Dominican Republic - Second Road Maintenance And Reconstruction Project : Loan 1784 - Loan Agreement - Conformed

LOAN NUMBER 1784 DO DOC.:T: Loan Agreement (Second Road Maintenance and Reconstruction Project) between DOMINICAN REPUBLIC and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated f)/J , 1980 LOAN NUMBER 1784 DO LOAN AGREEMENT AGREEMENT, dated ( , 1980, between DOMINICAN REPUBLIC (hereina er called the Borrower) and INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter 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) "SEOPC" means the Secretarla de Estado de Obras P6blicas y Comunicaciones of the Borrower; (b) "DGC" means the Direcci6n General de Carreteras of SEOPC; (c) "DGCV" means the Direcci6n General de Caminos "eci- nales of SEOPC; (d) "DGPP" means the Direcci6n General de Programaci6n Y Proyectos of SEOPC; (e) "UEPI" means Unidad Ejecutora del Programa de Mano de Obra Intensiva to be established within DGCV in accordance with Section 3.13 of this Agreement; (f) "First Project" means the Road Maintenance and Recon- struction Project financed by the Loan Agreement for Loan Number 1316 T-DO between the Bank and the Borrower dated August 10, 1976; -2- (g) "Five-Year Highway Maintenance Program" means SEOPC's national highway maintenance program for the 1980-1984 period; (h) "Highway Reconstruction Program" means SEOPC's highway reconstruction program for the 1980-1989 period; (i) "Training Program" means SEOPC's program for training highway maintenance personnel for the 1981-1984 period; (j) "Pilot Rural Roads Program" means SEOPC's pilot rural roads program employing labor-based techniques for the 1.980-1982 period; (k) "Reconstruction Planning Unit" means the unit within DGPP referred to in Section 3.10 of this Agreement; and (1) "Production Training Unit" means the unit referred to in Section 3.04 of this Agreement. 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-five million dollars ($35,000,000). 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. -3- 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 March 1 and September 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. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project, through SEOPC, as the executing agency, with DGC to execute Parts A (1) and (2) and B (1), (2) and (3) of the Project, DGPP to execute Parts A (3) and (4) of the Project, and DGCV through UEPI to execute Part C of the Project, with due diligence and effi- ciency and in conformity with appropriate engineering, administra- tive and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without any limitation or restriction on its obligations under paragraph (a) above, the Borrower shall provide in its annual budget and make available promptly as needed funds to cover: (i) the local currency cost requirements of the Project estimated to be the equivalent of $14,000,000; and (ii) recurrent expenditures for the Five-Year Highway Maintenance Program. Section 3.02. In order to assist the Borrower in the carrying out of the Project, the Borrower shall employ consultants whose -4- qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank, as follows: (a) with respect to Part A (2) of the Project, international engineering consultants to supervise and coordinate the execution of Part A (1) of the Project; (b) with respect to Part A (3) of the Project, highway engineering consultants for the design of additional road recon- struction works; (c) with respect to Part A (4) of the Project, international consultants, including a senior highway engineer and a transport economist, to provide the necessary technical assistance to the Reconstruction Planning Unit; (d) with respect to Part B (2) and (3) of the Project, consultants to provide the necessary technical assistance for the Five-Year Highway Maintenance Program and for the Training Pro- gram; and (e) with respect to Part C (3) of the Project, consultants to provide technical assistance on labor-based techniques for the Pilot Rural Roads Program and related institutional improvements. Section 3.03. The Borrower shall: (a) enter into a contract, the terms and conditions of which shall be satisfactory to the Bank, to take effect not later than March 31, 1980, for the ser- vices of the consultants referred to in Section 3.02 (d) of this Agreement, with respect to Part B (2) and (3) of the Project; and (b) cause DGC to review, not later than December 31, 1980, in consultation with the Bank, the technical assistance requirements under Part B (2) of the Project. Section 3.04. The Borrower shall cause SEOPC: (a) to establish, and maintain adequately staffed there- after, the Production Training Unit to carry out the Training Program and provide, promptly as needed, the necessary facilities, funds, equipment and other resources as shall be required for the efficient operation thereof; and (b) to employ, contemporaneously with the initiation of technical assistance services under Part B (3) of the Project, local instructors, whose qualifications, experience and terms and -5- conditions of employment shall be satisfactory to the Bank, to work for approximately twelve months with the consultants referred to in Section 3.02 (d) of this Agreement. Section 3.05. The Borrower shall: (a) adopt, starting in the 1980 fiscal year, a budgeting system under which: (i) the highway maintenance budget shall be separate from other SEOPC activities; and (ii) the maintenance budget shall contain specific allocations for individual compo- nents, including, inter alia, labor, materials, equipment, fuel, administration and contracts for periodic maintenance; and (b) release, starting in the 1980 fiscal year, funds in accordance with the work programs in the budget. Section 3.06. The Borrower shall: (a) provide adequate funds, through its budget. for the carrying out of the Five-Year Highway Maintenance Fogram; and (b) exchange views with the Bank each year at the time of preparation of such budget on the funding and carrying out thereof. Section 3.07. In carrying out the road reconstruction items of the Highway Reconstruction Program not included in the Project, the Borrower shall give priority to such items over other highway capital expenditures not included in such Program. Section 3.08. The Borrower shall: (i) cause all national roads of the Borrower to be adequately maintained and cause all necessary repairs thereof to be made, all in accordance with appropriate engineering practices; (ii) cause all road maintenance equipment and workshops of SEOPC to be adequately maintained and cause all necessary repairs and renewals thereof to be made, all in accordance with appropriate engineering practices; (iii) carry out the Five-Year Highway Maintenance Program in accordance with the Final Report on Planning for Highway Maintenance and Rehabilitation dated January 1979 and prepare and adopt an annual maintenance plan based on the recommendations contained in such Report; and (iv) cause SEOPC to review with the Bank, not later than December 31, 1981, the coordination of its maintenance activities and secondary and rural road construction activities to ensure adequate equipment management and maintenance. -6- Section 3.09. The Borrower shall, from time to time, review, jointly with the B1ank, the arrangements adopted by SEOPC, the carrying out of the Project, including the staffing of, and the coordination among the administrative subdivisions of SEOPC involved in the Project. Section 3.10. The Borrower shall: (a) establish, not later than June 30, 1980 and maintain thereafter, the Reconstruction Planning Unit within DGPP, to plan, program and study the economic and technical feasibility of projects for the Highway Reconstruction Program; (b) appoint, not later than December 31, 1980, the staff for the Reconstruction Planning Unit, whose qualifications, experience and terms and conditions of employment shall be satis- factory to the Bank; and (c) without limiting the generality of the provisions in Section 3.01 of this Agreement, provide, or cause. to be pro- vided, the Reconstruction Planning Unit, promptly as needed, with the facilities, funds, equipment and other resources as shall be required for the efficient operation thereof. Section 3.11. The Borrower shall cause SEOPC: (a) to monitor, on a continuing basis, and make an annual assessment of, on the basis of targets agreed with the Bank, the availability and utilization of its equip.ment fleet; (b) to adopt, not later than June 30, 1981, adequate proce- dures for the systematic renewal, overhaul and scrapping of its equipment fleet; and (c) to review, at the time of the annual maintenance review, jointLy with the Bank, the renewal, overhaul and scrapping plan for the following calendar year. Section 3.12. The Borrower shall prepare a study on and shall thereafter enact, on the timetable agreed with the Bank, appro- priate vehicle axle-load and dimension regulations. Section 3.13. The Borrower shall establish, not later than June 30, 1980 and maintain thereafter with an adequate staff, a labor-based construction unit within DGCV to carry out the Pilot -7- Rural Roads Program and provide, promptly as needed, the necessary facilities, funds, equipment and other resources as shall be required for the efficient operation thereof. Section 3.14. (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. (c) The Borrower shall cause the equipment and spare parts financed out of the proceeds of the Loan to be purchased on the basis of the acquisition list and procurement schedule agreed to with the Bank. Section 3.15. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract 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 Borrower: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (in- cluding its cost 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 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 -8- 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 3.16. The Borrower shall take, or cause to be taken, all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out the Project and shall furnish to the Bank, promptly after such acquisition, evidence satisfactory to the Bank that such land and rights in respect of land are available for purposes related to the Project. ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member con- cerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distri- bution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the alloca- tion, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto, and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptlyV and at no cost to the Bank, secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, -9- 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. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative subdivision thereof and of any entity owned or controlled by, or operating for the acc' unt or benefit of, the Borrower or any such subdivision, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section 4.02. The Borrower shall maintain or cause to be maintained records, including separate accounts for the Project, adequate to reflect in accordance with consistently maintained sound accounting practices the operations, resources and expendi- tures, 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. The Borrower shall have: (i) the accounts referred to in Section 4.02 of this Agreement for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent audit(cs acceptable to the Bank; (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, 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 referred to in (i) above and the audit thereof as the Bank shall from time to time reasonably request. Section 4.04. The Borrower shall take all action, including the granting of all necessary authorizations, import licenses, foreign exchange permits and all other approvals required under the laws of the Borrower, to ensure the timely procurement of the goods and services required for the Project. ARTICLE V Effective Date; Termination Section 5.01. The date 85~t 19j is hereby specified for the purpose of SL!rtion 12.04 of the General Condi- tions. - 10 - ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Secretario de Estado de Obras PG'blicas y Comunicaciones 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: Secretarla de Estado de Obras PGblicas y Comunicaciones Ave. San Crist6bal, Ensanche la Fe Santo Domingo, D.N. Dominican Republic Cable address: Secretarfa de Obras PGiblicas y Comunicaciones Santo Domingo, D.N. 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) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused - 11 - this Agreement to be signed in their respective names in Santo Domingo, DN, Dominican Republic, and delivered in the District of Columbia, United States of America, as of the day and year first above written. DOMINICAN REPUBLIC By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Latin erica and the Caribbean - 12 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of imported items to be financed out of the proceeds of the Loan and the allocation of amounts of the Loan to each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works under 15,000,000 63% Parts A (1) and C (1) of the Project and training facilities under Part B (3) of the Project (2) Equiement, spare parts and workshop tools: (a) Under Part B 9,650,000 (2) (d) (b) Under Part B 550,000 (3) (c) (c) Under Part C (4) 450,000 (i) directly 100% of foreign imported expenditures (ii) imported and procured locally 95% (3) Consultants' services 1,700,000 63% under Parts A (2) and A (3) of the Project (4) Consultants' services 1,400,000 80% under Parts A (4), B (2), B (3) and C (3) of the Project - 13 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (5) Per diem of SEOPC 500,000 100% trainees under Part B (3) of the Project (6) Unallocated 5,750,000 TOTAL 35,000,000 2. For the purposes of this Schedule, the term "foreign expen- ditures" 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. 3. The disbursement percentages have been calculated in compli- ance 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: (a) payments made for expenditures prior to the date of this Agreement; and (b) payments for expenditures under Category (1) for civil works under Part A (1) of the Project until the Borrower has furnished to the Bank evidence satisfactory to the Bank of the employment of the consultants referred to in Section 3.02 (a) of this Agreement. - 14 - 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in para- graph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insuffi- cient 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 realloca- tion 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 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. - 15 - SCHEDULE 2 Description of the Project The Project includes the Five-Year Highway Maintenance Program and includes part of the Highway Reconstruction Program. The Project consists of the following: Part A: Road Reconstruction (1) Reconstruction of about 150 kilometers of roads under the Highway Reconstruction Program for the 1980-1982 neriod. (2) Provision of about 264 man-months of construction supervision and related technical assistance for the reconstruction works. (3) Detailed engineering design for the reconstruction of about 317 kilometers of additional roads under the Highway Reconstruction Program. (4) Establishment within DGPP of the Reconstruction Planning Unit for the purpose of planning, programming and studying the economic feasibility of projects for the Highway Reconstruction Program and provision of about 15 man-months of technical assistance for such purpose. Part B: Maintenance and Training Program (1) Carrying out of the Five-Year Highway Maintenance Program. (2) Strengthening of SEOPC's maintenance capacity by the adoption, with the provision of about 46 man-months of technical assistance, of measures for: (a) the consolidation of systems for equipment manage- ment and accounting and for overall maintenance; (b) planning for the inclusion of the feeder roads network into the overall maintenance management system; (c) ensuring that the 18 workshops are in full operat- ing condition; - 16 - (d) the selection and procurement of about 200 units of equipment, spare parts therefor and spare parts to establish basic stocks for preventive maintenance and to overhaul existing equipment; (e) putting into effect improved administrative procedures; (f) developing an overall personnel management system; and (g) rehabilitation of about 50 units of equipment. (3) Carrying out, with the provision of technical assis- tance, of the Training Program, including: (a) the establishment and operation of the Produc- tion Training Unit; (b) the strengthening of SEOPC's training unit; (c) the purchase of training equipment and materials; (d) the organization of workshops; and (e) the overseas training of senior maintenance engineers. Part C: Pilot Rural Roads Program (1) Carrying out of the pilot program for the 1980-1982 period for the construction of about 200 kilometers of rural roads utilizing labor-based techniques and employ- ing for the purpose labor force available and to be contracted in the rural areas where the roads will be located. (2) The adoption of related institutional improvements, including the development of planning and administrative procedures and a staff training program. (3) The provision of technical assistance for such purposes. - 17 - (4) The acquisition and utilization of the equipment re- quired to supplement the labor-based techniques for purposes of (1) above. Parts A and C of the Project are expected to be completed by December 31, 1982 and Part B of the Project is expected to be completed by December 31, 1984. - 18 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each March 1 and September 1 beginning September 1, 1984 through September 1, 1996 1,345,000 On March 1, 1997 1,375,000 * 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 equiva- lents determined as for purposes of withdrawal. - 19 - 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 1.40% More than three years but not more than six years before maturity 2.80% More than six years but not more than eleven years before maturity 5.15% More than eleven years but not more than fifteen years before maturity 7.00% More than fifteen years before maturity 7.95% - 20 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Part B 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: (a) 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; and (b) customs duties and other import taxes levied in connection with the importation, or the sales or 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. 4. (a) With respect to any contract for civil works to be procured in accordance with the provisions of paragraph 1 above, contractors shall be required to prequalify. - 21 - (b) For bidding purposes, civil works under Part A of the Project shall be divided into five lots in a manner acceptable to the Bank. (c) For bidding purposes, goods to be procured in accordance with the provisions of paragraph 1 above, shall be divided into lots, to the extent practicable, in such manner as shall be agreed between the Borrower and the Bank, prior to issuing the invitation to bid. B. Other Procurement Procedures 1. Contracts for goods with an estimated cost of less than the equivalent of $50,000, up to a maximum aggregate amount of the equivalent of $500,000, may be procured in accordance with local competitive bidding procedures satisfactory to the Bank. 2. Notwithstanding the above, contracts for the purchase of spare parts for existing equipment with an estimated cost of less than the equivalent of $50,000, up to a maximum aggregate amount of the equivalent of $500,000, may be procured directly from established dealers in accordance with local procedures satisfac- tory to the Bank. 3. Bidding documents and model contracts for the contracts referred to in 1 and 2 above shall be satisfactory to the Bank. C. Review of Procurement Decisions by the Bank 1. Review of prequalification. The Borrower shall, before qualification is invited, inform the Bank in detail of the procedure to be followed, and shall introduce such modifications in said procedure as the Bank shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any appli- cant for prequalification shall be furnished by the Borrower to the Bank for its comments before the applicants are notified of the Borrower's decision, and the Borrower shall make such addi- tions 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 estimated to cost the equiva- lent of $50,000 or more: - 22 - (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, by the consultants referred to in Section 3.02 of this Agreement, on the evaluation and com- parison 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 deter- mines 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 bis 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 submis- sion 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 not governed by the preceding paragraph, the Borrower 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 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. - 23 - 4. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an exten- sion of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 20% 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. D. Procurement Without Contracting Civil works under Part C of the Project may be carried out by the Borrower by force account. 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 - day of , 1932_ FOR SECRETARY