Conformed Copy - C2173 - Integrated Child Development Services Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2173 IN LOAN NUMBER 3253 IN (Integrated Child Development Services Project) among INTERNATIONAL DEVELOPMENT ASSOCIATION and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and STATE OF ANDHRA PRADESH STATE OF ORISSA Dated October 23, 1990 CREDIT NUMBER 2173 IN LOAN NUMBER 3253 IN PROJECT AGREEMENT AGREEMENT, dated October 23, 1990, between INTERNATIONAL DEVELOPMENT ASSOCIATION, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and STATE OF ANDHRA PRADESH and STATE OF ORISSA. WHEREAS (A) by the Development Credit Agreement of even date herewith between India and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to seventy- three million six hundred thousand Special Drawing Rights (SDR 73,600,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condi- tion that the State of Andhra Pradesh and the State of Orissa agree to undertake such obligations toward the Association as are set forth in this Agreement; (B) by the Loan Agreement of even date herewith between 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 ($10,000,00- 0), on the terms and conditions set forth in the Loan Page 2 Agreement, but only on condition that the State of Andhra Pradesh and the State of Orissa agree to undertake such obligations toward the Bank as are set forth in this Agreement; WHEREAS the State of Andhra Pradesh and the State of Orissa, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, and the Bank's entering into the Loan 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 Loan Agreement, and in the General Conditions (as so defined in the Development Credit Agreement and the Loan Agreement, respectively) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) The Project States declare their 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 with appropri- ate administrative, financial, maternal and child health welfare 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 Associa- tion, the Bank and the Project States shall otherwise agree, the Project States shall carry out the Project in accordance with the Implementation Program set forth in Schedule 2 to this Agreement. Section 2.02. Except as the Association and the Bank shall otherwise agree, procurement of the goods, works and services required for the Project and to be financed out of the proceeds of the Credit and the Loan shall be governed by the provisions of Schedule 1 to this Agree- ment. Section 2.03. The Project States 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 applicable to the Development Credit Agreement and in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of the General Conditions applicable to the Loan Agreement (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respec- tively) in respect of the Project Agreement, and the Project. Section 2.04. (a) The Project States shall, at the request of the Association and the Bank, exchange views with the Association and the Bank with regard to the progress of the Project, the performance of their obligations under this Agreement, and other matters relating to the purposes of the Credit and the Loan. Page 3 (b) The Project States shall promptly inform the Association and the Bank of any condition which inter- feres or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit or the Loan, or the performance by the Project States of their obligations under this Agreement. ARTICLE III Financial Covenants Section 3.01. (a) The Project States shall maintain records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project. (b) The Project States shall: (i) have their records and accounts referred to paragraph (a) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consis- tently applied, by independent auditors acceptable to the Association and the Bank; (ii) furnish to the Association and the Bank as soon as available, but in any case not later than nine months after the end of each such year: (A) certified copies of their records and accounts 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 and the Bank shall have reasonably requested; and (iii) furnish to the Association and the Bank such other information concerning said records, accounts and financial state- ments as well as the audit thereof, as the Association and the Bank shall from time to time reasonably request. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which both the Development Credit Agreement and the Loan Agreement become effective. Section 4.02. (a) This Agreement and all obligations of the Association, the Bank and of the Project States thereunder shall terminate on the earlier of the follow- ing two dates: (i) the date on which both the Development Credit Agreement and the Loan Agreement shall have terminated in accordance with their respective terms; or (ii) the date twenty (20) years after the date of this Agreement. (b) If the Development Credit Agreement or the Loan Agreement or both of the said Agreements terminate in accordance with their respective terms before the date specified in paragraph (a) (ii) of this Section, the Association or the Bank or both shall promptly notify the Project States of this event. Page 4 Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Condi- tions applicable to the Development Credit Agreement or the Loan Agreement. 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 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 197688 (TRT) Washington, D.C. 248423 (RCA) 64145 (WUI) or 82987 (FTCC) 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 197688 (TRT) Washington, D.C. 248423 (RCA) 64145 (WUI) or 82987 (FTCC) For the State of Andhra Pradesh: Chief Secretary Government of Andhra Pradesh Secretariat, Hyderabad 500 022 India Telex: 042 56325 For the State of Orissa: Chief Secretary Government of Orissa Bhubaneshwar - 751001 India Telex: 067 5210 Section 5.02. Any action required or permitted to be Page 5 taken, and any document required or permitted to be executed, under this Agreement on behalf of the Project States may be taken or executed by its Chief Secretary or such other person or persons as the Project States shall designate in writing, and the Project States shall furnish to the Association and the Bank sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 5.03. As long as the Bank has not given notice to the contrary to the Project States and so long as the Development Credit Agreement shall not have terminated prior to the termination of the Loan Agree- ment: (a) the obligations of the Project States to consult with, and to furnish information, documents, plans, reports, records and statements to, the Bank shall be satisfied to the extent performance in respect of such obligations is rendered to the Association; (b) the obligations of the Bank to consult with, and to furnish information to, the Project States shall be satisfied to the extent such obligations are fulfilled by the Association; and (c) all actions taken (including the giving of approvals or granting of waivers) by the Association pursuant to the Development Credit Agreement shall be deemed to be taken pursuant to both the Development Credit Agreement and the Loan Agreement, and in the name and on behalf of both the Association and the Bank. Section 5.04. 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 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 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Attila Karaosmanoglu Regional Vice President Asia STATE OF ANDHRA PRADESH By /s/ Abid Hussain Authorized Representative STATE OF ORISSA Page 6 By /s/ Abid Hussain Authorized Representative SCHEDULE 1 Procurement and Consultants' Services Section I: Procurement of Goods and Works Part A: International Competitive Bidding 1. Except as provided in Part C hereof, drugs and medicines 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 procedures 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 and 4 of Appendix 2 thereto. Part C: Other Procurement Procedures 1. Except as provided in Paragraph 3 hereof, contracts for civil works shall be awarded on the basis of competi- tive bidding, advertised locally, in accordance with procedures satisfactory to the Association and the Bank. 2. Except as provided in Paragraph 5 hereof, drugs and medicines estimated to cost less than the equivalent of $200,000 per contract, up to an aggregate amount not exceeding $1,000,000 may be procured under contracts awarded on the basis of competitive bidding, advertized locally, in accordance with procedures satisfactory to the Association and the Bank. 3. Civil works, estimated to cost less than $5,000 equivalent each up to an aggregate amount not exceeding $17,700,000 equivalent, may be carried out through force account. 4. Except as provided in Paragraph 5 hereof, furniture and equipment shall be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association and the Bank. 5. Furniture and equipment, and drugs and medicines, estimated to cost less than the equivalent of $50,000 per contract, up to an aggregate amount not exceeding $2,800,000 and $3,000,000 equivalent respectively, and vehicles and therapeutic nutrition supplements may be procured under quotations solicited from a list of at least three suppliers eligible under the Guidelines, in accordance with procedures satisfactory to the Associa- tion and the Bank. Part D: Review by the Association and the Bank of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to (i) each contract awarded under Part A above; and (ii) each contract for civil works, and furniture and equipment estimated to cost the equivalent Page 7 of $200,000 or more the procedures set forth in para- graphs 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 and the Bank 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 preceding 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 and the Bank pursuant to said paragraph 3 shall be furnished to the Association and the Bank as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 3 to the Development Credit Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which the Association and the Bank have authorized withdrawals from the Credit Account on the basis of statements of expendi- ture. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of the Development Credit Agree- ment. 2. The figure of 15% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II: Employment of Consultants In order to assist the Project States in carrying out the Project, the Project States shall employ consul- tants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association and the Bank. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association and the Bank 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. SCHEDULE 2 Implementation Program 1. Each Project State shall apply and maintain benefi- ciary selection criteria and procedures, acceptable to the Association and the Bank, for the purpose of carrying out the nutrition supplementation program under Part A.5 of the Project. 2. Each Project State shall: (a) carry out the studies under Parts D.1 (a) and D.1 (b) of the Project under terms of reference satisfactory to the Association and the Bank; (b) by September 30, 1991, complete the study under Part D.1 (a) of the Project and by April 1, 1992, discuss the results thereof with the Association and the Bank; and (c) by September 30, 1994, complete and discuss with the Association and the Bank the study under Part D.1 (b) of the Project. Page 8 3. In carrying out Part D.2 of the Project, each Project State shall by January 1, 1991 establish and thereafter maintain until completion of the Project a PMU in accordance with a key staffing plan satisfactory to the Association and the Bank for the purpose of managing, monitoring and reviewing the progress of the Project. 4. Without limitation or restriction to the provisions of Section 2.04 of this Agreement, each Project State shall furnish to the Association and the Bank for review and discussion: (a) quarterly and annual progress reports within three months of the relevant implementation period, and (b) a prospective annual work plan on the activities to be carried out under the Project by January 31 of each Fiscal Year, in formats satisfactory to the Association and the Bank. 5. The Project States shall in consultation with the Borrower, the Association and the Bank and in accordance with terms of reference and methodology satisfactory to the Association and the Bank, undertake and complete: (a) by December 31, 1993, a mid-term review and evaluation of the Project; and (b) by September 30, 1997, a final evaluation of the Project. 6. In carrying out Part A.2 of the Project, each Project State shall place one additional supervisor in each block in the Project Area where the Project is carried out for the first two years of implementation of the Project in such block.