Dominican Republic - Population And Family Health Project : Loan 1325 - Loan Agreement - Conformed

17--q CONFORMED COPY LOAN NUMBER 1325 T-DO WAN AGREEMENT (Population and Family Health Project) between DOMINICAN REPUBLIC and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated September 16, 1976 LOAN AGREEMENT AGREEMENT, dated September 16, 1976, between DOMINICAN REPUB- LIC (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). 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) the Bank has determined that the Borrower is eligible to receive this Loan as an intermediate term loan, as that term is defined in Resolution No. 75-111 of the Executive Directors of the Bank establishing an Interest Subsidy Fund for the Third Win- dow (hereinafter called the Fund) and upon the terms and conditions set forth in such Resolution; (C) the Administrator of the Fund (hereinafter called the Administrator), subject to the terms and conditions set forth in the Resolution referred to in (B) above, is obligated to pay to the Bank semi-annually from the resources of the Fund an amount equal to four per cent (4%) per annum of the outstanding amounts of principal on intermediate term loans, of which this Loan is one; and WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan to the Borrower upon the terms and con- ditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: -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 (said Gen- eral Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the con- text otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respec- tive meanings therein set forth and the following additional terms have the following meanings: (a) "Project Unit" means the unit in the Secretariat of Pub- lic Health and Social Assistance of the Borrower referred to in Section 3.01 (b)(i) of this Agreement; (b) "Project Director", "Deputy Project Director", "Project Training Coordinator" and "Project Architect" mean the persons re- ferred to in Section 3.01 (b) (i) of this Agreement; (c) "Project Account" means the Borrower's account referred to in Section 3.01 (b) (ii) of this Agreement; (d) "Region I" means the Borrower's health region comprising the provinces of Estrelleta, San Juan, Azua and Peravia; -3- (e) "Region V" means the Borrower's health region comprising the provinces of San Pedro de Macoris, La Romana, Altagracia and El Seibo; and (f) "SESPAS" means the Borrower's Secretariat of Public Health and Social Assistance. -4- 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 referred to, an amount in various currencies equivalent to five million dol- lars ($5,000,000). 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 Proj- ect and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, con- tracts for the purchase of goods or for civil works to be financed out of the proceeds of the Loan, shall be awarded in accordance with the provisions of Schedule 4 to this Agreement. 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 of such later date. Section 2.05. The Borrow 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 four and ninety hundredths per cent (4.90%) per annum on the prin- cipal amount of the Loan withdrawn and outstanding from time to time; provided, however, that if the Administrator shall at any time determine that the resources of the Fund shall not be sufficient to pay to the Bank at the next succeeding semi-annual interest payment date of the Loan the amount scheduled to be paid by the Administrator at that interest payment date as specified in paragraph (C) of the Preamble to this Agreement, the Borrower shall, upon notification by the Administrator of such determination and the amount of the resulting shortfall, pay additional interest on such principal amount of the Loan equal to such shortfall. Section 2.07. Interest and other charges shall be payable semi-annually on January 15 and July 15 in each year. Section 2.08. The Borrower shall repay the principal 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 the Project with due diligence and efficiency and in conformity with appropri- ate administrative, financial, technical, engineering, public health and family planning practices, and shall provide, promptly as needed, the funds, facilities, services and other resources re- quired for the purpose. (b) Without limitation or restriction upon the provisions of paragraph (a) of this Section, the Borrower shall (i) maintain a Project Unit in SESPAS with such functions as are specified in Schedule 5 to this Agreement. The staff of the Project Unit shall be headed by a Project Director and shall include a Deputy Proj- ect Director, a Project Training Coordinator, a Project Architect, and other supporting staff, such Project Director, Deputy Director, Training Coordinator and Architect to be acceptable to the Bank and to be employed under terms and conditions satisfactory to the Bank; (ii) establish and maintain a separate Project Account in SESPAS for the purpose of recording all receipts and payments of money for or in connection with the Project; and (iii) make monthly deposits in such Account of such amounts of money as shall be necessary to provide it with an adequate level of funds to cover estimated Project expenditures in the ensuing month, such deposits to be in any case in amounts equivalent to at least $75,000. (c) For the purposes of reviewing the progress of the Project and planning its execution, the Borrower shall cause the Project 01 Director, the Deputy Project Director, the directors of Regions I and V and senior officials from the National Council for Family Planning, Technical Secretariat of the Presidency and the universities and agencies referred to in Sections 3.07 and 3.10 of this Agree- ment, respectively, to meet at least every four months during the execution of the Project, under the chairmanship of the Secretary of Public Health and Social Assistance. Section 3.02. In order to assist the Borrower in the prepara- tion of procurement procedures and in the carrying out of Parts E and F of the Project, the Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Section 3.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the impcxted goods to be financed out of the proceeds of the Loan 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 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, specifications, reports, contract documents and construction and procurement schedules for 01 -8- 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 re- cord 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) shall enable the Bank'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 Loan and any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request con- cerning the Project, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. Section 3.05. The Borrower shall take all such action as shall be necessary to acquire not later than three months from the Effec- tive Date, all such land, the location of which shall be satis- factory to the Bank, and rights in respect of land as shall be required for the construction and operation of the facilities in- cluded in the Project and shall furnish to the Bank, promptly after such acquisition, evidence satisfactory to the Bank that such land and rights in respect of land are available for purposes related to the Project. Section 3.06. (a) The Borrower shall take all steps necessary: (i) to give the directors of Regions I and V authority and respon- sibility for day-to-day management of health services and imple- mentation of the Project in their respective Regions; (ii) to pro- vide such directors with such budgetary resources as shall be -9- required for the efficient day-to-day operation of their respective Regions; and (iii) to cause the personnel working in such Regions to be paid wages only upon performance of their respective assign- ments. (b) The Borrower shall consult with the directors of Regions I and V, as the case may be, before making any personnel appoint- ments, transfers and dismissals, and creating any new positions in their respective Regions. (c) The Borrower shall adequately staff the facilities in- cluded in the Project with trained and qualified personnel. Section 3.07. (a) The Borrower shall, within six months from the Effective Date, enter into agreements, and maintain such agree- ments in effect until at least the completion of the Project, with: (i) at least three Dominican universities with medical schools, whereby such universities will undertake inter alia: (A) to assign their medical students for field practice in Regions I and V for such periods of time as shall be necessary to ensure the continuity of health services in such Regions; (B) to train SESPAS' field personnel in community-based health services; and (C) to review and, if necessary, to revise the curricula in their medical schools to reflect the emphasis on preventive and community health services, including maternal and child health care; and (ii) at least one Dominican university with a nursing school, whereby such university will undertake inter alia: (A) to assign its nursing students to work in rural clinics for such periods of time as shall be neces- sary to ensure the continuity of health services in rural areas; -10 0 and (B) to review and, if necessary, to revise the curricula in its nursing school to introduce the concept of community-based health care, emphasizing preventive services, including maternal and child health care. (b) The Borrower shall cause SESPAS' nursing school, within six months from the Effective Date: (i) to assign its students for field practice in Regions I and V for such periods of time as shall be necessary to ensure the continuity of health services in such Regions; and (ii) to review and, if necessary, to revise its curricula to introduce the concept of community-based health care, emphasizing preventive services, including maternal and child health care. Section 3.08. In granting fellowships under the Project, the Borrower shall require each fellowship beneficiary to sign a con- tract with SESPAS, whereby each such beneficiary will inter alia undertake (i) upon r..; ,1etion of the fellowship, to work for SESPAS, in the location set forth in such contract, for a period of at least two years; and (ii) to repay the cost of the fellowship to the Borrower in case such beneficiary shall not comply with the obligation in the preceding paragraph (i) of this Section. Section 3.09. The Borrower shall, every year during a period of five years str',ting on January 1, 1977, create within SESPAS such positions .,r;ughout the country, mainly in rural areas, for graduate nurses and technical nurses as shall be necessary to ensure employment for the graduates of the fellowship program included in the Project. - 11 - Section 3.10. (a) The Borrower shall, not later than three months from the Effective Date, cause the Office of Community De- velopment, the State Sugar Council, the Dominican Agrarian Insti- tute and the Department of Agricultural Extension of the Secretar- iat of Agriculture to assist the Borrower in the carrying out of Part E (i), (ii) and (v) of the Project and to assign their staff to work as health promoters in Regions I and V together with the personnel included in Part D (i) of the Project. (b) The Borrower shall, not later than three months from the Effective Date, enter into an agreement, and maintain such agreement in effect until at least the completion of the Project, with the Social Service of Dominican Churches, whereby such Ser- vice will undertake to assist the Borrower in the carrying out of Part D (iii) of the Project. Section 3.11. The Borrower shall continue to carry out an evaluation of its family planning program under terms of reference which shall include those set forth in Schedule 6 to this Agree- ment. Section 3.12. The Borrower undertakes to review and, if nec- essary, to revise the salary scale for nursing personnel in the public health services from time to time, in order to ensure that such salary scale provides sufficient incentive for (i) people to enter and remain in the nursing profession, and (ii) nursing per- sonnel to serve in rural areas. -12- ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, specific security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall other- wise agree, ipso facto and at no cost to the Bank, equally and rat- ably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Bor- rower shall promptly and at no cost to the Bank secure the princi- pal of, and interest and other charges on, the Loan by an equiva- lent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; - 13 - and (ii) any lien arising in the ordinary course of banking trans- aclions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative sub- division thereof and of any entity owned or controlled by, or op- erating for the account or benefit of, the Borrower or any such subdivision, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section 4.02. The Borrower shall maintain or cause to be main- tained records adequate to reflect in accordance with consistently maintained sound 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 Proj- ect or any part thereof, including the Project Unit. Section 4.03. The Borrower shall (i) cause the Project Account and financial statements of SESPAS related to the Project to be audited at least annually, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than three months after the end of each fiscal year, (A) certified copies of such financial statements for such year as so audited and (B) the report of such audit by said audi- tors, of such scope and in such detail as the Bank shall have rea- sonably requested; and (iii) furnish to the Bank such other - 14- information concerning the Project Account and financial statements and the audit thereof as the Bank shall from time to time reason- ably request. Section 4.04. (a) The Borrower shall cause the buildings, fur- niture and equipment of the facilities included in the Project to be adequately maintained and shall cause all necessary renewals and repairs thereof to be made in accordance with appropriate tech- nical and engineering practices. (b) The Borrower undertakes to pay, during at least fifteen years from the date of this Agreement and as required for the efficient operation of its health services, all salary costs of the personnel included in Part D (i) and (ii) of the Project. Section 4.05. The Borrower shall, with the assistance of quali- fied management consultants, take all steps necessary (i) to re- organize and strengthen SESPAS at the central level with a view to achieving an effective health delivery system and to replicating the experiences of Regions I and V in the whole country; and (ii) to put such reorganization and strengthening into effect not later than one year after the Effective Date. -15- ARTICLE V Effective Date; Termination Section 5.01. The following event is specified as an additional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely, that the Borrower has established the Project Account and deposited therein an amount equivalent to not less than $300,000. Section 5.02. The date December 21, 1976, is hereby specified for the purposes of Section 12.04 of the General Conditions. - 16 - ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Secretary of Public Health and Social Assis- tance of the Borrower is designated as representative of the Bor- rower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Secretaria de Estado de Salud Pfblica y Asistencia Social Ave. San Crist6bal Esquina Tiradentes Santo Domingo, D.N., Dominican Republic Cable address: Secretaria de Salud Pfblica y Assistencia Social Santo Domingo, D.N. For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. - 1T - 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. DOMINICAN REPUBLIC By /s/ Horacio Vicioso Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Is/ Suitbertus M.L. van der Meer Acting Regional Vice President Latin America and the Caribbean - 18 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be fi- nanced out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expen- ditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dol)ar Equivalent) to be Financed (1) Civil works 550,000 30% (2) Furniture and 350,000 60% Equipment for Part A (3) Equipment and 700,000 100% of foreign Vehicles for expenditures Parts B and C (4) Technical assis- 750,000 100% tance (including external auditor for the Project Unit), research, professional fees and Project prep- aration (5) Training, seminars, 1,650,000 80% supervision and community programs (6) Project adminis- 150,000 50% tration (7) Unallocated 850,000 TOTAL 5,000,000 -19- 2. For the purposes of this Schedule the term "foreign expendi- tures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the ter- ritory of any country other than the Borrower. 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 importa- tion, 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 in- creases, the Bank may, by notice to the Borrower, increase or de- crease 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 expenditures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equivalent of $83,000 may be made in respect of Category (4) on account of payments made for such expenditures before that date but after March 1, 1976. 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 Category, the - 20-- Bank may, by notice to the Borrower: (i) reallocate to such Cate- gory, to the extent required to meet the estimated shortfall, pro- ceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other ex- penditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then appli- cable 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 procure- ment 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 Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of t, Loan as, in the Bank's rea- sonable 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 is part of the Borrower's health and family plan- ning program to reduce the rate of population growth and improve the health and welfare of its population, particularly of mothers and children living in rural and semi-rural areas. The Project includes: Part A: Construction, equipping and furnishing of the following facilities: (i) about 11 rural health clinics in Region I; and (ii) one health sub-center and about 15 rural health clinics in Region V. Part B: Provision and utilization of (i) a radio communication system each in Regions I and V to connect rural health clinics and sub-centers with hospitals and ambulance services; (ii) audio-visual equipment and teaching mate- rials for the programs of the National Council for Family Planning in each of the six health regions; (iii) equip- ment, teaching materials and books for national nursing schools, nursing auxiliary training centers and courses for technical nurses in national secondary schools. - 22 0 Part C: Prov:sion and utilization of (i) 4 mini-buses for nursing schools and national secondary schools; (ii) about 35 vehicles for Regions I and V; and (iii) about 6 vehicles for the National Council for Family Planning. Part D: (i) Utilization of the services of medical and nursing supervisory staff, auxiliary nurses and medical and nursing students in rural health clinics and sub- centers located in Regions I and V; (ii) utilization of the services of the National Council for Family Planning's six regional training coor- dinators and their staff; and (iii) community based distribution and family planning education programs. Part E: Training programs and workshops as follows: (i) fifty days of courses in family planning and mater- nal and child care for about 400 community workers of the agencies referred to in Section 3.10 of this Agreement throughout the country; (ii) group meetings on family planning conducted by the community workers referred to in Part E (i) hereof to reach about 130,000 persons throughout the country in a period of three years; - 23 - (iii) one national and nine regional seminars of one week duration each on family planning and population education for about 300 teachers of teaching schools throughout the country; (iv) ten seminars of one week duration each for about 70 administrators and health personnel on comprehen- sive community health and family planning services in Regions I and V; (v) six courses of two weeks duration each for about 850 para-professional workers on community health work in Regions I and V; (vi) five seminars of five days duration each for about 125 health workers in Regions I and V on laboratory techniques and maintenance of laboratory equipment; (vii) about 850 fellowships of six months duration for basic training of auxiliary nurses in five national nursing auxiliary training centers; (viii) about 44o two-year fellowships for basic training of technical nurses in secondary schools; and (ix) about 168 fellowships of three-year duration for basic training of graduate nurses in national nurs- ing schools. Part F: A technical assistance program as follows: (i) about twelve man-months of senior and twelve man- months of associate consulting services to the di- rectors of Regions I and V in administration of health services, statistical information and pro- gram evaluation system; (ii) about twelve man-months of senior and twelve man- months of associate constring services in manage- ment and operation of re-oriented comprehensive community healt' care and family planning services; (iii) about ten man-months of senior consulting services and thirty-six man-months of research services in the preparation and implementation of family plan- ning research programs; (iv) about ten man-months of consulting services for the revision of (1) curricula in medical schools to include comprehensive community health care and family planning and (2) programs of the national nursing schools in order to make them responsive to the country's needs; (v) about twenty-four man-months of consulting services for evaluation of the cost, effectiveness and utili- zation of health facilities, establishing procedures for the procurement of equipment and furniture for Part A of the Project, and organizing a training - 25 - program in maintenance of health facilities and equipment; and (vi) four 12 man-months fellowships abroad and 6 man- months of study tours for the staff of SESPAS and the National Council for Family Planning. - 26- SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars) January 15, 1983 80,000 July 15, 1983 85,000 January 15, 1984 90,000 July 15, 1984 90,000 January 15, 1985 95,000 July 15, 1985 95,000 January 15, 1986 95,000 July 15, 1986 100,000 January 15, 1987 100,000 July 15, 1987 105,000 January 15, 1988 110,000 July 15, 1988 110,000 January 15, 1989 110,000 July 15, 1989 115,000 January 15, 1990 120,000 July 15, 1990 120,000 January 15, 1991 125,000 July 15, 1991 130,000 January 15, 1992 130,000 July 15, 1992 130,000 January 15, 1993 140,000 July 15, 1993 140,000 January 15, 1994 145,000 July 15, 1994 145,000 January 15, 1995 155,000 Thly 15, 1995 155,000 January 15, 1996 155,000 July 15, 1996 165,000 January 15, 1997 165,000 July 15, 1997 170,000 January 15, 1998 175,000 July 15, 1998 180,000 -27- Payment of Principal Date Payment Due (expressed in dollars) January 15, 1999 185,000 July 15, 1999 190,000 January 15, 2000 190,000 July 15, 2000 200,000 January 15, 2001 210,000 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. - 28 0 Premiums on Prepayment The following percentages are specified 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 before maturity 1.05% More than three years but not more than six years before maturity 2.10% More than six years but not more than eleven years before maturity 3.90% More than eleven years but not more than sixteen years before maturity 5.70% More than sixteen years but not more than twenty-one years before maturity 7.50% More than twenty-one years but not more than twenty-three years before maturity 8.20% More than twenty-three years before maturity 8.90% -29- SCHEDULE 14 Procurement A. General Procedures 1. 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 August 1975 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. Contractors for civil works shall be prequalified. Invitations for prequalification shall be advertised in newspapers widely cir- culated in the Dominican Republic and copies of such advertisement shall be transmitted to local representatives of Bank member coun- tries and Switzerland, which are potential suppliers of such ser- vices. Contractors which are found to be qualified shall be per- mitted to bid. 3. To the extent practicable, orders for civil works, furniture and equipment shall be grouped so as to encourage international competitive bidding. 4. Invitations to bid for (i) civil works contracts costing less than the equivalent of $200,000 and in the aggregate not more than the equivalent of $400,000 and (ii) contracts for the supply of goods costing less than the equivalent of $80,000 and in the ag- gregate not more than $200,000, may be locally advertised only. Foreign contractors and suppliers will not be precluded from bid- ding. 300 - 30 - 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 sim- ilar taxes on domestically-supplied goods, shall be excluded; and (iii) the cost to the Borrower of inland freight and other expen- ditures incidental to the delivery of goods to the place of their use or installation shall be included. 2. Goods manufactured in the Dominican Republic may be granted a margin of preference in accordance with, and subject to, the fol- lowing provisions: (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the infor- mation required to establish the eligibility of a bid for such preference and the following methods and stages that will be fol- lowed 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 the Dominican Republic if the bidder shall have estab- lished to the satisfaction of the Borrower and the -31- Bank that the manufacturing cost of such goods in- cludes a value added in the Dominican Republic equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in the Dominican Republic. (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 evalu- ated bid of each group. Such lowest evaluated bids 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 -32- not, the bid from group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shall be selected. C. Review of Procurement Decisions by the Bank 1. Review of prequalification. The Borrower shall, before quali- fication is invited, inform the Bank in detail of the procedure to be followed and shall introduce such modifications in said pro- cedure as the Bank shall reasonably request. The list of prequali- fied bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequal- ification shall be furnished by the Borrower to the Bank for its comments before the applicants are notified, and the Borrower shall make such additions to, deletions from, or modifications in, the said list as the Bank shall reasonably request. 2. Review of invitation to bid and of proposed awards and final contracts. With respect to civil works contracts estimated to cost the equivalent of $200,000 or more, and to contracts for the supply of goods estimated to cost the equivalent of $80,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Bank, 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 Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's con- currence before it is issued to the prospective bidders. - 33 - (b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Bank 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 Bank, in sufficient time for its review, a detailed report on the evalu- ation and comparison of the bids received, together with the recom- mendation for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the in- tended award would be inconsistent with the Guidelines or this Sched- ule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, with- out the Bank'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 Bank promptly after its execution and prior to the submis- sion to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 3. With respect to each contract to be financed out of the pro- ceeds of the Loan and not governed by the preceding paragraph, the Borrower shall furnish to the Bank, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such contract, together with the i1) - 34- analysis of bids, recommendations for award and such other informa- tion as the Bank shall reasonably request. The Bank 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. -35 - SCHEDULE 5 Project Unit 1. The Project Unit will be responsible for the overall manage- ment and coordination of activities in the execution of the Proj- ect. It will be administratively under SESPAS and will have such powers and responsibilities as may be necessary for, or incidental to, the proper execution and supervision of the Project. 2. The Project Director will be responsible for overall manage- ment of Project operations and for preparing and furnishing quar- terly reports on progress of the Project, and will report to the Secretary of Health and Social Assistance directly. 3. The Deputy Project Director, who will replace the Project Director in his absence, will assist such Director in the manage- ment, planning, implementation and supervision of the Project. 4. The Project Training Coordinator will direct, coordinate and help organize the training activities included in the Project at the national level. 5. The Project Architect will direct the construction activities included in the Project and will be responsible for advising the Project Director in the construction aspects of the Project. 6. The Project Unit will also have the following functions: 01 - 36 0 (a) Procurement activities carried out by officers familiar with hospital and training equipment and local and international procurement procedures; and (b) administration and accounting activities for budgeting, collection, disbursement and other financial matters. -37- SCHEDULE 6 Evaluation of the Borrower's Family Planning Program The Borrower will continue to carry out the evaluation of its family planning program through the statistical system of the Na- tional Council for Family Planning and will complement the infor- mation from such system with surveys to achieve the evaluation of: (a) program efforts and inputs, such as personnel-hours, costs and contraceptives distributed; (b) intermediate results, such as number of acceptors, con- tinuing users, active clients and couple years of protection; (c) program efficiency, such as relation of intermediate re- sults to various physical or financial inputs; and (d) effect on fertility as measured by age - specific fer- tility rates.