India - Periyar Vaigai Irrigation II Project : Credit 1468 - Project Agreement - Conformed

FF ICAL FDCUMEIA CREDIT NURBER 1468 IN SPECIAL FUND CREDIT NUMBER SF-16 IN Project Agreement (Periyar Vaigal Irrigation II Project) among INTERNATIONAL DEVELOPMENT ASSOCIATION and INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL FUND established with funds contributed by certain members of the International Development Association and STATE OF TAMIL NADU Dated , 1984 CREDIT NUMER 1468 IN SPECIAL FUND CREDIT NUMBER SF-16 IN PROJECT AGREEMENT AGREEMENT, dated L / , 1984, among INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association), INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINIS- TRATOR of the SPECIAL FUND established with funds contributed by certain members of the International Development Association (hereinafter called the Administrator), and the STATE OF TAMIL NADU, acting by its Governor (hereinafter called Tamil Nadu). WHEREAS (A) 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 sixteen million six hundred thousand Special Drawing Rights (SDR 16,600,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Tamil Nadu agree to undertake such obliga- tions toward the Association as are hereinafter set forth; and (B) by the Special Fund Credit Agreement of even date here- with between the Borrower and the Administrator, the Administra- tor has agreed to make available to the Borrower an amount in various currencies equivalent to sixteen million six hundred thousand Special Drawing Rights (SDR 16,600,000), on the terms and conditions set forth in the Special Fund Credit Agreement, but only on condition that Tamil Nadu agree to undertake such obligations toward the Administrator as are hereinafter set forth; and WHEREAS Tamil Nadu, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, and the Administrator's entering into the Special Fund Credit Agreement with the Borrower, has agreed to undertake the obliga- tions 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 -2- Development Credit Agreement, in the Special Fund Credit Agree- ment, and in the General Conditions (as so defined) have the respective meanings therein set forth and the term "Association" means also the International Development Association acting as Administrator of the Special Fund referred to in the Preamble to the Special Fund Credit Agreement. ARTICLE II Execution of the Project Section 2.01. Tamil Nadu declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement and Schedule 2 to the Special Fund Credit Agreement, and, to this end, shall carry out the Project described in said Schedules with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and agricultural practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 2.02. In order to assist Tamil Nadu in carrying out Parts E and G of the Project, Tamil Nadu shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association; provided, however, that if such consultants' cost shall be financed out of the proceeds of the Credit, such consultants shall 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 I to this Agree- ment, and procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Special Fund Credit shall be governed by the provisions of Schedule 2 to this Agreement. Section 2.04. (a) Tamil Nadu undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit and out of the pro- ceeds of the Special Fund Credit, respectively, made available to -3- 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 pay- able in a currency freely usable by Tamil Nadu to replace or repair such goods. (b) Tamil Nadu shall cause all goods and services financed out of the proceeds of the Credit and of the proceeds of the Special Fund Credit, respectively, made available to it by the Borrower to be used exclusively for the purposes of the Project. Section 2.05. Without limitation to the provisions of Sec- tion 2.01 of this Agreement, Tamil Nadu shall carry out the plan- ning, design, construction, operation and maintenance of the irrigation systems under the Project, in accordance with the technical criteria established under the Prior Project. Section 2.06. For purposes of carrying out Part F of the Project, Tamil Nadu shall, not later than December 31, 1984, establish and, thereafter, maintain in PWD, an office headed by an Executive Engineer with suitable qualifications and experi- ence, such office to be assigned with such powers, functions, responsibilities, staffing, organization and funds as shall be required to enable it to manage irrigation water releases from the reservoir, main canals and branch channels within the irriga- tion systems under the Project. Section 2.07. Tamil Nadu shall, not later than December 31, 1984, take all such action as shall be necessary to strengthen its Agricultural Engineering Department in order to enable it, inter alia, to adequately promote in the Project Area a rota- tional water supply system. Section 2.08. Tamil Nadu shall, not later than December 31, 1984, establish and, thereafter, maintain in PWD, a Monitoring and Evaluation Cell headed by an officer with suitable qualifi- cations and experience, such cell to be assigned with such powers, functions, responsibilities, organization, staffing and funds as shall be required to enable it to coordinate, analyze, and recommend action programs and additional studies, as required, to adequately carry out the monitoring and evaluation activities of the Project. Section 2.09. In order to promote a more active participa- tion of farmers in the water management of irrigation water, and -4- in the operation and maintenance of the irrigation systems under the Project, Tamil Nadu shall take all such action as shall be necessary to establish suitable farmer organizations in the Project Area, such organizations to be established as and when required for the implementation of the improved irrigation systems' operation under the Project. Section 2.10. Tamil Nadu shall not later than April 1, 1986, prepare and furnish to the Association, for its review and com- ments, a draft of Tamil Nadu's revised operation and maintenance manual for the irrigation systems in the Project Area, including revised criteria for water allocation priorities and for distri- buting and scheduling the delivery of water, and taking into account the Association's comments, if any, thereafter, adopt and utilize in the Project Area such revised operation and mainte- nance manual. Section 2.11. (a) Tamil Nadu 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 addi- tions thereto, in such detail as the Association shall reasonably request. (b) Tamil Nadu shall: (i) maintain records and procedures adequate to record and monitor the progress of the Project (including their cost and the benefits to be derived from them), to identify the goods and services financed out of the proceeds of the Credit and of the Special Fund Credit in respect of the Project, and to disclose their use in the carrying out of 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 of the Special Fund Credit and any relevant records and docu- ments; 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 Tamil Nadu of any contract for goods, works or services to be financed out of the proceeds of the Credit or the Special Fund 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. -5- (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 Tamil Nadu and the Association, Tamil Nadu 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, their cost and the benefits derived and to be derived from them, the performance by Tamil Nadu and the Association of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Credit and of the Special Fund Credit. Section 2.12. (a) Tamil Nadu 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 and of the Special Fund Credit. (b) Tamil Nadu 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 and of the Special Fund Credit, or the performance by Tamil Nadu of its obligations under this Agreement. Section 2.13. Tamil Nadu shall take all such action as shall be necessary to acquire all such land and rights in respect of land as shall be required for carrying out the Project and shall furnish to the Association, promptly after such acquisition, evidence satisfactory to the Association that such land and rights in respect of land are available for purposes related to the Project. Section 2.14. Tamil Nadu shall at all times cause the irri- gation systems under the Project, as well as the vehicles and equipment provided for purposes of the Project to be efficiently operated and maintained, and all necessary repairs and renewals thereof to be made, all in accordance with sound engineering, agricultural and financial practices. Section 2.15. Tamil Nadu undertakes to take all measures as may be considered necessary to minimize the risk of malaria and other water-related diseases within the Project Area. Section 2.16. Tamil Nadu shall take all such a t&'n as shall be necessary to maintain PWD, at all times, with the necessary powers in order to enable it to adequately distribute, regulate and schedule the irrigation water supply in th6 Project Area. ARTICLE III Financial Covenants Section 3.01. (a) Tamil Nadu 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, its 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 each such year. Section 3.02. Tamil Nadu 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 con- sistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association immediately follow- ing 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 said accounts and records, financial statements and the audit thereof as the Association shall from time to time reasonably request. Section 3.03. (a) Except as the Association and Tamil Nadu shall otherwise agree, Tamil Nadu shall, with the objective of ensuring recovery from the farmers benefiting from the Project annual operation and maintenance costs and, to the extent possi- ble, the capital costs of the irrigation system under the Proj- ect: (i) cause PWD to review by December 31, 1985, its irrigation water charges; (ii) exchange views with the Association on the results of such review; and (iii) thereafter, consolidate and start applying the revised water charges in the Project Area. For purposes of this paragraph, Tamil Nadu may take into account incentives for and the payment capacity of such farmers. -7- (b) Tamil Nadu shall, on April 1 of each year, commencing April 1, 1985 and thereafter, take all such actions as shall be necessary to ensure that annual budgetary allocations shall be made to adequately cover operation and maintenance expenditures of the irrigation systems in the Project Area. (c) For the purposes set forth in paragraph (a) of this section, Tamil Nadu shall annually, commencing on December 31, 1986 and thereafter, review its irrigation water charges. 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 and the Special Fund Credit Agreement becomes effective. Section 4.02. (a) This Agreement and all obligations of the Association and of Tamil Nadu thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement and the Special Fund Credit Agreement shall terminate in accordance with their terms; or (ii) a date 20 years after the date of this Agreement. (b) If the Development Credit Agreement and the Special Fund Credit Agreement terminate in accordance with their term8 before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify Tamil Nadu of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- tion or suspension under the General Conditions. ARTICLE 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. -8- 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. For Tamil Nadu: Secretary to the Government of Tamil Nadu Public Works Department Fort St. George, Madras 600009 India Cable address: QUADENSA Madras 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 Tamil Nadu may be taken or executed by the Secretary, Public Works Department or such other person or persons as Tamil Nadu shall designate in writing, and Tamil Nadu 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. -9- 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 Anrica, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By #c71iqr Regional Vice President South Asia STATE OF TAMIL NADU By Authorized Representative - 10 - SCHEDULE 1 Procurent A. International Competitive Bidding 1. Except as provided in Parts D and F 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, Tamil Nadu shall prepare and forward to the Association 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 Association shall reasonably request; the Association 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. Tamil Nadu shall provide the necessary information to update such notice annually so long as any goods or works remain to be procured on the basis of international competitive bidding. 3. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international com- petitive bidding: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for the imported goods, or the ex-factory price or off-the-shelf price of other goods, offered in such bid; (ii) customs duties and other import taxes levied in connection with the importation, or the sales and 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. B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedure described in Part A of this Schedule, goods manufactured in India - 11 - 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 India if the bidder shall have established to the satis- faction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in India equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other domestic bids. (3) Group C: bids offering any other goods. 3. In order to determine the lowest evaluated bid of each group, all evaluated bids in each group shall first be compared among themselves, without taking into account customs duties and other import taxes levied in connection with the importation, and sales and similar taxes levied in connection with the sale or delivery, pursuant to the bids, of the goods. Such lowest 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 the lowest, it shall be selected for the award. 4. If, as a result of the comparison under paragraph 3 above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the evaluated bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to: (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in 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 12 - which as a result of the comparison under paragraph 3 is the lowest evaluated bid shall be selected. C. Preference for Domestic Contractors With respect to the evaluation of bids for any contract for civil works included under Category (1) of the table set forth in Schedule 1 to the Development Credit Agreement and to be procured in accordance with the procedures described in Part A of this Schedule, Tamil Nadu may grant a margin of preference of 7-1/2% to domestic contractors, in accordance with, and subject to, the following provisions: 1. Contractors applying for such preference shall be asked to provide, as part of the data for qualification, such informa- tion, including details of ownership, as shall be required to determine whether, according to the classification established by Tamil Nadu and accepted by the Association, a particular firm or group of firms qualifies for a domestic preference. The bidding documents shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. 2. After bids have been received and reviewed by Tamil Nadu, responsive bids will be classified into the following groups: (i) bids offered by domestic contractors eligible for preference; and (ii) bids offered by other contractors. For the purpose of evaluation and comparison of bids an amount equal to 7-1/2% of the bid amount shall be added to bids received under group (ii) above. D. Other Procurement Procedures 1. Contracts for equipment and vehicles estimated to cost the equivalent of $50,000, or less, each may be procured through normal trade channels, provided, however, that such contracts, in the aggregate, shall not exceed the equivalent of $250,000. 2. Contracts for civil works may be let on the basis of compet- itive bidding advertised locally, in accordance with procedures which are satisfactory to the Association. - 13 - E. 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 equiva- lent of $300,000 or more: (a) Before bids are invited, Tamil Nadu 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, Tamil Nadu 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 evalua- tion and comparison of the bids received and such other informa- tion as the Association shall reasonably request. The Association shall, if it determines that the intended award would be incon- sistent with the Guidelines or this Schedule, promptly inform Tamil Nadu 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 submission to the Association of the first application for with- drawal of funds from the Credit Account in respect of such con- tract. 2. With respect to each contract not governed by the preceding paragraph, Tamil Nadu shall furnish to the Association, promptly after its execution and prior to the submission to the Associa- tion of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective - 14 - bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it de:ermines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform Tamil Nadu and state the reasons for such determination. 3. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an extension of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 15% of the original price, Tamil Nadu shall inform the Association of the proposed modification, waiver, extension or change order and the reasons therefor. The Association, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform Tamil Nadu and state the reasons for its determination. F. Procurement Without Contracting Civil works may be carried out through force account, pro- vided, however, that such works shall not exceed 20% of the total cost of civil works to be financed under the Project. - 15 - SCHEDULE 2 Procurement A. International Competitive Lidding 1. Subject to the eligibility restrictions set forth in Section 2.02 (b) of the Special Fund Credit Agreement and except as pro- vided in Parts D and F hereof, goods and civil works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the "Guidelines for Procure- ment under World Bank Loans and IDA Credits" published by the Bank in March 1977 (July 1980 edition) (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. The above-mentioned eligibility restrictions shall be stated in the tender or prequalification documents for the procurement of such goods and civil works. 2. For goods and works to be procured on the basis of interna- tional competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, Tamil Nadu shall prepare and forward to the Administrator 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 Administrator shall reasonably request; the Administrator will arrange for the publication of such notice in order to pro- vide timely notification to prospective bidders of the oppor- tunity to bid for the goods and works in question. Tamil Nadu shall provide the necessary information to update such notice annually so long as any goods or works remain to be procured on the basis of international competitive bidding. 3. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international 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; and (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 - 16 - inland freight and other expenditures incidental to the delivery of the goods to the place of their use or installation shall be included. 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 India 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 India if the bidder shall have established to the satisfaction of the Borrower and the Administrator that the manufacturing cost of such goods includes a value added in India equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other domestic bids. (3) Group C: bids offering any other goods. 3. In order to determine the lowest evaluated bid of each group, all evaluated bids in each group shall first be compared among themselves, without taking into account customs duties and other import taxes levied in connection with the importation, and sales and similar taxes levied in connection with the sale or delivery, pursuant to the bids, of the goodsi Such lowest evaluated bids shall then be compared with each other, and if, as a result of this comparison, a bid from group A o group B is the lowest, it shall be selected for the award. 4. If, as a result of the comparison Onder 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 - 17 - 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 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. Preference for Domestic Contractors With respect to the evaluation of bids for any contract for civil works included under Category (1) of the table set forth in Schedule 1 to the Special Fund Credit Agreement and to be procured in accordance with the procedures described in Part A of this Schedule, Tamil Nadu may grant a margin of preference of 7-1/2% to domestic contractors, in accordance with, and subject to, the following provisions: 1. Contractors applying for such preference shall be asked to provide, as part of the data for qualification, such informa- tion, including details of ownership, as shall be required to determine whether, according to the classification established by Tamil Nadu and accepted by the Administrator, a particular firm or group of firms qualifies for a domestic preference. The bidding documents shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. 2. After bids have been received and reviewed by Tamil Nadu, responsive bids will be classified into the following groups: (i) bids offered by domestic contractors eligible for preference; and (ii) bids offered by other contractors. For the purpose of evaluation and comparison of bids an amount equal to 7-1/2% of the bid amount shall be added to bids received under group (ii) above. - 18 - D. Other Procurement Procedures 1. Contracts for equipment and vehicles estimated to cost the equivalent of $50,000, or less, each may be procured through normal trade channels, provided, however, that such contracts, in the aggregate, shall not exceed the equivalent of $250,000. 2. Contracts for civil works may be let on the basis of compe- titive bidding advertised locally, in accordance with procedures which are satisfactory to the Association., E. Review of Procurement Decisions by the Administrator 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts estimated to cost the equiva- lent of $300,000 or more: (a) Before bids are invited, Tamil Nadu shall furnish to the Administrator, 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 Administrator shall reasonably request. Any further modification to the bidding documents shall require the Administrator's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, Tamil Nadu shall, before a final decision on the award is made, inform the Administrator of the name of the bidder to which it intends to award the contract and shall furnish to the Administrator, in sufficient time for its review, a detailed report on the evalua- tion and comparison of the bids received, and such other informa- tion as the Administrator shall reasonably request. The Admin- istrator shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform Tamil Nadu and state the reasons for such determination. (c) The terms and conditions of the contract shall not, withoat the AdministratorIs concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Administrator promptly after its execution and prior to - 19 - the submission to the Administrator of the first application for withdrawal of funds from the Special Fund Credit Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, Tamil Nadu shall furnish to the Administrator, promptly after its execution and prior to the submission to the Administrator of the first application for withdrawal of funds from the Special Fund Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Administrator shall reasonably request. The Adminis'trator shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform Tamil Nadu and state the reasons for such determination. 3. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an extension of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 15% of the original price, Tamil Nadu shall inform the Administrator of the proposed modification, waiver, extension or change order and the reasons therefor. The Administrator, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform Tamil Nadu and state the reasons for its determination. F. Procurement Without Contracting Civil works may be carried out through force account, pro- vided, however, that such works shall not exceed 20% of the total cost of civil works to be financed under the Project. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Developm-nt Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association ihereunto the day of 198 L. FOR SECRETARY