Togo - Second Rural Development Project In Cotton Areas : Credit 1302 - Project Agreement - Conformed

OFFICIAL CREDIT NUMBER 1302 TO DOCUMENTS Project Agreement (Second Rural Development Project in Cotton Areas) between INTERNATIONAL DEVELOPMENT ASSOCIATION and SOCIETE TOGOLAISE DU COTON Dated , 1983 CREDIT NUMBER 1302 TO PROJECT AGREEMENT AGREEMENT, dated L_> U A , 1983, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and SOCIETE TOGOLAISE DU COTON (hereinafter called SOTOCO). WHEREAS by the Development Credit Agreement of even date herewith between the Republic of Togo (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to. twenty one million seven hundred thousand Special Drawing Rights (SDR 21,700,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that SOTOCO agree to undertake such obligations toward the Association as are hereinafter set forth; WHEREAS SOTOCO, 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. (a) SOTOCO shall carry out Parts A through 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, engineering, agri- cultural and rural development practices. (b) In order to assist SOTOCO in carrying out Parts A through E of the Project, SOTOCO shall, not later than May 31, -2- 1983, enter into arrangements satisfactory to the Association with the following: (i) PROPTA, CNCA and UPROMA for carrying out Part B (ii) of the Project; (ii) IRCT and IRAT for carrying out Part B (iii) of the Project; (iii) DHE for carrying out Part D of the Project; and (iv) MRW for carrying out Part E of the Project. Section 2.02. (a) In order to assist SOTOCO in carrying out Parts A through E of the Project, SOTOCO shall employ: (i) a General Director, a Deputy General Director and a Director of the Marketing Department whose qualifications, experience and terms and condi- tions of employment shall be satisfactory to the Association; and (ii) specialists for the positions of: (1) Director, Agricultural Production Department; (2) Director, Financial and Administration De- partment; (3) Director, Industrial Department; (4) Head, Engineering Division; (5) Head, Project Monitoring and Evaluation Unit; (6) Chief, Extension Services; (7) Chief, Farmer Groups and Credit Services; (8) a Cost Accountant with computer experience for the Financial and Administration Depart- ment; (9) an Agronomist for seed production; -3- (10) two Workshop Managers for Industrial Depart- ment Garages; and (11) a short-term Consultant in animal traction, all whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consul- tants shall be selected, in accordance with principles satis- factory to the Association, on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. (b) SOTOCO shall employ experienced and qualified Togolese staff to work as counterparts to and closely with the specialists referred to in paragraph (a) (ii) of this Section. (c) The terms of reference of said specialists and counter- parts shall be reviewed annually by SOTOCO and the Association. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works required for the Project, and to be financed out of the proceeds of the Credit, shall be governed by the provisions of the Schedule to this Agreement. Section 2.04. (a) SOTOCO 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 made available to it by the Borrower, against hazards incident to the acquisition, 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 SOTOCO to replace or repair such goods. (b) SOTOCO shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Bor- rower to be used exclusively for the purposes of the Project. Section 2.05. (a) SOTOCO shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and construction work and procurement schedules for Parts A through E of the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. -4- (b) SOTOCO shall: (i) maintain records and procedures adequate to record and monitor the progress of Parts A through 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 the Project; (ii) enable the Association's representatives to visit the facilities and construction sites included in Parts A through E of the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; (iii) furnish to the Association, not later than two months after the end of each quarter, quarterly reports and, by June 30 of each year, annual reports containing all such information as the Association shall reasonably request concerning Parts A through E of 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; and (iv) not later than four months from the date of completion of the field work, furnish to the Association for its review and comment, a report on each survey and study undertaken by .the Project Monitoring and Evaluation Unit established pur- suant to Part C of the Project. (c) Upon the award by SOTOCO of any contract for goods, works or services to be financed out of the proceeds of the Credit, the Association may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) 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 SOTOCO and the Association, SOTOCO shall prepare and furnish to the Asso- ciation a report, of such scope and in such detail as the Asso- ciation shall reasonably request, on the execution and initial -5- operation of Parts A through E of the Project, its cost and the benefits derived and to be derived from it, the performance by SOTOCO and the Association of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Credit. (e) SOTOCO shall enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment of SOTOCO and any relevant records and documents. Section 2.06. SOTOCO shall, under the arrangements with DHE referred to in Section 3.01 (g) of the Development Credit Agree- ment, annually draw up a list of villages in which the tubewells would be constructed and, after comment by DHE, furnish such list to the Association, for its review and comment, not later than three months before the implementation of each tubewell program. Section 2.07. (a) SOTOCO 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) SOTOCO 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 SOTOCO of its obligations under this Agreement. ARTICLE III Management and Operations of SOTOCO Section 3.01. SOTOCO shall carry on its operations and conduct its affairs in accordance with sound administrative, financial, agricultural and rural development practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. -Section 3.02. SOTOCO shall, at all times, operate and main- tain its plant, machinery, equipment and other property, and, from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial, agricultural and rural development practices. -6- Section 3.03. SOTOCO shall take out and maintain with responsible 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. ARTICLE IV Financial Covenants Section 4.01. SOTOCO shall maintain records adequate to reflect, in accordance with consistently maintained appropriate accounting practices, its operations and financial condition. Section 4.02. SOTOCO shall: (i) have its accounts and financial statements (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, but in any case, not later than four 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 SOTOCO and the audit thereof as the Association shall from time to time reasonably request. 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. -7- Section 5.02. (a) This Agreement and all obligations of the Association and of SOTOCO 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 ten 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 SOTOCO of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- tion 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 hereinafter 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) -8- For Societ6 Togolaise du Coton SOTOCO B. P. 219 Atakpame Republic of Togo Cable address: Telex: SOTOCO 5286 Atakpame 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 SOTOCO, may be taken or executed by its General Director or such other person or persons as SOTOCO shall designate in writing, and SOTOCO 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 collectively shall be 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 Regional Vice President Western Africa SOCIETE TOGOLAISE DU COTON By/uthre R/ e p t a Authorized Representative -9- SCHEDULE Procurement A. International Competitive Bidding 1. Except as provided in Part D hereof, goods and civil works shall be procured under contracts awarded in accordance with pro- cedures consistent with those set forth in the current edition of 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 bid- ding as described in Part A of the Guidelines. 2. For goods and works to be procured on the basis of inter- national competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, SOTOCO 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 prequalification documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Asso- ciation 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 and works in question. SOTOCO shall provide the neces- sary 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 com- petitive 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; (ii) customs duties and other import taxes levied in con- nection with the importation or 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; and - 10 - (iii) the cost of inland freight and other expenditures incidental to the delivery of the goods to the place of their use or installation shall be included. B. Preference for Domestic Manufacturers In the procurement of goods, in accordance with the proce- dures described in Part A of this Schedule, goods manufactured in Togo 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 Togo, if the bidder shall have established to the satisfaction of Togo and the Association, that the manufacturing cost of such goods includes a value added in Togo equal to at least twenty per cent (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 - 11 - goods offered in each Group C bid, for the purpose of this further comparison only, an amount equal to: (a) 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; (b) fifteen per cent (15%) of the c.i.f. bid price of such goods if said customs duties and taxes exceed fifteen per cent (15%) of such price. If the Group A bid in such 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. Preference for Domestic Contractors With respect to the evaluation of bids for any contract for civil works included under Category 3 of the table set forth in Schedule 1 to the Development Credit Agreement and to be procured in accordance with the procedures described in Part A of this Schedule, SOTOCO may grant a margin of preference of seven and one-half per cent (7-1/2%) to domestic contractors in accordance with and subject to the following provisions: 1. Contractors shall be required to prequalify as provided in Part A of this Schedule, and applicants for qualification applying for such preference shall be asked to provide, as part of the data for qualification, such information including details of ownership as shall be required to determine whether, according to the classification established by the Borrower and accepted by the Association, a particular firm or group of firms qualifies for a domestic preference. The bidding documents shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. 2. After bids have been received and reviewed by SOTOCO, responsive bids will be classified into the following groups: (a) bids offered by domestic contractors eligible for preference; and (b) bids offered by other contractors. - 12 - For the purpose of evaluation and comparison of bids an amount equal to seven and one-half per cent (7-1/2%) of the bid amount shall be added to bids received under group (b) above. D. Other Procurement Procedures (a) Contracts for the construction of buildings whose cost is estimated not to exceed, in the aggregate, the equivalent of two million two hundred thousand dollars ($2,200,000), may be procured on the basis of competitive bidding advertised locally, in accordance with local procedures satisfactory to the Association. (b) Contracts for goods estimated to cost less than the equivalent of one hundred thousand dollars ($100,000) may be pro- cured on the basis of competitive bidding advertised locally, in accordance with local procedures satisfactory to the Association, provided, however, that the aggregate cost of the contracts so procured shall not exceed the equivalent of eight hundred thousand dollars ($800,000). (c) Contracts for goods estimated to cost less than the equivalent of fifty thousand dollars ($50,000) may be procured on the basis of quotations from at least three suppliers represented in TOGO and able to provide adequate guarantee of service and spare parts, provided, however, that the aggregate cost of the contracts so procured shall not exceed the equivalent of four hundred thousand dollars ($400,000). .E. 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 for works and for the purchase of goods 9stimated to cost the equivalent of one hundred thousand dollars ($100,000) or more: (a) Before bids are invited, SOTOCO 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 - 13 - require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, SOTOCO shall, before a final decision on the award is made, 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 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 SOTOCO 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 was 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 with- drawal of funds from the Credit Account in respect of such con- tract. 2.1 With respect to each contract not governed by the preceding paragraph, SOTOCO shall furnish to the Association, promptly after its execution and prior to the submission to the Associa- tion 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 SOTOCO and state the reasons for such determination. 3. Before agreeing to any material modification or waiver of the terms and conditions of a contract, granting an extension 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 ten per cent (10%) of the original price, SOTOCO shall inform the Association of the proposed mcdification, waiver, extension or change order and the reasons therefor. The Associa- tion, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform SOTOCO 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 d. FOR SECRETARY