China - North China Plain Agriculture Project : Credit 1261 - Project Agreement - Conformed

OEFICIAL OCUMENTS CREDIT NUMBER 11( - CHA Shandong Project Agreement (North China Plain Agricultural Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and SHANDONG PROVINCE Dated 3 ) , 1982 CREDIT NUMBER M ( - SHANDONG PROJECT AGREEMENT AGRELEMENT, dated 5 ck_ , 1982, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and SHANDONG PROVINCE (hereinafter called Shandong). WHEREAS by the Development Credit Agreement of even date herewith between the 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 fifty-four million Special Drawing Rights (SDR 54,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Shandong agree to undertake such obligations toward the Associa- tion as are hereinafter set forth; and WHEREAS Shandong, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) Shandong shall carry out and shall cause to be carried out that part of the Project described in Schedule 2 to the Development Credit Agreement located in Shandong with due diligence and efficiency and in conformity with appropriate administrative, financial, agricultural and engineering prac- tices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose, including without limitation adequate electrical power or fuel supply for tubewells. -2- (b) With respect to that part of the Project for which Shandong is financially responsible, Shandong shall: (i) make adequate and timely budgetary provisions for the implementation of such part; and (ii) take appropriate steps for the operation and maintenance of the facilities and equipment provided under the Project. Section 2.02. Except as the Association shall otherwise agree, procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Credit, shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. Section 2.03 (a) Shandong undertakes to insure, or make ade- quate provision for the insurance or replacement of, the imported goods to be financed out of the proceeds of the Credit made available to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by Shandong to replace or repair such goods. (b) Except as the Association may otherwise agree, Shandong shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclusively for the Project. Section 2.04. With respect to that part of the Project for which Shandong or any of its counties or agencies shall be responsible: (a) Shandong shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) Shandong: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use in the Project; (ii) shall 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) shall furnish to - 3 - the Association at regular intervals all such information as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefite to be derived from it, the expenditures of such proceeds and the goods and services financed out of such proceeds. (c) Shandong shall enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment and any relevant records and documents. Section 2.05. (a) Shandong shall at the request of the Asso- ciation, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit. (b) Shandong shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by Shandong of its obligations under this Agreement. ARTICLE III Other Covenants Section 3.01. Shandong shall maintain, or cause its agencies and counties to maintain, records adequate to reflect in accor- dance with consistently maintained appropriate accounting prac- tices its operations and financial condition in respect of acti- vities related to the Project. Section 3.02. Shandong shall in respect .l activities re- lated to the Project: (i) have its accounts ana financial state- ments for each fiscal year audited, in accordance with appro- priate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Asso- ciation as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies 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 shall have reasonably requested; and (iii) furnish to the Association such other information concern- -4- ing such accounts and financial statements and the audit thereof as the Association shall from time to time reasonably request. Section 3.03. Shandong shall, at all times, operate, main- tain, renew and repair, or cause to be operated, maintained, renewed and repaired, in accordance with appropriate agricultural and management practices, the facilities and equipment provided under that portion of the Project located in Shandong. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 4.02. (a) This Agreement and all obligations of the Association and of Shandong thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date 20 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify Shandong of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- ticn or suspension under the General Conditions. ARTICLE V Miscellaneous Provisions Section 5.01. 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, -5- 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 address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For Shandong: Shandong Provincial Agricultural Department Chia Fang Bridge Tsinan, China Section 5.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of Shandong may be taken or executed by the Director of the Province Project Management Office in Shandong Province or such other person or persons as such Director shall designate in writing, and Shandong shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 5.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. -6- IN WITNESS WHEREOF, the parties hereto, acting through their represantatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President East Asia and Pacific SHANDONG PROVINCE By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the U day of ,e 198 2. FOR SECRETARY