Tanzania - Fifth Highway Project : Credit 0876 - Development Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 876 TA Development Credit Agreement (Fifth Highway Project) between UNITED REPUBLIC OF TANZANIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated March 2, 1979 CREDIT NUMBER 876 TA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated March 2, 1979, between UNITED REPUBLIC OF TANZANIA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). 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 Agree- ments 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 General Conditions have the respective meanings therein set forth. 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 equivalent to twenty million five hundred thousand dollars ($20,500,000). 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 The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement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 Association, 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. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agreement. - 2 - Section 2.04. The Closing Date shall be December 31, 1984, or such later date as the Association shall establish. The Association 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service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time.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 April 15 and October 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each April 15 and October 15 commencing April 15, 1989, and ending October 15, 2028, each installment to and including the installment payable on October 15, 1998, to be one-half of one per cent (1/2 of 1%) -f 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. The Borrower shall carry out the Project through its Ministry of Works with due diligence and efficiency in accordance with the provisions of Schedule 2 to this Agreement and in conformity with appropriate administrative, financial and engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. (a) In order to assist the Borrower in: (i) planning and initiating project implementation, in preparing specifications and documents for equipment procurement and in carrying out Part C.1 of the Project, the Borrower shall employ qualified and experienced advisors to the (A) Maintenance Manage- ment Engineer, (B) Maintenance Administrator, and (C) Plant and Procurement Engineer; and (ii) on-the-job training for staff and field personnel of the Ministry of Works, the Borrower shall - 3 - employ qualified and experienced advisors; all on terms and conditions satisfactory to the Borrower and the Association and in accordance with Schedule 4 to this Agreement. (b) The Borrower shall appoint local staff, having qualifi- cations and experience satisfactory to the Borrower and the Association, to each position in the Ministry of Works maintenance section to which advisors are to be provided under the Project in accordance with the foregoing paragraph (a) prior to the date such advisors are employed, but in any event not later than December 31, 1979, or such later date as the Association may accept. (c) In r-der to assist the Borrower in carrying out Part C.3 of the Project, the Borrower shall employ, or continue to employ, qualified and experienced advisors, all on terms and conditions satisfactory to the Borrower and the Association and in accordance with Schedule 4 to this Agreement. Section 3.03. In carrying out Parts A.2 and A.4 of the Project the Borrower shall employ or cause to be employed con- tractors acceptable to the Borrower and the Association upon terms and conditions satisfactory to the Borrower and the Association, or if the Association shall agree, carry out such parts of the Project by force account. Section 3.04. With respect to Part C.2 of the Project, the Borrower shall, by June 1, 1979, make arrangements satisfactory to the Borrower and the Association for the training for its Ministry of Works of approximately 120 high school graduates in an engineering program at appropriate institutions of higher educa- tion. Section 3.05. The Borrower shall, by March 31, 1979, or such later date as the Association may accept, adopt a management system (with operational guidelines) which, in a manner consistent with the Borrower's overall decentralization policies, would ei,able its Ministry of Works to determine and exercise full authority over trunk road maintenance programs and to control trunk road maintenance equipment. The Borrower shall develop a program in consultation with the Association to implement such management system. Section 3.06. The Borrower shall by April 30, 1979, and by each April 30 thereafter until the Project has been completed, submit, or cause to be submitted, to the Association for its review a detailed annual project implementation program, including exact locations, designs, construction details, cost estimates, proposed budgetary allocations, and actions to be taken in connec- tion with the program referred to in Section 3.05 of this Agree- ment. Section 3.07. The Borrower shall prepare a two-year program, satisfactory to the Borrower and the Association, for the recruit- ment and training of trainees in the Morogoro Training School of the Ministry of Works. Section 3.08. With respect to Part B of the Project, the Borrower shall submit, or cause to be submitted, by December 31, 1979, or such later date as the Association may accept, to the Association for its review and approval a detailed implemen- tation program, including a list of spare parts for repair and rehabilitation of existing regional equipment and a plan for deploying technical assistance. Section 3.09. (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 Credit 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 Association shall otherwise agree, all goods and services financed out of the proceeds of the Credit shall be used exclusively for the Project until its completion. Section 3.10. (a) The Borrower 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) The Borrower: (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 -5- 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 expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. (c) Promptly after completion of the Project, but in any event not later than three months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Association, the Borrower shall prepare and furnish to 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 the Borrower and the Association of their respective obligations under the Development Credit Agreement and the accomplishment of the purposes of the Credit. Section 3.11. The Borrower shall take 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. ARTICLE IV Other Covenants Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with con- sistently maintained appropriate accounting practices the opera- tions, 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 4.02. The Borrower shall cause all Project road camps, workshops, road maintenance equipment and related facili- ties to be operated and adequately maintained and all necessary repairs thereof to be made in accordance with appropriate engi- neering practices. Section 4.03. The Project road mair'enance and rehabilitation equipment, including related worksho,, equipment, spare parts -6- and tools will only be deployed for use (a) by the ancillary plant pool, after the advisor to the mechanical supervisor is in post; and (b) by road maintenance rehabilitation and regravelling crews, after the respective advisors to the trunk road maintenance superintendents, road works superintendents and equipment service managers are in post. Section 4.04. The Borrower shall make, or cause to be made, regular and systematic traffic counts on its trunk road network. Section 4.05. The Borrower shall progressively apply and continue to apply its increased road maintenance capacity and improved road maintenance capability assisted and developed under this Project and the Highway Maintenance Project (described in the Development Credit Agreement between the Borrower and the Associ- ation dated August 21, 1974) to the maintenance of its trunk roads system in accordance with sound engineering and financial practices and shall promptly provide the funds required for the foregoing. 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 advisors referred to in Section 3.02 (a) (i) shall be in post; and (b) the following local staff of the Ministry of Works shall have been appointed in post in accordance with Section 3.02 (b): Maintenance Management Engineer, Maintenance Administrator, Plant and Procurement Engineer, Mechanical Supervisor, one Trunk Road Maintenance Superintendent and one Roadworks Super- intendent. Section 5.02. The date May 31, 1)79, is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.03. The obligations of the Borrower under Sections 4.02, 4.04 and 4.05 of this Agreement shall cease and determine on -7- the date on which the Development Credit Agreement shall terminate or on a date twelve years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. The Minister of the Borrower at the time responsible for Finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Condi- tions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Finance and Planning P.O. Box 9111 Dar es Salaam Tanzania Cable address: TREASURY Dar es Salaam 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.Co 248423 (RCA) or 64145 (WUI) - 8 - 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. UNITED REPUBLIC OF TANZANIA By Is/ Paul Bomani Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Is! Willi A. Wapenhans Regional Vice President Eastern Africa -9- 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 be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Road maintenance and 12,840,000 100% of foreign workshop equipment, expenditures and vehicles, materials, 70% of local tools, training aids expenditures and spare parts (2) Civil works: (a) Road camps 360,000 15% (b) Housing 200,000 40% (3) Technical assistance and training for: (a) Parts A, B and 2,430,000 100% of foreign C.1 of the Proj- expenditures ect (b) Part C.2 of 1,250,000 100% of foreign the Project expenditures (c) Part C.3 of 420,000 100% of foreign the Project expenditures (4) Unallocated 3,000,000 TOTAL 20,500,000 - 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 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 noti,ce 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: (a) payments made for expenditures prior to the date of this Agreemeut, except that withdrawals, in an aggregate amount not exceeding the equivalent of $40,000 may be made in respect of Category 3 (a) on account of payments made for expenditures for technical assistance provided for in Section 3.02 (a) (i) of this Agreement before that date but after January 1, 1979; and (b) expenditures for technical assis- tance and training under Category 3 (c) until the program referred to in Section 3.07 shall have been agreed upon between the Bor- rower and the Association. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 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 allo- cated to another Category and which in the opinion of the Associ- ation are not needed to meet other expenditures; and (ii) if such - 11 - 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 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 Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financ- ing out of the proceeds of the Credit. - 12 - SCHEDULE 2 Description of the Project The Project is the second stage of the Borrower's program to improve the maintenance of trunk roads throughout Tanzania, and includes a pilot program for regional road maintenance. The Project includes the following Parts: Part A: Road Maintenance 1. The maintenance (including, where necessary, the rehabilitation) of about 2,700 kilometers of the 5,100 kilometers of trunk roads in the following regions: Arusha, Dodoma, Kigoma, Kilimanjaro, Mara, Mwanza, Rukwa, Shinyanga, Singida, Tabora and West Lake. 2. The construction and improvement, where necessary, of road camps along the roads included in Part A.1 of the Project. 3. The provision of road maintenance and workshop equip- ment, vehicles, spare parts, tools, training aids and materials for use by (a) the Ministry of Works' zonal workshops, (b) the Ministry of Works' training school at Morogoro, and (c) the maintenance crews carrying out Part A.1 of the Project. 4. The construction of about 16 houses for use by advisors under Part C.1 of the Project. Part B: Pilot Program for Regional Road Maintenance Carrying out a pilot program to strengthen and improve Mwanza Region and Zanzibar road maintenance through equipment repair and rehabilitation and technical assistance. Part C: Technical Assistance and Training 1. Strengthening the capabilities of the Borrower's Ministry of Works by the provision of technical assis- tance in training on-the-job and planning. 2. Training of engineers for the Borrower's Ministry of Works. - 13 - 3. The provision of additional advisors to the instructors for the Morogoro Training School of the Ministry of Works. Part D: Ministry of Works Staffing Carrying out a review of Ministry of Works staffing to improve manpower allocation and utilization within the Ministry. The results and recommendations of this review, including an implementation schedule, shall be furnished to the Association for comment by March 31, 1979, or such later date as the Association may accept. The Project is expected to be completed by June 30, 1984. - 14 - SCHEDULE 3 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 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. 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 compe- titive bidding. 3. Technical specifications and lists of equipment to be pur- chased for the zonal workshops included in Part A.3 (a) of the Project shall be submitted to the Association for its review and approval. 4. Orders shall be grouped to the maximum extent possible for the purposes of bidding and procurement. 5. Suppliers of equipment to be procured in accordance with paragraph 1 above will be required to provide in Tanzania services for the training of mechanics, service personnel and equipment operators, and to maintain in Tanzania an adequate service organization, including a reasonable inventory of spare parts. 6. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international - 15 - 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 the Borrower 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 goods in accordance with the procedures described in Part A of this Schedule, goods manufactured in Tanzania 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 Tanzania if the bidder shall have established to the satisfaction of the Borrower and the Associa- tion that the manufacturing cost of such goods includes a value added in Tanzania equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Tanzania. (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. - 16 - 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 c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to: (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid; or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph 3 is the lowest evaluated bid shall be selected. C. Other Procurement Procedures 1. Contracts for training aids for Part A.3 (b) of the Project may be awarded in accordance with the Borrower's applicable competitive bidding procedures. Lists of such training aids will be submitted to the Association for its review and approval. 2. Contracts for spare parts for rehabilitation of existing equipment for Part B of the Project may be awarded in accordance with the Borrower's applicable procedures. Lists of such spare parts will be submitted to the Association for its review and approval. 3. Off-the-shelf items estimated to cost less than $15,000 equivalent each may be procured in accordance with the Borrower's applicable procedures, provided that the maximum value of con- tracts awarded pursuant to this paragraph shall not exceed $200,000 equivalent. 4. If the Association shall so agree, contracts for civil works, including housing, may be awarded in accordance with the Bor- rower's applicable procedures, or such civil works, including housing, may be carried out by force account. D. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: - 17 - With respect to all contracts to be awarded pursuant to the provisions of Part A of this Schedule estimated to cost the equivalent of $100,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Association, for its comments, the text of the invita- tions 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 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, the Borrower 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 Associa- tion, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, together with the recommendations for award and such other information as the Association shall reasonably request. The Association 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 Association's concurrence, materially differ from those on which bids were asked. (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, the Borrower shall furnish 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, 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 - 18 - 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 issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 5% of the original price for contracts financed under Category (1) of Schedule 1, more than 25% of the original price for contracts financed under Category (2) of Schedule 1 and more than 15% for contracts financed under Category (3) of Schedule 1, the Borrower shall inform the Association of the proposed modifi- cation, 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 the Borrower and state the reasons for its determination. - 19 - SCHEDULE 4 Technical Assistance The table below sets forth the advisors to be employed in connection with the Project and the duration of their appoint- ments. Approximate Program/Post No. Man-months Road Maintenance Program Advisors to: Maintenance Management Engineer 1 36 Maintenance Administrator 1 36 Plant and Procurement Engineer 1 36 Mechanical Supervisor 1 30 Bridge and Culvert Superintendent 1 24 Trunk Road Maintenance Superintendent 5 132 Equipment Service Manager 5 126 Roadworks Superintendent 3 78 Morogoro Training School Advisors to: Training Coordinator 1 24 Mechanics Instructor 1 24 Roadworks Instructor 1 18 Electrical Systems Instructor 1 24