Tunisia - Sidi Salem Multipurpose Project : Loan 1431 - Project Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1431 TUN Project Agreement (Sidi Salem Multipurpose Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and OFFICE DE LA MISE EN VALEUR DE LA VALLEE DE LA MEDJERDA ET DES PERIMETRES PUBLICS IRRIGUES Dated July 5, 1977 PROJECT AGREEMENT AGREEMENT, dated July 5, 1977, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, party of the first part (such party of the first part hereinafter called the Bank) and OFFICE DE LA MISE EN VALEUR DE LA MEDJERDA ET DES PERIMETRES PUBLICS IRRIGUES (hereinafter sometimes called 0MVVM); WHEREAS by the Loan Agreement of even date herewith be- tween Republic of Tunisia (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to forty-two million dollars ($42,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that OMVVM agree to under- take such obligations toward the Bank as hereinafter set forth; and WHEREAS OMVVM, 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: -2- 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 following additional term has the following meaning, namely that, "OMVVM Project Agreement" means the agreement (Irrigtion Rehabilitation Project) dated December 31, 1974, between the Bank and OMVVM, and such term includes all schedules to such agreement. - 3 - ARTICLE II Execution of the Project Section 2.01. OMVVM shall carry out Part G of the Project de- scribed in Schedule 2 to the Loan Agreement with due diligence and efficiency and in conformity with appropriate administrative, fi- nancial and engineering practices. Section 2.02. In order to assist OMVVM in the preparation of plans and specifications for Part G of the Project, in the prepara- tion of bidding documents for Part G of the Project, and in the supervision of the construction of Part G of the Project, OMVVM shall employ no later than December 31, 1977, or such other date as the Bank may agree, engineering consultants whose qualifica- tions, experience and terms and conditions of employment shall be satisfactory to the Bank. Section 2.03. Except as the Bank shall otherwise agree, contracts for the purchase of goods or for civil works under Part G of the Project 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) OMWM 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, and for such insurance any indemnity shall be payable in a currency freely usable to replace or repair such goods. 14 (b) Except as the Bank may otherwise agree, OMVVM 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 the Project. Section 2.05. (a) OMVVM shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, con- tract documents and work and procurement schedules for Part G of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) OMVVM: (i) shall maintain records adequate to record the progress of Part G 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 Part G 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 Part G of the Project and to examine th- goods financed out of such proceeds and any relevant records and documents; (iii) shall furnish to the Bank within forty-five calendar days after each calendar quarter a report, of such scope and in such detail as the Bank shall reasonably request on the progress of Part G of the Project, during such quarter; and (iv) shall furnish to the Bank all such information as the Bank shall reasonably request concerning Part G 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. - 5 - (c) OMVVM shall enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of OMVVM and any relevant records and documents. Section 2.06. (a) OMYVM shall, at the request of the Bank, exchange views with the Bank with regard to the progress of Part G of the Project, the performance of its obligations under this Agreement, and other matters relating to the purposes of the Loan. (b) OMVVM shall promptly inform the Bank of any condition which interferes or threatens to interfere with, the progress of Part G of the Project, the accomplishment of the purposes of the Loan, or the performance by OMWM of its obligations under this Agreement. Section 2.07. If the completion of Part G of the Project is hindered or delayed, or is threatened with hindrance or delay, be- cause the funds available to OMVVM are inadequate to insure its completion, OMVVM shall promptly demand that the Borrower provide OMVVM, or cause OMVVM to be provided with, the necessary funds on terms and conditions satisfactory to the Bank as and when required. Section 2.08. (a) In order to assist OMVVM to carry out Part G (e) of the Project, OMVVM shall employ experts, whose qualifica- tions, experience and terms and conditions of employment shall be satisfactory to the Bank. -6- (b) In carrying out Part G (e) of the Project OMWM shall by August 31, 1978, or such other date as the Bank may agree, co, sult with the Bank on the nature and the description of the train- ing programs to be attended by its personnel and on the names, qualifications and experience of the persons considered for such training programs. Section 2.09, (a) OMVVM shall strengthen by December 31, 1981, or such other date as the Bank may agree its Regional Directorate located in the Cap Bon Area and shall establish by June 30, 1979, or such other date as the Bank may agree, one additional Regional Directorate to be located in Medjez and shall thereafter at all times maintain such Regional Directorates in such areas, with such functions, powers and responsibilities as shall be satisfactory to the Bank, including without limitation, responsibility for operation and maintenance of the facilities constructed under Part G of the Project and for providing extension services to Project Area Farmers. (b) Without limitation or restriction to the generality of the provisions of paragraphs (a) and (b) of Section 3.01 of this Agreement, OMVVM shall take all measures as may be required: (i) to maintain the Regional Directorates in such areas referred to in paragraph (a) of this Section at all times adequately staffed with qualified and experienced personnel in adequate numbers, in- cluding without limitation, operation, maintenance and extension staff under the supervision of qualified and experienced manage- ment; and (ii) to provide all funds, resources, facilities and resources required for the purpose and for their efficient opera- tion. 7 ARTICLE III Management and Operations of OMVVM Section 3.01. (a) OMVVM shall, at all times, manage its affairs, plan its future expansion and carry on its operations, all in ac- cordance with appropriate agricultural, administrative, business, financial, public utility, and engineering practices, under the supervision of experienced and competent management assisted by qualified and competent personnel in adequate numbers. (b) Without limitation to the provisions of paragraph (a) of Section 3.01 of this Agreement, OMVVM shall, for the purpose of carrying out Part G of the Project, by December 31, 1980, or such other date as the Bank may agree, take all such measures as may be required to strengthen its operation, maintenance and extension staff including the employment of additional experienced and quali- fied operation, maintenance and extension staff in adequate num- bers. (c) OMVVM shall at all times operate, maintain, renew and repair its facilities, plants, equipment, machinery, communications systems and property (including but not limited to all facilities, plants, equipment, machinery and property financed out of the pro- ceeds of the Loan), and promptly make all necessary repairs and renewals thereof, in accordance with appropriate engineering, public utility and agricultural practices. (d) OMVVM shall take all action within its power to maintain its existence and right to carry on operations and shall take all steps necessary to acquire, maintain and renew all rights, privi- leges and franchises which are necessary or useful in the conduct of its business. (e) Except as the Bank shall otherwise agree, OMVVM shall obtain title to all goods financed out of the proceeds of the Loan and made available to it free and clear of all encumbrances. Section 3.02. OMVVM shall take out and, maintain with respon- sible insurers, or make other provisions satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.03. Except as the Bank shall otherwise agree, OMVVM shall furnish to the Bank by no later than March 31 in each calen- dar year, an annual report of such scope and in such detail as the Bank shall reasonably request on the operations of OMVVM during the preceding agricultural year ending at about September 30 of each year; such report shall cover the area brought or to be brought under irrigation under Part G of the Project, the land tenure in the said area, the cropping patterns followed in said area, the crop yields and outputs in said area, and the operation and maintenance, including their cost, of the irrigation and drainage facilities under its responsibility in the said area; such area shall include without limitation any land owned, leased, cultivated, or otherwise controlled by the Borrower's Office des Terres Domaniales in the said area. -9- ARTICLE IV Financial Covenants Section 4.01. OMVVM shall take all such action as may be re- quired to charge to, and to collect from, each Project Area Farmer the irrigation water charges referred to under Section 4.03 of the Loan Agreement. Section 4.02. (a) OMVVM shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. (b) Without limitation or restriction upon the provisions of the foregoing paragraph (a) of this Section, OMVVM shall estab- lish and thereafter maintain accounts and records adequate to re- flect separately in accordance with consistently maintained appro- priate accounting practices: (i) its resources and expenditures on account of Part G of the Project; (ii) the collection of revenues from the water charges referred to in Section 4.01 of this Agree- ment; and (iii) the investment, operation, maintenance and replace- ment costs of the facilities constructed under Part G of the Proj- ect. Section 4.03. The provisions of Section 4.02 of the OMVVM Project Agreement are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein; provided, however, that the term "accounts" in such Section shall include, without limitation, the accounts referred to in paragraph (b) of Section 4.02 of this Agreement. - 10 - 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 Loan Agreement becomes effective. Section 5.02. This Agreement and all obligations of the Bank and of OMVVM thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms. Section 5.03. All the provisions of this Agreement shall con- tinue in full force and effect notwithstanding any cancellation or suspension under the Loan Agreement. 11- ARTICLE VI Miscellaneous Provisions Section 6.01. 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 desig- nated by notice to the party giving such notice or making such re- quest. 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 OMVVM: Office de la Mise en Valeur de la Medjerda et des Pgrimetres Publics Irrigues Tunis Tunisia - 12 - Cable address: OFFICE MEDJERDA Tunis 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 OMVVM may be taken or executed by the Directeur G9n9ral of OMVVM or such other person or persons as such Directeur Gneral shall designate in writing. Section 6.03. OMVM shall furnish to the Bank sufficient evi- dence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of OMVVM, take any action or execute any documents required or permitted to be taken or exe- cuted by OMVVM, pursuant to any of the provisions of this Agree- ment. Section 6.04. This Agreement may be executed in several coun- terparts, each of which shall be an original, and all collectively but one instrument. - 13 - 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 Tunis, Republic of Tunisia, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Maurice P. Bart Acting Regional Vice President Europe, Middle East and North Africa OFFICE DE LA MISE EN VALEUR DE LA VALLEE DE LA MEDJERDA ET DES PERIMETRES PUBLICS IRRIGUES By /s/ Moncef Ben Romdhane Authorized Representative