Argentina - Grain Storage Project : Loan 1521 - Project Agreement - 1 - Conformed

CONFORMED COPY LOAN NUMBER 1521 AR Project Agreement (Grain Storage Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and JUNTA NACIONAL DE GRANOS Dated June 29, 1978 LOAN NUMBER 1521 AR PROJECT AGREEMENT AGREEMENT, dated June 29, 1978, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and Junta Nacional de Granos (hereinafter called the Grain Board). WHEREAS (A) by the Loan Agreement of even date herewith between the Argentine Republic (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Bor- rower an amount in various currencies equivalent to one hundred and five million dollars ($105,000,000), on the terms and condi- tions set forth in the Loan Agreement, but only on condition that the Grain Board agree to undertake such obligations toward the Bank as hereinafter set forth; (B) the proceeds of the Loan for Parts A, B, and C provided for under the Loan Agreement will be made available to the Grain Board on the terms and conditions therein set forth; (C) the Grain Board will make available to Ferrocarriles Argentinos those proceeds of the Loan required for Part C.1 of the Project; and WHEREAS the Grain Board, 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. ARTICLE II Execution of the Project Section 2.01. The Grain Board shall carry out Parts A, B and C of the Project described in Schedule 2 to the Loan Agreement -2- with due diligence and efficiency and in conformity with appro- priate administrative, financial, engineering and agricultural practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 2.02. For purposes of carrying out Part C.1 of the Project, the Grain Board shall enter into contractual arrangements with FA whereby: (a) The Grain Board shall make the proceeds of the Loan for Part C.1 of the Project, made available to it by the Borrower pursuant to Section 3.01 (b) of the Loan Agreement, available to FA as a loan to mature in fifteen years including a three year period of grace and to bear interest of seven and forty-five hundredths per cent (7.45%) per annum. (b) FA shall undertake: (i) to carry out the works included in Part C.1 of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices; (ii) to provide 13,200,000 dollars equi- valent and such other funds as shall be required for that purpose; and (iii) to take such action as shall be required to permit the Grain Board to perform its obligations under this Agreement in respect of Part C.1 of the Project. Section 2.03. (a) In order to assist the Grain Board in the preparation of detailed designs and functional specifications for the Project silos, the preparation of bidding documents and eval- uation of bids for the Project works, the supervision of the construction of the Project works, and training and inventory control, the Grain Board shall employ engineering, management and accounting consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. In respect of consultants' contracts for more than $100,000 equiv- alent, qualifications of the pre-selected consultants and proposed draft contracts shall be satisfactory to the Bank. (b) The Grain Board shall employ such consultants as shall be necessary to assist the Project Executing Unit referred to in Section 3.04 (b) of the Loan Agreement in the discharge of its functions and responsibilities; the qualifications, experience and terms and conditions of employment of such consultants to be satisfactory to the Bank. -3- Section 2.04. Except as the Bank shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Loan, shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.05. (a) The Grain Board 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, 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 the Grain Board to replace or repair such goods. (b) Except as the Bank may otherwise agree, the Grain Board shall cause all goods and services financed out of the proceeds of the Loan made available to the Grain Board by the Borrower to be used exclusively for the Project until its completion. Section 2.06. (a) The Grain Board shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contracts 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 Grain Board: (i) shall maintain records adequate to record the progress of Parts A, B and C of the Project (includ- ing 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 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 the Project and to examine the goods financed out of such proceeds and any records and documents relevant to the Project; and (iii) shall furnish to the Bank, on a quarterly basis, all such information as the Bank shall reasonably request concerning 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) The Grain Board shall enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of the Grain Board and any relevant records and documents. -4- Section 2.07. The Grain Board shall enter into contractual arrangements with FA whereby FA shall provide the necessary locomotives and rail cars for transporting grain from Project silos directly administered by the Grain Board to the various ports at such rates as shall reflect the improvements in the transport of grain resulting from the Project. Section 2.08. The Grain Board shall provide the Secretariat of Maritime Affairs of the Borrower with such information as shall be available to the Grain Board and required for carrying out Part D of the Project. Section 2.09. The Grain Board shall, not later than July 31, 1979, construct and test a ramp for the unloading of grain from railway boxcars. Section 2.10. The Grain Board shall, not later than May 1, 1980, start the training referred to in Part B (v) of the Project. Section 2.11. (a) The Grain Board shall, at the request of the Bank, exchange views with the Bank with regard to the progress of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Loan. (b) The Grain Board shall promptly inform the Bank of any condition which interferes or threatens to interfere with, the progress of the Project, the accomplishment of the purposes of the Loan, or the performance by the Grain Board of its obligations under this Agreement and under the Loan Agreement. ARTICLE III Management and Operations of the Grain Board Section 3.01. The Grain Board shall take out and maintain with responsible 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 3.02. The Grain Board shall, in accordance with Decree-Law No. 6698/63, as amended, at all times maintain its right to carry on its operations and shall take all steps neces- sary to acquire, maintain and renew all rights, powers, privileges and franchises which are necessary or useful in the conduct of its business. -5- Section 3.03. The Grain Board shall at all times manage its affairs, plan its investments and maintain its financial position, all in accordance with appropriate business practices under the supervision of experienced and competent management. Section 3.04. The Grain Board shall at all times operate and maintain its property, facilities and. equipment and from time to time make all necessary repairs and renewals thereof, all in accordance with appropriate practices. ARTICLE IV Financial Covenants Section 4.01. The Grain Board shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 4.02. The Grain Board shall: (i) have its accounts and financial statements (balaie sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by Contadorla General de la Naci6n of the Borrower; (ii) furnish to the Bank as soon as available, but in any case not later than four months after the end of each such year, (A) cer- tified 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 Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning the accounts and financial statements of the Grain Board and the audit thereof as the Bank shall from time to time reasonably request. Section 4.03. (a) The Grain Board may lease Project silos with option to purchase or sell them on cash or credit terms, provided that the terms and conditions of the lease or sale are satisfactory to the Bank, including the following: (i) lessees or purchasers shall be groups qualified to operate silos; (ii) only one Project silo may be leased or sold to any one lessee or purchaser; (iii) leases shall be for periods of not less than one year or more than three years; and -6- (iv) in the case of sales financed by the Grain Board, the financial terms and conditions of the portion of the sale price so financed corresponding to the portion of the proceeds of the Loan relent to it by the Borrower and outstanding to finance the Project silo so sold shall be the same as those applicable to such proceeds. (b) The Grain Board shall operate all Project silos not leased or sold as per provisions of paragraph (a) above, with the assistance of qualified silo managers and supporting staff. (c) The Grain Board shall levy such fees on leased Project silos or user charges on Project silos directly administered by the Grain Board so as to earn an annual financial rate of return of not less than 10% on the capital invested in the construction of Project silos. (d) In the case of a Project silo sold for cash, the Grain Board shall: (i) promptly repay to the Borrower such amounts as shall be equivalent to the proceeds of the Loan relent to it by the Borower for purposes of constructing the Project silo so sold, or (ii) use the proceeds of such sale to finance the construction of new silos with such characteristics, of such size and in such locations as shall be satisfactory to the Bank. 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. (a) This Agreement and all obligations of the Bank and of the Grain Board thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms. (b) If the Loan Agreement terminates in accordance with its terms before the date specified in paragraph (a) of this Section, the Bank shall promptly so notify the Grain Board. Section 5.02. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. -7- 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 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 the Grain Board: Junta Nacional de Granos Paseo Col6n 367 Buenos Aires Argentina Cable address: Telex: JUNACAR 121793-AR BAIRES 122151-AR Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of the Grain Board may be taken or executed by its Presidente or Gerente General or such other person or -8- persons as its Presidente or Gerente General shall designate in writing, and the Grain Board shall furnish to the Bank sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. 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/ Adalbert Krieger Regional Vice President Latin America and the Caribbean JUNTA NACIONAL DE GRANOS By /s/ David Lacroze Authorized Representative -9- SCHEDULE 1 Procurement A. International Competitive Bidding 1. Except as provided in Parts B and D hereof, contracts for the purchase of goods or for civil works 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 bidding as described in Part A of the Guidelines. 2. (i) Bidders for the works and services included in Parts A and B (1) of the Project shall be prequalified as described in paragraph 1.3 of Part A of the Guidelines; (ii) Contracts for civil works and equipment under Part A of the Project shall, whenever possible, be grouped in packages of not more than five silos each. 3. For goods and works to be procured on the basis of inter- national competitive bidding under the Project, the Grain Board shall prepare and forward to the Bank as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender or prequalification documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Bank shall reasonably request; the Bank will arrange for the publication of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods and works in question. The Grain Board shall provide the necessary information to update such notice annually so long as any goods or works remain to be procured on the basis of international competi- tive bidding. B. Other Procurement Procedures (i) Contracts for purchase of goods other than computer equipment or for civil works costing more than $50,000 . equivalent but less than $1,000,000 equivalent shall be let after competitive bidding based on local advertising in accordance with procedures acceptable to the Bank. - 10 - (ii) Goods and civil works costing $50,000 equivalent or less shall be purchased at a reasonable price, after solici- tation of quotations from suppliers or contractors, as the case may be, account being taken also of other relevant factors such as time of delivery and efficiency and reliability of the goods and availability of mainte- nance facilities and spare parts therefor, and, in the case of civil works, of the competence of the contractors undertaking them. (iii) Contracts under Part C (i) of the Project not exceeding a total of $11 million equivalent may be let after competitive bidding based on local advertising in accordance with local procurement procedures acceptable to the Bank. 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 Grain Board 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 manufactured in Argentina 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 shall clearly indicate any preference which will be granted, the infor- mation 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 Argentina if the bidder shall have established to - 11 - the satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added in Argentina equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Argentina. (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 eval- uated 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 evaluated bid shall be selected. D. Procurement without Contracting All works for silo access railway lines, interline rail connections, small hump in Bahia Blanca Port and improvements for rail marshalling yards and silo access railway tracks in Rosario Port shall be executed by use of force account by FA with the assistance of subcontractors. - 12 - E. Review of Procurement Decisions by the Bank 1. Review of prequalification. The Grain Board shall, before qualification is invited, inform the Bank in detail of the pro- cedure to be followed, and shall introduce such modifications in said procedure as the Bank shall reasonabjy request. The list of prequalified bidders, together with a statement of their qualifications and, where applicable, of their eligibility for domestic preference under Part C.1 above and of the reasons for the exclusion of any applicant for prequalification and for such eligibility shall be furnished by the Grain Board to the Bank for its comments before the applicants are notified of the Grain Board's decision, and the Grain Board shall make such additions to, deletions from, or modifications in, the said list as the Bank shall reasonably request. 2. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for civil works and equipment for Project silos estimated to cost the equivalent of $1,000,000 or more and contracts for consultant services estimated to cost the equivalent of $100,000 or more; (a) Before bids are invited, the Grain Board shall furnish to the Bank, 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 Bank shall reasonably request. Any 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 Grain Board 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, by the consultants referred to in Section 2.03 of this Agreement, on the evaluation and comparison of the bids received, together with the recommendations for award of the said consultants 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 Grain Board and state the reasons for such determination. - 13 - (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 delivery 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 proceeds of the Loan and not governed by the preceding paragraph, the Grain Board shall furnish to the Bank, promptly after its execution and prior to the delivery to the Bank of the first application for withdrawal of funds from the Loan 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 Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Grain Board and state the reasons for such determination.