South Africa - Transport Project : Loan 0178 - Loan Agreement - Conformed

LOAN NUMBER 178 SA Loan Agreement (Transport Project) BETWEEN THE UNION OF SOUTH AFRICA AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED OCTOBER 1, 1957 LOAN NUMBER 178 SA Loan Agreement (Transport Project) BETWEEN THE UNION OF SOUTH AFRICA AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED OCTOBER 1, 1957 ICnan Argreemet AGREEMENT, dated October 1, 1957, between TH E UNIoN OF SOUTH AFRICA (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVEL- OPMENT (hereinafter called the Bank). ARTICLE I Loan Regulations SECTION 1.01. The parties to this Loan Agreement ac- cept all the provisions of Loan Regulations No. 3 of the Bank dated June 15, 1950, subject, however, to the modifica- tions thcreof set forth in Rcbedule 3 to this Agreement (said Loan Regulations No. 3 as so nodified lbeing herein- after called the Loan Regiiiati.ons), with the same force and offect 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 currenies equivalent to twenty-five million dollars ($25,000,000). SECTIOx 2.02. The Bank shall open a Loan Account on its books in the name of the Bo-rower and shall crie(it to such Account the amount of the Loan. The amount of tho Loan may be withdrawn from the Loan Account as pro- vided in, and su)ject to the rights of cancellation and sus- pension set forth in, the Loan Regulations. SECTION 2.03. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (% of 1% ) per annum on the principal amount of the Loan not so withdrawn from time to time. Such commit- ment charge shall accrue froni a date sixty days after the date of this Agreement to the respective dates on which S 4 amounts shall be withdrawn by the Borrower from the Loan Account as provided in Article IV of the Loau Regulations or shall be cancelled pursuant to Article V of the Loan Regulations. SECTION 2.04. The Borrower shall pay interest at the rate of five and three-fourths per cent (5-%/ ) per annum on the principal amount of the Loan so withdrawn and outstanding from time to time. SECTION 2.05. Except as the Borrower and the Bank shall otherwise agree, the charge payable for special com- mitments 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 cout (]/! of 1% ) per annum on the principal amount of any such special commitments outstanding from time to time. SECTION 2.06. Interest and other charges shall be pay- able semi-annually on April 1 and October 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 exclusivcly 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 agreement between the Borrower and the Bank, subject to modification 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. 5 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. SECTION 4.02. The Minister of Finance of the Borrower ar1 such person or persons as he shall appoint in writing are designated as authorized representatives of the Bor- rower for the purposes of Section 6.12 of the Loan Regula- tions. 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. (b) The Borrower shall maintain or cause to be main- tained records adequate to identify the goods financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof), and to reflect in accordance with consist- ently maintained sound accounting practices the financial condition and operations of the South African Railways and Harbours Administration; shall enable the Bank's repre- sentatives to inspect the Project, the goods and any rele- vant records and documents and the equipment and prop- erties operated by, and the operations of, the South African Railways and Harbours Administration; and shall furnish to the Bank all such information as the Bank shall reason- ably request concerning the expenditure of the proceeds of the Loan, the Project, the goods, and the financial condi- tion and operations of the South African Railways and Harbours Administration. (c) The Borrower shall maintain or cause to be main- tained the plant, equipment and property owned by it and 6 operated by the South African Railways and Harbours Ad- ministration and shall make or cause to be made all neces- sary renewals and repairs thereof, all in accordance with sound engineering practices; and shall at all times operate or cause to be operated such plant, equipment and property in accordance with sound business practices. SECTION 5.02. (a) The Borrower and the Bank shall cooperate 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 conditions in the territories of the Borrower and the international 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 interferes with, or threatens to interfere with, the accomplishment of the purposes of the Loan or the maintenance of the service thereof. (c) The Borrower shall afford all reasonable opportu- nity 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 public 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 7 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 created by the South African Reserve Bank on any of its assets in the ordinary course of its banking business to secure a debt maturing not more than one year after the date on which it is originally incurred. The term "assets of the Borrower " as used in this Section includes assets of the Borrower or of any of its Provinces or other political subdivisions or of any agency of the Bor- rower or of any such Provinces or other political subdivi- sions, including assets of the South African Reserve Bank and of local governing authorities. 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 ter- ritories or in territories administered by it; provided, how- ever, that the provisions of this Section shall not apply to taxation of, or fees upon, payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual 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 or in territories administered by it on or in connection with the execution, issue, delivery or registration thereof and the Borrower shall pay all such taxes and fees, if any, im- 8 posed 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 or in territories administered by it. SECTION 5.07. The Borrower shall satisfy the Bank that adequate arrangements have been made to insure the goods financed out of the proceeds of the Loan against risks inci- dent to their purchase and importation into the territories of the Borrower. 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 Section 5.02 of the Loan Regulations shall occur and shall continue 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 notwithstanding. SECTION 6.02. The following are specified as additional events for the purposes of Section 5.02 (h) of the Loan Regulations: (i) Any event specified in paragraph(3)of Section 5.02 of Loan Regulations No. 3 of the Bank dated Au- gust 15, 1950,with reference to the Loan Agreement 9 dated January 23, 1951, between the Borrower and the Bank shall have occurred; (ii) Any event specified in paragraph (c) of Section 5.02 of Loan Regulations No. 3 of the Bank dated October 15, 1952, with reference to the Loan Agreement dated August 28, 1953, between the Borrower and the Bank shall have occurred; (iii) Any event specified in paragraph (c) of Section 5.02 of Loan Regulations No. 3 of the Bank dated Febru- ary 15, 1955, with reference to the Loan Agreement dated November 28, 1955, between the Borrower and the Bank shall have occurred. ARTICLE VII Miscellaneous SECTION 7.01. The Closing Date shall be March 31, 1960. SECTION 7.02. A date 60 days after the date of this Agreement is hereby specified for the purposes of Section 9.04 of the Loan Regulations. SECTION 7.03. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: Secretary to the Treasury, Union Buildings Pretoria Union of South Africa Alternative address for cablegrams and radiograms: Findep, Pretoria South Africa 10 For the Bank: International Bank for Reconstruction and Development, 1818 H Street, N.W. Washington 25, D. C. United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D. C. SECTION 7.04. The Minister of Finance of the Borrower is designated for the purposes of Section 8.03 of the Loan Regulations. SECTION 7.05. In this Agreement any reference to the Minister of Finance of the Borrower shall include a refer- ence to any Minister of State of the Borrower for the time being acting for or on behalf of the Minister of Finance of the Borrower. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respective names 11 and delivered in the City of New York, State of New York, United States of America, as of the day and year first above written. Ti-m UNION OF SOIT I AFRICA By J. F. NAU-DFE Aiu/horized R?epresen/ative INTERNAT1oNAL BANK FOR RECONSTRUÅTION AND DEVELOPMALENT By E uUG-NE R. .BIJAcK President 12 SCHEDULE 1 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars) * April 1, 1960 $1,253,000 October 1, 1960 1,289,000 April 1, 1961 1,326,000 October 1, 1961 1,364,000 April 1, 1962 1,403,000 October 1, 1962 1,443,000 April 1, 1963 1,485,000 October 1, 1963 1,527,000 April 1, 1964 1,571,000 October 1, 1964 1,616,000 April 1, 1965 1,663,000 October 1, 1965 1,711,000 April 1, 1966 1,760,000 October 1, 1966 1,811,000 April 1, 1967 1,862,000 October 1, 1967 1,916,000 * To the extent that any part of the Loan is repayable in a currency other than dollars (see Loan Regulations, Section 3.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 13 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 2 years before maturity... / % More than 2 years but not more than 4 years before maturity ................. . 2% More than 4 years but not more than 6 years before maturity ............. ...... 3 % More than 6 years but not more than 8 years before maturity..... ............ ..4% More than 8 years before maturity........ 5%% 14 SCHEDULE 2 Description of Project The Project is (a) the part of the development program of the South African Railways and Harbours Administra- tion relating to its railway, harbor and road transport facilities for the three-year period ending March 31, 1960; and (b) the completion to a state of practical usefulness within a reasonable time after March 31, 1960, of such components of the part of the program described in clause (a) as are scheduled to be still in progress at that date. The program is designed to increase the capacity of and modernize the transport facilities ownedI by the Borrower and operated by the South African Railways and Harbours Administration by modernizing, improving and adding to the existing facilities, with special emphasis on the increase of line and yard capacity, the expansion of motive power and rolling stock, the extension of modernized signalling and traffic control facilities, and the continued improve- ment and expansion of workshop facilities. The part of the program described in clause (a) above contemplates expenditure by the Borrower of the equiv- alent of approximately 185 million South African pounds between April 1, 1957 and March 31, 1960. The main com- ponents of this part include: (i) the construction of new suburban, avoiding and branch lines; (ii) the strengthening and improvement of the existing permanent way by the construction of deviations and by regrading; by the replacement and strengthening of bridges; and by relaying with heavier rails; (iii) the provision of additional tracks on various sections, and of new or enlarged marshalling yards and goods yards; 15 (iv) the extension and improvement of electrified sections; (v) the acquisition and construction of approximately 70 steam locomotives, 200 electric locomotive units, 135 diesel locomotives, 5 diesel rail-car sets, 155 electric motor coaches, 375 trailers, and 19,000 goods wagons and other rolling stock, and spare parts for all of the foregoing; (vi) the modernization and expansion of manufacturing and repair facilities by the construction and enlarge- ment of mechanical workshops and running sheds and the acquisition and installation of machinery and equipment therefor; (vii) the improvement and installation of signalling and interlocking equipment, telegraph and telephone sys- tems, electric power distribution, water supplies and other railway facilities; (viii) the construction and remodelling of station buildings and layouts, goods sheds, staff quarters, office build- ings and other necessary buildings; (ix) the extension of harbor facilities and the acquisition and improvement of fixed and floating harbor equip- ment, pre-cooling plant and equipment required for construction work at the harbors. 16 SCHEDULE 3 Modifications of Loan Regulations No. 3 For the purposes of this Agreement the provisions of Loan Regulations No. 3 of the Bank, dated June 15, 1956, shall be deemed to be modified as follows: (a) Section 2.02 is deleted. (b) The eighth paragraph of the Form of Bond set forth in Schedule 1 and the seventh paragraph of the Form of Bond set forth in Schedule 2 are amended by in- serting, after the word "territories" in each such paragraph, the words ", or in territories admin- istered by it".