Peru - Lima-Amazon Transport Corridor : Loan 1196 - Project Agreement - Conformed

CONFORMED COPY lw LOAN NUMBER 1196 PE Project Agreement (Lima-Amazon Transport Corridor Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND EMPRESA NACIONAL DE PUERTOS DATED MAY 27, 1976 CONFORMED COPY LOAN NUMBER 1196 PE Project Agreement (Lima-Amazon Transport Corridor Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND EMPRESA NACIONAL DE PUERTOS DATED MAY 27, 1976 PROJECT AGREEMENT AGREEMENT, dated May 27, 1976, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and EMPRESA NACIONAL DE PUERTOS (ENAPU). WHEREAS by the Loan Agreement of even date herewith between the Republic of Peru (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to seventy-six million five hundred thousand dollars ($76,500,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that ENAPU agree to undertake such obligations toward the Bank as hereinafter set forth; and WHEREAS ENAPU, in consideration of the Bank's entering into the Loan 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 Loan Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Management and Operations of ENAPU Section 2.01. (a) ENAPU shall operate and maintain all its properties, plants, facilities and equipment and from time to time make all necessary renewals and repairs thereof, and at all times manage its affairs, operate its facilities and equipment and maintain its financial position, in conformity with appropriate administrative, financial and engineering practices. (b) Without limiting the generality of the foregoing, ENAPU shall operate, maintain, renew and repair the properties, facilities and equipment transferred to it by the Borrower pursuant to Section 3.06 of the Loan Agreement with due 4 diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices, and shall provide, or shall take all steps necessary to obtain, promptly as needed, the funds, facilities, services and other resources required for the purpose. (c) ENAPU shall at all times be managed by competent, qualified and experienced management. Section 2.02. ENAPU shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 2.03. (a) ENAPU (i) shall, without limitation upon the provisions of paragraph (b) hereof, enable the Bank's representatives to visit the properties, facilities and equipment transferred to it by the Borrower pursuant to Section 3.06 of the Loan Agreement and any relevant records and documents; and (ii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning the operation and maintenance of the properties, facilities and equipment in (i) hereof. (b) ENAPU shall, for purposes of the Project, enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of ENAPU and any relevant records and documents. Section 2.04. (a) The Bank and ENAPU shall, at the request of any one of them, exchange views through their representatives with regard to the operation and maintenance of the properties, facilities and equipment transferred to ENAPU by the Borrower pursuant to Section 3.06 of the Loan Agreement, the performance of their respective obligations under this Agreement and other matters relating to the purposes of the Loan. (b) ENAPU shall promptly inform the Bank of any condition which interferes or threatens to interfere with the operation and maintenance of the properties, facilities and equipment in paragraph (a) hereof, or the performance by ENAPU of its obligations under this Agreement. ARTICLE III Financial Covenants Section 3.01. ENAPU shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. 5 Section 3.02. ENAPU 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 appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than four 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 shall have reasonably requested; and (iii) furnish to the Bank such other information concerning the accounts and financial statements of ENAPU and the audit thereof as the Bank shall from time to time reasonably request. Section 3.03. (a) Except as the Bank shall otherwise agree, ENAPU shall: (i) revise, not later than December 31, 1976, on the basis of the costing study presently being carried out by ENAPU, the tariff structure of its rates and charges for port services to enable ENAPU to earn an annual rate of return of at least six per cent (6%) on the average current net value of its fixed assets in operation calculated in accordance with a method, satisfactory to the Bank, which shall exclude from the revenues of ENAPU any revenues not related to services provided by it; (ii) revalue its assets and liabilities, from time to time, to such extent as shall be necessary to reflect adequately, at the time of each revaluation, the current value thereof, in accordance with a sound and consistently applied method of revaluation acceptable to the Bank; (iii) establish and maintain, in accordance with the Basic Laws, rates and charges for its services at the port of Iquitos at levels sufficient to achieve a working ratio of no more than 140 in the year 1976, 120 in the year 1977 and 100 in the year 1978; and (iv) establish and maintain, in accordance with the Basic Laws, rates and charges for its services at the ports of Iquitos, Pucallpa and Yurimaguas at levels sufficient to achieve a working ratio for the three ports together of not more than 100 in the year 1979 and progressively lower ratios in the following years. (b) For the purposes of paragraph (a)(iii) and (iv) of this Section, "working ratio" means working expenses (i.e., operating expenses before depreciation and interest) divided by operating revenues (excluding any revenues not related to services provided by ENAPU). ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which the Loan Agreement becomes effective. 6 Section 4.02. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Loan Agreement. Section 4.03. This Agreement and all obligations of the Bank and of ENAPU thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms. ARTICLE V Miscellaneous Provisions Section 5.01. 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. For ENAPU: Terminal Maritimo del Callao Edificio Administrativo, Tercer Piso Callao, Perf Cable address: ENAPUPERU Callao, Peru 7 Section 5.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of ENAPU may be taken or executed by its Gerente General or such other person or persons as ENAPU shall designate in writing. Section 5.03. ENAPU shall furnish to the Bank sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of ENAPU, take any action or execute any documents required or permitted to be taken or executed by ENAPU pursuant to any of the provisions of this Agreement. Section 5.04. 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 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 / Adalbert Krieger Regional Vice President Latin America and the Caribbean EMPRPSA NACIONAL DE PUERTOS By /s I Carlos Garcia Bedoya Authorized Representative