Haiti - Urban Development Project : Credit 1338 - Credit Agreement - Conformed

OFFIC A DOCUMENTS CREDIT NUMBER 1338 HA Development Credit Agreement (Urban Development Project) between REPUBLIC OF HAITI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1983 CREDIT NUMBER 1338 HA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated /3/ , 1983, between REPUBLIC OF HAITI (hereinafter called the Borrower) and INTER- NATIONAL 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 Resolution No. IDA 82--6, adopted on October 26, 1982, of the Executive Directors of the Association there has been established by the Association a Special Fund constituted by the funds which shall be contributed by certain members of the Association and administered by the Association, acting as Administrator of such Special Fund, for the purpose of, and in accordance with, the provisions of said Resolution; (C) the Borrower has requested the Administrator for assistance from the resources of the Special Fund in the financing of Part A of the Project described in Schedule 2 to this Agreement and the Administrator has determined that such assistance would be in accordance with the provisions of the Resolution referred to above; (D) by the Special Fund Credit Agreement (hereinafter called the Special Fund Credit Agreement) of even date herewith, the Administrator has agreed to make available to the Borrower a Special Fund Credit (hereinafter called the Special Fund Credit) to assist in the financing of Part A of such Project, on the terms and conditions therein set forth; (E) Parts B and C of the Project will be carried out by Entreprise Publique de Promotion de Logements Sociaux (hereinafter called EPPLS), the Borrower's Public Social Housing Promotion Company, with the Borrower's assistance and, as part of such assistance, the Borrower will make available to EPPLS part of the proceeds of the Credit as hereinafter provided; (F) Part D of the Project will be carried out by an agency of the Borrower to be established before the Effective Date, with the Borrower's assistance and, as part of such assistance, the Borrower will make available to such agency part of the proceeds of the Credit as hereinafter provided, and -2- 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 and in the Project Agreement of even date herewith between the Association and EPPLS; 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 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 Gen- eral Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following addi- tional terms have the following meanings: (a) "SAGMAP" means Societe Autonome de Gestion des Marches de l'Aire de Port-au-Prince, a metropolitan market management agency to be established by the Borrower and to be responsible for the carrying out of Part D of the Project; (b) "Project Agreement" means the agreement between the Association and EPPLS 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; (c) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and EPPLS pursuant to Section 3.02 (b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement; (d) "SAGMAP Subsidiary Agreement" means the agreement to be entered into between the Borrower and SAGMAP pursuant to Section -3- 3.02 (d) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the SAGMAP Sub- sidiary Agreement; (e) "Special Account" means the account to be opened pur- suant to Section 2.02 (c) of this Agreement; (f) "MPW" means the Ministry of Public Works, Transport and Communications of the Borrower; (g) "Project Unit" means the unit established within the MPW; (h) "SCUD" means the special commission for urban develop- ment established by the Borrower on August 4, 1981, with such responsibilities as are set forth in Schedule 4 to this Agree- ment; and (i) "Project Preparation Advance" means the project pre- paration advance granted by the Association to the Borrower pursuant to an exchange of letters dated May 21, 1979, June 19, 1979, December 3, 1980 (countersigned by the Borrower on Febru- ary 20, 1981) and July 24, 1981 (countersigned by the Borrower on July 28, 1981) between the Borrower and the Association. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions set forth or referred to in this Agreement, an amount in various currencies equivalent to seven million four hundred thousand Special Drawing Rights (SDR 7,400,000). Section 2.02. (a) 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. (b) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit -4- Account and pay to itself the amount required to repay the prin- cipal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges there- on. The unwithdrawn balance of the authorized amount of the Pro- ject Preparation Advance shall thereupon be cancelled. (c) The Borrower, through its Ministry of Finance and Economic Affairs, shall, for the purposes of the Project, open a Special Account in a commercial bank or the Central Bank on terms and conditions satisfactory to the Association. Payments out of the Special Account shall je made exclusively to pay the reason- able costs of goods and services required to carry out the Pro- ject and to be financed under this Agreement in accordance with the provisions of the table set forth in paragraph 1 of Schedule 1 hereto. (d) The Association shall, upon receipt from the Borrower of an application for withdrawal and information identifying the Special Account, withdraw on behalf of the Borrower from the Credit Account and deposit in the Special Account an initial amount in the currency of the Borrower equivalent to SDR 460,000. Thereafter, at the request of the Borrower, the Association on behalf of the Borrower shall further withdraw from the Credit Account and deposit in the Special Account such amounts as shall be required to replenish the Special Account with amounts equal to payments made out of the Special Account for expenditures for the Project eligible for financing under this Agreement, but only to the extent that the amount of any such deposit, together with any amount remaining on deposit in the Special' Account as of the date of such request, shall not exceed in the aggregate the equivalent of SDR 460,000. Except as the Association shall otherwise determine, each such deposit after the initial deposit shall be withdrawn from the Credit Account under the same Cate- gories set forth in the table in paragraph 1 of Schedule 1 to this Agreement, and in the same respective amounts as have been justified by the evidence supporting the request for such deposits furnished pursuant to paragraph (e) of this Section. (e) Prior to or at the time of each request by the Borrower for a deposit into the Special Account, the Borrower shall furnish to the Association in respect of each payment out of the Special Account such documents and other evidence as the Associa- tion shall reasonably request, showing that such payment was made to pay the reasonable cost of goods or services required for the -5- Project and to be financed out of the proceeds of the Credit in accordance with Schedule 1 to this Agreement. (f) If the Association shall have determined that any pay- ment out of the Special Account: (i) was made for any expenditure or in any amount not eligible for financing by withdrawal from the Credit Account; or (ii) was not justified by the evidence furnished pursuant to paragraph (e) of this Section, the Borrower shall, promptly upon notice from the Association and, unless otherwise agreed by the Association, prior to any further deposit in the Special Account, deposit in the Special Account or refund to the Association an amount equal to the amount of such payment or of the portion thereof not so eligible or justified. (g) Notwithstanding the provisions of paragraph (d) of this Section, no further deposit in the Special Account shall be made when (i) the Association shall have determined that all further withdrawals can be made directly by the Borrower from the Credit Account under Section 2.02(a) of this Agreement, or (ii) when the total amount withdrawn from the Credit Account, plus the amount of any qualified agreement to reimburse made by the Association and of any special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions, shall have reached the equivalent of SDR 6,480,000, whichever shall be sooner. Withdrawal from the Credit Account of the remaining amounts of the Credit shall follow such procedures as shall be agreed between the Borrower and the Association and shall be made only to the extent that the Association shall be satisfied by the evidence submitted in support of the applications for such with- drawals that all payments by the Borrower out of the Special Account and out of -the proceeds of the Credit were made on account of the reasonable cost of goods or services required for the Project and to be financed out of the proceeds of the Credit in accordance with Schedule 1 to this Agreement. 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 Schedule 3 to this Agree- ment. Section 2.04. The Closing Date shall be December 31, 1987 or such later date as the Association shall establish. The Asso- ciation shall promptly notify the Borrower of such later date. - 6 - 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 Asso6iation 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 designat-d 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 June 1 and December 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installmenta payable on each June 1 and December 1 commencing June 1, 1993, and ending December 1, 2032, each installment to and including the installment payable on December 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. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out Part A of the Project and shall cause SAGMAP to carry out Part D of the Project with due diligence and efficiency and in conformity with appro- priate administrative, financial and engineering practices, and -7- shall provide, promptly as needed, the funds, facilities, ser- vices and other resources required for the purpose. (b) The Borrower shall exchange views with the Association in March of each year on the proposed budget allocations for the Project and prior to August 15 of each year on the adequacy thereof. (c) In order to assist the Borrower in the carrying out of Part A of the Project, the Borrower shall maintain, until the Borrower and the Association shall so determine, a Project Unit with such powers, responsibilities, personnel and resources as shall be satisfactory to the Association. Section 3.02. (a) Without any limitation or restriction upon any of its other obligations under the Development Credit Agree- ment, the Borrower shall cause EPPLS to carry out Parts B and C of the Project, and to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provi- sion of funds, facilities, services and other resources, neces- sary or appropriate to enable EPPLS 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 make part of the proceeds of the Credit available to EPPLS under a subsidiary loan agreement to be entered into between the Borrower and EPPLS under terms and con- ditions which shall have been approved by the Association, which shall include (i) 4% interest per annum for 25 years on the funds transferred for Part B.1 of the Project, (ii) the transfer as a non-revocable grant of the funds necessary for the carrying out of Parts B.2, B.3 and C of the Project. (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 Association and to accomplish the pur- poses of the Credit, and except as the Association shall other- wise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. (d) The Borrower shall, promptly after SAGMAP has been established, make part of the proceeds of the Credit available to SAGMAP, as a non-revocable grant, under a subsidiary agreement to be entered into between the Borrower and SAGMAP under terms and -8- conditions which shall have been approved by the Association which shall include, inter alia, the provisions set forth in Schedule 5 to this Agreement. (e) The Borrower shall exercise its rights under the SAGMAP Subsidiary Agreement in such a manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the SAGMAP Subsidiary Agreement or any provision thereof. Section 3.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards inci- dent 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 Borrower to replace or repair such goods. (b) The Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the purposes of the Project. Section 3.04. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, contract documents and construction and procurement schedules for Part A of the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain records and procedures 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 Credit, and to disclose their use in Part A of the Project; (ii) shall enable the Association's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association at regular intervals all such information as the Association shall reasonably request concern- ing Part A of the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. (c) Upon the award by the Borrower of any contract for goods, works or services to be financed out oi the proceeds of the Ciedit, the Association 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 Borrower and the Association, the Borrower shall prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution and initial operation of Part A of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Association of their respec- tive obligations under the Development Credit Agreement and the accomplishment of the purposes of the Credit. Section 3.05. (a) The Borrower shall take all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out the Project and shall furnish to the Association, promptly after such acquisition, evidence satisfactory to the Association that such land and rights in respect of land are available for purposes related to the Project. (b) The Borrower shall transfer to SAGMAP as a capital contribution, not later than December 31, 1983, 16 hectares of land at the Chancerelle military airport, for the construction of a wholesale market. (c) The Borrower shall utilize the existing facilities of the Gare Macdonald at Port-au-Prince as a passenger transport terminal. Section 3.06. Upon the construction of the facilities included in Part A of the Project, the Borrower shall assign to SAGMAP, under arrangements satisfactory to the Association, the operation and the maintenance of such facilities. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consis- tently maintained appropriate accounting practices the opera- tions, resources and expenditures, in respect of Part A of the - 10 - Project, of the departments or agencies of the Borrower respon- sible for carrying out Part A of the Project or any part thereof. (b) The Borrower shall: (i) establish and maintain separate accounts for Part A of the Project; (ii) have the Special Account referred to in Section 2.02 (c) of this Agreement and the separ- ate accounts referred to in paragraph (i) above for each fiscal year audited, in accordance with sound auditing principles con- sistently applied, by independent auditors acceptable to the Association; (iii) furnish to the Association as soon as avail- able, but in any case not later-than four months after the end of each such year, (A) certified copies of such accounts for such year as so audited and (B) a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iv) furnish to the Association such. other information concerning the accounts and the audit thereof as the Association shall from time to time reasonably request. ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the Gener- al Conditions the following additional events are specified pur- suant to paragraph (h) thereof: (a) EPPLS shall have failed to perform any of its obliga- tions under the Project Agreement; (b) 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 EPPLS will be able to perform its obligations under the Project Agreement; (c) the Decree-law of the Borrower establishing EPPLS, dated November 26, 1982, shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of EPPLS to perform any of its obligations under the Project Agreement; (d) SAGMAP shall have failed to perform any of its obliga- tions under the SAGMAP Subsidiary Agreement; - 11 - (e) the Decree-law of the Borrower establishing SAGMAP shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of SAGMAP to perform any of its obligations under the SAGMAP Subsidiary Agreement; (f) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of EPPLS or SAGMAP or for the suspension of their opera- tions; and (g) (i) Subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower to withdraw the proceeds of the Special Fund Credit or of any grant or loan made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor, or (B) the Special Fund Credit or any such loan shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, can- cellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement; and (B) ad-equate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. Section 5.02. For the purposes of Section 7.01 of the Gen- eral Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) any event specified in paragraphs (a) and (d) of Sec- tion 5.01 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; (b) any event specified in paragraphs (c), (e) and (f) of Section 5.01 of this Agreement shall occur; and - 12 - (c) any event specified in paragraph (g) (i) (B) of Section 5.01 of this Agreement shall occur, subject to the proviso of subparagraph (ii) of that paragraph. ARTICLE VI Effective Date; Termination Section 6.01. 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) that the Subsidiary Loan Agreement has been executed on behalf of the Borrower and EPPLS; (b) that SAGMAP has been established and the SAGMAP Subsidiary Agreement has been executed on behalf of the Borrower and SAGMAP; (c) that the Association has received evidence, satis- factory to the Association, that the Special Account has been established; and (d) that all conditions precedent to the effectiveness of the Special Fund Credit Agreement, except for the effectiveness of this Agreement, have been fulfilled. Section 6.02. 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 furnished to the Association: (a) that the Project Agreement has been duly authorized or ratified by EPPLS, and is legally binding upon EPPLS in accor- dance with its terms; (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and EPPLS and is legally binding upon the Borrower and EPPLS in accordance with its terms; (c) that all action necessary for the establishment of SAGMAP has been taken; and (d) that the SAGMAP Subsidiary Agreement has been duly authorized or ratified by the Borrower and SAGMAP and is legally - 13 - binding upon the Borrower and SAGMAP in accordance with its terms. Section 6.03. The date Pl . 3O,91?As hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.04. The provisions of paragraphs (a) and (b) 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 15 years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of Finance and Economic Affairs 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 purpose of Section 11.01 of the General Conditions: For the Borrower: Departement des Finances et des Affaires Economiques Palais des Ministeres Port-au-Prince, Haiti Telex: 3490347 For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Telex: 440098 (ITT) 248423 (RCA) or 64145 (WUI) - 14 - 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. REPUBLIC OF HAITI By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Latin America and the Caribbean - 15 - 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 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) Civil works and 4,500,000 100% of foreign related supervision, expenditures materials and and 77% of equipment for local expendi- Part B of the tures Project (2) Equipment for: 50,000 100% of foreign (a) Part C of expenditures the Project and 77% of (b) Part D of 35,000 local expendi- the Project tures (3) Technical assistance 100% of foreign and training for: expenditures (a) Part C of 640,000 and 10% of the Project. local expendi- (b) Part D of 50,000 tures the Project (4) Initial Deposit in 460,000 Amount due Special Account under Section 2.02 (d) of this Agreement (5) Refunding of Project 920,000 Amount due Preparation Advance under Section 2.02 (b) of this Agreement (6) Unallocated 745,000 TOTAL 7,400,000 - 16 - 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 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 sup- ply 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, in- crease 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 740,000, may be made in respect of Categories (1), (2) (a) and (3) (a) on account of expenditures made before that date but after August 1, 1982. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement iercentages 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 in- sufficient 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 ex- penditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. - 17 - 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 expend- itures 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 Borrow- er, 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. - 18 - SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A. Rehabilitation and Upgrading of the Croix-des-Bossales Central Market Area Construction of: (i) a wholesale market; (ii) two retail markets; (iii) an open-air market; (iv) an administrative build- ing; and (v) a building for public dormitories; and related infrastructure, at the Croix-des-Bossales central market area in Port-au-Prince. Part B. Sites and Services and Office Facilities for EPPLS 1. Provision of on-site infrastructure for, and construction of: (i) about 1,036 service sites in Port-au-Prince; (ii) about 1,093 service sites in Cap-Haitien; and (iii) about 278 service sites in Les Cayes. 2. Provision of off-site infrastructure for the service sites included in Part B.1 and construction of basic community facilities in Cap-Haitien and Les Cayes. 3. Rehabilitation and expansion of the administrative facili- ties of EPPLS. Part C. Technical Assistance, Training and Equipment for EPPLS 1. Provision of technical assistance and training for the reorganization of EPPLS. 2. Acquisition and utilization by EPPLS of micro-computing, engineering and office equipment. Part D. Technical Assistance, Training and Equipment for SAGMAP 1. Provision of technical assistance for drafting rules, operating procedures and operating budgets for SAGMAP, and of training for SAGMAP staff. 2. Acquisition and utilization by SAGMAP of micro-computing and office equipment. The Project is expected to be completed by June 30, 1987. - 19 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Goods and civil works for Parts B, C and D of the Project 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 and works for Parts B, C and D of the Project to be procured on the basis of international competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, the Borrower shall cause, EPPLS or SAGMAP, as the case may be, to prepare and forward to the Association 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 prequalifica- tion documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Association shall reasonably request; the Association 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 cause EPPLS or SAGMAP, as the case may be, to 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. 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 simi- lar taxes levied in connection with the sale or delivery, pur- suant 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. - 20 - B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedure described in Part A of this Schedule, goods manufactured in Haiti 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 Haiti if the bidder shall have established to the satis- faction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in Haiti 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 evalu- ated 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 fur- ther comparison only, an amount equal to: (i) the amount of cus- toms duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in - 21 - 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 low- est evaluated bid shall be selected. C. Preference for Domestic Contractors With respect to the evaluation of bids for any contract for civil works included under Category (1) of the table set forth in Schedule 1 to the Development Cr,dit Agreement and to be procured in accordance with the procedures described in Part A of this Schedule, EPPLS may grant a margin of preference of 7-1/2% to domestic contractors, in accordance with, and subject to, the following provisions: 1. Contractors applying for such preference shall be asked to provide, as part of the data for qualification, such informa- tion, including details of ownership, as shall be required to determine whether, according to the classification established by the Borrower and accepted by the Association, a particular firm or group of firms qualifies for a domestic preference. The bid- ding documents shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. 2. After bids have been received and reviewed by the Borrower, responsive bids will be classified into the following groups: (i) bids offered by domestic contractors eligible for preference; and (ii) bids offered by other contractors. For the purpose of evaluation and comparison of bids an amount equal to 7-1/2% of the bid amount shall be added to bids received under group (ii) above. D. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: - 22 - With respect to all contracts esti-ted to cost the equiva- lent of $250,000 or more: (a) Before bids are invited, the Borrower shall cause EPPLS or SAGMAP, as the case may be, to furnish to the Association, for its comments, the text of the invitations to bid and the specifi- cations and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably request. Any further modifi- cation to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Bor- rower shall cause EPPLS or SAGMAP, as the case may be, before a final decision on the award is made, to inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, -and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and EPPLS or SAG- MAP, as the case may be, and state the reasons for such deter- mination. (c) The terms and conditions of the contract shall not, without the Association'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 Association promptly after its execution and prior to the submission to the Association of the first application for with- drawal of funds from the Credit Account in respect of such con- tract. 2. With respect to each contract not governed by the preceding paragraph the Borrower shall cause EPPLS or SAGMAP, as the case may be, to furnish to the Association, promptly after its execu- tion and prior to the submission to the Association of the first application for withdrawal of funds from the Credit 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 Associa- tion shall reasonably request. The Association shall, if it - 23 - determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and EPPLS or SAGMAP, as the case may be, 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 10% of the original price, the Borrower shall cause EPPLS or SAGMAP, as the case may be, to inform the Association of the proposed modification, waiver, extension or change order and the reasons therefor. The Association, if it determines that the proposal would be inconsistent with the provisions of this Agree- ment, shall promptly inform the Borrower and EPPLS or SAGMAP, as the case may be, and state the reasons for its determination. - 24 - SCHEDULE 4 The Responsibilities of the SCUD The responsibilities of the SCUD will include: (a) the recruitment of SAGMAP management, including the director general, director of operations, the heads of personnel and accounting and the division chiefs, the recruitment of sup- port personnel, and the operation staff; (b) together with the SAGMAP management team: (i) the studying and planning of the temporary arrangements for market activities during con- struction; and (ii) the programing and overseeing of the proposed training of staff upon recruitment, according to the nature of their jobs; and (c) the preparation of SAGMAP's first operational budget presentation to the Board of Directors upon its formal establish- ment. - 25 - SCHEDULE 5 Terms and Conditions of the SAGMAP Subsidiary Agreement The SAGMAP Subsidiary Agreement shall include, inter alia, provisions requiring SAGMAP: (a) To carry out Part D of the Project described in Sched- ule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative and financial practices. (b) To, not later than 18 months after the Development Credit Agreement has been signed, employ consultants for the carrying out of Part D of the Project whose qualifications, experience and terms and conditions of employment shall be satis- factory to the Association, such consultants to be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Con- sultants by World Bank Borrowers and by the World Bank as Execut- ing Agency" published by the Bank in August 1981. (c) To procure the goods required for Part D of the Project and to be financed out of the proceeds of the Credit in accord- ance with the provisions of Schedule 3 to the Development Credit Agreement. (d) To insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit made available-to it by the Borrower against hazards inci- dent 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 SAGMAP to replace or repair such goods. (e) To cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclusively for the purposes of the Project. (f) To furnish to the Association, promptly upon their preparation, the plans, specifications, contract documents and procurement schedules for Part D of the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. - 26 - (g) To: (i) maintain records and procedures adequate to record and monitor the progress of Part D of the Project (in- cluding its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use in the Project; (ii) enable the Association's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) furnish to the Association at regular intervals all such information as the Association shall reasonably request concerning Part D of the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditures of such proceeds and the goods and services financed out of such proceeds. (h) To authorize the Association, upon the award by SAGMAP of any contract for goods, works or services to be financed out of the proceeds of the Credit, to publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (i) 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 SAGMAP and the Associatio., to prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution and initial operation of Part D of the Project, its cost and the benefits derived and to be derived from it, and the accomplishment of the purposes of the Credit. (j) Not to take or concur in any action which would have the effect of amending, abrogating, assigiing or waiving the SAGMAP Subsidiary Agreement or any provision thereof. (k) To, at the request of the Borrower or the Association, exchange views with the Borrower or the Association , as the case may be, with regard to the progress of Part D of the Project, the performance of its obligations under the SAGMAP Subsidiary Agreement, and other matters relating to the purposes of the Credit. (1) To promptly inform the Association of any condition which interferes or threatens to interfere with the progress of Part D of the Project, the accomplishment of the purposes of the - 27 - Credit, or the performance by SAGMAP of its obligations under the SAGMAP Subsidiary Agreement. (m) To establish, before the start of the operation of the facilities under Part A of the Project, and thereafter maintain a fee structure satisfactory to the Association so as to produce revenues sufficient to: (A) cover its operation and maintenance costs and the.depreciation of its fixed assets; and (B) maintain a ratio of operating costs to total revenues (working ratio) not greater than 0.9, in order to permit gradual upgrading and incor- poration of all municipal markets in the metropolitan area of Port-au-Prince. (n) To forward to the Association, for review, any invest- ment plan in an amount equivalent to $2,000,000 (two million dollars) or more. (o) To carry on its operations and conduct its affairs in accordance with sound administrative and financial practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. (p) To operate and maintain at all times its plant, machinery, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound engineering and financial practices. (q) To take out and maintain with responsible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. (r) To maintain records adequate to reflect, in accordance with consistently maintained appropriate accounting practices, its operations and financial condition. (s) To (i) establish and maintain a separate account for Part D of the Project; (ii) have its accounts (including the separate account referred to in paragraph (a) above) and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acc-itable to the Association; (iii) furnish to the Association as soon as available, but in any - 28 - case not later than four months after the end of each such year, (A) certified copies of the separate account referred to in para- graph (i) above and its financial statements for such year as so audited, and (B) a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Associa- tion shall have reasonably requested; and (iv) furnish to the Association such other information concerning said accounts, financial statements, records and expenditures, as well as the audit thereof, as the Association shall from time to time reason- ably request. (t) To employ and maintain a General Manager whose qualifi- cations, experience and terms and conditions of employment shall be satisfactory to the Association. (u) Upon construction of the facilities included in Part A of the Project, to enter into contractual arrangements, satisfac- tory to the Association, with the Borrower's agencies responsible for the provision of the support services for such facilities, regulating the provision of said services by said agencies. 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 '__ , 198.3 FOR SECRETARY