Conformed Copy - C2663 - Andhra Pradesh First Referral Health System Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2663 IN Project Agreement (Andhra Pradesh First Referral Health System Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and STATE OF ANDHRA PRADESH and ANDHRA PRADESH VAIDYA VIDHANA PARISHAD Dated December 22, 1994 CREDIT NUMBER 2663 IN PROJECT AGREEMENT AGREEMENT, dated December 22, 1994, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and THE STATE OF ANDHRA PRADESH (ACTING BY ITS GOVERNOR) (the Project State) AND ANDHRA PRADESH VAIDYA VIDHANA PARISHAD (APVVP). WHEREAS by the Development Credit Agreement of even date herewith between India, acting by its President (the Borrower) and the Association (the Development Credit Agreement), the Association has agreed to make available to the Borrower an amount in various currencies equivalent to ninety million seven hundred thousand Special Drawing Rights (SDR 90,700,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that the Project State and APVVP agree to undertake such obligations toward the Association as are set forth in this Agreement; and WHEREAS the Project State and APVVP, in consideration of the Association's entering into the Development Credit Page 2 Agreement with the Borrower, have 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 thereto, 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 and APVVP jointly and severally declare their respective commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement, and, to this end, shall jointly and severally carry out the Project, with due diligence and efficiency and in conformity with appropriate administrative, financial and 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 shall otherwise agree, the Project State and APVVP 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 and APVVP 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 (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 and that part of the Project carried out by each of them respectively. Section 2.04. (a) The Project State and APVVP shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance by each of them of its respective obligations under this Agreement, and other matters relating to the purposes of the Credit. (b) The Project State and APVVP 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 each of them of its respective obligations under this Agreement. ARTICLE III Financial Covenants Section 3.01. (a) The Project State and APVVP shall each maintain records and accounts, adequate to reflect in accordance with sound accounting practices their operations, resources and expenditures in respect of activities related to Page 3 its respective parts of the Project, of the departments or agencies responsible for carrying out the Project or any part thereof. (b) The Project State and APVVP 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, certified copies 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 said 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 and APVVP thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agree- ment 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 the Project State and APVVP 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 Page 4 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 Andhra Pradesh Chief Secretary to the Government of Andhra Pradesh Hyderabad, India For the Andhra Pradesh Vaidya Vidhana Parishad: The Commissioner Andhra Pradesh Vaidya Vidhana Parishad Hyderabad, India 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 or APVVP may be taken or executed by its Chief Secretary or the Commissioner, APVVP, respectively, or such other person or persons as the Chief Secretary or the Commissioner shall respectively designate in writing and the Project State and APVVP 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/ Heinz Vergin Acting Regional Vice President South Asia STATE OF ANDHRA PRADESH ANDHRA PRADESH VAIDYA VIDHANA PARISHAD By /s/ N. Vallrui Authorized Representative SCHEDULE 1 Procurement and Consultants' Services Section I: Procurement of Goods and Works Page 5 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 International Bank for Reconstruction and Development (the Bank) in May 1992 (the Guidelines), and in accordance with the following additional procedures: (a) When contract award is delayed beyond the original bid validity period, such period may be extended once, subject to and in accordance with the provisions of paragraph 2.59 of the Guidelines, by the minimum amount of time required to complete the evaluation, obtain necessary approvals and clearances and award the contract. The bid validity period may be extended a second time only if the bidding documents or the request for extension shall provide for appropriate adjustment of the bid price to reflect changes in the cost of inputs for the contract over the period of extension. Such an increase in the bid price shall not be taken into account in the bid evaluation. With respect to each contract made subject to the Bank's prior review in accordance with the provisions of Part D.1 (a) of this Section, the Bank's prior approval will be required for (i) a first extension of the bid validity period if the period of extension exceeds sixty (60) days and (ii) any subsequent extension of the bid validity period. (b) 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. (c) In the procurement of goods in accordance with this Part A, the Project State and APVVP shall use the relevant standard bidding documents issued by the Association, with such modifications thereto as the Association shall have agreed to be necessary for the purposes of the Project. Where no relevant standard bidding documents have been issued by the Association, the Project State and APVVP shall use bidding documents based on other internationally recognized standard forms agreed with the Association. 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 1. Except as provided in paragraph 2 of Part C of this Schedule, civil works shall be procured on the basis of competitive bidding advertised locally in accordance with procedures satisfactory to the Association. 2. Civil works, estimated to cost the equivalent of $15,000 or less per contract (a) up to an aggregate of $2,120,000 equivalent, shall be carried out by force account in accordance with procedures satisfactory to the Association; and (b) up to an aggregate of $4,950,000 equivalent, shall be procured on the basis of quotations selected from a list of at least three contractors, in accordance with procedures satisfactory to the Page 6 Association. 3. Contracts for equipment: (i) estimated to cost $200,000 equivalent or less but $50,000 equivalent or more per contract, up to an aggregate amount of $4,590,000 equivalent, shall be procured on the basis of competitive bidding advertised locally in accordance with procedures satisfactory to the Association; (ii) estimated to cost $200,000 equivalent or less but $50,000 equivalent or more per contract, up to an aggregate amount of $650,000 equivalent shall be procured on the basis of quotations solicited from a list of at least three suppliers from at least two countries eligible under the Association