Madagascar - Agricultrual Institutions Technical Assistance Project : Credit 1249 - Credit Agreement - Conformed

DOCUMENS DIT NUMBER 1249 MAG Development Credit Agreement (Agricultural Institutions Technical Assistance Project) between DEMOCRATIC REPUBLIC OF MADAGASCAR and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1982 CREDIT NUMBER 1249 MAG DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated A 2 , 1982, between DEMOCRATIC REPUBLIC OF GASCAR (hereinafter called the Bor- rower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the Gene:al 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) "Project Preparation Advance" means the project prepa- ration advance granted by the Association to the Borrower pursuant to an exchange of letters dated July 28, 1981 and September 10, 1981 between the Borrower and the Association; (b) "MPARA" means the Borrower's Ministry of Agricultural Production and Agrarian Reform; (c) "DEP" means the Department for Studies and Planning within the Borrower's Ministry of Agricultural Production and Agrarian Reform; (d) "SAMANGOKY" means Societe pour l'Am9nagement et la Mise en Valeur de la Vallee du Bas Mangoky; (e) "SOMALAC" means Societg Malgache pour l'Amenagemeat du Lac Alaotra; (f) "FIFABE" means Comite d'Expansion Economique de la Plaine de Marovoay; - 2 - (g) "FOFIFA" means Centre National de Recherche Appliguge pour le DSveloppement Rural; (h) "S-D-R" means Service de Dfveloppement Rural within the Borrower's Ministry of Agricultural Production and Agrarian Reform; (i) "Coordinating Unit" means the unit to be created by the Borrower pursuant to Section 3.10 of this Agreement; and (j) "SINPA" means Socifit& d'Int6r8t Nationale des Produits Agricoles. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to five million two hundred thousand Special Drawing Rights (SDR 5,200,000). Section 2.02. (a) 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. (b) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account Cnd pay to itself the amount required to repay the principal amovnt of the Project Preparation Advance withdrawn and outstand- ing as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods 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 this Agreement. -3- Section 2.04. The Closing Date shall be June 30, 1985 or such later date as the Association shall establish. The Asso- ciation shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not withdrawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agreeient to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency. specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.06. 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 2.07. Commitment charges and service charges shall be payable semiannually on March 1 and September 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 1 and September 1 commencing September 1, 1992, and ending March 1, 2032, each installment to and including the installment payable on March 1, 2002, 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 2,09. 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) The Borrower shall carry out Parts A, C.1, C.2, C.5 and D of the Project through DEP and Part B of the -4- Project through the Coordinating Unit with due diligence and efficiency and in conformity with appropriate administrative and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) The Borrower shall cause SOMALAC to carry out Part C.3 of the Project, SAMANGOKY to carry out Part C.4 of the Project and FOFIFA to carry out Part E of the Project and shall cause SOMALAC, SANANGOKY and FOFIFA to do so with due diligence and efficiency and in conformity with appropriate administrative and financial practices and shall provide, promptly as needed, the funds needed for the purpose. Section 3.02. In order to assist the Borrower in carrying out Parts A, B, C.2, C.5 and D of the Project, in order to assist SOMALAC to carry out Part C.3 of the Project, in order to assist SAMANGOKY to carry out Part C.4 of the Project and in order to assist FOFIFA to carry out Part E of the Project, the Borrower shall employ or shall cause SOMALAC, SAMANGOKY and FOFIFA to employ consultants whose selection, qualifications, experience and terms and conditions of employment shall be satisfactory to the Association, in accordance with the principles and procedures described in the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" pub- lished by the Bank in August 1981. Section 3.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) The Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the purposes of the Project. Section 3.04. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, reports and contract documents for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. -5- (b) The Borrower: (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 representatives to visit the facilities included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; (iii) shall furnish to the Association all interim reports pre- pared by consultants under the Project; (iv) shall furnish to the Association at regular intervals all such information as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds; and (v) by June 30, 1983 or such other date as the Association may agree prepare through DEP a iLd-Lerm Project review to be discussed by the Borrower and the Association. (c) Upon the award by the Borrower of any contract for goods or services to be financed out of the proceeds of the Credit, the Association may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Association, the Borrower shall prepare and furnish to the Association a report, of such Lcope and in such detail as the Association shall reasonably request, on the execution and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Association of their respective obligations under the Development Credit Agreement and the accomplishment of the purposes of the Credit. Section 3.05. (a) In carrying out Part A.1 of the Project the Borrower shall: (i) by February 1, 1983 or by such other date as the Association may agree submit an interim investment plan to the Association for its comments; and -6- (ii) by May 1, 1983 or by such other date as the Association may agree submit the final version of the investment plan to the Association. (b) By February 1, 1983 or by such other date as the Association may agree the Borrower shall, in carrying out Part A.2 of the Project, submit to the Association recommendations for measures to be undertaken to strengthen DEP's planning capability. Section 3.06. (a) By February 1, 1983 or by such other date as the Association may agree the Borrower shall, in carrying out Part B.1 of the Project, submit to the Association for its com- ments a short-term plan to increase rice production and to improve rice processing and marketing. (b) By May 1, 1983 or by such other date as the Associa- tion may agree the Borrower shall submit to the Association for its comments the findings and recommendations of the studies to be carried out under Part B.2 of the Project. (c) By-June 1, 1983 or by such other date as the Associa- tion may agree the Borrower shall submit to the Association for its comments the findings and recommendations of the studies to be carried out under Part B.3 of the Project. Section 3.07. By July 15, 1982 or by such other date as the Association may agree the Borrower shall furnish to the Association for its approval detailed recommendations for the strengthening of SOMALAC's and SAMANGOKY's management to be carried out under Parts C.3 and C.4 of the Project. Section 3.08. By April 1, 1983 or by such other date as the Associrtion may agree the Borrower shall submit to the Association: (i) the findings of the studies to be carried out under Parts D.1 and D.4 of the Project for its review and com- ments; and (ii) the measures to be carried out under Part D.2 of the Project for its approval. Section 3.09. By March 31, 1983 or by such other date as the Association may agree the Borrower shall submit to the Asso- ciation for its approval a program to strengthen the management of FOFIFA and a detailed research program for FOFIFA. Section 3.10. By August 31, 1982 or by such other date as the Association may agree the Borrower shall establish and -7- thereafter maintain a Coordinating Unit for the planning of rice production and marketing with sufficient authority to carry out its mandate. Section 3.11. Prior t. the carrying out of any training under such Parts of the Project as cited below in this Section the Borrower shall submit to the Association for its approval detailed proposals for training to be carried out under Parts A.3, C.2 and D.3 of the Project and shall cause FOFIFA to submit detailed proposals for training to be carried out under Part E.3 of the Project. Section 3.12. By December 31, 1982 or by such other date as the Association may agree the Borrower shall submit to the Asso- ciation for its approval a list of companies to be audited under Part C.5 of the Project. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained separate records and accounts adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the carrying out of Parts A, B, C.1, C.2, C.5, ana D of the Project, of the departments or agencies of the Borrower responsi- ble for carrying out of such Parts of the Project. (b) The Borrower shall: (i) have its accounts referred to in paragraph (a) of this Section, for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year, (A) certified 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 concerning such accounts and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. (a) The Borrower shall cause SAMANGOKY, SOMALAC and FOFIFA to maintain separate accounts and records adequate to reflect in accordance with consistently maintained appropriate -8- accounting practices: (i) the operations and financial condition of SAMANGOKY, SOMALAC and FOFIFA; and (ii) their respective operations and expenditures in respect of the carrying out of Parts C.3, C.4 and E of the Project. (b) The Borrower shall cause SAMANGOKY, SOMALAC and FOFIFA: (i) to have their accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscam year audited, in accordance with appropriate auditing principles consistenly applied, by independent auditors acceptable to the Association; (ii) to furnish to the Association as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of their 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) to furnish to the Association such other information con- cerning the accounts and financial statements of SAMANGOKY, SOMALAC and FOFIFA and the audit thereof as the Association shall from time ta time reasonably request. ARTICLE V Effective Date; Termination Section 5.01. The date /0 4 ,/ D /92, is hereby speci- fied for the purposes of Sectio 12.04 of the General Conditions. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. The Minist4re aupr4s de la Pr6sidence de la R6publique chargA des Finances of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministare aupres de la Prfsidence chargg des Finances Antananarivo Madagascar 9 Cable address: Telex: MINFIN 22339 Antananarivo For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, act!ng 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. DEMOCRATIC REPUBLIC OF MADAGASCAR By ALR"/)k -x-; Authorized Representati e INTERNATIONAL DEVELOPMENT ASSOCIATION Regicnal Vice President Eastern Africa - 10 - 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 under 990,000 100% of foreign Parts A through E expenditures of the Project and 50% of local expenditures (2) Consultants' services 1,500,000 100% of foreign under Parts A, C, expenditures D and E of the and 50% of local Project expenditures (3) Consultants' services 510,000 100% of foreign under Part B of expenditures the Project and 50% of local expenditures (4) Training under Parts 530,000 100% of foreign A.3, C.2, D.3 and E.3 expenditures of the Project and 50% of local expenditures (5) Refunding of Project 890,000 Amount due Preparation Advance (6) Unallocated 780,000 TOTAL 5,200,000 - 11 - 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 Asseciation 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: (i) for expenditures prior to the date of this Agreement; and (ii) for expenditures under Category 3 of the table in paragraph 1 above until the Borrower shall have established the Coordinating Unit pursuant to Section 3.10 of this Agreement. 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. - 12 - 6. If the Association shall have reasonably determined that the procurement of aAPy 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. - 13 - SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: Management Assistance for DEP 1. Preparation of a three year investment plan covering the years 1984-86; 2. Strengthening of DEP's planning capability; and 3. Training of DEP's staff. Part B: Technical Assistance for the Planning of Rice Production and Marketing 1. Preparation of a short-term plan to increase rice production and to improve the processing and market- ing of rice; 2. Studies to review the Borrower's procedures for managing rice imports and input distribution for rice production; and 3. A study to review the Borrower's rice marketing system, including the review of SINPA's operations. Part C: Management Assistance for SAMANGOKY, SONALAC and FIFABE and other selected companies 1. Financial audits of SAMANGOKY, SOMALAC, and FIFABE and management audits of SOMALAC and FIFABE; 2. Training of the staff of SAMANGOKY, SOMALAC and FIFABE; 3. Strengthening of SOMALAC's management; 4. Strengthening of SAMANGOKY's management; and 5. Management audits of selected companies. Part D: Studies pertaining to the Organization of MPARA 1. Studies to evaluate the organizational structure and operational procedures of MPARA, including - 14 - the identification of immediate measures to be under- taken to reorganize MPARA; 2. Implementation of the measures identified in the carrying out of Part D.1 of the Project; 3. Training of MPARA's staff; and 4. A study to review the organizational structure, the operational procedures and the resources available to the S-D-R of Antananarivo. Part E: Technical Assistance to FOFIFA 1. Preparation of a program to reorganize FOFIFA and implementation of such program; 2. Preparation of a detailed research program and implemen- tation thereof; and 3. Training of FOFIFA's staff. The Project is expected to be completed by December 31, 1984. - 15 - SCHEDULE 3 Procurement 1. Except as provided in paragraph 2 of this Schedule, goods shall be procured after competitive bidding advertised locally under contracts awarded in accordance with the Borrower's regular procurement procedures which shall be satisfactory to the Association. 2. With respect to all contracts estimated to cost the equiva- lent of $10,000 or less goods may be procured through prudent local shopping. 3. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for goods estimated to cost the equivalent of $30,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before they are issued to the prospective bidders. (b) After bids have been received and evaluated, the Bor- rower shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, in sufficient time for its review, a detailed report on the evalua- tion and comparison of the bids received, and such other inform- ation as the Association shall reasonably-request. The Association shall, if it determines that the intended award would be inconsis- tent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. - 16 - (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. 4. With respect to each contract not governed by the preceding paragraph, the Borrower shall furnish to the Association, promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. 5. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting- an extension of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 15% of the original price, the Borrower shall inform the Association of the proposed modification, waiver, extension or change order and the reasons therefor. The Association, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform the Borrower and state the reasons for its determination. 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 Associatitin. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the ah day of 198 ( FOR SECRETARY