India - Maharasthtra Water Supply & Sewerage : Credit 0899 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 899 IN Development Credit Agreement (Maharashtra Water Supply and Sewerage Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated June 21, 1979 I CREDIT NUMBER 899 IN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 21, 1979, between INDIA, acting by its President (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association.) WHEREAS the Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; WHEREAS by an agreement of even date herewith between the Association and the Maharashtra Water Supply and Sewerage Board (hereinafter called MWSSB), MWSSB has agreed to undertake certain obligations in respect of the carrying out of the Project; WHEREAS by an agreement of even date herewith between the Association and the State of Maharashtra, acting by its Governor, (hereinafter called Maharashtra), Maharashtra has agreed, inter alia, to assist MWSSB in the carrying out of the said Project; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth, in the Project Agreement of even date herewith between the Association and MWSSB and in the Maharashtra Agreement of even date herewith between the Association and Maharashtra; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements of the Association 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 "A -2- General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project Agreement" means the agreement between the Association and MWSSB of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement; (b) "Maharashtra Agreement" means the agreement between the Association and Maharashtra of even date herewith, as the same may be amended from time to time; (c) "Act" means the Maharashtra Water Supply and Sewerage Board Act, 1976 which established the MWSSB, as amended from time to time; (d) "Six Towns" means the towns of Thane, Bhiwandi, Kalvan, Dombivli, Ulhasnagar and Ambernath, collectively; and "Town" means any of the Six Towns; (e) "Project Area" means the area comprising the Six Towns and about 1C4 villages to be serviced under the Project; and (f) "MIDC" means the Maharashtra Industrial Development Corporation established by the Maharashtra Industrial Development Act, 1961. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equiva- lent to forty-eight million dollars ($48,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit 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 Associ- ation, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. 1 II V"-3- Section 2.03. 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 the Project Agreement. Section 2.04. The Closing Date shall be June 30, 1984 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semiannually on January 15 and July 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Janu- ary 15 and July 15 commencing July 15, 1989, and ending Janu- ary 15, 2029, each installment to and including the installment payable on January 15, 1999, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the United Kingdom of Great Britain and Northern Ireland is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Borrower shall cause Maharashtra and MWSSB to perform in accordance with the provisions of the Maharashtra Agreement and the Project Agreement, respectively, all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable Maharashtra and MWSSB to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. 1 II (b) The Borrower shall make the proceeds of the Credit available to Maharashtra, for relending to MWSSB under arrange- ments to be entered into between Maharashtra and MWSSB pursuant to Section 2.02 of the Maharashtra Agreement, in accordance with the Borrower's standard arrangements for development assistance to the States of India. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the Gen ral Conditions th following additional events are specified pura-uant to paragraph (h) thereof: (a) a default shall have occurred in the performance of any obligation on the part of Maharashtra under the Maharashtra Agreement; (b) a default shall ha!e occurred in the performance of any obligation on the part of MWSSB under the Project Agreement; (c) Maharashtra or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of MWSSB or for the suspension of its operations; (d) an extraordinary situation shall have arisen which shall make it improbable that MWSSB or Maharashtra will be able to perform its obligations under the Project Agreement or the Maharashtra Agreement, respectively; and (e) Maharashtra shall have amended, suspended, or abrogated the Act in such a way as to materially and adversely affect the ability of MWSSB to carry out the obligations set forth in the Project Agreement. Section 4.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) any event specified in paragraph (a) or (b) of Section 4.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower, Maharashtra and MWSSB; and (b) any event specified in paragraph (c) or (e) of Section 4.01 of this Agreement shall occur. -5- ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the execution and delivery of the Project Agreement on behalf of MWSSB have been duly authorized or ratified by all necessary governmental and corporate action; (b) the execution and delivery of the Maharashtra Agreement on behalf of Maharashtra have been duly authorized or ratified by all necessary governmental action; and (c) the consulting engineers for the engineering design of the Project shall have been duly appointed pursuant to Section 2.02 (a) of the Project Agreement. Section-5.02. The following are specified as additional matters, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association: (a) that the Project Agreement has been duly authorized or, ratified by, and executed and delivered on behalf of, MWSSB and is legally binding upon MWSSB in accordance with its terms; and (b) that the Maharashtra Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, Maharashtra, and is legally binding upon Maharashtra in accordance with its terms. Section 5.03. The date September 20, 1979 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.04. The provisions of Section 4.02 (b) of this Agreement shall cease and determine on a date twenty years 1 -6- after the date of this Agreement or on the date on which the Development Credit Agreement shall terminate, whichever shall be the earlier. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Any Secretary, Additional Secretary, Joint Secretary, Director or Deputy Secretary in the Ministry of Fin- ance, Department of Economic Affairs 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 purpose of Section 11.01 of the General Conditions: For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: Telex: ECOFAIRS 953-313546 New Delhi For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cab1c address: Telex: INDEVAS 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. INDIA By /s/ N. A. Palkhivala Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ David Hopper Regional Vice President South Asia NII -8- SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to he financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Equipment and 30,600,000 materials: (a) directly 100% of foreign imported expenditures (b) manufactured 100% of local locally expenditures (ex-factory) (c) locally 50% procured (2) Civil works for water 12,000,000 75% supply (excluding distribution systems) (3) Consultants' ser- 2,800,000 100% vices and training (4) Unallocated 2,600.,000 TOTAL 48,000,000 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 -9- (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 Association that no proceeds of the Credit 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 Credit decreases or increases, the Association 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 Association. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expendi- tures prior to the date of this Agreement, except that with- drawals, in an aggregate amount not exceeding the equivalent of $500,000 may be made on account of payments made for expendi- tures on consultants' services before that date but after April 1, 1979. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 1 above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association 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 expen- ditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Association 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 pro- ceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the -10- Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Associ- ation's reasonable opinion, represents the amount of such expendi- tures which would otherwise have been eligible for financing out of the proceeds of the Credit. I -11T- SCHEDULE 2 Description of the Project The Project includes the augmentation of the existing piped water systems and the provision of sewage collection, sewage treatment and disposal facilities in the Six Towns as well as augmentation of water supplies in about 22 villages and provision of new piped water supplies in about 82 other villages in the Project Area. The Project consists of the following Parts: Part I: Water Supply A. 1. Construction of a water treatment plant and a pumping station with the initial capacity of about 200 million liters per day at Temghar; and 2. Renovation of the Badlapur water treatment plant and pumping station, to increase its capacity from 34 to about 50 million liters per day. B. Construction on the Ulhas River, near Shahad weir, of a water intake and a pumping station with a capacity of about 260 million liters per day and of a transmission main (including the necessary bridges) to the Temghar water treatment plant. C. Construction of (i) three transmission mains of about 3 kilometers in length each and (ii) of three service reser- voirs with a total capacity of about 22 million liters, all of the above to serve the towns of Thane and lhiwandi, and the villages in the northern part of the Project Area. D. Improvement of the water distribution system i.n (i) the towns of Thane and Bhiwandi and the villages in the northern part of the Project Area, through the construction of twelve new reservoirs wijth a total capacity of about 32 million liters, of two boos er pumping stations and of associated main networks a:id stand pipes; and (ii) the towns of Kalyan, Dombivli, Ulhasnagar, Ambernath and the villages in the southern part of the Project Area, through the construction of thirteen reservoirs with a total capacity of about 36 million liters, of two booster pumping stations and of associated mains and stand pipes. - 12 - E. Construction of (i) three booster pumping stations and of thirty-four distribution reservoirs with a total capacity of about 23 million liters and (ii) ten distribution reservoirs with a total capacity of about 11 million liters, to serve villages in the northern and southern parts of the Project Area, respectively. F. Construction of (i) about 118 kilometers of transmission mains (including the necessary bridges) and (ii) about 43 kilometers of transmission mains in the northern and southern parts of the Project Area, respectively. Part II: Sewerage A. Extension of the sewage collection and conveyance systems in Thane and Bhiwandi, including about 48 km of sewers, five sewage pumping stations and associated force mains, about 9,000 property connections, expansion of a primary sewage treatment plant from a capacity of 18 to about 62 million liters per day, and expansion of oxidation ponds from a capacity of 5.5 to about 20 million liters per day. B . Provision of sewage collection and conveyance systems, as well as primary sewage treatment plants, in Dombivli, Ulhasnagar and Ambernath, including about 168 km of sewers, ten sewage pumping stations and associated force mains, about 17,000 property connections (of which about 2,000 are in Kalyan) and minor surface water drainage works in Dombivli. Part III: Other Items A. Provision of workshops for the testing and repair of water meters, provision of bulk water meters and provision of vehicles and tools for the servicing of all such meters and the testing and repair of mains. B. Provision of consultants services and training to MWSSB. The Project is expected to be completed by September 30, 1983.