Bolivia - Urban Development Project : Loan 1489 - Project Agreement - 4 - Conformed

CONFORMED COPY LOAN NUMBER 1489 BO Project Agreement (Urban Development Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and HONORABLE ALCALDIA MUNICIPAL DE LA PAZ Dated November 30, 1977 LOAN NUMBER 1489 BO PROJECT AGREEMENT AGREEMENT, dated November 30, 1977, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and HONORABLE ALCALDIA MUNICIPAL DE LA PAZ (hereinafter called HAM). WHEREAS (A) by the Loan Agreement of even date herewith between Republic of Bolivia (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to seventeen million dollars ($17,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition inter alia that HAM agree to undertake such obligations toward the Bank as hereinafter set forth; (B) by a subsidiary loan agreement between the Borrower and HAM, part of the proceeds of the loan provided for under the Loan Agreement will be made available to HAM on the terms and condi- tions therein set forth; and WHEREAS HAM, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Loan Agreement, the Preamble to this Agreement and the General Conditions (as so defined) have the respective meanings therein set forth and the term "Acci6n Comunal" means the department of HAM in charge of community development. ARTICLE II Execution of Parts B, C and E.2 of the Project Section 2.01. HAM shall carry out Parts B, C and E.2 of the Project described in Schedule 2 to the Loan Agreement and in -2- Schedule 1 to this Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and urban development practices. Section 2.02. In order to assist HAM in the carrying out of Part E.2 of the Project, HAM shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. 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 procured in accordance with the provisions of Schedule 4 to the Loan Agreement. Section 2.04. (a) Before commencing work on the urban up- grading under Part B of the Project, HAM shall furnish to the Bank for its approval: (i) the final development plan for the urban upgrading and the costs calculations therefor; and (ii) the arrangements established for providing secure tenure to partici- pants in the urban upgrading. (b) HAM shall cause Acci6n Comunal to enter into an indi- vidual contract with each participant in the urban upgrading setting forth the terms and conditions for the repayment of the prorated capital costs of the infrastructure provided and, if applicable, the amount of the construction materials credit. Such terms and conditions shall be satisfactory to the Bank and shall include those set forth in paragraph 1 of Schedule 2 to this Agreement. (c) HAM shall cause Acci6n Comunal to make credits for con- struction materials and contracted labor to participants in the urban upgrading on terms and conditions satisfactory to the Bank, including those set forth in paragraph 2 of Schedule 2 to this Agreement. (d) HAM shall, not later than March 31, 1978 or such later date as the Bank shall agree, furnish to the Bank for its approval a standard form of the contract to be used for the purposes referred to in paragraphs (b) and (c) of this Section. Section 2.05. (a) HAM undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan made available to it by the Borrower against hazards incident to the acquisition, transporta- tion and delivery thereof to the place of use or installation, - 3 - and for such insurance any indemnity shall be payable in a cur- rency freely usable by HAM to replace or repair such goods. (b) Except as the Bank may otherwise agree, HAM shall cause all goods and services financed out of the proceeds of the Loan made available to it by the Borrower to be used exclusively for Parts B, C and E.2 of the Project. Section 2.06. (a) HAM shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, con- tract documents and construction and procurement schedules for Parts B and C of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) HAM: (i) shall maintain records adequate to record the progress of Parts B, C and E.2 of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Loan made available to it by the Borrower, and to disclose the use thereof in Parts B,.C and E.2 of the Project; (ii) shall, without limitation upon the provisions of paragraph (c) of this Section, enable the Bank's representatives to visit the facilities and construction sites included in Parts B and C of the Project and to examine the goods financed out of such proceeds and any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning Parts B, C and E.2 of the Project, the expenditure of the proceeds of the Loan so made available to it and the goods and services financed out of such proceeds. (c) HAM shall enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of HAM and any relevant records and documents. Section 2.07. HAM shall duly perform all its obligations under the HAM Subsidiary Loan Agreement. Except as the Bank shall otherwise agree, HAM shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiv- ing the HAM Subsidiary Loan Agreement or any provision thereof. Section 2.08. (a) HAM shall, at the request of the Bank, exchange views with the Bank with regard to the progress of Parts B, C and E.2 of the Project, the performance of its obligations under this Agreement and under the HAM Subsidiary Loan Agreement, and other matters relating to the purposes of the Loan. -4- (b) HAM shall promptly inform the Bank of any condition which interferes or threatens to interfere with, the progress of Parts B, C and E.2 of the Project, the accomplishment of the purposes of the Loan, or the performance by HAM of its obligations under this Agreement and under the HAM Subsidiary Loan Agreement. ARTICLE III Financial and Other Covenants Section 3.01. HAM shall maintain or cause to be maintained separate records adequate to reflect, in accordance with consis- tently maintained sound accounting practices, the operations, resources and expenditures, in respect of Parts B, C and E.2 of the Project, of the departments or agencies of HAM responsible for carrying out Parts B, C and E.2 of the Project or any part thereof. Section 3.02. HAM shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) regarding Parts B, C and E.2 of the Project for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as avail- able, but in any case not later than six months after the end of each such year, (A) certified copies of such financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning such accounts and financial state- ments and the audit thereof as the Bank shall from time to time reasonably request. Section 3.03. HAM shall cause Acci6n Comunal at all times to manage its affairs, plan the future expansion of its operations and maintain its financial position, all in accordance with appro- priate business, financial and urban development principles and practices and under the supervision of experienced and competent management assisted by qualified and experienced staff in adequate numbers. Section 3.04. HAM shall operate the retail food markets included in Part C of the Project pursuant to a rate structure designed to secure recovery of the full capital, maintenance and operation costs of such part of the Project. - 5 - Section 3.05. HAM shall promptly take all action necessary to approve the layout and construction standards which have been developed by CONAVI for the dwellings to be built pursuant to Part A of the Project. Section 3.06. HAM shall promptly establish special procedures to ensure prompt approval by it of all designs made by CONAVI for the sites included in Part A of the Project. Section 3.07. HAM shall cause the equipment and vehicles used in the operation of the refuse collection system included in Parts A and B of the Project to be adequately maintained and shall cause all necessary repairs thereof promptly to be made, all in accor- dance with appropriate engineering practices, and shall provide, promptly as needed, the funds, facilities, equipment, services and other resources required therefor. Section 3.08. HAM shall promptly make all arrangements necessary to provide to the participants in the urban upgrading pursuant to Part B of the Project secure tenure with regard to their respective plots. Section 3.09. HAM shall, not later than March 31, 1978 or such later date as the Bank shall agree, make contractual arrange- ments with SAMAPA satisfactory to the Bank for the provision of adequate amounts of water to the areas included in Parts B and C of the Project. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which the Loan Agreement becomes effective. Section 4.02. This Agreement and all obligations of the Bank and of HAM thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Loan Agreement. -6- ARTICLE V Miscellaneous Provisions Section 5.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: 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 (WUI) For HAM: Acci6n Comunal Honorable Alcaldia Municipal de La Paz La Paz, Bolivia Cable address: ALCALDIA La Paz Section 5.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of HAM may be taken or executed by its Alcalde or such other person or persons as he shall designate in writing. -7- Section 5.03. HAM shall furnish to the Bank sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of HAM, take any action or execute any documents required or permitted to be taken or executed by HAM pursuant to any of the provisions of this Agreement. Section 5.04. This Agreement may be executed in several counterparts, each of which shall be an original, and all collec- tively but one instrument. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement 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/ Suitbertus M. L. van der Meer Acting Regional Vice President Latin America and the Caribbean HONORABLE ALCALDIA MUNICIPAL DE LA PAZ By /s/ Alberto Crespo Gutierrez Authorized Representative -8- SCHEDULE 1 Description of Parts B, C and E.2 of the Project I. Urban Upgrading (Part B of the Project) 1. Provision of basic urban services, such as water supply and sewerage, a refuse collection system, pathways and street pavement, and community facilities, such as community centers, day-care facilities and recreational spaces, to about 4,500 families living in seven low- income areas of La Paz. 2. Provision of secure tenure for participants in the urban upgrading with regard to their respective plots. 3. Provision of construction materials credits for self- help housing improvements to about 4,500 participants. II. Retail Markets (Part C of the Project) Design, construction and operation of five public retail food markets in the following locations: (a) One each in the Villa Adela and Rio Seco sections of the El Alto area of La Paz; (b) One in the vicinity of the Sagrado Coraz6n area of La Paz; and (c) One each in two other low-income areas of La Paz. III. Technical Assistance (Part E.2 of the Project) Provision of about 63 man-months of foreign and local con- sultants and acquisition of necessary equipment to assist Acci6n Comunal in the: (a) carrying out of Part B of the Project; (b) processing of loan applications from artisans in coordination with BISA under Part D of the Project; (c) training of its staff in the work described in (b) hereof; and -9- (d) development of a proper methodology for the analysis of Acci6n Comunal's on-going socio- economic surveys. - 10 - SCHEDULE 2 Terms and Conditions for Provision of Urban Upgrading and of Credits for Construction Materials and Contracted Labor 1. Provision of Urban Upgrading (i) Amount: Prorated capital costs of infrastructure provided. (ii) Interest: 10% per annum. (iii) Repayment period: 15 years (iv) Security: Such security as HAM shall reasonably request. (v) Down payment: Participants will be required to make a minimum down payment of 10% of the amount referred to in (i) hereof either in cash or the equivalent in mutual help labor. For the purpose of this Schedule, the term "mutual help labor" means work performed by partici- pants on on-site infrastructure during the execution of the urban upgrading. 2. Credits for Construction Materials and Contracted Labor (i) Amount: A maximum of the equivalent of $300. (ii) Disbursement: Credit recipients will receive only the construction materials; payments for con- tracted labor will be made directly to the contractor by HAM. (iii) Interest: 10% per annum. (iv) Repayment period: From 1 to 5 years. (v) Security: Such security as HAM shall reasonably request.