Chad - Highway Maintenace Project : Credit 1728 - Credit Agreement - Conformed

OFFICIAL CREDIT NUMBER 1728 CD DOCUMENTS Development Credit Agreement (Highway Maintenance Project) between REPUBLIC OF CHAD and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1986 CREDIT NUMBER 1728 CD DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated , 1986, between REPUBLIC OF CHAD (the 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) tile Borrower intends to contract from the African Development Fund (AfDF) a Credit (the AfDF Credit) in an amount equivalent to US$7,200,000 to assist in financing part of the Project on the terms and conditions set forth in an agreement (the AfDF Credit Agreement) to be entered into between the Bor- rower and AfDF; 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; 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 is deleted (the General Conditions) constitute an integral part of this Agree- ment. 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) "CFAF" means the common currency of the Borrower and other members of the Banque des Etats de l'Afrique Centrale; -2- (b) "GDPW" means the General Directorate of Public Works of MPWHUD; (c) "GDT" means the General Directorate of Transport of MTCA; (d) "MPWHUD" means the Ministry of Public Works, Housing and Urban Development of the Borrower; (e) "MTCA" means the Ministry of Transport and Civil Aviation of the Borrower; (f) "OFNAR" means Office National des Routes, the agency responsible for management of the road network, including road construction and maintenance, under the tutelle of MPWHUD; (g) "Project Account" means the account referred to in Section 3.03 of this Agreement; (h) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; and (i) "Fiscal Year" means the Borrower's fiscal year begin- ning January 1 and ending December 31. 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 seventeen million one hundred thousand Special Drawing Rights (SDR 17,100,000). 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 Asso- ciation, for expenditures made (cr, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit. -3- (b) The Borrower shall, for the purposes of the Project, open and maintain in CFAF a special account in a commercial bank 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 4 to this Agreement. * Section 2.03. The Closing Date shall be June 30, 1989 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 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 March 1 and September 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 1 and September 1 commencing September 1, 1996, and ending March 1, 2036. Each installment to and including the installment payable on March 1, 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 amoint. Section 2.08. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Con- ditions. * The dates inserted here should be the same as those stipu- lated in Section 2.06 of this Agreement. -4- ARTICLE III Execution of the Project Section 3.01. The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and,. to this end, shall carry out Parts A, B, C (2) and D of the Project through MPWIIUD, Part C (1) of the Project through MTCA and Part C (3) both through MPWHUD and MTCA, all with due diligence and efficiency and in conformity with appro- priate administrative, financial and engineering practices, and shall provide, promptly as needed, the funds, facilities, ser- vices and other resources required for the Project. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services reu.ired for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agreement. Section 3.03. Without limitation or restriction uapon any of its obligations under Section 3.01 of this Agreement, the Bor- rower shall cause OFNAR to: (a) open, on terms and conditions satisfactory to the Asso- ciation, and thereafter maintain for purp'ses of Parts A and D of the Project, a Project Account in a commercial bank for payment of expenditures under Parts A and D of the Project not financed out of the proceed\' of the Credit; (b) make into such Project Account an initial deposit of fifty million CFAF (CFAF 50,000,000); and (c) in addition to the initi=l deposit referred to in para- graph (b) hereof, quarterly replenish the Project Account in an amount of at least fifty million CFAF (CFAF 50,000,000) so that the funds available in such Project Account shall at all times be- sufficient to permit timely and efficient execution of Parts A and D of the Project. Section 3.04. The Borrower shall: (a) carry out a study on the role and structure of OFNAR; (b) review with the Association the recommendations of said study not later than September 30, 1987; and -5- (c) promptly implement such recommendations of said study as shall be satisfactory to the Borrower and the Association. Section 3.05. The Borrower shall: (a) take all necessary actions to improve collection of fuel taxes and accordingly increase OFNAR's revenues to at least CFAF 800,000,000 in Fiscal Year 1987; (b) carry out a study on road user charges, review with the Association the recommendations of said study not later than September 30, 1987 and promptly implement such recommendations of said study as shall be satisfactory to the Borrower and the Asso-. ciation, including measures to increase the transport sector's revenues and improve the sector's cost recovery; and (c) take all necessary actions to further increase OFNAR's revenues in Fiscal Year 1988 and in each Fiscal Year thereafter, in amounts sufficient to cover OFNAR's reasonable estimated fund- ing needs for the Fiscal Year concerned. Section 3.06. The Borrower shall: (a) carry out a study on the organization, the liberali- zation and management of the trucking industry; (b) review with the Association the recommendations of said study not later than March 31, 1988; and (c) promptly implement such recommendations of said study as shall be satisfactory to the Borrower and the Association. Section 3.07. The Borrower shall not later than September 30 of each year submit to the Association for review, a transport sector investment and expenditure program for the following Fiscal Year. ARTICLE IV Other Covenants Section 4.01. (a) The Borrover shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of the departments or -6- agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have the accounts referred to in paragraph (a) of this Section including the Special Account and the Project Account for each Fiscal Year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association, as soon as available, but in any case not later than six 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 Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the said accounts and the audit thereof and said records as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower 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 comple- tion of the audit for the Fiscal Year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association's representatives to exam- ine such records; and (iv) ensure that such separate accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report thereof contains, -7- in respect of such separate accounts, a separate opinion by said auditors as to whether the pro- ceeds of the Credit withdrawn in respect of such expenditures were used for the purposes for which they were provided. Section 4.02. The Borrower shall cause the ferries included in the Project and its workshops, road maintenance equipment and related facilities to be operated and adequately maintained and shall cause all necessary repairs and replacements thereof to be made promptly, all in accordance with appropriate engineering practices. Section 4.03. The Borrower shall cause its priority road network to be reasonably maintained and promptly repaired in accordance with sound engineering praqtices, and shall provide or cause to be provided, promptly as needed, the funds, facilities, services and other resources requir d for the foregoing. Section 4.04. The Borrower shall take reasonable measures to enforce its traffic laws and shall inform the Association from time to time on the actions taken and proposed to be taken in this connection. Section 4.05. The Borrower shall cause OFNAR: (a) to take out and maintain with responsible insurers, or to make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be con- sistent with appropriate practice; (b) to carry on its operations and conduct its affairs in accordance with sound administrative, financial, and engineering practices under the supervision of qualified and experienced management assisted by competent staff Ln adequate numbers; and (c) at all times to operate and to maintain its plants, machinery, equipment and other property, and from time to time, promptly as needed, to make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and administratidve practices. -8- ARTICLE V Remedies of the Association Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional event is specified, namely, that: (a) Subject to subparagraph (b) of this paragraph: (i) the right of the Borrower to withdraw the proceeds of any grant or credit made to the Borrower for the financing of the Project shall have been sus- pended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement pro- viding therefor, or (ii) any such credit shall have become due and payable prior to the agreed maturity thereof. (b) Subparagraph (a) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (i) such suspension, cancellation, termination or pre- maturing is not caused by the failure of the Bor- rower to perform any of its obligations under such agreement; and (ii) adequate funds for the Project are available to the Borrower from other sources on terms and con- ditions consistent with the obligations of the Borrower under this Agreement. Section 5.02. Pursuant to Soction 7.01 (d) of the General Conditions, the following additional event is specified, namely that any event specified in paragraph (a) (i) of Section 5.01 of this Agreement shall occur, subject to the proviso of para- graph (b) (ii) of that Section. ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an addi- tional condition to the effectiveness of the Development Credit -9- Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely, that the account referred to under Sec- tion 3.03 (a) of this Agreement has been opened and the initial deposit referred to under Section 3.03 (b) has been made. Section 6.02. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Sec- tion 12.04 of the General Conditions. Section 6.03. The provisions of Section 5.02 of this Agree- ment in respect of a particular Credit Agreement referred to in Section 5.01 (a) shall cease and determine on the date any such agreement shall terminate. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of the Borrower responsible for Planning is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministre Chargf du Plan N'Djamena Republic of Chad Cable address: Telex: MINPLAN 5201 KD or 5307 KD 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) - 10 - 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. REPUBLIC OF CHAD By 1N A"a4 A oum& Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By/ Regional Vice President Western Africa - 11 - 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) Parts'A and D of the Project: (a) Civil works for 1,400,000 95% buildings and equipment (b) Road main- 2,250,000 100% tenance equipment (c) Spare parts for 580,000 80% road equipment (d) Technical 2,280,000 100% assistance and training (e) Road main- 2,330,000 80% tenance by contract or force account (2) Part B of the Project: (a), Civil works 1,340,000 100% for access road construction by contract or force account - 12 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (b) Equipment and 340,000 100% spare parts (3) Consultants' 3,080,000 100% services for Part C of the Project (4) Unallocated 3,500,000 TOTAL 17,100,000 2. 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 850,000, may be made in respect of Category (1) (d) and (e) on account of payments made for expenditures before that date but after May 1, 1986. - 13 - SCHEDULE 2 Description of the Project The objective of the Project is to implement an emergency program for highway maintenance, through: (i) the rehabilitation and maintenance of high priority roads, bridges and ferries; and (ii) strengthening of the Borrower's institutions responsible for the highway sector, consisting of staff training programs, studies and technical assistance. 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: OFNAR 1. (a) Rehabilitation and re-equipping of existing bui.ldings and facilities in OFNAR's subdivisions of N'Djamena, Moundou and Sarh; and (b) Constructing and equipping of new office buildings and workshops in the subdivision of Mongo. 2. Repairs and maintenance of road equipment. 3. Acquisition of: (a) spare parts for further maintenance of OFNAR's maintenance equipment; and (b) equipment to complete at least one road maintenance brigade per subdivision. 4. Assistance to OFNAR's subdivisions in the fields of manage- ment and staff training. Part B: Rehabilitation and Construction of Roads 1. Upgrading or construction of access roads at Onoko, Moissala, and at the Lere Bridge. 2. Acquisition of a 40 ton ferry at Onoko and acquisition of spare parts for the overhaul of the ferry at Moissala. Part C: Institutional Strengthening 1. MTCA: strengthening of GDT's technical capacity including upgrading of local staff, sector planning and management. - 14 - 2. MPWHUD: strengthening of GDPW's technical capacity in road planning and management, including traffic counts and analysis of administrative records, geotechnical studies on the use of local soils in road construction, study of incentives for routine road maintenance by local communities or small contractors, and donor coordination. 3. Carrying out of the following studies: (a) by GDPW: (i) study on OFNAR's role and organization; (ii) study on road user charges, road maintenance needs, and measures to increase OFNAR's revenues to meet anticipated needs; (iii) feasibility study of the Guelengdeng-Moundou corridor and engineering design for the selected alignment; and (iv) engineering of the N'Djamena industrial road; (b) by GDT: study on the trucking industry. Part D: Routine Maintenance 1. Maintenance by contract of the Lere-Moundou-Sarh road. 2. Routine maintenance of the newly rehabilitated roads. The Project is expected to be completed by December 31, 1988. - 15 - SCHEDULZ 3 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A. Inteiiational Competitive Bidding Except as provided in Part D hereof, goods and works shall be procured under contracts awarded 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). Part B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the proce- dures described in Part A hereof, goods manufactured in the Republic of Chad may be granted a margin of preference in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraphs 1 through 4 of Appendix 2 thereto. Part C. Preference for Domestic Contractors In the procurement of works in accordance with the proce- dures described in Part A hereof, the Borrower may grant a margin of preference to domestic contractors in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of. the Guidelines and paragraph 5 of Appendix 2 thereto. Part D. Other Procurement Procedures Civil and road maintenance works estimated to cost less than the equivalent of $1,000,000 may be procured by force account or under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association; provided, however, that emergency maintenance works for the Sarh-Moundou-Lere road estimated to cost the equivalent of about $1,700,000 shall be procured under a contract awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. - 16 - Part E. Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract for civil works and equipment estimated to cost the equivalent of $100,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Association pursuant to said paragraph 2 (d) shall be furnished to the Association prior to the making of the first payment out of the Special Account in respect of such contract. (b) With respect to each contract not governed by the pre- ceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Association pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 4 to this Agreement. (c) The provisions of the preceAing subparagraphs (a) and (b) shall not apply to contracts on azcount of which the Associa- tion has authorized withdrawals from the Credit Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agree- ment. 2. The figure of 10% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower in carrying out the Project, the Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satis- factory to the Association. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Con- sultants by World Bank Borrowers and by the World Bank as Exe- cuting Agency" published by the Bank in August 1981. - 17 - SCHEDULE 4 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1) through (3) 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 of CFAF 720,000,000 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 Account 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 iade out of the Special Account for eligible - 18 - expenditures. All such deposits shall be withdrawn by the Asso- ciation 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 accordance 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 eli- gible Category 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 - 19 - 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 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 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