Comoros - First Education Project : Credit 1195 - Credit Agreement - Conformed

OFFICIAL CREDIT NUMEER 1195 COM DOCUMENTS Development Credit Agreement (First Education Project) between FEDERAL ISLAMIC REPUBLIC OF THE COMOROS and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1982 CREDIT NUMBER 1195 COM DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated (\ 3' , 1982, between FEDERAL ISLAMIC REPUBLIC OF THE COMOROS (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) pursuant to an exchange of letters dated December 13, 1980 and February 2, 1981 between the Borrower and the Asso- ciation, the Association has granted the Borrower an advance (hereinafter called the Advance) in an amount equivalent to $205,000 to assist the Borrower in financing the proposed project and the Association is prepared to refund such Advance out of the proceeds of the Credit provided for herein; and WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth; 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 June 30, 1980, 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) "MEN" means the Ministere de l'Education Nationale, de la Culture, de la Jeunesse et des Sports, the Borrower's ministry responsible for education, culture, youth and sport; -2- (b) "BEPE" means the Bureau d'Ex6cution des ProJets d'Educa- tion, the Borrower's office responsible for coordinating and supervising development projects in the education sector; (c) "INE" means the Institut National d'Education, the institute within MEN responsible for curriculum development, research and teacher training and upgrading; (d) "MPI" means the Ministere de la Production et de l'Industrie, the Borrower's ministry responsible for, inter alia, agricultural development; (e) "MSPM" means the Ministare de la Santf, de la Popula- tion et des Affaires Musulmanes, the Borrower's ministry respon- sible for, inter alia, public health; and (f) "Special Account" means the account to be opened pur- suant to Section 2.02 (c) of this Agreement. 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 five million three hundred thousand Special Drawing Rights (SDR 5,300,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provision 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; (b) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Advance withdrawn and outstanding as of such date, and pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Advance shall be automatically cancelled as of the same date; -3- (c) The Borrower shall, for the purposes of Parts A (2) and D of the Project, open a Special Account at the Treasury in. the name- of BEPE. Payments out of the Special Account shall be made exclusively,to pay the reasonable costs of services required to carry out Parts A (2) and D of the Project and to be financed under this Agreement in accordance with the provisions of the table set forth. in paragraph 1 of Schedule I hereto; (d) The Association shall, promptly after the Effective Date, withdraw -on behalf of the Borrower from the Credit Account and deposit in the Special Account an initial amount in the currency of the Borrower equivalent to fifty thousand Special Drawing Rights (SDR .50,000). Thereafter, at the request of. the Borrower, the-Association shall further so withdraw from the Credit Account and-deposit in the Special Account such amounts as shall be required to replenish the Special Account with amounts equal to payments made out of the Special Account for expenditures for Parts A (2) and D of the Project eligible for financing under this Agreement, but only .to the extent that the amount of any such deposit,. together. with any amount remaining on deposit in the Special Account as of the date of such request, shall not exceed in the aggregate ,the equivalent of fifty thousand Special Drawing Rights (SDR 50,000). Except as the Association shall otherwise determine, each such d.eposit after the. initial deposit shall be withdrawn by the Assoiation from. the Credit Account under the same Categories set forth in the table in paragraph 1 of Sche- dule 1 to this Agreement, and in the same respective amounts, as have been justified by the evidence supporting the request for such deposit furnished pursuant to paragraph (e) of this Section; (e) Prior to or at .the time of each request by the Borrower for a deposit by the Association into the Special Account, the Borrower shall furnish to the Association in respect of each payment made by the Borrower out of the Special Account Fuch documents and other evidence as the Association shall reasonably request, showing that the payment was made on account of the reasonable cost of goods or services required for Parts A (2) and D of the Project and to be financed out of the proceeds of the Credit in accordance with Schedule 1 to this Agreement; (f) If the Association shall have determined that any payment out of the Special Account: (i) was made for any expend- iture or in any amount not eligible for financing from the Credit Account, or (ii) was not justified by the evidence furnished pursuant to paragraph (e) of this Section, the Borrower shall, -4- promptly upon notice from the Association and, unless otherwise determined by the Association, prior to any further deposit in the Special Account by the Association, deposit in the Special Account an amount equal to the amount of such payment or the portion thereof not so eligible or justified; and (g) Notwithstanding the provision of paragraph (d) of this Section, no further deposit in the Special Account shall be made by the Association when the Association shall have determined that all further withdrawals from the Credit Account can be made directly by the Borrower from the Credit Account under paragraph (a) of this Section, or when the total amount withdrawn from the Credit Account plus the amount of any qualified agreement to reimburse the Association and of any special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions, shall have reached the equivalent of five million two hundred fifty thousand Special Drawing Rights (SDR 5,250,000), whichever shall be sooner. Withdrawal from the Credit Account of the remaining amount of the Credit for Parts A (2) and D of the Project shall follow such procedures as shall be agreed between the Borrower and the Association and shall be made only to the extent that the Association shall be satisfied by the evidence submitted in support of the applications for such withdrawal that all payments by the Borrower out of the Special Account were made on account of the reasonable cost of services required for Parts A (2) and D of the Project and to be financed out of the proceeds of the Credit in accordance with Schedule 1 to this Agreement. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Credit, shall be governed by the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1987 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 June 15 and December 15 in each year. -5- Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each June 15 and December 15 commencing June 15, 1992, and ending December 15, 2031, each installment to and including the installment payable on December 15, 2001, 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 Republic of France is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project through MEN, with the assistance of other ministries as appro- priate, all with due diligence and efficiency and in conformity with appropriate education, engineering, administrative and budgetary practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) To assist the Borrower in the carrying out of the Project, the Borrower shall: (i) except as the Association shall otherwise agree, establish, operate and staff BEPE in accordance with Schedule 4 to this Agreement; and (ii) employ within BEPE a Project Director and an accountant whose qualifications and experience shall be acceptable to the Association. Section 3.02. In order to assist the Borrower in the carrying out of civil works and in the procurement of equipment and textbooks, the Borrower shall employ an architect, an equipment specialist and a textbook specialist whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association; such employment shall be made in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines on the Use of Consultants by World Bank Borrowers and the World Bank as Exe- cuting Agency" published in August 1981. Section 3.03. Not later than October 1, 1982, the Borrower shall ensure that the education planning unit within MEN will be staffed on a permanent, full-time basis with two qualified -6- officials who will be responsible for coordinating education planning between MEN and the Ministry of Finance, Economy and Planning. Section 3.04. In order to control expenditures in the education sector, the Borrower shall, beginning in December 1, 1982 and thereafter by December 1 of each year until completion of the Project, review with the Association measures taken and discuss proposals for measures to be taken for purposes of: (i) restricting enrollment in both lower and upper secondary schools; (ii) reducing the amount of funds available for student grants at the upper secondary level; (iii) linking fellowships abroad to specific training needs; and (iv) implementing such other cost- saving measures as the Borrower and the Association may consider appropriate. Section 3.05. The Borrower shall review, in consultation with the Association, its current policy on financial assistance to students for post-secondary education and will, not later than December 1, 1982, introduce a policy acceptable to the Association for such grants which will: (i) take into account prospective manpower needs in the areas of, inter alia, agriculture, health, public administration and accounting; and (ii) ensure that con- tractual arrangements acceptable to the Association require recipients of fellowships to return to the Comoros upon completion of their studies. Section 3.06. For purposes of Parts A (3) and B (2) of the Project the Borrower shall furnish to the Association, not later than June 30, 1982, an overseas training program satisfactory to the Association; such program shall include the following inform- ation: (i) the qualifications of each of the candidates selected for an overseas fellowship; and (ii) the course (and its cost) to be followed by each such candidate. Section 3.07. The Borrower shall take all steps necessary to establish and put into operation by October 1, 1983, a fund for the purpose of financing the replacement of school textbooks and educational materials. Section 3.08. (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 -7- 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, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.09. (a) The Borrower shall through BEPE furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifica- tions thereof or additions thereto, in such detail as the Associa- tion shall reasonably request. (b) The Borrower shall: (i) through BEPE maintain records and procedures adequate to record and monitor the progress of all Parts of the Project (including their cost) and the benefits to be derived therefrom, identify the goods and services financed out of the proceeds of the Credit, and disclose their use in the Project; (ii) enable the Association'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) through BEPE furnish to the Association at regular intervals all such information as the Aseciation shall reasonably request concerning any Part of the Project, its cost and, where appro- priate, 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) Without limitation or restriction upon paragraph (b) of this Section, the Borrower shall, annually during the Project, discuss with the Association the progress made towards achieving the educational objectives of the Project. (d) Upon the award by the Borrower of any contract for goods, works or services to be financed out of the proceeds of the Credit, the Association may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (e) 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 -he Borrower -8- and the Association, the Borrower shall through BEPE in coopera- tion with the appropriate ministries 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 all Parts of the Project, their cost and the benefits derived and to be derived therefrom, 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 3.10. (a) The Borrower shall take all such action as shall be necessary to acquire all such land, rights in respect of land and buildings as shall be required for the construction (and operation) of the facilities included in the Project and shall furnish to the Association, promptly after such acquisition, evidence satisfactory to the Association that such land, rights in respect of land and buildings are available for purposes related to the Project. (b) Without limitation on or restriction to the generality of paragraph (a) of this Section the Borrower shall: (i) ensure that not later than March 31, 1982, a site acceptable to the Asso- ciation is available for Part C of the Project; (ii) ensure that the following are at all times available for purposes of the Project: (A) land and buildings located in the Hombo district of Mutsamudu for Part A; (B) the community center in Wanani for Part B; and (C) the site referred to in sub-paragraph (b) (i) of this Section for Part C of the Project. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall through BEPE maintain or cause to be maintained records adequate to reflect in accord- ance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the ministries, departments or agencies of the Bor- rower responsible for carrying out the Project or any part thereof. (b) The Borrower shall through BEPE: (i) maintain, or cause to be maintained, as part of the records referred to in paragraph (a) of this Section, separate accounts reflecting all expendi- tures on account of which withdrawals a: _ requested from 'the Credit Account on the basis of certified statements of expenditure; and (ii) retain, until one year after the Closing Date, all records (orders, invoices, bills, receipts and other documents) evidencing the expenditures on account of which withdrawals are requested from the Credit Account on the basis of certified statements of expenditure, and enable the Asso- ciation's accredited representatives to examine such records. (c) The Borrower shall through BEPE: (i) have its accounts and records, including the separate accounts referred to in paragraph (b) of this Section, for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by auditors acceptable to the Borrower and the Associa- tion; (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 such audi- tors, of such scope and in such detail as the Association shall have reasonably requested, including without limitation to the foregoing, an opinion by said auditors in respect of the separate accounts 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 certified statements of expenditure have been used for the purpose for which they were provided; and (iii) furnish to the Association such other information concerning said accounts, records and expenditures and the audits thereof as the Association shall from time to time reasonably request. Section 4.02. The Borrower shall take out and maintain with responsible insurers, or make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 4.03. (a) The Borrower shall take all such action as shall be necessary to ensure that the teacher training school on the island of Anjouan, the agricultural training center on the island of Moheli and the health training school in Moroni carry out their operations and manage their affairs in accordance with appropriate technical, educational, financial and administrative practices and shall provide, promptly as needed, the funds, - 10 - facilities and other resources as well as qualified teachers and administrators in adequate numbers required for the effective utilization, staffing and operation of such institutions. (b) Without in any way limiting the generality of paragraph (a) of this Section, the Borrower shall: (i) ensure that the buildings, furniture and equipment of the training schools and training center referred to in said paragraph are adequately maintained and shall cause all necessary repairs and renewals thereof to be made; and (ii) take appropriate administrative and financial measures for the above purposes. 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) that the Special Account provided for in Section 2.02 (c) of this Agreement has been opened; and (b) that the Bureau d'Ex6cution des Projets d'Education (BEPE) referred to in Section 3.01 (b) of this Agreement has been established. Section 5.02. The date \) is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.03. The obligations of the Borrower under Article IV of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty 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 re- sponsible for finance is designated as representative of the - 11 - 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: Minist5re des Finances de 1'Economie, du Plan et du Commerce Extfrieure Botte Postale 324 Moroni, Rpublique Ffdfrale Islamique des Comores Cable address: Telex: MINIFINANCES 211CW BOOTH KO Moroni 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 - 12 - Agreement to be signed in their respective names in Paris, France, as of the day and year first above written. FEDERAL ISLAMIC REPUBLIC OF THE COMOROS- By a6u Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Authorized Representative - 13 - 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 SDR Equivalent) to be Financed (1) Civil works 1,500,000 85% (2) Equipment and furniture 570,000 100% (3) Textbooks and 530,000 100% teaching materials (4) In-service training 160,000 100% under Part A (2) of the Project (excluding salaries of teaching staff) (5) Project administra- 130,000 100% tion under Part D of the Project (excluding:salaries of local personnel) (6) Consultants' services 680,000 100% and fellowships (7) Initial deposit in 50,000 Special Account under" Section 2.02 (c) to prefinance items under Categories (4) and (5) above - 14 - Aiount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (8) Refunding of Advance 180,000 Amount due under Section 2.02 (b) (9) Unallocated 1,500,000 TOTAL 5 300, 000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for .goods or services supplied from the territory of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower. 3. The disbursement percentages have been calculated in com- pliance with the polic. of the Association that no proceeds 6f the Credit shall be disbur.ed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement prior Decem- ber 15, 1981. - 15 - 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, BorroVer: (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) 11, such reallocation cannot fully meet the estimated shortfall., reduce tte disbursement percentage ther! 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 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 sopinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 16 - SCHEDULE 2 Description of the Project The objectives of the Project are, inter alia: (i) in primary education, to improve the quality of instruction, to raise the achievement level of the students and to ensure that the Bor- rower's education policy is relevant to its development needs; (ii) in agricultural education, to provide trained personnel for the improved implementation of the Borrower's agricultural pdlicy; and (iii) in health education, to train the personnel required for carrying out the Borrower's long-term health plan. The Project consists of the following Parts: Part A: Primary Education (1) Construction, furnishing and equipping of a teacher training school with places for about 180 students and a demon- stration primary school adjacent to the training school with places for about 300 children. (2) Provision of in-service training courses for about 500. primary school teachers. (3) Provision of fellowships to train about seven instruc- tors for the teacher training school. (4) Purchase and distribution of about 59,000 textbooks, 4,400 teachers guides and 235,000 workbooks and booklets for use by primary school children and teachers. Part B: Agricultural Education (1) Construction, furnishing and equipping of an agricul- tural training center on the island of Moheli with teaching and boarding facilities for about 40 students. (2) Provision of fellowships to train about three teachers for the agricultural training center. Part C: Health Education Construction, furnishing and equipping of a health school in Moroni with capacity for a combined enrollment of about 75 students. - 17- Part D: Project Administration Monitoring and evaluation pf the foregoing Parts of the Project in a manner acceptable to the Association. The Project is expected to be completed by December 31, 1986. - 18 - SCHEDULE 3 Procurement A. International Competitive Bidding ]. Except as provided in Part D 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", dated July 1980 (hereinafter called the Guidelines), on the basis of inter- national competitive bidding as described in Part A of the Guide- lines. 2. For goods and civil works to be procured on the basis of international 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 relating thereto 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 civil 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 competitive bidding. 3. (a) Detailed lists and specifications of furniture, equip- ment and textbooks, indicating the extent to which items can be grouped together for bulk procurement, shall be furnished to the Association for its review and approval, and the equipment procured, and its grouping for bulk procurement, shall be sub- stantially in conformity with the lists so approved; and (b) Detailed sketch designs for institutions included in the Project shall be furnished to the Association for its review and approval. 4. 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 the imported goods, or the ex-factory price or off-the-shelf price of other - 19 - goods, offered in such bid;. (ii). customs duties and other import taxes levied in connection with the importation, or the sales and similar taxes levied in connection.- with the sale or delivery, pursuant to the bid, of the goods shall-not be taken into account in the evaluation of the bids; and (iii) the cost of inland freight and -other expenditures incidental to the delivery of goods. to the place of their use or installation shall be included. B. Preferencefor Domestic, Manufacturers In the procurement of goods in accordance with the procedures described in Part A of this Schedule, goods manufactured in the Comoros 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 threetgroups: (1) Group A: bids offering goods manufactured in the Comoros 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 the Comoros equal to at least 20% of the-ex-factory bid price of such goods. (2) Group B: all other domestic bids. (3) Group C: bids offering any other goods. 3. In order to determine the lowest evaluated bid of each group, all evaluated bids in each group shall first be compared among themselves, without taking into account customs duties and other import taxes levied in connection with the importation, and sales and similar taxes levied in connection with the sale or delivery, pursuant to the bids, of the goods. 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.. - 20 - 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 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 the Development Credit Agreement and to be pro- cured in accordance with the procedures described in Part A of this Schedule, the Borrower may grant a margin of preference of 7-1/2% to domestic contractors, in accordance with, and subject to, the following provisions: 1. Contractors applying for such preference shall be asked to provide, as part of the data for qualification, such inform- ation, 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 by the Borrower, 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. - 21 - 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 r-Procedures 1. Contracts for goods or for civil, works which cannot be grouped into, contracts estimated to cost the equivalent of $50,000 or more may- be awarded on the, basis of competitive bidding advertised locally in accordance with procedures satisfactory to the Association; provided, however, that such contracts shall not in the aggregate exceed $400,000 equivalent. 2. Contracts for imported textbooks may be negotiated directly with the publishers thereof. 3. (a) Detailed lists and specifications of furniture, equip- ment and textbooks, shall be furnished to the Association for its review and approval, and the equipment procured shall be sub- stantially in conformity with the list so approved; and (b) Detailed sketch designs for institutions included in the Project shall be furnished to the Association for its review and approval. E. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for goods or civil works estimated to cost the equivalent of $50,000 or more: (a) Before bids are invited, the Borrower 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 Borrower shall, before a. final decision on the award is made, - 22 - 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, 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 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 15% of the original price, the! Borrower 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 and state the reasons for its determination. - 23 - SCHEDULE 4 Operations and Staffing of BEPE (Section 3 01 (b) of the 'Development Credit Agreement) 1. The Borrower, undertakes to ensure that BEPE, established within MEN under the direction of the Project Director, will be responsible for the execution of the Project, including: (i) overall management of the Project; (ii) supervision of the carrying out of .the Project; ,(iii) coordination of activities related to the Project with all ministries, departments and agencies of the Borrower participating in the carrying out of the Project; and (iv) liaison with the Association. Specifically, the Borrower undertakes that BEPE will, inter alia: (a) coordinate and integrate all Project activities with the ministries, departments and agencies of the Borrower, and corres- pond with the Association on technical matters related to the Project; (b) select an architect,, an equipment specialist and a textbook specialist, define their terms of reference and administer their contracts;. (c) prepare with the assistance of the MPI and MSPM offi- cials referred to in paragraph 4 of this Schedule and of the Director of INE a comprehensive Project implementation schedule for the approval of the Association. (d) in collaboration, with the MPI and MSPM officials referred to in paragraph 4 of this Schedule, monitor the progress of construction, studies, preparation of new curriculae and other education and training programs; (e) in collaboration with the Director of INE, monitor the progress made in carrying out i-service training and the supply of textbooks; (f) ensure the review and approval by appropriate autho- rities of the reports, specifications and other material sub- mitted to the Borrower by the architect and other specialists; (g) regularly inspect all construction works; (h) ensure the preparation of lists of furniture and equip- ment and materials for the Project; - 24 - (i) prepare invitations to bid and arrange for the award of contracts relating to the Project; (j) maintain recqrds and accounts and prepare for presenta- tion to the Association through proper channels applications for withdrawals from the Credit Account; and (k) prepare semi annual progress reports to be furnished to the Association within two months of the end of each semi- annual period. 2. The Project Director will at all times have direct access to the officials of MPI and MSPM referred to in paragraph 4 of this Schedule and to the Director of INE. He will be directly respon- sible for the execution of the routine aspects of the Project, including staff management, coordination of consultants and specialists' services, and procurement matters, and will report to the Minister of Education. He will also ensure that the construc- tion, equipment and furniture of the Project facilities meet educational and training requirements. 3. In addition to the architect, the equipment specialist and the textbook specialist referred to in Section 3.02 of this Agreement, the Project Director will be assisted by, inter alios the following full-time personnel: (a) two draftsmen; and (b) an accountant. 4. MPI and MSPM will each appoint a qualified and experienced official responsible for: (i) ensuring that the aspects of the Project related to their respective ministries are carried out; and (ii) coordinating Project activities between MPI, MSPM and BEPE. 5. BEPE will also be provided with required supporting staff, adequate premises, equipment, means of communication and trans- port. In addition it will be assisted by the appropriate mini- stries, departments and agencies in: (i) preparing and reviewing lists of items of furniture, equipment, design sketches and mate- rials; and (ii) certifying that such designs, specifications and lists meet the economic and functional standards as well as the costs and the educational targets and objectives of the Project. 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 FORSECRETARY