India - Chambal (Madhya Pradesh) Irrigation II Project : Credit 1288 - Project Agreement - Conformed

0 ICA CREDIT NUMBER 1288 IN Project Agreement (Chambal (Madhya Pradesh) Irrigation II Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and STATE OF MADHYA PRADESH Dated , 1982 CREDIT NUMBER 1288 IN PROJECT AGREEMENT AGREEMENT, dated f tf, 1982, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and STATE OF MADHYA PRADESH, acting by its Governor (hereinafter called Madhya 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 twenty-seven million six hundred thousand Special Drawing Rights (SDR 27,600,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Madhya Pradesh agree to undertake such obligations toward the Association as are hereinafter set forth; and WHEREAS Madhya Pradesh, in consideration of the Asso- ciation's entering into the Development Credit Agreement with the Borrower, hat 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. Madhya 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, agricultural and engi- neering practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. - 2 - ction 2.02. 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 2.03. (a) Madhya Pradesh undertakes to insure, or make adequate 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 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 Madhya Pradesh to replace or repair such goods. (b) Madhya 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 purposes of the Project. Section 2.04 (a) Madhya Pradesh shall furnish to the Association, promptly upon their preparation, the plans, speci- fications, reports, contract documents and construction and procurement schedules for the Project, and any material modifica- tions thereof or additions thereto, in such detail as the Asso- ciation shall reasonably request. (b) Madhya Pradesh shall: (i) maintain or cause to be maintained 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) 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) 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) Upon the award by Madhya Pradesh 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, -3- 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 Madhya Pradesh and the Association, Madhya Pradesh 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 the Project, its cost and the benefits derived and to be derived from it, the performance by Madhya Pradesh and the Association of their respective obliga- tions under the Project Agreement and the accomplishment of the purposes of the Credit. Section 2.05. (a) Madhya 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) Madhya 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 Madhya Pradesh of its obli- gations under this Agreement. ARTICLE III Particular Covenants Section 3.01. Madhya Pradesh shall: (i) by November 30, 1982, establish and adequately staff a Quality Control unit within its Irrigation Department; and (ii) by March 31, 1983, furnish to the Association for its comments quality standards for the works to be carried out under the Project and a proposal for the methodology of implementing quality control. Section 3.02. Madhya Pradesh shall: (i) by November 30, 1982, sanction the posts required for strengthening the planning and monitoring unit within the Command Area Development Authority for the Project Area and appoint a Director of said unit; and (ii) by December 31, 1982, prepare in consultation with the Association a detailed plan for monitoring and evaluation. -4- Section 3.03. Madhya Pradesh shall: (i) select an agency to conduct water resources and management studies; (ii) by December 31, 1982, furnish to the Association for its comments a plan for water resource studies, including a detailed methodology and implementation schedule; and (iii) cause the selected agency to carry out said studies with due regard to the comments, if any, of the Association. Section 3.04. Madhya Pradesh shall: (i) by December 31, 1982, prepare and furnish to the Association for its review a detailed plan for a management study for the purpose of establishing rules, procedures and financial and other require- ments for securing effective operation and pr,ventive maintenance of the canal network in the Project Area; (ii) by June 30, 1983, carry out said study; and (iii) promptly thereafter inform the Association of the implementation uf the recommendations of the study. Section 3.05. Madhya Pradesh shall: (i) by December 31, 1982 prepare and furnish to the Association for its agreement a detailed plan for the establishment of a water and land manage- ment institute; and (ii) by September 30, 1983 establish such an institute. Section 3.06. Madhya Pradesh shall: (a) organize a rotational water allocation system for each block as soon as the construction of the augmentation tubewells and the block development works for the block have been completed; and (b) energize each of said augmentaton tubewells within one month after installation of the pump unit in the tubewells. Section 3.07. With the objective3 of ensuring recovery of annual operation and maintenance costs, and to the extent possi- ble, cost of infrastructure investment, having regard inter alia to incentives for, and payment capacity of, farmers, Madhya Pradesh undertakes: (i) by December 31, 1983, to review the water and water-related charges in Madhya Pradesh; and (ii) as soon as f6asible thereafter, to introduce and to enforce -.n appropriate system of water and water-related charges based on recommenda- tions arising from said review after paying due regard to the Association's comments, if any, on such recommendations. Section 3.08. Without limiting the generality of Section 2.01 of this Agreement, Madhya Pradesh shall, under arrangements -5- satisfactory to the Association and Madhya Pradesh, cause the dams and the related structures serving the Project to be period- ically inspected in accordance with sound engineering practice in order to determine whether there are any deficiencies in the condition of such structures, or in the the quality and adequacy of maintenance of methods of operations of the same, which may endanger their safety. Section 3.09. Madhya Pradesh undertakes to take all measures as may be considered necessary to minimize the risk of malaria and other water-related diseases within the Project Area. ARTICLE IV Financial Covenants Section 4.01. Madhya Pradesh shall cause its departments and other agencies and authorities responsible for carrying out the Project or any part thereof to: (i) maintain separate records and accounts adequate to reflect, in accordance with sound accounting principles and procedures consistently applied, its resources, expenditures and operation related to the Project; and (ii) furnish to the Association copies of their accounts and financial statements related to the Project for each fiscal year, certified as to their accuracy and authenticity by an independent auditor acceptable to the Association, as soon as available but in any case not later than nine months after the end of such year. Section 4.02. Madhya Pradesh shall cause its departments and other agencies and authorities responsible for carrying out the Project or any part thereof to: (i) have their accounts and financial statements related to 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 immediately following its finalization, 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, or cause to be furnished, to the Association such other information concern- ing said accounts and records, financial statements and the audit thereof as the Association shall from time to time reasonably request. - 6 - 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 Madhya Pradesh 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 20 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 Madhya Pradesh 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) For Madhya Pradesh: Chief Secretary Government of Madhya Pradesh Vallabh Bhavan Bhopal India 462006 Cable address: CHIEFSEC Bhopal India 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 Madhya Pradesh may be taken or executed by a Secretary to the Government of Madhya Pradesh or such other person or persons as Madhya Pradesh shall designate in writing, and Madhya Pradesh shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signa- ture 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 $$fRegional Vice President South Asia STATE OF MADHYA PRADESH By Authorized Representative -8- SCHEDULE Procurement A. 1. Drilling and well development works may be carried out either through force account or on the basis of competitive bidding advertised locally according to procedures satisfactory to the Association. 2. Contracts for works other than those mentioned under A.1 above, and for equipment, vehicles and materials may be procured on the *basis of competitive bidding advertised locally according to procedures satisfactory to t'e Association. B. 1. With respect to all contracts for civil works estimated to cost the equivalent of $1,000,000 or more: (a) Before bids are invited, Madhya 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 reason- ably 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, Madhya Pradesh 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 Asso- ciation, 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 this Schedule, promptly inform Madhya 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 which bids were asked. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the -9- submission to the Association of the first application for withdrawal of funds from the Credit Account !.n respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding para- graph, Madhya Pradesh shall furnish to the Association, promptly after its execution and prior to the submission to the Asso- ciation 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 this Schedule, promptly inform Madhya Pradesh and state the reasons for such 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 Certif cate and affixed the Seal of the Association thereunto the day of 1982RSCE. FOR SECRETARY