Tunisia - Mining Technical Assistance Project : Loan 2346 - Loan Agreement - Conformed

LOAN NUMBER 2346 TUN LDOCUJMENTS Loan Agreement (Mining Technical Assistance Project) between REPUBLIC OF TUNISIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated 7 , 1984 JOAN AGREEMENT AGREEMENT, dated 7, 1984, between REPUBLIC OF TUNISIA (hereinafter called the Borrower) and INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) any financing so provided by the Bank for Part A or Part B of the Project would be refunded, if the Bank so requests, out of the proceeds of any loan by the Bank which may later be granted for the construction of the facilities whose feasibility is to be studied under Part A or Part B of the Project, res- pectively; (C) by a Project Agreement of even date herewith between the Bank and Compagnie des Phosphates de Gafsa (hereinafter called CPG), CPG has agreed to undertake certain obligations in respect of carrying out Part A and Part B (1) (c) of the Project; and WHEREAS the Bank has agreed, on the basis inter alia of the foregolng, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in the Project Agreement of even date herewith between the Bank and CPG; 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 Loan and Gua- rantee Agreements of the Bank, dated October 27, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agree- ments of the Bank being hereinafter called the General Condi- tions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the -2- General Conditions and in the Preamble to this agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "CPG" means ne Compagnie des Phosphates de Gafsa, a societe anonyme esta-Ashed and operating under the Borrower's Code de Commerce; (b) "Statutes" means the statutes of CPG, registered with the Registre du Commerce at Sousse under the number 36; (c) "Project Agreement" means the agreement between the Bank and CPG of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; (d) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and CPG pursuant to Section 3.02 (a) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement; (e) "Subsidiary Loan" means the loan provided for under the Subsidiary Loan Agreement; (f) "DMG" means the Direction des Mines et de la Geologie, a directorate in the Borrower's Ministry of National Economy; (g) "ONM" means the Office National des i- .es, an etab- lissement public a caractere industriel et commercial established and operating in accordance with a Decret-Loi dated April 3, 1962; (h) "SDICS" means the Societe de Developpement des Indus- tries Chimiques du Sud, a societ' anonyme established and operat- ing under the Borrower's Code de Commerce; and (i) "Dinar" or the sign "DT" means the currency of the Borrower. ARTICLE I The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this -3- Agreement, an amount in various currencies equivalent to thirteen million four hundred thousand dollars ($13,400,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan 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 Bank, for expenditures made (or, if the Bank 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 Loan. Section 2.03. Except as the Bank shall otherwise agree, procuremet-t of the goods required for the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1987 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. rection 2.05. (a) The Borrower shall pay to the Bank a fee equivalent to thirty-three thousand four hundred sixteen dollars ($33,416). (b) On or promptly after the Effective Date, the Bank shall, on behalf of the Borrower, wichdraw from the Loan Account and pay to itself the amount of the said fee in such currency or currencies as the Bank shall determine. Section 2.06. The Borrower shall pay to the Bank a commit- ment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.07. (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time at a rate per annum for each Interest Period equal to one half percent per annum above the Cost of Qualified Borrowings for the last Semester ending prior to the comwiencement of such Interest Period. (h) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower of the Cost of Qualified Borrowings for such Semester. -4- (c) For purposes of this Section: (i) "Interest Period" means the six-month period commencing on each date specified in Section 2.08 of this Agreerent, including the Interest Period in which this Agreement is signed. (ii) "Cost" of Qualified Borrowings means the cost, expressed as a percentage per annum, as reasonably determined by the Bank, provided that the amount of $8,520.5 million referred to in (iii) (B) hereunder shall be reckoned at a cost of 10.93% per annum. (iii) "Qualified Borrowings" means (A) outstanding borrowings of the Bank drawn down after June 30, 1982; and (B) until July 1, 1985, the amount of $8,520.5 million (representing borrowings of the Bank between July 1, 1981 and June 30, 1982) less any part thereof repaid earlier than July 1, 1985. (iv) "Semester" means the first six months or the second six months of a calendar year. Section 2.08. Interest and other charges shall be payable semiannually on January 1 and July 1 in each year. Section 2.09. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Vroject Section 3.01. (a) The Borrower shall carry out: (i) Part B (1) (a) of the Project through DMG and SDICS; (ii) Part B (1) (b) of the Project through DMG and ONM; (iii) Part B (1) (c) of the Project through DMG and CPG; (iv) Part B (2) and (3) of the Project through DMG; and (v) Part C of the Project through DMG and ONM, with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and mining practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, staff, services and other re- sources required for the purpose. -5- (b) Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall cause CPG to perform in accordance with the provisions of the Project Agreement all the obligations of CPG therein set forth, and shall take or cause to be taken all action necessary or appropriate to enable CPG to perform such obligations. Section 3.02. (a) For the purpose of carrying out Part A and Part B (1) (c) of the Project, the Borrower shall relend to CPG out of the proceeds of the Loan the amounts allocated from time to time under Categories (1), (3) and (6) of the table set forth in paragraph 1 of Schedule 1 to this Agreement under a subsidiary loan agreement to be entered into between the Borrower and CPG, under terms and conditions which shall have been approved by the Bank including inter alia the following principal terms and conditions: (i) the principal amount of the Subsidiary Loan shall be repaid by CPG over a period of seventeen (17) years, including a grace period of four (4) years; (ii) the principal amount of the Subsidiary Loan repayable by CPG to the Borrower shall be the equivalent in Dinars of the amounts withdrawn from the Loan Account for expenditures under Parts A and B (1) (c) of the Project, such equivalent to be determined as of the date, or respective dates of, repayment; and (iii) CPG shall pay interest aL the rate of 10.50% per annum on the principal amount of the Subsidiary Loan withdrawn and outstanding from time to time, together with a fee equal to one quarter of one per cent (1/4 of 1%) of the Subsidiary Loan amount, and a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Subsidiary Loan not withdrawn from time to time. (b) For the purpose of carrying out Part B (1) (b) of the Project, the Borrower shall make available to ONM, on a grant basis, out of the proceeds of the Loan, the amounts allocated from time to time under Categories (2) and (5) of the table set forth in paragraph I of Schedule 1 to this Agreement. (c) The Borrower shall exercise its rights under the Sub- sidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan, and, except as the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsid- iary Loan Agreement or any provision thereof. - 6 - Section 3.03. The Borrower shall: (a) maintain within DMG during the execution of the Project a project unit, to be responsible for the coordination of actions under Part B of the Project, with such powers, functions, staff (including, without limitation, a full-time project manager, a geologist and an economist), facilities, equipment and work program as shall be satisfactory to the Bank; (b) (i) cause SDICS to maintain during the execution of the Project a project unit, to be responsible for the execution of Part B (1) (a) of the Project, with such powers, functions, staff, facilities, equipment and work program as shall be satisfactory to the Bank; and (ii) cause ONM to maintain during the execution of the Project a project unit, to be responsible for the execution of Part B (1) (b) of the Project, with such powers, functions, staff, facilities, equipment and work program as shall be satisfactory to the Bank; (c) cause DMG to assign during the execution of Part C of the Project a senior staff member with qualifications and experi- ence and with powers satisfactory to the Bank as coordinator for the carrying out of the study referred to in Part C of the Project; and (d) cause ONM to assign during the execution of Part C of the Project a staff member with qualifications and experience satisfactory to the Bank as project manager charged with main- taining liaison with DMG in the carrying out of the study referred to in Part C of the Project. Section 3.04. (a) The Borrower shall cause SDICS to employ technical consultants with qualifications, experience and terms and conditions of employment satisfactory to the Bank to assist SDICS in the execution of Part B (1) (a) of the Project. (b) The Borrower shall cause: (i) DMG to employ technical advisers to assist DMG in the coordination and execution of Part B of the Project; (ii) DMG to employ technical and marketing consultants, respectively, to assist DMG in the execution of Part B (2) and (3) of the Project, respectively; (iii) ONM to employ technical consultants to assist ONM in the execution of Part B (1) (b) of the Project; and (iv) ONM to employ mining, mineral economics and geological consultants to assist ONK in the execution of Part C of the Project. - 7 - (c) The advisers and consultants referred to in paragraph (b) of this Section shall have qualifications, experience and terms and conditions of employment satisfactory to the Bank and shall be selected in accordance with principles and procedures satisfactory to the Bank 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 3.05. (a) The Borrower undertakes to insure, or make adequate provision for th. insurance of, the imported goods to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indem- nity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) The Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the purposes of the Project. Section 3.06. (a) The Borrower shall furnish or cause to be furnished to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for Part B and Part C of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower: (i) shall cause DMG, ONM and SDICS to maintain records and procedures adequate to record and monitor the progress of their respective Project components specified in Section 3.01 (a) of this Agreement (including their cost and the benefits to be derived therefrom), to identify the goods and services financed out of the proceeds of the Loan, and to dis- close their use in the Project; (ii) shall enable the Bank's representatives to visit the facilities included in Part B of the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; (iii) shall furnish to the Bank within 15 days after the end of each month a summary statement on the progress of Part B and Part C of the Project; and (iv) shall furnish to the Bank within 45 days after the end of each calendar quarter progress reports including such information as the Bank shall reasonably request concerning Part B and Part C of the Project, their cost and, where appropriate, the benefits to be derived therefrom, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. -8- (c) Upon the award of any contract for goods 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 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 Borrower and the Bank, the Borrower shall cause DMG to prepare, and shall furnish to the Bank, a report, of such scope and in such detail as the Bank shall reasonably request, on the execution of Part B and Part C of the Project, their cost and the benefits derived and to be derived therefrom, the performance by the Borrower and the Bank of their respective obligations under the Loan Agreement and the accomplishment of the purposes of the Loan. Section 3.07. The Borrower shall: (a) (i) furnish to the Bank for its approval, on the basis of a review of the actions taken under Part B (1) of the Project, a plan for the carrying out of the study referred to in Part B (2) of the Project; and (ii) after approval the, oGf by the Bank, carry out such plan in accordance with a timetable satisfactory to the Bank; and (b) furnish to the Bank for its review, within three months after the completion of the studies referred to in Part B (2) and (3) and Part C of the Project, the conclusions and recom- mendations thereof, and consult with the Bank before implementing said recommendations. ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, -9- realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property or as security for the payment of debt incurred for the purpose of financing the purchase of such property; and (ii) any lien aris- ing in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means -ssets of the Borrower, of any political or administrative sub- division thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section 4.02. The Borrower shall cause each of DMG, ONM and SDICS: (a) to establish and maintain separate accounts adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations, resources and expenditures in respect of the Project; (b) to cause said accounts for each fiscal year to be audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (c) to furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, - 10 - (i) certified copies of said accounts for such year as so audited, and (ii) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (d) to furnish to the Bank such other information concern- ing said accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.03. The Borrower shall cause each of ONM and SDICS: (a) to take out and maintain with responsible insurers, or to make other provision satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice; (b) to carry on its operations and conduct its affairs in accordance with sound administrative, financial, engineering and mining practices under the supervision of qualified and ex- perienced management assisted by competent staff in adequate numbers; and (c) at all times to operate and to maintain its plants, machinery, equipment and other property, and from time to time, promptly as needed, to make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and mining practices. ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the Gen- eral Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) CPG shall have failed to perform any of its obligations under the Project Agreement or the Subsidiary Loan Agreement. (b) As a result of events which have occurred after the date of the Loan Agreement, an extraordinary situation shall have arisen which shall make it improbable that CPG will be able to perform its obligations under the Project Agreement. - 11 - (c) The Statutes shall have been amended, suspended, abro- gated, repealed or waived so as to affect materially and adversely the ability of CPG to perform any of its obligations under the Project Agreement. (d) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of any of CPG or ONM or for the suspension of its opera- tions. Section 5.02. For the purposes of Section 7.01 of the Gen- eral Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) the event specified in paragraph (a) of Section 5.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof s'all have been given by the Bank to the Borrower; and (b) any event specified in paragraphs (c) or (d) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an additional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely, that the Subsidiary Loan Agreement has been duly executed on behalf of the Borrower and CPG. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be fur- nished to the Bank: (a) that the Project Agreement has been duly authorized or ratified by CPG, and is legally binding upon CPG in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and CPG and is legally binding upon the Borrower and CPG in accordance with its terms. Section 6.03. The date / Z / ? f - , is hereby specified for the purposes of Section 12.04 of the General Conditions. - 12 - ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Ministre du Plan of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11..01 of the General Conditions: For the Borrower: Ministere du Plan Place Ali Zouaoui Tunis Tunisia Cable address: Telex: MIPLAN MIPLAN 12117 Tunis TN For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT); Washington, D.C. 248423 (RCA); or 64145 (WUI). - 13 - IN WITNESS WHEREOF, the parties hereto, acting through their represent.atives 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. REPUBLIC OF TUNISIA By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Europe, Middle East and North Africa - 14 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Consultants' 8,000,000 90% of local ex- services under penditures for Part A of the services of con- Project sultants domi- ciled within the territory of the Borrower, and 100% of foreign expenditures for services of other consultants (2) Equipment under 600,000 ) 100% of foreign Part B (1) (b) ) expenditures of the Project ) and 90% of local ) expenditures (for (3) Equipment under 600,000 ) items procured Part B (1) (c) ) locally) of the Project ) (4) Technical 700,000 ) 90% of local ex- advisers' services ) penditures for under Part B of ) services of ad- the Project ) visers and con- ) sultants domi- (5) Consultants' 300,000 ) ciled within the services under ) territory of the Part B (1) (b) ) Borrower, and of the Project ) 100% of foreign ) expenditures for ) services of other (6) Consultants' 100,000 ) advisers and con- services under ) sultants Part B (1) (c) ) of the Project ) - 15 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (7) Equipment under 300,000 100% of foreign Part B (2) of expenditures the Project and 90% of local expenditures (for items procured locally) (8) Consultants' 800,000 ) 90% of local services under ) expenditures for Part B (2) of ) services of con- the Project ) sultants domi- ) ciled within the (9) Consultants' 100,000 ) territory of the services under ) Borrower, and Part B (3) of ) 100% of foreign the Project ) expenditures for ) services of other (10) Consultants' 200,000 ) consultants services under ) Part C of the ) Project ) (11) Fee 33,416 Amount due under Section 2.05 (a) of this Agreement (12) Unallocated 1,666,584 TOTAL 13,400,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; and - 16 - (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 Bank that the proceeds of the Loan shall not be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; on this basis, if the amount of any such taxes levied on or in respect of items in any Category decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the dis- bursement percentage then applicable to such Category as required to be consistent with the aforementioned policy of the Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) expenditures made prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $1,300,000, may be made in respect of Categories (1), (2), (3), (4), (5) and (6) on account of expenditures made before that date but after August 1, 1983; and (b) expenditures (i) in respect of Categories (7) and (8), until the plan referred to in Section 3.07 (a) of this Agreement has been approved by the Bank; and (ii) in respect of Category (10), until the coordinator and the project manager referred to in Section 3.03 (c) and (d) of this Agreement, respectively, have been assigned in accordance with the provisions thereof. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph I above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Cate- gory, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disburse- ment percentage then applicable to such expenditures in order - 17 - that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the pro- curement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditure for such item shall be financed out of the proceeds of the Loan, and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 18 - SCHEDULE 2 Description of the Project The objectives of the Project are to assist the Borrower in developing its mining sector by studying the feasibility of new phosphate and potash development projects and by creating an in- stitutional framework for the establishment of minerals explora- tion policies, and to assist CPG in improving its operational efficiency. The Project consists of the following Parts: Part A: (1) Training of CPG personnel in the maintenance of equipment and plant process control. (2) The carrying out of a study of CPG's spare parts and storage management and training of CPG staff in spare parts and storage management. (3) The carrying out of a study of CPG's personnel management and training of CPG staff in personnel management techni- ques. (4) The carrying out of a technical and organizational study of CPG's underground mines and training of CPG staff in under- ground mining and organization techniques. (5) The carrying out of a study of CPG's organizational struc- ture, financial management, cost control and management information and training of CPG staff in financial manage- ment, cost control and management information techniques. (6) The carrying out of a feasibility study and the preparation of engineering designs for the expansion of the production capacity of the Kef Eschfair open pit mine. (7) The carrying out of a study and the preparation of engineer- ing designs for the rehabilitation of CPG's washing plants at Metlaoui and M'Dilla and for the improvement of its mate- rial handling facilities at M'Dilla. (8) The carrying out of a study of the feasibility of the ex- ploitation and beneficiation of the Djellabia deposit. - 19 - (9) The carrying out of studies evaluating the feasibility of the exploitation and beneficiatioh of deposits at Oum El Khecheb and Sehib South. Part B: (1) The carrying out of geological and geochemical surveys, exploration drillings, pumping and processing tests permitting the identification of the configuration of a viable potash development project at: (a) Zarzis; (b) El Adibate; and (c) Chott El Jerid. (2) If, and to the extent, the Bank agrees that such study is warranted on the basis of a review of the results of the actions under Part B (1) of the Project, the carrying out of a detailed feasibility study for a possible potash development project. (3) The carrying out of a marketing study for potash. Part C: The carrying out of a study: (a) formulating guidelines for ONM data collection, analysis, and evaluation; (b) establishing criteria for ONM's exploration policies and investments; and (c) formulating organizational, budget, staffing and training requirements for ONM. T P * The Project is expected to be completed by June 30, 1987. - 20 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each January 1 and July 1 beginning January 1, 1988 through January 1, 2000 515,000 On July 1, 2000 525,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal; see General Conditions, Section 3.04. - 21 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.04 (b) of the General Conditions: Time of Prepayment Premium The interest rate (ex- pressed as a percentage per annum) applicable to the balance outstanding on the Loan on the day of prepayment multiplied by: Not more than three years 0.18 before maturity More than three years but 0.35 not more than six years before maturity More than six years but 0.65 not more than 11 years before maturity More than 11 years but not 0.88 more than 15 years before maturity More than 15 years 1.00 before maturity - 22 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Part C hereof, goods shall be procured under contracts awarded in accordance with procedures 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 bidding as described in Part A of the Guidelines. 2. For goods to be procured on the basis of international com- petitive bidding, in addition to the requirements of paragraphs 1.2 of the Guidelines, the Borrower 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 documents, 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 for the goods and works in question. The Borrower 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. Contracts for goods shall be grouped to the extent possible. 4. 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 connection with the importation, or the 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 (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. - 23 - 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 the Republic of Tunisia 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. Aft.r evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactu:ed in the Republic of Tunisia 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 Republic of Tunisia 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 evaluated 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 goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to: (i) the amount of customs duties and other import taxes which a non-exempt importer - 24 - 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 such 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 Contracts for goods estimated to cost the equivalent of $100,000 or less each and in the aggregate not exceeding the equivalent of $850,000 may be procured through limited interna- tional tendering procedures on the basis of evaluations and com- parisons of bids invited from a list of at least three qualified manufacturers or suppliers eligible under the Guidelines and in accordance with procedures set forth in Part A of the Guidelines (excluding paragraphs 1.2 and 3.9 thereof) and paragraph A.4 of this Schedule. D. Review of Procurement Decisions by the Bank 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for goods estimated to cost more than the equivalent of $100,000 each: (a) Before bids are invited, the Borrower 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 for the bidding, and shall make such modifications in the said docu- ments 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 Borrower 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 on the evaluation and comparison of the bids received and such other information as the Bank shall reasonably request. The Bank shall, if it determines - 25 - that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower 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 was 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. 2. With respect to each contract not governed by the preceding paragraph, the Borrower 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 contract, together with the analysis of the respective bids, recommendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the ward of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. 3. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or 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 30% of the original price, the Borrower 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 Borrower and state the reasons for its determination. 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 day of r 198 . FOR SECRETARY