India - Nhava Sheva Port Project : Loan 2387 - Loan Agreement - Conformed

OFFICIAL LOAN NUMBER 2387 IN DOCUNIENTS Loan Agreement (Nhava Sheva Port Project) between INDIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , 1984 LOAN NUMBER 2387 IN LOAN AGREEMENT AGREEMENT, dated 2- 5 , 1984, between India, acting by its President (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 Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Project will be carried out by Nhava Sheva Port Trust with the Borrower's assistance and, as part of such assistance, the Borrower will make available to Nhava Sheva Port Trust 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 Agreement of even date herewith between the Bank and Nhava Sheva Port Trust; 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 Guarantee Agreements of the Bank, dated October 27, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "NSPT" means Nhava Sheva Port Trust, established under the Major Ports Trust Act, 1963 of the Borrower; -2- (b) ' "Project Agreement" means the agreement between the Bank and NSPT of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; (c) "BPT" means the Bombay Port Trust, an autonomous trust established under the Major Ports Trust Act, 1963 of the Bor- rower; and (d) "Financing Arrangement" means the arrangement made by the Borrower to finance the Project pursuant to Sections 3.01 and 3.02 of this Agreement. 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 two hundred fifty million dollars ($250,000,000). 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 expen- ditures 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 and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of the Schedule to the Project Agree- ment. Section 2.04. The Closing Date shall be June 30, 1989 or such later date as the Banik 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 six hundred twenty-three thousand four hundred forty-two dollars ($623,442). -3- (b) On or promptly after the Effective Date, 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 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 Borrowings for such Semester. (c) For purposes of this Section: (i) "Interest Period" means the six-month period commencing 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) hereunder shall be reckoned at a cost of 10.93% per annum. (iii) "Qualified Borrowings" means: (A) outstanding borrowings 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. Section 2.08. Interest and other charges shall be payable semiannually on January 1 and July 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) The Borrower declares its commitment to the objective of the Project as set forth in Schedule 2 to this Agreement, and, to this end, without any limitation or restric- tion upon any of its other obligations under the Loan Agreement, the Borrower shall cause NSPT to perform in accordance with the provisions of the Project Agreement all the obligations of NSPT therein set forth, shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable NSPT to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall relend the proceeds of the Loan to NSPT bearing terms and conditions which shall include interest at an effective rate of not less than 11-1/2% per annum on the prin- cipal amount so relent and withdrawn by NSPT (such amount with- drawn shall be determined in Rupees as of the time of withdrawal from the Loan Account) and outstanding from time to time and re- payment over a period of twenty-five years, including therein a period of grace on payment of interest and repayment of principal of five years (interest shall accrue during the grace period). Section 3.02. Without limitation or restriction upon the provisions of Section 3.01 of this Agreement, the Borrower speci- fically undertakes to: (a) cause BPT to lend to NSPT an amount of Rs two billion, bearing terms and conditions which shall include interest at an effective rate of not more than 10% per annum on the principal amount withdrawn by NSPT outstanding from time to time and repayment over a period of fifteen years, including therein a period of grace on payment of interest and repayment of principal of not less than five years (interest shall accrue during the grace period); and (b) provide such other loans as re- quired by NSPT for timely completion of the Project, bearing terms and conditions which shall include interest at an effective -5- rate of 10-f% per annum on the principal amount withdrawn by NSPT outstanding from time to time and repayment over a period of twenty-five years, including therein a period of grace on payment of interest and repayment of principal of ten years (interest shall accrue during the grace period). It is agreed that the repayment obligation of NSPT for the loan provided under Section 3.01 (b) of this Agreement shall have priority over that for the loan provided under paragraph (b) of this Section, in servicing of debt by NSPT. ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for 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 interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property or as security for the payment of debt incurred for the purpose of financing the purchase 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. - 6 - (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative sub- division thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section 4.02. The Borrower shall cause NSPT to prepare, by September 30, 1986, a plan for the performance of services with reference to the container freight station to be provided under Part A.3 of the Project. Section 4.03. The Borrower shall from time to time review the tariff of NSPT in order to enable NSPT to meet the require- ments stipulated in Section 4.04 (a) of the Project Agreement. Section 4.04. In order to ensure adequate and timely supply of water, power and other services required for the Project, the Borrower shall establish, by June 30, 1984, and thereafter maintain, a coordinating group consisting of representatives of appropriate agencies and authorities. ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) NSPT shall have failed to perform any of its obliga- tions under the Project Agreement; (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 NSPT will be able to perform its obligations under the Project Agreement; and (c) the Borrower, NSPT or any other authority having juris- diction shall have taken any action for the dissolution or liqui- dation of NSPT. - 7 - 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) an event specified in paragraph (a) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower and NSPT; and (b) an event specified in paragraph (c) of Section 5.01 of the Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an addi- tional condition to the effectiveness of the Loan Agreement with- in the meaning of Section 12.01 (c) of the General Conditions, namely that the Financing Arrangement shall have become effec- tive. Section 6.02. The following is specified as an additional matter, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be fur- nished to the Bank, namely that the Project Agreement has been duly authorized or ratified by NSPT, and is legally binding upon NSPT in accordance with its terms. Section 6.03. The date p- 2- 0V? , is hereby specified for the purposes of Section 12.04 of the General. Conditions. ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. The Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary or Under Secretary of the Department of Economic Affairs in the Ministry of Finance 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. -8- For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: ECOFAIRS New Delhi For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INDIA By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By cJV Regional Vice President South Asia - 9 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil and allied works: (a) 70,000,000 70% (b) 54,000,000 22% (2) Equipment, 100,000,000 100% of foreign materials expenditures; and spares 100% of local expenditures (ex-factory); and 70% of other items procured locally (3) Technical 16,000,000 100% assistance, engineering services and training (4) Fee 623,442 Amount due under Section 2.05 (a) of this Agreement (5) Unallocated 9,376,558 TOTAL 250,000,000 - 10 - 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of 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 the proceeds of the Loan shall not 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; on this basis, if the amount of any such taxes levied on or in respect of items in any Category decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the dis- bursement percentage then applicable to such Category 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: (a) in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $1,000,000 may be made on account of payments made with respect to Category (3) before that date but after June 1, 1982; and (b) under Category (1) (b), until the amount allocated to Category (1) (a) shall have been fully disbursed. 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- - 11 - 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 expenditure 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. - 12 - SCHEDULE 2 Description of the Project The objective of the Project is the construction of modern port facilities at Nhava Sheva near Bombay to accommodate the growth in maritime traffic in the area. The Project consists of the following: Part A: Construction of Container Handling Facilities 1. Construction of 680 m of offshore wharf with four access bridges. 2. Construction of container yard behind the berths. 3. Construction of container freight station. 4. Construction of storage and office buildings. 5. Provision of equipment. Part B: Construction of Bulk Cargo Facilities 1. Construction of 500 m. of offshore wharf with one access bridge. 2. Construction of a 212 m. of wharf to serve as. port craft berth and service berth. 3. Construction of storage buildings for bulk and bagged cargo. 4. Provision of electrical distribution system. 5. Provision of equipment. Part C: Construction of Ancillary Facilities 1. Land and land development including reclamation, leveling and fencing. 2. Dredging. - 13 - 3. Construction of a landing jetty. 4. Provision of infrastructure facilities and services such as provisions of water supply, power supply, sewerage, bunkering, firefighting, port area lighting and environmental protection. 5. Construction of roads and railway facilities. 6. Construction of residential township. 7. Construction of administrative and operational build- ings. 8. Communication system for operations and maintenance. Part D: Provision of port craft and navigational aids. Part E: Provision of Technical Assistance for: (i) a comprehensive staff training program; (ii) an Organization, Management and Finance Study; (iii) a Container Operations Manual; and (iv) other advisory services. Part F: Provision of engineering services for detailed engi- neering and supervision of contracts. The Project is expected to be completed by December 31, 1988. - 14 - SCHEDULE 3 Amortization Schedule Payment of Principal Date of Payment Due (Expressed in dollars)* On each January 1 and July 1 beginning July 1, 1989 through July 1, 2003 8,335,000 On January 1, 2004 8,285,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal; see General Conditions, Section 3.04. - 15 - 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 0.15 before maturity More than three years but 0.30 not more than six years before maturity More than six years but 0.55 not more than 11 years before maturity More than 11 years but not 0.80 more than 16 years before maturity More than 16 years but not 0.90 more than 18 years before maturity More than 18 years before 1.00 maturity 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 2i day of #' A 0V,7198 . FOR SECRETARY