Tanzania - Pyrethrum Project : Credit 1007 - Project Agreement - 2 - Conformed

REDIT NUMBER 1007 TA Project Agreement (Pyrethrum Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and TANGANYIKA PYRETHRUM BOARD Dated , 1980 CREDIT NUMBER 1007 TA PROJECT AGREEMENT AGREEMENT, dated 9 Q- kA , 1980, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and TANGANYIKA PYRETHRUM BOARD (hereinafter called TPB). WHEREAS by the Development Credit Agreement of even date herewith between the United Republic of Tanzania (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to ten million dollars ($10,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that TPB agree to undertake such obligations toward the Association as are hereinafter set forth; and WHEREAS by a subsidiary loan agreement to be entered into between the Borrower and TPB, a portion of the proceeds of the credit provided for under the Development Credit Agreement will be made available to TPB on the terms and conditions therein set forth; and WHEREAS TPB, 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. TPB shall carry out Parts A and B of the Project described in Schedule 2 to the Development Credit Agree- ment with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices. - 2 - Section 2.02. (a) In order to assist in strengthening TPB's accounting and financial capabilities, TPB shall, after consulta- tion with the Association, employ a qualified and experienced Financial Controller, whose terms and conditions of employment shall be satisfactory to the Borrower and the Association. (b) In order to assist TPB in the planning, management and implementation of Part A of the Project, TPB shall, after consul- tation with the Association, employ by not later than November 30, 1980, or such later date as shall be agreed upon between TPB and the Association, two qualified and experienced agronomists, one as a Field Agronomist and the other as a Planning and Production Agronomist, whose terms and conditions of employment shall be satisfactory to the Borrower and the Association. (c) In order to strengthen the staff of TPB, TPB shall employ qualified and experienced persons for the positions of Transport Officer, Cost Accountant, Internal Auditor, Planning Officer, Statistical and Evaluation Officer, and Procurement Officer. (d) In order to assist in the improvement of TPB's transport management systems, TPB shall employ consultants whose qualifica- tions, experience and terms and conditions of employment shall be satisfactory to the Borrower and the Association. (e) In order to assist in the improvement of flower-drying techniques, TPB shall employ experts whose qualifications, experi- ence and terms and conditions of employment shall be satisfactory to the Borrower and the Association. Section 2.03. TPB shall prepare and furnish to the Associa- tion for its review and comment not later than March 31 of each year until the completion of the Project, an annual work program covering the fiscal year commencing on the following July 1. Each annual work program shall set out the detailed proposals of TPB for the carrying out of Parts A and B of the Project in the period to which it relates. Section 2.04. TPB shall, until the completion of the Project and thereafter, continue the production and distribution to farmers of improved planting materials. - 3 - Section 2.05. TPB shall establish a credit scheme pursuant to which its staff may purchase motorcycles financed out of the proceeds of the Credit and shall make provision for the payment of operating allowances to staff making purchases under such scheme. Section 2.06. Except as the Association shall otherwise agree, procurement of the goods and civil works required for Parts A and B of the Project and to be financed out of the proceeds of the Credit, shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. Section 2.07. (a) TPB undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit allocated to Parts A and B of the Project and relent or made available to it by the Borrower 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 TPB to replace or repair such goods. (b) Except as the Association may otherwise agree, all goods and services financed out of the proceeds of the Credit allocated to Parts A and B of the Project and relent or made available to TPB by the Borrower shall be used exclusively for the Project until its completion. Section 2.08. (a) TPB shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for Parts A and B of the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) TPB: (i) shall maintain records and procedures adequate to record and monitor the progress of Parts A and B 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 Parts A and B of the Project; (ii) shall enable the Association's accredited represen- tatives to visit the facilities and construction sites included in Parts A and B of the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and docu- ments; and (iii) shall furnish to the Association at regular intervals all such information as the Association shall reasonably request concerning Parts A and B of the Project, its cost and, where appropriate, the benefits to be derived from it, the expend- itures 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 TPB and the Association, TPB 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 TPB, UAC, MOW, RIMU and the Association of their respective obligations under the Development Credit Agree- ment, the UAC Project Agreement, the TPB Project Agreement and the Subsidiary Loan Agreement and the accomplishment of the purposes of the Credit. (d) TPB sb/all enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment of TPB and any relevant records and docu- ments. Section 2.09. TPB shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Association shall otherwise agree, TPB shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Loan Agreement or any provision thereof. Section 2.10. (a) TPB shall at the request of the Associa- tion, exchange views with the Association with regard to the progress of Parts A and B of the Project, the performance of its obligations under this Agreement and under the Subsidiary Loan Agreement, and other matters relating to the purposes of the Credit. (b) The Association and TPB shall promptly inform each other of any condition which interferes or threatens to interfere with the progress of Parts A and B of the Project, the accomplishment of the purposes of the Credit, or the performance by TPB of its obligations under this Agreement and under the Subsidiary Loan Agreement. Section 2.11. TPB shall, by not later than August 31, 1981, or such later date as the Association shall agree, update its accounts, design and begin the implementation of, an improved financial accounting, control and information system. -5- ARTICLE III Management and Operations of TPB Section 3.01. TPB shall carry out its undertakings under the Project and shall conduct its affairs in conformity with sound administrative, agricultural, financial and technical practices, under qualified and experienced management and staff in adequate numbers. Section 3.02. TPB shall operate and maintain, repair and replace all vehicles, facilities and equipment financed under the Credit in accordance with appropriate administrative, financial and engineering practices. Section 3.03. TPB shall take out and maintain with respon- sible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.04. TPB shall ensure during the execution of the Project that, the positions of Planning and Production Manager, Iringa Regional Manager and Mbeya Regional Manager, shall continue to be filled at all times by persons with appropriate qualifica- tions and experience. ARTICLE IV Financial Covenants Section 4.01. (a) TPB shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition and the operations, resources and expenditures in respect of Parts A and B of the Project, including, without limitation to the fore- going, separate accounts reflecting all expenditures on account of which withdrawals are requested from the Credit Account under Category (5) (a) of paragraph I of Schedule 1 to the Development Credit Agreement on the basis of certificates of expenditure. (b) TPB shall retain, until two years after the Closing Date, all records (orders, invoices, bills, receipts and other documents) evidencing the expenditures on account of which with- drawals are requested from the Credit Account on the basis of certificates of expenditure and shall enable the Association's accredited representatives to examine such records. - 6 - (c) TPB shall: (i) have its accounts and financial state- ments (balance sheet, statements of income and expenses and related statements) and the separate accounts referred to in the foregoing paragraph (a) for each fiscal year audited, in accord- ance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested including, without limitation to the foregoing, a separate opinion by said auditors in respect of the expenditures and records referred to in paragraph (b) of this Section as to whether the proceeds of the Credit withdrawn from the Credit Account on the basis of certificates of expenditure have been used for the purpose for which they were provided; and (iii) furnish to the Association such other information concerning such separate accounts, records and expenditures and the audit thereof as the Association shall from time to time reasonably 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 TPB 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 TPB of this event. 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. -7- 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 TPB: Tanganyika Pyrethrum Board P. 0. Box 149 Iringa United Republic of Tanzania Cable address: PARETO Dar es Salaam/Iringa 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 TPB may be taken or executed by the Chief Executive Officer of TPB or such other person or persons as the Chief Executive Officer shall designate in writing, and TPB -8- 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 ASSOCIATION By is) \vXMJ lAQQ"x Regional Vice President Eastern Africa TANGANYIKA PYRETHRUM BOARD By Authorized Representative 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 198 02. FOR SECRETARY