India - Third Calcutta Urban Development Project : Credit 1369 - Credit Agreement - Conformed

F FICIAL DOCUMENTS DIT NUMBER 1369 IN Development Credit Agreement (Third Calcutta Urban Development Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated 1983 CREDIT NUMBER 1369 IN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated Qyz t ? , 1983, between INDIA, acting by its Presiddnt (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 between the Association and the State of West Bengal, the State of West Bengal has agreed to undertake certain obligations in respect of the carrrying out of the Project; (C) by an agreement of even date herewith between the Association and the Calcutta Metropolitan Development Authority, the Calcutta Metropolitan Development Authority has agreed to undertake certain obligations in respect of the carrrying out of the Project; and (D) the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower, upon the terms and conditions set forth hereinafter, in the West Bengal Agreement of even date herewith between the Association and the State of West Bengal and in the Project Agreement of even date herewith between the Association and the Calcutta Metropolitan Development Authority; 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 the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements of the Association being hereinafter called the General Conditions). - 2 - 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) "Act" means The West Bengal Town and Country (Planning and Development) Act, 1979, as amended; (b) "Authority" means the Calcutta Metropolitan Development Authority, a statutory body governed by the Act and such term shall include any successor thereto; (c) "Bustee" means an area occupied for the purposes of any collection of huts or other structures used or intended to be used for human habitation; (d) "CMA" means Calcutta Metropolitan Area, comprising the area described as such in the first Schedule to the Act, as such Schedule may be amended from time to time; (e) "CMWSA" means the Calcutta Metropolitan Water and Sanitation Authority; (f) "Corporation" means the Calcutta Municipal Corporation; (g) "Howrah" means the Howrah Municipal Corporation; (h) "Municipalities" means the 35 municipalities, 2 noti- fied areas, the Corporation and Howrah, all within CMA: (i) "Panchayat" means a non-municipal area within CMA; (j) "Project Agreement" means the agreement between the Association and the Authority 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 supple- mental to the Project Agreement; (k) "rupees" and "Rs." means rupees in the currency of the Borrower; (1) "West Bengal" means the State of West Bengal, acting by its Governor, a State of India or any successor thereto; and - 3 - (m) "West Bengal Agreement" means the agreement between the Association and West Bengal of even date herewith, as the same may be amended from time to time. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, an amount in various currencies equivalent to one hundred thirty-six million three hundred thousand Special Drawing Rights (SDR 136,300,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Sched- ule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Associa- tion, 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. (a) 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 Schedule 1 to the Project Agreement. (b) Where a contract is awarded for the supply for this Project of goods manufactured outside India, the Borrower shall immediately grant permission to import the goods covered by the contract, and all foreign exchange required therefor shall be promptly made available. Section 2.04. The Closing Date shall be March 31, 1989 or such later date as the Association shall establish. The Association 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 charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the 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. Commitment charges and service charges shall be payable semiannually on January 15 and July 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Janu- ary 15 and July 15 commencing July 15, 1993, and ending Janu- ary 15, 2033, each installment to and including the installment payable on January 15, 2003, 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. 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 West Bengal to perform in accor- dance with the provisions of the Project Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, ser- vices and other resources, necessary or appropriate to enable West Bengal to perform such obligations, and shall not take or - 5 - permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall make the proceeds of the Credit available to West Bengal in accordance with the Borrower's standard arrangements for developmental 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) West Bengal shall have failed to perform any of its obligations under the West Bengal Agreement. (b) The Authority shall have failed to perform any of its obligations under the Project Agreement. (c) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situation shall have arisen which shall make it improbable that West Bengal will be able to perform its obligations under the West Bengal Agreement or the Authority 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 the Authority 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) or (b) of Section 4.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower and West Bengal; and (b) any event specified in paragraph (d) of Section 4.01 of this Agreement shall occur. - 6 - ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) CMWSA has introduced the water supply rates in accor- dance with the provisions of Section 3.05 of the West Bengal Agreement; and (b) the Corporation has revised the rates for metered non-domestic water users in accordance with the provisions of paragraph 7 of the Schedule to the West Bengal Agreement. Section 5.02. 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 West Bengal Agreement has been duly authorized or ratified by West Bengal, and is legally binding upon West Bengal in accordance with its terms; and (b) that the Project Agreement has been duly authorized or ratified by the Authority and is legally binding upon the Authority in accordance with its terms. Section 5.03. The date q , is hereby specified for the purposes of Slction 12.04 of the General Condi- tions. Section 5.04. The provisions of Section 4.02 of this Agree- ment shall cease and determine on the date on which the Develop- ment 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 of the Department of Economic Affairs in the Ministry of Finance of the - 7 - 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: INDEVAS Washington, D.C. 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 Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION /# egional Vice President South Asia -8- SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the -roceeds 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) Civil works (a) contracts 20,400,000 70% procured through international competitive bidding (b) others 87,650,000 50% (c) area development 4,350,000 50% (2) Equipment and 16,030,000 100% of foreign vehicles expenditures, 100% of local expenditures (ex-factory cost) and 50% of local ex- penditures for other items pro- cured locally (3) Consultants 3,700,000 100% services and training (4) Unallocated 4,170,000 TOTAL 136,300,000 -9- 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 (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 the proceeds of the Credit 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 Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such Category as required to be consistent with the aforemen- tioned policy of the Association. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of expenditures made prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of SDR 463,600, may be made on account of expenditures made before that date but after March 1, 1983. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 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 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. - 10 - 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 expenditure 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 Asso- ciation's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 11 - SCHEDULE 2 Description of the Project The Project comprises part of the Authority's five year (1983-88) investment program to be carried out in CMA and con- sists of the following: Part A: Municipal Development Program The carrying out of a program to provide water supply, drainage, sanitation, transportation infrastructure, markets and community halls, and upgrading of the Bustees in the Munici- palities. Part B: Transmunicipal Infrastructure Program The carrying out of a program to provide critical infra- structure in the water supply, drainage, sanitation, transporta- tion and area development sectors. Part C: Calcutta-Howrah Investment Program The carrying out of a program of investments to optimize existing infrastructure in the Corporation and Howrah jurisdic- tions in the water supply, drainage, sanitation, Bustee improve- ment, traffic, transportation and urban renewal sectors. Part D: Complementary Programs The carrying out of CMA-wide complementary programs of shelter and area development, health, assistance to small-scale entrepreneurs, Panchayat development, technical assistance and training. The Project is expected to be completed by March 31, 1988. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the day of 198-,? FOR SECRETARY