Ecuador - National Low Income Housing Project : Loan 2135 - Loan Agreement - Conformed

OFFIAL LOAN NUMBER 2135 EC Loan Agreement (National Low-Income Housing Project) between REPUBLIC OF ECUADOR and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated 1982 LOAN NUMBER 2135 EC LOAN AGREEMENT AGREEMENT, dated 41--r- V , 1982, between REPUBLIC OF ECUADOR (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 Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Project will be carried out by the Borrower's Junta Nacional de la Vivienda (hereinafter called JNV) and by Banco Ecuatoriano de la Vivienda (hereinafter called BEV), with the Borrower's assistance and, as part of such assistance, the Bor- rower will make available to BEV the proceeds of the Loan as hereinafter provided; and WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in the Project Agreement of even date herewith between the Bank and BEV; 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, dated 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 additional terms have the following meanings: (a) "Project Agreement" means the agreement between the Bank and BEV of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; (b) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and BEV pursuant to Section 3.01 (c) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement; and (c) "Sucre" means the currency of the Borrower. 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 thirty five million and seven hundred thousand dollars ($35,700,000). 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 expendi- tures made (or, if the Bank shall so agree, to be made) in res- pect 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 as the Bank shall otherwise agree, pro- curement of: (i) all goods and civil works required for the Pro- ject to be financed out of the proceeds of the Loan; (ii) civil works required for Part C of the Project; and (iii) vehicles and equipment required for the Project; shall be governed by the pro- visions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1987 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and BEV of such later date. Section 2.05. Not later than the Effective Date, the Bor- rower shall pay to the Bank a fee equivalent to five hundred, twenty seven thousand five hundred and eighty six dollars ($527,586). The fee shall be payable in such currency or curren- cies as the Bank shall specify. In the event that the Bank shall -3- 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 pay- ment 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 atnum on the prin- cipal amount of the Loan withdrawn and outstanding from time to time. Section 2.08. Interest and other charges shall be payable semiannually on June 15 and December 15 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. Section 2.10. BEV is designated as representative of the Borrower for the purposes of taking any action required or per- mitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall cause JNV and BEV to carry out the Project described in Schedule 2 to this Agreement, with due diligence and efficiency and in conformity with appro- priate administrative, financial, public utility, engineering and banking practices and with the targets set forth in Schedule 5 to this Agreement; provided, however, that JNV shall be entrusted with the planning and construction aspects of the Project and BEV shall be entrusted with the financial and banking aspects of the Project. (b) Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall cause BEV to perform in accordance with the provisions of the -4- Project Agreement all the obligations of BEV therein set forth, shall take or cause to be taken all action, including the provi- sion of funds, facilities, services and other resources, neces- sary or appropriate to enable BEV to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (c) The Borrower shall make the proceeds of the Loan available to BEV under a subsidiary loan agreement to be entered into between the Borrower and BEV, under terms and conditions which shall have been approved by the Bank which shall provide, inter alia, that: (i) the subsidiary loan shall be denominated and payable in Sucres; (ii) the foreign exchange risk will be borne by the Borrower; (iii) the interest rate shall be equal to the rate set forth in Section 2.07 of this Agreement; (iv) the commitment charge referred to in Section 2.06 of this Agreement will be borne by BEV; (v) the proceeds of the subsidiary loan shall be used by BEV exclusively in the execution of the Project; and (vi) the capital costs of the community facilities included in the Project will be borne by the Borrower. (d) The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan, and except as the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. (e) The Borrower shall cause BEV and JNV to enter into arrangements satisfactory to the Bank for purposes of defining in detail the responsibilities (including financial responsibili- ties), functions and administrative procedures of BEV and JNV for the carrying out the Project. Section 3.02. In order to assist JNV in carrying out the Project, the Borrower shall cause JNV to employ consultants whose selection, qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank 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" published by the Bank in August 1981. Section 3.03. The Borrower shall cause JNV to take all action required on the part of JNV to meet, in respect of Part A of the Project, the affordability targets set forth in Schedule 5 -5- to this Agreement and to furnish to the Bank, by not later than November 30 of each year, until the Project has been completed, a report on current estimates of income distribution, costs and planning for meeting such targets. Section 3.04-. The Borrower shall cause JNV to furnish to the Bank, for comment, by not later than June 30, 1983, a report on the institutional development of JNV, which shall include information and evaluation regarding: (i) the changes in the organizational structure of JNV; (ii) the systems utilized by JNV in the preparation and appraisal of projects; and (iii) the systems utilized by JNV in its planning and coordination with BEV. Section 3.05. The Borrower shall cause JNV to furnish to the Bank, for comment, by not later than December 31, 1982, a report on: (i) the construction program of JNV until the completion of the Project; and (ii) the evaluation of a site for the construc- tion of new houses under the Project, including the social, financial and technical criteria utilized for such evaluation. Section 3.06. Without any limitation or restriction upon its obligations under Section 3.01 of this Agreement, the Borrower shall: (i) provide the funds necessary to operate and maintain the street lights, roads and water, drainage and sewerage infrastructure and the community centers included in the Project; and (ii) through its Ministries of Health and of Education, at all times adequately operate and maintain the health centers and schools included in the Project. Section 3.07. For the purpose of coordinating and adminis- trating the execution of the Project, the Borrower shall cause JNV to employ a Project Coordinator and a Project Manager under terms of reference and conditions of employment satisfactory to the Bank. Section 3.08. (a) The Borrower shall cause JNV to furnish to the Bank, promptly upon their preparation, the plans, specifi- cations, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower shall cause JNV to: (i) maintain records and procedures adequate to record and monitor the progress of the -6- 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 Loan for the Project, and to disclose their use in the Project; (ii) enable the Bank's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iii) furnish to the Bank at regular intervals all such information as the Bank shall rea- sonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Loan and the goods and services financed out of the proceeds. (c) Upon the award of any contract for goods, works or services to be financed out of the proceeds of the ioan, the Bank may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) The Borrower shall cause JNV to enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of the Borrower and any relevant records and documents related to the Project. (e) 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 Bank, the Borrower shall cause JNV to prepare and furnish to the Bank a report, of such scope and in such detail as the Bank 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 Bank of their respective obligations under the Loan Agreement and the accomplishment of the purposes of the Loan. 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 -7- 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 subdivision 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 any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section 4.02. The Borrower shall cause JNV and BEV to main- tain records adequate to reflect in accordance with consistently maintained sound accounting practices, the operations, resources and expenditures of JNV in respect of the Project. 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: -8- (a) BEV shall have failed to perform any of its obligations under the Project Agreement. (b) As a result of events which have occurred after the of the date of the Loan Agreement, an extraordinary situation shall have arisen which shall make it improbable that BEV will be able to perform its obligations under the Project Agreement. (c) Decreto Supremo No. 559 of the Borrower, dated March 29, 1973, shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the carrying out of the Project. (d) Decreto Supremo No. 1486 of the Borrower, dated Decem- ber 22, 1972, and Resolucion No. 75-354 of the Superintendencia de Bancos of the. Borrower, dated April 22, 1975, shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of BEV to perform any of its obligations under the Project Agreement. 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 sixty days after notice thereof shall have been given by the Bank to the Borrower and BEV. (b) Any event specified in parLoraphs (c) and (d) of Sec- tion 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 Conditions: (a) the Subsidiary Loan Agreement has been executed on behalf of the Borrower and BEV; and -9- (b) the Project Coordinator referred to in Section 3.07 of this Agreement has been selected. 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 fur- nished to the Bank: (a) that the Project Agreement has been duly authorized or ratified by BEV, and is legally binding upon BEV in accordance with its terms; and (b) that the Subsidiary Loan Agreement has baen duly autho- rized or ratified by the Borrower and BEV and is legally binding upon the Borru4er and BEV in accordance with its term; Section 6.03. The date 7ta6s , is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. Except as provided in Section 2.10 of this Agreement, the Ministro de Finanzas y Crddito Publico is design- ated as representative of the Borrower for the purposes of Sec- tion 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions. For the Borrower: Ministerio de Finanzas y Credito P6blico Quito, Ecuador .Cable address: Telex: MINFINANZAS 2358-MINFIN-ED Quito, Ecuador - 10 - 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 (RXCA) or 64145 (WUI) 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 ECUADOR By F Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Latin American and the Caribbean - 11 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items financed out of the proceeds of the Loan, the allocation of 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, 13,960,000 42% including design and supervision and building materials under Parts A and B of the Project (2) Sub-loans under 5,750,000 42% of amounts Part D of the disbursed by /Project; BEV (3) Services and 1,000,000 100% of foreign equipment under expenditures under Part E of and 42% of the Project local expendi- tures (4) Fee 527,586 Amount due (5) Unallocated 14,462,414 TOTAL 35,700,000 - 12 - 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, except that withdrawals, in an aggregate amount not exceeding the equivalent of $1,300,000 may be made in respect of Categories (1) and (3) on account of payments made for such expenditures before that date but after August 1, 1981. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 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 Category, 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. - 13 - 6. If the Bank shall have reasonably determi that the procurement of any item in any Category is inconsisLent 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 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 purpose of the Project is to strengthen the institu- tional, technical and financial capabilities of BEV and JNV and to support the Borrower's objectives of providing low-cost hous- ing in Ecuador. The Project consists of the following parts: PART A: HOUSING Construction of about 8,200 low-income units and related basic infrastructure in Quito and nine smaller cities. PART B: URBAN UPGRADING Regularization of land titles and provision of basic infrastructure in existing low-income urban settlements. PART C: COMMUNITY FACILITIES Construction and equipping of about 14 community centers, about 10 schools, about 9 day-care centers, and about 7 health centers, in Quito and nine smaller cities. PART D: CREDIT Making Sub-loans for house construction or improvement to about 7,000 families in the municipalities included in Part A of the Project. PART E: TECHNICAL ASSISTANCE Strengthening of BEV's and JNV's capabilities in such areas as: (i) preparation and execution of projects; (ii) improvement of their low-cost housing technology; and (iii) financial management. The Project is expected to be completed by June 30, 1986. - 15 - SCHEDULE 3 Amortization Schedule Payment of Principal Date of Payment Due (Expressed in dollars)* On each June 15 and December 15 beginning December 15, 1986 through December 15, 1998 1,375,000 On June 15, 1999 1,325,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal; see General Conditions, Section 3.04. - 16 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.04 (b) of the General Conditions: Time of Prepayment Premium Not more than three years 3.00% before maturity More than three years but 6.10% 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 - 17 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Part C hereof, goods and civil works 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, and in addition to the requirements of paragraph 1.2 of the Guidelines, the Borrower 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. The Borrower 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. 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 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. - 18 - 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 Ecuador 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 Ecuador 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 Ecuador 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 connection with the sale or delivery, pursuant to the bids, of the goods. Such lowest eva- luated 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. 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 - 19 - 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 (a) contracts for civil works estimated to cost less than $1,000,000 equivalent may be awarded on the basis of competitive bidding under procedures satisfactory to the Bank. (b) contracts for the purchase of goods, other than computer and associated software, may be procured in accordance with local procurement procedures satisfactory to the Bank. (c) civil work., for Part A of the Project (when cooperative labor is involved) and for Part B of the Project may be executed by use of force account, if the Bank shall so agree. D. Review of Procurement Decisions by the Bank 1. Review of invitations to bid and of proposed awards and final contracts: With respect to: (i) the first two contracts for each type of civil work; (ii) all contracts for civil works estimated to cost the equivalent of $1,000,000 or more; and (iii) all con- tracts for goods estimated to cost the equivalent of $750,000 or more: (a) Before bids are invited, the Borrower 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 bid- ders. (b) After bids have been received and evaluated, the Bor- rower 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 - 20 - 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 deter- mines that the intended award would be inconsistent 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 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 submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, the Borrower shall furnish to the Bank, promptly 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 the Borrower and state the reasons for such determination. 3. 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, the Borrower shall inform the Bank of the proposed modification, waiver, extension or change order and the reasons therefor. The Bank, 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. - 21 - SCHEDULE 5 Affordability Targets I. Quito (A) About forty per cent (40%) of the units to be con- structed in Quito, for the purposes of Part A of the Project, will have to be affordable to about sixty five per cent (65%) of families living in that city; and (B) the remaining units to be constructed in Quito, for the purposes of Part A of the Project, will have to be affordable to about fifty five per cent (55%) of families living in that city. II. Cities included in the Project other than Quito (A) About sixty per cent (60%) of the units to be con- structed in cities included in the Project other than Quito, for the purposes of Part A of the Project, will have to be affordable to about eighty per cent (80%) of families living in those cities; (B) About twenty five per cent (25%) of the units to be constructed in cities included in the Project other than Quito, for the purposes of Part A of the Project, will have to be affordable to about fifty per cent (50%) of families living in those cities; and (C) the remaining units to be constructed in cities included in the Project other than Quito, for the purposes of Part A of the Project, will have to be affordable to about forty per cent (40%) of families living in those cities. 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 9 day of , 198 2. FOR SECRETARY