Ghana - Road Rehabilitation And Maintenance Project : Credit 1601 - Japanese Agreement - Conformed

OFFICIAL ~DOCUMENTS C,/c/C JAPANESE GRANT NUMBER 1601-1 GH Japanese Grant Agreement (Road Rehabilitation and Maintenance Project) between REPUBLIC OF GHANA and INTERNATIONAL DEVELOPmENT ASSOCIATION as AWyMINISTRATOR of the Japanese Funds within the framework of the SPECIAL FACILITY for SUB-SAHARAN AFRICA Dated , 1987 JAPANESE GRANT NUHBER 1601-1 CH JAPANESE GRANT AGREEMENT AGREEMENT, dated 0 , 1987, between REPUBLIC OF GHANA (the Beneficia4) and INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of the Japanese funds within the framework of the Special Facility for Sub-Saharan Africa (the Administrator). WHEREAS (A) the Executive Directors of the International Development Association (IDA) have established by their Resolu- tion No. IDA 85-1 of May 21, 1985, (the Resolution), a Special Facility for Sub-Saharan Africa (the African Facility) consti- tuted by the funds which shall be contributed by the Inter- national Bank for Reconstruction and Development (the Bank) and other donors and administered by IDA, acting as Administrator of the African Facility, for the purpose of, and in accordance with, the provisions of the Resolution; (B) Pursuant to Section F of the Resolution, the Government of Japan (Japan) has agreed to provide Japanese funds in the form of grants (the SJF Grants) in support of projects of structural change, policy reform and institutional improvement in countries which are eligible for financing from the African Facility's resources; (C) by the notes exchanged between Japan and IDA on Novem- ber 20, 1985, (the Notes), concerning the SJF Grants, Japan and IDA agreed that IDA will act as Administrator of the Japanese funds (the Administrator) in accordance with the provisions of Zhe Notes; (D) the Beneficiary has requested Japanese funds from the Administrator for the financing of mobile highway maintenance units (including spare parts and a portion of the operating costs thereof) under the Project described in Schedule 2 to the African Facility Credit Agreement (Road Rehabilitation and Main- tenance Project) dated October 23, 1985, between the Beneficiary and the Administrator (the African Facility Credit Agreement), and the Administrator has determined that the provision of such funds (the Japanese Grant) would be in accordance with the pro- visions of the Resolution; (E) the Beneficiary has also requested IDA to provide addi- tional assistance towards the financing of the Project and by an agreement dated June 24, 1985 between the Beneficiary and IDA -2- (the Development Credit Agreement), IDA is agreeing to provide such assistance in an amount of forty million four hundred ttousand Special Drawing Rights (SDR 40,400,000) (the IDA Credit); (F) the Beneficiary has requested IDA, acting as Adminis- trator of the African Facility, to provide additional assistance in support of the Project and, by the African Facility Credit Agreement, IDA acting as such Administrator is agreeing to pro- vide a financial contribution in an aggregate principal amount equivalent to ten million one hundred thousand Special Drawing Rights (SDR 10,100,000) (the African Facility Credit); WHEREAS the Administrator has agreed on the basis, inter alia, of the foregoing, to extend, the Japanese Grant to the Beneficiary in support of the Project, upon the terms and condi- tions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Develop- ment Credit Agreements" of IDA, dated January 1, 1985, with the modifications set forth below (the General Conditions) constitute an integral part of this Agreement: (a) the term "Association", when used in the General Condi- tions, means the Interna.ional Development Association acting as Administrator of the Japanese Grant, except in the phrase "member of the Association" in Sec:ions 2.01 (5), 4.02 (b) and 6.02 (e) thereof; (b) the terms "Development Credit Agreement", "Credit" and "Credit Account", when used in the General Conditions, are amended to read "Japanese Grant Agreement", "Japanese Grant" and "Japanese Grant Account", respectively; (c) Section 2.01, paragraph 11, shall be modified to read: '"Project" means the imports of equipment for the Ghana Highway Authority's mobile maintenance units (including spare parts and a portion of the operating costs -3- thereof) that may be financed out of the proceeds of the Japanese Grant pursuant to the provisions of Schedule 1 to the Japanese Grant Agreement.;' (d) the last sentence of Section 3.02 is deleted; (e) the second sentence of Section 5.01 is deleted; (f) in Sections 6.02 and 7.01, the term "Association" shall also include the International Development Association acting in its own capacity; and (g) Section 9.06 (c) shall be modified to read: "(c) Not later than six months after the Closing Date or such later date as may be agreed for this pur- pose between the Beneficiary and the Administrator, the Beneficiary shall prepare and furnish to the Adminis- trator a report, of such scope and in such detail as the'Administrator shall reasonably request, on the exe- cution of the project referred to in the Preamble to the Japanese Grant Agreement, the performance by the Beneficiary and the Administrator of their respective obligations under the Japanese Grant Agreement and the accomplishment of the purposes of the Japanese Grant". Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Pre- amble to this Agreement have the respective meanings therein set forth and the following additional terms have the following mean- ings: (a) "Special Account" means the account referred to in Section 2.02 (c) of this Agreement; and (b) "Part II member of IDA" means a member of IDA with res- pect to which the terms and conditions of membership are those prescribed in the Articles of Agreement of IDA for countries whose names are listed in Part II of Schedule A to those Arti- cles. ARTICLE II The Japanese Grant Section 2.01. The Administrator agrees to extend to the Beneficiary, on the terms and conditions set forth or referred to -4- in this Agreement, an am int in various currencies equivaleftt to seven hundred million Jap nese Yen (Yen 700,000,000). Section 2.02. (a) a1e amount of the Japanese Grant may be withdrawn from the Japan-,,e Grant Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to L!me by agreement between the Beneficiary and the Administrator, (b) Withdrawals shaLl be made only on account of expendi- tures for goods produced in the territories of: (i) any Part II member of IDA; or (ii) aoy country designated by the Administra- tor as meeting the provitions set forth in paragraph 4 (f) (ii) and (iii) of the Resolution. (c) The Beneficiary shall, for the purposes of the Project, open and maintain in dollars a special account in e commercial bank on terms and conditions satisfactory to the Administrator. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 3 to this Agreement. (d) The Beneficiary shall, to the extent possible, withdraw the proceeds of the Japanese Grant and the African Facility Credit before the proceeds of the IDA Credit. Section 2.03. The Closing Date shall be June 30, 1988 or such later date as the Administrator shall establish. The Admin- istrator shall promptly notify the Beneficiary of such later date. ARTICLE III Particular Covenants Section 3.01. (a) The Beneficiary and the Administrator shall from time to time, at the request of either party, exchange viev's on the progress achieved in carrying out the Project. (b) Prior to each such exchange of views, the Beneficiary shall furnish to the Adii,inistrator for its review and comment a report on the progress achieved in carrying out the Project, in such detail as the Administrator shall reasonably request. Section 3.02. Except as the Administrator shall otherwise agree, procurement of the goods to be financed out of the pro- ceeds of the Japanese Grant shall be governed by the provisions -5- of Schedule 2 to this Agreement, subject to the eligibility restrictions set forth in Section 2.02 (b) of this Agreement. Section 3.03. (a) The Beneficiary shall raintain or cause to be maintained records and accounts adequate to reflect in accord- ance with consistently maintained sound accounting practices the expenditures financed out of the proceeds of the Japanese Grant. (b) The Beneficiary shall: (i) have the records and accounts referred to in paragraph (a) of this Section including the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Administrator; (ii) furnish to the Administrator as soon as available, but in any case not later than four months after the end of each such year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Administrator shall have reasonably requested; and (iii) furnish to the Administrator such other informa- tion concerning said accounts and the audit there- of as the Administrator shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Japanese Grant Account were made on the basis of state- ments of expenditure, the Beneficiary shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, separate records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Admin- istrator has received the audit report for the fiscal year in which the last withdrawal from the Japanese Grant Account was made, all records (con- tracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; -6- (iii) 2nable the Administrator's representatives to examine such records; and (iv) ensure that such separate accounts are included in the annual audits referred to in paragraph (b) of this Section and that the report thereof contains, in respect of such separate accounts, a separate opinion by said auditors as to whether the pro- ceeds of the Japanese Grant withdrawn in reepect of such expenditures were used for the purposes for which they were provided. ARTICLE IV Remedies of the Administrator Section 4.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) an event has occurred which shall make it improbable that the Project, or a significant part thereof, will be carried out: (b) (i) Subject to subparagraph (ii) of this paragraph: (A) the right of the Beneficiary to withdraw the proceeds of any financial contribution, grant, loan or credit made to the Beneficiary 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) any such financial contribution, loan or cre- dit shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Beneficiary establishes to the satisfaction of the Administrator that: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Beneficiary to per- form any of its obligations under such agreement; and (B) adequate funds for the Project are avail- able to the Beneficiary from other sources on -7- terms and conditions consistent with the obliga- tions of the Beneficiary under this Agreement. ARTICLE V Termination; Section 5.01. The date ninety (90) days after the date of this Agreement is hereb- specified for the purposes of Sec- tion 12.04 of the General Conditions. ARTICLE VI Representatives of the Beneficiary; Addresses Section 6.01. The Provisional National Defence Council Secretary for Finance and Economic Planning of the Beneficiary is designated as representative of the Beneficiary 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 Beneficiary: The Provisional National Defence Council Secretary Ministry of Finance and Economic Planning P.O. Box M 40 Accra Ghana Cable address: ECONOMICOM Accra For the Administrator: Administrator of the Japanese Funds (International Development Association) 1818 H Street, N.W. Washington, D.C. 20433 United States of America -8- Cable address: Telex: INDEVAS 440098 (ITT) Washington, DIC. 248423 (RCA) or 64145 (WUI) 9 IN WITNESS WREREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as Qf the day and year first above written. REPUBLIC OF GHANA B y Cl Tt 4* Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the Japanese funds within the framework of the SPECIAL FACILITY for SUB-SAHARAN AFRICA Regional Vice President Western Africa - 10 - SCHEDULE 1 Withdrawal of the Proceeds of the Japanese Grant 1. Subject to the provisions set forth or referred to in this Schedule, the proceeds of the Japanese Grant may be withdrawn from the Japanese Grant Account for expenditures made (or, if the Administrator 7hall so agree, to be made) in respect of the reasonable cost of equipping the Ghana Highway Authority's mobile maintenance units (including spare parts and a portion of the operating costs thereof) required for the Project and to be financed out of such proceeds. The table below sets forth the Categories of items to be financed out of the proceeds of the Japanese Grant, the allocation of the amounts of the Japanese Grant to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Japanese Grant % of Allocated (Expressed Expenditures Category in Japanese Yen) to be financed (1) Equipment and 500,000,000 100% of foreign spare parts expenditures (2) Operating Costs 150,000,000 16% (3) Unallocated 50,000,000 TOTAL 700,000,000 2. For the purposes of this Schedule, the term "foreign expen- ditures" means expenditures in the currency of any country other than that of the Beneficiary for goods or services supplied from the territory of any country other than that of the Beneficiary. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement; - 11 - (b) expenditures for goods procured under contracts costing less than $4,000 equivalent; and (c) expenditures for goods supplied under a cntract which any national or international financing institution or agency other than the Administrator shall have financed or agreed to finance. 4. Applications for withdrawal of proceeds of the Japanese Grant shall to the extent practicable be consolidated into aggre- gate amounts of not less than $100,000 equivalent. - 12 - SCHEDULE 2 Procurement 1. Except as provided in paragraph 3 hereof, contracts for goods estimated to cost the equivalent of $50,000 or more each shall be awarded through international competitive bidding in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines). 2. (a) Contracts will be grouped to the maximum extent prac- ticable to allow bulk procurement. (b) Goods shall be exempted from pre-shipment price inspec- tion by a third-party inspection firm. 3. Equipment and spare parts of a proprietary nature or subject to standardization and contracts for goods estimated to cost less than $50,000, may be procured on the basis of price quotations from at least three suppliers, with at least two of them located outside of Ghana. 4. Goods procured pursuant to paragraphs 1 and 3 of this Sched- ule are subject to the eligibility requirements set forth in Sec- tion 2.02 (b) of this Agreement. Such eligibility requirements shall be stated in the tender or prequalification documents for the procurement of goods pursuant to paragraph 1 of this Sched- ule. 5. With respect to each contract for goods estimated to cost an amount equivalent to $100,000 or more, the Beneficiary shall fur- nish to the Administrator, prior to the delivery to the Adminis- trator of the first application for withdrawal of funds from the Japanese Grant Account in respect of such contract, two conformed copies of such contract, together with the analysis of the res- pective bids and recommendations for award, a description of the advertising and tendering procedures followed and such other information as the Administrator shall reasonably request. 6. With respect to each contract not governed by the preceding paragraph, the Beneficiary shall furnish to the Administrator, prior to the delivery to the Administrator of the first applica- tion for withdrawal of funds from the Japanese Grant Account in - 13 - respect thereof, such documentation and information as the Admin- istrator may reasonably request to support withdrawal applica- tions in respect of such contract. 7. Notwithstanding the provisions of paragraphs 5 and 6 of this Schedule, where payments under a contract are to be made out of the proceeds of the Special Account, the copies of such contract or the documentation and the information to be furnished to the Administrator pursuant to the provisions of paragraph 5 or 6 of this Schedule, as the case may be, shall be furnished to the Administrator as part of the evidence required under paragraph 4 of Schedule 3 (the Special Account Schedule) to this Agreement. 8. The provisions of the preceding paragraphs 5, 6 and 7 shall not apply to contracts and operating costs of the mobile main- tenance units on account of which the Administrator has autho- rized withdrawals from the Japanese Grant Account on the basis of statements of expenditure. 9. The figure 15% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. - 14 - SCHEDULE 3 Special Account 1. For the purposes of this Schedule: (a) the term "eligible expenditures" means expenditures in respect of the reasonable cost of the goods and services required for the Project and to be financed out of the proceeds of the Japanese Grant in accordance with the provisions of Schedule 1 to this Agreement; and (b) the term "Authorized Allocation" means an amount equi- valent to $300,000 to be withdrawn from the Japanese Grant Account and deposited in the Special Account pursuant to para- graph 3 (a) of this Schedule. 2. Except as the Administrator shall otherwise agree, payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Administrator has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to reple- nish the Special Account may be made as follows: (a) On the basis of a request or requests by the Bene- ficiary for a deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Administrator shall, on behalf of the Beneficiary, withdraw from the Japanese Grant Account and deposit in the Special Account such amount or amounts as the Beneficiary shall have requested. (b) The Beneficiary shall furnish to the Administrator requests for replenishment of the Special Account at such inter- vals as the Administrator shall specify. On the basis of such requests, the Administrator shall withdraw from the Japanese Grant Account and deposit into the Special Account such amounts as shall be required to replenish the Special Account with amounts not exceeding the amount of payments made out of the Special Account for eligible expenditures. All such deposits shall be withdrawn by the Administrator from the Japanese Grant Account in the respective equivalent amounts, as shall have been justified by the evidence supporting the request for such deposit furnished pursuant to paragraph 4 of this Schedule. - 15 - 4. For each payment made by the Beneficiary out of the Special Account for which the Beneficiary requests replenishment pursuant to paragraph 3 (b) of this Schedule, the Beneficiary shall fur- nish to the Administrator, prior to or at the time of such request, such documents and other evidence as the Administrator shall reasonably request, showing that such payment was made for eligible expenditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Special Account shall be made by the Administrator when either of the following situations first arises: (i) the Administrator shall have determined that all further withdrawals should be made directly by the Beneficiary from the Japanese Grant Account in accordance with the provisions of paragraph (a) of Section 2.02 of this Agreement; or (ii) the total unwithdrawn amount of the Japanese Grant less the amount of any outstanding agreement to reimburse made by the Administrator and of any special-commitment entered into by the Administra- tor pursuant to Section 5.02 of the General Condi- tions with respect to the Project, shall be equal to the equivalent of twil-e the amount of the Authorized Allocation. (b) Thereafter, withdrawal from the Japanese Grant Account of the remaining unwithdrawn amount of the Japanese Grant shall follow such procedures as the Administrator shall specify by notice to the Beneficiary. Such further withdrawals shall be made only after and to the extent that the Administrator shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice have been or will be utilized in making payments for eligible expenditures. 6. (a) If the Administrator shall have determined at any time that any payment out of the Special Account: (i) was made for any expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedule, or (ii) was not justified by the evidence fur- nished pursuant to paragraph 4 of this Schedule, the Beneficiary shall, promptly upon notice from the Administrator deposit into the Special Account (or, if the Administrator shall so request, refund to the Administrator) an amount equal to the amount of - 16 - such payment or the portion thereof not so eligible or justi- fied. No further deposit by the Administrator into the Special AccG"nt shall be made until the Beneficiary has made such deposit or refund. (b) If the Administrator shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Beneficiary shall, promptly upon notice from the Administrator, refund to the Administrator such outstanding amount for crediting to the Japanese Grant Account. INTERNATIONAL DEVELOP: AENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY