Rwanda - Sixth Highways Project : Credit 1641 - Credit Agreement - 2 - Conformed

REDIT NUMBER 1641 RW OFIFFICIAL OCU MENTS Development Credit Agreement (Sixth Highways Project) between RWANDESE REPUBLIC and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated k va , t 1986 CREDIT NUMBER 1641 RW DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated C L. \r , 1986, between the RWANDESE REPU'BLIC (the Borrower) and the INTER- NATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and p:iority of the Project described in Schedule 2 to this Agreements has requested the Association to assist in the financing of the Project; (B) the Borrower has also requested the Special Facility for Sub-Sahara Africa (the African Facility), established by the Resolution No. IDA 85-1 of May 21, 1985 of the Executive Directors of the Association to provide additional assistance towards the financing of the Project and by an agreepient of even date herewith between the Borrower and the Association as Administrator of the African Facility (the African Facility Credit Agreement) is agreeing to provide such assistance in an aggregate principal amount equivalent to fourteen million five hundred thousand Special Drawing Rights (SDR 14,500,000); and (C) the Borrower intends to contract from the Danish International Development Agency, the Federal Republic of Germany, the French Republic, the Arab Bank for Economic Development of Africa, the European Development Fund, the Kuwait Fund, the United Nations Development Fund and the World Food Program additional loans and grants to assist in financing the Project, on the terms and conditions set forth in agreements between the Borrower and such nations and agencies; and WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon the terms and conditions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The General Conditions Applicable to Develop- ment Credit Agreements of the Association, dated January 1, 1985, with the following modifications (the General Conditions), constitute an integral part of this Agreement: the second sen- tence of Section 2.03 is deleted. -2- Section 1.02. Unless the context otherwise requires, the several terms defined in the Preamble to this Agreement and in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Ministry" means the ministry of the Borrower respon- sible for public works; (b) "Road Branch" means the Direction G6n6rale des Ponts et Chauss6es, a part of the Ministry; and (c) "Special Account A" means the account referred to in Section 2.02 (b) of this Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to ten million seven hundred thousand Special Drawing Rights (SDR 10,700,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of this Section and of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Associa- tion 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 Credit. (b) The Borrower shall, for the purposes of the Project, open and maintain in the name of the Ministry in dollars a special account (Special Account A) in a commercial bank on terms and conditions satisfactory to the Association. Deposits into, and payments out of, Special Account A shall be made in accor- dance with the provisions of Schedule 3 to this Agreement. Section 2.03. The Closing Date shall be December 31, 1990 or such later date as the Association shall establish. The Asso- ciation shall promptly notify the Borrower of such later date. -3- Section 2.04. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without re- strictions of any kind imposed by, or it; the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semiannually on May 1 and November 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each May 1 and November 1 commencing May 1, 1996 and ending November 1, 2035. Each installment to and including the installment payable on November 1, 2005 shall be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter shall be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes cf Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement and, to this end, shall carry out Parts A through E.1 of the Project through the Road Branch and Part E.2 through the -4- Ministry of Transport and Communications with due diligence and efficiency and in conformity with appropriate financial, economic, administrative and technical practices and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 4 to this Agreement. Section 3.03. Prior to October 31 in each year during the carrying out of the Project, the Borrower shall furnish to the Association for its comment an up-to-date schedule of proposed road construction works for the following four year period together with its proposed program of expenditures in the road sector for such period, based on sound financial and feasibility criteria and shall take the Association's views into account in the carrying out of such programs. Section 3.04. The Borrower shall, by June 30, 1986, make such organizational arrangements as shall be necessary to provide for the strengthening of its planning in the transport sector and for the formulation and carrying out of transport policies. Section 3.05. The Borrower shall furnish to the Association by June 30, 1986 its prcposals for financing out of its own funds progressively increasing proportions of its expencitures for recurrent road maintenance and shall exchange views thereon with the Association. Section 3.06. (a) The Borrower shall, through the Road Branch, furnish to the Association by October 31 of each year during the carrying out of the Project the proposed work program of the Road Branch for road maintenance during the coming year, shall take into account the Association's views in carrying out such program and shall cause the Road Branch to monitor the carrying out of such program pursuant to procedures satisfactory to the Association. (b) The Borrower shall cause the Road Branch to carry out productivity and cost analyses of all its force account activi- ties. -5- Section 3.07. The Borrower shall, through the Ministry, furnish to the National Bank of Rwanda each year the estimate of requirements for foreign exchange for the Borrower's share of financing of road maintenance activities in the coming year and shall make such arrangements, as shall be necessary, to ensure the availability as and when needed of such foreign exchange. Section 3.08. The proposals concerning communal roads to be formulated under Part E.1 of the Project shall be furnished to the Association by December 31, 1987. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project and the road maintenance operations of the Road Branch and of the other departments or agencies of the Borrower responsible for carrying out the Project or any part thereof and shall cause the Road Branch to keep separate records and accounts in respect of expenditures for the Project. (b) The Borrower shall: (i) have the separate accounts of the Road Branch referred to in paragraph (a) of this Section, including Special Account A, audited for each fiscal year in accordance with appropriate audit- ing principles consistently applied, by indepen- dent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by the 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 the said accounts and the audit thereof and said records as the Association shall from ti.ae to time reasonably request. -6- (c) For all expenditures with respect to which withdrawals from the Credit Account or from the Special Account A were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, separate records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Closing Date and in any event until the completion of the audit for the fiscal year in which the last dis- bursement from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association's representatives to exa- mine such records; and (iv) ensure that such separate accounts be included in the annual audit referred to in paragraph (b) of this Section and that the report thereof contain, in respect of such separate accounts, a separate opinion by the said auditors as to whether the proceeds of the Credit withdrawn in respect of such expenditures were used for the purposes for which they were provided. (d) The Borrower shall ensure that the accounting unit of the Roads Branch (i) maintain such accounts as shall be necessary to permit proper cost accounting and the determination of unit costs and (ii) keep separate accounts reflecting expenditures of the Road Branch under its investment budget. ARTICLE V Remedies of the Association Section 5.01. (a) Pursuant to Section 6.02 (h) of the General Conditions, the following additional event is specified, namely that, subject to paragraph (b) of this Section: (i) The right of the Borrower to withdraw the pro- ceeds of any grant or loan made to the Borrower for the financing of the Project shall have been -7- suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor, or (ii) any such loan shall have become due and payable prior to the agreed maturity thereof. (b) Paragraph (a) of this Section shall not apply if the Borrower establishes to the satisfaction of the Association that: (i) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement; and (ii) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. Section 5.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional event is specified, namely, that the event specified in paragraph (a)(ii) of Section 5.01 of this Agreement shall occur, subject to the proviso of para- graph (b) of that Section. ARTICLE VI Effective Date; Termination Section 6.01. Th. following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Borrower has taken steps satisfactory to the Association for the limitation of the dimensions and weights of vehicles using its highways and roads and for the enforcement of such limitations; (b) the Road Branch has strengthened its Personnel Bureau by the appointment of two staff members specialized in personnel management; (c) the Road Branch has established a Training Unit and a Training Coordination Committee; and (d) all conditions precedent to the effectiveness of the African Facility Credit Agreement, except for the effectiveness of this Agreement, have been fulfilled. Section 6.02. The date 120 days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.03. The provisions of Section 5.02 of this Agree- ment shall cease on the date on which the Development Credit Agreement shall terminate or on the date fifteen years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of the Borrower responsible for public works 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: Ministry of Public Works and Energy B.P. 24 Kigali, Rwanda Cable address: Telex: MINITRAPE 04-BUB KGL Kigali For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) -9- IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, 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. RWANDESE REPUBLIC By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Eastern and Southern Africa - 10 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Equipment, spare 6,000,000 100% of foreign parts, Laterials, expenditures, and supplies 90% of local expenditures (ex-factory cost) and 85% of local ex- penditures for other items pro- cured locally (2) Consultants' 2,900,000 100% services; training (3) Unallocated 1,800,000 TOTAL 10,700,000 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. - 11 - 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expen- ditures prior to the date of this Agreement. - 12 - SCHEDULE 2 Description of the Project The objectives of the Project are to assist the Borrower in its program of roads maintenance and reconstruction and in implementing a comprehensive program of training in the highways sector in order to improve maintenance and construction planning, strengthen the capacity of the Road Branch for administering the road network and reduce the cost of road transport. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: Labor-intensive routine maintenance works on about 3,200 km of earth and gravel roads; patching and resealing of about 600 km of paved roads, and repair and selective resurfacing of about 130 km of paved roads; periodic maintenance of about 500 km of earth and gravel roads, including regravelling and selective improve- ment of the roads and of drainage facilities; and maintenance and repair of bridges and the purchase of equipment, spare parts and tools for the foregoing. Part B: 1. Resurfacing of the Cyangugu-Bugarama Road including rehabi- litation of about 500 m thereof. 2. Selective improvement and regravelling works on the Rubengera-Ntendezi Road and the road circling Lakes Bulera and Ruhondo, including drainage improvement and limited realignments and grade improvements. Part C: Reconstruction of Sections I and II of the Kigali - Gatuna Road, including the drainage system and base course, and with a triple surface treatment. - 13 - Part D: The carrying out of a comprehensive training program for staff, including mechanics, equipment operators, drivers, work- site managers and supervisors, office clerical staff, warehouse- men, higher level technical, administrative and financial staff, and vocational training managers and trainers. Part E: 1. The formulation of proposals concerning the improvement and maintenance of communal roads; the strengthening of planning capabilities in the road sector, including the preparation and annual revision of balanced expenditure programs. 2. Carrying out of studies for the formulation of measures and policies to reduce the costs of international transport. The Project is expected to be completed by December 31, 1989. - 14 - SCHEDULE 3 Special Account A 1. For the purposes of this Schedule: (a) the term "Category" means a category of items to be financed out of the proceeds of the Credit as set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit in accordance with the provisions of Schedule 1 to this Agree- ment; and (c) the term "Authorized Allocation" means an amount of 500,000 dollars which is to be withdrawn from the Credit Account and deposited in Special Account A pursuant to paragraph 3 (a) of this Schedule. 2. Except as the Association shall otherwise agree, payments out of Special Account A shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to the Association that Special Account A has been duly opened, withdrawals of the Authorized Allocation and subsequent withdraw- als to replenish Special Account A may be made as follows: (a) On the basis of one or more requests by the Borrower for a deposit or deposits which add up to the amount of the Authorized Allocation, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit in Special Account A such amount or amounts as the Borrower shall have requested. (b) The Borrower shall furnish to the Association requests for replenishment of Special Account A at such intervals as the Association shall specify. On the basis of such requests, the Association shall withdraw from the Credit Account and deposit into Special Account A such amounts as shall be required to replenish Special Account A with amounts not exceeding the amount of payments which have been made out of Special Account A for eligible expenditures and which have been justified by the - 15 - evidence supporting the request for such deposit furnished pursuant to paragraph 4 of this Schedule. 4. For each payment made by the Borrower out of Special Account A for which the Borrower requests replenishment pursuant to para- graph 3 (b) of this Schedule, the Borrower shall furnish to the Association, prior to or at the time of such request, such documents and other evidence as the Association shall reasonably request showing that such payment was made for eligible expen- ditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into Special Account A shall be made by the Association when the first of the following situa- tions arises: (i) the Association shall have determined that all further withdrawals should be made directly by the Borrower from the Credit Account in accor- dance with the provisions of paragraph (a) of Section 2.02 of this Agreement; or (ii) when the total unwithdrawn amount of the Credit minus the amount of any outstanding qualified agreement to reimburse made by the Association and of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions shall be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal of the remaining unwithdrawn amount of the Credit shall follow such procedures as the Associa- tion shall specify by notice to the Borrower. Such further with- drawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in Special Account A as of the date of such notice will be utilized in making payments for eligible expen- ditures. 6. (a) If the Association shall have determined at any time that any payment out of Special Account A was (i) made for any expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedule, or (ii) was not justified by the evidence furnished pursuant to paragraph 4 of this Schedule, the Borrower - 16 - shall, promptly upon notice from the Association, deposit into Special Account A (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment. No further deposit by the Association into Special Account A shall be made until the Borrower has made such deposit or refund. (b) If the Association shall have determined at any time that any amount outstanding in Special Account A will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount for crediting to the Credit Account. 17 - SCHEDULE 4 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A. International Competitive Bidding 1. Except as provided in Part B hereof, goods and works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines). 2. Materials, equipment, tools, spare parts and supplies shall be grouped wherever practicable in bulk lots of at least $75,000 equivalent in value for the purpose of inviting bids or quota- tions. Part B. Other Procurement Procedures 1. Works included in Part A of the Project may be carried out by the Borrower under force account. 2. Materials, equipment, tools, spare pa%.ts and supplies which cannot be bulked as provided in paragraph A.3 of this Schedule may be procured on the basis of the applicable procedures of the Borrower for competitive bidding or inviting competing quota- tions, provided that the aggregate value of such goods shall not, without the prior approval of the Assocation, exceed the equi- valent of $1,000,000. 3. Proprietary spare parts may be procured by direct negotia- tion with their suppliers. Part C. Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract estimated to cost the equivalent of $75,000 or more, the procedures set forth in para- graphs 2 and 4 of Appendix I to the Guidelines shall apply. Where payments for such contract are to be made out of Special Account A, such procedures shall be modified to ensure that the two - 18 - conformed copies of the contract required to be furnished to the Association pursuant to said paragraph 2 (d) shall be furnished to the Association prior to the making of the first payment out of Special Account A in respect of such contract. (b) With respect to each contract not governed by the pre- ceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of Special Account A, such procedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Association pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 3 to this Agreement. (c) The provisions of the preceding paragraphs (a) and (b) shall not apply to contracts on account of which the Association has authorized withdrawals from the Credit Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agreement. 2. The figure of 15% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower in preparing bidding docu- ments, in the evaluation of bids, in the supervision and coor- dination of works, in the carrying out of works under force account, in carrying out and coordinating the training program, in carrying out the studies included in the Project and in strengthening planning capabilities in the highway sector, the Borrower shall employ engineering, management and training consultants and experts, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants and experts 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. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the a day o 198. FOR SECRETARY