India - Bombay Urban Transport Project : Loan 1335 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1335 IN LOAN AGREEMENT (Bombay Urban Transport Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and BOMBAY METROPOLITAN REGION DEVELOPMENT AUTHORITY Dated December 20, 1976 LOAN AGREEMENT AGREEMENT, dated December 20, 1976, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and BOMBAY METROPOLITAN REGION DEVELOPMENT AUTHORITY (hereinafter called the Borrower), a body corporate established and existing pursuant to the Bombay Metropolitan Region Development Authority Act, 1974, as amended, (hereinafter called the BMRDA Act). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the Project described in Schedule 2 to this Agree- ment by making the Loan as hereinafter provided; (B) Parts (A) and (B) of the Project will be carried out by the Municipal Corporation of Greater Bombay (hereinafter called BMC) with the Borrower's assistance and, as part of such assis- tance, the Borrower will make available to BMC a portion of the proceeds of the Loan as hereinafter provided; and WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in a project agree- ment of even date herewith between the Bank and BMC; NOW THEREFORE the parties hereto hereby agree as follows: .S. ... -2- ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guar- antee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein, subject, however, to the following modification thereof (said General Con- ditions Applicable to Loan and Guarantee Agreements of the Bank, as so modified, being hereinafter called the General Conditions): Paragraph 7 of Section 2.01 is amended to read as follows: "7. The term 'Guarantor' means India acting by its President." Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "BEST" means the Bombay Electric Supply and Transport Undertaking, a semi-autonomous authority of the BMC, existing pursuant to the Bombay Municipal Corporation Act (Bombay Act No. III of 1888), as amended (hereinafter called the BMC Act). (b) "BMC" means the Municipal Corporation of Greater Bombay, a body corporate established and existing pursuant to the BMC Act. () -3- (c) "Bombay Metropolitan Region" means the region defined as such in Section 2 (b) of the BMRDA Act. (d) "Greater Bombay" means the area defined as such in Sec- tion 3 (al) of the BMC Act. (e) "Maharashtra Agreement" means the agreement between the Bank and the Governor of the State of Maharashtra of even date herewith, as the same may be amended from time to time. (f) "Project" and references to "Parts" thereof means the project and parts thereof described in Schedule 2 to this Agree- ment. (g) "Project Agreement" means the agreement between the Bank and BMC of even date herewith, as the same may be amended from time to time, and such term includes the schedule to the Project Agreement and all agreements supplemental to the Project Agreement. (h) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and BMC pursuant to Section 3.01 (d) of this Agreement, as the same may be amended from time to time, and such term includes any schedules to the Subsidiary Loan Agreement. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or re- ferred to, an amount in various currencies equivalent to twenty- five million dollars ($25,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank, for expendi- tures made (or, if the Bank 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 Loan. Section 2.03. Except as the Bank shall otherwise agree, contracts for the purchase of goods or for civil works to be fi- nanced out of the proceeds of the Loan, shall be procured in ac- cordance with the provisions of the Schedule to the Project Agree- ment. Section 2.04. The Closing Date shall be June 30, 1980 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of such later date. Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. ) -5 - Section 2.06. The Borrower shall pay interest at the rate of eight and seventy hundredths per cent (8.70%) per annum on the prin- cinal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annually on April 1 and October 1 in each year. Section 2.08. The Borrower shall repay the princiDal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. -6- ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out Part C of the Project, and ensure the carrying out of Parts A and B of the Proj- ect, with due diligence and efficiency, and shall provide, promptly as needed, the funds, facilities, services and other resources re- quired for the purpose of completing the Project. (b) Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall cause BMC to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take and cause to be taken all action necessary or appropriate to enable BMC to perform such obligations, and shall not take or per- mit to be taken any action which would prevent or interfere with such performance. (c) For the purposes of carrying out Part C of the Project and supervising the execution of Parts A and B of the Project by BMC, the Borrower shall, not later than December 31, 1976 or such later date as the Bank may accept, establish a project coordina- tion and monitoring unit. Such unit shall: (i) report to the Borrower's Transport and Communications Board; (ii) undertake all major Project coordination and progress monitoring functions including: () -7- (A) preparing quarterly physical and financial status reports on the basis of periodic pro- gram reporting by the BMC City Engineers De- partment and BEST; (B) monitoring BMC's and BEST's performance and their compliance with the Loan Agreement and the Project Agreement; and (C) arranging for remedial measures to overcome any delays or other impediments to Project execution; and (iii) include two works administrators and two works ac- countants who shall be appointed not later than December 31, 1976 or such later date as the Bank may accept, and who shall devote full time to the func- tions described above. (d) The Borrower shall relend the proceeds of the Loan with- drawn in respect of Parts A and B of the Project to BMC under a Subsidiary Loan Agreement to be entered into between the Borrower and BMC, under terms and conditions not inconsistent with those set out in Schedule 4 to this Agreement. (e) The Borrower shall exercise its rights under the Sub- sidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan, and except as the Bank shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. -8- Section 3.02. In order to assist the Borrower in carrying out Part C of the Project, the Borrower shall employ organization, management, finance, development planning and transport consultants whose qualifications, experience and terms and conditions of em- ployment shall be satisfactory to the Bank in accordance with a time schedule to be agreed between the Bank and the Borrower by the Effective Date. Section 3.03. (a) The Borrower shall ensure that the imported goods to be financed out of the proceeds of the Loan are insured, or that adequate provision is made for their insurance against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insur- ance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the Project. Section 3.04. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, reports and contract documents in respect of Part C of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank 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 Loan, and to disclose the use thereof in the Project; (ii) -9- shall enable the Bank's accredited representatives to examine any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning the Project, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. Section 3.05. If the Borrower proposes to make any substantial change in (a) the scope of responsibility and jurisdiction of its functional boards or its Town and Country Planning Division or (b) the duties and initial work program of the Traffic Planning and Evaluation Subcommittee of its Accounting and Finance Manage- ment Division, the Borrower shall allow the Bank a reasonable op- portunity to comment on such proposals. -10- ARTICLE IV Financial and Other Covenants Section 4.01. The Borrower shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 4.02. The Borrower shall: (i) have an annual audit satisfactory to the Bank made of its accounts and financial state- ments (balance sheets, statements of income and expenses and re- lated statements) for each fiscal year in accordance with sound auditing principles consistently applied by independent and quali- fied auditors; (ii) furnish to the Bank as soon as available, but in any case not later than four months after the end of each such year its unaudited financial statements; (iii) furnish to the Bank as soon as available, but in any case not later than eight months after the end .: each such year, (A) certified copies of its finan- cial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iv) furnish to the Bank such other information concerning the accounts and financial st,;tments of the Borrower and the audit thereof as the Bank shall from time to time reasonably request. Sect' *n 4.03. (a) The Borrower represents that at the date of this Agreement no lien exists on any of its assets as security for any debt. (b) The Borrower undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower as security for any debt, such lien will iso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan, and in the creation of any such lien express provision will be made to that effect, at no cost to the Bank; provided, however, that the foregoing provisions of this paragraph shall not apply to: (A) any lien cre- ated on property, at the time of purchase thereof, solely as sec- urity for the payment of the purchase price of such property; or (B) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after the date on which it is originally incurred. Section 4.04. The Borrower shall furnish the Bank: (a) by May 31 of each year, or such other date as the Bank may accept, its approved budget for its then current fiscal year; and (b) by September 30, 1977, or such later date as the Bank may accept, for its review, a draft five year regional investment plan for the fiscal years ending 1978 to and including 1982. - 12 - ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) A default shall occur in performance of any obligation on the part of Maharashtra under the Maharashtra Agreement. (b) A default shall occur in performance of any obligation on the part of BMC under the Project Agreement. (c) Any authority having jurisdiction shall have taken any action for the dissolution or disestablishment of BEST. (d) An extraordinary situation shall have arisen which shall make it improbable that BMC will be able to perform its obligations under the Project Agreement or Maharashtra under the Maharashtra Agreement. (e) The BMRDA Act shall have been amended or repealed, in whole or in part, or any rules or regulations pursuant thereto shall be promulgated, amended or repealed, in whole or in part, in such a way, in any such case or taking such cases together, as to diminish substantially the capability of the Borrower to meet any of its obligations under this Agreement. -13 - Section 5.02. For the purposes of Section 7.01 of the General Conditions, the follcving additional events are specified pursuant to paragraph (h) thereof: (a) any event specified in paragraph (a) or (b) of Section 5.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Bank to the Borrower; and (b) any event specified in paragraph. (c) or (e) of Section 5.01 of this Agreement shall occur. - 14 ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions: (a) the execution of the Project Agreement on behalf of BMC has been duly authorized or ratified by all necessary corporate and governmental action; (b) the execution of the Subsidiary Loan Agreement on behalf of the Borrower and BMC, respectively, has been duly authorized or ratified by all necessary corporate and governmental action; and (c) the execution of the Maharashtra Agreement on behalf of Maharashtra has been duly authorized or ratified by all necessary governmental action. Section 6.02. The following are specified as additional mat- ters, within the meaning of Section 12.02 (c) of the General Con- ditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the Project Agreement has been duly authorized or ratified by BMC, and is legally binding upon BMC in accordance with its terms; -15 - (b) that the Subsidiary Loan Agreement has been duly author- ized or ratified by the Borrower and BMC, respectively, and is legally binding upon the Borrower and BMC in accordance with its terms; and (c) that the Maharashtra Agreement has been duly authorized or ratified by Maharashtra, and is legally binding on Maharashtra in accordance with its terms. Section 6.03. The date March 21, 1977, is hereby specified for the purposes of Section 12.04 of the General Conditions. - 16 - ARTICLE VII Addresses Section 7.01. The Metropolitan Commissioner of the Borrower is designated as a 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 Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (wuT) For the Borrower: The Metropolitan Commissioner The Bombay Metropolitan Region Development Authority 18th Floor New Administrative Offices Building Madame Cama Road Bombay 21 (400-021) India - 17 - 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. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Ernest Stern Regional Vice President South Asia BOMBAY METROPOLITAN REGION DEVELOPMENT AUTHORITY By /s/ Kewal Singh Authorized Representative SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of ex- penditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works (includ- 7,000,000 50% ing relocation of utility facilities) (2) Buses, bus components, 12,000,000 workshop equipment and traffic control equipment (a) procured by 100% of foreign international expenditures or competitive 100% of local bidding expe.Aitures limit d to ex- factory cost (b) otherwise 50% of local procured expenditures (3) Technical assistance 1,000,000 100% and training (4) Unallocated 5,000,000 TOTAL 25,000,000 -19- 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Guarantor and for goods or services supplied from the territory of any country other than the Guarantor; and (b) the term "local expenditures" means expenditures in the currency of the Guarantor and for goods or services supplied from the territory of the Guarantor. 3. The disbursement percentages have been calculated in compli- ance with the policy of the Bank that no proceeds 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 the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank 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 Bank. 4. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of: (a) -payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $200,000, may be made on account of payments made for such expenditures for BMC and BEST civil works and technical assistance before that datE but after November 1, 1975; . and - 20 - (b) withdrawals under Category (3) in respect of training of BMC or BEST staff until the Bank has approved the training program described in Section 3.07 of the Project Agreement. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Cate- gory, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated short- fall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement per- centage 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 Bank shall have reasonably determined that the pro- curement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expen- ditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or lim- iting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in 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 Loan. - 21 - SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: Bus Services (1) Procurement and putting into regular service by BEST of 465 single-deck and 235 double-deck buses, and augmenting BEST's bus fleet thereby, or by other means, by at least 260 buses by September 30, 1979. Procurement of adequate spare parts for the buses so procured. (2) Construction by BEST of three bus depots at Goregaon, Dharavi and Bandra having an aggregate capacity of 360 buses. Improvement and extension by BEST of the existing bus depots at Marol, Kurla and Worli so as to increase their aggregate capacity by 50 buses. (3) Construction by BEST of one new bus workshop, and extension and re-equipping by BEST of the existing bus workshop at Dadar, so as to bring total workshop capacity to 2,200 buses. (4) Construction by BEST of eleven sheltered bus termini, together with road widening to enable buses to load and unload off the carriageway, at such locations as are acceptable to the Bank. -22- (5) Providing technical assistance (estimated twenty man- months) for, and completing, a review of BEST's bus operations and management practices; and training BEST's staff. Part B: Traffic Circulation (1) Construction by BMC, at locations acceptable to the Bank and the Borrower, of eight road flyover bridges, improve- ments at twelve intersections to channel traffic, works to widen and extend two streets and widen one bridge, two pedestrian bridges and five pedestrian tunnels or such similar works as may be agreed between the Bank and the Borrower. (2) Installation by BMC of electric traffic signals at four intersections. (3) Provision of technical assistance in traffic engineering to BMC's Traffic Planning Division and Traffic Opera- tions Division (estimated twenty man-months) and train- ing of BMC staff. Part C: Development Planning and Management - BMRDA Development of the organizational structure and divisional work programs of BMRDA; preparation of a staffing program; adoption of basic management and administrative procedures and an adequate accounting, financial management and reporting S -23 - system; preparation of an initial traffic management program for the Bombay Metropolitan Region; and provision of technical assistance in respect thereof. * * * * The numbers set out in this Schedule are approximate. The Project is expected to be completed by December 31, 1979. - 24 -0 SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each April 1 and October 1 $805,000 Beginning April 1, 1981 through October 1, 1995 On April 1, 1996 $850,000 To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equiva- lents determined as for purposes of withdrawal. * -25 - Premiums on Prepayment The following percentages are snecified as the premiums pay- able on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years 1.30% before maturity More than three years but 2.60% not more than six years before maturity More than six years but not 4.Fo more than eleven years More than eleven years but 6.95% not more than sixteen years before maturity More than sixteen years but 7.850 not more than eighteen years before maturity More than eighteen years 8.70% before maturity -26 - ( SCHEDULE 4 Borrower/BMC Lending Terms A. Subsidiary Loan Agreement Except as the Bank may otherwise agree, the Subsidiary Loan Agreement shall clearly obligate the Borrower and BMC as follows: 1. Proceeds of the Loan relent to BMC for the benefit of BEST for Part A of the Project shall be repayable in substantially equal semi-annual installments of principal commencing about three years after, and ending about fifteen years after, the Effective Date. Such proceeds shall be promptly transferred to, or paid for the benefit of, BEST, and BEST shall not be required to make any transfers in respect of such proceeds, or otherwise in respect of the Project, from its accounts to those of BMC except to the ex- tent required to enable BMC to meet its obligations to the Borrower in respect of such proceeds. 2. Proceeds of the Loan relent to BMC for Part B of the Project shall be repayable in substantially equal semi-annual installments of principal commencing about four and one half years after, and ending about twenty years after, the Effective Date. 3. In respect of all proceeds of the Loan relent to BMC: (a) interest shall be charged on the principal amount from time to time outstanding at an annual rate one-half - 27 - a percentage point above the rate specified in Section 2.06 of this Agreement and shall be payable semi-annually commencing within six months of the first withdrawal; (b) the commitment charge payable pursuant to Section 2.05 of this Agreement and all other charges payable by the Borrower in respect of the Loan shall be borne by BMC except to the extent that any such charges relate to the portion of the Loan to be retained by the Borrower for Part C of the Project; (c) the risk of fluctuation in the relative values of currencies shall, to the maximum extent practicable, be borne by BMC; and (d) the Borrower shall be relieved of its obligation to relend funds to the extent, if any, that the Borrower's right to withdraw proceeds of the Loan shall have been suspended or cancelled. 4. BMC shall undertake to perform all its obligations pur- suant to the Project Agreement, and the Borrower shall obtain rights sufficient to enable it to meet all its obligations pursuant to the Loan Agreement, including without limitation the right to sus- pend, and in appropriate circumstances cancel, disbursements pur- suant to the Subsidiary Loan Agreement in the event that BMC fails to meet its obligations pursuant thereto. B. Other Project Loans If the Borrower provides funds other than the proceeds of the Loan to BMC in consequence of the Borrower's obligations pursuant -28- to Section 3.01 (a) of this Agreement, such funds shall be provided to BMC for the benefit of BEST, on terms no less favorable than those in respect of the loan provided for in the Subsidiary Loan Agreement.