India - Karnataka Social Forestry Project : Credit 1432 - Project Agreement - Conformed

DIT NUMBER 1432 IN EOFFICIAL, DOCUMENTSjf Project Agreement (Karnataka Social Forestry Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and STATE OF KARNATAKA Dated , 19-3 CREDIT NUMBER 1432 IN PROJECT AGREEMENT AGREEMENT, dated -4A n , 193*, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and STATE OF KARNATAKA, acting by its Governor (hereinafter called Karnataka). WHEREAS by the Development Credit Agreement of even date herewith between India, acting by its President (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to twenty-five million six hundred thousand Special Drawing Rights (SDR 25,600,000), on the terms arid conditions set forth in the Development Credit Agreement, but only on condition that Karnataka agree to undertake such obliga- ti<.es toward the Association as are hereinafter set forth; WHEREAS, in accordance with the Borrower's standard arrange- ments for developmental assistance to the States of India, the proceeds of the credit provided for under the Development Credit Agreement will be made available to Karnataka; and WHEREAS Karnataka, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement;, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) Karnataka shall carry out the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial, forestry and engineering practices. - 2 - (b) Karnataka shall ensure that, in carrying out the Project, the implementation procedures set forth in Schedule 2 to this Agreement are complied with. Section 2.02. In order to assist Karnataka in carrying out studies referred to in Part G of the Project, Karnataka shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association, such consultants to be selected in accordance with principles and procedures satisfactory to the Association on the basis of 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 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.04. (a) Karnataka undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit made available to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by Karnataka to replace or repair such goods. (b) Except as the Association may otherwise agree, Karnataka shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclusively for the purposes of the Project. Section 2.05. (a) Karnataka shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) Karnataka shall: (i) 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) enable the Association'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 Credit and any relevant records and documents; and (iii) 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 expenditures of such proceeds and the goods and services financed out of such proceeds. (c) Upon the award by Karnataka of any contract for goods, works 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 Karnataka and the Association, Karnataka shall prepare and furnish to the Association a report, of such scope 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 Karnataka and the Association of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Credit. (e) Karnataka shall enable the Association's representa- tives to examine all sites, works, buildings, property equipment, records and documents of Karnataka relevant to Karnataka's per- formance of its obligations under this Agreement. 'Section 2.06. (a) Karnataka shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit. (b) Karnataka shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by Karnataka of its obligations under this Agreement. -4- ARTICLE III Particular Covenants Section 3.01. (a) Karnataka shall cause its departments and other agencies and authorities responsible for carrying out the Project or any part thereof to: (i) maintain separate records and accounts adequate to reflect, in accordance with sound accounting principles and procedures consistently applied, their resources, expenditures and operations related to the Project; and (ii) furnish to the Association copies of their accounts and financial statements related to the Project for each fiscal year, certified as to their accuracy and authenticity by an independent auditor acceptable to the Association, as soon as available but in any case not later than nine months after the end of such year. (b) Karnataka shall cause its departments and other agencies and authorities responsible for carrying out the Project or any Part thereof to: (i) have their accounts and financial statements related to the Project 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 immediately following its finalization, 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 acounts and records, financial statements and the audit thereof as the Association shall from time to time reasonably request. Section 3.02. Karnataka shall undertake a joint mid-term review of the Project with the Borrower and the Association promptly after completion of the third years tree planting and not later than March 31, 1986. Section 3.03. Karnataka shall, by June 30, 1984, review its current social forestry research program and, based on said review, prepare a detailed research program to be carried out during the implementation of the Project and furnish to the Assoc ation for concurrence. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. - 5 - Section 4.02. (a) This Agreement and all obligations of the Association and of Karnataka thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date 20 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a)(ii) of this Section, the Association shall promptly notify Karnataka of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE V Miscellaneous Provisions Section 5.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. -6- For Karnataka: Secretary to the Government of Karnataka Forest Department Bangalore, Karnataka Cable address: FOREST Bangalore Section 5.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of Karnataka may be taken or executed by a Secretary to the Government of Karnataka or such other person or persons as Karnataka shall designate in writing, and Karnataka shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 5.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. -7- IN WITNESS THEREOF, 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. INTERNATIONAL DEVELOPMENT ASSOCIATION By A Regional Vice President South Asia STATE OF KARNATAKA By Authorized Representative -8- SCHEDULE 1 Procurement A. General Procedures 1. Except as provided in Part C hereof, contracts for civil works, vehicles, equipment and materials shall be let on the basis of competitive bidding advertised locally under procedures satisfactory to the Association. B. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts estimated to cost the equivalent of Rs 7,000,000 or more: (a) Before bids are invited, Karnataka 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 it is issued to the prospective bidders. (b) After bids have been received and evaluated, Karnataka 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 evaluation and comparison of the bids received, and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform Karnataka 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 or prequalification was invited. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the -9- submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, Karnataka 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 conform- ed 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 con- tract was not consistent with the Guidelines or this Schedule, promptly inform Karnataka and state the reasons for such deter- mination. 3. Before agreeing to any material modification or waiv,r 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 cdst of the contract by more than 15% of the original price, Karnataka shall inform the Asso- ciation of the proposed modification, waiver, extension or change order and the reasons therefor. The Association, if it deter- mines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform Karnataka and state the reasons for its determination. C. Procurement Without Contracting Land preparation, nursery works, plantations, small civil works up to Rs 150,000 each and maintenance may be carried out through force account or piece rates established by Karnataka for each work season. - 10 - SCHEDULE 2 Implementation Procedures 1. Prior to planting on gomal lands, Karnataka shall: (a) ensure that fodder supplies will not be adversely affected by closure of the relevant gomal lands; and (b) identify such lands and select species to be planted on them in agreement with respective village panchayats and concerned villagers. 2. The respective Deputy Commissioner of the concerned District shall authorize tree plantation on gomal lands that have been identified by Karnataka in agreement with villagers and village panchayats in accordance with Karnataka state laws. 3. Establishment of plantations on C & D lands and on tank foreshores and upper reaches of derelict tank beds shall be the responsibility of the KSFD and its later management, including usage, shall be governed by an agreement between KSFD and village panchayats. 4. Karnataka shall ensure that plantation up to mid-term review shall not exceed 8,000 ha gomal land and 5,000 ha of C & D land out of 20,000 ha of agriculturally unproductive waste land. The plantation targets on the remaining 7,000 shall be determined on the basis of survey findings at mid-term review. 5. Karnataka shall distribute beginning with 1984-85 planting program 1500 seedlings (including replacement for losses) per family and up to 750 seedlings per family from 1985-86 onwards free of charge. Seedlings in excess of said limit shall be charged at the actual cost of production. However, germinated seedlings in baskets and/or seeds would be supplied free of charge. 6. Mechanical ripping and ploughing shall be limited to C & D lands and some gomal lands that are either laterite or compacted soils, and such lands shall be selected for planting only when better sites are not available. 7. Karnataka shall give priority to landless laborers, marginal farmers and members of scheduled casts and tribes and of other disadvantaged communities when hiring laborers for the works to be carried out under the Project. - 11 - 8. Senior and mid-level forestry staff and at least 20% of field staff for the Social Forestry Wing (SFW) of the Karnataka Social Forestry Department shall be appointed by April 30, 1984.A monitoring and evaluation cell shall be established and staffed by September 30, 1984. Appointment of SFW staff to full recommended strength would be annually assessed in the background of implementation schedule. 9. Karnataka shall, by June 30, 1984, make suitable arrange- ments for utilizing the services of field staff of all relevant Departments of Karnataka, for social forestry extension, and orientation and training of such staff shall be initiated in time for the services to be available for the 1984 planting season. 10. For the purpose of providing policy guidance and advisory support during implementation of the Project, Karnataka shall, by September 30, 1984, establish and maintain a Social Forestry Advisory Committee and Social Forestry Project Working Groups. 11. Karnataka shall by March 31, 1984 review the functions and compositions of Taluka Level Forestry Committees on Social Forestry to ensure their effective contribution to the implement- ation of the Project. 12. Karnataka shall ensure that about 30% of plantations on tank foreshores, C & D lands, and non-gomal waste lands shall be designated for usufruct by the poorer sections of the nearby com- munities. 13. Karnataka shall, by December 31, 1984, finalize arrangements for the distribution of forestry produce from gomal lands and other public plantations in accordance with principles agreed between Karnataka and the Association. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the day of 198 FOR SECRETARY