Conformed Copy - C2158 - Second Tamil Nadu Nutrition Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2158 IN (Second Tamil Nadu Nutrition Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and THE STATE OF TAMIL NADU Dated September 14, 1990 CREDIT NUMBER 2158 IN PROJECT AGREEMENT AGREEMENT, dated September 14, 1990, between INTERNATIONAL DEVELOPMENT ASSOCIATION, and THE STATE OF TAMIL NADU. WHEREAS 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 five hundred thousand Special Drawing Rights (SDR 73,500,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that the Project State agrees to undertake such obligations toward the Association as are set forth in this Agreement; WHEREAS the Project State, 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 THEREFORE the parties hereto hereby agree as follows: Page 2 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 in the Development Credit Agreement) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) The Project State 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 with appropriate administrative, financial, maternal and child health 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 Association and the Project State shall otherwise agree, the Project State 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 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 shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.03. The Project State shall carry out the obliga- tions 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 (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) The Project State shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement, and other matters relating to the purposes of the Credit. (b) The Project State 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 the Credit, or the performance by the Project State of its obligations under this Agreement. ARTICLE III Financial Covenants Section 3.01. (a) The Project State shall maintain records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures of the departments or agencies of the Project State responsible for carrying out the Project or any part thereof. (b) The Project State shall: (i) have the records and accounts referred to in paragraph (a) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Associa- tion; (ii) furnish to the Association as soon as available, Page 3 but in any case not later than nine months after the end of each such year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning such records, accounts and the audit thereof, as the Association 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 the Development Credit Agreement becomes effective. Section 4.02. (a) This Agreement and all obligations of the Association and of the Project State thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall have terminated in accordance with its terms; or (ii) the date twenty (20) 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 the Project State 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 applicable to the Development Credit 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 State of Tamil Nadu: Page 4 Chief Secretary to the Government of Tamil Nadu Fort St. George Madras 600009 India Cable address: Telex: CHIEFSEC 41-7400 GOTN Fort St. George Madras 600009 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 the Project State may be taken or executed by its Chief Secretary or such other person or persons as the Project State shall designate in writing, and the Project State shall furnish to the Association 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. 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 /s/ Attila Karaosmanoglu Regional Vice President Asia THE STATE OF TAMIL NADU By /s/ Anil Kumar Authorized Representative 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, 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: 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 2 hereof, contracts for civil works shall be awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. Page 5 2. Civil works, estimated to cost less than $6,000 equivalent each, up to an aggregate amount not exceeding $3,000,000 equivalent, may be carried out through force account. 3. 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. 4. Except as provided in paragraphs 5 and 6 hereof, therapeutic nutrition supplements, shall be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 5. Furniture, equipment, drugs and medicines, vehicles, and therapeutic nutrition supplements, off the shelf items or groups of items estimated to cost less than the equivalent of $50,000 per contract, up to an aggregate amount not exceeding $4,200,000, $2,000,000, $3,000,000, $4,940,000, and $5,000,000 equivalent respectively, 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 Association. 6. Therapeutic nutrition supplements, up to an aggregate amount of $5,000,000 equivalent, may be procured under contracts negotiated directly with one or more suppliers thereof in accordance with procedures satisfactory to the Association. Part D: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract for drugs and medicines, therapeutic nutrition supplements, civil works, equipment, furniture, and vehicles estimated to cost the equivalent of $200,000 or more, the procedures set forth in paragraphs 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 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 pre- ceding 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 pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 4 to the Development Credit Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which the Association 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 (a) (ii) of the Development Credit Agreement. 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 Project State in carrying out the Project, the Project State may employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be Page 6 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. SCHEDULE 2 Implementation Program 1. The Project State shall by January 1, 1991, (a) adopt and apply beneficiary selection criteria and methodology, mutually agreed to by the Association and the Project State, for provision of therapeutic supplements to children under thirty six months of age, and pregnant and lactating women in the Project Area, and (b) thereafter make provision in the Project Area and maintain the provision of therapeutic nutrition supplements which have a composition satisfactory to the Association. 2. The Project State shall, by January 1, 1991, introduce and thereafter maintain arrangements agreed to by the Association and the Project State for coordination between the health and nutrition services in the Project Area. 3. The Project State shall by, September 30, 1991, undertake and complete operations research on the efficacy of different approaches to strengthening obstetrical and child nutritional risk management at referral facilities in the Project Area. The said operations research shall be conducted in accordance with the terms of reference and criteria agreed to by the Association and the Project State. 4. The Project State shall (a) prior to undertaking innovative studies, operational research, and activities, furnish terms of reference, work plans and proposed budgets in respect thereof satisfactory to the Association, and (b) discuss the results of the innovative studies, operations research and activities with the Association. 5. The Project State shall furnish to the Association 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 by January 31 of each year for the Borrower's following financial year, in formats satisfactory to the Association. 6. The Project State shall, in consultation with the Borrower and the Association and in accordance with terms of reference and methodology satisfactory to the Association, undertake and complete (a) collection of baseline survey data for each health unit district in the Project Area prior to the commencement of activities in that health unit district under Parts A and B of the Project, (b) by December 31, 1993, a mid-term review and evaluation of the Project, and (c) by September 30, 1997, a final review and evaluation of the Project.