India - Calcutta Urban Development Project : Credit 0427 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 427 IN Development Credit Agreement (Calcutta Urban Development Project) BETWEEN INDIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED SEPTEMBER 12, 1973 CONFORMED COPY CREDIT NUMBER 427 IN Development Credit Agreement (Calcutta Urban Development Project) BETWEEN INDIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED SEPTEMBER 12, 1973 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated September 12, 1973, between INDIA, acting by its President (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) By an agreement of even date herewith between the Association and the State of West Bengal, acting by its Governor (hereinafter called West Bengal), West Bengal has agreed inter alia to assist the Calcutta Metropolitan Development Authority in the carrying out of the said Project; (C) By an agreement of even date herewith between the Association and the Calcutta Metropolitan Development Authority, said Authority has agreed to undertake certain obligations in respect of the carrying out of the Project; and (D) The Association is willing to make the Credit available upon the terms and conditions set forth hereinafter, in the project agreement of even date herewith between the Association and the Authority, and in the West Bengal Agreement of even date herewith between West Bengal and the Association; NOW THEREFORE the parties hereto hereby agree as follows: 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 following modifications thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions): (a) Section 5.01 is deleted; (b) Section 6.02(h) is deleted and Section 6.02(i) becomes 6.02(h); 4 0 (c) Paragraph 5 of Section 2.01 is amended to read as follows: "5. The term 'Borrower' means India, acting by its President." Section 1.02. Wherever used in this Agreeffient, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "West Bengal" means the State of West Bengal, acting by its Governor, a state of India or any successor thereof. (b) "Act" means the Calcutta Metropolitan Development Authority Act, 1972. (c) "Authority" means the Calcutta Metropolitan Development Authority, a statutory body established under the Act. (d) "Calcutta" means the city area defined in Calcutta Municipal Act, 1951, as amended from time to time. (e) "CMD" means Calcutta Metropolitan District, comprising of the area described as such in the Schedule to the West Bengal Act XIV of 1965; (f) "West Bengal Agreement" means the agreement between the Association and West Bengal of even date herewith, as the same may be amended from time to time; and (g) "Project Agreement" means the agreement between the Association and the Authority of even date herewith, as the same may be amended from time to time. 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 thirty-five million dollars ($35,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as 5 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 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 not a member of the Bank (other than Switzerland) or for goods produced in, or services supplied from, such territories. Section 2.03. (a) Except as the Association shall otherwise agree, the goods and services required for the Project and to be financed out of the proceeds of the Credit shall be procured pursuant to the provisions set forth or referred to in Section 2.04 of the Project Agreement. (b) When, with respect to any contract for the goods described in paragraph (a) above, the lowest evaluated bid falls under Group C (as defined in paragraph B(2)(a) of Schedule 1 to the Project Agreement), the Borrower shall immediately grant permission to import the goods covered by the contract, and no reviews of such permission to import shall be made by the Borrower or by any of its agencies, and all foreign exchange required therefor shall be promptly made available. When, with respect to any contract, Lhe lowest evaluated bid falls under Group A or under Group B (as defined in paragraph B(2)(a) of Schedule 1 to the Project Agreement), the Borrower shall (i) promptly upon receipt of the appropriate applications, issue, or cause to be issued, such import licenses as shall be required to implement the contract; (ii) make available, or cause to be made available, promptly as needed, all foreign exchange which shall be required therefor; and (iii) with respect to locally produced materials which are subject to allocation, make, or cause to be made, allocations of such materials promptly and in such quantities as shall be required for such contract. Section 2.04. The Closing Date shall be December 3 1, 1977 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. Seection 2.06. Service charges shall be payable semi-annually on April 15 and October 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each April 15 and October 15 commencing October 15, 1983 and ending April 15, 2023, each installment to and including the installment payable on April 15, 1993 to be one-half of one per cent (1/2 6 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 Kingdom of Great Britain and Northern Ireland is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Borrower shall cause West Bengal and the Authority to perform in accordance with the provisions of the West Bengal Agreement and the Project Agreement respectively, all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable West Bengal and the Authority to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. Section 3.02. The Borrower shall relend the proceeds of the Credit to West Bengal for relending to the Authority under terms and conditions acceptable to the Association. ARTICLE IV Consultation, Information and Inspection Section 4.01. 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 performance by West Bengal of its obligations under the West Bengal Agreement and the performance by the Authority of its obligations under the Project Agreement, the administra -ion, operations, resources and expenditures of the Authority 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 7 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 subdivision. Section 4.02. (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 of the Authority. (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, the performance by either of them of its obligations under the Development Credit Agreement or the performance by West Bengal and the Authority of their obligations under the West Bengal Agreement and the Project Agreement. Section 4.03. The Borrower shall afford all reasonable opportunity for accredited representatives of the Association to visit any part of the territories of the Borrower for purposes related to the Credit. ARTICLE V Taxes and Restrictions Section 5.01. 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 5.02. The Development Credit Agreement, the West Bengal Agreement and the Project 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 5.03. The payment of the 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 VI Remedies of the Association Section 6.01. If any event specified in Section 7.01 of the General Conditions or in Section 6.03 of this Agreement shall occur and shall continue for the period, 8 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 the principal of ,he Credit then outstanding to be due and payable immediately together with th . 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. Section 6.02. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) A default shall occur in performance of any obligation on the part of West Bengal under the West Bengal Agreement. (b) A default shall occur in performance of any obligation on the part of the Authority under the Project Agreement. (c) West Bengal shall have taken any action for the dissolution or disestablishment of the Authority. (d) West Bengal shall have taken any action to amend, suspend or abrogate the Act in such a way as to materially or adversely affect the ability of the Authority to carry out its obligations set forth in the Project Agreement. (e) An extraordinary situation shall have arisen which shall make it improbable that West Bengal will be able to perform its obligations under the West Bengal Agreement or the Authority under the Project Agreement. Section 6.03. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified: (a) Any event specified in paragraph (a) or (b) of Section 6.02 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower, West Bengal and the Authority. (b) Any event specified in paragraph (c) or (d) of Section 6.02 of this Agreement shall occur. ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 10.01(1b) of the General Conditions: 9 (a) the execution and delivery of the West Bengal Agreement on behalf of West Bengal have been duly authorized or ratified by all necessary action; (b) the execution and delivery of the Project Agreement on behalf of the Authority have been duly authorized or ratified by all necessary corporate and governmental action; (c) the terms and conditions of relending the proceeds of the Credit to the Authority have been communicated to and accepted by the Association; and (d) the engineering management unit referred to in Section 3.02 of the Project Agreement has been established. Section 7.02. The following event is specified as an additional condition to the effectiveness of the Development Credit Agreement with respect to the portion of the Credit allocated under Categories 11(b) and 111(b) of the table set out in paragraph 1 of Schedule 1 to this Agreement, namely, that the Association has reviewed and approved the project reports for the area development schemes included in Part F of Schedule 2 to this Agreement. Section 7.03. The following are specified as additional matters, within the meaning of Section 10.02(b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association: (a) that the West Bengal Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, West Bengal, and constitutes a valid and binding obligation of West Bengal in accordance with its terms; and (b) that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Authority, and constitutes a valid and binding obligation of the Authority in accordance with its terms. Section 7.04. The date January 11, 1974 is hereby specified for the purposes of Section 10.04 of the General Conditions. ARTICLE VIII Representative of the Borrower; Addresses Section 8.01. Any Secretary, Additional Secretary, Joint Secretary or Director/Deputy Secretary to the Government of India in the Ministry of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. 10 Section 8.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: ECOFAIRS New Delhi 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 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. INDIA By /s / T. N. Kaul Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / I.P.M. Cargill Regional Vice President Asia 11 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 %0 Of (Expressed in Expenditures Category Dollar Equivalent) to be Financed I. Equipment and 9,200,000 100% of foreign Materials pro- expenditures; or cured by Inter- 100% of local national Com- expenditures petition (ex-factory) II. Locally manufac- 40% of local tured equipment expenditures and materials (ex-factory) F rocured by ocal bidding (a) for arts A, 5,500,000 B,C, D and E of the Project (b) for part F of 300,000 the Project III. Civil works (ex- 40% of local cluding expendi- expenditures tures on land and project management fees) (a) for parts A, 17,200,000 B, C, D and E of the Project (b) for pKart F 2,300,000 of te Project IV. Consultants 500,000 100% of total Services expenditures TOTAL 35,000,000 12 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, or 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 1 above, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement; and (b) payments for taxes imposed 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 proceeds 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 of the Categories 1, 11 or IV shall decrease, the amount of the proceeds of the Credit then allocated to such Category and no longer required therefor will be reallocated by the Association (subject, however, to the requirements for contingencies, as determined by the Association), by increasing correspondingly the amount allocated to Category III and the Association may, at the request of the Borrower increase correspondingly (up to a maximum of 100% net of taxes) the percentage applicable to Category III. (b) 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 2.04 of the Project Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association 13 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 set out in paragraph I above, if the estimate of local expenditures under Category II or III 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 percentage then applicable to such expenditures in order that further withdrawals under any such Category may continue until all expenditures thereunder shall have been made. 14 SCHEDULE 2 Description of the Project The Project is part of Borrower's program to rehabilitate and augment basic urban facilities in the CMD and comprises the following parts: Part A: Water Supply Construction and renovation of transmission mains, primary and secondary distribution mains, reservoirs and booster stations in Calcutta and its southern suburban area, and improvement of ground water source and distribution facilities in the fringe areas of the CMD comprised of eight sub-projects involving small scale works at about 40 sites and related equipment installations. Part B: Sewerage and Drainage Renovation and construction of storm drains, sewers, outfall canals and sluices serving Calcutta, its northeastern suburban area and Howrah comprised of 17 sub-projects involving small scale works at about 30 sites and related equipment installations. Part C. Garbage Disposal Improvement of garbage collection and disposal services in Calcutta, comprised of two sub-projects involving small scale works at one site, and acquisition and utilization of related equipment, Part D: Environmental Hygiene Conversion of service privies to sanitary latrines in the CMD comprised of three sub-projects involving centralized force account manufature and installation of prefabricated sanitary latrines. Part E: Urban Transport Extension and widening of existing roads, improvement of traffic operation measures, construction of a bus terminal, and extension of street lighting in the CMD comprised of 12 sub-projects involving small scale work and installation of equipment at about 15 sites. 15 Part F: Area Development Redevelopment of slums in Calcutta and development of sites and services southeast of Calcutta comprised of two sub-projects involving extensive works at two sites. Part G: Consultants' Services (i) Use of consultant assistance by the Authority for a study of the organization, staffing, procedures and standards, equipment and training requirements of the operations and maintenance units of major operating agencies in the water, sewerage and drainage sectors in the CMD. (ii) Use of consultant assistance by the Authority to determine the means by which the water supply, sewerage and drainage services in the CMD can be most economically and effectively provided. (iii) Use of consultant assistance by the Authority for reviewing, updating and modifying as required the existing plans for water supply, sewerage and drainage, traffic and transportation, and in the analysis and formulation of plans and programs of urban land development and community facilities. The Project is expected to be completed by December 31, 1976.