Tanzania - Second Livestock Development Project : Credit 0382 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 382 TA Project Agreement (Second Livestock Development Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND TANZANIA RURAL DEVELOPMENT BANK DATED MAY 23, 1973 CONFORMED COPY CREDIT NUMBER 382 TA Project Agreement (Second Livestock Development Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND TANZANIA RURAL DEVELOPMENT BANK DATED MAY 23, 1973 PROJECT AGREEMENT AGREEMENT, dated May 23, 1973, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and TANZANIA RURAL DEVELOPMENT BANK (hereinafter called TRDB). WHEREAS by the Development Credit Agreement of even date herewith between the United Republic of Tanzania (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to eighteen million five hundred thousand dollars ($18,500,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition, inter alia, that TRDIM agree to undertake such obligations toward the Association as hereinafter set forth; WHEREAS part of the proceeds of the credit provided for under the Development Credit Agreement will be made available to TRDB under a subsidiary loan agreement to be entered into by the Borrower and TRDB; and WHEREAS TRDB, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, 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 Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. TRDB shall participate as a financial intermediary in the carrying out of Parts A through D of the Project described in Schedule 2 to the 4 w Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative and financial 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. TRDB shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Borrower and the Association shall otherwise agree, TRDB shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Loan Agreement or any provision thereof. Section 2.03. TRDB shall relend the proceeds of the loan under the Subsidiary Loan Agreement to Beneficiaries for Investment Projects, under Sub-loans on terms and conditions satisfactory to the Association and in accordance with the operating policies and procedures set forth in Schedule 1 to this Agreement, as the same may be amended by agreement among the Borrower, the Association and TRDB. Section 2.04. 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 2 to this Agreement. Section 2.05. In carrying out Part D of the Project, TRDB shall cause the Beneficiaries to employ contractors acceptable to the Borrower and the Association upon terms and conditions satisfactory to the Borrower and the Association. Section 2.06. (a) TRDB shall cause the Beneficiaries to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of Sub-loans 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 Beneficiary to replace or repair such goods. (b) Except as the Association may otherwise agree, TRDB shall cause all goods and services financed out of the proceeds of sub-loans to be used exclusively for the Project until its completion. Section 2.07. (a) The meat processing plants under Part D of the Project shall be constructed to design standards acceptable to the Association. TRDB shall As5 cause to be furnished to the Association, promptly upon their preparation, the plans, specifications, contract documents and construction and procurement schedules for Part D of the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) TRDB shall cause the Beneficiaries to (i) maintain records adequate to record the progress of the Investment Projects (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Sub-loans, and to disclose the use thereof in the Investment Projects; (ii) enable the Association's representatives to examine the Investment Projects, the goods financed out of such proceeds and any relevant records and documents; and (iii) furnish to the Association all such information as the Association shall reasonably request concerning the Investment Projects, the expenditure of the proceeds of the Sub-loan and the goods and services financed out of such proceeds. Section 2.08. TRDB shall not amend the investment policy set forth in the resolution of its Board passed on December 15, 1971, without prior consultation with the Association. Section 2.09. TRDB shall cause such Beneficiaries as are either District Development Corporations or ujamaa ranches to keep a set of ranch accounts and to submit them quarterly to TRDB. Section 2.10. TRDB shall cause: (a) the Tanzania Livestock Marketing Company, Limited (i) to appoint, in accordance with the staffing plan referred to in paragraph (g) of Section 7.01 of the Development Credit Agreement, the Chief Accountant referred to in paragraph 5 of Annex A to Schedule 2 to the Development Credit Agreement with qualifications and experience and under terms and conditions satisfactory to the Borrower and the Association; and (ii) to set up and maintain an accounting system based on commercial principles consistently applied, to reflect separately and at all times the revenues and expenditures of each of its undertakings; (b) the Tanzania Meat Processing Company, Limited (i) to employ in accordance with the staffing plan referred to in paragraph (g) of Section 7.01 of the Development Credit Agreement, the Meat Technologist referred to in paragraph 3 of Annex A to Schedule 2 to the Development Credit Agreement with qualifications and experience and under terms and conditions satisfactory to the Borrower and the Association; and (ii) (A) to enter into a management contract or contracts for the operation of the plants to be constructed under the Project at Mbeya and Shinyanga, with such experienced international meat processing company or companies as shall be acceptable to the Borrower and the Association, 6 and under terms and conditions satisfactory to the Borrower and the Association, or (B) to make such other arrangements for the operation of such plants as shall be satisfactory to the Borrower and the Association; (c) the National Agricultural Company, Limited (i) to employ, in accordance with the staffing plan referred to in paragraph (g) of Section 7.01 of the Development Credit Agreement, the Chief Development Officer and the Senior Development Officer referred to in paragraph 2 of Annex A to Schedule 2 to the Development Credit Agreement with qualifications and experience acceptable to the Association and under terms and conditions satisfactory to the Association; and (ii), during the period before the Closing Date, to submit to the Association for review and comment no later than three months before the beginning of each fiscal year its proposed development program and its proposed work and staffing plans for the respective fiscal year, such program and plans to include detailed physical and financial projections; and (d) Tanganyika Packers, Limited, in carrying out its portion of Part D of the Project and except as the Borrower and the Association shall otherwise agree, to employ consultants acceptable to, and on terms and conditions satisfactory to, the Borrower and the Association to assist it in carrying out such portion of the Project. Section 2.11. TRDB shall cause the Beneficiaries to take 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 the construction and operation of the facilities included in the Project. ARTICLE III Financial Covenants Section 3.01. (a) TRDB shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. (b) TRDB shall establish and maintain a separate Project account to be used exclusively for the Project and shall record in it all receipts and payments for or in connection with the Project, including (i) amounts received from, and payments made to, the Borrower under the Subsidiary Loan Agreement; and (ii) amounts disbursed to, and received from, Beneficiaries under Sub-loans. Section 3.02. TRDB shall, and shall cause each such Beneficiary as is a subsidiary of NAFCO to, (i) have its accounts and financial statements (balance 7 sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to 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 Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of TRDB and of such Beneficiary and the audit thereof as the Association shall from time to time reasonably request. ARTICLE IV Consultation, Information and Inspection Section 4.01. The Association and TRDB shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Association and TRDB 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 TRDB and other matters relating to the purpose of the Credit. Section 4.02. The Association and TRDB 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 performance by either of them of its obligations under this Agreement or the performance by the Borrower and TRDB of their respective obligations under the Subsidiary Loan Agreement. Section 4.03. TRDB shall enable the Association's representatives to examine any of its records and documents relevant to the Project. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the Effective Date. Section 5.02. (a) This Agreement and all obligations of the Association and of TRDB thereunder shall terminate on the earlier of the following two dates: 8 (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms;. or - (ii) a date 20 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a)(ii) of this Section, the Association shall promptly notify TRDB of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Development Credit Agreement. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement betwe-n the parties contemplated by this Agreement shall be in writing. Such notice or 9quest 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 Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. For TRDB: Tanzania Rural Development Bank. P.O. Box 268 Dar es Salaam United Republic of Tanzania 9 Cable address: MTAJI Dar es Salaam Section 6.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of TRDB may be taken or executed by TRDB or such other person or persons as TRDB shall designate in writing. Section 6.03. TRDB shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of TRDB, take any action or execute any documents required or permitted to be taken or executed by TRDB pursuant to any of the provisions of this Agreement. Section 6.04. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. IN WITNESS WHEREOF, the parties hereto, 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 DEVELOPMENT ASSOCIATION By /s / Michael L. Lejeune Director, Country Programs Department Eastern Africa Regional Office TANZANIA RURAL DEVELOPMENT BANK By /s/ Paul Bomani Authorized Representative 10 SCHEDULE 1 Operating Policies and Procedures 1. On-lending terms (a) Subsidiary Loan Agreement: 20 years, including 5 years of grace, 4% per year rate of interest, the Borrower to bear the exchange risk. (b) Sub-loans: Repayment terms to be based on the estimated cash flows of the ranches and plants to be financed but not to exceed 12 years, including 6 years of grace, 8.5% per year rate of interest. Amount and terms of the Sub-loans: % of total estimated cost Part of the of the Invest- Repayment Project ment Project Period Grace Period A.1 and 2 70 ) ) ) ) not more A.3(i) and (ii) 90 ) not more ) than 6 ) than 12 ) years A.3(iii) 80 ) years ) B, C and D 70 ) not more than 3 years 2. Procedures Beneficiaries will apply to TRDB for Sub-loans and prepare with the assistance of TRDB's staff, to the extent required, an Investment Plan. If the Investment Plan is approved by the Project Management Unit as to its technical, financial and economic viability, TRDB may grant the Sub-loan, provided that: (i) in the case of a Sub-loan for an ujamaa ranch, the Beneficiary is a cooperative society duly registered under the Cooperative 11 Societies Act, 1968; and a certificate of occupancy has been issued guaranteeing to such cooperative the exclusive use of the land allocated to it for a period of not less than 50 years; and (ii) in other cases under Part A of the Project, provisional rights of user covering the ranch area have been established. 3. Investments (a) Parts A, I and 2 of the Project: Investments thereunder may without limitation include farm roads, water development, firebreaks, stock dipping and handling facilities, and workers' housing. Incremental working capital may be financed for purchase of breeding stock and steers and to cover operating expenses for the first two years. Pasture development will be included in the ranch at the Kitulo Plateau. (b) Part A.3 of the Project: Investments thereunder may without limitation include water development, firebreaks, stock dipping and handling facilities, hou sg and incremental working capital. (c) Part B of the Project: Investments thereunder may without limitation include yards, pens, simple livestock handling facilities, auction rings, office buildings, stores, water facilities and livestock weighing scales. (d) Part C of the Project: Investments thereunder may without limitation include firebreaks, tracks, water facilities, stock handling facilities, vehicles and equipment. (e) Part D of the Project: Investments thereunder may include construction and equipping of the respective facilities. 12 SCHEDULE 2 Procurement A. Contracts To Be Awarded Under International Competitive Bidding 1. Except for contracts included in paragraphs C and D hereinafter, (i) any contract for tractors and machinery for Part A of the Project, (ii) any contract for the meat processing plants under Part D of the Project, and (iii) any other contract estimated to cost the equivalent of $30,000 or more shall be awarded on the basis of international competition under procedures consistent with the Guidelines referred to in Section 2.04 of this Agreement, and in accordance with, and subject to, the following provisions: (a) If bidders are required to prequalify, the Association shall be informed in detail, before qualification is invited, of the procedure to be followed and such modifications shall be introduced in said procedure as 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 to the Association for its comments before the applicants are notified and such additions to or deletions from the said list shall be made as the Association shall reasonably request. (b) Before bids are invited, the Association shall be furnished, 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 such modifications in the said documents or procedure shall be made 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. (c) After bids have been received and evaluated, before a final decision on the award is made, the Association shall be informed of the name of the bidder to whom it is intended to award the contract and the Association shall be furnished, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, together with 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 2.04 of this Agreement, promptly inform the Borrower and the beneficiary if the procurement is being done by a beneficiary, and state the reasons for such determination. (d) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. 13 (e) 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. 2. The procurement and installation of equipment and the civil works required for the meat processing plants at Mbeya and Shinyanga, under Part D of the Project, shall be let as one contract, on a "turn-key" basis. B. Supplemental Rules on Bid Evaluation and Comparison 1. For the purpose of evaluation and comparison of bids for the procurement of goods referred to under paragraph A. 1. (i), (ii) and (iii) hereinabove (other than those referred to under paragraph A.2 above), customs duties and other import taxes on imported goods, and sales and similar taxes on locally produced goods, shall be excluded, except to the extent hereinafter provided, and bidders shall be required to state in their bid the c.i.f. (Tanzanian port of entry) price for imported goods, or the ex-factory price for locally produced goods. The cost to the Borrower or Beneficiary, as the case may be, 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 purposes of the provisions hereinafter set forth, the following terms shall have the following meanings: (a) Preferred Domestic Bid means a bid offering goods manufactured in Tanzania if the bidder shall have established to the satisfaction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in Tanzania of not less than 20% of the ex-factory bid price. (b) Non-preferred Domestic Bid means any other bid offering goods manufactured in Tanzania. (c) Foreign Bid means any bid other than those specified in (a) or (b) above. 3. A margin of preference may be granted to Preferred Domestic Bids. Such preference shall be granted by adding to each Foreign Bid, for the purpose only of comparison with Preferred Domestic Bids, an amount (hereinafter called "Domestic Preference Margin") 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 goods offered in the bid, or (ii) 15% of the c.i.f. bid price of such goods. 14 4. If Preferred Domestic Bids are received, the comparison among all evaluated bids for each contract shall be made in the stages and with the preferences indicated below: Stage Bids to be Compared Preference I. All Preferred Domestic Bids and None Non-preferred Domestic Bids. II. (a) Lowest evaluated bid under Stage I, Add Domestic if Preferred Domestic Bid, with all Preference Foreign Bids; Margin to Foreign Bids or (b) Lowest evaluated bid under Stage 1, None if Non-preferred Domestic Bid, with all Foreign Bids. III. If lowest evaluated bid under Stage None II is not the lowest evaluated bid under Stage I, all Foreign Bids among themselves. 5. The bidding documents shall clearly indicate any preference which will be granted to Preferred Domestic Bids 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. C. Other Contracts Procurement of all goods other than those that must be procured under the supplemental procedures hereinabove set forth shall be made through existing commercial channels. D. Certain Civil Works 1. Ranch and other development work such as construction of roads, water dams and firebreaks, to be financed under Sub-loans, shall be carried out, under contracts, by the Tsetse Control Unit of the Borrower's Ministry of Agriculture. 15 2. Contracts for civil works for the improvement and remodelling of the meat processing plant of Tanganyika Packers, Limited included in Part D of the Project shall be awarded on the basis of local competition under procedures consistent with the Guidelines referred to in Section 2.04 of this Agreement, and in accordance with, and subject to, the provisions set forth in sub-paragraphs (a) through (e) of paragraph A.1. of this Schedule 2.