China - Provincial Universities Project : Credit 1671 - Credit Agreement - Conformed

CREDIT NUMBER 1671-CHA Development Credit Agreement (Provincial Universities Project) between PEOPLE'S REPUBLIC OF CHINA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated 5 ,1986 CREDIT NUMBER 1671-CHA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated , 1986, between PEOPLE'S REPUBLIC OF CHINA (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS 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; 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 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 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 Sec- tion 2.02 (b) of this Agreement; (b) "State Education Commission" means the Borrower's State Education Commission or any successor thereto; (c) "Provinces" means the provinces, autonomous regions and municipalities participating in the implementation of the Project and listed in Schedule 4 to this Agreement; and (d) "Provincial Universities" means the universities and other institutions listed in Schedule 4 to this Agreement. -3- Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of the Credit with- drawn and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semiannually on February 1 and August 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each February 1 and August 1 commencing August 1, 1996, and ending February 1, 2036. Each installment to and including the install- ment payable on February 1, 2006, shall be one-half of one per- cent (1/2 of 1%) of such principal amount, and each installment thereafter shell be one and one-half percent (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. 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 the Project through the State Education Commission and the Provinces with due dili- gence and efficiency and in conformity with appropriate educa- tional, engineering, financial and administrative practices, and shall provide, and cause each of the Provinces to provide, promptly as needed, the funds, facilities, services and other resources required for the Project. Section 3.02. In order to coordinate and assist in carrying out the Project, the Borrower shall: (i) maintain the Steering Committee established for the purposes of the Project, with staffing, functions and responsibilities acceptable to the Asso- ciation; (ii) cause each of the Provinces to maintain the Project Office established for the purposes of the Project, or the existing permanent unit within the Provincial Higher Education Bureau assigned for the purposes of the Project, each with staffing, functions and responsibilities acceptable to the Association; (iii) cause each of the Provincial Universities to -5 (iii) furnish to the Association such other information concerning 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 are requested from the Credit Account 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 one year after the Association has received the audit report 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 examine 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, 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, have been used for the purpose for which they were provided. Section 4.02. The Borrower shall, until such date as may be agreed between the Borrower and the Association, monitor and evaluate the progress achieved in fulfilling the objectives of the Project, through performance indicators agreed between the Borrower and the Association. ARTICLE V Effective Date; Termination Section 5.01. The following event is specified as an additional condition to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the -6- General Conditions, namely, that the Borrower's State Council has approved this Agreement. Section 5.02. 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. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Minister 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: Ministry of Finance Sanlihe Beijing People's Republic of China Cable address: Telex: FINANMIN 22486 MFPRC CN Beijing 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) -7- 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. PEOPLE'S REPUBLIC OF CHINA By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President East Asia and Pacific -8- 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 such proceeds to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit All,,ocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Equipment, 81,000,000 100% of foreign books and expenditures, journals 100% of local expenditures (ex-factory) and 75% of local expenditures for other items locally procured (2) Consultants' 16,200,000 100% services, exchange programs, fellowships and study tours (3) Unallocated 10,800,000 TOTAL 108,000,000 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 goods or services supplied from the territory of any country other than that of the Borrower; and 9 (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 I above, no withdrawals shall be made in respect of payments made for expen- ditures prior to the date of this Agreement. - 10 - SCHEDULE 2 Description of the Project The objectives of the Project are: (i) to assist the Borrower in developing higher education at the provincial level through assistance to the Provincial Universities; and (ii) to continue supporting the three national educational objectives of enrollment expansion, educational program improvement and manage- ment reform. 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: A program to (i) increase the number and improve the quality of graduates, and (ii) improve the quality of teaching and management at the Provincial Universities, through the provision of buildings, furniture and equipment, specialist services, fellowships, training and other related inputs required. Part B: A program to strengthen planning and management capa- bilities of the State Education Commission and the Pro- vincial Higher Education Bureaux through provision of equipment, specialist services, fellowships, training and other related inputs required. The Project is expected to be completed by December 31, 1990. - 11 - SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A: International Competitive Bidding Except as provided in Part C hereof, goods and works shall be procured under contracts awarded in accordarce 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 China 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: Other Procurement Procedures 1. Items or group of items estimated to cost less than the equivalent of $200,000 per contract, up to an aggregate amount not exceeding the equivalent of $5,000,000 may be procured under contracts awarded through limited international bidding proce- dures on the basis of evaluation and comparison of bids invited from a list of at least three qualified suppliers eligible under the Guidelines and in accordance with the procedures set forth in Sections I and II of the Guidelines (excluding paragraphs 2.8, 2.9, 2.55 and 2.56 thereof). 2. Books and journals estimated to cost up to an aggregate amount of $5,000,000 equivalent, and proprietary items and other items required for standardization estimated to cost up to an aggregate amount of $7,000,000 equivalent, may be purchased directly under negotiated contracts. Part D: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: - 12 - (a) With respect to each contract estimated to cost the equivalent of more than $500,000, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply; provided, however, where payments for such contract are to be made out of the Special Account, the two conformed copies of the contract required to be furnished to the Association pursuant to paragraph 2 (d) of Appendix 1 to the Guidelines shall be fur- nished to the Association prior to the making of the first pay- ment 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; provided, however, where payments for such contract are to be made out of the pro- ceeds of the Special Account, the two conformed copies of the contract required to be furnished to the Association, together with the other information specified therein, shall be furnished to the Association as part of the evidence to be furnished pur- suant to paragraph 4 of Schedule 5 (the Special Account Schedule) to this Agreement. (c) The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Asso- ciation 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 15% 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. - 13 - SCHEDULE 4 Provincial Universities Except as the Borrower and the Association shall otherwise agree, the following shall be the Provincial Universities and the Provinces participating in the Project: 1. Beijing Normal College Beijing 2. Tianjin Normal University Tianjin 3. Hebei Normal University Hebei 4. Neimonggol Normal University Neimonggol 5. Liaoning Normal University Liaoning 6. Siping Normal College Jilin 7. Harbin Normal University Heilongjiang 8. Shanghai Normal University Shanghai 9. Nanjing Normal University Jiangsu 10. Zhejiang Normal University Zhejiang 11. Anhui Normal University Anhui 12. Fujian Normal University Fujian 13. Jiangxi Normal University Jiangxi 14. Shandong Normal University Shandong 15. Henan Normal University Henan 16. Hubei University Hubei 17. Hunan Normal University Hunan 18. South China Normal University Guangdong 19. Guangxi Normal University Guangxi 20. Sichuan Normal University Sichuan 21. Guizhou Normal University Guizhou 22. Yunnan Normal University Yunnan 23. Northwest Normal College Gansu 24. Qinghai Normal University Qinghai 25. Northeast Normal University Jilin 26. Central China Normal University Hubei 27. Southwest Normal University Sichuan 28. Shaanxi Normal University Shaanxi 29. Hebei University Hebei 30. Shanxi University Shanxi 31. Neimonggol University Neimonggol 32. Liaoning University Liaoning 33. Yanbian University Jilin 34. Heilongjiang University Heilongjiang 35. Suzhou University Jiangsu 36. Hangzhou University Zhejiang 37. Anhui University Anhui - 14 - 38. Jiangxi University Jiangxi 39. Zhengzhou University Henan 40. Xiangtan University Hunan 41. Guizhou University Guizhou 42. Yunnan University Yunnan 43. Northwest University Shaanxi 44. Ningxia University Ningxia 45. Xinjiang University Xinjiang 46. Shenzhen University Guangdong 47. Beijing Technical University Beijing 48. Taiyuan Technical University Shanxi 49. Shanghai Technical University Shanghai 50. Fuzhou University Fujian 51. Shandong Technical University Shandong 52. Guangdong Technical College Guangdong 53. Guangxi University Guangxi 54. Tianjin Medical College Tianjin 55. Harbin Medical University Heilongjiang 56. Shanghai Second Medical University Shanghai 57. Hubei Medical College Hubei 58. Chongqing Medical University Sichuan 59. Xinjiang August 1 Agricultural College Xinjiang 60. Sichuan Agricultural University Sichuan - 15 - SCHEDULE 5 Special Account 1. For the purposes of this Schedule: (a) the term "Category" means a category of items to be financed out of the proceeds of the Credit as 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; and (c) the term "Authorized Allocation" means an amount of SDR 5,000,000 equivalent to be withdrawn from the Crcdit Account and deposited into 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 the Association that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent with- drawals 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 into 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 expenditures. Each such deposit shall be withdrawn by the Asso- ciation from the Credit Account in the respective equivalent - 16 - 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 reason- ably 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 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) when the total unwithdrawn amount of the Credit allocated to the Project, 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 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 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 - 17 - 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