Conformed Copy - C2539 - Rural Health Workers Development Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2539 CHA (Rural Health Workers Development Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and THE PROVINCES OF ANHUI, FUJIAN, GUIZHOU, HEBEI, HENAN, AND SHANXI Dated August 25, 1993 CREDIT NUMBER 2539 CHA PROJECT AGREEMENT AGREEMENT, dated August 25, 1993, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and THE PROVINCES OF ANHUI, FUJIAN, GUIZHOU, HEBEI, HENAN AND SHANXI (the Project Provinces). WHEREAS by the Development Credit Agreement of even date herewith between People's Republic of China (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to seventy-nine million three hundred thousand Special Drawing Rights (SDR 79,300,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that the Project Provinces agree to undertake such obligations toward the Association as are set forth in this Agreement; and WHEREAS the Project Provinces, 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) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) Each Project Province 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 Parts A, B, C and D of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and health practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for Parts A, B, C and D of the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Association and the Project Provinces shall otherwise agree: (i) each Project Province shall carry out Parts A, B, C and D of the Project in accordance with the Implementation Program set forth in Schedule 2 to this Agreement; and (ii) each Project Province shall make the proceeds of the Credit lent to it by the Borrower and additional funds from its own resources available to health institutions and bureaus carrying out the Project at the prefecture, county, township and village levels on the terms and conditions set forth in Schedule 3 to this Agreement. 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. the Project Provinces 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 respectively to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition) in respect of the Project Agreement and Parts A, B, C and D of the Project. Section 2.04. (a) the Project Provinces shall, at the request of the Association, exchange views with the Association with regard to the progress of Parts A, B, C and D of the Project, the performance of their respective obligations under this Agreement and other matters relating to the purposes of the Credit. (b) the Project Provinces shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of Parts A, B, C and D of the Project, the accomplishment of the purposes of the Credit, or the performance by the Project Provinces of their respective obligations under this Agreement. ARTICLE III Financial Covenants Section 3.01. (a) The Project Provinces 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 Parts A, B, C and D of the Project of the departments or agencies of the Project Provinces responsible for carrying out Parts A, B, C and D of the Project. Page 3 (b) The Project Provinces 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, through the Borrower, as soon as available, but in any case not later than six months after the end of each such year, 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 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 the Project Provinces 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 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 Provinces 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), Page 4 64145 (WUI) or 197688 (TRT) For Anhui Province: The People's Government of Anhui Province 85 Changjiang Road, Hefei Anhui Province People's Republic of China 230001 For Fujian Province: The People's Government of Fujian Province 28 Hualin Road, Fuzhou Fujian Province People's Republic of China 350003 For Guizhou Province: The People's Government of Guizhou Province 346 Zhonghua Road, Guiyang, Guizhou Province People's Republic of China 550004 For Hebei Province: The People's Government of Hebei Province 10 Weiming Street, Shijiazhuang Hebei Province People's Republic of China 050050 For Henan Province: The People's Government of Henan Province 10 Weier Road, Zhengzhou Henan Province People's Republic of China 450003 For Shanxi Province: The People's Government of Shanxi Province 101 Dongjie, Taiyuan Shanxi Province People's Republic of China 030072 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 each Project Province may be taken or executed by Governor or Vice-Governor or such other person or persons as Governor or Vice-Governor shall designate in writing, and each Project Province 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/ Gautam S. Kaji Regional Vice President East Asia and Pacific Page 5 ANHUI PROVINCE, FUJIAN PROVINCE, GUIZHOU PROVINCE, HEBEI PROVINCE, HENAN PROVINCE, AND SHANXI PROVINCE By /s/ Li Daoyu 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). For fixed-price contracts, the invitation to bid referred to in paragraph 2.13 of the Guidelines shall provide that, when contract award is delayed beyond the original bid validity period, the successful bidder's bid price will be increased for each week of delay by two predisclosed correction factors acceptable to the Association, one to be applied to all foreign currency components and the other to the local currency component of the bid price. Such an increase shall not be taken into account in the bid evaluation. 2. To the extent practicable, contracts for goods shall be grouped into bid packages estimated to cost the equivalent of $300,000 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 China 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, and equipment estimated to cost the equivalent of $300,000 or less per contract up to an aggregate amount equivalent to $11,700,000, may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 2. Civil works estimated to cost less than the equivalent of $100,000 per contract for construction and repair of prefecture, county, township or village health and training facilities, and goods estimated to cost the equivalent of $25,000 or less per contract up to an aggregate amount equivalent to $5,000,000, may be procured under contracts awarded on the basis of comparison of price quotations obtained from at least three contractors or suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Association. 3. Contracts for proprietary items, subject to the approval of the Association on a case-by-case basis, and items required for purposes of achieving equipment standardization, may be awarded after direct negotiations with suppliers, in accordance with procedures acceptable to the Association. 4. Civil works estimated to cost less than the equivalent of $25,000 per contract up to an aggregate amount equivalent to $1,500,000 for township health facilities, Page 6 including Practice Bases, may be procured under force account procedures acceptable 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 goods or works estimated to cost the equivalent of $300,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. When 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. When 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 3 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 1. In order to assist the Project Provinces in carrying out Parts A, B, C, and D of the Project, and the Borrower in carrying out Part E of the Project, the Project Provinces and the Borrower 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 (the Consultant Guidelines). 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts shall not apply to contracts estimated to cost less than $100,000 equivalent each. However this exemption to prior Association review shall not apply to the terms of reference for such contracts nor to the employment of individuals, to single source selection of firms, to assignments of a critical nature as reasonably determined by the Association and to amendments of contracts raising the contract value to $100,000 equivalent or above. SCHEDULE 2 Implementation Program 1. Each Project Province shall maintain, until the completion of the Project, its project implementation office (PIO) with facilities and functions satisfactory to the Association, staffed with qualified personnel in adequate numbers. 2. Each Project Province shall carry out Parts A, B, C and D of the Project in accordance with its Performance Plan, including providing, without limitation to the reporting requirements of Sections 9.05 and 9.06 of the General Conditions, reports based on the progress indicators included in such Performance Plan to MOPH. 3. Each Project Province shall conduct, by not later than November 30, 1996, a Page 7 midterm review of the progress of carrying out the Parts A, B, C and D of the Project. SCHEDULE 3 Funding Arrangements 1. Each Project Province shall relend the proceeds of the Credit to counties and prefectures for purposes of carrying out the Project on the terms and conditions stated in Section 3.01 (b) (i) and (ii) of the Development Credit Agreement, provided, however, that the Project Province may make the proceeds of the Credit available on more concessional terms if warranted by the poverty level of the county or prefecture concerned. 2. Each Project Province shall ensure that the proceeds of the Credit are made available to carry out the Project at the township and village level without obligation of repayment by such townships and villages. 3. Without limitation to the provisions of Section 2.01 (a) of this Agreement, each Project Province, in addition to the proceeds of the Credit it receives, shall provide from its own resources, sufficient funds, satisfactory to the Association, to carry out all activities under Parts A, B, C and D of the Project. 4. The Project Provinces agree that should the funds contributed from its counties' and prefectures' resources prove to be insufficient to carry out the activities under Parts A, B, C and D of the Project, the Province shall provide any additional funds needed to meet any shortfall in funding by such counties and prefectures.