Benin - Transport Infrastructure Rehabilitation And Maintenance Project : Credit 1807 - Project Agreement - Conformed

cocUMENT'f CREDIT NUMBER 1807 BEN Project Agreement (Transport Infrastructure Rehabilitation and Maintenance Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and PORT AUTONOME DE COTONOU Dated ,1987 2qe CREDIT NUMBER 1807 BEN PROJECT AGREEMENT AGREEMENT, dated A-' , 1987, between INTERNATIONAL DEVELOPMENT ASSOCIATN (the Association) and PORT AUTONOME DE COTONOU (PAC). WHEREAS (A) by the Development Credit Agreement of even date herewith between People's Republic of Benin (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to fifteen million two hundred thousand Special Drawing Rights (SDR 15,200,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that PAC agree to undertake such obligations toward the Association as are set forth in this Agreement; (B) by a subsidiary loan agreement to be entered into between the Borrower and PAC, part of the proceeds of the credit provided for under the Development Credit Agreement will be made available to PAC on the terms and conditions set forth in said Subsidiary Loan Agreement; and WHEREAS PAC, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agreement; NOW THEREORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) PAC declares its commitment to the objec- tives of the Project as set forth in Schedule 2 to the Develop- ment Credit Agreement and, to this end, shall carry out Parts A (a) through (e) and C (a) of the Project with due diligence and -2- efficiency and in conformity with appropriate financial, engi- neering, economic, administrative and port management practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Borrower, the Association and PAC shall otherwise agree, PAC shall carry out Parts A (a) through (e) and C (a) of the Project in accordance with its Action Plan. Section 2.02. 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 3 to the Development Credit Agreement. Section 2.03. PAC shall carry out 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 insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of the Project Agreement and Parts A (a) through (e) and C (a) of the Project. Section 2.04. PAC shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Association shall otherwise agree, PAC shall not take or concur in any action which would have the. effect of amending, abrogating, assigning or waiving the Subsidiary Loan Agreement or any provision thereof. Section 2.05. (a) PAC shall, at the request of the Associa- tion, exchange views with the Association with regard to the progress of Parts A (a) through (e) and C (a) of the Project, the performance of its obligations under this Agreement and under the Subsidiary Loan Agreement, and other matters relating to the purposes of the Credit. (b) PAC shall promptly inform the Association of any condi- tion which interferes or threatens to interfere with the progress of Parts A (a) through (e) and C (a) of the Project, the accomplishment of the purposes of the Credit, or the performance by PAC of its obligations under this Agreement and under the Subsidiary Loan Agreement. -3- ARTICLE III Management and Operations of PAC Section 3.01. PAC shall carry on its operations and conduct its affairs in accordance with sound administrative, financial, engineering and port management practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. PAC shall at all times operate and maintain its installations, machinery, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and port management practices. Section 3.03. PAC shall take out and maintain with respons- ible insurers, or make other provision satisfactory to the Asso- ciation for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. (a) PAC shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its operations and financial condition. (b) PAC shall: (i) have its records, accounts and financial state- ments (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 Asso- ciation; (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 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 Association shall have reasonably requested; and -4- (iii) furnish to the Association such other information concerning said records, accounts and financial statements as well as the audit thereof, 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, PAC shall: (i) maintain, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Associa- tion 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 records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the proce- dures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. (a) Except as the Association shall otherwise agree, PAC shall maintain, for each of its fiscal years after its fiscal year ending on December 31, 1987, a ratio of total working expenses to total operating revenues not higher than 0.45. (b) Before August 31 in each of its fiscal years, PAC shall, on the basis of forecasts prepared by PAC and satisfactory to the Association, review whether it would meet the requirements set forth in paragraph (a) in respect of such year and the next following fiscal year, and shall furnish to the Association the results of such review upon its completion. - 5 - (c) If any such review shows that PAC would not meet the requirements set forth in paragraph (a) for PAC's fiscal years covered by such review, PAC shall promptly take all necessary measures (including, without limitation, adjustments of the structure or levels of its rates) in order to meet such requirements. (d) Without any limitation on the provisions of para- graph (c) above, PAC shall, inter alia: (i) during the period 1988-1991, annually reduce its number of total permanent and temporary staff by at least 5% over the previous year; and (ii) revise its tariff structure to take into account the cost of its services and the availability of facilities and, not later than June 30, 1989, introduce a revised tariff structure satisfactory to the Association. (e) For the purposes of this Section: (i) The term "total working expenses" means all cash expenses related to operations, including admin- istration, adequate maintenance, taxes and pay- ments in lieu of taxes, but excluding interest and other charges on debt. (ii) The term "total operating revenues" means revenues from all sources related to operations. Section 4.03. (a) Except as the Association shall otherwise agree, PAC shall not incur any debt if, after the incurrence of such debt, the ratio of debt to equity shall be greater than 35 to 65. (b) For purposes of this Section: (i) The term "debt" means any indebtedness of PAC maturing by its terms more than one year after the date on which it is originally incurred. (ii) Debt shall be deemed to be incurred: (A) under a loan contract or agreement or other instrument providing for such debt or for the modification of -6- its terms of payment on the date of such contract, agreement or instrument; and (B) under a guarantee agreement, on the date the agreement providing for such guarantee has been entered into. (iii) The term "equity" means the sum of the total unimpaired paid-up capital, retained earnings and reserves of PAC not allocated to cover specific liabilities. (iv) Whenever for the purposes of this Section it shall be necessary to value, in terms of the currency of the Borrower, debt payable in another currency, such valuation shall be made on the basis of the prevailing lawful rate of exchange at which such other currency is, at the time of such valuation, obtainable for the purposes of servicing such debt, or, in the absence of such rate, on the basis of exchange acceptable to the Association. Section 4.04. Until the completion of the Project, by August 31 for each year or such other date as the Association may agree, PAC shall furnish to the Association for its approval: (a) its proposed annual maintenance program and related budget; and (b) its proposed multi-year investment plan including the investment budget for the following year. Furthermore, prior to undertaking any investment or group of investments exceeding CFAF 200 million, not included in the investment plan approved by the Association, PAC shall consult with the Association as to the justification of said investment(s) and obtain the Association's approval therefor. 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 Development Credit Agreement becomes effective. -7- Section 5.02. (a) This Agreement and all obligations of the Association and of PAC thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) the date 18 years after the date of this Agree- ment. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify PAC of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- tion 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 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 hereinafter 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 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) -8- For PAC: Port Autonome de Cotonou P. 0. Box 927 Cotonou People's Republic of Benin Cable address: Telex: DIRPORT 5004 Cotonou DIRPORT CTNOU Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of PAC, or by PAC on behalf of the Borrower under the Development Credit Agreement, may be taken or executed by the Director General or such other person or persons as PAC shall designate in writing, and PAC shall furnish to the Associa- tion sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 9 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. INTERNATIONAL DEVELOPMENT ASSOCIATION Regional Vice President Africa PORT AUTONOME DE COTONOU Authorized Representative 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