India - Bihar Public Tubewell Project : Credit 1737 - Credit Agreement - Conformed

OFFICIAL DOCUMENTS CREDIT NUMBER 1737 IN Development Credit Agreement (Bihar Public Tubeell Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated / 1987 CREDIT NUMBER 1737 IN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated - , 1987, between INDIA, acting by its President (th1 Borrow) 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 Project will be carried out by the State of Bihar (hereinafter called Bihar) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to Bihar the proceeds of the Credit as provided in this Agreement; 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 and in the Project Agreement of even date herewith between the Association and Bihar; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Development 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) "Bihar" means the State of Bihar, a State of India; (b) "Project Agreement' means the agreement, of even date herewith, entered into between the Association and Bihar, as the -2- same may be amended from time to time, and such term includes all schedules and agreements supplemental to the Project Agreement; (c) "Project Area" means the total number of sites and their command areas selected pursuant to the provisions of para- graph 1 (a) of Schedule 2 to the Project Agreement; (d) "Tubewell Wing" means the Wing established within Bihar's Minor Irrigation Department responsible, inter alia, for the construction, operation and maintenance of the public tube- well irrigation systems throughout Bihar; and (e) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to fifty-nine million five hundred thousand Special Drawing Rights (SDR 59,500,000). Section 2.02. (a) 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. (b) The Borrower shall, for the purposes of the Project, open and maintain in dollars a special account in the Reserve Bank of India on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 3 to this Agreement. Section 2.03. The Closing Date shall be May 31, 1994 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. -3- 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 withdrawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agreement 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. 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 June 15 and December 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each June 15 and December 15 commencing December 15, 1996, and ending June 15, 2036. Each installment to and including the installment payable on June 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 4- Agreement, and, to this end, without any limitation or restrin- tion upon any of its other obligations under the Development Credit Agreement, shall cause Bihar to perform in accordance with the provisions of the Project Agreement all the obligations of Bihar 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 Bihar to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall make the proceeds of the Credit available to Bihar 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 Pr(ject 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) in respect of the Project shall be carried out by Bihar 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) Bihar shall have failed to perform any of its obliga- tions under the Project Agreement. (b) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situa- tion shall have arisen which shall make it improbable that Bihar will be able to perform its obligations under the Project Agree- ment. - 5 - Section 4.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional event is specified, namely, that the event specified in paragraph (a) of Section 4.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower. ARTICLE V Effective Date; Termination Section 5.01. The following is specified as an additional matter 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, namely, that the Project Agreement has been duly authorized or ratified by Bihar, and is legally binding upon Bihar in accordance with its terms. Section 5.02. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. Any Secretary, Additional Secretary, Joint Secretary, Director or Deputy Secretary to the Department of Economic Affairs of 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 -6- 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) 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 By/ A 6 ~ Authorized 'Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By/J ~ I Regional Vice President South Asia -7- 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 amounts 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: (a) Completed tube- 4,400,000 75% well systems under Part A (i) of the Project (b) Completed tube- 4,900,000 75% well systems under Part A (ii) of the Project (c) Completed tube- 4,600,000 75% well systems under Part A (iii) of the Project (d) Completed energi- 17,600,000 75% zation works under Part B of the Project -8- Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (2) Equipment, vehicles and materials: (a) PVC pipes and 14,000,000 ) fittings ) ) 100% of foreign (b) Pump units and 3,100,000 ) expenditures ancillaries ) 100% of local ) expenditures (c) Steel pipes, 2,100,000 ) (ex-factory fitting and ) cost), and 75% casings and ) of local ex- general steel ) penditures for items ) other items pro- ) cured locally. (d) Other equipment 3,600,000 ) and vehicles, ) including manage- ) ment improvement ) equipment ) (3) Management Improvements: (a) Buildings 2,900,000 75% (b) Training, study 500,000 100% tours, monitoring and evaluation, technical assistance and studies (4) Unallocated 1,800,000 TOTAL 59,500,000 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 - 9 - goods or services supplied from the territory of any country other than that of the Borrower; (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; (c) the term "completed tubewell systems" means a tubewell irrigation system constructed either under Part A (i), Part A (ii) or Part A (iii) of the Project, which is certified to have been constructed and installed in accordance with the planning, design and construction standards and criteria provided for in paragraph 1 (a) of Schedule 2 to the Project Agreement, and is energized with a connection to a dedicated feeder line; and (d) the term "completed energization works" means works carried out under Part B of the Project to connect any tubewell under Part A of the Project with power supply from a dedicated feeder line. 3. 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, except that with- drawals, in an aggregate amount not exceeding the equivalent of SDR 900,000, may be made in respect of: (a) materials for tubewell energization under Category 1 (d); (b) equipment, vehicles and materials under Category 2; and (c) management improvement activities under Category 3, on account of payments made for expenditures before that date but after October 1, 1985. - 10 - SCHEDULE 2 Description of the Project The objectives of the Project are to raise agricultural pro- duction and farm incomes in the Project Area by applying appro- priate technology for the exploitation of groundwater resources, taking into account the agro-economic characteristics of the Project Area, and to strengthen the Tubewell Wing of Bihar's Minor Irrigation Department. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: (i) Construction, installation, operation and mainten- ance in the Project Area, including connection to dedicated power lines, of about 500 tubewells with an improved design, each capable of automatically discharging about 150 cubic meters per hour to serve a command area of about 100 hectares. (ii) Modernization of about 1,000 existing tubewell systems in the Project Area through the: (a) repair or replacement of the wells, pumps switch- gear, pumphouses and staff quarters; (b) construc- tion of distribution chambers such that each well can operate automatically; (c) construction of new buried pipe distribution systems; and (d) connec- tion to dedicated power lines. (iii) Rehabilitation of about 3,700 existing tubewells in the Project Area, including repair or replace- ment of wells, pumps, switchgear, pumphouses and staff quarters, as required, repairs of the exist- ing distribution systems (for about 1,300 tube- wells), and connection to dedicated power lines. Part B: Installation of dedicated and independent electrical power transmission lines to serve public tubewell irrigation - 11 - systems from substations in the Project Area to the tube- wells under Part A of the Project. Part C: Provisions of equipment, vehicles and buildings for the construction, operation and maintenance of the tubewell irrigation systems under Part A of the Project. Part D: Strengthening of the Tubewell Wing through, inter alia: (i) training of Project staff; (ii) the carrying out of studies related to Project management, water charges and socio-economic development; and (iii) provision of technical assistance for the pre- paration of design, and operation and maintenance manuals of tubewell irrigation systems. Part E: Monitoring and evaluation of the various activities under the Project. The Project is expected to be completed by November 30, 1993. - 12 - SCHEDULE 3 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means the Categories set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures 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 allocated from time to time to the eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount equivalent to SDR 4,400,000 to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Except as the Association 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 Association has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account may be made as follows: (a) On the basis of a request or requests by the Borrower for a deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Association shall, on behalf of the Borrower, withdraw from the Credit Accoup,t and deposit in the Special Account such amount or amounts as the Borrower shall have requested. (b) The Borrower shall furnish to the Association requests for replenishment of the Special Account at such intervals as the Association shall specify. On the basis of such requests, the Association shall withdraw from the Credit 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 - 13 - expenditures. All such deposits shall be withdrawn by the Association from the Credit Account under the respective eligible Categories, and 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. 4. For each payment made by the Borrower out of the Special Account for which the Borrower requests replenishment pursuant to paragraph 3 (b) of this Schedule, the Borrower shall furnish to the Association, prior to or at the time of such request, such documents and other evidence as the Association shall reasonably request, showing that such payment was made for eligible expen- ditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Special Account shall be made by the Association when either of the following situations first arises: (i) the Association shall have determined that all further withdrawals should be made directly by the Borrower from the Credit Account in accor- dance with the provisions of paragraph (a) of Section 2.02 of this Agreement; or (ii) the total unwithdrawn amount of the Credit allo- cated to the eligible Categories, minus the amount of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Project, shall be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to the eligible Categories shall follow such procedures as the Association shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Association 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 Association shall have determined at any time that any payment out of the Special Account (i) was made for any - 14 - expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedule, or (ii) was not justified by the evidence furnished pursuant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Association deposit into the Special Account (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. No further deposit by the Association into the Special Account shall be made until the Borrower has made such deposit or refund. (b) If the Association 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 Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount for crediting to the Credit Account. 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 International Bank for Reconstruction and Development. FOR SECRETARY