Sierra Leone - Integrated Agricultural Development Project II : Credit 0568 - Credit Agreement - 2 - Conformed

CONFORMED COPY CREDIT NUMBER 568 SL Development Credit Agreement (Integrated Agricultural Development Project II) BETWEEN SIERRA LEONE AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JULY 2, 1975 CONFORMED COPY CREDIT NUMBER 568 SL Development Credit Agreement (Integrated Agricultural Development Project II) BETWEEN SIERRA LEONE AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JULY 2, 1975 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 2, 1975, between SIERRA LEONE (hereinafter called the Borrower) and INTERNATIONAL DEVELOP1MENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) The Borrower has also requested the Bank to provide additional assistance towards the financing of the Project and by an agreement of even date herewith between the Borrower and the Bank (hereinafter called the Loan Agreement) the Bank is agreeing to provide such assistance in an aggregate principal amount equivalent to five million dollars ($5,000,000) (hereicafter called the Loan); (C) The Borrower and the Association intend, to the extent practicable, that the proceeds of the Credit provided for in this Agreement be disbursed on account of expenditures on the Project before disbursements of the proceeds of the Loan provided for in the Loan Agreement are made; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: 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, subject, however, to the following modifications thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions): (a) Section 2.01(9) is deleted and the following is substituted therefor: 4 "9. The term 'Project' means the project or program for which the Credit is granted, as described in the Development Credit Agreement and as the description thereof shall be amended from time to time by agreement between the Borrower, the Association and the Bank."; (b) Section 6.02(b) is deleted and the following is substituted therefor: "(b) The Borrower shall have failed to perform any other obligation under the Loan Agreement (as such terms are defined in the Development Credit Agreement) or the Development Credit Agreement."; and (c) Section 7.01(c) is amended to read as follows: "(c) A default shall occur in the performance of any other obligation on the part of the Borrower inder the Loan Agreement (as such term is defined in the Development Credit Agreement) or the Development Credit Agreement, and such default shall continue for a period of 60 days after notice thereof shall have been given by the Association or the Bank to the Borrower." 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) "Loan Agreement" means the agreement of even date herewith between the Borrower and the Bank for the purpose of the Project, as such agreement may be amended from time to time; and such term includes the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, as made applicable to such agreement, all agreements supplemental to the Loan Agreement and all schedules to the Loan Agreement; (b) "Loan" means the loan provided for in the Loan Agreement; (c) "Loan Account" means the account referred to in Section 2.02 of the Loan Agreement; (d) "Prior Credit Agreement" means the Credit Agreement, 323 SL, dated June 30, 1972, between the Borrower and the Association; (e) "EAPMU" means the project unit referred to in Section 3.03(i) of this Agreement; 5 (f) "NAPMU" means the project unit referred to in Section 3.03(ii) of this Agreement; (g) "PESU" means the project evaluation and services unit referred to in Section 3.03(iii) of this Agreement; (h) "FFC" means the farmer finance company included in Part B(2)(d) of the Project; and (i) Thc letters "Le" mean Leone in the currency of the Borrower. ARTICLE I 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 five million dollars ($5,000,000). 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 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. Section 2.04. The Closing Date shall be March 31, 1980 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. 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 I and September I in each year. 6 Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each March I and September 1 commencing September 1, 1985, and ending March 1, 2025, each installment to and including the installment payable on March 1, 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 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. The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appropriate agricultural, financial, administrative and engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. In order to assist the Borrower in the preparation of projects in its agricultural sector, the Borrower shall employ in its Ministry of Agriculture and Natural Resources consultants whose qualifications, experience and terms and c6nditions of employment shall be satisfactory to the Association. Section 3.03. Except as the Borrower and the Association shall otherwise agree, the Borrower shall, in carrying out the Project, (i) maintain within its Ministry of Agriculture and Natural Resources, as the project unit for Part B of the Project, the project unit referred to in Section 3.04 of the Prior Credit Agreement with such responsibilities, powers and staff as are specified in Schedule 4 to this Agreement; (ii) establish and maintain within its Ministry of Agriculture and Natural Resources as the project unit for Part A of the Project a second project unit with such responsibilities, powers and staff as are specified in Schedule 4 to this Agreement; (iii) establish and maintain within its Ministry of Agriculture and Natural Resources the project evaluation and services unit included in Part C(1) of the Project with such responsibilities, powers and staff as are specified in Schedule 5 to this Agreement; and (iv) .ot later than three months after the Effective Date of this Agreement or such other date as shall be agreed between the Borrower and the Association, establish and maintain project coordinating committees, with composition and functions to be agreed between the Borrower and the Association, to advise NAPMU and EAPMU respectively on the planning and implementation of Parts A and B of the Project. 7 Section 3.04. The Borrower shall appoint, upon terms and conditions and with qualifications satisfactory to the Association (i) the Project Manager, Accountant, Commercial Officer, Extension and Training Officer, Conservation and Land Development Officer, Livestock Officer and Construction Engineer of NAPMU; (ii) the Project Manager, Accountant, Commercial Officer, Extension and Training Officer and Conservation Land Development Officer of EAPMU; (iii) the Financial Controller and Commercial Services Officer of PESU and (iv) the General Manager of the Borrower's Daru Oil Palm Company. Section 3.05. The Borrower shall not later than six months after the Effective Date of this Agreement or such other date as may be agreed between the Borrower and the Association, appoint for the purpose of carrying out Part A of the Project, eight qualified professional officers or experienced technical officers and thirty agricultural field assistants. Section 3.06. The Borrower shall, not later than December 31, 1975 or such other date as may be agreed between the Borrower and the Association, establish the farmer finance company referred to in Part B(2)(d) of the Project with memorandum and articles of association, board of directors, operational procedures and staff composition as shall be acceptable to the Association. Section 3.07. The Borrower shall, not later than December 1, 1975 or such other date as may be agreed by the Association. make arrangements satisfactory to the Association for the construction and improvement of roads in the area included in Part B of the Project. Section 3.08. The Borrower shall, not later than September 15, 1975, establish the Daru Oil Palm Company with memorandum and articles of association acceptable to the Association. Such memorandum and articles of association shall include a pricing formula acceptable to the Association for the purchase of fresh fruit bunches by such company from farmers. 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. 8 Section 3.10. (a) The Borrower shall furnish to 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 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 3.11. 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 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. ARTICLE IV Other Covenants Section 4.01. (a) 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. (b) The Borrower shall cause NAPMU, EAPMU, PESU and FFC to: (i) have their respective 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 independent auditors acceptable to the Association; (ii) 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 their respective 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 9 to the Association such other information concerning their respective accounts and financial statements and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. The Borrower shall, not later than March 31, 1976 or such other date as may be agreed between the Borrower and the Association, furnish to the Association for review proposals for an agricultural research policy for the territory of the Borrower. Section 4.03. The Borrower undertakes (i) that, except as the Association shall otherwise agree, the Borrower will reduce by thirty per cent (30%) the subsidies for the purchase of fertilizer to farmers participating in the Project and (ii) not later than March 31, 1976 or such other date as may be agreed between the Borrower and the Association, to furnish to the Association proposals for the reduction or removal of the Borrower's subsidies related to the financing of agricultural inputs and to consult with the Association with a view to implementing such proposals. Section 4.04. The Borrower shall cause its Sierra Leone Produce Marketing Board to gazette groundnuts as a statutory crop for the purposes of the Borrower's Produce Marketing Board Act, prepare a price formula for groundnuts satisfactory to the Association and, not later than December 31, 1975 or such other date as may be agreed between the Borrower and the Association, establish and publish a minimum price for groundnuts. ARTICLE V Amendment of Prior Credit Agreement Section 5.0 1. The Prior Credit Agreement is amended as follows: (a) Paragraph (e) of Section 1.02 is deleted and paragraph (f) is re-numbered (c). (b) The words ", as soon as said palm oil mill shall have been transferred to ADA as specified in Section 3,05(c)(iv) of this Agreement" in Section 3.0 1(b)(i) are deleted. (c) Section 3.04 is amended to read as follows: "Except as the Borrower and the Association shall otherwise agree, the Borrower shall, in carrying out the Project, establish and maintain within 10 its Ministry of Agriculture and Natural Resources, a project unit, with such responsibilities, powers and staff as are specified in Schedule 4 to the Development Credit Agreement (Second Integrated Agricultural Development Project) dated , 1975, between the Borrower and the Association." (d) Section 3.05 is deleted. (e) The words ", or shall cause ADA to" in Section 3.07(b) and 3.08 are deleted. (f) Sections 3.06, 3.07 and 3.08 are re-numbered 3.05, 3.06 and 3.07 respectively. (g) The words "and of ADA" in the last line of Section 4.01(a), in the third line of Section 4.0 1(b) and in the penultimate line of Section 4.01(b) are deleted. (h) Section 4.02 is deleted. (i) Section 4.03(c) is deleted. (j) The words ", including a draft' agreement to be entered into by SLPMB and ADA, once established, setting up millgate pricing arrangements and a guarantee that SLPMB will purchase all palm oil produced as a result of the Project" in Section 4.04(b)(ii) are deleted. (k) Section 4.03 and 4.04 are re-numbered 4.02 and 4.03 respectively. (1) The words ", of ADA" in Sections 5.01(a) and 5.02(a) are deleted. (m) Sections 7.02 and 7.03 ar- deleted. (n) The first column of Category V of the table in paragraph I of Schedule I is amended to read "Recruiting and services of expatriate staff and consultants". (o) Part V of Schedule 2 is deleted. (p) The final sentence of paragraph I of Schedule 4 is deleted. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01(b) of the General Conditions: (a) that all conditions precedent to the effectiveness of the Loan Agreement other than the effectiveness of the Development Credit Agreement have been fulfilled; (b) that bank accounts for PESU and NAPMU have been established with initial payments of Le20,000 and LelOO,000 respectively and that procedures satisfactory to the Association to ensure that adequate funds are avai ,.te at all times in such accounts have been agreed between the Borrower and tl- bankers for NAPMU, EAPMU and PESU; (c) that NAPMU has been established and EAPMU has been reorganized pursuant t) Section 3.03(i) of this Agreement; and (d) that the Project Manager and Accountant of NAPMU have been appointed with qualifications and on terms and conditions acceptable to the Association and the Financial Controller of PESU has been appointed. Section 6.02. The date September 30, 1975 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.03. The obligations of the Borrower under Sections 4.01(b) and 4.03(i) 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. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of Finance of the Borrower or such other person or persons appointed by such Minister in writing 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: 12 For the Borrower: The Financial Secretary The Ministry of Finance Freetown Sierra Leone Cable address: MINFIN Freetown 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 in their respective names in the District of Columbia, United States of America, as of the day and year first above written. SIERRA LEONE By /s/ Philip Palmer Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ E. Peter Wright Acting Regional Vice President Western Af)ica 13 SCHEDULE 1 Withdrawal of the Proceeds of the Credit and of the Loan 1. The thble below sets forth the Categories of items to be financed out of the proceeds of the Credit and of the Loan, the allocation of amounts of such proceeds to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit and of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Vehicles, heavy 900,000 plant and equip- ment (a) directly 100% of foreign imported expenditures (b) imported but 87% locally pro- cured (2) Fertilizer 500,000 100% of foreign expenditures (3) Internationally 1,400,000 100% of foreign recruited staff expenditures and consultants' services (4) Civil works, local 3,800,000 70% staff and support services, and vehicles and plant operation 14 Amount of the Credit and of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (5) Farm inputs other 1,000,000 70% than fertilizer, in- including seeds, plant- ing materials, pesti- cides, fungicides, herbicides, tools, hired labor and spray- ing machines (6) Una!!ocated 2,400,000 TOTAL 10,000,000 2. For the purposes of this Schedule 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. 3. The disbursement percentages have been calculated in compliance with the policy of the Association and the Bank that no proceeds of the Credit and of the Loan 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 and of the Loan, the Association or the Bank 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, except that withdrawals may be made in respect of Categories (1), (3) and (4) on account of expenditures incurred after March 3 1, 1975 in an aggregate amount not exceeding the equivalent of $100,000. In addition, except as the Borrower, the Association and the Bank shall otherwise agree, and until all amounts of the Credit shall have been withdrawn 15 or committed, no withdrawals shall be made from the Loan Account except under commitments entered into by the Bank pursuant to Section 5.02 of the General Conditions referred to in Section 1.01 of the Loan Agreement. 5. Notwithstanding the allocation of an amount of the Credit and of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Association and the Bank have, or after full withdrawal of the entire amount of the Credit, the Bank has reasonably estimated that the amount of the Credit and of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association and the Bank may, by notice to the Borrower: (i) reallocate to such Category to the extent required to meet the estimated shortfall proceeds of the Credit and of the Loan which are then allocated to another Category and which in the opinion of the Association and of the Bank 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 and the Bank 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 of the Loan and the Association and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Association and of the Bank under the Development Credit Agreement and the Loan Agreement, by notice to the Borrower, cancel such amount of the Credit and of the Loan as in the Association's and the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit and of the Loan. 16 SCHEDULE 2 Description of the Project The Project will be carried out in two areas, namely the northern area centered on Makeni in the northern province of the Borrower, covering about 1,300 square miles with about 14,000 farming families, and the eastern area centered on Kenema in the eastern province of the Borrower, covering about 4,300 square miles and about 65,000 farming families. The Project consists of the following parts: Part A In the northern area: (1) Civil Works (a) Construction of about 20 miles and upgrading of about 280 miles of crop extraction roads; (b) Construction of 200 village wells; (c) Establishment of five market centers; (d) Construction of a training center; and (e) Construction of houses, stores and offices. (2) Farm and Crop Development (a) Provision of extension and related farm services, including operational staff and supporting vehicles and equipment; (b) Provision of short- and medium-term credit upon terms and conditions described in Schedule 6 to this Agreement through a revolving credit fund for labor, pesticides, fertilizers, and improved planting material to increase the production of about 6,000 acres of inland swamp rice, about 25,000 acres of upland rice, and about 10,000 acres of groundnuts; and (c) Development of a seed multiplication farm. 17 (3) Investigations and Research (a) Investigation of the potential for future livestock development and establishment of three cattle farms; and (b) Researching methods of increasing wood fuel production for tobacco farmers. Part B In the eastern area; (1) Civil Works (a) Establishment of 12 market centers; and (b) Construction of houses, stores and offices. (2) Farm and Crop Development (a) Expansion of extension and related farm services including operational staff and supporting vehicles and equipment; (b) Provision of short-, medium- and long-term credit upon terms and conditions described in Schedule 6 to this Agreement for labor, pesticides, fertilizers and improved planting material to increase the production of about 1,800 acres of inland swamp rice and up to about 36,000 acres of upland rice, to develop about 4,200 acres of inland swamp for rice production, and to establish about 1,000 acres of cocoa and about 1,600 acres of oil palm; (c) Continued development and improvement of seed multiplication farms; and (d) Establishment of a Farmer Finance Company to assume the activities of the existing revolving credit fund. 18 Part C Central Support Services: (1) Establishment of and staffing of a project evaluation and services unit to assist the Borrower's Ministry of Agriculture and Natural Resources in managing EAPMU, NAPMU and FFC and the Daru Oil Palm Company. (2) Assistance in the preparation of projects by the Borrower's Ministry of Agriculture and Natural Resources by providing consultants. The Project is expected to be completed by June 30, 1979. 19 SCHEDULE 3 Procurement A. General Procedures 1. Except as provided in Part A.2 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. (a) Individual contracts not exceeding the equivalent of $24,000 and not exceeding in the aggregate the equivalent of $200,000 for vehicles, plant, equipment, fertilizer, pesticides and tools shall be let on the basis of competitive bidding advertised locally and in accordance with procedures satisfactory to the Association. Contracts for other farm inputs such as spraying machines and planting materials, shall be let through competitive bidding advertised locally. (b) Hired labor, staff, vehicle maintenance and operation and general services shall be procured through procedures acceptable to the Association. (c) Contracts for the construction of buildings, houses and the purchase of construction materials and furnishings shall be let on the basis of competitive bidding advertised locally and in accordance with procedures satisfactory to the Association. 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 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 Sierra Leone 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 20 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 Sierra Leone 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 Sierra Leone equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Sierra Leone. (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 bid of each group. The lowest evaluated bid 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 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. C. Procurement Without Contracting 1. Construction of roads shall be carried out by force account of the Borrower. 2. Construction of wells shall be by villagers using materials financed by the proceeds of the Credit and the Loan. 21 D. Review of Procurement Decisions by Association 1. Review of invitation to bid and of proposed awards and final contracts: With respect to all contracts referred to in paragraph 1 of Section A of this Schedule: (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 on the evaluation and comparison of the bids received, together with the recommendation for award 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 and Loan Account in respect of such contract. 2. With respect to each contract referred to in paragraph 2(a) and (c) of Section A of this Schedule to be financed out of the proceeds of the Credit and Loan 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 and 22 Loan Account in respect of such contract, two conformed copies of such contract, together with, where appropriate, 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 this Schedule, promptly inform the Borrower and state the reasons for such determination. 23 SCHEDULE 4 EAPMU and NAPMU A. EAPMU 1. EAPMU shall consist of: (a) the Project Manager who shall have over-all responsibility for the direction and coordination of the work of EAPMU and shall report directly to the Permanent Secretary of the Borrower's Ministry of Agriculture and Natural Resources; (b) the Accountant; (c) the Commercial Officer; (d) the Extension and Training Officer; (e) the Conservation and Land Development Officer; and (f) such supporting staff as shall be necessary for the efficient operation of EAPMU. 2. EAPMU shall be responsible, and have the necessary powers, for carrying out Part B of the Project. The head office of EAPMU shall be located at Kenema. B. NAPMU 1. NAPMU shall consist of: (a) the Project Manager who shall have over-all responsibility for the direction and coordination of the work of NAPMU and shall report directly to the Permanent Secretary of the Borrower's Ministry of Agriculture and Natural Resources; (b) the Accountant; (c) the Commercial Officer; (d) the Extension and Training Officer; 24 (e) the Conservation and Land Development Officer; (f) the Livestock Officer; (g) the Construction Engineer; and (h) such supporting staff as shall be necessary for the efficient operation of NAPMU. 3. NAPMU shall be responsible, and have the necessary powers, for carrying out Part A of the Project. 25 SCHEDULE 5 PESU 1. PESU shall consist of: (a) the Financial Controller; (b) the Commercial Services Officer; (c) the Accountant; and (d) the Projects Economist. 2. The PESU would be responsible to the Permanent Secretary of the Ministry of Agriculture and Natural Resources of the Borrower and would have the following functions: (a) undertaking continuous project evaluation; (b) providing EAPMU, NAPMU and other project management units with information relevant to decision making; (c) establishing priorities for new projects within the agricultural sector; (d) forward planning; (e) training and assisting the staff of EAPMU, NAPMU and other project management units in appropriate accounting, auditing, stores and procurement procedures; (f) processing reimbursement claims; (g) auditing EAPMU, NAPMU and other project management units; (h) establishing suitable credit systems for project farmers; (i) developing appropriate farm input supply systems; and (j) carrying out any other functions as may be assigned to it by the Borrower. 3. The Financial Controller would be head of PESU and would be a member of the project advisory committee of the Borrower. 26 SCHEDULE 6 Terms and Conditions for Extension of Credit Extension of credit by the Borrower under Part A(2)(b) and Part B(2)(b) of the Project shall be in accordance with the following terms and conditions: (a) Except as the Association shall otherwise agree, interest rates for development loans shall be eight per cent (8%) per annum and for seasonal loans a fixed charge of ten per cent (10%) shall be made. (b) Amortization of the principal amount lent by way of development loans shall be in the case of oil palm over a term of thirteen years including four years of grace, in the case of cocoa over a term of twelve years including four years of grace, and in the case of swamp rice over a term of five years. (c) Interest payments shall be capitalized in the case of development loans for oil palm and cocoa. (d) Development loans shall be made available for the establishment of no more than ten acres of oil palm, no more than four acres of cocoa and no more than about three acres of swamp rice, except than in the case of such loans for the establishment of swamp rice, such loans may be made in respect of a reasonably greater area than three acres on condition that credit is extended to a group of farmers.