Conformed Copy - C2433 - Agricultural Development Project - Rajasthan - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2433 IN Project Agreement (Agricultural Development Project - Rajasthan) between INTERNATIONAL DEVELOPMENT ASSOCIATION and STATE OF RAJASTHAN Dated December 17, 1992 CREDIT NUMBER 2433 IN PROJECT AGREEMENT AGREEMENT, dated December 17, 1992, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and STATE OF RAJASTHAN, acting by its Governor (Rajasthan). WHEREAS by the Development Credit Agreement of even date herewith between India (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to seventy three million one hundred thousand Special Drawing Rights (SDR 73,100,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Rajasthan agree to undertake such obligations toward the Association as are set forth in this Agreement; WHEREAS Rajasthan, 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: ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the Development Credit Agreement and in the Page 2 General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) Rajasthan 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 and agricultural 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 to the provisions of paragraph (a) of this Section and except as the Association shall otherwise agree, Rajasthan shall carry out a program of reforms of the agricultural sector relating to policy measures, institutional developments and technological improvements, satisfactory to the Association, and shall implement such reforms and 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. Rajasthan 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) Rajasthan shall, no later than December 31, 1993, and December 31 of every year thereafter during the imple- mentation of the Project, exchange views with the Association with regard to the progress of the Policy Reform Program, the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit. (b) Rajasthan shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Policy Reform Program, the Project, the accomplish- ment of the purposes of the Credit, or the performance by Rajasthan of its obligations under this Agreement. ARTICLE III Financial Covenants Section 3.01. (a) Rajasthan shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of the departments or agencies of Rajasthan responsible for carrying out the Project or any part thereof. (b) Rajasthan 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 Association. (ii) furnish to the Association as soon as available, but in any case not later than nine months after the end of each such year, the report of such audit by said auditors, of such scope and in such Page 3 detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records and 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 Rajasthan 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 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 Rajasthan 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 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 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) For Rajasthan: Chief Sectetary Govermment of Rajasthan Jaipur, Rajasthan, PIN 302005 India Page 4 Telex: 3652047 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 Rajasthan may be taken or executed by Chief Secretary or such other person or persons as Rajasthan shall designate in writing, and Rajasthan 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/ D. Joseph Wood Regional Vice President South Asia STATE OF RAJASTHAN By /s/ Narayan Valluri 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, 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 1992 (the Guidelines). 2. To the extent practicable, contracts for goods shall be grouped into bid packages estimated to cost the equivalent of $200,000 or more. Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A.1 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 Page 5 1. Except as provided in paragraph 2 hereof, civil works under the Project, may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 2. Small works estimated to cost the equivalent of $10,000 or less per contract, up to an aggregate amount not exceeding the equivalent of $5,000,000, may be carried out by force account in a manner satisfactory to the Association. 3. Goods estimated to cost the equivalent of less than $200,000 per contract, up to an aggregate amount equivalent to $16,900,000, may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 4. The following may be procured under contracts awarded on the basis of comparison of price quotations obtained from at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Association: (a) Livestock for breeding purposes, seeds, planting materials, semen and materials estimated to cost the equivalent of $1,000,000; (b) Construction materials for force account works estimated to cost the equivalent of $2,000,000; and (c) Other goods estimated to cost the equivalent of $20,000 or less per contract, up to an aggregate amount equivalent to $3,300,000, and vehicles estimated to cost $1,200,000. 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 works estimated to cost the equivalent of $200,000 or more and each contract for goods estimated to cost the equivalent of $100,000 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 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 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 withdrawals from the Credit Account are to be made on the basis of statements of expenditure. 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 Rajasthan in carrying out the Project, Rajasthan shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Page 6 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. SCHEDULE 2 Implementation Program 1. Rajasthan shall by (i) March 31, 1993 employ in accordance with the provisions of Section 11 of Schedule 1 to this Agreement, consultants to carry out the water resources planning study under Part D.1 of the project, and (ii) December 31, 1995, furnish to the Association, for the Association's review and comments, the results of the study, and take such comments into account in formulating and implementing the future water resources plans. 2. Rajasthan shall, not later than March 31, 1993, under terms of reference agreed with the Association, commission a study for the preparation of a Strategic Development Plan for Rajasthan Agricultural University under Part G of the Project. 3. Rajasthan shall, not later than June 30, 1993, employ in accordance with the provisions of Section II of Schedule 1 to this Agreement, consultants to carry out the studies in the Indira Gandhi Canal command area under Part D.3 of the Project. 4. Rajasthan shall, with regard to roads under Part E of the Project: (a) ensure that such roads be selected in accordance with criteria, and constructed in accordance with standards, satisfactory to the Association; (b) without limitation to the provisions of Section 9.07 of the General Conditions, ensure that roads constructed under the Project shall be maintained in a manner satisfactory to the Association; (c) employ consultants in accordance with the provisions of Section II of Schedule 1 to this Agreement, to verify that roads have been constructed in accordance with the provisions of sub- paragraph (a) above; and (d) refrain from using proceeds of the Credit to assist in financing the construction of roads in the Indira Gandhi Canal command area, except in Sriganganagar District. 5. Rajasthan shall, without limitation to the provisions of Section 9.06 (a) (iii) of the General Conditions, by June 30, 1993 and December 31, 1993, and by each June 30 and December 31, there- after, furnish to the Association, a report on the progress of the Project, including the Policy Reform Program. 6. Rajasthan shall by December 31, 1993 and by each December 31 thereafter furnish to the Association, for the Association's review and comments, the annual action plan of activities under the Project for the following year. 7. Rajasthan shall, without limitation to the provisions of Section 2.01 of this Agreement, implement a system satisfactory to the Association, to channel funds required for the Project to all entities involved in carrying out the Project. 8. Rajasthan shall complete, not later than December 31, 1996, the study on experimental recharge schemes under Part D of the Project, and shall furnish to the Association, for the Association's review and comments, the results of the study. 9. (a) Rajasthan shall maintain the Environment Cell under Part Page 7 F of the Project with (i) key staff whose qualifications and experience are satisfactory to the Association, and (ii) environmental criteria and operating procedures acceptable to the Association. (b) The Environment Cell shall review the environmental implications of, and endorse, each annual action plan referred to in paragraph 6 of this Schedule. 10. Without limitation to the provisions of Section 9.08 of the General Conditions, Rajasthan shall not call for tenders for roads under Part E of the Project prior to completion of the process for land acquisition required for such roads.