Madagascar - Water And Sanitation Project : Credit 1002 - Credit Agreement - Conformed

CREDIT NUMBER 1002 MAG DOCUME1TS Development Credit Agreement (Water and Sanitation Project) between DEMOCRATIC REPUBLIC OF MADAGASCAR and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated ,1980 CREDIT NUMBER 1002 MAG DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 2 , 1980, between the DEMOCRATIC REPUBLIC OF MADAGASC (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) 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; (B) the Project will be carried out by Jiro Sy Rano Malagasy (JIRAMA) and by the Municipality of Antananarivo with the Bor- rower's assistance and, as part of such assistance, the Borrower will make available to JIRAMA and the Municipality the proceeds of the Credit as hereinafter provided; 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 set forth hereinafter and in the Project Agreements of even date herewith between the Association and JIRAMA and the Municipality, respectively; 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 General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Ministry" means the Ministry of the Borrower respon- sible for public works; - 2 - (b) "JIRAMA" means Jiro Sy Rano Malagasy, the Malagasy Electricity and Water Corporation, created by Ordinance No. 75-024 of October 17, 1975; (c) "Statutes" means the statutes of JIRAMA set forth in Ordinance No. 75-024 of October 17, 1975; (d) "Directorate" means the Directorate of the Ministry responsible for Urbanism and Habitat; (e) "Municipality" means the urban community (Fivondronana) of Antananarivo-Renivohitra; (f) "Project Agreement" means either or both of the agree- ments between the Association and JIRAMA or the Municipality of even date hrewith, as either may be amended from time to time, and such term includes all schedules to the Project Agree- ment and all agreements supplemental to the Project Agreement; and (g) "Subsidiary Loan Agreement" means either or both of the agreements to be entered into between the Borrower and JIRAMA and the Municipality, respectively, pursuant to Section 3.01 (b) and (-) of this Agreement, as either may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, 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 Associa- tion, 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. -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 set forth or referred to in Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1985 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, 1990, and ending October 15, 2029, each installment to and including the installment payable on October 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 States of America 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 JIRAMA and the Municipality to perform in accordance with the provisions of the respective Project Agreements and Subsidiary Loan Agreements all the obliga- tions 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 JIRAMA and the Municipality to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall relend to JIRAMA the equivalent of the proceeds of the Credit withdrawn from the Credit Account for Part A of the Project under a Subsidiary Loan Agreement to be entered into between the Borrower and JIRAMA providing for a term of 25 years including 5 years' grace with interest at the rate of 8% per annum deferred and added to principal during such period of grace and containing such other terms and conditions as shall have been approved by the Association. (c) The Borrower shall relend to the Municipality the equivalent of the proceeds of the Credit withdrawn from the Credit Account for Parts B and C of the Project under a Subsidiary Loan Agreement to be entered into between the Borrower and the Municipality providing for a term of 35 years including 5 years' grace with interest at the rate of 4% per annum deferred and added to principal during such period of grace and containing such other terms and conditions as shall have been approved by the Asso- ciation. (d) The Borrower shall exercise its rights under the Subsidiary Loan Agreements in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive either of the Subsidiary Loan Agreements or any provision thereof. Section 3.02. (a) In order to assist the Municipality in carrying out Part B of the Project, the Borrower shall cause the Directorate: (i) to administer the carrying out of such Part B; (ii) to employ such consultants under such terms of reference and conditions of employment as shall be satisfactory to the Associa- tion; and (iii) to assign its staff to the engineering and super- vision of river dykes, storage basins, dredging of canals and sewage collectors included in Part B of the Project. (b) The adequacy of the arrangements made pursuant to paragraph (a) of this Section will be reviewed from time to time by the Association and the Borrower with a view to making such changes therein as may be appropriate. Section 3.03. The Borrower shall ensure that the Municipality will sell through the Borrower's fertilizer distribution channels or otherwise, the output of the composting facility included in Part C of the Project at unit prices which will cover the incre- mental cost of composting. Section 3.04. (a) The Borrower: (i) shall maintain and cause to be maintained by JIRAMA and the Municipality records and -5- procedures adequate to record and, where appropriate, monitor the progress of the Project (including its cost and, where appro- priate, 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 Associa- tion'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 expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. (b) 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 Borrower and the Association, the Borrower shall cause JIRAMA and the Municipality to prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reason- ably 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, JIRAMA, the Municipality and the Association of their respective obligations under the Develop- ment Credit Agreement, the Project Agreements and the Subsidiary Loan Agreements, and the accomplishment of the purposes of the Credit. Section 3.05. The Borrower shall cause JIRAMA to adjust each year the rate of the "surtax for development works" collected by JIRAMA on behalf of the Municipality; such adjustment to be proportional to the increase, during the preceding year, in the operating and maintenance expenses and depreciation allowances of the Sanitation Division of the Municipality, as determined in the pro-forma accounts referred to in Section 4.01 of the Project Agreement between the Association and the Municipality, for the following services and facilities: drainage system, and collec- tion, treatment and disposal of sewage and solid wastes. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof: - 6 - (a) JIRAMA shall have failed to carry out any covenant, agreement or obligation of JIRAMA under its Project Agreement with the Association or its Subsidiary Loan Agreement with the Bor- rower; (b) the Municipality shall have failed to carry out any covenant, agreement or obligation of the Municipality under its Project Agreement with the Association or its Subsidiary Loan Agreement with the Borrower; (c) an extraordinary situation shall have arisen which shall make it improbable that JIRAMA or the Municipality will be able to perform their respective obligations under the Project Agreements or the Subsidiary Loan Agreements; (d) the Statutes shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the ability of JIRAMA to carry out the covenants, agreements and obligations set forth in its Project Agreement; or (e) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of JIRAMA or for the suspension of its operations. 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 paragraphs (a) or (b) of Section 4.01 of this Agreement shall occur and shall continue for a period of 30 days after notice thereof shall have been given by the Association to the Borrower and JIRAMA or the Municipality, as the case may be; and (b) any event specified in paragraphs (d) or (e) of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit -7- Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely that the Subsidiary Loan Agreements have been executed on behalf of the Borrower and JIRAMA and the Muni- cipality, respectively. 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 each of the Project Agreements have been duly authorized or ratified by JIRAMA and the Municipality, respec- tively, and are legally binding upon JIRAMA and the Municipality in accordance with their respective terms; and (b) that each of the Subsidiary Loan Agreements have been duly authorized or ratified by the Borrower, JIRAMA and the Municipality and are legally binding upon the Borrower, JIRAMA and the Municipality, respectively, in accordance with their respective terms. Section 5.03. The date is hereby specified for the purposes of Section 12.04 of the General Condi- tions. Section 5.04. The provisions of Section 4.02 of this Agree- ment shall cease and determine on the date on which the Develop- ment Credit Agreement shall terminate or on a date twenty-six years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Except as provided in Section 2.09 of this Agreement, the Minister of the Borrower responsible for finance 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: -8- For the Borrower: Ministere aupres de la Presidence de la Republique Charge des Finances et du Plan Antananarivo Madagascar Cable address: Telex: MINFINPLAN 22339 Antananarivo 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) 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. DEMOCRATIC REPUBLIC OF MADAGASCAR By S t- Authorized Representati e INTERNATIONAL DEVELOPMENT ASSOCIATION 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 ,xpenditures Category Dollar Equivalent) to be Financed (1) Civil works (except 85% laying of water mains) (a) Part A of the 1,400,000 Project (b) Parts B and C of 8,000,000 the Project (2) Equipment; pipes (a) Part A of the 5,000,000 ) 100% of foreign Project ) expenditures or ) 100% of local (b) Parts B and C 3,200,000 ) expenditures of the Project ) ex-factory or ) 80% of local ) expenditures ) ex-store (3) Consultants' services 100% of for- and training eign expendi- tures (a) Part A of the 200,000 Project (b) Parts B and C 200,000 of the Project - 10 - Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (4) Unallocated (a) Part A of the 700,000 Project (b) Parts B and C 1,800,000 of the Project TOTAL 20,5003000 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 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 I 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 - 11 - $100,000 may be made in respect of Category (3) on account of payments made for such expenditures before that date but after January 1, 1980. 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 expendi- tures, and (ii) if such 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 proceeds of the Credit and the Association may, without in any way re- stricting 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 Associa- tion'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. - 12 - SCHEDULE 2 Description of the Project Part A: Water Supply (1) Construction of water production works and water mains; extension and reinforcement of the water distribution system (reservoirs, pipes, booster station) and procure- ment of heavy equipment for maintenance. (2) Training of senior, medium and lower level staff of JIRAMA; construction and equipping of an extension to JIRAMA's training center in Antananarivo. Part B: Drainage and Sewerage (1) Construction of drainage collectors, a pumping station, river dykes, storage basins and a new drainage canal, dredging of an existing canal and rerouting of an irrigation canal. (2) Construction of sewerage collectors and reticulation, a pumping station, pumping discharge mains and pilot stabilization ponds. Part C: Solid Waste and Sanitation Training (1) Construction of collective dumping containers; procure- ment of collection trucks and heavy equipment to upgrade and properly maintain the existing dumping site; im- provement of an experimental composting facility with a 10,000 T per year production capacity. (2) Training in Madagascar of lower-level sanitation staff and for higher-level staff abroad; and procurement of training equipment for the purpose. The Project is expected to be completed by December 31, 1984. - 13 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Parts D and F 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, JIRAMA or the Municipality, as appropriate, 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 publica- tion 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, JIRAMA or the Municipality, as appropriate, 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 competitive 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 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 -14 - Madagascar 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 Madagascar 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 Madagascar equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Madagascar. (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 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 - 15 - 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. 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 this Agreement and to be procured in accordance with the procedures described in Part A of this Schedule, the Borrower, JIRAMA or the Municipality, as the case may be, may grant a margin of preference of 7-1/2% to domestic contractors, in accordance with, and subject to, the following p---visions: 1. Contractors shall be required to prequalify as provided in Part A of this Schedule and applicants for qualification applying for such preference shall be asked to provide, as part of the data for qualification, such information, including details of ownership, as shall be required to determine whether, according to the classification established by the Borrower 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, 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 Contracts, the estimated value of which is below $100,000 equivalent, may be awarded following competitive bidding adver- tised locally according to the applicable procedures of the Bor- rower, subject to the provisions of Part E.2 of this Schedule. - 16 - E. Review of Procurement Decisions by the Association 1. Review of prequalification. The Borrower shall, before qualification is invited, inform the Association in detail of the procedure to be followed, and shall introduce such modi- fications in said procedure as the Association shall reasonably request. The list of prequalified bidders, together with a state- ment of their qualifications and, where applicable, of their eligibility for domestic preference under Part C above and of the reasons for the exclusion of any applicant for prequalifi- cation and for such eligibility shall be furnished by the Borrower to the Association for its comments before the applicants are notified of the Borrower's decision, and the Borrower shall make such additions to, deletions from, or modifications in, the said list as the Association shall reasonably request. 2. Review of invitations to bid and of proposed awards and final contracts: With respect to: (i) all contracts estimated to cost the equivalent of $100,000 or more; arid (ii) all contracts of any value for Part A of the Project proposed to be procured under Part D of this Schedule the value of which, when added to the aggregate value of all other contracts for Part A of the Project so pro- cured, is expected to exceed $400,000 equivalent; and (iii) all contracts of any value for Parts B or C of the Project proposed to be procured under Part D of this Schedule the value of which, when added to the aggregate value of all other such contracts so procured, is expected to exceed $500,000 equivalent: (a) Before bids are invited, the Borrower, JIRAMA or the Municipality, as appropriate, shall furnish to the Association, 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 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 Bor- rower, JIRAMA or the Municipality, as appropriate, 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 - 17 - shall furnish to the Association, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, 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, JIRAMA or the Municipality, as appropriate, 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. 3. With respect to each contract not governed by the preceding paragraph, the Borrower, JIRAMA or the Municipality, as appro- priate, 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 con- tract, together with the analysis of the respective bids, recom- mendations 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 Guide- lines or this Schedule, promptly inform the Borrower, JIRAMA or the Municipality, as appropriate, and state the reasons for such determination. 4. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an exten- sion 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 15% of the original price, the Borrower, JIRAMA or the Municipality, as appropriate, shall inform the Association of the proposed modification, 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, JIRAMA or the Municipality, as appropriate, and state the reasons for its determination. - 18 - F. Procurement Without Contracting The laying of water pipes and the installation of a portion of electromechanical equipment for water supply may be carried out by JIRAMA on force account. 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 FOR SECRETARY