India - Second Maharashtra Irrigation Project : Credit 0954 - Project Agreement - Conformed

CREDIT NUMBER 954 IN Project Agreement (Second Maharashtra Irrigation Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and STATE OF MAHARASHTRA Dated , 1980 CREDIT NUMBER 954 IN PROJECT AGREEMENT AGREEMENT, dated 4/, 1980, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and STATE OF MAHARASHTRA, acting by its Governor (hereinafter called Maharashtra). WHEREAS by the Development Credit Agreement of even date herewith between India, acting by its President (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to two hundred and ten million dollars ($210,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Maharashtra agree to undertake such obligations toward the Association as are hereinafter set forth; and WHEREAS Maharashtra, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. Maharashtra shall carry out the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appro- priate administrative, financial and engineering practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. - 2 - Section 2.02. Except as the Association shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Credit, shall be governed by the provisions of the Schedule to this Agreement. Section 2.03. (a) Maharashtra undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit 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 Maharashtra to replace or repair such goods. (b) Except as the Association may otherwise agree, Maha- rashtra shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclusively for the Project. Section 2.04. (a) Maharashtra shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) Maharashtra: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use in the Project; (ii) shall enable the Association's accredited representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association at regular intervals all such information as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditures of such proceeds 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 Maharashtra and the Association, Maharashtra shall prepare and furnish to - 3 - the Association a report, of such scope and in such detail as the Association shall reasonably 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 Maharashtra and the Association of their respective obligations under the Credit Agreement and the accomplishment of the purposes of the Credit. Section 2.05. (a) Maharashtra shall at the request of the Association, exchange views with the Association 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 Credit. (b) Maharashtra shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by Maharashtra of its obligations under this Agreement. ARTICLE III Particular Covenants Section 3.01. Maharashtra agrees to: (a) carry out the works under Parts A and B of the Project in accordance with design and construction standards and planning criteria agreed between the Association and Maharashtra; and (b) operate and maintain the completed works under Parts A and B of the Project in accordance with procedures agreed betweeen the Association and Maharashtra. Section 3.02. In order to maintain quality control of the Project works, Maharashtra agrees to: (a) establish a quality control unit in each of the irriga- tion schemes under the Project, by January 1, 1980; and (b) appoint a senior engineer in Maharashtra's Department of Irrigation, who shall be responsible for the quality control units under Section 3.03 (a). Section 3.03. Maharashtra agrees: (a) to establish by October 1, 1980 and thereafter maintain a training program under Part G of the Project acceptable to the Association; and (b) to establish within the Command Area Development organization of Maharashtra's Department of Irrigation a cadre of land development and water management specialists and fill the established posts in such cadre as and when each distributary block is commissioned and as and when staff trained under the training program referred to under sub-section (a) above becomes available. Section 3.04. Maharashtra agrees to establish, in consulta- tion with the Association: (a) new water allocation procedures in the Project Area, such procedures to be in effect in each distributary block not later than two years after the first water delivery; and (b) a training and visit agricultural extension scheme in the Project Area, such scheme to be in effect in each distributary block not later than two years after the first water delivery. Section 3.05. Maharashtra agrees to take all necessary measures to minimize malaria and other water-related diseases in the Project Area. Section 3.06. Maharashtra agrees to cause the canal systems included in the Project to be operated and maintained in accor- dance with sound engineering practices and to provide each of its Command Area Development authorities with sufficient funds to carry out the said operation and maintenance. Section 3.07. Maharashtra agrees to maintain all the roads included in the Project in accordance with sound engineering practices and shall provide promptly as required, the funds, facilities and other resources required for the purpose. Section 3.08. Without limiting the generality of Section 2.01, Maharashtra shall, under arrangement satisfactory to the Association, cause the dams and related structures constructed under the Project to be periodically inspected in accordance with sound engineering practice in order to determine whether there are - 5 - any deficiencies in the condition of such structures, or in the quality and adequacy of maintenance or methods of operations of the same, which may endanger their safety. To this end, Maharashtra agrees to maintain an independent panel of experts with responsibility of advising on all Project dam engineering and construction in order that they conform to sound engineering practices, with special reference to dam safety, and carry out the recommendations of the said panel. Section 3.09. Maharashtra agrees, for the purpose of carrying out Part F of the Project, to establish by January 1, 1980 a monitoring and evaluation unit in the Office of the Command Area Development Commissioner. Section 3.10. Maharashtra agrees to: (a) complete by December 31, 1980, a review of its existing water and water-related charges in Mah,rashtra; and (b) commence by July 1, 1081, experimental schemes with different systems of volumetric charges to promote efficient water use by consumers, said schemes to be based on the findings of the review referred to in sub-Section (a) above and comments by the Association on the said review; and (c) commence by December 31, 1983, a system of volumetric charges based on the evaluation of the experimental schemes referred to in sub-Section (b) above. The system shall ensure direct recovery of annual operation and maintenance costs and, to the extent possible, cost of infrastructure investment, having regard, inter alia, to the incentive and repayment capacity of farmers and the overall budgetary requirements of Maharashtra. Section 3.11. Maharashtra agrees, after the completion of the Project, to continue the development of the irrigation schemes in Krishna, Kukadi, Upper Wardha, Upper Penganga and Warna and complete the said development as soon as it is technically and financially feasible to do so. ARTICLE IV Financial Covenants Section 4.01. Maharashtra shall cause each of its various departments or agencies responsible for carrying out any part of -6- the Project, to maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition in respect of the Project or any part thereof. Section 4.02. Maharashtra shall cause each of its various departments or agencies responsible for carrying out any part of the Project to: (i) have the accounts and financial statements for such part of the Project as the department or agency may be responsible, for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by indepen- dent auditors acceptable to the Association; (ii) furnish to the Association, as soon as available, but in any case not later than nine months after the end of each such year, (A) certified copies of the said 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 Association shall have reasonably requeste6; and (iii) furnish to the Association such other information concerning the said accounts and financial statements and the audit thereof as the Association shall from time to time reason- ably request. 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 Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of Maharashtra thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date 20 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify Maharashtra of this event. - 7 - Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. 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 herein- after 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 Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For Maharashtra: Chief Secretary to the Government of Maharashtra Mantralaya Bombay, India Cable address: Telex: RESTIS 011 2443 DGPR IN Bombay -8- 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 Maharashtra may be taken or executed by the Chief Secretary to the Government of Maharashtra or such other person or persons as Maharashtra shall designate in writing, and Maharashtra shall furnish to the Association 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 DEVELOPMENT ASSOCATION By Regional Vice President South Asia STATE OF MAHARASHTRA Byideen v Authorized Representative 9 SCHEDULE Procurement A. International Competitive Bidding 1. Except as provided in Part D hereof, goods and civil works for dams and main canals 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, Maharashtra shall prepare and forward to the Association 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 Association shall reasonably request; the Association 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. Maharashtra 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 compe- titive 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 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 Maharashtra of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. B. Preference for Domestic Manufacturers In the procurement of goodi in accordance with the procedures described in Part A of this Schedule, goods manufactured in - 10 - India may be granted a margin of preference in accordance 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 India if the bidder shall have established to the satisfaction of Maharashtra and the Association that the manufacturing cost of such goods includes a value added in India 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. 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 evaluated 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. 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 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 evaluated 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. - 11 - C. Preference for Domestic Contractors With respect to the evaluation of bids for any contract for civil works included under Category (1) of the table set forth in Schedule 1 to the Development Credit Agreement and to be procured in accordance with the procedures described in Part A of this Schedule, Maharashtra may grant a margin of preference of 7-1/2% to domestic contractors, in accordance with, and subject to, the following provisions: 1. Contractors applyin& for such preference shall be asked to provide, as part of the data for qualification, such informa- tion, including details of ownership, as shall be required to determine whether, according to the classification established by the Maharashtra and accepted by the Association, a particular firm or group of firms qualifies for a domestic preference. The bidding documents shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. 2. After bids have been received and reviewed by Maharash- tra, responsive bids will be classified into the following groups: (i) bids offered by domestic contractors eligible for preference; and (ii) bids offered by other contractors. For the purpose of evaluation and comparison of bids an amount equal to 7-1/2% of the bid amount shall be added to bids received under group (ii) above. D. Other Procurement Procedures 1. Contracts for civil works on dams and main canals estimated to cost the equivalent of $6,000,000 or less may be awarded on the basis of local competitive bidding in accordance with procedures satisfactory to the Association. 2. The manufacture and installation of gates for dams and canals may be carried ou!: departmentally. 3. Contracts for other civil works may be awarded on the basis of local competitive bidding in accordance with procedures satis- factory to the Association. - 12 - 4. Contracts for light equipment and vehicles may be awarded on the basis of competitive bidding advertised locally in accordance with procedures satisfactory to the Association. E. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts estimated to cost the equi- valent of $1,000,000 or more: (a) Before bids are invited, Maharashtra shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, to- gether with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, Maharashtra shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, in sufficient time for its review, a detailed report on the evalua- tion and comparison of the bids received, and such other infor- mation as the Association shall reasonably request. The Associa- tion shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform Maharashtra and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Association'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 Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, Maharashtra shall furnish to the Association, promptly - 13 - after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform Maharashtra and state the reasons for such determination. 3. Before agreeing to (a) any material modification or waiver of the terms and conditions of a contract, or (b) granting a material extension of the stipulated time for performance of such contract, or (c) 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, Maharashtra shall inform the Association of the proposed modi- fication, waiver, extension or change order and the reasons therefor. The Association, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform Maharashtra and state the reasons for its deter- mination.' INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the / day of 1980 FOR SECRETARY INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the ' day of , 1980. FOR SECRETARY