Afghanistan - Second Road Improvement And Maintenance Project : Credit 0449 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 449 AF Development Credit Agreement (Second Road Improvement and Maintenance Project) BETWEEN REPUBLIC OF AFGHANISTAN AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED DECEMBER 21, 1973 CONFORMED COPY CREDIT NUMBER 449 AF Development Credit Agreement (Second Road Improvement and Maintenance Project) BETWEEN REPUBLIC OF AFGHANISTAN AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED DECEMBER 21, 1973 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated December 21, 1973, between REPUBLIC OF AFGHANISTAN (hereinafter called the Borrower) and INTER'ATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the deletion of Sections 5.01 and 6.02(h) thereof and to the renumbering of Section 6.02(i) into 6.02(h) thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the term "RMFD" means the Road Maintenance First Directorate in the Borrower's Ministry of Public Works. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to eleven million five hundred thousand dollars ($1 1,500,000). Section 2.02. The amount of the Credit may be withdrawn fro*n the Credit Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule shall be amended from time to time, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed under the Development Credit Agreement; provided, however, that, except as the Association shall otherwise agree, no withdrawal shall be made on account of expenditures in the territories of any country which is 4 not a member of the Bank (other than Switzerland) or for goods produced in, or services supplied from, such territories. Section 2.03. Except as the Association shall otherwise agree, the goods and services (other than services of consultants) required for the Project and to be financed out of the proceeds of the Credit, shall be procured on the basis of international competition under procedures consistent with the Guidelines for Procurement under World Bank Loans and IDA Credits, published by the Bank in April 1972 as revised in October 1972, and in accordance with, and subject to, the provisions set forth in Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1978 or such other date as shall be agreed between the Borrower and the Association. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semi-annually on June 15 and December 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each June 15 and December 15 commencing June 15, 1984, and ending December 15, 2023, each installment to and including the installment payable on December 15, 1993 to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project through its Ministry of Public Works with due diligence and efficiency and in conformity with appropriate technical, engineering, administrative and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without restriction or limitation upon the provisions of Section 3.01(a) of this Agreement, the Borrower shall: (i) establish and maintain, or cause to be 5 established and maintained, a bank account (hereinafter called the Project Imprest Account) to be used exclusively to make payments for the cost of goods and services required for the Project. The Borrower shall deposit, or cause to be deposited, on a three-monthly basis, in the Project Imprest Account such amounts as shall be required to cover the payments for the costs of the Project for the forthcoming three months as estimated by the Borrower's Ministry of Public Works, and the first such deposit shall be in the amount of twenty-five million Afghanis (Af25,000,000). Section 3.02. In order to assist the Borrower in carrying out the Project, the Borrower shall employ engineering consultants acceptable to the Association upon terms and conditions satisfactory to the Association. Section 3.03. In carrying out the construction of the facility included in Part C of the Project, the Borrower shall employ contractors acceptable to the Association upon terms and conditions satisfactory to the Association. Section 3.04. The Borrower shall, with the assistance of the consultants referred to in Section 3.02 of this Agreement, prepare and submit to the Association for its approval, not later than ninety days after the Effective Date, or such other date as shall be agreed with the Association, a detailed program to carry out Part E of the Project. Section 3.05. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Association shall otherwise agree, all goods and services financed out of the proceeds of the Credit shall be used exclusively for the Project until its completion. Section 3.06. (a) The Borrower shall furnish to the Association, promptly upon their preparation, the plans, specifications, -reports, contract documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and 6 services financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited representatives to examine the Project, the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. Section 3.07. The Borrower shall take or cause to be taken all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out the Project and shall furnish to the Association, promptly after such acquisition, evidence satisfactory to the Association that such land and rights in respect of land are available for purposes related to the Project. ARTICLE IV Other Covenants Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. Section 4.02. (a) The Borrower shall: (i) not later than September 30, 1974 or such other date as shall be agreed with the Association, adopt regulations, acceptable to the Association, to ensure that the dimensions and axle-loads of the vehicles using its roads do not exceed limits consistent with the structural and geometric design standards of such roads; and (ii) thereafter, take all measures necessary to ensure that the limits imposed by such regulations on such dimensions and axle-loads in accordance with such design standards are duly observed. (b) The Borrower shall, not later than March 31, 1975 or such other date as shall be agreed with the Association, adopt measures, satisfactory to the Association, to regulate the access to highways and the use of land adjacent thereto. Section 4.03. The Borrower shall assign an adequate number of appropriately qualified personnel of RMFD to serve as counterparts to the consultants referred to in Section 3.02 of this Agreement. Section 4.04. In order to assist RMFD in the execution and supervision of highway projects, the Borrower shall, not later than July 1, 1974, or such other 7 date as shall be agreed with the Association, appoint to the staff of RMFD qualified and experienced specialists acceptable to the Association upon terms and conditions satisfactory to the Association. Section 4.05. The Borrower shall: (i) collect and record in accordance with appropriate statistical methods and procedures such data as are required to assess the technical, economic and financial aspects of the Borrower's road network for proper planning of maintenance, improvements and extensions of said road network; and (ii) review, in consultation with the Association, its 1974-1976 highway improvement and maintenance program, annually, in light of such data, and make all necessary modifications thereto. Section 4.06. (a) The Borrower shall: (i) cause the roads under the jurisdiction of its Ministry of Public Works to be adequately maintained and all necessary repairs thereof promptly to be made, all in accordance with sound engineering practices; and (ii) make adequate arrangements satisfactory to the Association for the timely provision of funds and resources required for that purpose. (b) The Borrower shall: (i) cause all its road maintenance equipment to be adequately maintained and all necessary repairs, renewals and replacements thereof to be made; and (ii) make adequate financial arrangements satisfactory to the Association for the timely acquisition or renewal of such road maintenance equipment. Section 4.07. In order to ensure the adequate maintenance of its road network, as provided in Section 4.06 of this Agreement, the Borrower shall: (i) define, in accordance with criteria satisfactory to the Association, the roads falling under the jurisdiction of the Road Construction and Maintenance Department of the Borrower's Minis+ry of Public Works; and (ii) establish suitable procedures, including annual traffic counts, to ensure that such jurisdiction is extended to roads under the jurisdiction of other authorities to satisfy the maintenance needs of such roads as shall be required by the nature and volume of traffic thereon. Section 4.08. Except as the Association shall otherwise agree, the Borrower shall: (i) not later than three months from the Effective Date, cause a study to be made of the alternatives to Borrower's present permit system for movement of trucks; (ii) promptly, upon completion of the study, furnish the report to the Association for its comments; and (iii) agree with the Association, within twenty-four months from the Effective Date, on the recommendations to be implemented by the Borrower and a time-phased program therefor. Section 4.09. The Borrower shall, upon completion of the preparation of the highway improvement and maintenance program and the studies included in 8 Part G of the Project, promptly review with the Association the consultants' recommendations for said program and studies. ARTICLE V Consultation, Information and Inspection Section 5.01. The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Borrower and the Association shall from time to time, at the request of either party: (a) exchange views through their representatives with regard to the performance of their respective obligations under the Development Credit Agreement, the administration, operations and financial condition, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out any part of the Project, and other matters relating to the purposes of the Credit; and (b) furnish to the other all such information as it shall reasonably request with regard to the general status of the Credit. On the part of the Borrower, such information shall include information with respect to financial and economic conditions in the territories of the Borrower, including its balance of payments, and the external debt of the Borrower, of any of its political subdivisions and of any agency of the Borrower or of any such political subdivIion. Section 5.02. (a) The Borrower shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the administration, operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out any part of the Project. (b) The Borrower and the Association shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit, the maintenance of the service thereof or the performance by either of them of its obligations under the Development Credit Agreement. Section 5.03. The Borrower shall afford all reasonable opportunity fc- accredited representatives of the Association to visit any part of the territories of the Borrower for purposes related to the Credit. 9 ARTICLE VI Taxes and Restrictions Section 6.01. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories. Section 6.02. The Development Credit Agreement shall be free from any taxes on or in connection with the execution, delivery or registration thereof, imposed under the laws of the Borrower or laws in effect in its territories. Section 6.03. The payment of tAie principal of, and service charges on, the Credit shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories. ARTICLE VII Remedies of the Association Section 7.01. If any event specified in Section 7.01 of the General Conditions shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continuance thereof, the Association, at its option, may by notice to the Borrower declare thr principal of the Credit then outstanding to be due and payable immediately together with the service charges thereon, and upon any such declaration such principal and service charges shall become due and payable immediately, anything to the contrary in the Development Credit Agreement notwithstanding. ARTICLE VIII Effective Date; Termination Section 8.01. The following event is specified as an additional condition to the effectiveness of the Development Credit Agreement within the meaning of Section 10.01(b) of the General Conditions, namely, that the Project Imprest Account referred to in Sub-section 3.01(b) of this Agreement has been established in accordance with the provisions thereof and the Borrower has deposited therein an amount of twenty-five million Afghanis. Section 8.02. The date June 20, 1974 is hereby specified for the purposes of Section 10.04 of the General Conditions. 10 Section 8.03. The obligations of the Borrower under Sections 4.01, 4.02(a)(ii), 4.03, 4.05(i), 4.06 and 4.07 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date fifteen years after the date of this Agreement, whichever shall be the earlier. ARTICLE IX Representative of the Borrower; Addresses Section 9.01. The Minister of Public Works of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. Section 9.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: Ministry of Public Works Kabul Afghanistan Cable address: Ministry of Public Works Kabul Afghanistan For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed 11 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. REPUBLIC OF AFGHANISTAN By /s/ A. Malikyar Authorized Representative INTERNATIONAL DEVEOPMENT ASSOCIATION By /s/ M. Benjenk Regional Vice President Europe, Middle East and North Aftica 12 SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of amounts of the Credit to each Category and the percentage of eligible expenditures so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed I. (a) Equipment and Spare ) Parts for highway ) maintenance and im- ) provement including ) spare parts for ex- ) isting equipment ) under Part A of the 5,700,000 ) 100% of foreign Project ) expenditures (b) Materials (other ) than cement) for ) highway and work- ) shop improvement ) under Parts A and ) B of the Project ) II. Cement for highway im- 200,000 80% of local provement works under expenditures Part A of the Project (the ex-factory and workshop improve- cost) ment under Part B of the Project III. Workshop Tools under 470,000 100% of foreign Parts B and C of the expenditures Project IV. Civil Works under 930,000 80% of total Part C of the Proj- expenditures ect V. Consultants' and Spe- 2,400,000 100% of total cialists' Services expenditures VI. Unallocated 1,800,000 TOTAL 11,500,000 13 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures for goods produced in, or services supplied from, the territories, and in the currency, of any country other than the Borrower; (b) the term "local expenditures" means expenditures in the currency of the Borrower for goods produced in, or services supplied from, the territories of the Borrower; and (c) the term "total expenditures" means the aggregate of foreign and local expenditures. 3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement; and (b) payments for taxes imposed directly under the laws of the Borrower or laws in effect in its territories on goods or services, or on the importation, manufacture, procurement or supply thereof. To the extent that the amount represented by the percentage set forth in the third column of the table in paragraph I above in respect of any Category would exceed the amount payable net of all such taxes, such percentage shall be reduced to ensure that no proceeds of the Credit will be withdrawn on account of payments for such taxes. 4. Notwithstanding the allocation of an amount of the Credit set forth in the second column of the table in paragraph I above: (a) if the estimate of the expenditures under any Category shall decrease, the amount of the Credit then allocated to such Category and no longer required therefor will be reallocated by the Association by increasing correspondingly the unallocated amount of the Credit; (b) if the estimate of the expenditures under any Category shall increase, the percentage set forth in the third column of the table in paragraph I above in respect of such expenditures shall be applied to the amount of such increase, and a corresponding amount will be allocated by the Association, at the request of the Borrower, to such Category from the unallocated amount of the Credit, subject, however, to the requirements for contingencies, as determined by the Association, in respect of any other expenditures; and 14 (c) if the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 5. Notwithstanding the percentages set forth in the third column of the table in paragraph 1 above, if the estimate of total expenditures under Category IV or of local expenditures under Category II, shall increase and no proceeds of the Credit are available for reallocation to such Category, the Association may, by notice to the Borrower, adjust the petcentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 15 SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A The execution of a highway improvement and maintenance program on about 4,000 km of roads in Eastern, Southern and Western Afghanistan, as detailed in Annex I and II hereto, including the purchase of related equipment, spare parts and materials. Part B The improvement of highway maintenance workshops at Kabul, Kandahar, Herat, Jalalabad Gardez, Ghazni, Bamyan, Charikar and Chaghcharan. Part C The construction and equipping of a highway maintenance center in Kabul. Part D The employment of about thirty specialists in the Road Maintenance First Directorate of the Ministry of Public Works of the Borrower to assist in the carrying out of Parts A, B, C and E of the Project. Part E The carrying out of a training program for about 300 personnel of the Ministry of Public Works of the Borrower for such professions as, among others, accountants, mechanics, electricians and field foremen. Part F The updating, through annual revisions, of the Borrower's highway improvement and maintenance program for the years 1974-1976. Part G The formulation of a highway improvement and maintenance program for the Borrower's next five-year development plan and the carrying out of 16 studies of the priorities of highway projects proposed for construction during the said plan period and of the measures for supporting the local construction industry. Part H The formulation and introduction of road project evaluation techniques for the Borrower's Provincial Development Department or any successor thereof. The Project is expected to be completed by June 30, 1977. 17 ANNEX I Details of Highway Improvement and Maintenance Program Type of Work by Road Class (Kilometers) All Improvement and works subsequent total maintenance Maintenance only Road Section length B2 C D A* B2 C D EASTERN REGION Kabul-Sorobi 70 70 Sorobi-Jalalabad 76 76 Jalalabad-Torkham 78 78 Kabul-Maydan road 30 30 Maydan road-Ghazni 104 104 Ghazni-Moqur 104 104 Kotae-Ashro-Kabul- Kandahar road 11 11 Kotae Ashro-Sarchashma 35 11 24 Sarchashma-Gardendewal 25 25 Panjab-Herkul 49 49 Jabal Serai-Ghorband 65 25 40 Ghorband-Bamyan 95 30 65 Jabulsaraj-Gulbahar 8 8 Gulbahar-Mahmude Raqi 20 20 Laghnian-Kabul-Jalalabad road 20 20 Lalpur-Ghanikhel 8 8 Sultani-Urgon 38 38 Sultani-Zurmat 52 52 Sharan-Sultani 26 26 Ghazni-Sharan 56 56 Gardendewal-Bamyan 50 50 Bamyan-Bande Amir 75 75 Doshi-Doab 100 100 Doab-Bamyan 52 52 Chake Wardak-Kabul- Kandahar road 15 15 Qarabagh road 12 12 Gulbahar-Rokha 33 33 Rokha-Zenya 19 19 Mahmude Raqi-Tagab 50 50 Kabul-Bagrami 12 12 Bagrami-Sorobi (old road) 63 63 Jalalabad-Kama bridge 11 11 * Hard surfaced roads; road class BI and higher. 18 Type of Work by Road Class (Kilometers) All Improvement and works subsequent total maintenance Maintenance only Road Section length B2 C D A* B2 C D Kama Bridge-Kama 15 15 Debala road 42 42 Jalalabad-Fatehabad 20 20 Fatehabad-Kadja 14 14 Pule Alam-Sayd Abad 80 80 Pule Alam-Shenkai 40 40 Shenkai-Azra 60 60 Said Karam-Khost 103 103 Khost-Gurbas 38 38 Zarghonshar-Wazakhwa 107 107 Ghazni-Zurrnat 76 76 Zurnat-Gardez 14 14 Istalef road 13 13 Gardez-Sayd Karam 20 20 Sayd Karam-Hasankhel 30 30 Hasankhel-Jaji 20 20 Kabul-Paghman 32 32 Darulaman-Reshkhor 7 7 Total Eastern Region 2,193 112 286 480 494 115 250 456 WESTERN REGION Herat-Eslam Qala 123 123 Ghormach-Balarnurghab 66 66 Balamurghab-Qalai Naw 116 116 Qalai Naw-Karukh 148 148 Karukh-Herat 11 11 Harkul-Chaghcharan 164 164 Chaghcharan-Shahrak 125 125 Herat-Obe 97 97 Farah Rod-Farah 75 75 Herat-Ghoryan 81 81 Pashtun-Zarghun 50 50 Shahrak-Kandahar-Herat road 237 237 Total Western Region 1,293 0 326 396 123 0 0 448 * Hard surfaced roads; road class BI and higher. 19 Type of Work by Road Class (Kilometers) All Improvement and works subsequent total maintenance Maintenance only Road Section length B2 C D A* B2 C D SOUTHERN REGION Moqur-Qalat 110 110 Qalat-Kandahar 132 132 Kandahar-Spinboldak 105 105 Nahr-i-Serai-Lashkargah 46 46 Kandahar-Dahla 25 25 Dahla-Tarinkot 141 141 Panjwai road 20 20 Total Southern Region 579 46 45 141 347 0 0 0 * Hard surfaced roads; road class Bi and higher. 20 ANNEX II Standards for Road Classes B2, C and D Type of Terrain Flat Rolling Mountainous Road Class B2 No. of Traffic lanes 1 1 1 Pavement width (m) 4.0 4.0 4.0 Shoulder width (m) 1.5 1.5 1.0 Minimum horizontal radius (m) 15 Design speed (km/h) 60 40 30 Pavement type* (7cm mechanically stabilized gravel (7cm selected gravel Road Class C No. of Traffic lanes I 1 1 Pavement width (in) 4.0 4.0 3.5 Shoulder width (m) 1.0 1.0 0.75 Minimum horizontal radius (m) 10 Design speed (kn/h) 50 30 20 Pavement type 7cm selected gravel Road Class D No. of Traffic lanes I 1 1 Pavement width (m) 4.0 4.0 3.0 Shoulder width (m) 0.5 0.5 0.5 Minimum horizontal radius (m) - Design speed (kin/h) 30 30 - Pavement type 7cm selected gravel * Single axle load: 8t 21 SCHEDULE 3 Procurement A. Contracts Governed by Guidelines 1. With respect to procurement of goods (other than cement, tools and spare parts, except tires, for the existing equipment included in Categories I and III of the table set out in paragraph 1 of Schedule 1 to this Agreement), similar items shall be grouped, as far as practicable, in such manner that the estimated cost of each contract shall be not less than the equivalent of $25,000. With respect to such contracts: (a) Invitations to bid shall provide at least sixty days for the submission of bids. Bid documents shall require suppliers to provide adequate after-sales services. Before bids are invited, the Borrower shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedure as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Association of the name of the bidder to whom it intends to award the contract and shall furnish to the Association, in sufficient time for its review, a detailed report, by the consultants referred to in Section 3.02 of this Agreement, on the evaluation and comparison of the bids received, together with the recommendations for award of the said consultants, and the reasons for the intended award. The Association shall, if it determines that the intended award would be inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the delivery to the Association of the first application for withdrawal of funds from the Credit Account in respect of any such contract. 22 2. With respect to any other contract for goods (other than cement, tools and spare parts, except tires, for the existing equipment included in Categories I and III of the table set out in paragraph I of Schedule I to this Agreement), the Borrower shall furnish to the Association, promptly after its execution and prior to the delivery to the Association of the first application for withdrawal of funds from the Credit Account in respect of any such contract, two conformed copies of such contract, together with the analysis of bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract is not consistent with the procedures set forth or referred to in Section 2.03 of this Agreement, promptly inform the Borrower and state the reasons for such determination. 3. (a) Contracts for civil works under Part C of the Project shall be awarded on the basis of local competitive bidding. The invitation to bid shall provide at least 45 days for submission of bids, and shall be advertised in at least two newspapers of wide circulation in Afghanistan. Bids shall be accompanied by a bid bond or bank guarantee amounting to 5% of the bid amount. (b) The bid documents shall contain, inter alia, the following requirements: (i) that the successful bidder shall be required to furnish, at his option, either a 100% performance bond or a bank guarantee by an acceptable financial institution in an amount 9f 10% of the contract price, which bond or guarantee shall remain in effect until the final acceptance of the works; and (ii) that the contract with the successful bidders shall contain the following provisions: (A) retention by the Borrower of 10% of the cost of works on each monthly invoice. These retention monies shall be released when all work has been provisionally accepted. At the provisional acceptance retention shall be made for any responsibility of the contractor in respect of defects. In lieu of such retention the contractor may, at his option, substitute a bank guarantee; and (B) the warranty period during which the contractor remains responsible in respect of defects in the works (fair wear and tear excepted) shall extend for one year after provisional acceptance of the work. 23 (c) The provisions of sub-paragraphs (a), (b), (c) and (d) of Paragraph A of this Schedule shall apply for procurement of civil works under this Paragraph. B. Other Contracts 1. With respect to the contracts for tools and spare parts, except tires, for the existing equipment included in Categories I and III of the table set out in paragraph I of Schedule 1 to this Agreement, no international competitive bidding will be required. Before awarding any contract the Borrower shall furnish to the Association (i) for its approval a form or forms of contract under which procurements will be made; and (ii) from time to time, lists of said spare parts and tools for which the Borrower intends to place orders. Promptly after the execution of any contract and prior to submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, a copy of such contract shall be furnished to the Association. 2. With respect to the cement included in Category II of the table set out in Paragraph I of Schedule 1 to this Agreement, the Borrower may procure such item by direct purchase from either the Ghori Cement Factory or the Jabal es-Seraj Cement Factory at the prices prevailing at the time of such purchases. The Borrower shall, in advance of each such purchase, inform the Association of the then prevailing price. If the Association shall have determined that such price is unreasonable it shall promptly so inform the Borrower and no expenditures for such item shall be financed out of the proceeds of the Credit.