India - Gujarat Water Supply And Sewerage Project : Credit 1280 - Credit Agreement - Conformed

O CFCA L CREDIT NUMBER 1280 IN Development Credit Agreement (Gujarat Water Supply and Sewerage Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1982 CREDIT NUMBER 1280 IN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated w), 1982, between India, acting by its President (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) by an agreement of even date herewith (hereinafter called the Gujarat Agreement) between the Association and the State of Gujarat, acting by its Governor (hereinafter called Gujarat), Gujarat has agreed to undertake certain obligations in respect of the Project; (C) by an agreement of even date herewith (hereinafter called the GWSSB Project Agreement) between the Association and the Gujarat Water Supply and Sewerage Board (hereinafter called GWSSB), GWSSB has agreed to carry out Parts A to G of the Project and to undertake certain other obligations in respect of the Project; (D) by an agreement of even date herewith (hereinafter called the AMC Project Agreement) between the Association and the Ahmedabad Municipal Corporation (hereinafter called AMC), AMC has agreed to carry out Part H of the Project and to undertake certain other obligations in respect of the Project; and WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth, in the Gujarat Agreement, in the GWSSB Project Agreement and in the AMC Project Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated June 30, 1980, with - 2 - the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agree- ments of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Gujarat" means the State of Gujarat, a State of India or any successor thereof; (b) "Gujarat Agreement" means the agreement of even date herewith between the Association and Gujarat, as the same may be amended from time to time, and such term includes all agreements supplemental to the Gujarat Agreement; (c) "Act" means the Gujarat Water Supply and Sewerage Act, 1978, as amended, of Gujarat; (d) "Corporation Act" means the Bombay Municipal Corpora- tion Act, 1949, as adopted and amended by Gujarat; (e) "GWSSB" means the Gujarat Water Supply and Sewerage Board, established under the Act; (f) "AMC" means the Ahmedabad Municipal Corporation estab- lished under the Corporation Act; (g) "GWSSB Project Agreement" means the agreement between the Association and GWSSB of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the GWSSB Project Agreement and all agreements supplemental to such agreement; (h) "AMC Project Agreement" means the agreement between the Association and AMC of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the AMC Project Agreement and all agreements supplemental to such Agreement; (i) "Financial Arrangements" means the arrangements under which Gujarat shall make available the proceeds of the Credit to GWSSB and AMC pursuant to Section 2.01 (b) and (c) of the Gujarat Agreement; and -3- (j) "Subsidiary Loan Agreements" means the agreements to be entered into between GWSSB and each of the Project Towns pursuant to Section 2.02 (a) of the GWSSB Project Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreements and all agreements supplemental to the Subsidiary Loan Agreements; (k) "Project Towns" means the municipal corporations of Rajkot, Bhavnagar and Jamnagar established under the Corporation Act and the municipalities of Anand, Godhra, Nadiad, and Savarkundla established under the Gujarat Municipalities Act, 1963, of Gujarat; (1) "Problem Village" means a village without an assured safe water supply source within a distance of 1.6 kilometers from said village; (m) "Rs" means rupees in the currency of the Borrower; and (n) "Fiscal Year" or "FY" means the Borrower's Fiscal Year commencing April 1 and ending March 31. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various curren- cies equivalent to sixty-three million eight hundred thousand Special Drawing Rights (SDR 63,800,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. 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 the GWSSB Project Agreement. Section 2.04. The Closing Date shall be September 30, 1987 or such later date as the Association shall establish. The Asso- ciation shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment c:hare shall be paid: (i) at such places as the Association slall reasonably request; (ii) without restrictions of any kind :mpose by, or in the territory of, the Borrower; and (iii) in th, currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.06. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.07. Service and commitment charges shall be payable semiannually on January 1 and July 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each January 1 and July 1 commencing January 1, 1993, and ending July 1, 2032, each installment to and including the installment payable on July 1, 2002, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.09. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. -5- ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Development Credit Agree- ment, the Borrower shall cause Gujarat to perform in accordance with the provisions of the Gujarat Agreement, all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable Gujarat to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall malke the proceeds of the Credit available to Gujarat in accordance with the Borrower's standard arrangements for development assistance to the States of India. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) Gujarat shall have failed to perform any of its obliga- tions under the Gujarat Agreement; (b) GWSSB shall have failed to perform any of its obliga- tions under the GWSSB Project Agreement; (c) AMC shall have failed to perform any of its obligations under the AMC Project Agreement; (d) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situa- tion shall have arisen which shall make it improbable that Gujarat, GWSSB or AMC will be able to perform their respective obligations under the Gujarat Agreement, the GWSSB Project Agree- ment or the AMC Project Agreement; (e) The Act or the Corporation Act shall have been amended, suspended, abrogated, repealed or waived so as to affect mate- rially and adversely the ability of GWSSB or AMC to perform any -6- of their respective obligations under the GWSSB Project Agreement or the AMC Project Agreement; and (f) Gujarat or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of GWSSB or for the suspension of its operations. Section 4.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) Any event specified in paragraphs (a), (b) and (c) of Section 4.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower; and (b) Any event specified in paragraphs (e) and (f) of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. The following are specified as additional matters, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be fur- nished to the Association: (a) that the Gujarat Agreement has been duly authorized or ratified by Gujarat, and is legally binding upon Gujarat in accordance with its terms; (b) that the GWSSB Project Agreement has been duly authorized or ratified by GWSSB, and is legally binding upon GWSSB in accordance with its terms; and (c) that the AMC Project Agreement has been duly authorized or ratified by AMC, and is legally binding upon AMC in accordance with its terms. Section 5.02. The date 2b, \&WV5 is hereby specified for the purposes of Section 12.04 of the General Conditions. -7 -I Section 5.03. The provisions of Section 4.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Any Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary or Under Secretary in the Department of Economic Affairs of the Ministry of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purpose of Section 11.01 of the General Conditions: For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: ECOFAIRS New Delhi 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- 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. INDIA By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President South Asia -9- SCHEDULE I Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Equipment and 28,500,000 materials (a) procured by 100% of foreign international expenditures and competitive 100% of local bidding expenditures (ex-factory) (b) procured by 40% methods other than inter- national competitive bidding (2) Civil works 26,600,000 40% (3) Consultants' ser- 3,100,000 100% vices, training and hydrogeological investigations (4) Loans under Part 2,130,000 Amounts disbursed G of the Project (5) Unallocated 3,470,000 TOTAL 63,800,000 - 10 - 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower. 3. The disbursement percentages have been calculated in com- pliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or ser- vices, or cn the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement, except that withdrawals in respect of Category (3) may be made in an aggregate amount not exceeding the equiva- lent of $2,350,000 on account of payments made for expenditures on consultants' services before that date but after August 15, 1981 and in an aggregate amount not exceeding the equivalent of $150,000 on account of payments made for expenditures on hydrogeological investigations before that date but after February 1, 1981; and (b) payments made for expenditures in a sub-project in any of the Project Towns until the Subsidiary Loan Agreement between GWSSB and the Project Town concerned has been executed. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 1 above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures - 11 - in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 12 - SCHEDULE 2 Description of the Project The Project consists of the following: Part A. Urban Water Supply Development of the water supply services in Anand, Jamnagar, Bhavnagar, Godhra and Nadiad through, inter alia, construction of treatment facilities, extensions to existing treatment facilities, construction of tube-wells and extensions of the existing distribution systems. Part B. Urban Sewerage 1. Construction of a new sewerage system for Rajkot with zonal lift-stations, a terminal pumping station and a treatment plant. 2. Extensions to the existing sewerage systems for Nadiad and Anand and construction of a new sewerage system for S:varkundla. Part C. Rural Water Supply 1. Provision of piped water supplies to about 255 Problem Villages divided into seven regional groups. 2. Provision of piped water supplies for about 110 individual Problem Villages. Part D. Low Cost Sanitation Provision of low-cost sanitation for fifteen selected middle-sized towns identified in the UNDP Global Project Number GLO/78/006. Part E. Common Services Construction of stores, workshops and depots, and provision of vehicles and sanitation equipment for GWSSB. Part F. Technical Assistance 1. Training of staff employed in the water supply and sewerage sector in Gujarat. - 13 - 2. Carrying out of an organizational and manaqement study for Rajkot's water supply and sewerage sector. 3. Carrying out of detailed engineering design and construction supervision for GWSSB and Rajkot. Part G. Loans Carrying out of a program of loans to low-income property owners for house connections to the sewerage systems to be constructed under Part B of the Project. Part H. AMC Urban Sewerage 1. Construction of two peripheral trunk sewers, two terminal pumping stations, and two sewage treatment plants. 2. Carrying out of detailed engineering design, and construction supervision for (1) above. The Project is expected to be completed by December 31, 1986. 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 J 198 Z. FOR SECRETARY