India - Gujarat Rural Roads Project : Credit 1757 - Project Agreement - Conformed

DOC UMENTS CREDIT NUMBER 1757 IN Project Agreement (Gujarat Rural Roads Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and STATE OF GUJARAT Dated 'L 2 , 1987 CREDIT NUMBER 1757 IN PROJECT AGREEMENT AGREEMENT, dated 2 /.2 , 1987, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association), and STATE OF GUJARAT, (Gujarat) acting by its Governor. WHEREAS (A) by the Development Credit Agreement of even date herewith between India, acting by its President (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to one hundred one million Special Drawing Rights (SDR 101,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Gujarat agrees to undertake such obligations toward the Association as are set forth in this Agreement; (B) in accordance with the Borrower's standard arrangements for developmental assistance to the States of India, the proceeds of the Credit provided for under the Development Credit Agreement will be made available to Gujarat; and WHEREAS Gujarat, in consideration of the Association's entering into the Credit Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE 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, the Preamble to this 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) Gujarat declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement, and, to this end, shall carry out the Project with due diligence and efficiency and in conformity - 2- with appropriate administrative, financial and engineering 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, Gujarat shall carry out the Project in accor- dance with the Implementation Program set forth in Schedule 2 to this Agreement, as such Schedule may be amended from time to time by agreement between the Association and Gujarati 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 1 to this Agreement. Section 2.03. Gujarat 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. Section 2.04. (a) Gujarat shall, at the request of the Association, exchange views with the Association with regard to progress of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit. (b) Gujarat shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of Credit, or the performance by Gujarat of its obligations under this Agreement. ARTICLE III Financial Covenants Section 3.01. (a) Gujarat shall cause its departments and other agencies and authorities responsible for the carrying out of the Project or any part thereof to: (i) maintain separate records and accounts adequate to reflect, in accordance with sound accounting practices and procedures consistently applied, -3- their resources, expenditures and operations related to the Project; and (ii) furnish to the Association copies of their accounts and financial statements related to the Project for each fiscal year, certified as to their accuracy and authenticity by an independent auditor acceptable to the Association, as soon as available but in any case not later than nine months after the end of each such year. (b) Gujarat shall cause its departments and other agencies and authorities responsible for the carrying out of the Project or any part thereof to: (i) have their accounts and financial statements related to the Project 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 immediately following its finalization, the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasoaably requested; and (iii) furnish to the Association such other information concerning said accounts and records, financial statements and 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, Gujarat shall: (i) maintain, in accordance with paragraph (a) of this Section, separate records and accounts reflecting such expenditures; (ii) retain, until at least 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 audits referred to in paragraphs (a) and (b) of this Section and that the report thereof contains, in respect of such separate -4- accounts, a separate opinion by said auditors as to whether the proceeds of the Credit withdrawn in respect of such expenditures were used for the purposes for which they were provided. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 4.02. This Agreement and all obligations of the Association, and of Gujarat 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 their respective terms; or (ii) the date 25 years after the date of this Agreement. (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 Gujarat of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE V Miscellaneous Provisions Section 5.01. 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 -5- 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: INTBAFRAD Washington, D.C. For Gujarat: Secretary, Roads and Buildings Department Government of Gujarat, Block No. 14 Sachivalaya Building, Gandhinagar 382010, India Cable address: WORKSEC Gandhinagar Section 5.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of Gujarat may be taken or executed by its Chief Secretary or such other person or persons as Chief Secretary shall designate in writing, and Gujarat shall furnish to the Bank sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 5.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. -6- 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 By k A/. bibl Oel Regional Vice President South Asia STATE OF GUJARAT By 1gL/CL Authorized Representative -7- SCHEDULE 1 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A: International Competitive Bidding Except as provided in Part C hereof, goods 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 India 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. Civil works contracts may be procured on the basis of competitive bidding, advertised locally in accordance with procedures satisfactory to the Association. 2. Equipment items or groups of items estimated to cost les$ than the equivalent of $500,000 per item or group of items up to an aggregate amount not to exceed the equivalent of $11,000,000 may be procured under contracts awarded on the basis of competi- tive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 3. Items required for their demonstration effect and the tech- nology they introduce may be procured through prudent shopping. 4. Bidders for the works included in the Project shall be pre- qualified as described in paragraph 2.10 of the Guidelines. 5. To the extent practicable, contracts for civil works shall be grouped in bid packages estimated to cost the equivalent of $500,000 or more each. -8- Part D: Review by the Association of Procurement Decisions 1. Review of prequalification: With respect to the prequalification of bidders, as provided in Part C.3 hereof, the procedures set forth in p;§ragraph 1 of Appendix 1 to the Guidelines shall apply. 2. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract for civil works estimated to cost the equivalent of $700,000 or more and contracts for equipment estimated to cost the equivalent of $50,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. (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. (c) The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account 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 3.01 (c) (ii) of this Agree- ment. 3. 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 Gujarat in carrying out the Project, Gujarat shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory 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 Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. 9 SCHEDULE 2 Implementation Program 1. Gujarat shall: (a) carry out a Maintenance Planning Study in accordance with terms of reference acceptable to the Association; (b) have it completed by December 31, 1988; and (c),thereafter discuss its findings with the Association. 2. Gujarat shall undertake an economic evaluation, for each Project road, satisfactory to the Association. 3. Gujarat shall introduce a Project Monitoring System for the implementation of the Project. 4. Gujarat shall, at the commencement of each financial year, accord umbrella administrative approval to each year's construc- tion program under the Project. 5. Gujarat shall: (a) beginning April 1, 1988 provide funds for road maintenance at levels acceptable to the Association; and (b) maintain these levels in real terms throughout the Project period. 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. FORSECRETARY