India - Kandy Watershed And Area Development Project : Loan 1897 - Project Agreement - Conformed

OFFICIAL LOAN NUMBER 1897 IN DOCUMVENTS Project Agreement (Kandi Watershed and Area Development Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and STATE OF PUNJAB Dated , 1980 LOAN NUMBER 1897 IN PROJECT AGREEMENT AGREEMENT, dated 40 14 , 1980, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and STATE OF PUNJAB, acting by its Governor (hereinafter called Punjab). WHEREAS by the Loan Agreement of even date herewith between India, acting by its President (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Bor- rower an amount in various currencies equivalent to thirty million dollars ($30,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that Punjab agree to undertake such obligations toward the Bank as are hereinafter set forth; and WHEREAS Punjab, in consideration of the Bank's entering into the Loan 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 Loan 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. Punjab shall carry out the Project described in Schedule 2 to the Loan Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial, agricultural 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. Section 2.02. In order to assist Punjab in the planning, implementation, monitoring and evaluation of the Project and other -2- purposes mutually agreed by the Bank and Punjab, Punjab shall employ consultants, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank and Punjab. Section 2.03. In order to facilitate the carrying out of the Project, Punjab shall: (a) appoint, at all times for the duration of the Project, a Project Coordinator to assist the Secretary of Agriculture and Forests of Punjab who shall be responsible for the overall imple- mentation of the Project. The said Project Coordinator shall head a Program Planning and Coordination Unit. (b) establish, and thereafter maintain: (i) a Policy Review Committee which shall be respon- sible for policy decisions affecting the Project; (ii) an Implementation Committee, which shall be respon- sible for coordinating the activities of the departments and agencies of Punjab implementing the Project; and (iii) a District Level Committee which shall be respon- sible for implementing the Project and coordinating interdepartmental activities in each of the dis- tricts of Punjab in which Parts A, B and C of the Project will be carried out. Section 2.04. 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 the Schedule to this Agreement. Section 2.05. (a) Punjab undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan 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 Punjab to replace or repair such goods. (b) Except as the Bank may otherwise agree, Punjab shall cause all goods and services financed out of the proceeds of -3- the Loan made available to it by the Borrower to be used exclu- sively for the Project. Section 2.06. (a) Punjab shall furnish to the Bank, 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 Bank shall reasonably request. (b) Punjab: (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 Loan, and to disclose their use in the Project; (ii) shall enable the Bank'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 Loan and any relevant records and documents; and (iii) shall furnish to the Bank at regular intervals all such information as the Bank 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) As part of the information referred to in subparagraph (iii) of paragraph (b) above, prepare and furnish to the Bank, every six. months, certificates of expenditures under the Project, audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank, and certifying that, inter alia, the funds withdrawn out of the proceeds of the Loan have been used for the purposes intended therefor, the goods, services or works financed out of such funds have been delivered or performed and payments for said goods, services or works have been made. (d) 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 Bank and Punjab, Punjab shall prepare and furnish to the Bank a report, of such scope and in such detail as the Bank 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 Punjab and the Bank of their respective obligations under the Loan Agreement and the accomplishment of the purposes of the Loan. -4- Section 2.07. (a) Punjab shall at the request of the Bank, exchange views with the Bank 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 Loan. (b) Punjab shall promptly inform the Bank of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Loan, or the performance by Punjab of its obligations under this Agreement. Section 2.08. Punjab 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, if requested by the Bank, 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. Section 2.09. Punjab shall ensure that all lands rehabili- tated under Part A of the Project are closed to livestock grazing and unauthorized extraction of fuel wood and timber. Section 2.10. Punjab shall, in respect of works other than those for the watershed in Dholbaha, under Parts A, B and C of the Project: (a) select about ten watersheds representative of water- sheds generally in terms of problems encountered in the Project Area, and prepare feasibility plans for the said ten watersheds by March 31, 1985; (b) select about four watersheds for implementation of the said works under the Project on the basis that each of the watersheds shall be technically feasible, and shall have an economic rate of return of not less than about 12 per cent or such other rate as the Bank may otherwise agree; (c) if any of the watersheds shall not meet the basis specified in (b) above, substitute such watershed with another from among the other six watersheds, which shall meet the said basis; -5- (d) furnish the detailed implementation plans for the water- sheds selected under the said basis together with a detailed explanation of the reasons for the selection, to the Bank for review. Section 2.11. Punjab shall, by December 31, 1980, prepare and furnish to the Bank for review and comment by the Bank, a detailed program for the carrying out of the research work under Part D of the Project. Section 2.12. Punjab shall cause the Punjab Agricultural University, to prepare and furnish through Punjab to the Bank, by December 31, 1980, for review and comment by the Bank, detailed proposals for the said University to conduct a continuous evalu- ation of the economic and social effects of the Project on the beneficiaries of the Project, the results of such evaluation to be furnished in the form of yearly reports to the Bank through Punjab. Section 2.13. Punjab shall furnish the details of a compre- hensive program to improve the social and economic conditions of farmers and livestock owners affected by the implementation of Part A of the Project, to the Bank for review. In the case of Dholbaha, Punjab shall furnish the said details of the compre- hensive program to the Bank by December 31, 1980. ARTICLE III Other Covenants Section 3.01. Punjab shall cause its departments and agencies responsible for carrying out the Project or any part thereof to maintain separate records in respect of the Project, adequate to reflect in accordance with consistently maintained appropriate accounting practices their operations, resources and expenditures. Section 3.02. Punjab shall, in respect of the Project: (i) have the accounts and financial statements of the departments and agencies referred to in Section 3.01 of this Agreement for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors accept- able to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than nine months after the end of each such year, (A) certified copies of said financial statements for such year as so audited and (B) the report of such audit by -6- 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 said accounts and financial statements and the audit thereof as the Bank shall from time to time reasonably request. Section 3.03. (a) Punjab shall cause its independent panel of experts to periodically examine the concept, the design and the construction of the dams and spillways included in the Project until their completion. (b) Punjab shall cause the dams, spillways, irrigation canals and flood channels constructed under the Project to be periodically inspected in accordance with sound engineering practices in order to determine whether there are any deficiencies in the condition of such structures, or in the quality and ade- quacy of their maintenance or methods of operation which might endanger their safety. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which the Loan Agreement becomes effective. Section 4.02. This Agreement and all obligations of the Bank and of Punjab thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms, and the Bank shall promptly so notify Punjab thereof. Section 4.03. All the provisions of this Agreement shall con- tinue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE V Miscellaneous Provisions Section 5.01. 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, -7- cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have des- ignated by notice to the party giving such notice or making such request. The addresses so specified are: 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) For State of Punjab: Secretary of Agriculture and Forests Government of Punjab Chandigarh Punjab India Cable address: Secretary of Agriculture and Forests Government of Punjab Chandigarh Punjab India Section 5.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of Punjab may be taken or executed by Secretary of Agriculture and Forests or such other person or persons as Punjab shall designate in writing, and Punjab shall furnish to the Bank sufficient evidence of the authority and the authenticated specimen signature of each such person. -8- Section 5.03. This Agreement may be executed in several coun- terparts, each of which shall be an original, and all collectively but one instrument. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment 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 BANK FOR RECONSTRUCTION AND DEVELOPMENT ByA/ V2' d Yooo~ Regional Vice President South Asia STATE OF PUNJAB By Authorized Representative -9- SCHEDULE Procurement A. Except as provided in Part B hereof, contracts for goods and civil works siiall be procured on the basis of competitive bidding advertised locally under procedures satisfactory to the Bank. B. (1) Civil works under Parts A and C of the Project may be carried out departmentally. (2) Civil works not in excess of 30% of the total of civil works under Part B of the Project may be carried out departmentally, (3) Equipment shall be bulked wherever possible and (i) if the value of such equipment is estimated to cost $100,000 or more, it shall be procured on the basis of competitive bidding advertised locally under procedures satisfactory to the Bank; and (ii) if the value of such equipment is estimated to cost less than $100,000 equivalent it may be procured by prudent shopping through normal commercial channels under procedures satisfactory to the Bank. (4) Field vehicles and cattle and sheep, may be procured through prudent shopping in accordance with procedures satisfactory to the Bank. C. 1. With respect to all contracts for civil works, vehicles and equipment estimated to cost the equivalent of $100,000 or more: (a) Before bids are invited, Punjab 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, Punjab shall, before a final decision on the award is made, inform - 10 - the Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform Punjab and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the sub- mission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, Punjab shall furnish to the Bank, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations 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 Punjab 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 exten- sion of the stipulated timi 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 15% of the original price, Punjab 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 Punjab and state the reasons for its determination. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this /A day of & l, 198O . FOR SECRETARY