Tunisia - Fifth Highway (Rural Roads) Project : Loan 2108 - Loan Agreement - Conformed

OFFICIAL4 DocMT LOAN NUMBER 2108 TUN Loan Agreement (Fifth Highway (Rural Roads) Project) between REPUBLIC OF TUNISIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated Mo. ,.1982 LOAN NUMBER 2108 TUN LOAN AGREEMENT AGREEMENT, dated b 1 , 1982, between REPUBLIC OF TUNISIA (hereinafter called the Borrower) and INTERNA- TIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS 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; and WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan to the Borrower upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE 1 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 have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Rural Road" means a road, under Part A of the Project, carrying predominantly agriculture-related traffic, generally unpaved, irrespective of its classification, and located outside urban areas in the Borrower's territory; (b) "MPW" means the Borrower's Ministry of Public Works; (c) "DPC" means the Direction des Ponts et Chauss6es, a directorate established and operating within MPW; (d) "MA" means the Borrower's Ministry of Agriculture; -2- (e) "MTC"' means the Borrower's Ministry of Transport and Communication; (f) "BNT" means Banque Nationale de Tunisie, a Societe Anonyme incorporated and operating under the Borrower's Code de Commerce promulgated by Law No. 59/129 of October 5, 1959, and pursuant to its Statutes as filed with the R6gistre du Commerce of Tunis, as the same may be amended from time to time; and (g) "Dinars" and the sign "DT" mean 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 curre-cies equivalent to thirty-five million five hundred thousand dollars ($35,500,000). 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 as the Bank shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1987 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 five hundred twenty-four thousand six hundred and thirty-one dollars ($524,631). The fee shall be payable in such currency or currencies 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 -3- 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 commitment charge at the rate of three-fourth 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 principal amount of the Loan withdrawn and outstanding from time to time. Section 2.08. Interest and other charges shall be payable semiannually on March 15 and September 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 Schedul-, 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall: (i) carry out Parts A, D, E and H (1) (iv) and (v) of the Project through DPC; (ii) carry out Parts B, F, and H (1) (iii) of the Project through MA; (iii) carry out Part H (1) (i) and (ii) and Part (H) (2) of the Project through MPW's DPC in collabora- tion with MA; (iv) carry out Part G of the Project through MTC; and (v) cause BNT to carry out Part C of the Project in collaboration with MA; all under the overall supervision of MPW with due diligence and efficiency and in conformity with appropriate financial, admini- strative, agricultural and engineering practices, and shall -4- provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) For the purpose of coordinating the activities of the Borrower's departments and agencies and of BNT in the execution of the Project or any part thereof, the Borrower shall establish and maintain, until the completion of the Project, a Project Coordination Committee, with such membership, powers and responsi- bilities as shall be satisfactory to the Bank. Section 3.02. Without any limitation to the generality of the provisions of Section 3.01 of this Agreement, the Borrower shall cause BNT to make the short-, medium- and long-term credit included in Part C of the Project adequately available to farmers and all other agricultural enterprises in the zones served by the Rural Roads to be improved under Part A of the Project. Section 3.03. (a) The Borrower shall carry out the Project in accordance with an overall action program to be agreed upon between the Borrower and the Bank. (b) Not later than April 30 of each year, starting in 1983, the Borrower shall through the Project Coordination Commit- tee submit to the Bank for its review and comments a plan of project operations, consistent with the overall action program, to be carried out in the following calendar year. Upon receipt of the Bank's comments, the Borrower shall promptly finalize such plan of operations and furnish it to the Bank not later than September 30 of that same year. (c) The Borrower shall furnish to the Bank, together with the plans of operations referred to in paragraph (b) of this Section, for approval, using selection criteria and a methodology satisfactory to the Bank: (i) feasibility reports for the Rural Roads proposed to be included in Part A (2) of the Project for each year; and (ii) extension guidelines, farm budget analyses and implementation data for the extension to be carried out in each year in the zones served by the Rural Roads proposed to be included. Section 3.04. In order to assist the Borrower in: (i) the preparation of feasibility studies, detailed designs and contract documents for the Rural Roads included in Part A (2) of the Project; (ii) the supervision of works to be carried out under Part A of the Project; (iii) the preparation of detailed extension -5- programs and of credit need projections to be carried out under Part B of the Project for the zones served by the Rural Roads included in the second or third year of the Rural Roads improve- ment program; (iv) the carrying out of Part H of the Project; and (v) the preparation of guidelines for use by regional engineers in the carrying out of Part E of the Project; the Borrower shall 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 3.05. (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 Loan 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) Except as the Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the purposes of the Project. Section 3.06. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and construction 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: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (in- cluding its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Loan, and to disclose their use in the Project; (ii) shall enable the Bank's representatives to visit the facilities and construction sites included in the Project and to e-amine the goods financed out of the proceeds of the Loan and Lny rele- vant records and documents; and (iii) shall furnish to the Bank at regular intervals all such information as the Bank shall reason- ably request concerning the Project, its cost and, where appro- priate, the benefits to be derived from it, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. - 6- (c) Without any limitation to the generality of the fore- going and except as the Bank may otherwise agree the Borrower shall, through its Project Coordination Commictee, furnish to the Bank quarterly progress reports in form and substance satisfac- tory to the Bank. (d) Upon the award by the Borrower of any contract for goods, works or services to be financed out of the proceeds of the Loan, the Bank may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (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 prepare and furnish to the Bank a report, of such scope and in such detail as the Bank shall reason- ably 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. Section 3.07. The Borrower shall take or cause to be taken all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out the Project and shall furnish to the Bank, promptly after such acquisition, evidence satisfactory to the Bank that such land and rights in respect of land are avail- able for purposes related to the Project. 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 -7- the benefit of the creditor of such external debt in the alloca- tion, 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 ratabl- 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 simi tr functions, for the Borrower. Section 4.02. The Borrower shall: (a) establish and maintain within MPW, MA and MTC Project accounts and records adequate to reflect, separately, in accordance with consistently maintained sound accounting practices, their operations, resources and ex- penditures in respect of the Project; and (b) cause MPW, MA and MTC to: (i) have such Project accounts and records for each fiscal year audited, in accoiiance with appropriate accounting principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year the report of the audit of such Project accounts and records by said independent auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information -8- concerning the said Project accounts and records and the audit thereof as the Bank shall from time to time reasonably request. Section 4.03. The Borrower shall ensure adequate supervision of Rural Road improvement works and shall provide, promptly as needed, the funds, facilities, equipment, staff and other resources required for the foregoing. Section 4.04. The Borrower shall cause all the Rural Roads as well as other improved rural roads offering an appropriate level of service to be adequately maintained; shall cause all necessary repairs thereof promptly to be made, all in accordance with sound engineering practices; and shall provide, promptly as needed, the funds, facilities, equipment, staff and other resources required for the foregoing. ARTICLE V Effective Date; Termination Section 5.01. The following event is specified as an addi- tional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely, that the Project Coordination Committee referred to in Section 3.01 (b) of this Agreement sha'1l have been established pursuant to the provisions thereof. Section 5.02. The date <eb. 13 19?2. , is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Ministre du Plan et 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: Ministere du Plan et des Finances Place de la Monnaie Tunis, Tunisia -9- Cable address: Telex: MIPLAN MIPLAN 12117 Tunis TN 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) 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 hiSj Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By ~ c( C~ Regional Vice President Europe, Middle East and North Africa - 10 - 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 (at:gory Dollar Equivalent) to be Financed (1) Rural Road works 21,000,000 40% (2) Construction and 500,000 30% rehabilitation of buildings for Part B of the Project (3) Extension 150,000 100% of for- equipment eign expendi- tures and 63% of local ex- penditures (4) Spot improvements 1,000,000 33% (5) Motor vehicles 350,000 100% of for- for Part B of eign expendi- the Project tures and 40% of local expenditures (6) Motor vehicle in- 400,000 100% of for- spection equipment eign expendi- for Part B of tures and 63% the Project of local ex- penditures - 11 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (7) Consultant 2,100,000 75% services (8) Fellowships 100,000 100% (9) Fee 524,631 Amount due (10) Unallocated 9,375,369 TOTAL 35,500,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the curr=ncy 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 ptrcentage 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 with- drawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. - 12 - 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 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. 6. If the Bank shall have reasonably determined that the procurement of any 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 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. - 13 - SCHEDULE 2 Description of the Project The Project is part of the Borrower's program under its Sixth Development Plan to develop the Borrower's rural road network and to improve the maintenance thereof, to further strengthen the Borrower's agricultural extension services and to provide short-, medium- and long-term agricultural credit in the zones served by the Rural Roads. The Project consists of the following: Part A: Rural Road Improvement Rehabilitation, upgrading or construction of Rural Road sections totalling about 1,200 km, in accordance with a Rural Road improvement program and with the design standards specified in Annex I to this Schedule: (1) for the first year of the Rural Road improvement pro- gram, 33 Rural Road sections totalling about 400 km, as detailed in Annex II to this Schedule; and (2) for the second and third years of the Rural Road im- provement program, about 70 Rural Road sections total- ling about 800 km, as agreed from time to time between the Borrower and the Bank on the basis of feasibility studies and detailed designs. Part B: Agricultural Extension (1) Strengthening of agricultural extension services in the zones served by the Rural Roads included in the Project, includ- ing, inter alia, the assignment of extension agents to tech- nical centers, the construction and equipping of about 55 technical centers and the purchase of vehicles for use by the extension agents. (2) Preparation of detailed extension programs and credit need projections, and the implementation of such extension programs, in the zones served by the Rural Roads included in the Project. - 14 - Part C: Agricultural Credit Provision, through BNT, of: (i) short-term credit to farmers for inputs; and (ii) medium- and long-term credit for investment projects. Part D: Road Maintenance Implementation of a road maintenance program for all improved Rural Roads. Part E: Spot Improvement Program Implementation of a feeder roads spot improvement program. Part F: Small Rural Infrastructure Works Construction and rehabilitation of small infrastructure works, including irrigation schemes, drainage works and mountain dams. Part G: Road Safety Provision of equipment for 5 vehicle inspection stations at Kebili, Sfax, Tataouine, Tozeur and Tunis. Part H: Technical Assistance, Training and Fellowships (1) Provision of consulting services to: (i) assist DPC and MA in the preparation of a project covering the next phase of rural road improvements; (ii) assist DPC and MA in project auditing and with monitor- ing and evaluation of the socio-economic, agricultural and transport impacts of the Project; (iii) assist MA with training, including instruction of extension agents; (iv) assist DPC in carrying out a study of materials, con- struction and maintenance techniques for unpaved roads in Tunisia; and - 15 - (v) assist DPC in the preparation of a program of road rehabilitation. (2) Provision of fellowships to MA and DPC staff for short training missions overseas. The Project is expected to be completed by December 31, 1986. - 16 - ANNEX I TO SCHEDULE 2 Design and Structural Standards 1. Most of the Rural Roads will be improved following the existing alignment. The longitudinal profile may be modified to raise the road above flood level, but not generally just to achieve the minimum design standards. Standards for horizontal alignment and longitudinal profile will not therefore be imposed in this Agreement. In the rare cases where a higher standard may be required on a new alignment satisfactory comprehensive standards have been established by the DPC. 2. Except as the Bank and the Borrower otherwise agree, cross section and pavement structure standards shall be as shown below. Improvement Level 1/ Item N2 N3 N4 Traffic Volume ADT 0-50 50-100 more than 100 Platform Width 5 m 6 m 9 m (with 6 m of high quality gravel) Pavement Structure2/ 150-200 mm 200-250 mm 300 mm 1/ See Directives Techniques en Matiere d'Amenagement des Routes Rurales, Manuel du Projeteur, DPC, February 1980. 2/ Depends on subgrade soil. 3/ Drainage would be provided by lateral ditches, pipe and box culverts, and paved fords. - 17 - ANNEX II TO SCHEDULE 2 List of Rural Road sections included in Part A (1) Except as the Borrower and the Bank shall otherwise agree, the following Rural Road sections shall be included: Approximate Improvement Road Number/Name Length in km Level* Siliana: 204 MC47-Ecole d'Agric. 13.0 N4 205 MC 171-GP4 8.6 N3 206 RVE 623-Siliana 25.3 N4 255B Sidi Bou Rouis-GP5 7.0 N4 Gafsa: 707 Nouamer 8.2 N3 708 Ancienne GP3 6.5 N3 709 Circuit Gafsa 7.0 N3 710 Circuit Tozeur 6.8 N3 711 Sened-Majoura 10.3 N3 Gabes: 808 Mareth-Sadria-Zarat 8.7 N4 809 Kettana-Zrig Barrania 5.4 N3 Bizerte: 901 Bou M'Khila 13.0 N3 902 Sidi Abdelbasset 13.2 N3 903 Errokb 6.0 N3 906A Kef Grab 9.7 N4 907 Kef Mezouar 20.1 N4 * As defined in Directives Techniques en Matiere d'Am&nagement des Routes Rurales, Manuel du Projeteur, DPC, February 1980. - 18 - Approximate Improvement Road Number/Name Length Level* Monastir: 1502 Bembla-Touza-Sidi Naija 18.1 N3 1503 Moknine-Beni Hassen 12.6 N3 1505 Bou Othman-Menzel Kamel 21.2 N4 1506B Bou Othman-Zaouiet Kontech 8.0 N3 Mahdia: 1602 Boumerdes-El Jem 18.3 N4 1651 Souassi-Somra 25.5 N3 1652 Souassi-Sidi Bouhlel 10.0 N3 Sfax: 1701 Djebeniana-Agenga 15.2 N3 1702 El Amra-Hazeg 11.8 N4 1703 Teniour-Boujarboua 12.2 N4 1704 Sidi Abdelkefi 11.7 N3 1751 Ouled Ahmed-Chograne 11.0 N3 Medenine: 1801 Oughla-Gribis 8.7 N3 1802 Mouensa-Sidi Chamekh 11.5 N3 1803 Gribis-Hassi Jerbi 9.5 N3 1804 Mouensa-El Kantara 11.8 N3 1805 Khaoui-El Oubbigla 14.0 N3 399.9 * As defined in Directives Techniques en Matière d'Aménagement des Routes Rurales, Manuel du Projeteur, DPC, February 1980. - 19 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each March 15 and September 15 beginning September 15, 1986 through September 15, 1998 1,365,000 On March 15, 1999 1,375,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal; see General Conditions, Section 3.04. - 20 - 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 before maturity 2.05% More than three years but not more than six years before maturity 4.10% More than six years but not more than eleven years before maturity 7.50% More than eleven years but not more than fifteen years before maturity 10.25% More than fifteen years before maturity 11.60% - 21 - 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, 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 publication 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. (i) Bidders for the Rural Road improvement works included in Part A of the Project will be prequalified as described in paragraph 1.3 of Part A of the Guidelines for either single or multiple lots. (ii) For bidding purposes, Rural Road improvement works under Part A of the Project shall be divided into lots estimated to cost the equivalent of at least DT500,000 each. Lots shall be packaged in groups estimated to cost the equivalent of about DT3,000,000 each. Bidders may bid for one or several lots or group of lots, and contracts, each to be based on a unit price, shall be awarded on the basis of the lowest bid for any lot or group of lots. - 22 - (iii) Contracts for equipment and vehicles included in Part B of the Project 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 competitive bidding: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for the imported goods, or the ex-factory price or off-the-shelf price of other goods, offered in such bid; (ii) customs duties and other import taxes levied in connection with the importation, or the sales and similar taxes levied in connection with the sale or delivery, pursuant to the bid, of the goods shall not be taken into account in the evaluation of the bids; and (iii) the cost of inland freight and other expenditures incidental to the delivery of the goods to the place of their use or installation shall be included. B. Prefereace for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A of this Schedule, goods manufactured in 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: (i) Group A: bids offering goods manufactured in 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 Tunisia equal to at least 20% of the ex-factory bid price of such goods. (ii) Group B: all other domestic bids. (iii) Group C: bids offering any other goods. - 23 - 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 evalu- ated 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 thr 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 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) Contracts for equipment or vehicles included in Part B of the Project estimated to cost less than $100,000 each may be awarded after competitive bidding advertised locally in accordance with local procedures acceptable to the Bank, provided that the aggregate cost of all contracts so awarded shall not exceed $500,000. (2) Contracts for civil works under Parts B and E of the Project may be awarded after competitive bidding advertised locally in accordance with local procedures acceptable to the Bank. (3) Specialized vehicle inspection equipment included in Part G of the Project shall be procured from suppliers of equipment compatible with existing equipment under negotiated contracts, account being taken of the reasonableness of the price thereof - 24 - and other factors such as time of delivery and efficiency and reliability of the equipment and the availability of maintenance facilities and spare parts. D. Review of Procurement Decisions by the Bank 1. Review of prequalification. The Borrower 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 exclusion of any appli- the Borrower's decision shall be furnished by the Borrower to the Bank for its commentp before the applicants are notified of the Borrower's decision, and the Borrower shall make such addi- tions 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: (i) contracts for civil works included in Part A of the Project; and (ii) contracts for equipment or vehicles estimated to cost the equivalent of $100,000 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 documents 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, 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 the contract and shall furnish to the Bank, in suffiLient time for its review, a detailed report, on the evaluation and comparison of the bids received, together with uhe recommendations for award 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 the Borrower and state the reasons for such determination. - 25 - (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 sub- mission 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, 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 con- tract, together with the analysis of the respective bids or price quotations as the case may be, 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. 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 15% 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. 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 /4 day of , 198L. FOR SECRETARY