India - West Bengal Agricultural Development Project : Credit 0541 - West Bengal Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 541 IN West Bengal Agreement (West Bengal Agricultural Development Project) BETWEEN THE STATE OF WEST BENGAL AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED APRIL 28, 1975 WEST BENGAL AGREEMENT AGREEMENT, dated April 28, 1975, between THE STATE OF WEST BENGAL, acting by its Governor (hereinafter called West Bengal) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) by a development credit agreement of even date herewith between India, acting by its President (hereinafter called the Borrower) and the Association (hereinafter referred to as the Development Credit Agreement), the Association has agreed to make available to the Borrower an amount in various currencies equivalent to thirty-four million dollars ($34,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition inter alia that West Bengal agrees to undertake such obligations toward the Association as hereinafter set forth; (B) by an agreement of even date herewith between the Association and Agricultural Refinance Corporation, Agricultural Refinance Corporation has agreed to undertake certain obligations in respect of the carrying out of the Project; and (C) West Bengal, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Particular Covenants Section 2.01. (a) West Bengal shall carry out, or cause to be carried out, the Project with due diligence and efficiency and in conformity with sound administrative, financial, agricultural and engineering practices, and shall provide, 4 or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) West Bengal shall take all action which shall be necessary on its part to enable ARC to perform its obligations under the Project Agreement and shall not take or permit any of its agencies to take any action which would prevent or interfere with the performance of any such obligations of ARC or of Participating Banks associated therewith. Section 2.02. (a) Except as the Association shall otherwise agree, the goods, works and services (other than consultants' services) for the Project to be financed out of the proceeds of the Credit shall be procured in accordance with the provisions of Schedule I to this Agreement. (b) West Bengal undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit made available to it by the Borrower 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 West Bengal to replace or repair such goods. Section 2.03. (a) In order to formulate designs and technical specifications for riverlift installations included in Part B(i) of the Project, West Bengal shall appoint a technical group in consultation with the Association under terms of reference mutually acceptable to West Bengal and the Association. (b) In order to conduct economic evaluation and feasibility studies included in Part B(ii) of the Project, West Bengal shall employ qualified consultants acceptable to the Association upon terms and conditions satisfactory to the Association. (c) Any other consultants required for assistance in carrying out the Project shall be employed by West Bengal on terms and conditions satisfactory to the Association. Section 2.04. West Bengal shall entrust coordination of the Project to the Sub-committee on Long-term Loans and ARC Schemes of its state level Coordination Committee established pursuant to its Resolution No. 441, dated February 6, 1974. Section 2.05. West Bengal shall, not later than December 31, 1975, or such other date as the Association shall agree: 5 (a) cause the three secretaries of the Market Committees located at Samsi, Karimpur and Katwa to attend the appropriate training course for market secretaries at Nagpur or Poona Training Institutes; (b) prepare a plan for the reorganization of extension services in the Project Area satisfactory to the Association; and (c) appoint competent and adequate staff to prepare agricultural development projects in accordance with a work program satisfactory to the Association. Section 2.06. West Bengal shall, pursuant to the provisions of the Act, establish the Marketing Board in a form satisfactory to the Association. Section 2.07. Except as the Association shall otherwise agree, West Bengal shall fix, maintain and enforce uniform market fees to be levied by all Market Committees of not less than 1% of the value of the agricultural produce marketed. Section 2.08. (a) West Bengal shall, by December 31, 1975, or such other date as the Association shall agree, select areas where construction and equipping of deep tubewells shall be confined to Irrigation Groups during the implementation of the Project. (b) West Bengal shall make available to Irrigation Groups, as a grant, at least 50% of the capital cost of construction and equipping of deep tubewells. Section 2.09. West Bengal shall, through the Water Board, establish technical criteria for irrigation investments, including those relating to siting of wells and riverlifts. Section 2.10. (a) West Bengal shall, by December 31, 1975, or such other date as the Association shall agree, implement a program satisfactory to the Association for collection of water charges to recover the full operating and maintenance costs of minor irrigation facilities owned by MIC and West Bengal. (b) West Bengal undertakes to increase water charges in respect of minor irrigation to an extent sufficient to recover progressively a larger portion of capital costs. To this end, West Bengal shall promptly commence continuous field studies on terms and conditions satisfactory to the Association. Section 2.11. (a) West Bengal shall cause MIC to prepare and implement a staffing and financing plan satisfactory to the Association. 6 (b) To avoid duplication of staff and equipment when operating in the same area, West Bengal shall cause MIC and the Engineering Directorate of its Department of Agriculture to provide appropriate staff and equipment services for each other on an agency basis. Section 2.12. West Bengal shall ensure that an adequate quantity of seed supplies is available to meet the requirements of the Beneficiaries in the Project Area. Section 2.13. West Bengal undertakes not to make any agricultural loans directly to farmers in any Block of the Project Area in which Sub-loans are made for minor irrigation. Section 2.14. West Bengal shall: (i) provide the West Bengal State Electricity Board beginning with fiscal year 1975/76 and thereafter with an annual subsidy equivalent to the amount by which such Board's operating expenses (including loan interest) in respect of rural electrification operations in the Project Area exceed its revenues from such operations; (ii) in respect of electrification schemes to connect shallow tubewells and deep tubewells to be constructed under the Project, make arrangements for appraisal by December 31, 1975, of such schemes in a manner satisfactory to the Association; (iii) cause its State Electricity Board to act expeditiously in, and give priority to, the connection of electricity to tubewells included in the Project; and (iv) give priority to agricultural users in the Project Area for the allocation of fuel oil for operation of wells and riverlift installations. Section 2.15. West Bengal shall, as early as possible, take all necessary action to regulate ground water use in the State of West Bengal. Section 2.16. Except as the Association may otherwise agree, West Bengal shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 2.17. West Bengal 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 of the Markets under the Project. Section 2.18. (a) West Bengal 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, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. 7 (b) West Bengal: (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 made available to it by the Borrower, and to disclose the use thereof in the Project; (ii) shall enable the Association's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of such proceeds 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 so made available to it and the goods and services financed out of such proceeds. Section 2.19. (a) West Bengal shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit. (b) West Bengal shall promptly inform the Association of any condition which interferes or threatens to interfere with, the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by West Bengal of its obligations under this Agreement. Section 2.20. West Bengal shall cause MIC to: (i) at all times manage its affairs, maintain its financial position, and carry on its operation, all in accordance with sound business and financial practices and under the supervision of experienced and competent management assisted by adequate staff; and (ii) take all steps necessary to acquire, maintain and renew all rights, powers, privileges and franchises which are necessary or useful in the conduct of its business or in the carrying out of any part of the Project. Section 2.21. West Bengal shall cause MIC to take out and maintain with responsible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 2.22. West Bengal shall cause MIC and the Market Committees to maintain records adequate to reflect in accordance with consistently maintained al)propriate accounting practices their operations and financial condition. Section 2.23. West Bengal shall cause MIC and the Market Committees to: (i) have their 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 8 auditors acceptable to the Association; (ii) furnish to the Association as soon as available, and, except as the Association shall otherwise agree, not later than four months after the end of each such year, (A) certified copies of the financial statements for such year as so audited and (B) the report of such audit by said auditors of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of MIC and said Market Committees, and the audit thereof, as the Association shall from time to time reasonably request. ARTICLE III Effective Date; Termination; Cancellation and Suspension Section 3.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. If the Development Credit Agreement shall terminate pursuant to Section 10.04 of the General Conditions, the Association shall promptly notify West Bengal of this event and, upon the giving of such notice, this Agreement and all obligations of the parties hereunder shall forthwith terminate. Section 3.02. This Agreement shall terminate and all obligations of West Bengal and the Association hereunder shall cease and determine on the date on which the Project Agreement terminates in accordance with its terms. Section 3.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any partial cancellation or suspension under the Development Credit Agremeent. ARTICLE IV Miscellaneous Provisions Section 4.01. 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: 9 For West Bengal: The Chief Secretary to the Government of West Bengal Writers Building Calcutta - 1, West Bengal India Cable address: CHIEFSEC Calcutta 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. Section 4.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of West Bengal may be taken or executed by a Secretary to the Government of West Bengal or such other person or persons as West Bengal shall designate in writing. Section 4.03. West Bengal shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of West Bengal take any action or execute any documents required or permitted to be taken or executed by West Bengal pursuant to any of the provisions of this Agreement. Section 4.04. This Agreement may be executed in several counterparts, each of which shall be an original and all collectively but one instrument. 0 10 IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. THE STATE OF WEST BENGAL By /s/ T.N.Kaul Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / M. L. Weiner Regional Vice President South Asia 11 SCHEDULE 1 Procurement A. General Procedures 1. Equipment and materials for shallow tubewells and agro-service centres may be procured through normal commercial channels. 2. Contracts for civil works, equipment and materials for the constructio, of deep tubewells, and equipment and materials for the Water Board, MIC and the Department of Agriculture of West Bengal shall be let on the basis of competitive bidding advertised locally and in accordance with usual procedures of West Bengal. 3. Contracts for civil works, equipment and materials for the Markets shall be let under the following procedures: (a) Each Market to be constructed under Part A(iii) of the Project shall be designed according to its site requirements and commercial needs. On behalf of Market Committees and upon the request of the Marketing Board, West Bengal shall prepare or cause to be prepared designs, plans and cost estimates in such detail as shall allow appraisal by Participating Banks. After such appraisal, West Bengal, upon request by the Marketing Board, shall prepare or cause to be prepared detailed drawings, specifications, tender documents and construction contracts. (b) After approval of tender documents and construction contracts by a Market Committee, the Marketing Board or the Participating Banks, West Bengal shall call, or cause to be called, for bids through public tenders following established procedure for governmental procurement in West Bengal. After appropriate bid evaluation West Bengal, on behalf of Market Committees, and after approval of bid award proposals by the Marketing Board, shall award contracts for construction. (c) Payments to successful bidders shall be approved by the appropriate engineer to be nominated by West Bengal. B. Review of Procurement Decisions by the Association I. With respect to all contracts for equipment and materials estimated to cost the equivalent of $50,000 or more: (a) Before bids are invited, West Bengal shall furnish to the Association, for its comments, the text of the invitation to bid and the specifications and other 12 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) After bids have been received and opened, West Bengal shall promptly furnish to the Association a list of all bidders together with the amount of each bid, (c) After bids have been evaluated, West Bengal 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 provisions of this Schedule, promptly inform West Bengal 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. 2. With respect to each contract (except contracts awarded pursuant to paragraph A.1 hereof) to be financed out of the proceeds of the Credit and not governed by the preceding paragraph, West Bengal 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 provisions of this Schedule, promptly inform West Bengal and state the reasons for such determination.