Mali - Railway Project : Credit 0095 - Project Agreement - Conformed

CREDIT NUMBER 95 MLI Project Agreement (Railway Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND REGIE DU CHEMIN DE FER DU MALI DATED SEPTEMBER 29, 1966 CREDIT NUMBER 95 MLI Project Agreement (Railway Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND REGIE DU CHEMIN DE FER DU MALI DATED SEPTEMBER 29, 1966 AGREEMENT, dated September 29, 1966, between the INTERNATIONAL DEVELOPMENT AssoCIATION (hereinafter called the Association) and the REGIE DU CHEMIN DE FER DU MALI (hereinafter called the R6gie). WHEREAS by a development credit agreement of even date herewith (hereinafter called the Development Credit Agree- ment) between the Republic of Mali (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower a development credit in various currencies equivalent to nine million one hundred thousand dollars ($9,100,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that the R6gie agree to undertake certain obligations to the Association as hereinafter in this Project Agreement set forth; and WHEREAS the R6gie, in consideration of the foregoing has agreed to undertake the obligations hereinafter set forth; Now THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions SECTION 1.01. Wherever used in this Project Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the Regulations (as so defined) shall have the respective mean- ings therein set forth. ARTICLE II Particular Covenants SECTION 2.01. The Regie shall carry out the Project with due diligen,e and efficiency and in conformity with sound 4 railway, engineering and financial practices and shall pro- vide, promptly as needed, the funds, facilities, services and other resources required for the purpose. SECTION 2.02. The R6gie shall duly perform its obliga- tions under the Subsidiary Loan Agreement and, except as the Association shall otherwise agree, shall not amend, assign, abrogate or waive any provision of such Subsidiary Loan Agreement. SECTION 2.03. In the carrying out of such parts of the Project as the Association and the Regie shall agree upon, the Regie shall employ competent and experienced con- sultants and technicians acceptable to the Association, to an extent and upon terms and conditions satisfactory to the Association. SECTION 2.04. (a) Tpon request from time to time by the Association, the Regie shall furnish to the Association, promptly upon their preparation, the plans, specifications and work schedules for the Project and any material modi- fications subsequently made therein, in such detail as the Association shall request. (b) The Regie shall maintain records adequate to iden- tify the goods financed out of the proceeds of the Credit, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices its operations and financial condition; shall enable the Association's representatives to inspect the Project, the goods, the Railways and any relevant records and documents; and shall furnish to the Association all such information as the Association shall reasonably re- quest concerning the expenditure of the proceeds of the Credit, the Project, the goods, and its administration, oper- ations and financial condition. SECTION 2.05. (a) The Association and the Regie shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, each of them shall fur- 5 nish to the other all such information as it shall reasonably request. (b) The Association and the R4gie shall from time to time exchange views through their representatives with regard to the performance by the Regie of its obligations hereunder or under the Subsidiary Loan Agreement and its administration, operations and financial condition. (c) The R6gie shall promptly inform the Association of any condition which interferes with, or threatens to inter- fere with, the accomplishment of the purposes of the Credit or the performance by the R6gie of its obligations under this Project Agreement or under the Subsidiary Loan Agreement or which shall increase or threaten to increase materially the estimated cost of the Project. SECTION 2.06. (a) The Regie shall take out and maintain with responsible insurers or make other provision satisfac- tory to the Association for insurance against such risks and in such amount as shall be consistent with sound practice. (b) Without limiting the generality of the foregoing, the Regie undertakes to insure the imported goods to be financed out of the proceeds of the Credit against marine, transit and other hazards incident to acquisition, transpor- tation and delivery thereof to the place of use or installa- tion and for such insurance any indemnity shall be payable in a currency freely usable by the R4gie to replace or repair such goods. SECTION 2.07. Except as shall otherwise be agreed by the Regie and the Association, the Regie shall use all goods financed out of the proceeds of the Credit exclusively in the carrying out of the Project. SECTION 2.08. Except in the normal course of business, goods purchased or paid for out of the proceeds of the Credit shall not be sold or otherwise disposed of without the prior consent of the Association. 6 SECTION 2.09. (a) The Regie shall operate and maintain the Railways, and from time to time make or cause to be made all necessary renewals and repairs thereof, all in accordance with sound engineering and railway practices. (b) The Regie shall at all times manage its affairs, plan the development of the Railways and maintain its financial position all in accordance with sound engineering, railway, financial and business principles and practices and with qualified and experienced management. SECTION 2.10. Except as the Association shall otherwise agree, the Regie shall have its financial statements (balance sheet and related statements of revenues and expenses) cer- tified annually by an independent accountant or accounting firm acceptable to the Association, and shall promptly after their preparation and not later than six months after the close of the Regie's fiscal year transmit to the Association certified copies of such statements and a signed copy of the accountant's or accounting firm's report. SECTION 2.11. The Regie shall from time to time take such steps (including, but without limitation, adjustments in its rates and fares) as shall be required to provide revenues sufficient, by such date or dates as shall be agreed upon between the Borrower, the Association and the Regie: (a) to ensure a reasonable return on its net fixed assets, after covering all operating expenses, including adequate maintenance and depreciation; and (b) to enable it, out of its cash resources, to meet debt interest and amortization, to establish and maintain adequate working capital, and to finance a material part of its capital expenditures. SECTION 2.12. (a) The Regie shall give priority to the carrying out of the Project and shall, if necessary to ensure the prompt completion of the Project, defer the carrying out of other works. (b) Until the Project shall have been carried out, the R'gie shall not incur any substantial expenditures for capi- 7 tal goods or works other than those included in the Project without prior consultation with the Association. SECTION 2.13. The R6gie shall take such action as shall be reasonable in the circumstances to facilitate railway operations between the territories of the Borrower and the territories of the Republic of Senegal, in accordance with the International Traffic Agreement, the Customs Agree- ment and the Railway Convention. ARTICLE III Effective Date; Termination SECTION 3.01. (a) This Project Agreement shall come into force and effect on the Effective Date. (b) If pursuant to Section 6.03 of the Development Credit Agreement, the Development Credit Agreement shall be terminated, this Project Agreement and all obli- gations of the parties hereunder shall also terminate and the Association shall promptly notify the Regie thereof. SECTION 3.02. This Project Agreement shall terminate and the obligations of the parties hereunder shall cease and determine: (i) on the date when the Development Credit Agreement shall terminate in accordance with its terms; or (ii) 30 years after the date of this Project Agreement, whichever shall be earlier. ARTICLE IV Miscellaneous Provisions SECTION 4.01. Any notice or request required or per- mitted to be given or made under this Project Agreement and any agreement between the parties contemplated by this Project 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 or radiogram to the party to which it is required or 8 permitted to be given or made at its 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: (a) For the R4gie: Regie du Chemin de Fer du Mali Bamako Mali Alternative address for cables and radiograms: Fermali Bamako Mali (b) For the Association: International Development Association 1818 H Street, N.W. Washington, D. C. 20433 United States of America Alternative address for cables and radiograms: Indevas Washington, D.C. SECTION 4.02. Any action required or permitted to be taken, and any documents required or permitted to be exe- cuted, under this Project Agreement on behalf of the R6gie may be taken or executed by the Director of the Regie or such other person or persons as he shall designate in writing. SECTION 4.03. The Regie shall furnish to the Association sufficient evidence of the authority of the person or persons who will, on behalf of the Regie, take any action or execute any documents required or permitted to be taken or exe- cuted by the Regie pursuant to any of the provisions of 9 this Project Agreement or the Development Credit Agree- ment and the authenticated specimen signature of each such person. SECTION 4.04. This Project 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 have caused this Project Agreement to be signed in their respective names by their representatives thereunto duly authorized and delivered in the District of Columbia, United States of America, as of the day and year first above written. REGIE DU CHEMIN DE FER DU AIALI By s/ L. NEGRE Authorized Representative INTEILNATIONAL DEVELOPMENT AssOCIATION By s/ GEORGE . WOODS President