Tunisia - Medjerda-Nebhana Irrigation Development Project : Loan 2157 - Loan Agreement - Conformed

LOAN IUMBER 2157 TUN DOCV13 Loan Agreement (Nedjerda-Nebhana Irrigation Development Project) between REPUBLIC OF TUNISIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND IEVELOPMENT Dated , 1982 LOAN NMBER 2157 TUN LOAN AGREEMENT AGREEMENT, dated , 1982, between REPUBLIC OF TUNISIA (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the foreign exchange cost of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Project will be carried out by Office de la Mise en Valeur de la Vall&e de la Medjerda and Office de Mise en Valeur de Nebhana with the Borrower's assistance and, as part of such assistance, the Borrower will make available to Office de la Mise en Valeur de la Vallee de la Medjerda and Office de Mise en Valeur de Nebhana the proceeds of the Loan as hereinafter provided; and WHEREAS the Bank has agreed, on the basis inter alia of the 7oregoing, to make the Loan available to the Borrower upon the arms and conditions set forth hereinafter and in the 'Project ;reements of even date herewith between the Bank and Office de a Mise en Valeur de la Vallge de la Medjerda and Office de Mise en Valeur de Nebhana; 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 Loan and Guarantee Agreements of the Bank, October 27, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank 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 addi- tional terms have the following meanings: -2- (a) "OMVVM" means Office de la Mise en Valeur de la Vallfe de la Medjerda, an etablissement a caract&re industriel et commercial established and operating pursuant to the Borrower's Laws No. 58/63 of June 11, 1958 and No. 58/76 of July 9, 1958, and Law No. 80/27 of May 26, 19fU, as amended; (b) "OMIVAN" means Office de Mise en Valeur de Nebhana, an etablissement public a caractere industriel et commercial established and operating pursuant to the Borrower's Law No. 73/28 of May 7, 1973 and Law No. 80/29 of May 26, 1980, as amended; (c) "DEGTH" means the Direction des Etudes et Grands Travaux Hydrauliques, a directorate in the Borrower's Ministry of Agriculture; (d) "Dinar" or the sign "DT" means the currency of the Borrower; (e) "M4edjerda Valley perimeter" means the areas served by OMVVM in the Tunis, Bizerte, Zaghouan and Beja Governorates of the Borrower; (f) "Nebhana perimeter" means the perimeters served by OMIVAN, through the Sidi Messaoud Dam pipeline, in the Sousse, Monastir, Mahdia, Sfax and Kairouan Governorates of the Borrower; (g) "BNT" means Banque Nationale de Tunisie, a Societ6 Anonyme incorporated and operating under the Borrower's Code de Commerce promulgated by Law No. 58/129 of October 5, 1959, as amended, and under its Statuts filed with the Registre du Commerce at Tunis, as amended; (h) "OMVVM Project Agreement" means the Project agreement between the Bank and OMVVM of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the OMVVM Project Agreement; and (i) "OMIVAN Project Agreement" means the Project agreement between the Bank and OMIVAN of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the OMIVAN Project Agreement. -3- ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to twenty-two million dollars ($22,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan 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 Bank, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan.. Section 2.03. Except cs the Bank shall otherwise agree, pro- curement of the goods and civil works required for the Project and to be financed out of the proceeds of the Loan shall be gov- erned by the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1988 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. Not later than the Effective Date, the Borrower shall pay to the Bank a fee equivalent to three hundred twenty-five thousand one hundred twenty-three dollars ($325,123). The fee shall be payable in such currency or curren- cies as the Bank shall specify. In the event that the Bank shall not have received full payment of the fee by the Effective Date, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amount required for the full payment of the fee in the currency or currencies specified for the purpose. Section 2.06. The Borrower shall pay to the Bank a commit- ment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.07. The Borrower shall pay interest at the rate of eleven and three-fifths per cent (11-3/5%) per annum on the -4- principal amount of the Loan withdrawn and outstanding from time to time. Section 2.08. Interest and other charges shall be payable semiannually on May 1 and November 1 in each year. Section 2.09. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligation under the Loan Agreement, the Borrower shall cause OMVVM and OMIVAN to perform in accordance with the provisions of the OMVVM Project Agreement and the OMIVAN Project Agreement, respectively, all the obligations of OMVVM and OMIVAN respectively therein set forth, shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable OMVVM and OMIVAN to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) Without any limitation or restriction upon its obligations under paragraph (a) of this Section, the Borrower shall: (i) make available to OMVVM, by way of grant, out of the proceeds of the Loan, for the purposes of carrying out Part A of the Project, the amounts allocated under Categories (1), (2) and (3) of the table set forth in paragraph I of Schedule 1 of this Agreement; and (ii) make available to OMIVAN, by way of grant, out of the proceeds of the Loan, for the purpose of carrying out Part B of the Project, the amounts allocated under Categories (4), (5), (6) and (7) of the table set forth in paragraph 1 of Schedule 1 of this Agreement. Section 3.02. The Borrower shall cause DEGTH to transfer to OMIVAN, progressively in accordance with a timetable agreed upon with the Bank, the responsibilities in the Nebhana perimeter for the operation of main and secondary pipelines, and for the operation and maintenance of pumping stations at Ain Kebrite, Bled Sisseb and Oued Aich and of all tubewells. Section 3.03. The Borrower shall cause BNT to provide under terms and conditions satisfactory to the Borrower and the Bank, agricultural credit: (i) to farmers in the Medjerda Valley perineter under Part A (9) of the Project; and (ii) to farmers and agricultural service cooperatives, respectively, in the Nebhana Valley perimeter under Part B (4) and (5) of the Project. Section 3.04. The Borrower shall: (a) by December 31, 1984 or such later date as the Bank may agree, take all measures or cause all measures to be taken to complete, in the Medjerda Valley perimeter, the furnishing of provisional titles to individuals for land distributed pursuant to Law No. 69/56 of September 22, 1969; and (b) by June 30, 1983 or such later date as the Bank may agree, take all measures or cause all measures to be taken to complete, in the Nebhana Valley perimeter, land consolidation and the furnishing of provisional titles to individuals for land dis- tributed pursuant to Law No. 63/18 of May 27, 1963 and Law No. 71/9 of February 16, 1971. Section 3.05. The Borrower shall take all measures, and cause all measures to be taken, to reserve for farmers suitable space at the Tunis wholesale market. Section 3.06. The Borrower shall: (i) entrust Groupement Inter-professionnel des Legumes and Groupement Inter- professionnel des Agrumes et Fruits with the development of a national export strategy for fruit and vegetables and the development of a strategy for assistance to exporters attempting to find market outlets and the provision of market intelligence; (ii) cause the Groupement Inter-professionnel des Ugumes and Groupement Inter-professionnel des Agrumes et Fruits to review, by December 31, 1983 or such later date as the Bank may agree, the proposed strategies with the Bank and the Borrower; and (iii) implement or cause to be implemented, promptly after such review, the recommendations resulting therefrom. -6- Section 3.07. Unless the Bank and the Borrower shall other- wise agree, the Borrower shall allow OMIVAN to increase water charges in the Nebhana perimeter to such levels as shall be required to enable OMIVAN to carry out its obligations as provided under Section 2.07 of the OMIVAN Project Agreement. ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative sub- division thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and foreign exchange assets held by -7- any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) OMVVM and OMIVAN shall have failed to perform any of their obligations under the OMVVM Project Agreement and the OMIVAN Project Agreement, respectively. (b) As a result of events which have occured after the date of the Loan Agreement, an extraordinary situation shall have arisen which shall make it improbable that OMVVM and OMIVAN will be able to perform their respective obligations under the OMVVM Project Agreement and the OMIVAN Project Agreement. (c) Laws No. 58/63 of June 11, 1958 and 58/76 of July 9, 1958 or Law No. 80/27 of May 26, 1980 shall have been amended, suspended, abrogated, rep-aled or waived so as to affect materially and adversely the ability of OMVVM to perform any of its obligations under the OMVVM Project Agreement. (d) Law No. 73/28 of May 7, 1973 or Law No. 80/29 of May 26, 1980 shall have been amended, suspenlded, abrogated, repealed or waived so as to affect materially and adversely the ability of OMIVAN to perform any of its obligations under the OMIVAN Project Agreement. (e) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of OMVVM and OMIVAN or for the suspension of their opera- tions. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) The event specified in paragraph (a) of Section 5.01 of this Agreement shall occur and shall continue for a period of -8- sixty days after notice thereof shall have been given by the Bank to the Borrower and OMVVM and OMIVAN. (b) Any event specified in paragraphs (c, (d) and (e) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Condi- tions: (a) the OMVVM Project Agreement shall have been executed and delivered on behalf of OMVVM and shall have been duly authorized or ratified by all necessary corporate or administra- tive action; and (b) the OMIVAN Project Agreement shall have been executed and delivered on behalf of OMIVAN and shall have been duly authorized or ratified by all necessary corporate or administra- tive action. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the OMVVM Project Agreement has been duly authorized or ratified by OMVVM, and is legally binding upon OMVVM in accordance with its terms; and (b) that the OMIVAN Project Agreement has been duly authorized or ratified by OMIVAN, and is legally binding upon OMIVAN in accordance with its terms. Section 6.03. The date Kc G q&d, , is hereby specified for the purposes of Section 12.04 of the General Conditions. -9- ARTICLE VII Representative of the Borrovez; Addresses Section 7.01. The Ministre du Plan et des Finanees of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The iollowing addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministare du Plan et des"Finances Place Ali Zouaoui Tunis, Tunisia Cable address: Telex: MINISTERE DU PLAN ET DES MIPLAN FINANCES 12 117 TUN Tunis For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) - 10 - 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. REPUBLIC OF TUNISIA By / jfJ Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By. 3/ Regional Vice President Europe, Middle East and North Africa - 11 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works. 5,000,000 35% for Part A of .the Project .(2) Vehicles and 2,300,000 100% of foreign Equipment for expenditures and Part A of the 65% of local ex- Project penditures (3) Fellowships for 50,000 100% of foreign Part A of the expenditures and Project 80% of local ex- penditures (4) Civil works.for 2,100,000 35% Part B of the Project (5) Vehicles and 7,700,000 100% of foreign Equipment for expenditures and Part B of the 65% of local ex- Project penditures (6) Technical Assist- 1,000,000 100% of foreign ance for Part B expenditures and of the Project 80% of local ex- penditures - 12 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (7) Fellowships 50,000 100% of foreign for Part B of expenditures and the Project 80% of local expenditures (8) Fee 325,123 Amount due (9) Unallocated 3,474,877 TOTAL 22,000,000 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 compliance with the policy of the Bank that no proceeds of the Loan 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 Loan decreases or increases, the Bank 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 Bank. 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. - 13 - 5. Notwithstanding the allocation of an amount of te Loan or the disbursement percentages set forth in the table ir aragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Cate- gory, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disburse- ment 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 Bank shall have reasonably determined that the pro- curement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no ex- penditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 14 - SCHEDULE 2 Description of the Project The objective of the Project is to increase production of vegetables, fruit, forage, industrial crops, and livestock in the Medjerda Valley perimeter and the Nebhana perimeter. The Project consists of the following Parts: Part A: Medjerda Valley perimeter (1) Construction of irrigation facilities by the install- ation of irrigation canals and drains; windbreak plantation; construction of about 35 km of farm access roads, of about 70 km of road ditches and of about 200 farm access structures; and land levelling and field drainage, over an area of about 2,400 ha. (2) Improvement of the existing irrigation canal network over about 500 ha. (3) Improvement of about 100 km of farm access roads. (4) Construction and equipping of, and provision of trucks for, a 20,000 ton capacity fruit and vegetable processing center at El Bathan -(with a 600 ton cold storage capacity), and con- struction and equipping of a 600 ton capacity cold storage center at Mornag. (5) Construction and equipping of refrigerated milk collec-. tion centers at Sidi Thabet, Zhana, Manouba and Mornag; provision of 12 farm-to-farm milk collection units with a tractor and a trailer each; and staffing of an extension team in charge of improving milking and milk handling. (6) Provision of about 45 equipped tractors to OMVVM br4- gades to be newly established at Bordj Toumi, Oued Ellil, Soukra, Utique, Bordj El Amri, Djedeida and Chouigui. (7) Construction of 9 stores for inputs at Oued Ellil, Saida, Soukra, Tarfa, Mornaghia, Bordj El Amri, Djedeida, Chouigui and Lezdine; construction of 7 shelters for agricultural equipment at Bordj Toumi, Bordj El Amri, Djedeida, Chouigui, Oued * Ellil, Soukta and Utique; construction of 6 offices for OMVVM extension staff at Saida, Mornaghia, Djedeida, Bejaoua, Soukra - 15 - and Chouigui; and construction of 17 houses for extension agents in the Medjerda Valley perimeter. (8) Strengthening of OMVVM staff by the hiring of 11 addi- tional extension staff, by the establishment of an agricultural and irrigation training unit, and by the provision of fellowships. (9) Provision of credit, through BNT, to farmers to promote mechanization of small farm operations, development of livestock and fruit tree plantations. Part B: Nebhana perimeter (1) Improvement of the Nebhana perimeter irrigation system through: (a) (i) Construction and equipping of a second repumping station at Oued Aich, provision of three new pumps, and stabilization of the discharge pipe at the Ain Kebrite station; (ii) installation of four variable flow pumps and a telecontrol station at the Bled Sisseb main pumping station; and (iii) replacement of 4 diesel pumps by 4 electrical pumps and acquisition of 4 standby diesel groups for the Ain Bou Mourra station. (b) Installation of about 1,300 hydrants, about 30 pressure regulators, about 25 water meters on the primary and secondary irrigation canal network (including a water meter at the Sidi Messaoud Dam), about 750 flow regulators, about 3,100 water meters operating at farm level, and PVC pipes over about 1,100 ha to reduce water losses. (c) Construction and equipping of 11 reservoirs with a total capacity of about 14,600 m3, five at Sbikha and one each at Fahdloun, Enfida, Sidi Bou Ali, Akouda, Bembla and Monastir. (d) Construction of a second 400 m/m pipe line from Brise- charge 5 (Bembla) to Teboulba III, over about 16 km. - 16 - (e) (i) Construction of a third semi-mobile aluminum pipe for about 9 km, with a capacity of <105 1/s, to serve the Old Teboulba perimeter; (ii) replacement of the old pipe distribution system over about 450 ha at Old Teboulba, Ouardanine, Teboulba I and II and Bekalta; (iii) enlargement of the reservoir at Bekalta II to a capacity of about 2,050 m3; and (iv) minor repairs on the supply line serving the Kondar (Enfida) perimeter. (f) Recharging of the aquifer at Old Teboulba. (2) Improvement of farm access roads, including: the gravel surfacing of about 75 km of roads, the reconstruction of about 20 km of access roads to achieve an all-weather standard, the rehabilitation of about 37 km of side ditches, the construction of about 2,350 small culverts over ditches, the construction of 38 structures across temporary rivers or drains and the con- struction of simple gabions and concrete protection works against flooding in Sbikha and Sidi Bou Ali. (3) Construction and equipping of, and provision of trucks for, a 20,000 ton capacity fruit and vegetable processing center at Sahline (with a 600 ton cold storage capacity); and construc- tion and equipping of a small sizing, grading and packaging chain for fruit at Sbikha. (4) Provision of credit, through BNT, to farmers, for the purchase of perforated plastic pipes for greenhouse irrigation, portable gated pipe for open field irrigation, trickle irrigation equipment for tree irrigation, and tree plantation. (5) Provision of credit to agricultural cooperatives by BNT for the construction of cooperative service centers at Akouda, Bembla, Fahdloun, Monastir, Sbikha and Sidi Bou Ali. (6) (a) Establishment and operation of a 5 ha OMIVAN vegetable nursery; (b) equipping and staffing of two OMIVAN disinfection units to assist farmers in greenhouse treatment; - 17 - (c) carrying out of land clearing over about 1,400 ha; land levelling over about 600 ha; installation of windbreaks over about 3,000 ha; and drainage works at Ain Bou Mourra, as needed; and (d) provision of vehicles and equipment for the maintenance of infrastructure in the Nebhana perimeter. (7) Strengthening of OMIVAN's extension and marketing ser- vices through: (i) the hiring of about 30 additional extension agents and of 4 subject matter specialists to train and assist extension staff; (ii) the hiring of I engineer, 1 assistant engineer, 2 administrative staff and 1 technical assistant for OMIVAN's marketing service; (iii) the provision of vehicles to the subject matter specialists and the marketing staff, and the provision of mopeds to the additional extension staff; (iv) the provision of consultant services to assist in training and in the improvement of extension services; (v) fellowships for OMIVAN staff; and (vi) the provision of consultant services to assist in service cooperatives' organization and management. The Project is expected to be completed by December 31, 1987. - 18 SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each May 1 and November 1 beginning November 1, 1986 through November 1, 1998 $845,000 On May 1, 1999 $875,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal; see General Conditions, Section 3.04. - 19 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the prin-ipal amount of the Loan pursuant to Section 3.04 (b) of the Gen, al Conditions: Time of Prepayment Premium Not more than three years 2.05% before maturity More than three years but 4.10% not more than six years before maturity More than six years but 7.50% not more than eleven years before maturity More than eleven years but 10.25% not more than fifteen years before maturity More than fifteen years 11.60% before maturity - 20 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Parts C and E hereof, goods 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. 2. For goods and works to be procured on the basis of inter- national competitive bidding, in addition to the requirements of paragraphs 1.2 of the Guidelines, OMVVM and OHIVAN shall prepare and forward to the Bank as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender or prequalification documents relating thereto,, as the case may be, a general procurement notice, in such form and detail and containing such information as the Bank shall reasonably request; the Bank will arrange for the publica- tion of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods and works in question. OMVVM and OMIVAN 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. (1) Tender documents for the construction and equipping of the fruit and vegetable processing center at El Bathan included in Part A (4) of the Project shall be submitted by June 30, 1983 or such later date as the Bank may agree to the Bank for approval. (2) Contracts for equipment and vehicles shall be grouped to the extent possible. 4. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international com- petitive 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 - 21 - levied in connection with the importation, or the sales and simi1-r taxes levied in connection with the sale or delivery, purL..nt 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. B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the proce- dures described in Part A of this Schedule, goods manufactured in the Republic of Tunisia may be granted a margin of preference in accordance with, and subject to, the following provisions: 1. All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. 2. After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in the Republic of Tunisia if the bidder shall have established to the satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added in the Republic of Tunisia 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 conection 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. - 22 - 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. Other Procurement Procedures 1. Civil works, other than those referred to in Part E hereof, may be carried out under contracts awarded in accordance with local competitive bidding procedures satisfactory to the Bank. 2. Specialized hydraulic modules may be purchased directly under a negotiated contrac, from the sole manufacturer. 3. Contracts for equipment and vehicles estimated to cost less than $100,000 equivalent each may be awarded in accordance with local competitive bidding procedures satisfactory to the Bank; provided, however, that the aggregate amount of all contracts so awarded by OMVVM shall not exceed $1,000,000 equivalent; and that the aggregate amount of all contracts so awarded by OMIVAN shall not exceed $1,000,000 equivalent. D. Review of Procurement Decisions by the Bank 1. Review of prequalification. OMVVM and OMIVAN shall, before qualification is invited, inform the Bank in detail of the procedure to be followed, and shall introduce such modifications in said procedure as the Bank shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusions of any applicant for prequalification shall be furnished by OMVVM and OMIVAN to the Bank for its comments before the applicants are notified of OMVVM and OMIVAN's decision, and OMVVM and OMIVAN - 23 - shall make such additions to, deletions from, or modifications in, the said list as the Bank shall reasonably request. 2. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for equipment and vehicles estimated to cost the equivalent of $250,000 or more; with respect to all contracts for civil works estimated to cost the equivalent of $500,000 or more; and with respect to all contracts for the specialized hydraulic modules referred to in paragraph C.2 of this Schedule: (a) Before bids are invited, OMVVM and OMIVAN shall furnish to the Bank, 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 docu- ments or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, OMVVM and OMIVAN shall, before a final decision on the award is made, inform the Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform OMVVM or OMIVAN and the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification was invited. (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the 8ubmission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 3. With,respect to each contract not governed by the preceding paragraph, OMVVM and OMIVAN shall furnish to the Bank, promptly - 24 - after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan 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 Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform OMVVM or OMIVAN, and the Borrower and state the reasons for such determination. 4. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an 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 20% of the original price, OMVVM and OMIVAN shall inform the Bank of the proposed modification, waiver, extension or change order and the reasons therefor. The Bank, if it deter- mines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform OMVVM or OMIVAN and the Borrower and state the reasons for its determination. E. Procurement Without Contracting Minor civil works such as land leveling, upgrading of access roads, drainage improvements and windbreak plantation may, after approval by the Bank, be carried out by OMVVM and OMIVAN force account in accordance with OMVVM, OMIVAN, and Ministry of Equip- ment procedures satisfactory to the Bank. 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 -nd Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this 2 -day of 3r-1~, 198 A. FOR SECRETARY