Ghana - Petroleum Refinery Rehabilitation And Technical Assistance Project : Credit 1446 - Project Agreement - Conformed

OFIC~IL CREDIT NUMBER 1446 GH DOCUNI'rTS Project Agreement (Petroleum Refinery Rehabilitation and Technical Assistance Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and GHANAIAN ITALIAN PETROLEUM COMPANY LIMITED Dated 1 CQ QL , 1984 CREDIT NUMBER 1446 GR PROJECT AGREEMENT AGREEMENT, dated /&(o rtS z' , 1984, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and GHANAIAN ITALIAN PETROLEUM COMPANY LIMITED (hereinafter called GHAIP). WHEREAS by the Development Credit Agreement of even date herewith between Republic of Ghana (hereinafter called the Borrower or Ghana) and the Association, the Association has agreed to make available to the Borrower an amount in variois currencies equivalent to six million six hundred thousand Special Drawing Rights (SDR 6,600,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that GRAIP agree to undertake such obligations toward the Association as are hereinafter set forth; WHEREAS by a, subsidiary loan agreement to be entered into between the Borrower and GHAIP, part of the proceeds of the Credit provided for under the Development Credit Agreement will be relent to GHAIP on the terms and conditions therein set forth; and WHEREAS GRAIP, in consideration of the Association's entering into the Development Credit 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. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. GRAIP shall carry out Part D of the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and petroleum practices, -2- To that end, GHAIP shall, until completion of the Project, main- tain in existence a Project team on terms and conditions satis- factory to the Association. Section 2.02. Except as the Association shall otherwise agree, procurement of the goods required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of the Schedule to this Agreement. Section 2.03. (a) GHAIP undertakes to insure, or make ade- quate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit relent to it by the Borrower against hazards incident to the acquisition, transporta- tion and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a cur- rency freely usable by GHAIP to replace or repair such goods. (b) GHAIP shall cause all goods financed out of the pro- ceeds of the Credit relent to it by the Borrower to be used exclusively for the purposes of Part D of the Project. Section 2.04. (a) GHAIP shall furnish to the Association, promptly upon their preparation, the plans, specifications, :eports, contract documents and work 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. (b) GHAIP shall: (i) maintain records and procedures ade- quate to record and monitor the progress of Part D of the Project (including its cost and the benefits to be derived from it), to identify the goods financed out of the proceeds of the Credit, and to disclose their use in such Part of the Project; (ii) ena- ble the Association's representatives to visit the facilities and construction sites included in Part D of the Project and to exa- mine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) furnish to the Associa- tion 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. (c) Upon the award by GHAIP of any contract for goods to be financed out of the proceeds of the Credit, the Association - 3 - may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) Promptly aftor 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 GHAIP and the Association, GHAIP shall, in cooperation with the Borrower, 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, the performance by GRAIP and the Association of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Credit. (e) GHAIP shall enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment of GHAIP and any relevant records and documents. Section 2.05. GRAIP shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Association shall otherwise agree, GHAIP 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 2.06. (a) GRAIP shall, at the request of the Asso- ciation, exchange views with the Association with regard to the progress of Part D of the Project, the performance of its obligations under this Agreement and under the Subsidiary Loan Agreement, and other matters relating to the purposes of the Credit. (b) GHAIP shall 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 Credit, or the performance by GHAIP of its obligations under this Agreement and under the Subsidiary Loan Agreement. Section 2.07. (a) GHAIP shall, upon completion of Part A.2 of the Project, review with the Borrower and the Association the recommendations emanating from the inspection included therein and, promptly upon completion of such review, take all action -4- necessary and appropriate to prepare a plan of action acceptable to the Association to implement such recommendations, taking into account the Association's comments thereon. (b) GHAIP shall, upon completion of Part A.6 of the Project, review with the Borrower and the Association the recom- mendations emanating from the inspection included therein and, promptly upon completion of such review, take all action neces- sary and appropriate to prepare a plan of action acceptable to the Association to implement such recommendations, taking into account the Association's comments thereon. (c) GRAIP shall, by December 31, 1984, review with the Borrower, the Association and GOIL the recommendations emanating from the study included in Part C of the Project and take all action necessary and appropriate to prepare a plan of action acceptable to the Association to implement such recommendations, taking into account the Association's comments thereon. ARTICLE III Management and Operations of GHAIP Section 3.01. GHAIP shall carry on its operations and conduct its affairs in accordance with sound administrative, financial, engineering and petroleum practices under the super- vision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. GRAIP shall at all times operate and maintain 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 petroleum practices. Section 3.03. GHAIP shall 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. ARTICLE IV Financial Covenants Section 4.01. GRAIP shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. - 5- Section 4.02. GHAIP shall: (a) have its accounts and financial statements (balance sheets, statements of income and expenses, funds flow statements and related statements) for each fiscal year audited, in accor- dance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (b) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year, (i) certified copies of its financial statements for such year as so audited, and (ii) the report of such audit by said auditors, of such scope and in such detail as the Assoc-iation shall have reasonably requested; and (c) 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 reasonably request. 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 Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of GHAIP thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date 14 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify GHAIP of this event. 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. -6- 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 Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For GHAIP: P.O. Box 599 Tema Ghana Telex: 2011 Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement or Section 2.10 of the Development Credit Agreement on behalf of GHAIP may be taken or executed by the Managing Director or such other person or persons as GHAIP shall designate in writing, and GHAIP shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signa- ture of each such person. -7- Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collec- tively 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 DEVELOPMENT ASSOCIATION By tsd1(k9VA. Regional Vice President Western Africa GHANAIAN ITALIAN PETROLEUM COMPANY LIMITED By AuthrId Rps ena Authori.zed Representative - 8 - SCHEDULE Procurement A. International Competitive Bidding 1. Except as provided in Part C hereof, goods shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the current edition of the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. For goods to be procured on the basis of international com- petitive bidding, in addition to the requirements of 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, 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 publica- tion of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods in question. The Borrower shall provide the necessary information to update such notice annually so long as any goods 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. 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 Ghana - 9 - 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 Ghana 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 Ghana 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 further comparison only, an amount equal to: (i) the amount of customs 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 - 10 -- which as a result of the comparison under paragraph 3 is the lowest evaluated bid shall be selected. C. Other Procurement Procedures 1. (a) Replacement parts required for Part D of the'Pro- ject, which need to be compatible with existing equipment may be purchased directly from the ori- ginal suppliers. (b) Goods (other than the replacement parts referred to above) required for Part D of the Project may be procured under contracts awarded after obtain- ing quotations from at least three (3) qualified suppliers eligible under the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977. 2. It is specified that the cost of goods which may be procured as provided in paragraph 1 above shall not exceed $1,000,000 equivalent. D. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts: (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 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 - 11 - 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 nct, 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. 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 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 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 q day of 4T l, 198 . FOR SECRETARY