Sri Lanka - Road Passenger Transport Project : Credit 0994 - Project Agreement - Conformed

DocuME~NTs CREDIT NUMBER 994 CE Project Agreement (Road Passenger Transport Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and SRI LANKA CENTRAL TRANSPORT BOARD Dated ,ii Jb 1980 CREDIT NUMBER 994 CE PROJECT AGREEMENT AGREEMENT, dated 4tPA 11 , 1980, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and SRI LANKA CENTRAL TRANSPORT BOARD (hereinafter called SLCTB). WHEREAS by the Development Credit Agreement of even date herewith between Democratic Socialist Republic of Sri Lanka (hereinafter called the Borrower) and the Association, the Asso- ciation has agreed to make available to the Borrower an amount in various currencies equivalent to fifty-three million dollars ($53,000,000), on the terms and conditions set forth in the Development Credit Agreement, but on condition that SLCTB agrees to undertake such obligations toward the Association as are hereinafter set forth; and WHEREAS by a subsidiary loan agreement to be entered into between the Borrower and SLCTB, the proceeds of the credit pro- vided for under the Development Credit Agreement will be made available to SLCTB on the terms and conditions therein set forth; and WHEREAS SLCTB, 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. SLCTB shall carry out Parts A, B, C and E of the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices. -2- Section 2.02. In order to assist SLCTB in carrying out Parts A, B, C and E of the Project, SLCTB shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Credit, shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.04. (a) SLCTB shall, in accordance with a timetable and arrangements satisfactory to the Association, transfer to each RTB such equipment and facilities provided or constructed under the Project, as shall be agreed with the Association. (b) Prior to such transfer, SLCTB shall ensure: (i) that the respective RTB has concluded the agreement referred to in Section 5.01 (c) of the Development Credit Agreement; and (ii) that said equipment and facilities are operating satisfactorily. Section 2.05. SLCTB shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Association shall otherwise agree, SLCTB shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Loan Agreement or any provi- sion thereof. Section 2.06. (a) SLCTB undertakes to insure, or make ade- quate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit relent to it by the Borrower against hazards incident to the acquisition, transporta- tion 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 SLCTB to replace or repair such goods. (b) Except as the Association may otherwise agree, SLCTB shall cause all goods and services financed out of the proceeds of the Credit relent to it by the Borrower to be used exclusively for the Project. Section 2.07. (a) SLCTB shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents, training programs and work and procurement schedules for Parts A, B, C and E of the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. -3- (b) SLCTB: (i) shall maintain records and procedures ade- quate to record and monitor the progress of Parts A, B, C and E 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 Parts A, B, C and E of the Project; (ii) shall enable the Association's accred- ited representatives to visit the facilities and construction sites included in Parts A, B, C and E of 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 Parts A, B, C and E of the Project, its cost and, where appropriate, the bene- fits 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 Parts A, B, C and E 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 SLCTB and the Association, SLCTB 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 initial operation of Parts A, B, C and E of the Project, its cost and the benefits derived and to be derived from it, the perfor- mance by SLCTB and the Association of their respective obliga- tions under ?,he Project Agreement and the accomplishment of the purposes of the Credit. (d) SLCTB shall enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment of SLCTB and any relevant records and documents. Section 2.08. (a) SLCTB shall at the request of the Associa- tion, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement and under the Subsidiary Loan Agreement, and other matters relating to the purposes of the Credit. (b) SLCTB 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 SLCTB of its obligations under this Agreement and under the Subsidiary Loan Agreement. -4- ARTICLE III Management and Operations of SLCTB Section 3.01. SLCTB shall take out and maintain with respon- sible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.02. SLCTB shall take all action as may be necessary to adequately maintain the vehicles, workshops and all other facilities for which it is responsible, to promptly make all necessary repairs thereto in accordance with sound engineering practices, and to maintain and renew, as and when needed, the equipment required for this purpose and shall provide, as and when needed, the funds, facilities, services and other resources required therefor. Section 3.03. SLCTB shall: (a) appoint by September 30, 1981 a task force with composi- tion, staff and resources satisfactory to the Association respon- sible for the formulation of a Corporate Plan for SLCTB and the RTBs, in accordance with terms of reference satisfactory to the Association; and (b) cause to be furnished by April 30, 1982 the Corporate Plan to the Borrower for its review. The Borrower shall thereafter discuss the Corporate Plan with the Association. Section 3.04. SLCTB shall cause the RTBs to place limitations on its services to reflect the availability of properly maintained buses. Section 3.05. SLCTB shall adopt by September 30, 1980, guidelines satisfactory to the Association, designed to achieve appropriate SLCTB and RTB staffing levels. ARTICLE IV Financial Covenants Section 4.01. SLCTB shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations and financial condition of SLCTB and each RTB. -5- Section 4.02. SLCTB shall: (i) have the accounts and finan- cial statements of SLCTB and each RTB (balance sheets, statements of income and expenses and related statements) 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, in accordance with Schedule 2 to this Agreement, (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 and the audit thereof as the Association shall from time to time reasonably request. Section 4.03. SLCTB shall, by September 30, 1980 and by September 30 of each year thereafter, furnish to the Borrower and the Association financial and operational forecasts of SLCTB and each RTB. Section 4.04. SLCTB shall implement those measures referred to in Sections 3.08, 3.09 and 3.10 of the Development Credit Agreement for which SLCTB shall be responsible, in accordance with arrangements satisfactory to the Association. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of SLCTB thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date twenty years after the date of this Agree- ment. -6- (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 SLCTB of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address 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) For SLCTB: Sri Lanka Central Transport Board 200, Kirula Road, Colombo - 5 Sri Lanka -7- Cable address: Telex: TRANSTORES 1154 COLOMBO Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of SLCTB may be taken or executed by its chairman or such other person or persons as he shall designate' in writing, and SLCTB shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. 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 Byly ~a. 4 1 A C.#nRegional Vice President South Asia SRI LANKA CENTRAL TRANSPORT BOARD // Authorized Representative -8- SCHEDULE 1 Procurement A. International Competitive Bidding 1. Except as provided in Part C hereof, 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 inter- national competitive bidding as described in Part A of the Guide- lines. 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 and SLCTB, each for the respective Part or Parts of the Project for which it is respon- sible, shall 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 pre- qualification 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 publication of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods in question. The Borrower and SLCTB, each for the respective Part or Parts of the Project for which it is responsible, shall 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 Sri Lanka 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 minufactured in Sri Lanka if :he bidder shall have established to the satisfaction of the Borrower or SLCTB, each for the respective Part or Parts of the Project for which it is responsible and the Association that the manufacturing cost of such goods includes a value added in Sri Lanka 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 eva- luated 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 - 10 - 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. C. Other Procurement Procedures 1. Contracts for equipment and materials with values estimated not to exceed the equivalent of $200,000 for each contract, may be procured in accordance with the Borrower's competitive bidding procedures satisfactory to the Association, provided that the aggregate expenditure for items so procured shall not exceed the equivalent of $1,000,000. 2. Civil works under Part D of the Project may be carried out either under force account, or by coutracts awarded under the Borrower's procurement procedures satisfactory to the Asso- ciation. 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 $200,000 or more: (a) Before bids are invited, the Borrower or SLCTB, each for the respective Part or Parts of the Project for which it is responsible shall furnish to the Association, fur 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 Borrower or SLCTB, each for the respective Part or Parts of the Project for which it is responsible shall, before a final deci- sion on the award is made, inform the Association of the name of - 11 - 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 the Borrower or SLCTB, each for the respective Part or Parts of the Project for which it is respon- sible 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 or SLCTB, each for the respective Part or Parts of the Project for which it is responsible, shall furnish to the Association, promptly after its execution and prior to the submission to the Association of the first application for with- drawal of funds from the Credit Account in respect of such con- tract, 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 re- quest. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower or SLCTB, each for the respective Part or Parts of the Project for which it is respon- sible, 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 10% of che original price, the Borrower or SLCTB, each for the Part or Parts of the Project for which it is respon- sible, shall inform the Association of the proposed modification, waiver, extension or change order and the reasons therefor. The - 12 - Association, if it determines that the proposal would be inconsis- tent with the provisions of this Agreement, shall promptly inform the Borrower or SLCTB, each for the Part or Parts of the Project for which it is responsible, and state the reasons for its deter- mination. - 13 - SCHEDULE 2 Accounts and Auditor's Reports of SLCTB and each RTB Fiscal Year Ending Annual Accounts Auditor's Report June 14, 1978 June 30, 1980 December 31, 1980 December 31, 1978 September 30, 1980 March 31, 1981 December 31, 1979 March 31, 1981 September 30, 1981 December 31, 1980 December 31, 1981 May 31, 1982 December 31, 1981 September 30, 1982 January 31, 1983 December 31, 1982 September 30, 1983 December 31, 1983 December 31, 1983 June 30, 1984 September 30, 1984 Thereafter all accounts and reports shall be furnished not later than six months after the end of each fiscal year. 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 siged this Certifi- cate and affixed the Seal of the Association thereunto the day of 1 , 19FR S. FOR SECRETARY