Philippines - Fishery Training Project : Loan 1786 - Loan Agreement - Conformed

OFFICIAL LOAN NUMBER 1786 PH DOCUMENTS Loan Agreement (Fishery Training Project) between REPUBLIC OF THE PHILIPPINES and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , r 199 LOAN NUMBER 1786 PH LOAN AGREEMENT AGREEMENT, dated Febrtorq ( , 19?4 between REPUBLIC OF THE PHILIPPINES (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (herein- after called the Bank). ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "UPCF" means the University of the Philippines, College of Fisheries; (b) "UPVCF" means the University of the Philippines in the Visayas, College of Fisheries; (c) "Institute" means Regional Institute of Fishery Techno- logy of the Ministry of Education and Culture as specified in Part B.1 of Schedule 2 to this Agreement; (d) "Center" means Regional Center for Fishermen Training of the Ministry of Natural Resources/Bureau of Fisheries and Aquatic Resources; and (e) "Project Unit" means the Project Unit established pursuant to the provisions set forth in the Development Credit Agreement (Second Education Project) between the Borrower and the Association dated January 5, 1973. -2- ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to thirty-eight million dollars ($38,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan. Section 2.03. 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 4 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1985 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of seven and ninety-five hundredths per cent (7.95%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semiannually on January 1 and July 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. -3- ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project through the Project Unit with due diligence and efficiency and in conformity with appropriate administrative, financial, technical and educational practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. In order to assist in carrying out the Project, the Borrower shall: (i) award fellowships under the Project to appropriately qualified candidates in accordance with selection criteria and award procedures satisfactory to the Bank; and (ii) employ or cause to be employed specialists whose qualifications, experience and terms and conditions of employment shall be satis- factory to the Bank. Section 3.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the Project. Section 3.04. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, training programs, contract documents and work and procurement schedules for the Project, and any material modifica- tions thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (in- cluding its coat and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Loan, and to disclose their use in the Project; (ii) shall enable the Bank's accredited representatives to visit the facili- ties and construction sites included in the Project and to examine -4- the goods financed out of the proceeds of the Loan and any rele- vant records and documents; and (iii) shall furnish to the Bank at regular intervals all such information as the Bank shall reason- ably request concerning the Project, its cost and, where appro- priate, the benefits to be derived from it, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. (c) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Bank, the Borrower shall prepare and furnish to the Bank a report, of such scope and in such detail as the Bank shall reason- ably request, on the execution and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Bank of their respec- tive obligations under the Loan Agreement and the accomplishment of the purposes of the Loan. Section 3.05. The Borrower shall take or cause to be taken all such action as shall be necessary to acquire by May 31, 1980, or such other date as the Borrower and the Bank shall otherwise agree, all such land and rights in respect of land as shall be required for carrying out the Project. ARTICLE IV Other Covenants Section 4.01. (a) It is the mutual intention of the Borrower and the Bank that no other external debt shall enjoy any priority over the Loan by way of a lien on governmental assets. (b) To that end the Borrower: (i) represents that at the date of this Agreement no lien exists on any governmental assets as security for any external debt except as otherwise disclosed in writing by the Borrower to the Bank; and (ii) undertakes that, except as the Bank shall otherwise agree, if any such lien shall be created, it will ipso facto equally and ratably, and at no cost to the Bank, secure the payment of the principal of, and interest and other charges on, the Loan and in the crea- tion of any such lien express provision will be made to that effect. The Borrower shall promptly inform the Bank of the crea- tion of any such lien. -5- (c) The foregoing representation and undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (d) As used in this Section, the term "governmental assets" means the assets of the Borrower or of any agency of the Borrower including the Central Bank of the Philippines or any institution performing the functions of a central bank for the Borrower. (e) The Borrower further undertakes that, within the limits of the laws in force in its territories, it will make the fore- going undertaking effective with respect to liens on the assets of its political subdivisions and their agencies, and to the extent that the Borrower is unable within the limits of the laws in force in its territories to make this undertaking effective, the Bor- rower will give to the Bank an equivalert lien satisfactory to the Bank. Section 4.02. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consis- tently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. Section 4.03. (a) The Borrower shall cause each entity and institution included in the Project to carry out its operations, maintain its facilities and manage its affairs in accordance with sound administrative, financial, technical and educational prac- tices, and shall provide, promptly as needed, the funds, facili- ties, services and other resources required for the purpose, including the provision of adequate budgetary allocations: (i) to the Institutes and Centers for the full uti- lization, maintenance and repair of fishing training vessels; and (ii) to the Bureau of Fisheries and Aquatic Resources of its Ministry of Natural Resources for the full operation of the Centers. (b) The Borrower shall, in respect of vessels for fishery training, take out and maintain with responsible insurers, or make -6- other provisions satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appro- priate practice. Section 4.04. For the purpose of facilitating the transfer of UPCF staff to UPVCF, the Borrower shall implement a program of adequate incentives, which shall include housing and transporta- tion allowances, for said staff. Section 4.05. The Borrower shall make necessary arrangements: (a) for the Institutes, except for the Institute at Zamboanga, only to offer, starting with the academic year 1983/1984, programs leading to a Diploma in Fishery Technology; and (b) to facilitate the appointment and career advancement of such Diploma holders in the Ministry of Natural Resources. Section 4.06. During the implementation of the Project, the Borrower shall establish new post-secondary fishery training institutions only after the establishment of any such institution is recommended on the basis of fishery manpower needs by the Technical Panel for Agricultural Education of the Borrower. Section 4.07. The Borrower shall, by June 30, 1980, to coordinate activities among Institutes and Centers in each Region, establish a Regional Fishery Development Committee satisfactory to the Bank, in each of the Regions where Institutes and Centers would be located. Section 4.08. The Borrower shall: (a) in carrying out Part C.1 of the Project, (i) develop by June 30, 1980 a monitoring and evaluation system, (ii) complete collection of baseline data and begin implementation of said monitoring and evaluation system by March 31, 1981 and (iii) by June 30 of each year from 1982 through 1985 furnish the Bank for its review an annual report on the implementation of the monitoring and evaluation system; and (b) in carrying out Part D of the Project, consult with the Bank on the preparation of future projects ir the education sector. Section 4.09. The Borrower shall cause to be maintained at all times at UPVCF and the Institutes, a teaching staff to students ratio satisfactory to the Bank. Section 4.10. The Borrower shall, in carrying out Part A of the Project: (i) by March 31, 1980, establish at UPVCF a -7- Research Review Committee with terms of reference and composition satisfactory to the Bank; and (ii) select research programs in accordance with criteria satisfactory to the Bank. ARTICLE V Termination Section 5.01. The date O, is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: hinister of Finance Ministry of Finance Manila Republic of the Philippines Cable address: Telex: MINFIN 7550 CBP-PH Manila 0268 CB-CONF For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America -8- Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) 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. REPUBLIC OF THE PHILIPPINES By /1 dj uro Z. R omLtAudez Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By K&AJg4/( Regional Vice President East Asia and Pacific -9- SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed In Expenditures Category Dollar Equivalent) to be Financed (1) Civil works 15,500,000 40% (2) Furniture 1,300,000 40% (3) Equipment, materials, 7,400,000 books, vehicles and vessels (a) directly 100% of foreign imported expenditures (b) locally manu- 100% of local factured (ex- expenditures cluding vessels) (ex-factory) (c) locally procured 65% (4) Technical Assistance 7,200,000 (a) Specialists' 100% services and overseas fellowships (b) Local fellow- 65% ships (5) Unallocated 6,600,000 TOTAL 38,000,000 - 10 - 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower and for goods or services supplied from the territory of the Borrower. 3. The disbursement percentages have been calculated in com- pliance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expen- ditures prior to the date of this Agreement. 5. Notwithstanding the all-cation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no - 11 - expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 12 - SCHEDULE 2 Description of the Project The Project consists of the following Parts: A: Professional Fishery Manpower Training Establishment of UPVCF at Miagao as a center for fishery research and training with an enrollment capacity of about 850 students, through: (i) provision of academic and communal facilities, equip- ment, furniture, books and accommodations; (ii) implementation of fishery research programs; and (iii) provision of technical assistance. B: Technical Fishery Manpower Training 1. Establishment of Institutes at Aparri, Puerto Princesa, Tabaco, Carmen, Catbalogan, Zamboanga, and Panabo, to train technicians for the fishery industry and extension service each with an enrollment capacity of about 450 students (inc.luding off-campus training programs), through: (i) provision of academic and communal facilities, equipment, furniture, books and accommodations; (ii) provision of training vessels; and (iii) provision of technical assistance. 2. Establishment of Centers located adjacent to Institutes for in-service training of fishermen and Bureau of Fisheries and Aquatic Resources extension workers, each with a capacity for about 100 trainees, through: (i) provision of academic and communal facilities, equipment, furniture, books and accommodations; (ii) provision of training vessels; and (iii) provision of technical assistance. - 13 - C: Fishery Project Management 1. Establishment of a program to monitor and evaluate the implementation of Parts A and B of the Project. 2. Strengthening of the management capacity of the Fishery Education and Civil Works Divisions of the Project Unit. D: Future Projects Preparation Preparation of future projects in the education sector. The Project is expected to be completed by December 31, 1984. - 14 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each January 1 and July 1 beginning July 1, 1985 1,265,000 through July 1, 1999 On January 1, 2000 1,315,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. - 15 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.20% More than three years but not more than six years before maturity 2.40% More than six years but not more than eleven years before maturity 4.35% More than eleven years but not more than sixteen years before maturity 6.35% More than sixteen years but not more than eighteen years before maturity 7.15% More than eighteen years before maturity 7.95% - 16 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Part C hereof, goods and civil works shall be procured under contracts awarded 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. For goods and works to be procured on the basis of inter- national competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, the Borrower 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 Borrower 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 competitive bidding. 3. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international competitive bidding: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for the imported goods, or the ex-factory price or off-the-shelf price of other goods, offered in such bid; (ii) customs duties and other import taxes levied in connection with the importation, or tie sales and similar taxes levied in connection with the sale or delivery, pursuant to the bid, of the goods shall not be taken into account in the evaluation of the bids; and (iii) the cost to the Borrower of inland freight and other expenditures incidental to the deli- very of goods to the place of their use or installation shall be included. - 17 - 4. For bidding purposes, equipment, materials, furniture, books, vehicles, vessels and civil works shall be grouped to the extent practicable in such a manner as shall be agreed between the Borrower and the Bank so as to permit bulk procurement. B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A of this Schedule, goods manufactured in the Philippines may be granted a margin of preference in accor- dance with, and subject to, the following provisions: 1. All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the 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. 2. After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in the Philippines if the bidder shall have estab- lished to the satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added in the Philippines equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other domestic bids. (3) Group C: bids offering any other goods. 3. In order to determine the lowest evaluated bid of each group, all evaluated bids in each group shall be first compared among themselves, without taking into account customs duties and other import taxes levied in connection with the importation, and sales and similar taxes levied in connection with the sale or delivery, pursuant to the bids, of the goods. Such lowest eva- luated 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. 4. If, as a result of the comparison under paragraph 3 above, the lowest bid is a bid from group C, all group C bids - 18 - shall be further compared with the lowest evaluated bid from group A after adding to the evaluated 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 3 is the lowest evaluated bid shall be selected. C. Other Procurement Procedures 1. Contracts for civil works estimated to cost the equivalent of $500,000 or less, may be awarded on the basis of competi- tive bidding advertised locally in accordance with procurement procedures satisfactory to the Bank, provided that the aggregate expenditure for items so procured shall not exceed the equivalent of $2,000,000. 2. Contracts for furniture, equipment, materials and vessels estimated to cost the equivalent of $100,000 or less, may be awarded on the basis of competitive bidding advertised locally in accordance with procurement procedures satisfactory to the Bank, provided that the aggregate expenditure for items so procured shall not exceed the equivalent of $2,000,000. 3. Contracts costing less than $25,000 each for miscellaneous items may be awarded after inviting at least three price quota- tions, provided that such purchases shall not exceed the equiva- lent of $500,000. 4. Books may be procured in accordance with the Borrower's book procurement procedures satisfactory to the Bank. D. Review of Procurement Decisions by the Bank 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for civil works estimated to cost the equivalent of $200,000 or more, and all contracts for equipment, materials, furniture, books and vessels estimated to cost the equivalent of $100,000 or more: - 19 - (a) Before bids are invited, the Borrower 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 Bor- rower 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 on the evaluation and comparison of the bids received, 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 Borrower and state the reasons for such determination. (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 sub- mission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 2. With respect to each contract not governed by the precedin3 paragraph, the Borrower shall furnish to the Bank, promptly after its execution and prior to the submission 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 con- tract, together with the analysis of the respective bids, recom- mendations 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 Borrower and state the reasons for such determination. 3. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an extension of the stipulated time for performance of such contract, or - 20 - issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by 'more than 15% of the original price, the Borrower shall inform the Bank of the proposed modification, waiver, extension or change order and the reasons therefor. The Bank, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform the Borrower and state the reasons for its determination. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this /JAiL day of 198 . FOR SECRETARY