Chad - Rural Fund Project : Credit 0664 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 664 CD DEVELOPMENT CREDIT AGREEMENT (Rural Fund Project) between REPUBLIC OF CHAD and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated December 8, 19T6 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated December 8, 1976, between REPUBLIC OF CHAD (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT 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 making the Credit as hereinafter provided; (B) through an exchange of letters dated September 9/October 11, 1976, between the Borrower and the Association, the Association has granted to the Borrower a project preparation advance (hereinafter called the Project Preparation Advance) in an amount not exceeding five hundred thousand dollars ($500,000) to assist in financing technical assistance services, local staff salaries, civil works, the purchase of vehicles and equipment, and related expenses which are required to finalize the preparation of the Project and to ensure timely beginning of Project implementation; (C) the Borrower has also requested from the Fonds d'Aide et de Coopgration of the Republic of France (hereinafter called FAC) a grant (hereinafter called the FAC Grant) in an aggregate principal amount of four million three hundred ten thousand French Francs (FF4,310,000) to assist in the financing of Parts A and G through I of the Project, on the terms and conditions set forth in an agreement (hereinafter called the FAC Grant Agreement) to be entered into between the Borrower and FAC; and 2- (D) the FAC has already 7,4 available to the Borrower part of the proceeds of the FAC Grant to assist in financing technical assistance services, local staff salaries and related operating costs required to finalize preparation of Part A of the Project and to ensure timely beginning of the implementation of said Part of the Project; NOW THEREFORE the parties hereto hereby agree as follows: -3- 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 Agree- ments 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) "MEPT" means the Ministry of Economy, Planning and Transport of the Borrower, or any successor thereto; (b) "MAPD" means the Ministry of Agricultural and Pastoral Development of the Borrower, or any successor thereto; (c) "MEMG" means the Ministry of Engineering, Mining and Geology of the Borrower, or any successor thereto; (d) "ONDR" means Office National du Dgveloppement Rural, an agency of the Borrower under the jurisdiction of MAPD, estab- lished pursuant to Ordinance No. 26/PR of July 23, 1965, as such Ordinance may be amended from time to time, or any successor to ONDR; (e) "Ggnie Rural" means a department of MAPD, or any succes- sor thereto; (f) "SERARHY" means Service des Am4nagements Ruraux d'Hydraulique, an agency of the Borrower under the jurisdiction of MAPD, established pursuant to Ordinance No. 4/PR/Agri of Feb- ruary 26, 1968, as such Ordinance may be amended from time to time, or any successor to SERARHY; (g) "CMPA" means Centre de Modernisation des Productions Animales, an agency rof the Borrower under the jurisdiction of MAPD, established pursuant to Decree No. 24/PR of February 12, 1970, as such Decree may be amended from time to time, or any successor to CMPA; (h) "COTONTCHAD" means Societe Cotonniere du Tchad, a com- pany established and operating under the laws of the Borrower and registered in the Registre du Commerce of the Borrower with number 12/B/72 on November 1, 1971; (i) "PIC" means Perimetres Irrigugs du Chari, a subdivision of ONDR, or any successor thereto; (j) "BDT" means Banque de Dgveloppement du Tchad, a bank established and operating pursuant to the Borrower's Ordinance No. 1, dated January 13, 1962, as amended, or any successor thereto; (k) "RPF Account" means the Rural Projects Fund Account to be established in BDT in accordance with Section 3.02 (c) of this Agreement; -5- (1) "FMU" means the Fund Management Unit to be established pursuant to Section 3.02 (a) of this Agreement; (m) "DPW" means the Directorate of Public Works, a department of MEMG, or any successor thereto; (n) "First Development Credit Agreement" means the agreement dated June 28, 1974, as amended, entered into between the Borrower and the Association in connection with the Second Highway Project; (o) "CSPC" means Caisse de Stabilisation du Prix du Coton, the cotton price stabilization fund of the Borrower, established pursuant to Ordinance No. 16/PR of August 3, 1968, as such Ordinance may be amended from time to time, or any successor to CSPC; and (p) "Cotton Zone" means the cotton growing areas in the Borrower's Pr4fectures of Logone Oriental, Logone Occidental, Mayo Kebbi, Moyen Chari and Tandjile. -6 0 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 equiva- lent to twelve million dollars ($12,000,000). Section 2.02. (a) The amount of th Credit may be withdrawn from the Credit Account in accordance with the provisions of Sched- ule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services re- quired for the Project and to be financed out of the proceeds of the Credit. (b) On the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to it- self the amount required to repay the principal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall automatically be cancelled on the same date. (c) Without limitation on the provisions of paragraph (a) of this Section, the Association shall, promptly after the Effective Date, withdraw from the Credit Account and deposit in the RPF Ac- count an initial amount not exceeding $500,000 equivalent and shall -7- thereafter, at the request of the Borrower, further withdraw from the Credit Account and deposit in the RPF Account such amounts as shall be required to reimburse FMU for payments made out of the RPF Account for expenditures for the Project eligible for financing under this Agreement, but only to the extent that the amount of any such deposit, together with any amount on deposit in the RPF Account as of the date of such request, shall not exceed in the aggregate the equivalent of $500,000 or such other amount as shall be agreed between the Borrower and the Association. (d) Notwithstanding the provisions of paragraphs (a) and (c) of this Section, no further deposit shall be made to the RPF Account and no other withdrawal shall be made from the Credit Account when the total amount theretofore withdrawn from the Credit Account pursuant to paragraphs (a) and (c) of this Section, together with the amount of any special commitment entered into by the Association pursuant to Section 5.02 of the General Con- ditions, shall have reached in the aggregate the equivalent of $11,500,000 or such other amount as shall be agreed between the Borrower and the Association. (e) The Borrower shall be entitled to withdraw from the Credit Account pursuant to the provisions of paragraph (a) of this Section the unwithdrawn amount of the Credit in excess of the amount referred to in paragraph (d) of this Section, if and only to the extent that the Association shall have been satis- fied that all payments were made by FMU out of the RPF Account for expenditures eligible for withdrawal from the Credit Account. -8- (f) If the Association shall have determined that payments have been made by FMU out of the RPF Account for expenditures not eligible for withdrawal from the Credit Account, the Borrower shall, upon notice from the Association, deposit in the RPF Account an amount equal to the amount of such payments. Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods or for civil works to be fi- nanced out of the proceeds of the Credit, shall be procured 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 Associa- tion 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 15 and September 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each March 15 and September 15, commencing March 15, 1987, and ending September 15, 2026, each installment to and including the installment payable on September 15, 1996, 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 Republic of France is hereby specified for the purposes of Section 4.02 of the General Condi- tions. -10 0 ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall cause: (i) ONDR to carry out Parts A, B and G (ii) of the Project; (ii) SERARHY to carry out Parts C and D of the Project; (iii) COTONTCHAD to carry out Part E of the Project; (iv) CMPA to carry out Part F of the Proj- ect; (v) GSnie Rural to carry out Part G (i) of the Project; and (vi) IMU to carry out Parts H and I of the Project, all with due diligence and efficiency and in conformity with appropriate admin- istrative, agricultural, engineering and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. 0 (b) The Borrower shall cause all its departments and agencies responsible for the carrying out of any Part of the Project to co- operate effectively with FMU in the execution of the Project. Section 3.02. For the purposes of carrying out the Project, the Borrower shall: (a) establish and maintain within MEPT an ade- quately staffed Fund Management Unit (FMU) whose organization, functions and responsibilities shall be satisfactory to the Asso- ciation; (b) appoint (i) after consultation with the Association, as head of FMU a Fund Manager; and (ii) as his alternate a Deputy Fund Manager whose qualifications and experience shall be satis- factory to the Association; (c) establish and maintain in BDT an account (hereinafter called the RPF Account) in the name of FMU and shall cause FMU to utilize the RPF Account in accordance with the following provisions: (i) there shall be credited to the RPF - 11 - Account such amounts as shall from time to time be withdrawn from the Credit Account and deposited in the RPF Account by the Associ- ation pursuant to Section 2.02 (c) of this Agreement, together with such amounts as shall be deposited by the Borrower in the RPF Account pursuant to Section 2.02 (f) of this Agreement; and (ii) amounts deposited in the RPF Account in accordance with (i) above shall be used only to make payments for expenditures eligible for withdrawal from the Credit Account; and (d) cause FMU to make available, as and when needed, by way of grants to COTONTCHAD and the various agencies of the Borrower responsible for the carrying out of the Project, the proceeds of the Credit referred to in paragraph (c) (i) of this Section. Section 3.03. In order to ensure efficient coordination in the implementation of the Project, the Borrower shall establish and maintain an Interministerial Governing Committee whose member- ship shall include the General Directors of MEPT, MAPD and MEMG and whose organization, functions and respbnsibilities shall be satisfactory to the Association. Section 3.04. For the purpose of carrying out Part A of the Project the Borrower shall: (a) cause Ggnie Rural to assist ONDR in carrying out the necessary irrigation layout and works; (b) cause ONDR to appoint (i) an agronomist to be head of PIC; (ii) an irrigation agronomist; and (iii) a specialist in the organiza- tion of input supply and extension services, all with qualifica- tions and experience satisfactory to the Association; and (c) cause Ggnie Rural and PIC to submit to the Association for its approval, through FMU, their respective annual work programs not later than two months before the beginning of each fiscal year, or such other date as shall be agreed with the Association. -12- Section 3.05. The Borrower shall cause Ggnie Rural to assist ONDR in supervising the construction of the warehouses referred to in Part B of the Project. Section 3.06. For the purpose of carrying out Part G (i) of the Project, the Borrower shall cause Ggnie Rural to appoint a rural engineer to be responsible for the management of bottomland development and to have qualifications and experience satisfactory to the Association. Section 3.07. The Borrower shall cause SERARHY to appoint two drilling foremen to be responsible for the supervision of the works to be carried out under Parts C and D of the Prolect, re- spectively, and to have qualifications and experience satisfactory to the Association. Section 3.08. The Borrower shall cause FMU to submit to the Association for its approval, not later than three months from the Effective Date of this Agreement, or such other date as shall be agreed with the Association, a monitoring and reporting system established for the purpose of reporting to the Association, in a form satisfactory to the Association and in a timely manner, on the progress of the Project. Section 3.09. In order to assist FMU in carrying out Part H of the Project, the Borrower shall employ consultants whose qual- ifications, experience and terms and conditions of employment shall be satisfactory to the Association. - 13 - Section 3.10. For the purpose of carrying out the training programs referred to in Part I of the Project, the Borrower shall cause FMU to: (a) approve the curricula of seminars and the selec- tion of participants proposed by ONDR, SERARHY and Ggnie Rural; and (b) submit to the Association, for its approval, the said curricula. Section 3.11. (a) The Borrower shall: (i) after the first year of operation of each irrigation perimeter under Part A of the Project, set and collect from the beneficiaries of such peri- meter water charges at levels sufficient to ensure the recovery of part of the annual operating and maintenance costs of such perimeter, ie., the costs of,fuel, lubricants and pump repairs and, through the operation of a sinking fund, pump replacement after six years; and (ii) finance the other operating costs of PIC. (b) The Borrower shall cause ONDR to make available the nec- essary agricultural inputs to cotton growers in the irrigation perimeters referred to in Part A of the Project upon terms and conditions consistent with those applicable to cotton growers in other areas of the Borrower's territory. Section 3.12. In carrying out Part C of the Project, the Bor- rower shall, not later than two months before the beginning of each fiscal year or such other date as shall be agreed with the Association, submit to the Association for its approval, an annual well maintenance, repair, construction and reconstruction program to be based on the recommendations of a range and pastoral survey to be completed by the Borrower not later than June 30, 1977, or such other date.as shall be agreed between the Borrower and the Association. Section 3.13. (a) Upon completion of the wells included in Part C of the Project, the Borrower shall finance the operating costs of the SERARHY base. (b) Not later than two years from the Effective Date of this Agreement, or such other date as shall be agreed with the Association, the Borrower shall submit to the Association for its approval, its proposals for cost recovery from beneficiaries of said wells who shall be pastoral groups officially recognized by the Borrower and who shall be granted land use and watering rights, such proposals to be based on the recommendations of the survey referred to in Section 3.12 of this Agreement and of a livestock taxation study to be completed by the Borrower not later than December 31, 1976, or such other date as shall be agreed between the Borrower and the Association. Section 3.14. In carrying out Part D of the Project, the Borrower shall, not later than two months before the beginning of each fiscal year or such other date as shall be agreed with the Association, submit to the Association for its approval an annual well repair and tubewell installation program. Section 3.15. (a) Before starting vork for the installation or rehabilitation of any well included in Part D of the Project, the Borrower shall cause the future beneficiaries of such well to make a cash contribution covering not less than 10% of the capital costs thereof. -15 - (b) Upon completion of any well included in Part D of the Project, the Borrower shall set and collect from the beneficiaries of such well charges at levels sufficient to cover the full cost of pump repairs and renewals. Section 3.16. For the purpose of carrying out Part E of the Project, the Borrower shall cause COTONTCHAD to enter into a con- tract with DPW which shall be an extension of the contract referred to in Section 3.05 of the First Development Credit Agreement, upon terms and conditions satisfactory to the Association. Section 3.17. In carrying out Part E of the Project, the Borrower shall cause DPW to submit to the Association for its approval, through FMU, its annual work program not later than two months before the beginning of each fiscal year or such other date as shall be agreed with the Association. Section 3.18. The Borrower shall cause the feeder roads re- ferred to in Part E of the Project to be adequately maintained and shall cause all necessary repairs thereof to be made promptly, all in accordance with sound engineering and economic standards, and shall provide, promptly as needed, the necessary funds out of CSPCs revenues, together with the facilities, services and other resources required for such purposes. Section 3.19. In carrying out Part G (i) of the Project, the Borrower shall cause Ggnie Rural to submit to the Association for its approval, through FMU, its annual work program not later than two months before the beginning of each fiscal year or such other date as shall be agreed with the Association. - 16 - Section 3.20. (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 in- cident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any in- demnity shall be payable in a currency freely usable by the Bor- rower 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 3.21. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or addi- tions thereto, in such detail as the Association shall reasonably request. (b) The Borrower shall: (i) cause COTONTCHAD and the Bor- rower's agencies responsible for carrying out the Project to maintain records adequate to record the progress of the parts the Project (including the cost thereof) for which they are re- sponsible 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) enable the Association's accredited representa- tives 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) - 17 - 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 3.22. 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 Asso- ciation that such land and rights in respect of land are available for purposes related to the Project. Section 3.23. For the purposes of carrying out the Project, * the Borrower shall cause ONDR, SERARHY, COTONTCHAD and Genie Rural to employ such additional staff as shall be required to enable them to discharge their respective functions and responsibilities with due diligence and efficiency. -18 0 ARTICLE IV Other Covenants Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consis- tently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the de- partments or agencies of the Borrower responsible for carrying out the Project or any part thereof. Section 4.02. The Borrower shall: (a) cause ONDR, SERARHY, COTONTCHAD, CMPA and G4nie Rural to establish and maintain separate accounts for the purposes of the Parts of the Project for which they are responsible; (b) cause the Government Financial Controller to audit the accounts established pursuant to (a) above in accordance with ap- propriate auditing principles consistently applied; and (c) cause FMU to: (i) establish and maintain a Consolidated Project Account with sub-accounts for each Part of the Project, as provided in paragraph (a) of this Section, in addition to the RPF Account established pursuant to Section 3.02 (c) of this Agree- ment; (ii) have such Project Account and RPF Account for each fis- cal year audited, in accordance with sound auditing principles con- sistently applied, by independent auditors acceptable to the Asso- ciation; (iii) furnish to the Association as soon as available, -19 - but in any case not later than four months after the end of each such year, (A) certified copies of such Project Account and RPF 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 requested; and (iv) furnish to the Association such other information concerning such Project-Account and RPF Account and the audit thereof as the Association shall from time to time reasonably request. Section 4.03. The Borrower shall cause ONDR, SERARHY, CMPA and COTONTCHAD to take out and maintain with responsible insurers, or to make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be con- sistent with appropriate practice. .w.. .. -20 0 ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) the Borrower's Ordinance No. 26/PR, dated July 23, 1965, Ordinance No. 4/PR/Agri, dated February 26, 1968, or Decree No. 24/PR, dated February 12, 1970, establishing ONDR, SERARHY and CMPA, respectively, or the statutes of COTONTCHAD shall have been amended, suspended, repealed or waived in such a way as to mate- rially and adversely affect the ability of ONDR, SERARHY, CMPA or COTONTCHAD, respectively, to carry out their respective responsi- bilities with respect to the implementation of the Project; (b) the Borrower or any authority having jurisdiction shall have taken any action for the dissolution or disestablishment of ONDR, SERARHY, CMPA and COTONTCHAD or for the suspension of their operations; and (c) subject to subparagraph (iii) of this paragraph: (i) the funds to be provided under the FAC Grant Agreement shall not become available as and when needed for Parts A and G through I of the Project, or the right of the Borrower to withdraw the pro- ceeds of any other grant or loan made to the Borrower for the financing of the Project shall wl -21- have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor; or (ii) any such loan shall have become due and payable prior to the agreed maturity thereof; (iii) subparagraphs (i) and (ii) of this paragraph shall not apply if the Borrower establishes to the satis- faction of the Association that: (A) the event spe- cified in subparagraphs (i) and (ii) is not caused by the failure of the Borrower to perform any of its obligations under such agreement, and (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consis- tent with the obligations of the Borrower under this Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely that any event specified in para- graphs (a), (b) or (c) (ii) of Section 5.01 of this Agreement shall occur. Isk -22 0 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) FMU has been established in accordance with Section 3.02 (a) of this Agreement; (b) the Fund Manager has been appointed in accordance with Section 3.02 (b) of this Agreement; (c) the Interministerial Governing Committee has been estab- lished in accordance with Section 3.03 of this Agreement; (d) the RPF Account has been established in accordance with Section 3.02 (c) of this Agreement; and (e) assurances satisfactory to the Association have been received by the Association in respect of the availability of the financing to be provided under the FAC Grant Agreement. Section 6,02. The date March 8, 1977, is hereby specified for the purposes of Section 12.04 of the General Conditions. i. ... . -23 - ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of Economy, Planning and Transport 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: Ministry of Economy, Planning and Transport N'Djamena Republic oC Chad Cable address: MINIPLAN N'Djamena 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. -24- IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment 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. REPUBLIC OF CHAD By Is/ Bawoyeu Alingue Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Is! Roger Chaufournier Regional Vice President Western Africa -25- 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 amount of the Credit to each Category and the percentage of . expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works: * (a) under Parts 700,000 80% A and G of the Project (b) under other 3,300,000 100% Parts of the Project (2) Equipment, vehicles: (a) for Parts A (ex- 400,000 80% cept for on-farm investments) and G of the Project (b) for other Parts 1,400,000 100% of the Project (3) Salaries of expa- triate staff and consultants' ser- vices: -26 0 Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (a) under Parts A, 900,000 80% G and H of the Project (b) under other 500,000 100% Parts of the Project (4) Salaries of the local Project staff: (a) of FMU, ONDR 400,000 80% and G6nie Rural (b) of SERARHY and 500,000 100% COTONTCHAD (5) Operating costs (other than salaries): (a) of FMU (includ- 300,000 80% ing training seminars for Project staff and audit) and under Parts A and G of the Project (b) under Parts C 600,000 100% and'E of the Project (c) under Part D of 100,000 40% the Project -27 - Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (6) Farm inputs required 200,000 80% for the first year of crop production in the perimeters referred to in Part A of the Project (7) Refunding of 500,000 Project Prepara- tion Advance (8) Unallocated 2,200,000 TOTAL 12,000,000 0 -28- 2. The disbursement percentages have been calculated in compli- ance 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 the amount of any such taxes levied on or in re- spect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 3. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made: (a) in respect of payments made for expendi- tures prior to the date of this Agreement; (b) in respect of pay- ments made for expenditures under Part A of the Project until the agronomist referred to in Section 3.04 (b) (i) has been appointed by ONDR; (c) in respect of payments made for expenditures under Parts C and D of the Project until the two drilling foremen re- ferred to in Section 3.07 of this Agreement have been appointed by SERARHY; and (d) in respect of payments made for expenditures under Part G (i) of the Project until the rural engineer referred to in Section 3.06 of this Agreement has been appointed. 4. 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 or Sub-category will be insufficient to finance the agreed percentage of all expenditures - 29 - in that Category or Sub-category, the Association may, by notice to the Borrower, reallocate to such Category or Sub-category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category or Sub-category and which in the opinion of the Association are not needed to meet other expenditures. 5. 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 expendi- tures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, can- cel 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. -30 0 SCHEDULE 2 Description of the Project The Project consists of the following parts: Part A: Development and initial operation of about 42 small- scale pump irrigation perimeters (covering a total area of about 970 ha) and about 5 service centers along the northern Chari River. Part B: Construction of about 200 warehouses covering a total area of about 15,000 m2 at existing cotton markets. Part C: Rehabilitation of a pastoral well network comprising about 300 lined wells in the Batha Pr4fecture, in the Sahelian Zone. Part D: Establishment and initial operation of a tubewell dril- ling and open well maintenance unit, to serve villages in the Cotton Zone and to be responsible, inter alia, for the rehabilitation of about 146 lined wells and the installation of about 110 tubewells to be operated by foot pumps. Part E: Improvement, through selective regravelling and spot resurfacing, of about 1,200 km of feeder roads in the Cotton Zone. M -31- Part F: Construction of buildings for, and provision of equip- ment to, the animal-feed production and poultry products unit operated by CMPA, near N'Djamena. Part G: (i) Land improvements and water control works on about 700 ha of bottomlands in the Cotton Zone. (ii) Operation of the facilities constructed under Part G (i) of the Project. Part H: Identification and preparation of future small rural projects to be financed through FMU. Part I: Training of the senior field staff of ONDR, SERARHY and Ggnie Rural involved in the implementation of the above- mentioned Parts of the Project. The Project is expected to be completed by September 30, 1979. - 32 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, contracts for the purchase of goods or for civil works shall be procured in accordance with procedures consistent with those set forth in Part A of the "Guide- lines for Procurement under World Bank Loans and IDA Credits" pub- lished by the Bank in August 1975 (hereinafter called the Guide- lines), on the basis of international competitive bidding. 2. Contracts referred to in paragraph 1 above shall be grouped so as to permit bulk procurement as shall be consistent with ap- propriate technical and procurement practices. B. Other Procurement Procedures 1. Civil works required for the Project (other than the construc- tion of buildings under Parts B and F of the Project) shall be car- ried out by force account. 2. Contracts estimated to cost $10,000 equivalent or more but less than $50,000 equivalent may be let on the basis of competitive bidding advertised locally under procedures acceptable to the As- sociation. 3. Items estimated to cost less than $10,000 equivalent may be procured on the basis of local shopping. wI -33- C. Evaluation and Comparison of Bids for Civil Works; Preference for Domestic Contractors With respect to any contract for civil works included under Category (1) of the table set forth in Schedule 1 to the Develop- ment Credit Agreement and to be procured in accordance with the procedures described in Part A.1 of this Schedule, the Borrower may grant a margin of preference of 7-1/2% to domestic contractors, in accordance with, and subject to, the following provisions: (a) Contractors shall be required to prequalify, as described in paragraph 1.3 of Part A of the Guidelines, and applicants for qualification applying also for such preference shall be asked to provide, as part of the data for qualification, such information, including details of ownership, as shall be required to determine whether, according to the classification established by the Bor- rower and accepted by the Association, a particular firm or group of firms qualifies for a domestic preference. The bidding documents shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. (b) After bids have been received and reviewed by the Bor- rower, responsive bids will be classified into the following groups: (i) bids offered by domestic contractors eligible for preference; and (ii) bids offered by other contractors. - 34- For the purpose of evaluation and comparison of bids an amount equal to 7-1/2% of the bid amount shall be added to bids received under group (ii) above. D. Review of Procurement Decisions by the Association; Review of Invitations to Bid and of Proposed Awards and Final Contracts 1. With respect to all contracts estimated to cost the equiva- lent of $50,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and 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 re- quest. 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 evaluated, the Bor- rower 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 shall furnish to the Association, in suf- ficient time for its review, a detailed report on the evaluation and comparison of the bids received, together with the recoinmenda- tions 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 rea- sons for such determination. - 35 - (c) The terms and conditions of the contract shall not, with- out the Association's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) 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 with- drawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract costing $10,000 equivalent or more but less than $50,000 equivalent, the Borrower shall furnish to the Association, promptly after its execution and prior to the submission to the Association of the first application for with- drawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Association shall reasonably request. The As- sociation 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. 3. With respect to each contract to be financed out of the pro- ceeds of the Credit and let in accordance with the provisions of paragraph 3 of Part B of this Schedule, the Borrower shall furnish to the Association, promptly after its execution and prior to the submission to the Association of the first application for with- drawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract.