Rwanda - Education Project : Credit 0567 - Credit Agreement - Conformed

071, CONFORMED COPY CREDIT NUMBER 567 RW Development Credit Agreement (Education Project) BETWEEN REPUBLIC OF RWANDA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 30, 1975 CONFORMED COPY CREDIT NUMBER 567 RW Development Credit Agreement (Education Project) BETWEEN REPUBLIC OF RWANDA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 30, 1975 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 30, 1975, between REPUBLIC OF RWANDA (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 following additional terms have the following meanings: (a) "SFCS" means Service de Financement et de Constructions Scolaires, a school financing and construction unit established by the Borrower pursuant to ArrtM Presidentiel No. 67/10 dated March 11, 1975, in accordance with Section 3.02 of this Agreement; (b) "Revolving Fund" means the revolving fund referred to in Section 3.01(b) of this Agreement; and (c) "Commune" means an administrative division of the Borrower. 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 eight million dollars ($8,000,000). 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 The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule I to this Agreement, as 4 such Schedule may be amended from time to time, for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, the goods, works and services (other than consultants' services) for the Project shall be procured in accordance with the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1982 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 March 15 and September 15 in each year. Section 2.07. The Borrower shall repay the principal arnount of the Credit in semi-annual installments payable on each March 15 and September 15 commencing September 15, 1985, and ending March 15, 2025, each installment to and including the installment payable on March 15, 1995, 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 Director and the Accountant of SFCS, acting jointly, are designated as representatives of the Borrower for the purpose of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. Section 2.09. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE Ill Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project through its Ministry of Education with due diligence and efficiency and in conformity with appropriate administrative, financial, architectural and educational practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. 5 (b) Without limitation to its obligations under paragraph (a) of this Section, the Borrower shall (i) establish and maintain, in the National Bank of Rwanda, under arrangements satisfactory to the Association, a Revolving Fund in a special account in the name of SFCS, (ii) deposit in such Revolving Fund an initial amount in the currency of the Borrower equivalent to $100,000 from which SFCS may withdraw amounts required to meet expenditures in respect of the Project, (iii) replenish, from time to time, the amount in the Revolving Fund at the request of SFCS to a level at least equivalent to $100,000, and (iv) deposit or cause to be deposited in the Revolving Fund such amounts as shall from time to time be withdrawn by the Borrower from the Credit Account in respect of expenditures made out of the Revolving Fund. Section 3.02. (a) The Borrower shall establish and maintain within its Ministry of Education a school financing and construction unit (SFCS) with such functions and responsibilities as described in Schedule 4 to this Agreement, such unit to be staffed on a full-time basis with: (i) a Director, an architect (or a civil engineer), a procurement officer and an accountant, all of them with qualifications and experience satisfactory to the Association, upon terms and conditions acceptable to the Association; and (ii) such field and supporting staff as shall be required for SFCS to discharge its functions and responsibilities with due diligence and efficiency. (b) Not later than one year as from the date of this Agreement, or such other date as shall be agreed with the Association, the Borrower shall employ two Rwandese nationals to assist SFCS's architect (or civil engineer) and procurement officer, with a view to training them so that they can take over the respective functions in SFCS of said architect (or civil engineer) and procurement officer. Section 3.03. (a) For the purpose of Part B.1 of the Project, the Borrower shall cause SFCS to employ civil engineering technicians whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. (b) For the purpose of Part B.4 of the Project, the Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 3.04. The Borrower shall cause SFCS to submit to the Association for its review the list of sites proposed by SFCS for the construction of the workshops referred to in Part A.1 of the Project. Such sites shall be selected in accordance with the following criteria: 6 (a) in principle, each commune shall be provided with a workshop if it provides self-help for site preparation; and (b) workshops shall only be provided for primary schools which have (i) at least two classes in both grades 5 and 6 and (ii) a plot of land of about I ha to be used for training students in agricultural techniques. Section 3.05. The Borrower shall cause (a) SFCS to furnish to the Association for its approval, promptly upon completion, design and construction standards for the workshops to be provided under Part A of the Project, (b) the communes to establish cost estimates on the basis of such design and construction standards and (c) SFCS to review those cost estimates and furnish to the Association, for its comments, a summary of such review. Section 3.06. The Borrower shall cause SFCS to provide all such technical assistance to the communes as shall be necessary for the repair of schools selected under Section 3.04 of this Agreement which shall not be of a reasonable standard. Section 3.07. Not later than two years as from the date of this Agreement, or such other date as shall be agreed with the Association, the Borrower shall furnish to the Association for its comments a detailed summary of its proposed selection and examination procedures for entry into secondary schools. Section 3.08. The Borrower shall: (a) train primary school teachers in the teaching of practical subjects; and (b) make its best efforts to obtain external aid for such training. Section 3.09. (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, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.10. (a) The Borrower shall furnish or cause to be furnished to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, 7 and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain or cause to be maintained 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 or cause to be furnished 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 3.11. 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 the construction and operation of the facilities included in the Project and shall furnish or cause to be furnished 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. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall cause SFCS to maintain records adequate to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of SFCS. (b) The Borrower shall cause SFCS to: (i) establish and maintain a separate Project Account with sub-accounts for each sub-part of the Project and a consolidated account for all transactions made in connection with the Revolving Fund (hereinafter called the RF Account); (ii) have such Project Account and RF Account for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Association; (iii) furnish to the Association as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of such Project Account and RF Account 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 8 requested; and (iv) furnish to the Association such other information concerning such Project Account and RF Account and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. The Borrower shall: (i) cause SFCS to adequately maintain the workshops, equipment and vehicles provided under Part A of the Project, and make all necessary repairs thereof, and (ii) provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional event is specified pursuant to paragraph (h) thereof, namely, that the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of SFCS or for the suspension of its operations. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified, namely, that the event specified in Section 5.01 of this Agreement shall occur. ARTICLE VJ Effective Date; Termination Section 6.01. The following event is specified as an additional condition to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01(b) of the General Conditions, namely, that the Revolving Fund has been established in accordance with Section 3.01(b) of this Agreement and the Borrower has deposited in such Revolving Fund the amount referred to in (ii) of said Section 3.01(b). Section 6.02. The date September 29, 1975, is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.03. 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 fifteen years after the date of this Agreement, whichever shall be the earlier. 9 ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of Education of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02.The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministbre de l'Education Nationale P.O. Box 622 Kigali Rwanda Cable address: MINEDUC Kigali 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 10 in their respective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF RWANDA By /s/ Tharcisse Gatwa Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ M. H. Wichen/ Director Country Programs ,Departnent Eastern Aftica Regional Qffice 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 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 Part A.] of the Project (1) Civil works (a) Labor hired 250,000 85% by the com- munes (b) Construction 1,000,000 materials (i) directly 100% of foreign imported expenditures (ii) locally 85% of local ex- procured penditures (2) Furniture and in- 550,000 structional equip- ment (i) directly 100% of foreign imported expenditures (ii) locally 75% of local ex- procured penditures Part A.2 of the Project (3) Civil works 150,000 85% 12 Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (4) Printing equipment 300,000 and furniture (i) directly 100% of foreign imported expenditures (ii) locally 75% of local procured expenditures (5) Paper 1,000,000 100% of foreign expenditures Part A.3 of the Project (6) Civil works 50,000 85% (7) Equipment, furniture 100,000 and vehicles (i) directly 100% of foreign imported expenditures (ii) locally 75% of local procured expenditures (8) Salaries and operat- 250,000 90% ing costs with respect to Project adminis- tration Part B of the Project (9) Technical Assistance 800,000 100% of foreign under Parts B.1, B.2 expenditures and B.3 (10) Consultants' services 200,000 100% of foreign under Part B.4 expenditures and 85% of local expenditures (11) Unallocated 3,350,000 TOTAL 8,000,000 13 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 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 1 above, no withdrawals shall be made in respect of expenditures prior to the date of this Agreement, except that withdrawals may be made in respect of Category 8 on account of expenditures incurred after March 30, 1975 in an aggregate amount not exceeding the equivalent of $30,000. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 1 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 14 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. 15 SCHEDULE 2 Description of the Project The purpose of the Project is to assist the Borrower in financing the first phase of a comprehensive approach towards improving the quality and efficiency of primary education. The Project consists of the following parts: Part A 1. Construction, furnishing and equipping of about one hundred and fifty workshops for the teaching of practical subjects with an aggregate capacity for about 6,000 students. 2. Construction, furnishing and equipping of a print shop and provision of paper for the printing of about 2,700,000 textbooks and about 1,600,000 teaching guides. 3. (a) Construction, furnishing and equipping of an office building for SFCS and (b) provision of vehicles for SFCS's operation. Part B Technical Assistance 1. Provision of about 32 man-years of civil engineering technicians' services to provide technical advice to local craftsmen at the various construction sites. 2. Provision of about 10 man-years of architect's and procurement specialist's services. 3. Provision of about 2 man-years of specialists' services for the operation, maintenance and repair of the printing equipment included in Part A.2 abov'e. 4. Provision of about 4 man-years of consultants' services for the evaluation, during the implementation of the Project, of the financial mechanisms and the construction procedures established by SFCS for the purposes of the Project. The Project is expected to be completed by December 31, 1981. 16 SCHEDULE 3 Procurement A. General Procedures 1. Except as provided in Part A.3 hereof (a) 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, and (b) invitations to bid shall be advertised locally and in Zaire, Burundi, Tanzania, Uganda and Kenya. 2. Items of building materials, equipment and paper shall be grouped so as to permit bulk procurement as shall be consistent with appropriate technical and procurement practices. 3. (a) Contracts for bulk orders of building materials, furniture and instructional equipment available in Rwanda may be awarded by SFCS on the basis of competitive bidding advertised locally, under procedures acceptable to the Association. (b) Contracts for building materials and civil works under Part A. 1 of the Project may be awarded by the Communes, after approval by SFCS, on the basis of quotations from local suppliers and local contractors. (c) Contracts for civil works and vehicles tinder Parts A.2 and A.3 of the Project may be procured by SFCS on the basis of quotations from local contractors and local suppliers. (d) Items costing less than $2,500 equivalent may be procured on the basis of quotations from local suppliers, provided, however, that the aggregate of all items so procured shall not exceed $200,000 equivalent. B. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the supply of goods: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for domestically-manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically-supplied goods, shall be excluded; and (iii) the 17 cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. 2. Goods manufactured in Rwanda may be granted a margin of preference in accordance with, and subject to, the following provisions: (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Rwanda 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 Rwanda equal to at least 209% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Rwanda. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes on goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evaluated bids of each group. The lowest evaluated bid of each group shall then be compared with each other, and if, as a result of this comparision, a bid from group A or group B is the lowest, it shall be selected for the award. (d) If, as a result of the comparison under paragraph (c) above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A. after adding to the c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid, or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the lowest evaluated bid from group C shall be selected. 18 C. Review of Procurement Decisions by Association 1. Before inviting bids, the Borrower shall send to the Association for its approval, the lists of materials, furniture and equipment required for the Project showing the specifications and the estimated unit and total price. Amendments to such lists which may be made from time to time shall also be submitted to the Association for approval. Procurement shall be limited to those items of materials, furniture and equipment which are specified in such lists. 2. With respect t, contracts for equipment, printing machines, building materials, furniture and paper estimated to cost more than $20,000 equivalent: (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 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 Association 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 SFCS, on the evaluation and comparison of the bids received, together with the recommendation for award of SFCS 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. (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. 19 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. 20 SCHEDULE 4 Functions and Responsibilities of SFCS SFCS shall have such functions and responsibilities as shall be necessary for the proper execution and supervision of the Project and in particular the following: (a) Coordination with all ministries, authorities and agencies of the Borrower in respect of the execution of all aspects of the Project; and liaison with the Association; (b) Selection and briefing of technical assistance personnel, approval of their terms of reference and administration of their contracts; (c) Planning and programming of the Project execution schedule and monitoring to insure that works are on schedule and in compliance with established performance standards; (d) Preparation of functional low-cost designs and construction details for use by the bourgmasters; (e) Preparation of detailed lists of building materials, furniture and equipment, including printing machines and vehicles, required for the Project, and preparation of tender documents; (f) Making necessary arrangements for tendering, evaluation of bids and award of contracts related to the Project; (g) Review and approve or arrange for the review and approval, by the appropriate authorities, of all reports, plans, specifications and other materials related to the Project; (h) Assisting the bourgmasters and the district inspectors in preparing the required information for the workshops, in supervision of construction and in providing technical advice to local craftsmen; (i) Assisting in the delivery of building materials, and in the installation of furniture and equipment; (j) Ensuring that funds are available in the Revolving Fund as required to meet payments for expenditures incurred in connection with the Project, and that advances are made to the bourgmasters as appropriate; 21 (k) Ensuring prompt action with regard to payments on expenditures incurred with respect to the Project, including the preparation of withdrawal applications, (1) Preparing a manual on the maintenance of primary education facilities, including the Project workshops; and (m) Preparation of periodic progress reports for the Borrower and the Association.