India - Kadana Irrigation Project : Credit 0176 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 176 IN Project Agreement (Kadana Irrigation Project) BETWEEN THE STATE OF GUJARAT ANM INTERNATIONAL DEVELOPMENT ASSOCIATION DATED FEBRUARY 9, 1970 CONFORMED COPY CREDIT NUMBER 176 IN Project Agreement (Kadana Irrigation Project) BETWEEN THE STATE OF GUJARAT AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED FEBRUARY 9, 1970 AGREEMENT, dated February 9, 1970, between THE STATE OF GUJARAT, acting by its Governor (hereinafter called Gujarat) and INTERNATIONAL DEVELOPMENT ASSOCIA- TION (hereinafter called the Association). WI IEREAS by an agreement of even date herewith between India, acting by its President (hereinafter called the Bor- rower) and the Association, which agreement, the Sched- ules thereto and the General Conditions Applicable to Development Credit Agreements of the Association dated January 31, 1969, made applicable thereto are hereinafter called the Development Credit Agreement, the Associa- tion 'as agreed to lend to the Borrower an amount in various currencies equivalent to thirty-five million dollars ($35,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Gujarat agree to undertake certain obligations to the Asso- ciation as hereinafter provided; and WHEREAS Gujarat, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations herein- after set forth; Now, THEREFORE, the parties hereto hereby agree as f ollows: ARTICLE I Definitions SECTION 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms de- fined in the Development Credit Agreement shall have the respective meanings therein set forth. 4 ARTICLE II Particular Covenants SECTION 2.01. (a) Gujarat shall carry out the Project with due diligence and efficiency and in conformity with sound administrative, agricultural, engineering and finan- cial practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without limitation or restriction upon any of the obligations of Gujarat set forth in paragraph (a) of this Section, Gujarat shall, in addition to the equipment listed in the Exhibit to Schedule 3 to the Development Credit Agreement, procure the equipment listed in Schedule 4 to the Development Credit Agreement promptly as required for the efficient carrying out of the Project and in accord- ance with the normal procurement procedures of Gujarat. (c) Upon request from time to time by the Association, Gujarat shall promptly furnish or cause to be furnished to the Association, the plans, specifications and work schedules for the Project and any material modifications subsequently made therein, in such detail as the Association shall request. (d) In the carrying out of Parts B, C and D of the Project, Gujarat shall, within two years of the commission- ing of each minor canal, construct permanent irrigation outlets from the respective minor canal serving areas no larger than: (i) 20 hectares for rice cultivation; and (ii) 40 hectares for the cultivation of other crops (except that up to 10% of such outlets may serve areas no larger than 50 hectares). The locations of such permanent outlets shall be determined jointly by the Irrigation Wing of the Public Works Depart- ment of Gujarat, the Department of Agriculture of Gujarat and the farmers whose farms will be served by such outlets. 5 SECTION 2.02. Gujarat shall maintain or cause to be maintained records adequate to identify the goods and services financed out of the proceeds of the Credit, to dis- close the use thereof in the Project, to record the progress of the Project (including the cost thereof), to show the results achieved by the Project and to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition with respect to the Project of the agency or agencies responsible for the carry- ing out of the Project or any part thereof; shall enable the Association's representatives to inspect the Project, such goods and any relevant records and documents; and shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the expenditure of the proceeds of the Credit, the Project, such goods and services, and the operations and financial condition with respect to the Project of the agency or agencies responsible for the carrying out of the Project or any part thereof. SECTION 2.03. (a) Gujarat and the Association shall co- operate fully to assure that the purposes of the Credit will be accomplished. To that end, Gujarat and the Asso- eiation shall from time to time exchange views through their representatives with regard to matters relating to the pur- poses of the Credit and to the performancp by Gujarat of its obligations under the Project Agreement. (b) Gujarat 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 Gujarat of its obligations under the Project Agreement. SECTION 2.04. Gujarat shall (i) cause all works, facili- ties and roads included in the Project to be operated, main- tained and repaired in accordance with sound engineering practices and standards, (ii) cause all works, facilities and 6 roads not included in the Project but necessary to the proper and efficient operation thereof to be operated, main- tained and repaired in accordance with such practices and standards, and (iii) provide, or cause to be provided, promptly as needed, all funds, facilities, services and other resources required for the purpose. SECTION 2.05. Except as the Association shall otherwise agree, Gujarat shall transmit to the Association statements of the separate accounts maintained for the Project by the Irrigation Wing and the Roads Wing of the Public Works Department of Gujarat and by the Department of Agricul- ture of Gujarat, such statements to be audited by the office of the Accountant General of Gujarat, as soon as such audited statements are available and not later than six months after the close of the financial year to which they apply. SECTION 2.06. Except as the Association shall otherwise agree, Gujarat shall establish, and maintain in effect, within the Irrigation Wing of its Public Works Department: (i) an organization having a structure, purposes and staff satisfactory to the Association for the opera- tion and maintenance of the canal system included in the Project; and (ii) a team of engineers and agricultural officers with qualifications acceptable to the Association to super- vise the construction of the contour irrigation sys- tem included in Part C of the Project. SECTION 2.07. (a) Gujarat shall at all times provide, or cause to be provided, agricultural extension, demonstration, training and other technical services (including veterinary and research services) satisfactory to the Association in the Project area, and shall cause such services to be made available to farmers in the Project area through an ade- quate staff of officers trained in the techniques appropriate to the Project area. 7 (b) Gujarat shall make arrangements for the provision of agricultural credit to farmers in the Project area in order to enable such farmers to achieve full, prompt and productive utilization of their land and of the water and other facilities provided by the Project. SECTION 2.08. Except as the Association shall otherwise agree, Gujarat shall, within 6 months from the date of this Agreement: (i) establish a study team, adopt terms of reference satisfactory to the Association, and begin to implement the study of groundwater potential referred to in Part H(i) of the Project; (ii) establish a divisional organization within the Depart- ment of Agriculture of Gujarat having a structure, pur- poses and staff satisfactory to the Association to carry out the land development works referred to in Parts D and E of the Project; (iii) adopt and begin to implement an agricultural pro- gram in the Project area satisfactory to the Association and employ adequate staff for such implementation; and (iv) adopt and begin to implement a program to con- solidate land holdings in the Mahi Left Bank area. SECTION 2.09. Except as the Association shall otherwise agree, Gujarat shall: (i) establish and maintain water charges, cesses and land taxes applicable to farms in the Project area such that, not later than four years after the completion of Part B (i) and (ii) of the Project, the aggregate of such water charges collected from farms in the Project area shall be not less than Rs 20,000,000 in the currency of the Borrower annually; (ii) initiate the study of water charges in the Project area referred to in Part H(ii) of the Projeot under terms of reference satisfactory to the Association within 6 months 8 from the date of this Agreement and shall complete and submit to the Association such study within 3 years and 6 months after the date of this Agreement; (iii) discuss with the Association the recommendations of such study and the action proposed for the implementa- tion of such recommendations; and (iv) undertake periodic reviews of water charges in the Project area at intervals not exceeding 5 years. ARTICLE III Effective Date; Termination SECTION 3.01. This Agreement shall come into force and effect on the Effective Date. If the Development Credit Agreement terminates pursuant to Section 6.03 thereof, this Agreement and all obligations of the parties hereunder shall terminate. SECTION 3.02. This Agreement and all obligations of Gujarat and of the Association hereunder shall terminate on (i) the date on which the Development Credit Agree- ment shall terminate or (ii) December 31, 1995, whichever shall be earlier. ARTICLE IV Miscellaneous Provisions SECTION 4.01. Any notice, demand 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 or radio- gram to the party to which it is required or permitted to be given or made at its address hereinafter specified, or at such other address as such party shall have designated 9 by notice to the party giving such notice or making such demand or request. The addresses so specified are: For Gujarat: Secretary, Public Works Department Sachivalaya Ahmedabad, Gujarat India Alternative address for cables: Worksee Ahmedabad For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Alternative address for cables: 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 Agreement on behalf of Gujarat may be taken or executed by the Secretary, Public Works Depart- ment or such other person or persons as he shall designate in writing. SECTION 4.03. Gujarat shall furnish to the Association sufficient evidence of the authority of the person or persons who will, on behalf of Gujarat, take any action or execute any documents required or permitted to be taken or exe- cuted by Gujarat pursuant to any of the provisions of this Agreement and the authenticated specimen signature of each such person. 10 SECTION 4.04. This Agreement may be executed in sev- eral counterparts, each of which shall be an original and all collectively but one instrument. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. THE STATE OF GUJARAT By /s/ ALI YAVAR JUNG Authorized Representative INTERNATIONAL DEVELOPMENT AssoCIATIoN By /s/ J. BURKE KNAPP Vice President