India - Uttar Pradesh Public Tubewells Project : Credit 1004 - Project Agreement - Conformed

CREDIT NUMBER 1004 IN Project Agreement (Uttar Pradesh Public Tubewells Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and STATE OF UTTAR PRADESH Dated , 1980 CREDIT NUMBER 1004 IN PROJECT AGREEMENT AGREEMENT, dated 44 , 1980, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and STATE OF UTTAR PRADESH, acting by its Governor (hereinafter called Uttar Pradesh). 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 eighteen million dollars ($18,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Uttar Pradesh agree to undertake such obligations toward the Association as are herein- after set forth; and WHEREAS Uttar Pradesh, 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. Uttar Pradesh shall carry out the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and agricultural practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 2.02. Except as the Association shall otherwise agree, procurement of the goods and civil works to be financed out -2- of the proceeds of the Credit, shall be governed by the provisions of the Schedule to this Agreement. Section 2.03. (a) Uttar Pradesh undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credits 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 Uttar Pradesh to replace or repair such goods. (b) Except as the Association may otherwise agree, Uttar Pradesh shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclusively for the Project. Section 2.04. (a) Uttar Pradesh shall furnish to the Assoc- iation, promptly upon their preparation, the plans, specifi- cations, reports, contract documents and construction and procure- ment schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) Uttar Pradesh: (i) shall maintain 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 information 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 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 Asso- ciation and Uttar Pradesh, Uttar Pradesh shall prepare and furnish to the Association a report, of such scope and in such - 3 - 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 Uttar Pradesh and the Association of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Credit. Section 2.06. (a) Uttar Pradesh shall at the request of the Association, 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) Uttar Pradesh 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 Uttar Pradesh of its obligations under this Agreement. Section 2.07. (a) Uttar Pradesh shall: (i) select or cause to be selected, irrigation command areas under the Project; and (ii) design, construct, operate and maintain the irrigation systems under the Project, in accordance with criteria agreed between the Association and Uttar Pradesh. (b) Uttar Pradesh shall cause the State Electricity Board of Uttar Pradesh to energize each tubewell pump unit not later than two months after the completion of the piped distribution system for such unit. Section 2.08. Uttar Pradesh shall carry out a training program, satisfactory to the Association and Uttar Pradesh, for the operation and maintenance staff involved or to be involved with the Project. Section 2.09. Uttar Pradesh shall take all such measures in the command areas of tubewells under the Project as shall be necessary on its part to prevent the spread of malaria and other water-related diseases. Section 2.10. With the objective of ensuring recovery of annual operation and maintenance costs, and to the extent pos- sible, the capital costs of public tubewells, having regard inter alia to incentives for, and payment capacity of farmers, Uttar Pradesh undertakes to (i) review the water charges on the tube- wells in Uttar Pradesh by not later than March 31, 1981 and (ii) implement an appropriate system of water charges based on the recommendations arising from the said review, after paying due regard to the Association's comments; if any, on such recommendations. ARTICLE III Financial Covenants Section 3.01. Uttar Pradesh shall maintain separate records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition, in respect of the Project, or any part thereof. Section 3.02. Uttar Pradesh shall: (i) have its separate accounts in respect of 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, (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) furnish to the Association such other information concerning the accounts and financial statements of Uttar Pradesh and the audit thereof as the Association shall from time to time reasonably request. 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 Uttar Pradesh thereunder shall terminate on the earlier of the following two dates: -5- (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 Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify Uttar Pradesh of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE V Miscellaneous Provisions Section 5.01. An notice or request required or permitted to be given or made unler 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 herein- after specified or at such other address as such party shall have designated 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: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) -6- For Uttar Pradesh: Secretary to the Government of Uttar Pradesh Irrigation Department Lucknow Uttar Pradesh, India Cable address: SECRETARY Irrigation Lucknow 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 Uttar Pradesh may be taken or executed by its Secretary, Irrigation Department or such other person or persons as Uttar Pradesh shall designate in writing, and Uttar Pradesh 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 counterparts, each of which shall be an original, and all collec- tively but one instrument. 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 District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President South Asia STATE OF UTTAR PRADESH Authorized Representative - 7 - SCHEDULE Procurement A. International Competitive Bidding 1. Except as provided in Part C hereof, goods and civil works 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, Uttar Pradesh shall prepare and forward to the Association as soon as possible, and in any event not later than 60 days 1rior to the date of availability to the public of the first tender or prequalification documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Association shall reasonably request; the Association will arrange for the publi- cation of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods and works in question. Uttar Pradesh shall provide the necessary information to update such notice annually so long as any goods or works 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 - 8 - India 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 India if the bidder shall have established to the satisfaction of India and the Association that the manufacturing cost of such goods includes a value added in India 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 evalu- ated 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 - 9 - which as a result of the comparison under paragraph 3 is the lowest evaluated bid shall be selected. C. Other Procurement Procedures 1. Drilling of bore holes for tubewells shall be carried out departmentally by Uttar Pradesh. 2. Contracts for civil works, other than those included in paragraph C.1 above, may be let on the basis of competitive bidding advertised locally in accordance with procedures satis- factory to the Association, and Uttar Pradesh shall make available all necessary materials to the successful bidder or bidders. 3. (i) PVC pipes estimated to cost an amount not exceeding $2,000,000 equivalent in the aggregateS (ii) building materials such as steel bars, bricks, concrete, cement and timber; and (iii) field vehicles, shall be procured through Uttar Pradesh's standard procurement procedures, satisfactory to the Association. 4. Monitoring equipment may be purchased through usual commercial channels. 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 equiva- lent of $100,000 or more: (a) Before bids are invited, Uttar Pradesh 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, Uttar Pradesh shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it - 10 - intends to award the contract and shall furnish to the Assoc- iation, 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 Uttar Pradesh 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 whijk bids were asked or prequalification invited. 2. With respect to each contract not governed by the preceding paragraph, Uttar Pradesh shall furnish to the Association, promptly after its execution, together with the analysis of the respective bids, recommendations for award and such other informa- tion 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 Uttar Pradesh 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, Uttar Pradesh shall inform the Association of the proposed modification, 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 Uttar Pradesh 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 198 q . FOR SECRETARY