Tunisia - Urban Planning And Public Transport Project For The Tunis District : Credit 0432 - Project Agreement - 1 - Conformed

CONFORMED COPY LOAN NUMBER 937 TUN CREDIT NUMBER 432 TUN Project Agreement (Urban Planning and Public Transport Project for the Tunis District) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND INTERNATIONAL DEVELOPMENT ASSOCIATION AND SOCIETE NATIONALE DES TRANSPORTS DATED OCTOBER 5, 1973 CONFORMED COPY LOAN NUMBER 937 TUN CREDIT NUMBER 432 TUN Project Agreement (Urban Planning and Public Transport Project for the Tunis District) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND INTERNATIONAL DEVELOPMENT ASSOCIATION AND SOCIETE NATIONALE DES TRANSPORTS DATED OCTOBER 5, 1973 PROJECT AGREEMENT AGREEMENT, dated October 5, 1973, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank), INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and SOCIETE NATIONALE DES TRANSPORTS (hereinafter called SNT). WHEREAS by the Loan Agreement of even date herewith between Republic of Tunisia (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to eleven million dollars ($11,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that SNT agree to undertake such obligations toward the Bank as hereinafter set forth; WHEREAS by the Development Credit Agreement of even date herewith between Republic of Tunisia (hereinafter called the Borrower) and the Association, the Association has also agreed to make available to the Borrower an amount in various currencies equivalent to seven million dollars ($7,000,000), on the terms and conditions set forth in the Development Credit Agreement but only on condition that SNT agree to undertake such obligations toward the Association as hereinafter set forth, WHEREAS by a subsidiary loan agreement (hereinafter called the SNT Subsidiary Loan Agreement) to be entered into between the Borrower and SNT, a portion of the proceeds of the Loan and the Credit, required for the carrying out of Parts A, B, C and D of the Project, will be relent to SNT inter alia on the terms and conditions as provided in paragraph (c) of Section 3.01 of the Loan Agreement; and WHEREAS SNT, in consideration inter alia 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 Agreement, unless the context shall otherwise require, the several terms defined in the Loan and Development Credit 4 Agreements and in the General Conditions (as defined in the Loan and Development Credit Agreements) have the respective meanings therein set forth and the term "subsidiary" means any company or "tablissement public" effectively controlled by SNT or by any one or more subsidiaries of SNT or by SNT and one or more of its subsidiaries. ARTICLE II Execution of the Project Section 2.01. SNT shall carry out Parts A, B, C and D of the Project with due diligence and efficiency and in conformity with sound administrative, business, financial, engineering and urban transport practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 2.02. In order to assist SNT in the preparation of specifications for equipment, in the preparation of bidding documents and in bid evaluation under Parts A, B and C of the Project, SNT shall employ engineering consultants acceptable to the Bank and the Association upon terms and conditions satisfactory to the Bank and the Association. Section 2.03. In carrying out Part B of the Project, SNT shall employ contractors acceptable to the Bank anu' the Association upon terms and conditions satisfactory to the Bank and the Association. Section 2.04. Except as the Bank and 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 Loan and 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 1 to this Agreement. Section 2.05. (a) SNT undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan and the Credit relent to it by the Borrower 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 SNT to replace or repair such goods. 5 (b) Except as the Bank and the Association may otherwise agree, SNT shall cause all goods and services financed out of the proceeds of the Loan and the Credit relent to it by the Borrower to be used exclusively for the Project. Section 2.06. (a) SNT shall furnish to the Bank and the Association promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Bank and the Association shall reasonably request. (b) SNT: (i) shall maintain records adequate to record the progress of Parts A, B, C and D of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Loan and the Credit relent to it by the Borrower, and to disclose the use thereof in the Project; (ii) shall, without limitation upon the provisions of Section 5.03 of this Agreement, enable the Bank's and the Association's representatives to examine the Project, the goods financed out of such proceeds and any relevant records and documents; and (iii) shall furnish to the Bank and the Association all such information as the Bank and the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Loan and the Credit so relent to it and the goods and services financed out of such proceeds. Section 2.07. SNT shall duly perform all its obligations under the SNT Subsidiary Loan Agreement. Except as the Bank and the Association shall otherwise agree, SNT shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the SNT Subsidiary Loan Agreement or any provision thereof. ARTICLE III Management and Operations of SNT Section 3.01. (a) SNT shall, at all times, manage its affairs, plan its future expansion and carry on its operations, all in accordance with sound administrative, business, financial, engineering and urban transport practices, under the supervision of experienced and competent management assisted by qualified and competent personnel in adequate number. (b) SNT: (i) shall keep its staffing position under continuous review, implement policies to improve utilization of manpower, and retain and train sufficient qualified and experienced staff, in order to enable SNT to conduct its operations efficiently; and (ii) for such purposes shall increase its staff only if 6 managerial efficiency or the execution of the Project warrants the employment of specialized personnel. (c) In order to assist its management and personnel in the management and operation of its Urban bus Operations, SNT shall, during Project execution, employ management consultants and consultants on bus maintenance and operations acceptable to the Bank and the Association under terms and conditions satisfactory to the Bank and the Association. (d) In order to assist its management and personnel in the management and operation of its TGM operations, SNT shall, no later than August 1, 1974 (or such other date as the Bank and the Association may agree), employ management consultants and consultants on railway maintenance and operations acceptable to the Bank and the Association under terms and conditions satisfactory to the Bank and the Association. Section 3.02. (a) SNT shall, at all times, take all steps necessary to acquire, maintain and renew all rights (including but not limited to rights in respect of land and easements), powers, privileges and franchises which are necessary or useful for the efficient conduct of its business and for the execution and operation of the Project and shall, if requested by the Bank and the Association, furnish to the Bank and the Association promptly, evidence satisfactory to the Bank and the Association that such rights, powers, privileges and franchises are available for purposes related to the efficient conduct of its business and for execution and operation of the Project. (b) SNT shall, at all times, operate and maintain its equipment and other property and promptly make all necessary repairs and renewals thereof, in accordance with sound engineering and urban transport practices. (c) Until December 31, 1978, before undertaking or executing, for its own account or for the account of any third party or parties, any new major project or development related to its Urban Operations, other than Parts A, B, C and D of the Project, or for other purposes than the increase of its bus fleet by more than 110 buses for the 1976-1978 period, SNT shall first have satisfied the Bank and the Association that such action would not interfere with its obligations under this Agreement. For the purpose of this Section, the term "major project or development" means any project or development with an investment character resulting in estimated aggregate capital expenditures exceeding TD250,000 or the equivalent, or such other amount as shall be agreed from time to time between the Bank, the Association and SNT. (d) SNT shall, no later than December 31, 1975 (or such other date as the Bank and the Association may otherwise agree), submit to the Bank and the 7 Association, for review, technical and financial justification with respect to its 1976-1980 Urban Operations investment program. (e) Except in the normal course of business, SNT shall not, without the prior approval of the Bank and the Association, sell, lease, transfer or otherwise dispose of any part of its property or assets which shall be required for the efficient operation of its business and undertaking. Section 3.03. SNT shall insure, or make adequate provision for insurance, against such risks and in such amounts as shall be consistent with sound practice. Section 3.04. (a) Before SNT shall take any action to create any subsidiary, SNT shall first have satisfied the Bank and the Association that such action would not interfere with its obligations under this Agreement or the SNT Subsidiary Loan Agreement. (b) SNT shall not permit any of its subsidiaries to enter into any undertaking which might interfere with SNT's obligations under this Agreement or the SNT Subsidiary Loan Agreement. Section 3.05. No later than December 31, 1973 (or such other date as the Bank and the Association may agree) SNT shall take all action necessary to authorize its Pre'sident-Directeur Ginral to enter into contracts each in an amount of up to TD 100,000 equivalent, without prior approval of SNT's board of directors. SNT shall not rescind such authorization without prior consultation with the Bank and the Association. Section 3.06. (a) No later than April 30, 1974 (or such other date as the Bank and the Association may otherwise agree) SNT shall submit to the Borrower, the District, the Bank and the Association, for review and approval, a proposed system of operating and financial performance targets relating to its financial controls, staffing, organization, Urban bus and TGM Operations, traffic and maintenance to be prepared with the assistance of the consultants referred to in paragraph (c) of Section 3.01 and in paragraph (c) of Section 4.02 of this Agreement. (b) During Project execution, SNT shall report every six months to the Borrower, the District, the Bank and the Association on results derived from implementation of such operating and financial performance targets and after Project execution to the Borrower and the District. (c) SNT shall review, each year, with the Borrower, the District, the Bank and the Association such operating and financial performance targets and its performance in meeting such targets. 8 ARTICLE IV Financial Covenants Section 4.01. SNT shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. In particular SNT shall, starting with the fiscal year ending December 31, 1973 (or such other fiscal year as the Bank and the Association may agree) maintain separate accounts for its Urban and Inter-Urban Operations. Section 4.02. (a) For the audit of its accounts and financial statements (as such financial statements are described in the following paragraph) SNT shall, at all times, employ independent auditors acceptable to the Bank and the Association. (b) SNT shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles consistently applied, by the independent auditors referred to in the foregoing paragraph; (ii) furnish to the Bank and the Association as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank and the Association shall have reasonably requested; and (iii) furnish to the Bank and the Association such other information concerning the accounts and financial statements of SNT and the audit thereof as the Bank and the Association shall from time to time reasonably request. (c) In order to assist SNT in the use of modern managerial control and cost accounting procedures, SNT shall employ a consultant acceptable to the Bank and the Association on terms and conditions satisfactory to the Bank and the Association. Section 4.03. (a) SNT shall no later than June 30, 1975 (or such other date as the Bank and the Association may otherwise agree) revise its Urban Operations tariffs so as to effect an overall increase of its Urban Operations operating income of not less than 15% to be effective as of such date (or such other date as the Bank and the Association may otherwise agree). (b) SNT shall take all such action as shall be necessary to request and obtain, promptly as needed, funds that the Borrower has undertaken to provide pursuant to Section 4.04 of the Loan Agreement. (c) Without limitation to the provisions of the foregoing paragraphs (a) and (b) SNT shall (i) take all such steps as are necessary on its part (including but without limitation, adjustment of its Urban and Inter-Urban Operations tariffs) 9 to ensure that commencing with the fiscal year starting January 1, 1974, its Urban and Inter-Urban Operations operating income covers its Urban and Inter-Urban Operations operating expenses and its Urban and Inter-Urban Operations debt service requirements in excess of depreciation; and (ii) unless the Bank and the Association shall otherwise agree SNT shall no later than December 31, 1974 modify its Inter-Urban Operation tariffs to ensure that its Inter-Urban Operations operating income covers its Inter-Urban Operations operating expenses and Inter-Urban Operations debt service requirements in excess of depreciation. For the purposes of this Section: (i) The term "operating income" means all revenues from SNT's operations and other revenues incidental thereto, including funds to be provided by the Borrower to SNT pursuant to the provisions of Article 23 of SNT Law as provided under paragraph (a) of Section 4.04 of the Loan Agreement. (ii) The term "operating expenses" means all direct costs of operation by SNT of its facilities, including administrative and overhead costs, adequate maintenance expenses, and adequate provision for depreciation and taxes, but excluding interest and other charges on debt. (iii) The term "debt service requirement" means the aggregate amount of amortization (including sinking funds payments, if any), interest and other charges on debt. (iv) The term "debt" means any debt maturing by its terms more than one year after the date on which it is originally incurred. (v) The term "incur" with reference to any debt includes any modification of the terms of payment of such debt. Debt shall be deemed to be incurred on the date of execution and delivery of a contract, loan agreement or other instrument providing for such debt. (vi) Whenever for the purposes of this Section it shall be necessary to value, in terms of the currency of the Borrower, debt payable in another currency, such valuation shall be made on the basis of the prevailing lawful rate of exchange at which such other currency is, at the time of such valuation, obtainable by SNT for the purposes of servicing such debt or, if such other currency is not so obtainable, at the rate of exchange that will be reasonably determined by the Bank and the Association. 10 Section 4.04. SNT shall, until the Bank has reviewed the recommendations contained in the studies referred to under paragraph (e) of Section 3.03 and Section 4.04 of the Loan Agreement No. 746-TUN, dated as of June 9, 1971, between the Borrower and the Bank, consult with the Bank and the Association prior to incurring with respect to its Inter-Urban Operations any debt exceeding the amount of TD250,000 maturing by its terms more than one year after the date on which it is originally incurred, including any debt represented by bonds. ARTICLE V Consultation, Information and Inspection Section 5.01. The Bank, the Association and SNT shall cooperate fully to assure that the purposes of the Loan and the Credit will be accomplished. To that end, the Bank, the Association and SNT shall from time to time, at the request of either party, exchange views through their representatives with regard to the performance of their respective obligations under this Agreement, the administration, operations and financial condition of SNT and other matters relating to the purpose of the Loan and the Credit. Section 5.02. The Bank, the Association and SNT shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Loan and the Credit or the performance by either of them of its obligations under this Agreement or the performance by the Borrower and SNT of their respective obligations under the SNT Subsidiary Loan Agreement. Section 5.03. SNT shall enable the Bank's and the Association's accredited representatives to inspect all properties, sites, offices and equipment of SNT and any relevant records and documents. ARTICLE VI Effective Date; Termination; Cancellation and Suspension Section 6.01. This Agreement shall come into force and effect on the date upon which the Loan Agreement becomes effective. 11 Section 6.02. This Agreement and all obligations of the Bank, the Association and SNT thereunder shall terminate on the later of the following two dates: (a) the date on which the Loan Agreement shall terminate in accordance with its terms; or (b) the date on which the obligations of the Borrower referred to in Section 6.03 of the Development Credit Agreement shall terminate in accordance with the terms of such Section. Section 6.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Loan Agreement or the Development Credit Agreement. ARTICLE VII Miscellaneous Provisions Section 7.01. 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 Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. 12 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. For SNT: Soci6t6 Nationale des Transports 1, Avenue Bourguiba Tunis, Tunisia Cable address: SONATRA Tunis Section 7.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of SNT may be taken or executed by its Prsident-Directeur General or such other person or persons as such Prdsident-Directeur Gengral shall designate in writing. Section 7.03. SNT shall furnish to the Bank and the Association sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of SNT, take any action or execute any documents required or permitted to be taken or executed by SNT pursuant to any of the provisions of this Agreement. Section 7.04. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 13 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 delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ W. Wapenhans Director, Regional Projects Department Europe Middle East and North Africa Regional Office INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ W. Wapenhans Director, Regional Projects Department Europe Middle East and North Africa Regional Office SOCIETE NATIONALE DES TRANSPORTS By /s / Slaheddine El Goulli Authorized Representative 14 SCHEDULE 1 Procurement A. Contracts Governed by Guidelines for Procurement 1. With respect to any contract for items included in Categories I, II and III of the table set out in paragraph 1 to Schedule 1 to the Development Credit Agreement estimated to cost the equivalent of $100,000 or more: (a) If bidders are required to prequalify, SNT shall, before qualification is invited, inform the Bank and the Association in detail of the procedure to be followed and shall introduce such modifications in said procedure as the Bank and the Association shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequalification, shall be furnished by SNT to the Bank and the Association for their comments before the applicants are notified and SNT shall make such additions to or deletions from the said list as the Bank and the Association shall reasonably request. (b) Before bids are invited, SNT shall furnish to the Bank and the Association, for their 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 Bank and the Association shall reasonably request. Any further modification to the bidding documents shall require the Bank's and the Association's concurrence before it is issued to the prospective bidders. (c) After bids have been received and evaluated, SNT shall, before a final decision on the award is made, inform the Bank and the Association of the name of the bidder to whom it intends to award the contract and shall furnish to the Bank and the Association, in sufficient time for its review, a detailed report prepared with the assistance of the consultants referred to in Section 2.02 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 Bank and the Association shall, if they determine that the intended award would be inconsistent with the procedures set forth or referred to in Section 2.04 of this Agreement, promptly inform SNT and the Borrower, and state the reasons for such determination and advise SNT and the Borrower of any cancellation pursuant to the provisions of paragraph 4 of Schedule I to the Development Credit Agreement. 15 (d) The terms and conditions of the contract shall not, without the Bank's and the Association's concurrence, materially differ from those on which bids were asked. (e) Two conformed copies of the contract shall be furnished to the Bank and the Association promptly after its execution and prior to the delivery to the Bank and the Association of the first application for withdrawal of funds from the Loan Account or the Credit Account in respect of any such r-+, 2. With respect to any other contract for items included in Categories 1, II and III of the table set out in paragraph I to Schedule 1 to the Development Credit Agreement, SNT shall furnish to the Bank and the Association, promptly after its execution and prior to the delivery to the Bank and the Association of the first application for withdrawal of funds from the Loan Account and 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 Bank and the Association shall reasonably request. The Bank and the Association shall, if they determine that the award of the contract is not consistent with the procedures set forth or referred to in Section 2.04 of this Agreement, promptly inform SNT and the Borrower, and state the reasons for such determination and advise SNT and the Borrower of any cancellation pursuant to the provisions of paragraph 4 of Schedule 1 to the Development Credit Agreement. B. Supplemental Rules on Bid Evaluation and Comparison for goods included in Categories I and II of the table set out in paragraph 1 of Schedule 1 to the Development Credit Agreement 1. For the purpose of evaluation and comparison of bids, customs duties and other import taxes on imported goods, and sales and similar taxes on locally supplied goods, shall be excluded, except to the extent hereinafter provided. Bidders shall be required to state in their bid the c.i.f. (Tunis) price for imported goods, or the ex-factory price for locally manufactured goods. The cost to SNT of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be taken into account in the evaluation of bids in accordance with paragraph 4.7 of the Guidelines for Procurement. 2. For goods included in Categories I and II of the table set forth in paragraph 1 of Schedule 1 to the Development Credit Agreement, SNT may grant a margin of preference to goods manufactured in Tunisia in accordance with, and subject to, the following provisions: 16 (a) After evaluation, responsive bids will be classified in one of the following groups: (1) Group A: bids offering goods manufactured in Tunisia, if the bidder shall have established to the satisfaction of SNT and the Bank that the manufacturing cost of such goods includes a value added in Tunisia equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: bids offering goods manufactured in Tunisia, other than bids classified in Group A. (3) Group C: bids offering any other goods. (b) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes in goods to be imported and any sales or similar taxes on goods to be supplied locally, to determine the lowest evaluated bid of each group. The lowest evaluated bids of each group shall then be compared with each other and if, as a result of this comparison, a bid from Group A or Group B is the lowest, it shall be selected for purposes of award. (c) If, as a result of the comparison under paragraph (b) above, the lowest bid is a bid from Group C, all Group C bids shall be further compared with the lowest bid from Group A, as determined under paragraph (b) above, after adding to the c.i.f. bid price of goods to be imported offered in each Group C bid, for the purpose of this further comparison only, an amount equal to the smaller of (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of goods offered in such Group C bid, or (ii) 15% of the c.i.f. bid price of such goods. If the Group A bid in such further comparison is the lowest, it shall be selected for purposes of award; if not, the lowest bid from Group C, as determined under paragraph (b) above, shall be selected for purposes of award. 3. The bidding documents shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the methods and stages that will be followed in the evaluation and comparison of bids to give effect to such preference. 17 C. Special Procedures Applicable to Construction Works and Goods included in Categories V and VI of the table set out in paragraph 1 to Schedule 1 to the Development Credit Agreement (a) Notwithstanding the provisions referred to in Section 2.04 of this Agreement or included in the foregoing paragraphs of this Schedule, the Borrower may, pursuant to paragraph 1.2(a) of the Guidelines for Procurement use procedures other than international competition for equipment included in Category V of the table set out in paragraph 1 to Schedule 1 to the Development Credit Agreement; provided, that, such alternative procedures are acceptable to the Bank and the Association. (b) Notwithstanding the provisions included in the foregoing paragraphs of this Schedule the Bank and the Association may accept, pursuant to the provisions of paragraph 1.2(c) of the Guidelines for Procurement, that the works included in Category VI of the table set out in paragraph I to Schedule 1 to the Development Credit Agreement be procured pursuant to the Borrower's standard procurement procedures.