India - Third Bombay Water Supply And Sewerage : Credit 1750 - Credit Agreement - Conformed

OFFICIAL nn0.t iMFNTS, CREDIT NUMBER 1750 IN LOAN NUMBER 2769 IN Development Credit Agreement (Third Bombay Water Supply and Sewerage Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated -/,) , , 1987 CREDIT NUMBER 1750 IN LOAN NUMBER 2769 IN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 2, 1987, between INDIA, Acting by its President (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; (B) the Borrower has also requested the International Bank for Reconstruction and Development (the Bank) to provide additional assistance towards the financing of the Project and by an agreement of even date herewith between the Borrower and the Bank (hereinafter called the Loan Agreement) the Bank is agreeing to provide such assistance in an aggregate principal amount equivalent to forty million dollars ($40,000,000) (hereinafter called the Loan); (C) the Borrower and the Association intend, to the extent practicable, that the proceeds of the Credit provided for in this Agreement be disbursed on account of expenditures on the Project before disbursements of the proceeds of the Loan provided for in the Loan Agreement are made; (D) by an agreement of even date herewith among the Association, the Bank and the Municipal Corporation of Greater Bombay (hereinafter called BMC), BMC has agreed to undertake certain obligations in respect of the carrying out of the Project; (E) by an agreement of even date herewith among the Association, the Bank and the State of Maharashtra, acting by its Governor (hereinafter called Maharashtra), Maharashtra has agreed, inter alia, to assist BMC in the carrying out of the Project; 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 set forth in this Agreement, in the Project Agreement of even date hetewith among the Association, the Bank and BMC and in the Maharashtra Agreement of even date herewith among the Association, the Bank and Maharashtra; - 2 - 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 the Association, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the General Conditions) constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Maharashtra" means the State of Maharashtra, a State of India, acting by its Governor; (b) "Project Agreement" means the agreement among the Association, the Bank and BMC of even date herewith, as the same may be amended from time to time, and such term includes all schedules and agreements supplemental to the Project Agreement; (c) "Loan Agreement" means the agreement of even date here- with between the Borrower and the Bank for the Project, as such agreement may be amended from time to time; and such term includes the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 1, 1985, as applied to such agreement, and all schedules and agreements supplemental to the Loan Agreement; (d) "Loan" means the loan provided for in the Loan Agree- ment; (e) "Maharashtra Agreement" means the agreement among the Association, the Bank and Maharashtra of even date herewith, as the same may be amended from time to time and such term includes all schedules and agreements supplemental to the Maharashtra Agreement; (f) "Act" means the Bombay Municipal Corporation Act, 1888, as amended from time to time; -3- (g) "BMC" means the Municipal Corporation of Greater Bombay, a statutory corporation established under the Act; (h) "Subsidiary Loan Agreement" means the agreement between Maharashtra and BMC referred to in Section 2.01 (b) of the Maharashtra Agreement; (i) "WSSD" means the Water Supply and Sewerage Department of BMC, established by Order No. MC/1W of the Municipal Commis- sioner for Greater Bombay, dated April 2, 1973; and (j) "Rs" means rupees in the currency of India. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to one hundred five million five hundred thousand Special Drawing Rights (SDR 105,500,000). 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 Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. Section 2.03. The Closing Date shall be June 30, 1994 or such later date as the Association shall establish. The Asso- ciation shall promptly notify the Borrower of such later date. Section 2.04. (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 re- strictions 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. Section 2.05. 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 2.06. Commitment charges and service charges shall be payable semiannually on February 15 and August 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each February 15 and August 15 commencing February 15, 1997, and ending August 15, 2036. Each installment to and including the installment payable on August 15, 2006 shall be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter shall be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, without any limitation or restric- tion upon any of its other obligations under the Development Credit Agreement, shall cause Maharashtra and BMC to perform in accordance with the provisions of the Maharashtra Agreement and the Project Agreement respectively, all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable Maharashtra and BMC to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. -5- (b) The Borrower shall make the proceeds of the credit available to Maharashtra in accordance with the Borrower's standard arrangements for development assistance to the States of India. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 1 to the Project Agreement. Section 3.03. The Borrower and the Association hereby agree that the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions (relating to in- surance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) shall be carried out by BMC pursuant to Section 2.03 of the Project Agreement. ARTICLE IV Remedies of the Association Section 4.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) Maharashtra shall have failed to perform any of its obligations under the Maharashtra Agreement. (b) BMC shall have failed to perform any of its obligations under the Project Agreement. (c) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situation shall have arisen which shall make it improbable that BMC or Maharashtra will be able to perform its obligations under the Project Agreement or the Maharashtra Agreement, respectively. (d) The Act shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of BMC to perform any of its obligations under the Project Agreement. -6- (e) BMC or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of WSSD or for the suspension of its operations. Section 4.02. For the purposes of Section 7.01 (d) of the General Conditions, the following additional events are specified: (a) the events specified in paragraphs (a) or (b) of Section 4.01 of this Agreement shall occur and shall continuc for a period of sixty days after notice thereof shall have been given by the Association to the Borrower and Maharashtra or BMC, as the case may be; and (b) the events specified in paragraphs (d) or (e) of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) all conditions precedent to the effectiveness of the Loan Agreement have been fulfilled, except for the effectiveness of this Agreement. (b) the Subsidiary Loan Agreement has been executed on behalf of Maharashtra and BMC. Section 5.02. The following are specified as additional matters, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association: (a) that the Project Agreement and the Subsidiary Loan Agreement have been duly authorized or ratified by BMC, and are legally binding upon BMC in accordance with their terms; and (b) that the Maharashtra Agreement and the Subsidiary Loan Agreement have been duly authorized or ratified by Maharashtra and are legally binding upon Maharashtra in accordance with their terms. -7- Section 5.03. The date 90 days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.04. The obligations of the Borrower under Section 4.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on the date twenty-five years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. Any Secretary, kdditional Secretary, Joint Secretary, Director, Deputy Secretary and Under Secretary of the Department of Economic Affairs in the Ministry 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: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi India Cable address: Telex: ECOFAIRS 953-313546 New Delhi, India 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 duly authorized representatives, 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. INDIA Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By g AJ DCiI. 4. qmr Regional Vice President South Asia -9- SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of item to be financed out of the proceeds of the Credit, the allocation of amounts of the Credit to each Category and the percent of expenditures for items so to be financed in each Category: Amount of Amount of the Credit the Loan Allocated Allocated (Expressed (Expressed % of in SDR in Dollars Expenditures Category Equivalent) Equivalent) to be Financed (1) Equipment and materials: (a) procured 30,900,000 11,700,000 100% of foreign under inter- expenditues, national 100% of local competitive expenditures bidding (ex-factory costs) (b) procured 2,400,000 900,000 60% under local competitive bidding (2) Civil works 67,500,000 21,700,000 63% (3) Consulting services and 4,700,000 1,800,000 100% training (4) Unallocated ------ 3,900,000 TOTAL 105,500,000 40,000,000 - 10 - 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of SDR180,000, may be made in reGpect of Category (3) on account of payments made for expenditures before that date but after March 1, 1985. - 11 - SCHEDULE 2 Description of the Project The objectives of the Project are to expand the water supply and sewerage facilities for the city of Bombay and further strengthen WSSD's implementation capacity and its financial and operational performance. The Project consists of the following Darts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: Water Supply 1. System Distribution (i) Construction of about 52 km of trunk mains, diameter range 600 mm to 3000 mm. (ii) Construction of about 49 km of distribution, diameter range 150 mm to 1800 mm. (iii) Construction of about 9 km of 3000 mm diameter trans- mission tunnels. (±v) Installing of about 76 km of internal cement mortar pipelining, diameter range 1200 mm to 3000 mm. (v) Provision of leak detection, system instrumentation and control equipment, valves and about 32,000 water meters. 2. Treatment Capacity, Pumping and Storage (i) Construction of about 455 million liters per day (mld) capacity water treatment plant, together with staff quarters for operators. (ii) Building and installation of pumping capacity of about 2,233 mld in about 17 units. (iii) Construction of about 144 million liters of clear water storage in four service reservoirs. - 12 - Part B: Sewerage and Sanitation 1. Sewers and Pumping (i) Construction of about 54 km of sewers, diameter range 230 mm to 1000 mm. (ii) Building and installation of equipment for a pumping capacity of about 150 mld in 12 units. 2. Sanitation (i) Provision of low-cost on-site waste disposal facilities in selected areas of Bombay not covered by water-borne sewerage. (ii) Provision of suction tanks, local pumping arrangements, tubewells and minor mains to service the urban poor in slums. Part C: Technical Assistance and Vehicles for Operating 1. Training (i) Training for BMC/WSSD staff in management system maintenance and operations at facilities in Bombay and abroad, including development and expansion of facilities, and course curricula and provision of equipment for BMC's existing training center. (ii) Training in the reduction of distribution system water losses by the application of improved techniques. 2. Consultancy The carrying out of consultancy services including, inter alia, to: (i) improve WSSD's project planning and implementation capability; enhance the water and sewerage billing and collection; strengthen financial audit procedures; and to enhance financial analysis operations. 13 - (ii) prepare preliminary designs for the next tranche of source development (Vaitarna) to meet future water supply needs. (iii) review and develop design parameters in waste water disposal systems, based on stabilization pond tech- nology (Versova) and examine the possibilities for recycling wash-water at the potable water treatment plants. 3. Vehicles for Operations Supply of about 83 trucks and other vehicles for the Pro- ject's implementation and operations. The Project is expected to be completed by December 31, 1993. INTERNATIONAL DEVELOPMENT 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