Tunisia - Central Tunisia Irrigation Project : Loan 2234 - Project Agreement - 2 - Conformed

OFRCIAL LOAN NOMBER 2234 TUN DOCUMENTS Project Agreement (Central Tunisia Irrigation Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and OFFICE DE MISE EN VALEUR DES PERIMETRES IRRIGUES DE KAIROUAN Dated Fe 6- af -, 1983 LOAN NUMBER.2234 TUN PROJECT AGREEMENT AGREEMENT, dated FewrL'.o . , 1983, between INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and OFFICE DE MISE EN VALEUR DES PERIMETRES IRRIGUES DE KAIROUAN (hereinafter called OMIVAK). WHEREAS by the Loan Agreement of even date herewith between Republic of Tunisia (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to sixteen million five hundred thousand dollars ($16,500,000) on the terms and conditions set forth in the Loan Agreement but only on condition that OMIVAK agree to undertake such obligations toward the Bank as are hereinafter set forth; WHEREAS the Borrower has agreed to make available to OMIVAK, on a grant basis, out of the proceeds of the Loan, the amounts allocated for the execution of Part A of the Project; WHEREAS OMIVAK, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitione. Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Loan Agreement, the Preamble to this Agreement and the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. OMIVAK shall carry out Part A of the Project with due diligence and efficiency and in conformity with appro- priate administrative, financial, engineering and agricultural practices. -2- Section 2.02. Except as the Bank shall otherwise agree, procurement 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 the Loan Agreement. Section 2.03. (a) OMIVAK undertakes to insure, or make ade- quate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan made available to it by the Borrower against hazards incident to the acquisition, trans- portation and delivery thereof to the place of use or installa- tion, and for such insurance any indemnity shall be payable in a currency freely usable by OMIVAK to replace or repair such goods. (b) OMIVAK shall cause all goods and services financed out of the proceeds of the Loan made available to it by the Borrower to be used exclusively for the purposes of the Project. Section 2.04. (a) OMIVAK shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, con- tract documents and construction and procurement schedules for Part A of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) OMIVAK: (i) shall maintain records and procedures ade- quate to record and monitor the progress of Part A 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 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 Part .A of the Project and to examine the goods 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 A 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 services financed out of such proceeds. (c) Upon the award by OMIVAK 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. -3- (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 OMIVAK and the Bank, OMIVAK shall prepare and furnish through MA to the Bank a report, of such scope and in such detail as the Bank shall reasonably request, on the execution and initial operation of Part A of the Project, its cost and the benefits derived and to be derived from it, the performance by OMIVAK and the Bank of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Loan. Section 2.05. (a) OMIVAK shall, at the request of the Bank, exchange views with the Bank 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 Loan. (b) OMIVAK shall promptly inform the Bank of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Loan, or the performance by OMIVAK of its obligations under this Agree- ment. Section 2.06. OMIVAK shall: (a) furnish to the Bank for approval by September 30, 1984 or such later date as the Bank may agree draft terms and conditions of an agreement between OMIVAK and farmers of the PPI's referred to in Part A (1) and (2) of the Project defining the rights and obligations of OMIVAK and such farmers; and (b) take all action necessary to conclude, after approval by the Bank of the draft terms and conditions referred to in paragraph (a) of this Section and not later than (i) the time of completion of the rehabilitation works in the PPI's referred to in Part A (1) of the Project; and (ii) the start of operations of the irrigation system in the PPI referred to in Part A (2) of the Project; agreements with farmers of such PPI's defining the rights and obligations of farmers and OMIVAK. Section 2.07. OMIVAK shall by December 31, 1984 or such later date as the Bank may agree establish cost accounting and cost allocation systems satisfactory to the Borrower and the Bank. Section 2.08. OMIVAK shall, by September 30, 1985 or such later date as the Bank may agree, review in cooperation with the -4- Borrower and the Bank progress under the pilot schemes to be carried out under Part A (12) of the Project; and shall, promptly after such review, take all action agreed upon between OMIVAK, the Borrower and the Bank. Section 2.09. OMIVAK shall, not later that June 30, 1985 or such later date as the Bank may agree, submit to the Bank for its approval a long-term agricultural input supply and financing plan; and shall, promptly after approval thereof by the Bank, take all action necessary to implement such plan. Section 2.10. OMIVAK shall furnish to the Bank by Decem- ber 31, 1983 or such later date as the Bank may agree a plan for the establishment of a marketing unit for agricultural products of the OMIVAK Project Area. Section 2.11. OMIVAK shall establish fees for the use of the centers referred to in Part A (8) and A (11) of the Project at such levels as shall enable OMIVAK to recover progressively the full cost of operation and maintenance of such centers. Section 2.12. OMIVAK shall submit to the Bank for its approval, by June 30, 1986 or such later date as the Bank may agree, a plan, including a timetable, for the transfer of the management of the collection centers referred to in Part A (8) and A (11) of the Project to cooperatives or for the leasing of such collection centers to private operators; and shall, promptly after approval thereof by the Bank, take all action necessary to implement such plan. Section 2.13. OMIVAK shall: (i) increase water charges in the OMIVAK Project Area progressively in order to achieve by December 31, 1989 or such later date as the Bank may agree the full recovery of all operating and maintenance costs of the irrigation systems in PPI's in the OMIVAK Project Area; and (ii) review with the Borrower and the Bank by September 30 of each year starting 1984 the proposed next year's budget for the operation and maintenance of OMIVAK's irrigation system, including an assessment of expected revenues from water charges for such year. ARTICLE III Management and Operations of OMIVAK Section 3.01. OMIVAK shall carry on its operations and conduct its affairs in accordance with sound administrative, -5- financial and agricultural practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. OMIVAK shall at all times operate and maintain its plant, machinery, equipment and other property, and shall make promptly as needed all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and agricultural practices. Section 3.03. OMIVAK shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. (a) OMIVAK shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and finp.cial condition, including, without limitation to the foregoin., separate Project Accounts reflecting its operations, resources and expenditures in respect of Part A of the Project, separate sub-accounts reflect- ing its operations, resources and expenditures in respect of the centers referred to in Part A (8) and Part A (11) of the Project and separate sub-accounts reflecting all expenditures on account of which withdrawals are requested from the Loan Account on the basis of statements of expenditure. (b) OMIVAK shall 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 4.02. OMIVAK shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) 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 any case not later than nine months after the end of each such year, (a) -6- certified copies of its financial statements for such year as so audited, and (b) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including, without limitation to the foregoing, a separate opinion by said auditors: (A) on the separate Project Accounts and sub-accounts referred to in Section 4.01 (a) of this Agreement; (B) in respect of the expenditures and records referred to in Section 4.01 (b) of this Agreement, as to whether the proceeds of the Loan made available to it and withdrawn from the Loan Account on the basis of statements of expenditure have been used for the purpose for which they were provided; and (iii) furnish to the Bank such other information concerning said accounts, financial statements, records and expenditures, and the audit thereof, as the Bank shall from time to time request. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the *Loan Agreement becomes effective. Section 5.02. This Agreement and all obligations of the Bank and of OMIVAK thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms, and the Bank shall promptly notify OMIVAK thereof. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- tion or suspension under the General Conditions. ARTICLE VI Miscellaneous Provisions Section 6.01. 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 -7- designated by notice to the party giving such notice or making such request. The addresses so specified are: 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) For OMIVAK: Office de Mise en Valeur des P6rim&tres Irrigues de Kairouan Rue Khmayes Tarmene Kairouan Tunisia Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of OMIVAK may be taken or executed by its President Directeur General or such other person or persons as its Pr6sident Directeur General shall designate in writing, and OMIVAK shall furnish to the Bank sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 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 -8- of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By j19A.1h. Regional Vice President Europe, Midle East and North Africa OFFICE DE MISE EN VALEUR DES PERIMETRES IRRIGUES DE KAIROUAN ByAuhrie Rpesnatv Authorized Representative 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 ffL day of 198 . FOR SECRETARY