Malawi - Fifth Education Project : Credit 1330 - Credit Agreement - Conformed

OFFICIAL DOCVUMENTS DIT NU1MBER 1330 MAI Development Credit Agreement (Fifth Education Project) between REPUBLIC OF MALAWI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated CL 1983 CREDIT NUMBER 1330 MAI DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated , 1983, between REPUBLIC OF MALAWI (hereinafter called the Borrower) and INTERNA- TIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Associa- tion). WHEREAS 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; and WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth; 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 General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "MOE" means the Ministry of Education and Culture of the Borrower; (b) "PIU" means the Project Implementation Unit of MOE referred to in Section 3.01 to this Agreement. (c) "MCC" means the Malawi Correspondence College; and (d) "MCA" means the Malawi College of Accountancy. - 2 - ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various curre - cies equivalent to thirty million nine hundred thousand Special Drawing Rights (SDR 30,900,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Asso- ciation, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 4 to this Agree- ment. Section 2.04. The Closing Date shall be September 30, 1988, or such later date as the Association shall establish. The Asso- ciation shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment 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. - 3 - 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 February 1 and August 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Feb- ruary 1 and August 1 commencing August 1, 1993, and ending Feb- ruary 1, 2033, each installment to and including the installment payable on February 1, 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 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. The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering, educational and planning practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the pur- pose. To this end, the Borrower shall: (i) maintain PIU in existence with the responsibili- ties described in Schedule 3 to this Agreement; and (ii) ensure that PIU shall employ a Project Manager, a Senior Architect, a Senior Procurement Officer and a Financial Controller, all of whose qualifica- tions and experience shall be acceptable to the Association, and such other staff as shall be necessary to carry out the Project. Section 3.02. (a) In order to assist the Borrower in carry- ing out the Project, the Borrower shall employ consultants and -4- experts whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association, such con- sultants and experts to be selected in accordance with principles and procedures described in the "Guidelines for the Use of Con- sultants by World Bank Borrowers and by the World Bank as Execu- ting Agency" published by the Bank in August 1981. (b) The Borrower shall, prior to carrying out the studies described in Part E (i), (ii) and (iii) of the Project, prepare and furnish to the Association, for its approval, the terms of reference including estimated costs and time table of said stu- dies. 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 fi- nanced out of the proceeds of the Credit to be used exclusively for the purposes of the Project until its completion. Section 3.04. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower shall: (i) maintain records and procedures adequate to record and monitor the progress 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 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. - 5 - (c) Upon the award by the Borrower of any contract for goods, works or services to be financed out of the proceeds of the Credit, 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 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 ini- tial operation 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 respective obligations under the Devel- opment Credit Agreement and the accomplishment of the purposes of the Credit. Section 3.05. The Borrower shall take or cause to be taken 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 Pioject and shall furnish to the Association, promptly after such acquisition, evidence satisfac- tory to the Association that such land and rights in respect of land are available for purposes related to the Project. Section 3.06. The Borrower shall, not later than Septem- ber 30, 1983, prepare and furnish to the Association a detailed plan acceptable to the Association for the training of staff of the Teacher Training Colleges included in the Project. Section 3.07. The Borrower shall, not later than Decem- ber 31, 1983, or such later date as the Borrower and the Associa- tion shall otherwise agree, appoint to MCC a deputy principal and five additional specialists to be responsible for preparing and revising subject study materials. Section 3.08. The Borrower shall, not later than Decem- ber 31, 1983, appoint to the Auditor General's office an audit specialist whose qualifications, experience and terms and condi- tions of employment shall be satisfactory to the Association. Section 3.09. The Borrower shall, not later than Septem- ber 30, 1983, prepare and furnish to the Association a detailed plan, acceptable to the Association, for the training of Malawian accountancy teachers. - 6 - Section 3.10. The Borrower shall review, jointly with the Association, about one year from the date of this agreement and thereafter annually for a period of four years, its education budget proposals, to assess the extent to which the Borrower's educational objectives are adequately met. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain, or cause to be maintained separate accounts adequate to reflect, in accor- dance with consistently maintained appropriate accounting prac- tices, the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower res- ponsible for carrying out the Project or any part thereof (the Project Accounts). (b) Without limitation to the foregoing, the Borrower shall: (i) maintain or cause to be maintained separate accounts reflecting all expenditures on account of which withdrawals are requested from the Credit Account on the basis of statements of expenditure; (ii) retain, until one year after the Closing Date, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing the expenditures on account of which withdrawals are requested from the Credit Account on the basis of statements of expenditure; and (iii) enable the Association's representatives to examine such records. (c) The Borrower shall: (i) have the Project Accounts for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors accept- able to the Association; (ii) furnish to the Association, as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by such auditors, of such scope and in such detail as the Association shall have reasonably requested, including, without limitation to the foregoing, a separate opinion by said auditors in respect of the expenditures and records referred to in para- graph (b) of this Section as to whether the proceeds of the Cre- dit withdrawn from the Credit Account on the basis of statements of expenditure have been used for the purpose for which they were provided; and (iii) furnish to the Association such other inform- ation concerning said accounts, records and expenditures and the audit thereof as the Association shall from time to time reason- ably request. -7- Section 4.02. The Borrower shall take or cause to be taken all measures required to ensure adequate operation, maintenance, repair and renewal of the facilities and equipment provided under the Project in accordance with appropriate administrative, finan- cial and educational practices and shall provide or cause to be provided, promptly as needed, the funds, services and other re- sources required for this purpose. ARTICLE V Termination Section 5.01. The date 3,\pri ' 1M'3 , is hereby specified for the purposes of Section 12.04 of the General Condi- tions. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Finance P. 0. Box 30049 Lilongwe 3, Malawi Cable address: Telex: FINANCE 4407 MI Lilongwe For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America -8- Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) 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 MALAWI Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /5/ J v - Regional Vice President Eastern Africa 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 ,mounts 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 16,910,000 80% (2) Furniture 1,080,000 (a) Directly 100% of foreign imported expenditures (b) locally manu- 100% of local factured (ex- expenditures factory cost) (c) locally pro- 80% cured but previously imported (d) local 80% of local transport expenditures (3) Equipment and 1,550,000 Vehicles (a) Directly 100% of foreign imported expenditures (b) locally manu- 100% of local factured (ex- expenditures factory cost) (c) locally pro- 80% cured but previously imported - 10 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (d) local 80% of local transport expenditures (4) Architectural 850,000 100% of foreign Engineering and expenditures auditing Con- and 80% of sultant Services local expendi- tures (5) Technical Assis- 1,370,000 100% of foreign tance and Studies expenditures and 80% of local expendi- tures (6) Training and 890,000 100% of foreign Fellowships expenditures and 80% of local expendi- tures (7) Project Admin- 260,000 80% istration (ex- cluding salaries) (8) Unallocated 7,990,000 TOTAL 30,900,000 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. - 11 - 3. Disbursements under Categories (2) (d), (3) (d), (6) (local training only) and (7) may be made on the basis of statements of expenditure which shall be in the forms and shall contain infor- mation satisfactory to the Association. 4. The disbursement percentages have been calculated in compli- ance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in res- pect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 5. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expen- ditures prior to the date of this Agreement. 6. 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 expen- ditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 7. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way re- stricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to to the Borrower, cancel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financ- ing out of the proceeds of the Credit. - 12 - SCHEDULE 2 Description of the Project The Project is designed to improve the Borrower's primary education, to expand the output of secondary level educational institutions, to increase the number of trained accountants and accounting technicians and to strengthen management of the Bor- rower's education and auditing systems. Part A: Primary Teacher Training (i) Construction, furnishing and equipping of three primary teacher training colleges at Domasi, Kasungu and Karonga, and expansion of the existing St. Joseph's Teacher Training College at Bembeke, to provide for a total of about 1,560 new student places, including teaching and boarding facilities, as well as staff houses. (ii) Training of teaching staff for the colleges referred to in (i) above. Part B: Correspondence Education (i) Construction, furnishing and equipping of about 25 MCC Centers to serve about 2,960 students. (ii) Renovation and expansion of MCC headquarters at Blantyre, including provision of equipment, furniture and staff houses, and construction and furnishing of two staff houses at Lilongwe and Mzuzu. (iii) Training of MCC staff, including in-service training of MCC's headquarters and Center staff, about 9 man- years of fellowships and participation in international correspondence education conferences. (iv) Improvement of MCC's evaluation activities through the provision of about two man-years of technical assistance. - 13 - Part C: Secondary Education (i) Construction, furnishing and equipping of a new secondary school in Lilongwe District providing for 480 student places, including teaching and boarding facilities as well as staff,houses. (ii) Renovation, expansion, furnishing and equipping of Livingstonia Secondary School to ,increase its capacity to 480 student places. Part D: Accountancy Education (i) Construction, furnishing and equipping of teaching and boarding facilities as well as staff houses for MCA on the grounds of the Malawi Polytechnic in Blantyre to provide a total of about 215 stu- dent places. (ii) Training of Malawian accountants through provision of about 8 man-years of technical assistance for MCA. (iii) Training of Malawian accountancy teachers through the provision of about 20 man-years of fellowships for Malawian accountancy teachers. Part E: Studies, Evaluation and Auditing (i) A feasibility study on the establishment of non- boarding secondary schools. (ii) A review of costs and management of the primary school self-help construction program to determine its cost effectiveness. (iii) Evaluation of the Borrower's educational system and preinvestment studies for proposed future pro- jects. (iv) Strengthening of MOE's planning and management capacity through the provision of about 10 man- years of fellowships to its Planning Unit and about 8 man-years of fellowships to PIU. -14- (v) Strengthening of the Borrower's Auditor General's office through the provision of about 3 man-years of technical assistance and about 6 man-years fellowships. Part F: PIU Technical Assistance 1. Strengthening PIU's accounting capability through the provi- sion of about 5 man-years of technical assistance. 2. Provision of about 18 man-years of technical services to PIU [financed by the Danish International Development Agency (DANIDA),] for the implementation of the Project. The Project is expected to be completed by March 31, 1988. - 15 - SCHEDULE 3 Responsibilities of PIU 1. Under the direction of MOE, the PIU shall, inter alia: (a) coordinate and integrate all Project activities with the ministries, departments and agencies of the Borrower partici- pating in the carrying out of the Project; (b) correspond with the Association on technical and other matters related to the Project; (c) prepare a comprehensive project implementation schedule for approval by the Association and update said schedule to ensure the timely implementation of the Project; (d) in collaboration with other concerned agencies of the Borrower, select consultants and specialists, prepare their terms of reference, and administer their contracts; (e) in collaboration with other agencies of the Borrower, select fellowship recipients and prepare training programs to be financed under the Project; (f) monitor the progress of studies, plans and new curri- cula related to implementation of the Project; (g) prepare lists of furniture, equipment and materials for the project; (h) prepare invitations to bid and arrange for review of tenders and award of contracts relating to the Project; (i) arrange for the regular inspection of all construction works; (j) ensure the appropriate training and upgrading of PIU staff; (k) maintain records and accounts and prepare for presenta- tion to the Association through proper channels applications for withdrawals from the Credit Account; and - 16 - (1) prepare progress reports to be furnished to the Asso- ciation within two months after each semi-annual period ending March 31 and September 30. - 17 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Part C hereof, goods and civil works shall be procured under contracts awarded in accordance with pro- cedures 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 bid- ding as described in Part A of the Guidelines. 2. For goods and works to be procured on the basis of interna- tional competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, the Borrower shall 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 prequalification documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Asso- ciation 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 provide the necessary information to update such notice annually so long as any goods or works remain to be procured on the basis of interna- tional 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. 4. To the extent practicable and consistent with appropriate technical standards and procurement practices contracts for civil - 18 - works, furniture and equipment shall be grouped for purposes of bidding so as to permit international procurement. 5. Bidders for civil works under the *roject shall be prequali- fied as described in paragraph 1.3 of Part A of the Guidelines. 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 Malawi 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 Malawi if the bidder shall have established to the satiSfaction of the Borrower and the Association that tie manufacturing cost of such goods includes a value added in Malawi 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 - 19 - 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 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. 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 Credit Agreement and to be procured in accordance with the procedures described in Part A of this Schedule, the Borrower 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 bidding 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 Bor- rower, 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. - 20 - D. Other Procurement Procedures 1. Civil works contracts estimated to cost less than $300,000 equivalent and contracts for furniture and equipment estimated to cost less than $100,000 shall be procured following competitive bidding advertised locally in accordance with procedures accept- able to the Association. 2. Contracts for goods and equipment estimated to cost less than $10,000 equivalent but not exceeding in aggregate $25,000 equivalent may be procured on a local shopping basis. E. Review of Procurement Decisions by the Association 1. Review of prequalification. The Borrower shall, before qualification is invited, inform the Association in detail of the procedure to be followed, and shall introduce such modifications in said procedure as the Association shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and, where applicable, of their eligibility for domestic preference under Part C above and of the reasons for the exclusion of any applicant for prequalification and for such eligibility shall be furnished by the Borrower to the Association for its comments before the applicants are notified of the Bor- rower's decision, and the Borrower shall make such additions to, deletions from, or modifications in, the said list as the Asso- ciation shall reasonably request. 2. Architectural sketch designs for civil works and master lists of furniture, equipment and vehicles, including proposed grouping, shall be submitted to the Association for its review and all the items procured shall be substantially in conformity with the designs, lists and specifications so approved. 3. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for civil works estimated to cost the equivalent of $300,000 or more and all contracts for furniture and equipment estimated to cost $100,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Association, 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 - 21 - for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably request. Any further modification 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, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, in suf- ficient 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 incon- sistent 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 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. 4. With respect to each contract not governed by the preceding paragraph, the Borrower shall furnish to the Association, prompt- ly after its execution and prior to the submission to the Asso- ciation of the first application for withdrawal of funds from the Credit 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 Association shall reasonably request. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Bor- rower and state the reasons for such determination. 5. 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 issu- ing 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 inform - 22 - the Association of the proposed modification, waiver, extension or change order and the reasons ther -. The Association, if it determines that the proposal would b. tconsistent with the pro- visions of this Agreement, shall promptly inform the Borrower and state the reasons for its determination. 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 ,-. Ri S FOR SECRETARY