Togo - Rural Development Project In Cotton Areas : Credit 0741 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 741 TO Project Agreement (Rural Development Project in Cotton Areas) between INTERNATIONAL DEVELOPMENT ASSOCIATION and SOCIETE TOGOLAISE DU COTON Dated October 5, 1977 CREDIT NUMBER 741 TO PROJECT AGREEMENT AGREEMENT, dated October 5, 1977, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and SOCIETE TOGOLAISE DU COTON (hereinafter called SOTOCO). WHEREAS by the Development Credit Agreement of even date herewith between the Republic of Togo (hereinafter sometimes called the Borrower or Togo) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to fourteen million dollars ($14,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that SOTOCO agree to undertake such obligations toward the Association as hereinafter set forth; WHEREAS SOTOCO, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEP*EFORE 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 Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. SOTOCO shall carry out Parts A, B, C, E and F of the Project despribed in Schedule 2 to the Development Credit Agreement (including, without limitation, the management of the Special Account and the Centres Polyvalents) with due diligence and efficiency and in conformity with appropriate administrative, financial and agricultural and rural deve,opment practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. -2- Section 2.02. Except as the Association shall otherwise agree, contracts for the purchase of goods or for civil works required for the Project and to be financed out of the proceeds of the Credit and for the purchase of all fertilizers and insecti- cides required for the Project, shall be procured in accordance with the provisions of Schedule 1 to this Agreement. Section 2.03. (a) SOTOCO undertakes to insure, or make ade- quate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit made available to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or instal- lation, and for such insurance any indemnity shall be payable in a currency freely usable by SOTOCO to replace or repair such goods. (b) Except as the Association may otherwise agree, SOTOCO shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclusively for the Project. Section 2.04. (a) SOTOCO shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for Parts A, B, C, E and F of the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) SOTOCO: (i) shall maintain records adequate to record the progress of Parts A, B, C, E and F of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit made available to it by the Borrower, and to disclose the use thereof in Parts A, B, C, E and F of the Project; (ii) shall, without limitation upon the provi- sions of paragraph (c) of this Section, enable the Association's representatives to visit the facilities and construction sites included in Parts A, B, C, E and F 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 Association all such information as the Association shall reasonably request concerning Parts A, B, C, E and F of the Project, the expenditure of the proceeds of the Credit so made available to it and the goods and services financed out of such proceeds. -3- (c) SOTOCO shall enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment of SOTOCO and any relevant records and documents. Section 2.05. (a) SOTOCO shall, at the request of the Association, exchange views with the Association with regard to the progress of Parts A, B, C, E and F of the Project, the perfor- mance of its obligations under this Agreement and other matters relating to the purposes of the Credit. (b) SOTOCO shall promptly inform the Association of any condition which interferes or threatens to interfere with, the progress of the Project, the accomplishment of the purposes of the Credit or the performance by SOTOCO of its obligations under this Agreement. Section 2.06. Before carrying out the annual work programs pertaining to Parts B and F of the Project, the Borrower shall submit such programs to the Association for review, comments and approval. ARTICLE III Management and Operations of SOTOCO Section 3.01. (a) SOTOCO shall at all times manage its affairs, maintain its financial position, plan its future expan- sion and carry on its operations, all in accordance with appro- priate administrative, financial and rgricultural and rural development practices, under the supervision of qualified and experienced management assisted by qualified and experienced staff in adequate numbers and in accordance with the 1974 Decree. (b) Without any limitation upon the generality of the foregoing 50TOCO shall at all times employ, for all key positions of SOTOCO, persons whose qualifications, and terms and conditions of employment, are satisfactory to the Association. Such persons shall include inter alia a civil engineer, a chief for the feeder road unit, a chief mechanic, a senior training officer and a deputy training officer and SOTOCO shall hire said persons on or before December 31, 1977 (or such other date as the Association may agree). -4- Section 3.02. SOTOCO shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.03. SOTOCO shall cause all facilities included in Part A of the Project and the Centres Polyvalents to be adequately maintained, cause all necessary repairs thereof to be made and provide, promptly as needed, the funds, facilities, services and other resources required therefor. ARTICLE IV Financial Covenants Section 4.01. (a) SOTOCO shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. (b) Without any limitation upon the generality of the foregoing SOTOCO shall maintain separate accounts to record separately: (i) SOTOCO's marketing operations; (ii) SOTOCO's ginning operations at the Lama-Kara gin; (iii) the Borrower's account in SOTOCO's books with respect to the Borrower's payments made to SOTOCO pursuant to Sections 3.01 (c) and 3.05 of the Development Credit Agreement; and (iv) the operations of the Special Account. Section 4.02. SOTOCO shall: (i) have its accounts and finan- cial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accor- dance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its 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 Association shall have reasonably requested; and (iii) furnish to the Association such other infor- mation concerning the accounts and financial statements of SOTOCO and the audit thereof as the Assocation shall from time to time reasonably request. -5- ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of SOTOCO thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date twenty-five years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified- in paragraph (a) (ii) of this Section, the Association shall promptly notify SOTOCO of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Development Credit Agreement. ARTICLE VI Miscellaneous Provisions Section 6.01. Any uptice 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 g.ven 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 herein- after 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: -6- For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For SOTOCO: SOTOCO Atakpame Togo Cable address: SOTOCO Atakpame Togo Section 6.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of SOTOCO may be taken or executed by its Directeur Gfnfral or such other person or persons as SOTOCO shall designate in writing. Section 6.03. SOTOCO shall furnish to the Association suf- ficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of SOTOCO, take any action or execute any documents required or permitted to be taken or executed by SOTOCO pursuant to any of the provisions of this Agreement. Section 6.04. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. -7- 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 DEVELOPMENT ASSOCIATION By Is/ Roger Chaufournier Regional Vice President Western Africa SOCIETE TOGOLAISE DU COTON By Is/ Messanvi Kokou Kekeh Authorized Representative -8- SCHEDULE 1 Procurement A. International Competitive Bidding Except as provided in Part B hereof, contracts for the purchase of goods included in the Project shall be procured in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidd- ing, as described in Part A of the Guidelines. B. Other Procurement Procedures Contracts for the construction of buildings estimated to cost the equivalent of $3,100,000 (including taxes), or less, in the aggregate and contracts for goods whose individual cost is less than $50,000 equivalent (including taxes) and estimated to cost the equivalent of $300,000, or less, in the aggregate will be awarded on the basis of local procurement procedures acceptable to the Association. C. 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 except those to be procured in accordance with local procedures: (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 similar taxes on domestically supplied goods, shall be excluded; and (iii) the cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. 2. Goods (except those to be procured in accordance with local procedures) manufactured in Togo may be granted a margin of preference in accordance with, and subject to, the following provisions: (a) All bidding documents for the procurement of goods will clearly indicate any preference which will be granted, the -9- information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed 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 Togo if the bidder shall have established to the satis- faction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in Togo equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Togo. (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 evaluated 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 not, the bid from group C which as a result of the comparison under paragraph (c) is the lowest evalu- ated bid shall be selected. D. Procurement without contracting Civil works for Part E of the Project may be carried out by force account by SOTOCO. - 10 - E. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of prop-sed awards and final contracts: With respect to all contracts for the purchase of the fer- tilizers and insecticides required for the Project estimated to cost the equivalent of $250,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Associa- tion, in sufficient time for its review, a detailed report, on the evaluation and comparison of the bids received, together with the recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding para- graph, the Borrower shall furnish to the Association, promptly after its execution and prior to the submission to the Association - 11 - of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Association shall reasonably request. The Association 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.