China - Industrial Credit Project : Credit 1313 - Project Agreement - Conformed

OFFICIAL CREDIT NUMBER 1313 CHA DOCUMENTS LOAN NUMBER 2226 CHA Project Agreement (Industrial Credit Project) among INTERNATIONAL DEVELOPMENT ASSOCIATION and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and CHINA INVESTMENT BANK Dated , 1982 CREDIT NUMBER 1313 CHA LOAN NUMBER 2226 CHA PROJECT AGREEMENT AGREEMENT, dated A o) ' , 1982, among the INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association), INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOP- MENT (hereinafter called the Bank) and CHINA INVESTMENT BANK (hereinafter called CIB); WHEREAS (A) by the Development Credit Agreement of even date herewith between PEOPLE'S REPUBLIC OF CHINA (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to twenty-eight million Special Drawing Rights (SDR 28,000,000), on the terms and conditions set forth in the Devel- opment Credit Agreement, but only on condition that CIB agree to undertake such obligations toward the Association as are herein- after set forth; (B) by the Loan Agreement of even date herewith between the Borrower and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to forty million six hundred thousand dollars ($40,600,000), on the terms and conditions set forth in the Loan Agreement, but only on con- dition that CIB agrees to undertake such obligations toward the Bank as are hereinafter set forth; (C) by a subsidiary loan agreement to be entered into be- tween the Borrower and CIB, the proceeds of the Credit and the proceeds of the Loan will be made available to CIB on terms and conditions therein set forth; and WHEREAS CIB, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, and the Bank's entering into the Loan Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions -2- applicable thereto and in the Loan Agreement and in the General Conditions applicable thereto have the respective meanings there- in set forth. ARTICLE II Execution of the Project; Management and Operations of CIB Section 2.01. CIB shall carry out the Project, described in Section 3.01 (a) of the Development Credit Agreement, and conduct its operations and affairs, with due diligence and efficiency and in conformity with appropriate economic, financial, technical, managerial and investment standards and practices, with qualified and experienced management and in accordance with its Charter, Statement of Policy and Statement of Development Strategy. Section 2.02. (a) In accordance with and subject to the pro- visions of the Development Credit Agreement and the Loan Agree- ment, CIB shall present Sub-loans to the Association and the Bank for approval or for authorization for withdrawals to be made from the Credit Account or the Loan Account. (b) When presenting an Investment Sub-loan (other than a free-limit Sub-loan) to the Association and the Bank for approv- al, CIB shall furnish to the Association and the Bank an applica- tion, in form satisfactory to the Association and the Bank, together with: (i) a description of the Investment Enterprise and an appraisal of the Investment Project (including a description of the expenditures proposed to be financed out of the proceeds of the Credit and of the proceeds of the Loan, and a description of the procurement procedures); (ii) the proposed terms and con- ditions of the Sub-loan, including the schedule of amortization therefor; and (iii) such other information as the Association and the Bank shall reasonably request. (c) Each request by CIB for authorization to make with- drawals from the Credit Account in respect of a Preparation Sub- loan shall contain: (i) a brief description of the Investment Enterprise and the proposed Investment Project; and (ii) a state- ment of the nature of the technical assistance proposed to be provided and, when applicable, the qualifications, experience and terms and conditions of employment of the consultants to be em- ployed. -3- (d) Each request by CIB for authorization to make with- drawals from the Credit Account and the Loan Account in respect of a free-limit Sub-loan shall contain: (i) a summary description of the Investment Enterprise and the Investment Project (includ- ing a description of the expenditures proposed to be financed out of the proceeds of the Credit and of the proceeds of the Loan, and a description of the procurement procedures); and (ii) the terms and conditions of such free-limit Sub-loan, including the schedule of amortization therefor. (e) Except as the Association, the Bank and CIB shall otherwise agree, CIB shall submit applications for approval of Sub-loans pursuant to the provisions of paragraph (b) of this Section and requests for authorizations to withdraw from the Credit Account and the Loan Account pursuant to the provisions of paragraphs (c) and (d) of this Section on or before March 31, 1985. (f) The Association, the Bank and CIB agree that, to the extent practicable: (i) until all amounts of the Credit allocated under Section 2.02 (a) (i) of the Development Credit Agreement have been committed, applications for approval and requests for authorization to withdraw made by CIB pursuant to Section 2.02 (b) or (d) of this Agreement shall be deemed to be applications for approval by the Association or requests for authorization to withdraw from the Credit Account; and (ii) thereafter, such applications and requests shall be deemed to be applications for approval by the Bank or requests for authorization to withdraw from the Loan Account. Section 2.03. (a) CIB undertakes that unless the Associa- tion and the Bank shall otherwise agree, each Sub-loan will be made on terms, including those set out in the Schedule to this Agreement, whereby CIB shall obtain, by written contract with the Investment Enterprise or other appropriate legal means, rights adequate to protect the interests of the Association, the Bank and CIB, including, in the case of each Investment Sub-loan, the right of CIB to: (i) require the Investment Enterprise to carry out and operate the Investment Project with due diligence and efficiency and in accordance with sound tech- nical, financial and managerial standards and to maintain adequate records; -4- (ii) require that the goods and services to be financed out of the proceeds of the Sub-loan: (A) be pro- cured in accordance with Part B of the Schedule to this Agreement; and (B) be used exclusively in the carrying out of the Investment Project; (iii) to inspect, by itself or jointly with representa- tives of the Association and the Bank, if the Association or the Bank shall so request, such goods and the sites, works, plants and construc- tion included in the Investment Project, the oper- ation thereof, and any relevant records and docu- ments; (iv) require that: (A) the Investment Enterprise take out and main- tain with responsible insurers such insur- ance, against such risks and in such amounts, as shall be consistent with sound business practice; and (B) without any limitation upon the foregoing, such insurance shall cover hazards incident to the acquisition, transportation and deli- very of the goods financed out of the pro- ceeds of the Sub-loan to the place of use or installation, and that any indemnity there- under be payable in a currency freely usable by the Investment Enterprise to replace or repair such goods; (v) obtain all such information as the Association, the Bank or CIB shall reasonably request relating to the foregoing, to the administration, opera- tions and financial condition of the Investment Enterprise and to the benefits to be derived from the Investment Project; and (vi) suspend or terminate the right of the Investment Enterprise to the use of the proceeds of the Sub- loan upon failure by such Investment Enterprise to perform its obligations under its contract with CIB. -5- (b) CIB shall exercise its rights in relation to each Investment Project in such manner as to: (i) protect the inter- ests of the Association, the Bank and CIB; (ii) comply with its obligations under this Agreement and the Subsidiary Loan Agree- ment; and (iii) achieve the purposes of the Project. Section 2.04. (a) CIB shall: (i) employ industrial engi- neering and cther consultants for the purposes of carrying out the activities referred to in Section 3.01 (a) (ii) of the Devel- opment Credit Agreement, and (ii) cause Investment Enterprises to employ consultants under Preparation Sub-loans, all of whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association and the Bank, such con- sultants to be selected in accordance with principles and proce- dures satisfactory to the Association and the Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Bor- rowers and by the World Bank as Executing Agency" published by the Bank in August 1981; and (b) CIB shall carry out overseas study tours and technical visits under Section 3.01 (a) (ii) of the Development Credit Agreement as agreed among the Association, the Bank and CIB. Section 2.05. CIB shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Association and the Bank shall otherwise agree, CIB shall not take or concur in any action which would have the effect of assigning, amending, abrogating or waiving any provision of, the Subsidiary Loan Agreement. Section 2.06. Except as the Association, the Bank and CIB shall otherwise agree, CIB: (a) shall not sell, lease, transfer or otherwise dispose of any of its property or assets, except in the ordinary course of business; and (b) shall take all action necessary to maintain its corporate existence and right to carry on its operations and to acquire, maintain and renew all rights, powers, privileges and franchises necessary or useful in the con- duct of its business. Section 2.07. If CIB establishes or acquires any Subsidiary, CIB shall cause such Subsidiary to observe and perform the obligations of CIB under this Agreement to the extent to which such obligation shall or may be made applicable thereto, as though such obligations were binding upon such Subsidiary. -6- Section 2.08. CIB shall exchange views with the Association and the Bank on any proposal to modify its Charter, Supplemental Regulations, Statement of Policy, Statement of Development Stra- tegy or Lending Regulations. Section 2.09. (a) CIB shall: (i) issue to all CIB branches a project appraisal manual and instructions for experimental use, both satisfactory to the Association and the Bank; (ii) there- after, review and make such revisions to said manual as may be required in light of initial experience with its use and as may be agreed among the Association, the Bank and CIB; and (iii) not later than six months after such issuance or such later date as may be agreed among the Association, the Bank and CIB, require all CIB branches to apply said manual (including any revisions thereto) in all project appraisal work. (b) By June 30, 1983, or such later date as may be agreed among the Association, the Bank and CIB, CIB shall issue instruc- tions to its staff for carrying out project supervision. Section 2.10. (a) From time to time, at the request of any party, the Association, the Bank and CIB shall exchange views on the interest rates to be charged by CIB in its lending operations in light of CIB's cost of funds and profitability and the inter- est and inflation rates in China. (b) Prior to making any change in its interest rates, CIB shall inform the Association and the Bank of the proposed change, and afford them a reasonable opportunity to comment thereon. ARTICLE III Financial Covenants Section 3.01. CIB shall maintain procedures and records ade- quate to monitor and record the progress of the Project and of each Investment Project (including its cost and the benefits to be derived from it) and to reflect in accordance with consistent- ly maintained appropriate accounting practices the operations and financial condition of CIB. Section 3.02. CIB shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association and to the Bank; (ii) furnish to the Association and to the Bank as soon as available, but in any case not later t six months after the end of each such year, (A) certified c .ies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association and the Bank shall have reasonably requested; and (iii) furnish to the Association and the Bank such other informa- tion concerning the accounts and financial statements of CIB and the audit thereof as the Association and the Bank shall from time to time reasonably request. Section 3.03. Except as the Association and the Bank shall otherwise agree, CIB shall not incur ot permit any Subsidiary to incur any debt if, after the incurrence of such debt, the aggre- gate principal amount of the consolidated debt of CIB and all its Subsidiaries then incurred and outstanding would be greater than five times the consolidated capital and surplus of CIB and all its Subsidiaries. For the purpose of this Section: (a) The term "debt" means any indebtedness of CIB or any Subsidiary maturing by its terms more than one year after the date on which it is originally incurred. (b) Debt shall be deemed to be incurred: (i) under a loan contract or agreement or other instrument providing for such debt or for the modification of its terms of payment, on the date, and to the extent, the amount of such debt has become outstanding pursuant to such contract or agreement or instrument; and (ii) under a guarantee agreement, on the date the agreement providing for such guarantee has been entered into but only to the extent the guaranteed debt is outstanding. (c) Whenever in connection with this Section it shall be necessary to value, in terms of Renminbi, debt payable in foreign currency, such valuation shall be made at the prevailing lawful rate of exchange at which such foreign currency is, at the time of such valuation, obtainable for the purposes of servicing such debt, or, in the absence of such rate, on the basis of a rate of exchange acceptable to the Association and the Bank. (d) The term "consolidated debt of CIB and all its Subsid- iaries" means the total amount of debt of CIB and all its Subsid- iaries excluding (i) debt owed by CIB to any Subsidiary or by any Subsidiary to CIB or to any other Subsidiary and (ii) debt refer- red to in paragraph (e) (ii) of this Section. -8- (e) The term "coosolidated capital and surplus of CIB and all its Subsidiaries" means the aggregate of: (i) the total unim- paired paid-in capital, surplus and free reserves of CIB and of all its Subsidiaries after excluding therefrom such amounts as shall represent equity interests of CIB in any Subsidiary, or of any such Subsidiary in CIB or in any other Subsidiary; and (ii) such amount of any other loan which the Association and the Bank may determine to be included in the consolidated capital and sur- plus of CIB. Section 3.04. CIB shall not make any repayment in advance of maturity in respect of any outstanding debt of CIB which, in the judgment of the Association and the Bank, would materially affect CIB's ability to meet its financial obligations. Section 3.05. CIB shall take such steps satisfactory to the Association and to the Bank as shall be necessary to protect itself against risk of loss resulting from changes in the rates of exchange between the various currencies (including Renminbi) used in its borrowing and lending operations. ARTICLE IV Consultation, Information and Inspection Section 4.01. (a) The Association, the Bank and CIB shall cooperate fully to assure that the purposes of the Credit and of the Loan will be accomplished. To that end, the Association, the Bank and CIB shall from time to time, at the request of any party, exchange views through their representatives with regard to the progress of the Project, the performance by CIB of its obligations under this Agreement and the Subsidiary Loan Agree- ment, the administration, operations and financial condition of CIB and other matters relating to the purpose of the Credit and of the Loan. (b) CIB shall furnish to the Association and the Bank at regular intervals all such information as the Association and the Bank shall reasonably request concerning the expenditures of the proceeds of the Credit and of the Loan, the Project, the Invest- ment Enterprises, the Investment Projects and the Sub-loans and, where appropriate, the benefits to 1>. derived from the forego- ing. -9- (c) Within six months following the last withdrawal from the Credit Account and the Loan Account or by such later date as may be agreed for this purpose among the Association, the Bank and CIB, CIB shall prepare and furnish to the Association and the Bank a report, of such scope and in such detail as the Associa- tion and the Bank shall reasonably request, on the execution and initial operation of the Project and the Investment Projects, the costs thereof and the benefits derived and to be derived there- from, the performance by CIB, the Association and the Bank of their respective obligations under this Agreement and the accom- plishment of the purposes of the Credit and of the Loan. Section 4.02. CIB shall promptly inform the Association and the Bank of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit and of the Loan, or the performance by CIB of its obligations under this Agreement or the Subsidiary Loan Agreement. Section 4.03. CIB shall enable the Association's and the Bank's representatives to inspect the records referred to in Sec- tion 3.01 of this Agreement and any relevant documents. 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 and the Loan Agreement become effective. Section 5.02. (a) This Agreement and all obligations of the Association, the Bank and CIB thereunder shall terminate on the earlier of the following dates: (i) the date on which both the Development Credit Agreement and the Loan Agreement shall have term- inated in accordance with their respective terms; or (ii) a date twenty years after the date of this Agree- ment. (b) If the Development Credit Agreement or the Loan Agree- ment or both of said Agreements terminate in accordance with - 10 - their respective terms before the date specified in paragraph (a) (ii) of this Section, the Association or the Bank or both, as the case may be, shall promptly notify CIB of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- tion or suspension under the Development Credit Agreement or the Loan Agreement. 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 hereinafter specified or at such other addresses 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 the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America - 11 - Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For CIB: China Investment Bank Ministry of Finance Building Sanlihe Beijing, People's Republic of China Cable address Telex: PCBC 5189 22486 MFPRC CN Beijing Section 6.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement or under Section 2.03 of the Development Credit Agreement or Section 2.09 of the Loan Agreement on behalf of or by CIB may be taken or executed by its President, or by such other person or persons as the President shall designate in writ- ing, and CIB shall furnish to the Association and the Bank suffi- cient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. As long as the Bank has not given notice to the contrary to CIB and so long as the Development Credit Agree- ment shall not have terminated prior to the termination of the Loan Agreement: (a) the obligations of CIB to consult with, and to furnish information, documents, plans, reports, records and statements to, the Bank shall be satisfied to the extent perform- ance in respect of such obligations is rendered to the Associa- tion; (b) the obligations of the Bank to consult with, and to furnish information to CIB shall be satisfied to the extent such obligations are fulfilled by the Association; and (c) all actions taken (including the giving of approvals or the granting of waivers) by the Association pursuant to the Development Credit Agreement shall be deemed to be taken pursuant to both the Devel- opment Credit Agreement and the Loan Agreement and in the name and on behalf of both the Association and the Bank. Section 6.04. This Agreement may be executed in several counterparts, each of which shall be an original, and all collec- tively but one instrument. - 12 - 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 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By A duVj Regional Vice President East Asia and Pacific CHINA INVESTMENT BANK By Authorized Representative - 13 - SCHEDULE A. Principal Terms and Conditions of CIB Sub-loans 1. Sub-loans shall bear interest at a rate of not less than 8% per annum on the principal amount withdrawn and outstanding. 2. The maximum amount of any Sub-loan shall not exceed the equivalent of $8,000,000. 3. Repayment periods for Sub-loans shall normally not extend beyond seven years, and, in any case, shall not exceed twelve years. 4. Investment Enterprises shall bear the foreign exchange risk on Sub-loans between the dollar and the Renminbi. In order to implement this principle, each Sub-loan shall be denominated in dollars, with the principal amount equal to the dollar equivalent of the amounts disbursed from the Credit Account and the Loan Account on account of such Sub-loan, valued at the respective dates of withdrawal. 5. Preparation Sub-loans shall be made to finance technical assistance in preparing Investment Projects, including (a) over- seas technical visits by Investment Enterprise staff, and (b) employment of foreign consultants by Investment Enterprises. B. Procurement of Goods and Services under Sub-loans Except as the Association and the Bank may otherwise agree., CIB shall cause Investment Enterprises to procure goods and ser- vices to be financed in whole or in part under Investment Sub- loans in accordance with the following provisions and with the assistance of CNTIC pursuant to Section 3.01 (b) (iii) of the Development Credit Agreement. 1. Goods and services estimated to cost the equivalent of $3,000,000 or more each shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the current edition of 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. - 14 - (a) For such goods and services to be procured on the basis of international competitive bidding, in addition to the require- ments of paragraph 1.2 of the Guidelines, CNTIC shall prepare and forward to the Association and the Bank as soon as possible, and in any event not later than 60 days prior to the date of avail- ability to the public of the first tender documents relating thereto, a general procurement notice, in such form and detail and containing such information as the Association and the Bank shall reasonably request; the Association and the Bank 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 in question. CNTIC shall provide the necessary information to update such notice annually so long as any goods or services remain to be procured on the basis of international competitive bidding. (b) For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of interna- tional 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 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 the goods to the place of their use or installation shall be included. (c) Preference for domestic manufacturers: In the procure- ment of goods in accordance with the procedures described in this paragraph B.1, goods manufactured in the People's Republic of China may be granted a margin of preference in accordance with, and subject to, the following provisions: (i) 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 fol- lowed in the evaluation and comparison of bids. (ii) After evaluation, responsive bids will be classi- fied in one of the following three groups: - 15 - (A) Group A: bids offering goods manufactured in the People's Republic of China if the bidder shall have established to the satisfaction of CIB and -the Association and the Bank that the manufacturing cost of such goods includes a value added in the People's Republic of China equal to at least 20% of the ex-factory bid price of such goods. (B) Group B: all other domestic bids. (C) Group C: bids offering any other goods. (iii) 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. (iv) If, as a result of the comparison under sub- paragraph (iii) 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: (A) 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 (B) 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 sub-paragraph (iii) is the lowest evaluated bid shall be selected. - 16 - 2. Goods and services estimated to cost less than the equiva- lent of $3,000,000 shall be procured under contracts awarded after evaluation and comparison of quotations solicited from at least three qualified suppliers eligible under the Guidelines. 3. Review of procurement decisions by the Association and the Bank: (a) Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts estimated to cost the equiva- lent of $3,000,000 or more: (i) Before bids are invited, CNTIC shall furnish to the Association and the Bank, for comment, the text of the invitations to bid and the specifica- tions 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 and the Bank shall reasonably request. Any further modification to the bidding documents shall require the concurrence of the Association and the Bank before it is issued to the prospective bidders. (ii) After bids have been received and evaluated, CNTIC shall, before a final decision on the award is made, inform the Association and the Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Association and the Bank, in sufficient time for review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Association and the Bank shall reasonably request. The Association and the Bank shall, if both determine that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform CIB and CNTIC and state the rea- sons for such determination. (iii) The terms and conditions of the contract shall not, without the concurrence of the Association and the Bank, materially differ from those on which bids were asked. - 17 - (iv) Two conformed copies of the contract shall be fur- nished to the Association and the Bank promptly after its execution and prior to the submission to the Association and the Bank of the first applica- tion for withdrawal of funds from the Credit Ac- count and the Loan Account in respect of such contract. (b) With respect to each contract not governed by the preceding paragraph and whose value exceeds the equivalent of $1,000,000, CNTIC shall furnish to the Association and the Bank, promptly after its execution and prior to the submission to the Association and the Bank of the first application for withdrawal of funds from the Credit Account and the Loan Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective quotations, recommendations for award and such other information as the Association and the Bank shall reasonably request. The Association and the Bank shall, if both determine that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform CIB and CNTIC and state the reasons for such determination. (c) 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, CIB and CNTIC shall inform the Association and the Bank of the proposed modification, waiver, extension or change order and the reasons therefor. The Association and the Bank, if both determine that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform CIB and CNTIC and state the reasons for such determination. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a tru, 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 2J± day of 198 _ FOR SECRETARY INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this -27' day of ___- 198 FOR SECRETARY