Barbados - Industrial Development And Export Promotion Project : Loan 1813 - BIDC Project Agreement - Conformed

OFFICIAL DOUMENT S LOAN NUMBER 1813 BAR BIDC Project Agreement (Industrial Development and Export Promotion Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and BARBADOS INDUSTRIAL DEVELOPMENT CORPORATION Dated . 1980 LOAN NUMBER 1813 BAR BIDC PROJECT AGREEMENT AGREEMENT, dated 65"6 2 , 1980, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and BARBADOS INDUSTRIAL DEVELOPMENT CORPORATION (hereinafter called BIDC), a statutory corporation established pursuant to the Barbados Industrial Development Corporation Act (Cap. 341). WHEREAS (A) by the Loan Agreement of even date herewith between Barbados (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to ten million dollars ($10,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that BIDC agrees to undertake such obligations toward the Bank as are hereinafter, set forth; (B) by a subsidiary loan agreement to be entered into between the Borrower and BIDC, the equivalent of six million dollars ($6,000,000) out of the proceeds of the loan provided for under the Loan Agreement will be made available to BIDC on the terms and conditions therein set forch; and WHEREAS BIDC, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Loan Agreement and the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. BIDC shall carry out Part A of the Project described in Schedule 2 to the Loan Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices. - 2 - Section 2.02. In order to assist BIDC in carrying out Part A of the Project, BIDC shall employ consultants whose qualifica- tions, experience and terms and conditions of employment (includ- ing terms of reference) shall be satisfactory to the Bank. Section 2.03. Except as the Bank shall otherwise agree, procurement of the goods and civil works required for Part A of the Project and to be financed out of the proceeds of the Loan, shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.04. BIDC shall prepare and send to the Bank not later than September 30, 1980 a plan setting forth its proposals for increasing the participation of small scale domestic con- tractors in industrial estate construction, including subcon- tracting, preparation of small bid packages and consideration of less stringent prequalification requirements. Section 2.05. (a) BIDC undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan relent to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by BIDC to replace or repair such goods. (b) Except as the Bank may otherwise agree, BIDC shall cause all goods and services financed out of the proceeds of the Loan relent to it by the Borrower to be used exclusively for Part A of the Project. Section 2.06. (a) BIDC shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for Part A of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) BIDC: (i) shall maintain records and procedures adequate to record and monitor the progress of Part A of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Loan, and to disclose their use in Part A of the Project; (ii) shall enable the Bank's accredited representatives to visit the facilities and construction sites included in Part A of the -3- Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iii) shall furnish to the Bank at regular intervals all such information as the Bank shall reasonably request concerning Part A of the Pro- ject, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. (c) Promptly after completion of the Project, but in any event not later than six months after the Closing Date, or such later date as may be agreed for this purpose between BIDC and the Bank, BIDC shall prepare and furnish to the Bank a report, of such scope and in such detail as the Bank shall reasonably request, on the execution and initial operation of Part A of the Project, its cost and the benefits derived and to be derived from it, the performance by BIDC and the Bank of their respective obligations under this Agreement and the accomplishment of the purposes of the Loan. (d) BIDC shall enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of BIDC and any relevant records and documents. Section 2.07. BIDC shall dul. perform all its obligations under the BIDC Subsidiary Loan Agreement. Except as the Bank shall otherwise agree, BIDC shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the BIDC Subsidiary Loan Agreement or any provision thereof. Section 2.08. (a) BIDC shall, at the request of the Bank, exchange views with the Bank with regard to the progress of Part A of the Project, the performance of its obligations under this Agreement and under the BIDC Subsidiary Loan Agreement and other matters relating to the purposes of the Loan. (b) BIDC shall promptly inform the Bank of any condition which interferes or threatens to interfere with the progress of Part A of the Project, the accomplishment of the purposes of the Loan, or the performance by BIDC of its obligations under this Agreement and under the BIDC Subsidiary Loan Agreement. Section 2.09. BIDC shall prepare and send to the Bank not later than September 30, 1980 a staff training program satis- factory to the Bank. 4- ARTICLE III Management and Operations of BIDC Section 3.01. (a) BIDC shall at all times manage its affairs, maintain its financial position, plan its future expansion, operate and maintain its plant, equipment and other property and from time to time make all necessary renewals and repairs thereof and shall at all times carry on its operations in an efficient manner under capable management and with the assistance of quali- fied and experienced personnel, all in accordance with sound business, financial, administrative, engineering and public utility practices. (b) BIDC shall take all steps necessary to acquire, maintain and renew all rights, powers, privileges and franchises which are necessary or useful in the conduct of its business. (c) Except as the Bank and BIDC shall otherwise agree, BIDC shall not transfer, or permit to be transferred, to any other person or entity any portion of its property the transfer of which would in any manner adversely affect the operations or the financial position of BIDC. Section 3.02. BIDC shall take out and maintain with respon- sible insurers insurance against such risks and in such amounts as shall be consistent with sound administrative and business prac- tices. Section 3.03. BIDC shall cause the roads included in Part A of the Project to be maintained in accordance with sound engi- neering practices and shall provide, promptly as needed, the funds, facilities and services required for the purpose. Section 3.04. Schedule 2 to this Agreement shall have effect with respect to rent of BIDC's factory buildings, renewal of lease and rental contracts and lease contract with option to purchase such buildings. ARTICLE IV Financial Covenants Section 4.01. BIDC shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. - 5 - Section 4.02. BIDC shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning the accounts and financial statements of BIDC and the audit thereof as the Bank shall from time to time reasonably request. Section 4.03. BIDC shall not later than March 31, 1981 modify its bookeeping and financial reporting to adequately reflect: (i) BIDC's net operating income prior to any con- tribution from the Borrower for administration and promotion; (ii) a provision for depreciation of BIDC's buildings; and (iii) any other changes required by the system for lease with option to purchase described in Schedule 2 to this Agreement. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Loan Agreement becomes effective. Section 5.02. This Agreement and all obligations of the Bank and of BIDC thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms, and the Bank shall promptly so notify BIDC thereof. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between -6- the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address herein- after specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For BIDC: General Manager Barbados Industrial Development Corporation Harbour Industrial Park Bridgetown Barbados Cable address: Telex: BARDEV WB 295 Barbados Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement or under Section 2.09 of the Loan Agreement on behalf of BIDC may be taken or executed by BIDC's General Manager or by such other person or persons as BIDC shall designate in . writing, and BIDC shall furnish to the Bank sufficient evidence of the authority and the authenticated specimen signature of each such person. - 7 - Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, 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. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By $7e& e' Regional Vice President Latin America and the Caribbean BARBADOS INDUSTRIAL DEVELOPMENT CORPORATION By A es Authorized Representative - 8 - SCHEDULE 1 Procurement A. International Competitive Bidding 1. Civil works included in Part A of the Project estimated to cost the equivalent of $1,000,000 or more shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. For works to be procured on the basis of international competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, BIDC shall prepare and forward to the Bank as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender or prequalification documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Bank shall reasonably request; the Bank will arrange for the publication of such notice in order to provide timely notification to prospective bidders of the oppor- tunity to bid for the works in question. BIDC shall provide the necessary information to update such notice annually so long as any works remain to be procured on the basis of international competitive bidding. 3. Bidders for the works included in Part A of the Project shall be prequalified as described in paragraph 1.3 of the Guide- lines. B. Other Procurement Procedures 1. Civil works included in Part A of the Project and estimated to cost the equivalent of less than $1,000,000 and goods included in Part D of the Project shall be procured under contracts awarded on the basis of competitive bidding after local advertising and in accordance with the Borrower's procurement procedures. 2. Civil works mentioned in Part B (1) above and estimated to cost the equivalent of $350,000 or more shall be carried out in accordance with the provisions of said Part or, if the Bank shall so agree, by BIDC's own work force. Any such works estimated to - 9 - cost less than $350,000 may be carried out by BIDC's own work force. 3. Bidders for such works estimated to cost the equivalent of less than $1,000,000 shall be prequalified in accordance with the Borrower's prequalification procedures and prequalification shall be carried out by the consultants referred to in Section 2.02 of this Agreement. C. Review of Procurement Decisions by the Bank 1. Review of prequalification. BIDC shall, before qualification is invited, inform the Bank in detail of the procedure to be followed, and shall introduce such modifications in said procedure as the Bank shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequal- ification shall be furnished by BIDC to the Bank and the Bor- rower's Tender Committee for their comments before the applicants are notified of BIDC's decision, and BIDC shall make such addi- tions to, deletions from, or modifications in, the said list as the Bank shall reasonably request. 2. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for civil works estimated to cost the equivalent of $350,000 or more and in any case the first three contracts for civil works: (a) Before bids are invited, BIDC shall furnish to the Bank and the Borrower's Tender Committee, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising proce- dures to be followed for the bidding, and shall make such modifi- cations in the sid documents or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's and the Borrower's Tender Committee's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, BIDC shall, before a final decision on the award is made, inform the Bank and the Borrower's Tender Committee of the name of the bidder to which it intends to award the contract and shall furnish - 10 - to the Bank and said Committee, in sufficient time for their review, a detailed report, by the consultants referred to in Section 2.02 of this Agreement, on the evaluation and comparison of the bids received, together with the recommendations for award of the said consultants and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform BIDC and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the delivery to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 3. With respect to each contract not governed by the preceding paragraph, BIDC shall furnish to the Bank, promptly after its execution and prior to the delivery to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such con- tract, together with the analysis of the respective bids, recom- mendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform BIDC and state the reasons for such determination. 4. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an exten- sion of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 10% of the original price, BIDC shall inform the Bank of the proposed modification, waiver, extension or change order and the reasons therefor. The Bank, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform BIDC and state the reasons for its determination. - 11 - SCHEDULE 2 Factory Buildings BIDC shall: (i) with respect to factory buildings included in Part A of the Project and completed before December 31, 1981 rea-tre medium- and large-scale firms to pay rent of BD$6.5 per r- -re foot per year and small-scale firms to pay rent of _r square foot per year or such other rent amounting to - .7% respectively of the estimated construction costs as shall be agreed between BIDC and the Bank not later than October 31, 1980; and (ii) with respect to factory buildings completed on or after December 31, 1981 require: (A) medium- and large-scale firms to pay annual rent fixed at 14% of estimated construction costs as agreed between BIDC and the Bank not less frequently than once a year and annual rent fixed at 16% of such costs in the case of leases with option to purchase; and (B) small-scale firms to pay annual rent fixed at 7% of estimated construction costs, such rent to be increased pradually until it equals rent charge- able under (A) above in the tenth year of occupancy. All leases and rental contracts for factory buildings shall be for three years renewable and shall provide for price adjustment at the time of renewal at a rate equal to the compound inflation rate for the period up to a maximum of 40%. All such leases with option to purchase contracts shall be for five years and shall provide for the adjustment of the monthly rate after the third year and the option price shall reflect the buildings' market value and an appropriate discount. 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 Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this 2? # day of L , 198 . FOR SECRETARY