Tunisia - Central Tunisia Irrigation Project : Loan 2234 - Loan Agreement - Conformed

OFFICIAL LOAN NUMBER 2234 TUN DOCU ME NTS Loan Agreement (Central Tunisia Irrigation Project) between REPUBLIC OF TUNISIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated Fe. b v%j 2.. , 1983 LOAN NUMBER 2234 TUN LOAN AGREEMENT AGREEMENT, dated F-4erLOVA-4J 2 , 1983, between REPUBLIC OF TUNISIA (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the foreign exchange cost of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Project will be carried out in part by Office de D6veloppement de la Tunisie Centrale and Office de Mise en Valeur des P6rimetres Irrigu6s de Kairouan with the Borrower's assis- tance and, as part of such assistance, the Borrower will make available to Office de Developpement de la Tunisie Centrale and Office de Mise en Valeur des P'rimetres Irrigues de Kairouan 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 Agreements of even date herewith between the Bank and Office de Developpement de la Tunisie Centrale and Office de Mise en Valeur des Perimetres Irrigues de Kairouan, respectively; 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 Gua- rantee 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 Agree- ments of the Bank being hereinafter called the General Condi- tions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following addi- tional terms have the following meanings: -2- (a) "ODTC" means the Office de Developpement de la Tunisie Centrale, an etablissement public a caractere industriel et commercial established and operating pursuant to the Borrower's Law No. 78-43 of August 1, 1978, as amended; (b) "OMIVAK" means the Office de Mise en Valeur des Peri- m'tres Irrigues de Kairouan, an etablissement public I caractare industriel et commercial established and operating pursuant to the Borrower's Law No. 80-32 of May 24, 1980, as amended; (c) "ODTC Project Area" means the areas served by ODTC in the Kasserine, Gafsa and Siliana Governorates of the Borrower; (d) "OMIVAK Project Area" means the areas served by OMIVAK in the Kairouan Governorate of the Borrower; (e) "PPI" means a public irrigation perimeter; (f) "ODTC Project Agreement" means the agreement between the Bank and ODTC of even date herewith, as the same may be amended from time to time, and as such term includes all sched- ules to the ODTC Project Agreement and all agreements supplemen- tal to the ODTC Project Agreement; (g) "OMIVAK Project Agreement" means the agreement between the Bank and OMIVAK of even date herewith, as the same may be amended from time to time, and as such term includes all sched- ules to the OMIVAK Project Agreement and all agreements supple- mental to the OMIVAK Project Agreement; (h) "MA" means the Borrowe-r's Ministry of Agriculture; (i) "MPW" means the Borrower's Ministry of Public Works; (j) "DGPC" means the Direction G6nerale des Ponts et Chaussees, a directorate established and operating within MPW; (k) "BNT" means Banque National de Tunisie, a Societe Anonyme incorporated and operating under the Borrower's Code du Commerce promulgated by Law No. 98-129 of October 5, 1959, as amended, and under its Statuts filed with the R6gistre du Com- merce at Tunis, as amended; and (1) "Dinar" or the sign "DT" means the currency of the Borrower. -3- ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to six- teen million five hundred thousand dollars ($16,500,000). 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 expendi- tures 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, pro- curement of the goods and civil works required for the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to this Agreement. Section 2 04. The Closing Date shall be June 30, 1990 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to the Bank a fee equivalent to one hundred twenty-two thousand eight hundred twenty-nine dollars ($122,829). (b) On or promptly after the Effective Dat 4-the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amount of the said fee in such currency or currencies as the Bank shall determine. 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. (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time at a rate per annum for each Interest Period equal to one half percent per annum above the Cost of Qualified Borrowings for -4- the last Semester ending prior to the commencement of such Interest Period. (b) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower of the Cost of Qualified Bor- rowings for such Semester. (c) For purposes of this Section: (i) "Interest Period" means the six-month period com- mencing on each date specified in Section 2.08 of this Agreement, including the Interest Period in which this Agreement is signed. (ii) "Cost" of Qualified Borrowings means the cost, expressed as a percentage per annum, as reasonably determined by the Bank, provided that the amount of $8,520.5 million referred to in (iii) (B) here- under shall be reckoned at a cost of 10.93% per annum. (iii) "Qualified Borrowings" means (A) outstanding bor- rowings of the Bank drawn down after June 30, 1982; and (B) until July 1, 1985, the amount of $8,520.5 million (representing borrowings of the Bank between July 1, 1981 and June 30, 1982) less any part thereof repaid earlier than July 1, 1985. (iv) "Semester" means the first six months or the second six months of a calendar year. (d) Notwithstanding paragraph (a) of this Section, the interest rate for all Interest Periods commencing in 1982 shall be 11.43% per annum. Section 2.08. Interest and other charges shall be payable semiannually on May 1 and November 1 in each year. Section 2.09. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall: -5- (i) cause BNT to carry out Part D of the Project in cooperation with OMIVAK and ODTC; (ii) cause MPW's DGPC to carry out Part C (1) of the Project in cooperation with OMIVAK, and Part C (2) of the Project in cooperation with ODTC; and (iii) cause ODTC and OMIVAK to perform in accordance with the provisions of the ODTC Project Agreement and the OMIVAK Project Agreement, respectively, all the obligations of ODTC and OMIVAK therein set forth; and shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable ODTC, OMIVAK, BNT and DGPC to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such per- formance. (b) Without any limitation or restriction upon its obliga- tions under paragraph (a) of this Section, the Borrower shall: (i) make available to OMIVAK, on a grant basis, out of the proceeds of the Loan, for the purposes of carrying out Part A of the Project, the amounts allocated under Categories (1), (3), (6) and (10) of the table set forth in paragraph I of Schedule 1 of this Agreement; and (ii) make available to ODTC, on a grant basis, out of the proceeds of the Loan, for the purpose of carrying out Part B of the Project, the amounts allocated under Categories (2), (4), (7) and (11) of the table set forth in paragraph 1 of Schedule 1 of this Agreement. Section 3.02. The Borrower shall cause BNT to provide the agricultural credit referred to in Part D of the Project to far- mers in the OMIVAK Project Area and the ODTC Project Area under terms and conditions satisfactory to the Borrower and the Bank. Section 3.03. Without any limitation or restriction upon its obligations under Section 3.01 of this Agreement, the Borrower shall allocate to DGPC in each year such funds as shall be -6- necessary for the maintenance of the rural roads improved under the Project. Section 3.04. In order to assist OMIVAK, ODTC and DGPC in the execution of Part A, Part B and Part C of the Project, respectively, the Borrower shall: (a) cause MA to employ (i) by December 31, 1983 or such later date as the Bank may agree ex- perts in communication and farmer organization, financial manage- ment and monitoring and evaluation of Project execution; and (ii) as and when needed, experts in agricultural input supply, in mar- keting and in cooperative development; and (b) cause DGPC to employ, as and when needed, engineering experts; such experts to have qualifications, experience and terms and conditions of employment satisfactory to the Bank, and to be selected in accor- dance with principles and procedures satisfactory to the Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" pub- lished by the Bank in August 1981. Section 3.05. (a) The Borrower shall cause DGPC to furnish to the Bank, promptly upon their preparation, the plans, specifi- cations, reports, contract documents and work and procurement schedules for Part C of the Project, and any material modifica- tions thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower: (i) shall cause DGPC to maintain records and procedures adequate to record and monitor the progress of Part C of the Project (including its cost and the benefits to be derived from it), to identify the works financed out of the pro- ceeds of the Loan, and to disclose their use in the Project; (ii) shall enable the Bank's accredited representatives to visit the construction sites included in Part C of the Project and to exa- mine the works financed out of the proceeds of the Loan and any relevant records and documents; and (iii) shall furnish to the Bank at regular intervals all such information as the Bank shall reasonably request concerning Part C of 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 ser- vices financed out of such proceeds. (c) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as the Bank may agree, the Borrower shall cause MA to prepare with the assistance of DGPC, and furnish to the Bank, a -7- report, of such scope and in such detail as the Bank shall rea- sonably request, on the execution and initial operation of Part C 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 3.06. The Borrower shall cause OMIVAK aid ODTC to establish by December 31, 1984 or such later date as the Bank may agree, cost accounting and cost allocation systems satisfactory to the Borrower and the Bank. Section 3.07. The Borrower shall review with the Bank by September 30 of each year starting 1984 the proposed next year's budget for the operation and maintenance of OMIVAK and ODTC's irrigation systems, including an assessment of expected revenues from water charges for such year. Section 3.08. (a) The Borrower shall, starting in 1984, make annual allocations of funds for the purpose of maintaining OMIVAK's and ODTC's irrigation systems in amounts satisfactory to the Borrower and the Bank. (b) The Borrower shall include the funds allocated pursuant to the provisions of paragraph (a) of this Section in a separate category of the OMIVAK and ODTC annual budgets. Section 3.09. The Borrower shall: (a) by January 31, 1985 or such later date as the Bank may agree (i) take or cause to be taken all necessary action to define maximum land holdings satis- factory to the Bank in the PPI's referred to in Part A (2) and B (2) of the Project; and (ii) determine for farmers in the PPI's referred to in Part A (2) and B (2) of the Project a contribution to the cost of irrigation investments satisfactory to the Bank; and (b) complete before the start of irrigation works in the PPI's referred to in Part A (2) and B (2) of the Project the pro- visional delimitation of plots in such PPI's. Section 3.10. The Borrower shall by December 31, 1986 or such later date as the Bank may agree, take or cause to be taken all action necessary to establish a framework satisfactory to the Bank for the establishment of water users' associations. Section 3.11. The Borrower shall take or cause to be taken all action necessary to enable OMIVAK and ODTC to fulfill their -8- obligations under Section 2.13 (i) of 'the OMIVAK Project Agree- ment and Section 2.12 (i) of the ODTC Project Agreement, respec- tively. Section 3.12. In order to provide farmers with adequate in- centives to produce winter crops, the Borrower shall, by June 30, 1984 or such later date as the Bank may agree, submit to the Bank for its review proposals for different rates per season for water charges in the OMIVAK Project Area and the ODTC Project Area and shall, promptly after such review, take all action agreed upon between the Borrower and the Bank. Section 3.13. The Borrower shall cause the aquifers in the OMIVAK Project Area and the ODTC Project Area to be inspected in accordance with procedures satisfactory to the Bank and shall provide the Bank all such information about the aquifers in the OMIVAK Project Area and the ODTC Project Area as the Bank shall reasonably request. 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 ex- ternal 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 in- terest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make ex- press 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. -9- (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower of any political or administrative sub- division thereof and _ 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 fu.act..on3 for t1e Ba - rower. Section 4.02. The Borrower shall: (a) cause DGPC to estab- lish and maintain Project accounts adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations, resources and expenditures in respect of Part C of the Project, including without limitation to the foregoing separate sub-accounts reflecting all expenditures on account of which withdrawals are requested from the Loan Account on the basis of statements of expenditure; and (b) cause DGPC to retain, until one year after the Closing Date, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing the expenditures on account of which withdrawals are requested from the Loan Account on the basis of statements of expenditure, and shall enable the Bank's representatives to examine such records. Section 4.03. The Borrower shall cause DGPC to: (i) have its separate Project accounts for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in aT.y case not later than six months after the end of each suchM year: the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including, without limitation to the foregoing, a separate opinion by said auditors: (A) on the sub-accounts referred to in Section 4.02 (a) of this Agreement; and (B) in respect of the expenditures and records referred to in Section 4.02 (b) of this Agreement, as to whether the proceeds of the Loan made available to it and withdrawn from - 10 - the Loan Account on the basis of statements of expenditure have been used for the purposes for which they were provided; and (iii) furnish to the Bank such other information concerning said Project accounts, records, expenditures, and the audit thereof, as the Bank shall from time to time request. ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the Gen- eral Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) ODTC and OMIVAK shall have failed to perform any of their obligations under the ODTC Project Agreement and the OMIVAK Project Agreement, respectively. (b) As a result of events which have occurred after the date of the Loan Agreement, an extraordinary situation shall have arisen which shall make it improbable that DGPC, ODTC and OMIVAK will be able to perform their respective obligations under this Loan Agreement, the ODTC Project Agreement and the OMIVAK Project Agreement. (c) The Borrower's Law No. 78-43 of August 1, 1978 shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of ODTC to perform any of its obligations under the ODTC Project Agreement. (d) The Borrower's Law No. 80-32 of May 24, 1980 shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of OMIVAK to perform any of its obligations under the OMIVAK Project Agreement. (e) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of ODTC and OMIVAK or for the suspension of their opera- tions. Section 5.02. For the purposes of Section 7.01 of the Gen- eral 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 - 11 - sixty days after notice thereof shall have been given by the Bank to the Borrower and ODTC and OMIVAK. (b) Any event specified in paragraphs (b), (c), (d) and (e) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of the Loan Agreement within the meaning of Sect,on 12.01 (c) of the General Condi- tions: (a) the ODTC Project Agreement shall have been executed and delivered on behalf of ODTC and shall have been duly authorized or ratified by all necessary corporate or administrative action; and (b) the OMIVAK Project Agreement shall have been executed and delivered on behalf of OMIVAK and shall have been duly autho- rized or ratified by all necessary corporate or administrative action. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions .to be furnished to the Bank: (a) that the ODTC Project Agreement has -been duly autho- rized or ratified by ODTC, and is legally binding upon ODTC in accordance with its terms; and (b) that the OMIVAK Project Agreement has been duly autho- rized or ratified by OMIVAK, and is legally binding upon OMIVAK in accordance with its terms. Section 6.03. The date NA- 2t * is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. - 12 - ARTICLE VII Representative of the Borrower; Addresses Section 7.01. 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 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Minist're du Plan et des Finances Place Ali Zouaoui Tunis, Tunisia Cable address: Telex: MINISTERE DU PLAN ET DES MIPLAN FINANCES 12 117 TUN Tunis For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) 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 - 13 - of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF TUNISIA Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By C . . (0~ Regional Vice President Europe, Middle East and North Africa - 14 - 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 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 650,000 40% (other than Irrigation Works) under Part A (5), (6), (8), (11) and (12) of the Project (2) Civil Works 150,000 40% (other than Irri- gation Works) under Part B (3) and (8) of the Project (3) Irrigation Works 5,550,000 100% of foreign and Irrigation expenditures Equipment under and 50% of Part A (1), (2), local expendi- (3) and (9) of tures for items of the Project procured locally (4) Irrigation Works 3,700,000 100% of foreign and Irrigation expenditures Equipment under and 50% of Part B (1) and local expendi- (2) of the tures for items Project procured locally - 15 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (5) Rural Road 2,000,000 40% Rehabilitation (6) Equipment 1,200,000 ) 100% of foreign and Vehicles ) expenditures under Part A ) and 50% of (4), (5), (6), ) local expendi- (7), (8), (10), ) tures for items (11) and (12) ) procured of the Project ) locally (7) Equipment and 500,000 ) Vehicles under ) Part B (3), (4), ) (5), (6), (7) ) and (8) of the ) Project ) (8) Consultant 500,000 ) 100% of foreign Services ) expenditures ) and 65% of ) local expendi- ) tures for ser- ) vices pro- ) cured locally (9) Rural Roads 100,000 ) Studies ) (10) Studies and 200,000 ) Fellowships under ) Part A of the ) Project ) (11) Studies and 100,000 ) Fellowships under ) Part B of the ) Project ) - 16 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (12) Fee 122,829 Amount Due (13) Unallocated 1,727,171 TOTAL 16,500,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower.. 3. The disbursement percentages have been calculated in com- pliance 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 expen- diture prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $90,000 equivalent may be made in respect of Category (9) on account of payments made for expenditures for rural road studies before that date but after September 1, 1982. - 17 - 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 Cate- gory, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disburse- ment percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the pro- curement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expend- itures 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. - 18 - SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: OMIVAK Project Area (1) Rehabilitation of 28 PPI's, including: (a) the electrification of pumping stations, the installa- tion of electrical pumps, diesel motors and diesel motor pumps, the installation of water meters and the drilling of boreholes; (b) the construction and rehabilitation of water reser- voirs; (c) the relevelling of canals, the replacement, repair and lining of tertiary canals, together with the repair or reconstruction of hydraulic structures and the replace- ment of hydromechanical equipment; and (d) the levelling of land, the rehabilitation of roads and the installation of windbreaks. (2) Establishment of 1 PPI at Henchir Jefna. (3) Installation of about 20 piezometers in the plain of Kairouan. (4) Strengthening of OMIVAK's central machinery workshop through the provision of workshop tools and the recruitment of about 17 staff. (5) Strengthening of extension services through the recruitment of about 17 extension agents, the construction of offices and houses for extension agents, the acquisition of cars and motorcycles for use by extension agents, the establishment of demonstration plots, the establishment of an evaluation and monitoring unit, and the provision of training to exten- sion agents and fellowships to engineers. (6) Construction, equipping and staffing of an applied research support center. - 19 - (7) Equipping and staffing of 2 mechanized farming units. (8) Construction and equipping of 2 collection centers and training of OMIVAK staff and OMIVAK Project Area farmers in the management of the collection centers and the establish- ment of marketing cooperatives. (9) Acquisition of mobile equipment and spare parts to repair pumps and irrigation equipment in the irrigation conveyance system, and the recruitment of about 13 ..aff to handle such equipment. (10) Equipping and staffing of a Shallow Wells Support Unit in- cluding 4 mobile teams. (11) Construction and equipping of a veterinary station, con- struction of dipping tanks, acquisition of vehicles and equipment for artificial insemination teams and the con- struction, equipping and staffing of 2 milk collection cen- ters. (12) Establishment of two pilot schemes for integrated rainfed and irrigated fodder production at Oued Khtem and Zafranaa III, respectively, including the recruitment of staff ser- ving such schemes, the construction of water points, dipping tanks and storage sheds, the construction and equipping of offices and staff housing, and the acquisition of vehicles for such staff. (13) The carrying out of feasibility studies for investments in the OMIVAK Project Area. Part B: ODTC Project Area (1) Rehabilitation of 9 PPI's, including: (a) the electrification of pumping stations, the installa- tion of electrical pumps, diesel motors and diesel motor pumps, the installation of water meters, and the drilling of boreholes; (b) the construction and rehabilitation of water reser- voirs; - 20 - (c) the relevelling of canals, replacement, repair and lin- ing of tertiary canals, together with the repair or reconstruction of hydraulic structures and the replace- ment of hydromechanical equipment; and (d) the levelling of land, the rehabilitation of roads and the installation of windbreaks. (2)' Establishment of 4 PPI's, at Ain Hdia, Mzira I, Mzira II and Feriana. (3) Strengthening of extension services through the recruitment of about 11 extension agents, the cnstruction of offices and houses for extension agents, the acquisition of cars and motorcycles for use by extension agents, the establishment of demonstration plots, the establishment of an evaluation and monitoring unit, and the provision of training to extension agents and fellowships to engineers. (4) Equipping and staffing of a mechanized farming unit. (5) Equipping of 3 collection centers and training of ODTC staff and ODTC Project Area farmers in the management of the collection centers and the establishment of marketing cooperatives. (6) Acquisition of mobile equipment and spare parts to repair pumps and irrigation equipment in the irrigation conveyance system, and the recruitment of about 11 staff to handle such equipment. (7) Equipping and staffing of a Shallow Wells Support Unit including 3 mobile teams. (8) Construction and equipping of a veterinary station, con- struction of dipping tanks, and acquisition of vehicles and equipment for artificial insemination teams. (9) The carrying out of feasibility studies for investments in the ODTC Project Area. Part C: DGPC / (1) Rehabilitation of about 90 km of rural roads serving the OMIVAK Project Area. - 21 - (2) Rehabilitation of about 40 km of rural roads serving the ODTC Project Area. Part D: BNT Provision of about $4,800,000 equivalent in agricultural credit, through BNT, to farmers in the OMIVAK Project Area and the ODTC Project Area for, inter alia, the acquisition of mobile pipes, pumps, tractors, and cross-bred heifers, the construction of reservoirs and animal sheds and the rehabilitation of wells. The Project is expected to be completed by June 30, 1989. - 22 - SCHEDULE 3 Amortization Schedule Payment of Principal Date of Payment Due (Expressed in dollars)* On each May 1 and November 1 beginning November 1, 1987 through November 1, 1999 635,000 On May 1, 2000 625,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal; see General Conditions, Section 3.04. - 23 - 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 The interest rate (ex- pressed as a percentage per annum) applicable to the balance outstanding on the Loan on the day of prepayment multiplied by: Not more than three years 0.18 before maturity More than three years but 0.35 not more than six years before maturity More than six years but 0.65 not more than 11 years before maturity More than 11 years but not 0.88 more than 15 years before maturity More than 15 years before 1.00 maturity -24- SCREDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Parts C and E hereof, goods shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the current edition of the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bid- ding as described in Part A of the Guidelines. 2. For goods to be procured on the basis of international competitive bidding, in addition to the requirements of para- graphs 1.2 of the Guidelines, the Borrower shall prepare or cause to be prepared and forward to the Bank as soon as possible, and in any event not later than 60 days prior to the date of avail- ability to the public of the first tender documents relating thereto 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 in question. The Borrower shall provide the necessary information to update such notice annually so long as any goods remain to be procured on the basis of international competitive bidding. 3. Contracts for equipment and vehicles shall be grouped to the extent possible. 4. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international com- petitive bidding: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for the imported goods, or the ex-factory price or off-the-shelf price of other goods, offered in such bid; (ii) customs duties and other import taxes levied in connection with the importation, or the sales and simi- lar taxes levied in connection with the sale or delivery, pur- suant 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. - 25 - B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the proce- dures described in Part A of this Schedule, goods manufactured in the Republic of Tunisia may be granted a margin of preference in accordance with, and subject to, the following provisions: 1. All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. 2. After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in the Republic of Tunisia if the bidder shall have established to the satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added in the Republic of Tunisia equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other domestic bids. (3) Group C: bids offering any other goods. 3. In order to determine the lowest evaluated bid of each group, all evaluated bids in each group shall first be compared among themselves, without taking into account customs duties and other import taxes levied in connection with the importation, and sales and similar taxes levied in conection with the sale or delivery, pursuant to the bids, of the goods. Such lowest eval- uated 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 fur- ther comparison only, an amount equal to: (i) the amount of cus- toms duties and other import taxes which a non-exempt importer - 26 - 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 low- est evaluated bid shall be selected. C. Other Procurement Procedures 1. Civil works, other than those referred to in Part E hereof, may be carried out under contracts awarded in accordance with local competitive bidding procedures satisfactory to the Bank. 2. Concrete flumes may be purchased directly under a negotiated contract from the sole manufacturer; and pump electrification works may be awarded under a negotiated contract to Societ6 Tunisienne de 1'Electricite et du Gaz. 3. Contracts for equipment and vehicles estimated to cost $150,000 equivalent or less each may be awarded in accordance with local competitive bidding procedures satisfactory to the Bank; provided, however, that the aggregate amount of all con- tracts so awarded by OMIVAK shall not exceed $1,000,000 equiva- lent; and that the aggregate amount of all contracts so awarded by ODTC shall not exceed $1,000,000 equivalent. D. Review of Procurement Decisions by the Bank 1. Review of invitations to bid and of proposed awards and final contracts: with respect to any contract for works estimated to cost the equivalent of $500,000 or more each, and with respect to any contracts for vehicles and equipment estimated to cost the equivalent of $250,000 or more: (a) before bids are invited, the Borrower shall furnish or cause to be furnished 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 proce- dures to be followed for the bidding, and shall make such modifi- cations in the said documents or procedures as the Bank shall reasonably request. Any further modification to the bidding docu- ments shall require the Bank's concurrence before it is issued to the prospective bidders. - 27 - (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 sufficient time for its review, a detailed report on the evaluation and compari- son of the bids received, and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform 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. (d) two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the submis- sion to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 2. With respect to any contract referred to in paragraph C.2 of this Schedule: (a) the Borrower shall, before the signature of the con- tract and in sufficient time for its review, furnish or cause to be furnished to the Bank a copy of the contract and such other information as the Bank shall reasonably request. The Bank, if it determines that the provisions of the contract are not consistent with the Guidelines or this Schedule, promptly inform the Bor- rower and state the reasons for such determination. (b) two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the submis- sion 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 paragraphs, the Borrower shall furnish or cause to 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, two con- formed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other infor- mation as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent - 28 - with the Guidelines or this Schedule, promptly inform the Bor- rower and state the reasons for such determination. 4. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an extension of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 20% of the original price, 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. E. Procurement Without Contracting Minor civil works such as land leveling, upgrading of rural roads, drainage improvements, installation of piezometers and windbreak plantation may, after approval by the Bank, be carried out by DGPC, OMIVAK or ODTC force account in accordance with pro- cedures satisfactory to the Bank. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this 2c.Lday of I.t, 198a. FOR SECRETARY