India - Kanpur Urban Development Project : Credit 1185 - Credit Agreement - Conformed

FFICIAL CREDIT NUMBER 1185 IN DOCUMENTS Development Credit Agreement (Kanpur Urban Development Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1982 CREDIT NUMBER 1185 IN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated --, 1982, between INDIA, acting by its President (herinafter 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 the State of Uttar Pradesh with the Borrower's assistance and, as part of such assistance, the Borrower will make available to State of Uttar Pradesh 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 hereinafter set forth and in the Project Agreement of even date herewith between the Association and State of Uttar Pradesh; 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 have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Uttar Pradesh" means the State of Uttar Pradesh, acting by its Governor, a state of India, or any successor thereto; -2- (b) "Project Agreement" means the agreement between the Association and Uttar Pradesh of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; (c) "Kanpur" means the city of Kanpur in Uttar Pradesh; (d) "Authority" means the Kanpur Development Authority established under the Uttar Pradesh Urban Planning and Development Act, 1973 of Uttar Pradesh; (e) "Jal Sansthan" means the Kanpur Jal Sansthan. established under the Uttar Pradesh Water Supply and Sewerage Act, 1975 of Uttar Pradesh; and (f) "Nagar Mahapalika" means the Kanpur Nagar Mahapalika established under the Uttar Pradesh Nagar Mahapalika Adhiniyan, 1959 of Uttar Pradesh. 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 equiva- lent to twenty two million two hundred thousand Special Drawing Rights (SDR 22,200,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Credit, shall be governed by the provisions set forth or referred to in Section 2.03 of the Project Agreement. - 3 - Section 2.04. The Closing Date shall be June 30, 1986 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 1 and December 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each June 1 and December 1 commencing December 1, 1991, and ending June 1, 2031, each installment to and including the installment payable on June 1, 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 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 Agree- ment, the Borrower shall cause Uttar Pradesh to perform in accor- dance with the provisions of the Project Agreement 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 Uttar Pradesh 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 make the proceeds of the Credit available to Uttar Pradesh in accordance with the Borrower's standard arrangements for developmental assistance to the States of India. -4- 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: (a) Uttar Pradesh shall have failed to perform any covenant, agreement or obligation under the Project Agreement; (b) Uttar Pradesh shall have taken any action for the dissolution or disestablishment of the Authority, the Jal Sansthan or the Nagar Mahapalika; and (c) an extraordinary situation shall have arisen which shall make it improbable that Uttar Pradesh will be able to perform its obligations under the Project Agreement. 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) the event specified in paragraph (a) of Section 4.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower and Uttar Pradesh; and (b) the event specified in paragraph (b) of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. The following is specified as an additional matter, 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, namely, that the Project Agreement has been duly authorized or ratified by Uttar Pradesh, and is legally binding upon Uttar Pradesh in accordance with its terms. Section 5.02. The date O/t//9 /9c2 is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. -5- Section 5.03. The provisions of Section 4.02 of this Agree- ment shall zease and determine on the date on which the Develop- ment Credi-: Agreement shall terminate or on a date 20 years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Any Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary or Under Secretary to the Department of Economic Affairs in the Ministry of Finance of the Borrower is designated as representative of the Borrowe:r 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: For the Borrower: Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: Telex: ECOFAIRS 953-31354 New Delhi 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) -6- 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. INDIA Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President South Asia - 7 - 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) Equipment and 1,330,000 materials: (a) procured through 100% of for- international eign expendi- competitive tures and bidding 100% of local expenditures (ex-factory) (b) others 55% of local expenditures (2) Civil works 15,440,000 55% (3) Loans for construction 2,660,000 70% of amounts and improvement of disbursed homes and business premises, and for sewerage connections (4) Technical assistance 890,000 100% and training (5) Unallocated 1,880,000 TOTAL 22,200,000 -8- 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 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 1 above, no withdrawals shall be made in respect of payments made for expendi- tures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equivalent of $250,000 each may be made in respect of Categories (2) and (4) on account of payments made for such expenditures before that date but after April 1, 1981 and October 1, 1980, respectively. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 1 above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then 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 restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 10 - SCHEDULE 2 Description of the Project The Project is designed to provide basic infrastructure and developed land to primarily low-income beneficiaries in the city of Kanpur in Uttar Pradesh, to strengthen key urban institutions in the city, and to develop a state-wide strategy for urban development and management. The Project consists of the following. Part A: Shelter (i) Sites and Services: (a) Development of about 14,800 residential plots on three sites totalling about 200 hectares, including provision of on-site and off-site infrastructure, core units, community facilities, and house construction loans for beneficiaries; and (b) development on the said three sites of about 540 ser- viced small business plots, together with common facili- ties centers and building loans for small businesses. (ii) Slum Upgrading: Upgrading of slum areas comprising about 20,000 households on about 105 hectares, including grant of tenure, improved infrastructure services, home improvement and sanitary core loans, community facili- ties and small business support services. Part B: EnvironL.ental Sanitation, Maintenance and Traffic Management (i) Extensions and improvements to water supply, sewerage and drainage networks directly affecting shelter compo- nents under Part A of the Project, including the instal- lation of about 30,400 meters of sewer lines of various diameters, about 26,000 meters of water mains of various diameters and about 12,000 meters of stormwater drains; initiation of a water wastage and leakage reduction program; construction of about 1,800 meters of storm- water drains to drain the Latouche Road-Cooper Ganj- Bansmadi area; desilting and remodelling of 13 existing drainage outfalls; and implementation of a sewer connec- tion loan program. (ii) Solid Waste Management: Improvement of arrangements for collection and disposal of refuse and nightsoil, through - 11 - provision of equipment, improvements to depots and workshops, and introduction of related organizational changes. (iii) Maintenance: Provision of equipment to improve the infrastructure maintenance capacity of the Nagar Maha- palika and the Jal Sansthan. (iv) Traffic Management Measures: Improvement of traffic management in areas adjacent to shelter components under Part A of the Project. Part C: Technical Assistance and Institutional Strengthening Provision of advisory services and training to local and State-level bodies to improve urban planning, management and finance, and service delivery and establishment of a traffic engineering and management cell in the Nagar Mahapalika and a strategy planning cell in the Department of Town and Country Planning. The Project is expected to be completed by June 30, 1985. 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 19 8 F~7ECRETRY