Dominican Republic - Road Maintenance And Reconstruction Project : Loan 1316 - Loan Agreement - Conformed

7.l, CONFORMED COPY LOAN NUMBER 1316 T-DO LOAN AGREEMENT (Road Maintenance and Reconstruction Project) between DOMINICAN REPUBLIC and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated August 10, 1976 LOAN AGREEMENT AGREEMENT, dated August 10, 1976, between DOMINICAN REPUBLIC (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RE- CONSTRUCTION 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 Agreement 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 Window (hereinafter called the Fund) and upon the terms and con- ditions 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 conditions 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 context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the term "SEOPC" means Secretarla de Estado de Obras Pdblicas y Comunicaciones of the Borrower, and such term in- cludes any successor thereto. -3- 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 re- spect 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 awarded in accor- dance with the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1979 or such later date as the Bank shall establish. The Bank shall prompt- ly notify the Borrower 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. -4- Section 2.06. The Borrower shall pay interest at the rate of four and eighty-five hundredths per cent (4.85%) per annum on the principal 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 determina- tion and the amount of the resulting shortfall, pay additional interest on such principal amount of the Loan equal to such short- fall. 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. -5- ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appropriate engineering, administrative and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. (a) In order to assist the Borrower in the supervision of the reconstruction works included in Part A (1) of the Project, the Borrower shall employ engineering consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. (b) In order to assist the Borrower in carrying out Part B of the Project, the Borrower shall employ a road maintenance en- gineer, a mechanical engineer, a traffic engineer, a master me- chanic, an equipment inspector and a cost accountant, all of them to have qualifications, experience and terms and conditions of em- ployment satisfactory to the Bank. (c) In carrying out Part B of the Project, the Borrower shall assign, as and when needed, competent counterpart staff to work with the consultants referred to in the preceding para- graph (b) of this Section. Section 3.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be -6- 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 re- place or repair such goods. (b) Except as the Bank shall other-wise 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, con- tract documents and construction and procurement schedules for 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 pro- ceeds of the Loan, and to disclose the use thereof in the Proj- ect; (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 concerning the Project, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. - 7 - 5-21-76 Section 3.05. The Borrower shall take 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 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. The Borrower shall complete the carrying out of Part A (2) of the Project by the time of completion of Part A (1) thereof. -8- 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 ex- ternal 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 otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and in- terest and other charges on, the Loan, and the Borrower, in cre- ating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any con- stitutional 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 Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent 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; -9- and (ii) any lien arising in the ordinary course of banking trans- actions 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 subdivi- sion thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and other foreign exchange assets held by any insti- tution 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 agen- cies of the Borrower responsible for carrying out the Project or any part thereof. Section 4.03. The Borrower shall, not later than December 31, 1977, or such other date as shall be agreed with the Bank, prepare or cause to be prepared a study of its transport sector, such study to include the preparation of a transport master plan and a review of the transport sector organization. Section 4.04. (a) The Borrower shall: (i) cause all its roads to be adequately maintained and cause all necessary repairs there- of to be made, all in accordance with appropriate engineering prac- tices; (ii) cause all its road maintenance equipment and workshops -10- to be adequately maintained and cause all necessary repairs and re- newals thereol" to be made, all in accordance with appropriate en- gineering practices; and (iii) provide, promptly as needed, the funds, facilities, services and other resources required for the foregoing. (b) Without limiting the generality of the foregoing, the Borrower shall take all necessary action to (i) enact not later than December 31, 1976 or such other date as shall be agreed with the Bank, regulations defining maximum vehicle axle loads and di- mensions, such regulations to take into account the recommendations of the consultants referred to in Section 3.02(b) of this Agree- ment, (ii) ensure permanent and consistent enforcement of such regulations, and (iii) allocate not less than the equivalent of $4,000,000 to its road maintenance budget for each fiscal year, starting with the fiscal year 1977, such allocation to be revised in agreement with the Bank, taking into account the recommenda- tions of the consultants 7e ,rred to in Section 3.02 (b) of this Agreement. Section 4.05. (a) The Borrower shall (i) not later than July 31, 1977 or such ofhar date as shall be agreed with the Bank, determine the proper size and composition of the labor force and the equipment necessary for maintenarce of its roads, such determination to be made in agreement wit O)e Bank, taking into account the recommenda- tions of the consultantj referred to in Section 3.02 (b) of this Agreement and (ii) promptly thereafter put into effect a road maintenance program based on such determination. S- 11 - (b) The Borrower shall not recruit any further staff for the Highway Maintenance Department of SEOPC until the Borrower has complied with its obligations in the preceding paragraph (a) of this Section, provided that the foregoing shall not apply to the filling of positions for which present staff cannot be trained. - 12- ARTICLE V Effective Date; Termination Section 5.01. The following event is specified as an addi- tional 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 employed the consultants referred to in Section 3.02 (b) of this Agreement. Section 5.02. The date November 10, 1976, is hereby specified for the purposes of Section 12.04 of the General Conditions. -13 - ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Secretario de Estado de Obras PGblicas x Comunicaciones of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Con- ditions. 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 Obras Pfiblicas y Comunicaciones Ave. San Crist6bal, Ensanche la F6 Santo Domingo, D.N. Dominican Republic Cable address: Secretaria de Obras PGblicas y Comunicaciones 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. - 14- 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 /s/ Adalbert Krieger Regional Vice President Latin America and the Caribbean - 15 - 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 expenditures 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 1,100,000 58% (represent- for Part A (1) ing the estimat- ed foreign ex- penditure com- ponent) (2) (a) Maintenance 2,550,000 100% of foreign equipment and expenditures workshop tools and equipment (b) Spare parts 350,000 85% (represent- ing the estimated foreign expendi- ture component) (3) Consulting ser- 500,000 63% (representing vices the estimated foreign expendi- ture component) (4) Unallocated 500,000 TOTAL 5,000,000 - 16 0 2. For the purposes of this Schedule, the term "foreign expen- ditures" means expenditures for goods or services supplied from the territory, and in the currency, of any country other than the Borrower. 3. The disbursement percentages have been calculated in 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 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 expenditures: (a) prior to the date of this Agreement; (b) in Category (1) until the Borrower has furnished to the Bank designs and specifications of the bridges included in Part A (2) of the Project, which shall be consistent with the design stan- dards for the road included in Part A (1) of the Project; and (c) in Category (2) until the Borrower has furnished to the Bank evidence satisfactory to the Bank that (i) the workshops (other than the Santiago workshop) included in Part B (2) of the Project have been rehabilitated or reconstructed, as the case may be; and -17- (ii) an adequate progress in the construction works for the Santiago workshop has been made. 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 thatCategory, the Bank may, by notice to the Borrower: (i) reallocate to such Category to the extent required to meet the estimated shortfall, proceeds of the 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 short- fall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the 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 the 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. - 18 - SCHEDULE 2 Description of the Project The Project consists of: Part A: (1) Reconstruction of about 19 km of the Puente Camf - San Francisco de Macorfs road in accordance with the following design standards: Standard Ax1 Width Width Width Minimum Maxi- Stopping Type Load Design of of of Radium of mum light of Pavement Speed Roadway Surfacing Shoulders Curvature Grade Distance Surface Design (km/h) (m) (m) (m) (m) (%) (m) m tons 80.00 10.60 6.60 2.00 200.00 4.00 130.00 Asphalt 12.00 concrete carpet 5 cm thick (2) Necessary rehabilitation, widening or reconstruction of the bridges on the portion of the road included in Part A (1) hereof. Part B: A highway maintenance program including: (1) procurement and utilization of maintenance equip- ment, equipment spare parts and workshop tools and equipment; -19- (2) rehabilitation or reconstruction of about 18 work- shops; and (3) improvement of highway maintenance planning and procedures. The Project is expected to be completed by June 30, 1979. -20- SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* January 15, 1983 80,000 July 15, 1983 90,000 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 105,000 July 15, 1987 105,000 January 15, 1988 110,000 July 15, 1988 110,000 January 15, 1989 115,000 July 15, 1989 115,000 January 15, 1990 115,000 July 15, 1990 125,000 January 15, 1991 125,000 July 15, 1991 125,000 January 15, 1992 130,000 July 15, 1992 135,000 January 15, 1993 140,000 July 15, 1993 140,000 January 15, 1994 140,000 July 15, 1994 150,000 January 15, 1995 150,000 July 15, 1995 155,000 January 15, 1996 160,000 July 15, 1996 160,000 -21- Payment of Principal Date Payment Due (expressed in dollars) January 15, 1997 165,000 July 15, 1997 170,000 January 15, 1998 175,000 July 15, 1998 180,000 January 15, 1999 180,000 July 15, 1999 190,000 January 15, 2000 190,000 July 15, 2000 200,000 January 15, 2001 205,000 * 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 equivalents determined as for purposes of withdrawal. -22- Premiums on Prepayment The following percentages are specified as the premiums payable on Tepayment 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 5.65% More than sixteen years but not more than twenty-one years before maturity 7.45% More than twenty-one years but not more than twenty-three years before maturity 8.15% More than twenty-three years before maturity 8.85% -23- SCHEDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, contracts for the pur- chase of goods or for civil works shall be awarded in accordance with procedures consistent with those set forth in Part A of 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. With respect to any contract for civil works, contractors shall be prequalified as described in part 1.3 of the Guidelines, and a period of not less than 60 days shall be given to contractors for presentation of prequalification documents. B. Other Procurement Procedures Proprietary spare parts for maintenance equipment may be procured through direct negotiation with the dealers of such spare parts in accordance with procedures satisfactory to the Bank, pro- vided that the cost of such spare parts shall not exceed the equiv- alent of $200,000 in the aggregate, and that the procurement of -24- individual packages of such spare parts costing the equivalent of $10,000 or more shall be approved by the Bank. 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 procedure as the Bank shall reasonably re'qtU. it. The list of pre- qualified bidders, together with a statenent: of their qualifications and of the reasons for the exclusion of zvniy applicant for prequali- fication shall be furnished by the Borrower to the Bank for its comments before the applicants are notified of the Borrower's de- cision, and the Borrower shall make such additions to, deletions from, or modifications in, the said list as the Bank shall rea- sonably request. 2. Review of invitation to bid and of proposed awards and final contracts: With respect to all contracts excepting those referred to in Par: -. hereof: (a) Before bids are invited, the Borrower shall furnish to the Bank, for its comments, the text of the invitations to bid and t_! 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 docu- ments or procedures as the Bank shall reasonably request. Any -25- further modification to the bidding documents shall require the Bank'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 Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without 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 sub- mission 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 execu- tion and prior to the submission to the Bank of the first appli- cation for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such contract.