Tunisia - Second Urban Transport Project : Loan 2429 - Project Agreement - Conformed

OFFICIAL DOCUMENTS LOAN NUMBER 2429 TUN Project Agreement (Second Urban Transport Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and SOCIETE REGIONALE DE TRANSPORTS DE SFAX Dated , 1984 LOAN NUMBER 2429 TUN PROJECT AGREEMENT AGREEMENT, dated LL4U4* ag , 1984, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (herein- after called the Bank) and SOCIETE REGIONALE DE TRANSPORTS DE SFAX (hereinafter called SORETRAS). WHEREAS (A) by the Loan Agreement of even date herewith between the Republic of Tunisia (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Bor- rower an amount in various currencies equivalent to thirty-three million dollars ($33,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that SORETRAS agree to undertake such obligations toward the Bank as are hereinafter set forth; (B) by a subsidiary loan agreement to be entered into between the Borrower and SORETRAS, part of the proceeds of the Loan provided for under the Loan Agreement will be made available to SORETRAS on the terms and conditions therein set forth; and WHEREAS SORETRAS, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherver used in this Agreement, unless the context shall otherwise require, the several terms defined in the Loan Agreement, the Preamble to this Agreement and the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. SORETRAS declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Loan Agreement, and, to this end, shall carry out Part B (1) through (3) of the Project, described in said Schedule, with due - 2 - diligence and efficiency and in conformity with appropriate administrative, financial, engineering and public transport practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 2.02. (a) In order to assist SORETRAS in the carry- ing out of Part B (3) of the Project, SORETRAS shall employ management consultants whose qualifications, experience and terms of reference shall be satisfactory to the Bank. (b) In order to assist SORETRAS in the carrying out of Part B (1) and (2) of the Project, SORETRAS shall employ engineering and construction supervision consultants whose qualifications, experience and terms and conditions of employ- ment shall be satisfactory to the Bank, such consultants to be selected in accordance with principles and procedures satisfac- tory to the Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. Section 2.03. Except as the Bank shall otherwise agree, procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to the Loan Agreement. Section 2.04. (a) SORETRAS undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan relent to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by SORETRAS to replace or repair such goods. (b) SORETRAS shall cause all goods and services financed out of the proceeds of the Loan relent to Lt by the Borrower to be used exclusively for the purposes of the Project. Section 2.05. (a) SORETRAS shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for Part B (1) through (3) of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. -3- (b) SORETRAS: (i) shall maintain records and procedures adequate to record and monitor the progress of Part B (1) through (3) of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Loan, and to disclose their use in the Project; (ii) shall enable the Bank's representatives to visit the facilities and construction sites included in Part B (1) and (2) of the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iii) shall furnish to the Bank: (A) by April 30, August 31 and December 31 of each year a Project progress report concerning Part B (1) through (3) of the Project in such detail as the Bank shall reasonably request; and (B) at regular intervals all such information as the Bank shall reasonably request concerning Part B (1) through (3) of the Project, its cost and, where appro- priate, the benefits to be derived from it, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. (c) Upon the award of any contract for goods, works or services to be financed out of the proceeds of the Loan, the Bank may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) Promptly after completion of 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 SORETRAS and the Bank, SORETRAS shall prepare and furnish to the Bank a report, of such scope and in such detail as the Bank shall rea- sonably request, on the execution and initial operation of Part B (1) through (3) of the Project, its cost and the benefits derived and to be derived from it, the performance by SORETRAS and the Bank of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Loan. (e) SORETRAS shall enable the Bank's representatives to examine all plants, installations, sites, works, buildings, pro- perty and equipment of SORETRAS and any relevant records and documents. Section 2.06. SORETRAS shall duly perform all its obliga- tions under the Subsidiary Loan Agreement. Except as the Bank shall otherwise agree, SORETRAS shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Loan Agreement or any provi- sion thereof. Section 2.07. SORETRAS shall take or cause to be taken all such action as shall be necessary to acquire all such land and rights in respect of land as shall be required for the construction and operation of the facilities included in Part B (1) and (2) of the Project and shall furnish to the Bank, promptly after such acquisition, evidence satisfactory to the Bank that such land and rights in respect of land are available for purposes related to the Project. Section 2.08. (a) SORETRAS shall, at the request of the Bank, exchange views with the Bank with regard to the progress of the Project, the performance of its obligations under this Agree- ment and under the Subsidiary Loan Agreement, and other matters relating to the purposes of the Loan. (b) SORETRAS shall promptly inform the Bank of any condi- tion which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Loan, or the performance by SORETRAS of its obligations under this Agreement and under the Subsidiary Loan Agreement. ARTICLE III Management and Operations of SORETRAS Section 3.01. SORETRAS shall carry on its operations and conduct its affairs in accordance with sound administrative, financial and public transport practices tinder the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. SORETRAS shall at all times operate and main- tain 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, financial and public transport practices. Section 3.03. SORETRAS shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.04. SORETRAS shall take all steps necessary to acquire, maintain and renew all rights, powers, privileges and franchises which are necessary or useful in the conduct of its business. -5- Section 3.05. SORETRAS shall: (a) monitor its operations on the basis of a system of key technical and financial indicators and targets acceptable to the Bank; (b) furnish to the Bank by April 30 of each year, starting in 1985 until the completion of the Project, a report showing, in such detail as the Bank shall reasnnably request, the results of its operations in terms of said inaicators and targets; and (c) shall promptly take all such remedial action as the Bank may reasonably request to ensure that the targets referred to in paragraph (a) of this Section are met. Section 3.06. SORETRAS shall not, without the prior approval of the Bank, sell, lease or otherwise dispose of any of its pro- perties or assets required for the efficient operation of its business and undertakings. ARTICLE IV Financial Covenants Section 4.01. SORETRAS shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 4.02. For the purpose of computing its income and expenditures from its freight and passenger services, SORETRAS shall, by January 31, 1985, establish and thereafter maintain separate internal non-statutory income statements and state- ments of sources and applications of funds for its freight and passenger services. Section 4.03. SORETRAS shall: (a) have its accounts and financial statements (balance sheets, statements of income and expenditures and related statements including the statements referred to in Section 4.02 of this Agreement) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (b) furnish to the Bank as soon as available, but in any case not later than: (i) six months after the end of each such year copies of its unaudited financial statements for such year; and (ii) nine months after the end of each such year certified copies of its financial statements for such year as so audited and the report of such audit by said auditors of such scope and in such detail as the Bank shall have reasonably requested; and (c) furnish to the Bank such other information concerning said accounts, financial statements, records and expenditures, as well as the audit thereof, as the Bank shall from time to time reasonably request. Section 4.04. SORETRAS shall submit to the Bank for its review by September 30 of each year, starting in 1984, an invest- ment plan and financial projections for the next five years, of such scope and in such detail as shall be satLsfactory to the Bank. Section 4.05. SORETRAS shall take all action required on its part to implement a financial action plan (including a timetable for implementation) for SORETRAS' operations. Section 4.06. Except as the Bank shall otherwise agree, SORETRAS shall for its urban passenger service operations main- tain at all times after December 31, 1988, a ratio of direct operating expenses to total receipts of not more than 0.70 to 1. For the purposes of this Section: (a) The term "total receipts" means all revenues relating to urban passenger service operations including revenues from bus fares (net of taxes) and compensation for social tariffs, for the last twelve months. (b) The term "direct operating expenses" means expenditures incurred over the last twelve months for salaries, fuel, parts and other expenses related to urban passenger service operations, but excluding depreciation of assets related to urban passenger service operations and interest and other charges on debt related to urban passenger service operations. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Loan Agreement becomes effec- tive. - 7 - Section 5.02. This Agreement and all obligations of the Bank and of SORETRAS thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms, and the Bank shall promptly notify SORETRAS thereof. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- tion or suspension under the General Conditions. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT); Washington, D.C. 248423 (RCA); or 64145 (WUI). For SORETRAS: 3 Rue Aziza Othmana 3000 Sfax (Bab Bhar) Republic of Tunisia Cable Address: Telex: SOTRAS 40890. Sfax -8- Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of SORETRAS may be taken or executed by its President Director General or such other person or persons as its President Director General shall designate in writing, and SORETRAS shall furnish to the Bank sufficient evidence of the authority and the authenticated specimen signature of each such persono Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ k), Regional Vice President Europe, Middle East and North Africa SOCIETE REGIONALE DE TRANSPORTS DE SFAX By < Auth rized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this < -day of ,198 I. TOR SECRETARY