India - Orissa Irrigation Project : Credit 0740 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 740 IN Project Agreement (Orissa Irrigation Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and STATE OF ORISSA Dated October 11, 1977 CREDIT NUMBER 740 IN ORISSA PROJECT AGREEMENT AGREEMENT, dated October 11, 1977, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and STATE OF ORISSA, acting by its Governor (hereinafter called Orissa). WHEREAS by the Development Credit Agreemet of even date herewith between India, acting by its President (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to fifty-eight million dollars ($58,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Orissa agrees to undertake such obligations toward the Association as hereinafter set forth; and WHEREAS Orissa, 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 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 Dtvelopment 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. Orissa shall carry out, or cause to be carried out, the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial, agricultural and engineer- ing 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. (a) Orissa undertakes, (i) that each MIP to be financed under the Project shall be prepared, designed and con- structed in accordance with the established technical and economic criteria, and (ii) that provisions shall be made for funds suffi- cient to complete the MIPs started under the Project in accordance with said criteria. (b) For the purpose of carrying out each MIP under the Project, Orissa shall establish Project Preparation Committees consisting inter alia of the Executive Engineer and concerned Block Development Officers, and District Officers from the Depart- ments of Agriculture and Cooperation, Revenue, and Forestry and Fisheries of Orissa. (c) Orissa shall adhere to the appraisal and progress monitoring procedures for MIPs as set forth in Schedule 4 to the Development Credit Agreement. (d) For the purpose of allocation of water at the beginning of each irrigation season, Orissa shall establish Water Allocation Committees for each MIP under the Project consisting inter alia of a Revenue Officer, the Assistant Engineer in charge of the MIP, the Agriculture Extension, Cooperative Extension and Block Development Officers, and the Chairman of the local elected body at the block level (Panchayat Samiti). Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods or for civil works to be financed out of the proceeds of the Credit, shall be procured in accordance with the provisions of the Schedule to this Agree- ment. Section 2.04. Except as the Association may otherwise agree, Orissa 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 2.05. (a) To such extent and in such detail as the Association shall reasonably request, Orissa shall furnish to the Association the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto. (b) Orissa: (i) shall maintain, or cause to be maintained, records adequate to record the progress of the Project (including -3- 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 the Project; (ii) shall enable the Association's representatives to visit the facil- ities and construction sites included in 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 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. Section 2.06. (a) Orissa shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project and the performance of its obligations under this Agreement. (b) Orissa 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 Orissa of its obligations under this Agreement. ARTICLE III Particular Covenants Section 3.01. Orissa shall cause its departments and other agencies and authorities responsible for carrying out the Project or any part thereof to maintain rezords adequate to reflect in accordance with consistently maintained appropriate accounting practices their operations and financial condition related to the Project. Section 3.02. Orissa shall cause its departments and other agencies and authorities responsible for carrying out the Project or any part thereof to: (i) have their accounts and financial statements related to the Project for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as avialable, but in any case not later than twelve months after the end of each such year, 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 information -4- concerning the said accounts and financial statements and the audit thereof as the Assocation shall from time to time reasonably request. Section 3.03. With a view to ensuring recovery of annual operation and maintenance costs and as much as possible of capital costs, and having regard, inter alia, to incentives for, and pay- ment capacity of farmers, Orissa shall (a) undertake a review of water and water-related charges in Orissa by not later than December 31, 1979, and (b) implement an appropriate system of water and water-related charges, based on the recommendations arising from the said review, in consultation with the Associa- tion. Section 3.04. In executing the Project, Orissa shall promptly take necessary measures to minimize the risk of malaria and other water-related diseases in the areas covered by the MIPs. Section 3.05. (a) In order to meet the increasing needs of irrigated farming for the MIPs constructed under the Project, Orissa shall, if necessary, strengthen the credit, input supply, and marketing facilities available to farmers in MIP areas. (b) Orissa shall maintain staffing of its agricultural extension services in each MIP area in conformity with the statewise standards agreed between the Association and Orissa under the Orissa Project Agreement (Orissa Agricultural Develop- ment Project) dated April 1, 1977. Section 3.06. Orissa shall undertake biennial safety inspec- tions of MIPs financed under the Project, and shall make all necessary repairs as will be required. Section 3.07. Orissa shall, by March 31, 1983, complete and furnish to the Association a study of such scope and in such detail as shall be mutually agreed upon between the Association and Orissa, of (i) water losses, and (ii) agricultural benefits, relating to technical criteria established for MIPs constructed under the Project. Section 3.08. Orissa shallP by March 31, 1983, complete and furnish to the Association, a study on methods for the execution of maintenance works in order to establish the most economical and effective way of maintenance of MIPs. -5- Section 3.09. Orissa shall use its best endeavors to make eligible for financing from the proceeds of the Credit as many MIPs as possible. 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 Development Credit Agreement becomes effective. Section 4.02. (a) This Agreement and all obligations of the Association and of Orissa 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 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 Orissa of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Development Credit Agreement. ARTICLE 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 the 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: -6- For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. For Orissa: Agricultural Production Commissioner Government of Orissa Bhubaneswar, Orissa India Cable address: AGRISEC Bhubaneswar 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 Orissa may be taken or executed by a Secretary to the Government of Orissa or such other person or persons as Orissa shall designate in writing. Section 5.03. Orissa shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of Orissa, take any action or execute any documents required or permitted to be taken or executed by Orissa 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 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 /s/ E. Stern Regional Vice President South Asia STATE OF ORISSA By Is/ N. A. Palkhivala Authorized Representative SCHEDULE Procurement A. 1. Contracts for dams, spillways, structures and distribu- tion networks for the construction of MIPs may be let on the basis of competitive bidding advertised locally under procedures satisfactory to the Association. 2. Contracts for works in respect of on-farm development included under Part C of the Project may be let on unit price basis to the local contractors. 3. Notwithstanding the foregoing provisions of this Sched- ule, works under Part A of the Project for which safety or quality considerations, or the use of heavy machin- ery, are required, may be carried out by force account provided, however, that the aggregate of said force account works shall not exceed 25% of all civil works under Part A of the Project. B. 1. With respect to all contracts estimated to cost the equivalent of $300,000 or more: (a) Before bids are invited, Orissa 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, Orissa 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 Association, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with this Schedule, promptly inform Orissa and state the reasons for such determination. -9- (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. (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 paragraph, Orissa shall furnish 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, two conformed copies of such contract, together with the analysis of the respective bids, recoimendations 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 this Schedule, promptly inform Orissa and state the reasons for such determination.