Philippines - National Fisheries Development Project : Loan 2156 - Project Agreement - Conformed

WAN NUMBER 2156 PH Project Agreement (National Fisheries Development Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and SAMAR SEA - TICAO PASS FISHERIES DEVELOPMENT CORPORATION Dated , 1982 LOAN NUMBER 2156 PH PROJECT AGREEMENT AGREEMENT, dated a, 1982, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and SAMAR SEA - TICAO PASS FISHERIES DEVELOPMENT CORPORATION (hereinafter called the Corporation). WHEREAS (A) by the Loan Agreement of even date herewith between the Republic of the Philippines (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to twenty-two million four hundred thousand dollars ($22,400,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Corporation agree to undertake such obligations toward the Bank as are hereinafter set forth; (B) by a subsidiary loan agreement to be entered into between the Borrower and the Corporation, a portion of the pro- ceeds of the loan provided for under the Loan Agreement will be made available to the Corporation on the terms and conditions therein set forth; and WHEREAS the Corporation, in consideration of the Bank's entering into the Loan 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 Loan Agreement, the Preamble to this Agreement and the General Conditions (as so defined) have the rerpective meanings therein set forth. ARTICLE II Execution of Part A of the Project Section 2.01. The Corporation shall carry out Part A of the Project, described in Schedule 2 to the Loan Agreement, with due -2- diligence and efficiency and in conformity with appropriate administrative, financial, engineering and fisheries practices. Section 2.02. In order to assist the Corporation in carrying out Part A of the Project, the Corporation shall appoint consul- tants, including the managing agents, and design engineering ,!onsultant for plans, specifications and tender documents, whose qualifications, experience and terms and conditions of appointment shall be satisfactory to the Bank in accordance with principles and procedures described 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. Section 2.03. Except as the Bank shall otherwise agree, procurement of the goods and civil works required for Part A of the Project and to be financed out of the proceeds of the Loan, shall be governed by the provisions of Schedule 1 to this Agree- ment. Section 2.04. (a) The Corporation undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan made avail- able 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 the Corporation to replace or repair such goods. (b) Except as the Bank may otherwise agree, the Corporation shall cause all goods and services financed out of the proceeds of the Loan made available to it by the Borrower to be used exclusively for the Project. Section 2.05. (a) The Corporation shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents, training programs and construction and procurement schedules for Part A of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Corporation: (i) shall maintain records and proce- dures adequate to record and monitor the progress of Part A 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 Loan, and to disclose their use in the Project; -3- (ii) shall enable the Bank's accredited representatives to visit the facilities and construction sites included in Part A of the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iii) shall furnish to the Bank at regular intervals all such information as the Bank shall reasonably request concerning Part A of the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. (c) Upon the award by the Corporation of any contract for goods, works or services to be financed out of the proceeds of the Loan, the Bank 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 Part A 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 the Corporation and the Bank, the Corporation shall prepare and furnish to the Borrower a report, of such scope and in such detail as the Bank shall reasonably request, on the execution and initial operation of Part A of the Project, its cost and the benefits derived and to be derived from it, the performance by the Corpora- tion and the Bank of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Loan. (e) The Corporation shall enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of the Corporation and any relevant records and documents. Section 2.06. The Corporation shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Bank shall otherwise agree, the Corporation 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 provision thereof. Section 2.07. (a) The Corporation shall, at the request of the Bank, exchange views with the Bank 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 Loan. -4- (b) The Corporation shall promptly inform the Bank of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Loan, or the performance by the Corporation of its obligations under this Agreement and under the Subsidiary Loan Agreement. ARTICLE III Management and Operations of the Corporation Section 3.01. (a) The Corporation shall at all times carry on its operations, manage its affairs, plan its future development and maZntain its financial position in accordance with sound financial, administrative, engineering and fishery practices, and under the supervision of experienced and competent management. (b) The Corporation shall operate and maintain its plants, equipment, properties and facilities and from time to time make all necessary renewals and repairs thereof in accordance with sound engineering and management practices. Section 3.02. The Corporation shall take out and maintain with responsible insurers, or make other provision satisfactory to the Bank for, insurance' against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.03. The Corporation shall not, without the consent of the Bank, sell, lease, transfer, or otherwise dispose of any of its properties or assets which shall be required for the efficient carrying out of its business, including the carrying out of Part A of the Project. Section 3.04. The Corporation shall at all times take all steps necessary to maintain its corporate existence and right to carry on its operations, including Part A of the Project, and shall, except as the Bank shall otherwise agree, take all steps necessary to acquire, maintain and renew such licenses, consents, franchises or other rights, as may be necessary or useful for the construction and operation of Part A of the Project and the conduct of its business. Section 3.05. The Corporation shall extend credits and other forms of assistance to fishermen in accordance with terms and conditions, and procedures satisfactory to the Bank, in- cluding those outlined in Schedule 2 to this Agreement. -5- Section 3.06. The Corporation shall appoint and maintain in those positions, a General Manager and his Deputies whose selec- tion, qualifications and terms and conditions of employment are satisfactory to the Bank. ARTICLE IV Financial Covenants Section 4.01. The Corporation shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 4.02. The Corporation shall: (i) have its accounts, including separate accounts with respect to the Project, and financial statements (balance sheets, statements of income and expenses, statement of sources and uses, and related state- ments) for each fiscal year audited, in accordance with appro- priate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six 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 Bank shall have reasonably requested and (iii) furnish to the Bank such other information concerning the accounts and financial statements of the Corporation and the audit thereof as the Bank shall from time to time reasonably request. Section 4.03. Except as the Bank shall otherwise agree, the Corporation shall maintain a debt/equity ratio of not more than 2.5:1. For the purposes of this Section: (a) the term "debt" means any debt incurred by the Corpora- tion, including debts assumed or guaranteed by the Corporation, and maturing by its term more than twelve months after the date on which it is originally incurred; (b) debt shall be deemed to be incurred (i) under a loan agreement or contract, on the date and to the extent that it is drawn down pursuant to such loan agreement or contract; and (ii) under a guarantee agreement, on the date the agreement providing for such guarantee is entered into but only to the extent that the guaranteed debt is outstanding; -6- (c) the term "equity" means the Corporation's paid-in capital, retained earnings, surplus and reserveg (including any revaluation reserve but excluding any reserve allocated to cover specific liabilities). 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 Loan Agreement becomes effec- tive. Section 5.02. This Agreement and all obligations of the Bank and of the Corportation thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms, and the Bank shall promptly so notify the Corpora- tion thereof. 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 Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America -7- Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For the Corporation: Samar Sea - Ticao Pass Fisheries Development Corporation c/o Philippines Fisheries Development Authority 7th and 8th Floors PPSTA Builidng Banaue Street, Quezon City, Metro Manila Philippines Telex: PT & T 2379 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 the Corporation may be taken or executed by its General Manager or such other person or persons as the Corporation shall designate in writing, and the Corporation shall furnish to the Bank 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 col- lectively 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 BANK FOR RECONSTRUCTION AND DEVELOPMENT By/ Regional Vice President East Asia and Pacific SAMAR SEA - TICAO PASS FISHERIES DEVELOPMENT CORPORATION By/I Authorized Representative -9- SCHEDULE 1 Procurement under Part A of the Project A. International Competitive Bidding 1. Except as provided in Part C hereof, goods and civil works 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 international competitive bidding 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, the Corporation shall prepare and forward to the Bank 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 there- to, as the case may be, a general procurement notice, in such form and detail and containing such information as the Bank shall reasonably request; the Bank will arrange for the publication of such notice in order to provide timely notification to prospective bidders of the opportunity to bid fcr the goods and works in question. The Corporation shall provide the necessary 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. (a) Construction of all landing facilities, ice plants (except the ice plant at Catbalogan), ice storage, chill rooms, slipway and repair shop, buildings and other structures, and on-site development shall be procured under a single contract. (b) Bidders for such works shall be prequalified as des- cribed in paragraph 1.3 of Part A of the Guidelines. 4. 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 - 10 - 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 iu Part A of this Schedule, goods manufactured in the Philippines 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 the Philippines if the bidder shall have established to the satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added in the Philippines 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 - 11 - goods uffered in each group C bid, for the purpose of this further comparison only, an amount equal to: (i) the amount of customs duties r,d 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 3uch 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. Construction of carrier boats by prequalified shipyards, procurement of boats (bancas), marine eagines and insulated and pick-up trucks, shall be carried out itt accordance with the Borrower's competitive bidding procedures satisfactory to the Bank. 2. Fishing gear, input supplies, spare parts, and communications and office equipment shall be procured in accordance with the Borrower's procurement procedures satisfactory to the Bank. D. Review of Procurement Decisions_by the Bank 1. Review of prequalification. If prequalification is required, the Corporation shall, before qualification is invited, inform the Bank in detail of the procedure to be followed, and shall intro- duce such modifications ir said procedure as the Bank shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequalification shall be furnished by the Corporation to the BaEk for its comments before the applicants are notified of the Corporation's decision, and the Corporation shall make such additions to, deletions from, or modifications in, the said list as the Bank shall reasonably request. 2. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for civil works, and goods estimated to cost the equivalent of $50,000 or more: - 12 - (a) Before bids are invited, the Corporation shall furnish to the Bank, 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 :or the bidding, and shall make such modifications in the said .ocuments or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Cor- poration shall, before a final decision on the award is made, inform the Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report, by the consultants referred to in Section 2.02 of this Agreement, on the evaluation and comparison of the bids received, together with the recom- mendations for award of the said consultants and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Cor- poration and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Bank'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 Bank promptly after its execution and prior to the submis- sion to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 3. With respect to each contract not governed by the preceding paragraph, the Corporation shall furnish to the Bank, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such con- tract, together with the analysis of the respective bids, recom- mendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Corporation and state the reasons for such determination. 13 - 4. 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 5% of the original price for civil works, and more than 15% of the original prices for all other contracts, the Corpora- tion shall inform the Bank of the proposed modification, waiver, extension or change order and the reasons therefor. The Bank, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform the Corpora- tion and state the reasons for its determination. - 14 - SCHEDULE 2 Assistance to Fishermen Principal Terms and Conditions and Procedures of the Credit in-kind Program Credit in-kind consisting of input supplies, such as sails, nets, fuel, bait and other items, as well as boats and engine will be available to fishermen participants. Such items procured by the Corporation will be passed on the fisherman at cost plus identifiable overheads. Repayment by fishermen is to be deducted from catches marketed by the Corporation. Interest on such credits in-kind would be at least the equivalent of 14% per annum. Terms would be flexible depending on the in-kind item except that credits on boats and engines will be amortized over a period not to exceed six years including one year of grace. A minimum down payment of 5% of the purchase price will be required for credits on boats and engines. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this dayof , 198 . FOR SECRETARY