Malawi - Second Highway Project : Credit 0523 - Credit Agreement - Conformed

CONPORMED COPY CREDIT NUMBER 523 MAI Development Credit -A- Agreement (Second Highway Project) BETWEEN REPUBLIC OF MALAWI AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED DECEMBER 19, 1974 CONFORMED COPY CREDIT NUMBER 523 MAI Development Credit Agreement (Second Highway Project) BETWEEN REPUBLIC OF MALAWI AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED DECEMBER 19, 1974 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated December 19, 1974, between REPUBLIC OF MALAWI (hereinafter called the Borrower) and INTERNATIONAL 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 March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements of the Association 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 "MOWS" means the Ministry of Works and Supplies of the Borrower, and any successor or successors thereto. 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 ten million dollars ($10,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule may be amended from time to time, for expenditures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 out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods or for the carrying out of works or services (other than consultants' services) for the Project to be financed out of the proceeds of the Credit shall be awarded in accordance with the provisions of Schedule 3 to this Agreement. 4 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 February 15 and August 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each February 15 and August 15 commencing February 15, 1985, and ending August 15, 2024, each installment to and including the installment payable on August 15, 1994 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 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. (a) The Borrower shall carry out the Project through the Roads Department of MOWS with due diligence and efficiency and in conformity with appropriate administrative, engineering and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Except as the Association shall otherwise agree, the Borrower shall cause the Lilongwe-Kasungu highway to be improved so as to conform with the design standards set forth in Schedule 4 to this Agreement. (c) Without limiting or otherwise restricting its obligations under paragraph (b) of this Section, the Borrower shall consult with the Association fron time to time on the desirability of using a cement-stabilized base for particular segments of the highway included in Part A of the Project. Section 3.02. In order .to assist the Borrower in the supervision of highway and bridge construction included in Part A of the Project, the Borrower shall employ 5 engineering consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 3.03. In carrying out the civil works included in Part A of the Project, the Borrower shall employ contractors whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 3.04. (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 3.05. (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 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 visit the facilities and construction sites included in the Project and to examine 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 3.06. 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. Section 3.07. By December 1, 1976, or such other date as shall be agreed between the Borrower and the Association, the Borrower shall discuss with the 6 Association its evaluation report on the pilot program referred to in Part B of the Project and, based upon such discussion, shall take such action as may be necessary to implement in other districts of the Borrower a program similar to said pilot program. 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. The Borrower shall take such measures as may be necessary to ensure that the dimensions and axle-loads of vehicles using the Borrower's highways and roads are consistent with the structural and geometric design standards of such highways and roads. Section 4.03. The Borrower shall establish and maintain a suitable traffic data collection system to assist the improvement and development of its highway and road system. Section 4.04. The Borrower undertakes to maintain and repair its main and secondary road system in accordance with sound engineering and financial practices and shall provide, promptly as needed, all funds, equipment, workshop facilities, labor and other resources requihed for this purpose. ARTICLE V Effective Date; Termination Section 5.01. The date March 21, 1975 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.02. The obligations of the Borrower under Article IV of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty years after the date of this Agreement, whichever shall be the earlier. 7 ARTICLE VI Repiesentative of the Borrower; Addresses Section 6.01. The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: The Secretary to the Treasury Ministry of Finance P. 0. Box 30049 Capital City Lilongwe 3, Malawi Cable address: FINANCE Lilongwe 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 8 in their respective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF MALAWI By /s/ R. Mbale Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / S. Shahid Husain Regional Vice President Eastern Africa 9 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 the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works 7,410,000 80% under Part A of the Project (2) Consultants' 280,000 100% of foreign services expenditures (3) Pilot program 200,000 100% of foreign for development expenditures and and maintenance 50% of local of district roads expenditures (4) Unallocated 2, 110,000 TOTAL 10,000,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures for goods or services supplied from the territory, and in the currency, of any country other than the Borrower, and (b the term "local expenditures" means expenditures in the currency of the Borrower, and for goods or services supplied from, the territory of the Borrower. 3. The disbursement percentages have been calculated in compliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on 10 goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if any event occurs which shall affect the amount of any such taxes included in the cost of any item to be financed out of the proceeds of the Credit, the Association may, by notice to the Borrower, correspondingly adjust the disbursement percentage then applicable to such item. 4. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of expenditures prior to the date of this Agreement. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph I above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category to the extent required to meet the estimated shortfall proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. 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 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. 11 SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: Improvement of the Lilongwe-Kasungu highway (a distance of about 73 miles) to a two-laned bituminous paved standard, including (i) a bypass (known as Road 20) around the industrial area in Lilongwe and (ii) reconstruction of the Lingadzi Bridge on the MI Road in Lilongwe. Part B: Establishment of a pilot program in Kasungu District to improve the development and maintenance of district roads throughout the territory of the Borrower, including the carrying out of a study to determine inter alia (i) the most suitable methods of road maintenance for such program, (ii) the necessary operational and training funding requirements for such program and (iii) the feasibility of extending such program to other districts of the Borrower. The Project is expected to be completed by June 30, 1977. 12 SCHEDULE 3 Procurement A. General Procedures 1. Except as provided in Part A(3) hereof, contracts shall be let under procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in April 1972, as revised in October 1972 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. With respect to the contracts referred to in Part A(1) of this Schedule: (i) Bidders for the civil works included in Part A of the Project shall be prequalified as described in Part 2.2 of the Guidelines; and (ii) the civil works included in Part A of the Project shall be constructed under one unit-price contract. 3. Contracts for the purchase of equipment and vehicles and for the civil works included in Part B of the Project shall be let on the basis of local competition pursuant to the Borrower's usual procurement procedures. B. Review of Procurement Decisions by Association 1. Review of prequalification: The Borrower shall, before qualification is invited, inform the Association in detail of the procedure to be followed and shall introduce such modifications in said procedure as the Association shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications shall be furnished by the Borrower to the Association for its comments and the Borrower shall make such additions to, deletions from, or modifications in, the said list as the Association shall reasonably request. 2. Review of invitation to bid and of proposed awards and final contracts: With respect to all contracts for civil works estimated to cost the equivalent of $100,000 or more: (a) 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 13 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 procedures 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) Promptly after the bids have been received, the Borrower shall inform the Bank of the names of the bidders and the respective amounts of the bids. (c) 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 which it intends to award the contract and the reasons for the intended award 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 recommendation for award of the said consultants and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower 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 or prequalification invited. (e) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. 3. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding paragraph, the Borrower shall furnish to the Association, promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of 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 was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. 14 SCHEDULE 4 Design Standards for the Lilongwe-Kasungu Highway Width of right-of-way 200 ft Design speed 60 mph Stopping sight distance 475 ft Passing sight distance 2,000 ft Minimum radius horizontal 1,150 ft Maximum radius 50 Maximum gradient 5% Bituminous surfaced width 22 ft Roadway v idth 32 ft Crossfall pavement 1:30 Crossfall shoulders 1:20 Cuttings 1:1; 2:1 if height is greater than 4 ft. Embankments 1:3; 1:1.5 if height is greater than 4 ft. Pavement type Subbase: 4-6 in. natural gravel Base: 6 in. natural gravel or cement-stabilized base, pursuant to the provisions of Section 3.01(c) of this Agreement Surface: Double bituminous surface Pavement design axle-load 18,000 lbs. equivalent RRL Report LR 279 Structures: Width Equal to roadway width Loading BS153, 0.8 x H.A. 15U x H.B.