate closely with each other in carrying out the Project, and shall cause GRA to be responsible for the coordination of the respective activities of GHA and BHC under the Project. Section 3.02. (a) The Borrower shall cause GHA to carry out Parts A, B and F of the Project and BHC to carry out Parts C, D and E of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial and highway engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources, including an adequate supply of fuel, required for the purpose. (b) Without limitation upon the generality of the preceding paragraph, the Borrower shall: (i) provide in its annual budget and make available promptly as needed funds to cover expenditures -7- under Parts B and F of the Project; (ii) provide in its annual budget, and make available in advance of each quarter on the basis of GHA estimates, funds to cover recurrent expenditures and payments to contractors under the Maintenance Program; and (iii) not later than six months prior to the beginning of the 1982 and 1983 fiscal years, discuss with the Association the adequacy of its road maintenance budget for each such fiscal year. (c) In order to assist GHA in carrying out Part F of the Project, the Borrower shall cause GHA to employ a consultant or an expert whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 3.03. (a) Without any limitation or restriction upon any of its other obligations under the Development Credit Agree- ment, the Borrower shall cause BHC to perform in accordance with the provisions of the Project Agreement, the Subsidiary Loan Agreement and the Administration Agreement all obligations of BHC therein set forth, shall take and cause to be taken all action necessary or appropriate to enable BHC to perform such obliga- tions, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) For the purpose of carrying out Part C of the Project, the Borrower shall relend the equivalent of the ptroceeds of the Credit allocated to Part C of the Project to BHC under a Subsi- diary Loan Agreement to be entered into between the Borrower and BHC, the terms and conditions of which shall have been approved by the Association, and which shall include, inter alia, the following: (i) an interest rate of 12-1/2% per annum; (ii) a repayment term of eight years including a grace period of two years; and (iii) foreign exchange risk to be assumed by the Investment Enterprise. (c) For the purpose of carrying out Part D of the Project, the Borrower shall enter into an Administration Agreement with BHC, the terms and conditions of which -,hall have been approved by the Association, and which shall be consistent with the provisions of Schedule 2 to the Project Agreement. -8- (d) For the purpose of carrying out Part E of the Project, the Borrower shall make available to BHC, on terms and conditions which shall have been approved by the Association, the equivalent of the proceeds of the Credit allocated to Part E of the Project. (e) The Borrower shall exercise its rights under the Subsi- diary Loan Agreement and the Administration Agreement in such manner as to protect the interests of the Borrower and the Asso- ciation and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement and the Administration Agreement, or any provision thereof. Section 3.04. (a) The Borrower shall cause GHA to insure, or make adequate provision for the insurance of, the imported goods required for Part B of the Project and to be financed out of the proceeds of the Credit against hazards incident to the acquisi- tion, 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 GRA to replace or repair such goods. (b) Except as the Association shall otherwise agree, all goods and services financed out of the proceeds of the Credit, other than goods and services financed under a Sub-loan, shall be used exclusively for the purpose of the Project until its comple- tion. Section 3.05. (a) The Borrower shall cause GHA, with respect to Parts A, B and F of the Project, and BHC, with respect to Parts C, D and E of the Project, to furnish to the Association promptly upon their preparation, the plans, reports, and procurement schedules for the parts of the Project being carried out by the respective entity, and any material modifications thereof or additions thereto, in such detail as the Association shall reason- ably request. (b) The Borrower shall cause GHA, with respect to Parts A, B and F of the Project, and BHC, with respect to Parts C, D and E of the Project: (i) to maintain records adequate to record the progress of the Project and to identify the goods and services for the 'Lroicet financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) to enable the Association's accredited representatives to visit the facilities and maintenance sites included in the Project and to examine the goods for the Project financed out of the proceeds of the Credit and any relevant records and documents; and (iii) to furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit and the goods and services for the Project 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 Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution and operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower, GHA, BHC and the Association of their respective obligations under the Development Credit Agreement and the Project Agreement and the accomplishment of the purposes of the Credit. Section 3.06. The Borrower shall not take, or permit any of its political subdivisions, or any of its agencies or instru- mentalities, or any agency or instrumentality of any political subdivision to take any action which would prevent or materially interfere with the carrying out of the Project, or the performance by BHC of any of its other obligations under the Project Agree- ment, the Subsidiary Loan Agreement or the Administration Agree- ment, and shall take or cause to be taken all reasonable action which shall be required on its part in order to enable BHC to carry out Parts C, D and E of the Project. ARTICLE IV Other Covenants Section 4.01. The Borrower shall cause GHA and BHC to con- tinue to maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures of GHA and BHC. Section 4.02. The Borrower shall cause: (a) GHA to carry on its operations in accordance with appropriate administrative, financial and highway practices, under the supervision of com- petent and experienced management assisted by qualified staff in adequate numbers; and - 10 - (b) BHC to carry on its operations in accordance with appropriate administrative, financial and banking practices, under the supervision of competent and experienced management assisted by qualified staff in adequate numbers. Section 4.03. The Borrower shall ensure that its public roads shall be duly maintained by GHA in accordance with proper techni- cal, engineering, administrative and financial practices, and shall provide to GHA, promptly as needed, the funds, equipment, facilities, services and other resources required for the purpose. ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) a default shall occur in the performance of any obliga- tion of BHC under the Project Agreement or under any other project agreement between the Association and BHC; (b) the BHC Decree (N.R.C.D. 135) or the Ghana Highway Authority Decree, 1974 (N.R.C.D. 298) shall have been amended so as to affect materially and adversely the operations or financial condition of BHC or GHA, respectively; (c) BHC shall be unable to pay its debts as they mature or any action or proceeding shall have been undertaken whereby any of the property of BHC shall or may be distributed among its cre- ditors; (d) any part of the principal amount of any loan to BHC having an original maturity of one year or more shall, in accor- dance with its terms, have become due and payable in advance of maturity, as provided in the relative contractual instruments, or any security for any such loan shall have become enforceable; (e) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of BHC or for the suspension of its operations; and (f) a Subsidiary or any other entity shall have been created or acquired or taken over by BHC, if such creation, acquisition or - 11 - taking over would adversely affect the conduct of BHC's business, its financial situation, the efficiency of its management and personnel or the carrying out of the Project. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) any event specified in paragraphs (a), (b) or (f) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower and BHC; and (b) any event specified in paragraphs (c), (d) or (e) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association; namely that the Project Agreement has been duly authorized or ratified by, and executed on behalf of BHC, and constitutes a valid and binding obligation of BHC in accordance with its terms. Section 6.02. The date NoVemrA.Z- f6t4 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.03. The provisions of paragraphs (a) through (f) of Section 5.01 of this Agreement and those of paragraphs (a) and (b) of Section 5.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date -fifteen years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. Subject to the provision of Section 2.05 of this Agreement, the Principal Secretary, Ministry of Finance and - 12 - Economic Planning of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: The Principal Secretary Ministry of Finance and Economic Planning P.O. Box M76 Accra Ghana Cable address: ECONOMICOM Accra 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 authorized, have caused this Agreement to be signed in their respective names in the District - 13 - of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF GHANA By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /# ; 'Regional Vice President Western Africa - 14 - 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) Equipment, spare parts and materials (a) under Part B (1) 8,700,000 100% of foreign of the Project expenditures (b) under Part B (2) 3,000,000 100% of foreign of the Project expenditures (c) under Part B (3) 150,000 100% of foreign of the Project expenditures (d) under Part D of 100% of foreign the Project expenditures (i) for contrac- 3,000,000 tors (ii) for truck 3,000,000 operators (2) Sub-loans under Part C 4,000,000 100% of foreign of the Project expenditures (3) Consultants' services, 930,000 100% of foreign vehicles and office expenditures equipment under Part E of the Project - 15 - Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (4) Consultants' ser- 120,000 100% of foreign vices and vehicles expenditures under Part F of the Project (5) Unallocated 2,100,000 TOTAL 25,000,000 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. 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: (a) prior to the date of this Agreement, except that with- drawals in an aggregate amount not exceeding the equivalent of $50,000, may be made in respect of Category (3) on account of payments made for expenditures under Part E (2) of the Project before that date but after March 1, 1980; and - 16 - (b) under Part C of the Project until the Association has been furnished with evidence that the Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of the Borrower and BHC. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table 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 of the Credit and the Association may, without in any way restricting 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 Asso- ciation's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 17 - SCHEDULE 2 Description of the Project The Project consists of the following parts: Part A: Road Maintenance Program Carrying out by GHA of the Road Maintenance Program which consists of performing effective routine maintenance on all public roads and periodic maintenance on about 6,000 km of public roads. Part B: Acquisition of Goods by GHA (1) Acquisition and utilization of spare parts, tires and lubricants. (2) Acquisition and utilization of a two-year supply of bitumen for resealing and resurfacing operations. (3) Acquisition and installation in GHA's Training Center of generators and related spare parts. Part C: Sub-loans Granting of Sub-loans by BHC to about 16 contractors who are carrying out GHA road maintenance contracts and about 4 quarry operators who are supplying materials for the Road Maintenance Program to assist them in purchasing equipment and related spare parts. Part D: Special Import Facility Administration of a program by BHC, through Motor Trading Companies, for the importation into Ghana of spare parts, tools and lubricants for the benefit of (a) about 45 contractors engaged in periodic road maintenance works and (b) small-scale private truck operators primarily engaged in agricultural transport. Part E: Institutional Support for BHC and Contractors (1) Strengthening of BHC's financial management, organiza- tion and training by the provision of about 72 staff- months of expert services in the areas of financial systems and reporting procedures, project appraisal and supervision, accounting management, and organizational management. - 18 - (2) Putting into effect a procurement system for the Special Import Facility by the provision of about 9 staff-months of expert services to BHC and Plant Pool. (3) Strengthening the general technical and managerial competence of private local contracting firms by the provision of about 24 staff-months of expert services through BHC. (4) Acquisition and utilization by BHC of office equipment and vehicles in support of expert services. Part F: Institutional Support for GHA Strengthening the operations of GHA's workshops by the provision of about 12 staff-months of expert services and the acquisition and utilization by GHA of one vehicle. The Project is expected to be completed on December 31, 1982. - 19 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part C of this Schedule, goods shall be procured under contracts awarded 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 March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. For goods to be procured on the basis of international competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, the Borrower shall cause GHA and BHC to prepare and forward to the Association as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender or prequalification documents relating thereto, as the case may be, a general procure- ment notice, in such form and detail and containing such informa- tion as the Association shall reasonably request; the Association will arrange for the publication of such notice in order to provide timely notification to prospective bidders of the oppor- tunity to bid for the goods in question. The Borrower shall cause GHA and BHC to provide the necessary information to update such notice annually so long as any goods remain to be procured on the basis of international competitive bidding. 3. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international competitive bidding: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for the imported goods, or the ex-factory price or off-the-shelf price of other goods, offered in such bid; and (ii) customs duties and other import taxes levied in connection with the importation, or the sales and similar taxes levied in connection with the sale or delivery, pursuant to the bid, of the goods shall not be taken into account in the evaluation of the bids. B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A of this Schedule, goods manufactured in - 20 - Ghana may be granted a margin of preference in accordance with, and subject to, the following provisions: 1. All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. 2. After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Ghana if the bidder shall have established to the satisfaction of GHA and the Association that the manufacturing cost of such goods includes a value added in Ghana equal to at least 20% of the ex- factory bid price of such goods. (2) Group B: all other domestic bids. (3) Group C: bids offering any other goods. 3. In order to determine the lowest evaluated bid of each group, all evaluated bids in each group shall first be compared among themselves, without taking into account customs duties and other import taxes levied in connection with the importation, and sales and similar taxes levied in connection with the sale or delivery, pursuant to the bids, of the goods. Such lowest eval- uated bids shall then be 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. 4. If, as a result of the comparison under paragraph 3 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 evaluated bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to: (i) the amount of customs 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 3 is the lowest evaluated bid shall be selected. - 21 - C. Other Procurement Procedures 1. Lubricants required through June 1981, spare parts and tires required through December 1981, and spare parts required after December 1981, up to an aggregate amount of $500,000 equi- valent, under Part B of the Project, and the generators required for the training center under such Part B, shall be procured on the basis of international competitive bidding under Part A of this Schedule, but on the basis of invitations to bid issued directly to selected potential suppliers, without advertising. The description and quantities of such items shall be subject to prior approval by the Association. 2. Bitumen under Part B of the Project may be procured locally under a negotiated contract, the terms and conditions of which shall be subject to the prior approval of the Association. 3. Road maintenance equipment, quarry equipment and related spare parts under Part C of the Project shall be procured on the basis of international competitive bidding under Part A of this schedule, but on the basis of invitations to bid issued directly to selected potential suppliers, without advertising, except that contracts for such items estimated to cost the equivalent of $200,000 or less shall be procured on the basis of quotations received from not less than three suppliers. D. 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 estimated to cost the equi- valent of $100,000 or more: (a) Before bids are invited, the Borrower shall cause GHA and BHC to 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 proce- dures to be followed for the bidding, and shall make such modifi- cations 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 cause GHA and BHC, before a final decision on the - 22 - award is made, to inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, in sufficient 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 determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform GHA or BHC, as the case may be, 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 or prequalification invited. (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 withdrawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, the Borrower shall cause GHA and BHC to furnish to the Association, promptly after its execution and prior to the submis- sion 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 the Guidelines or this Schedule, promptly inform GHA or BHC, as the case may be, and state the reasons for such determination. 3. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an exten- sion of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 15% of the original price, the Borrower shall cause GRA and BHC to inform the Association of the proposed modifica- tion, waiver, extension or change order and the reasons therefor. The Association, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform GRA or BHC, as the case may be, and state the reasons for its determination. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the day of - A 1980f. FOR SECRETARY