India - Narmada River Development (Gujarat) Sardar Sarovar Dam And Power Project : Credit 1552 - Project Agreement - 1 - Conformed

CREDIT NUMBER 1552 IN S LOAN NUMBER 2497 IN Gujarat Project Agreement (Narmada River Development (Gujarat) Sardar Sarovar Dam and Power Project) among INTERNATIONAL DEVELOPMENT ASSOCIATION and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT . Nand STATE OF GUJARAT Dated ic 1985 CREDIT NUMBER 1552 IN LOAN NUMBER 2497 IN GUJARAT PROJECT AGREEMENT AGREEMENT, dated C , 1985, among INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association), INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and the STATE OF GUJARAT, acting by its Governor (hereinafter called GUJARAT). WHEREAS (A) by to Deve" opment Credit Agreement (Narmada River Development (Gujarat) !ardar Sarovar Dam and Power Project) of even date herewith between India, acting by its President (hereinafter called the Borrower), and the Association, the Asso- ciation has agreed to make available to the Borrower an amount in various currencies equivalent to ninety nine million seven hundred thousand Special Drawing Rights (SDR 99,700,000), on the terms and conditions set forth in the Development Credit Agree- ment (Narmada River Development (Gujarat) Sardar Sarovar Dam and Power Project), but only on condition that Gujarat agrees to undertake such obligations toward the Association as are herein- after set forth; (B) by the Loan Agreement (Narmada River Development (Gujarat) Sardar Sarovar Dam and Power Project) of even date herewith between the Borrower and the Bank, the Bank has agreed to make available to the Borrower an amount in various curren- cies equivalent to two hundred million. dollars ($200,000,000), on the terms and conditions set forth in the Loan Agreement (Narmada River Development (Gujarat) Sardar Sarovar Dam and Power Project), but only on condition that Gujarat agrees to undertake such obligations toward the Bank as are hereinafter set forth; and WHEREAS Gujarat, in consideration of the Association's entering into the Development Credit Agreement (Narmada River Development (Gujarat) Sardar Sarovar Dam and Power Project) and the Bank's entering into the Loan Agreement (Narmada River Devel- opment (Gujarat) Sardar Sarovar Dam and Power Project), with the Borrower, has agreed to undertake the obligations 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: (a) the several terms defined -2- in the Development Credit Agreement (Narmada River Development (Gujarat) Sardar Sarovar Dam and Power Project), in the Loan Agreement (Narmada River Development (Gujarat) Sardar Sarovar Dam and Power Project), and in the General Conditions (as so defined) have the respective meanings therein set forth; (b) reference to the Association shall also be deemed as reference to the Bank; and (c) reference to the Credit shall also be deemed as reference to the Loan. ARTICLE II Execution of the Project Section 2.01. Gujarat declares its commitment to the objec- tives of the Project as set forth in Schedule 2 to the Develop- ment Credit Agreement, and, to this end, shall: (a) carry out Parts A through 0 (i) of the Project des- cribed in said Schedule with due diligence and efficiency and in conformity with appropriate administrative, financial, engineer- ing, agricultural, environmental, sociological and public utili- ties practices, and shall provide, promptly as needed, the funds, facilities, staffing, services and other resources required for the purposes; provided, however, that Gujarat's obligation to carry out Parts L and N of the Project is limited to such com- ponents of such Parts of the Project to be implemented within Gujarat's State boundaries. Provided, further, that Gujarat shall, in a manner and substance satisfactory to the Association, coordinate with Madhya Pradesh, Maharashtra and NCA the procure- ment, construction, installation, operation and maintenance of such portions of the hydrometeorological network under Part N of the Project to be located within Gujarat's State boundaries; (b) without limitation to the provisions of paragraph (a) of this Section, provide, or cause to be provided, to NCA, promp- tly as needed and pursuant to the cost-sharing provisions of the Decision, the funds, facilities, services and other resources required to enable'NCA to carry out its responsibilities provided for in the Decision, inter alia, the overall operation and main- tenance of the hydrometeorological network under Part N of the Project, and shall not take or permit to be taken, any action which would prevent or interfere with such responsibilities; and (c) without limitation to the provisions of paragraph (b) of this Section, provide, or cause to be provided, to NCA, promp- tly as needed and pursuant to the cost-sharing provisions of the -3- Decision, the funds, facilities, services and other resources required to enable NCA to assist the Borrower in carrying out Part P of the Project with due diligence and efficiency and shall not take, or permit to be taken, any action which would prevent or interfere with such performance. Section 2.02. Without limitation to the provisions of Sec- tion 2.01 of this Agreement, Gujarat shall: (a) carry out the planning, design and construction of the works (located within Gujarat's State boundaries) under Parts A, B, D, E, G, H, I, J and N of the Project, and the installation of the equipment under Parts C, F and N of the Project, all in accordance with standards and criteria acceptable to the Asso- ciation; (b) by December 31, 1987, prepare and furnish to the Asso- ciation, for its approval, an operation and maintenance plan, including the provision of funds, staff and other resources, for the dams, powerhouses, canals and related structures and equip- ments (located within Gujarat's State Boundaries) under Parts A, B, C, D, E, F, G, H, I and J of the Project, respectively, and thereafter, adopt and implement such plan as so approved; (c) without limitation to the provisions of paragraph (a) of this Section, by December 31, 1986, in coordination with Madhya Pradesh, Maharashtra and NCA, prepare and furnish to the Association,. for its approval, a final system design for the hydrometeorlogical network under Part N of the Project, including equipment specifications and construction schedules, and, there- after, carry out such Part of the Project pursuant to such system design and construction schedule, as so approved; (d) by December 31, 1987, in coordination with Madhya Pradesh, Maharashtra and NCA, prepare and furnish to the Associa- tion, for its approval, an operation and maintenance plan for the hydrometeorological network under Part N of the Project, which plan shall include the provision of funds, staff and other resources, and, thereafter, adopt and implement such plan as so approved. (e) take all such action as shall be necessary to maintain, at all times, an adequate supply of materials critically needed for carrying out the construction works under Parts A, B, D, E, -4- G, H, I, J and N of the Project (located within Gujarat's State boundaries), including cement and steel; (f) by December 31, 1991 or such other date as may be agreed upon between the Association and Gujarat, complete within Gujarat's State boundaries, the construction of the transmission lines and substations required for the full integration of the power-related facilities under the Project with the Borrower's western region power grid; and (g) by June 30, 1988, have such components of the hydro- meteorological network under Part N of the Project located within Gujarat's State boundaries, installed and operational in a manner satisfactory to the Association. Section 2.03. (a) In order to assist Gujarat in carrying out Parts M (i), M (ii) and M (iii) of the Project, Gujarat shall employ consultants and/or experts whose qualifications, expe- rience and terms and conditions of employment shall be satis- factory to the Association, such consultants and/or experts to be selected in accordance with principles and procedures satis- factory 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. (b) For purposes of paragraph (a) of this Section, Gujarat shall, by April 1, 1985, prepare and furnish to the Association, for its approval, a list of consultants and/or experts in the follpwing area, inter alia, quality control; design of gates and valves and related control equipment; concrete design and place- ment; steel fabrication and erection; tunnels; rock mechanics, including controlled blasting and rock support systems for the underground powerhouse; design and installation of large rotat- ing equipment and accessory electrical equipment; emergencies encountered during construction of the Project, such as earth- quakes and other unforeseen events which may affect the Project; and, operation and maintenance of dams, spillways and power plants. (c) In order to assist Gujarat in carrying out Part N of the Project, Gujarat shall employ, in coordination with Madhya Pradesh and Maharashtra, consultants and/or experts whose quali- fications, experience and terms and conditions of employment shall be satisfactory to the Association, such consultants and/or -5- experts to be selected in accordance with principles and proce- dures satisfactory to the Association on the basis of the "Guide- lines 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 2.04. Except as the Association shall otherwise agree, procurement of the goods and civil works required for Parts A, B, H, K and N of the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.05. (a) Gujarat undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit made available to 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 Gujarat to replace or repair such goods. (b) Gujarat shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Bor- rower to be used exclusively for the purposes of the Project. Section 2.06. Gujarat shall take all such action as shall be necessary to maintain, at all times, the Narmada Control Author- ity, the Sardar Sarovar Construction Advisory Committee and the Narmada Review Committee, each with such powers, functions, responsibilities and membership as provided for in the Decision, and staffing and funds as shall be required to enable each of them to accomplish its purposes, and shall not take, or cause to be taken, any action which shall prevent or interfere with such purposes. Section 2.07. Gujarat shall maintain the Narmada Development Department, headed by a qualified and experienced officer, such Department to be assigned, at all times, with such powers, func- tions, responsibilities, organization, staffing and funds as shall be required to enable it to adequately undertake its responsibilities for the overall implementation and management of the Sardar Sarovar Project, including: (a) the operation and maintenance of the irrigation, municipal, industrial and domestic water facilities under Part B -6- of the Sardar Sarovar Project, which Project is described in Schedule 4 to the Development Credit Agreement (Gujarat) Sardar Sarovar Dam and Power Project; (b) the operation and maintenance of Parts A, D, E, H and I ol the Project described in Schedule 2 to the Development Credit Agreement (Gujarat) Sardar Sarovar Dam and Power Proj.-,ct; (c) pursuant to the provisions of the Decision, the supply and distribution of irrigation, municipal, industrial and domestic water resulting from the Sardar Sarovar Project, which Project is described in Schedule 4 to the Development Credit Agreement (Gujarat) Sardar Sarovar Dam and Power Project; and (d) through an appropriate agency to be established by December 31, 1988: (i) the operation and maintenance of Parts B, C, F, G and J of the Project described in Schedule 2 to the Development Credit Agreement (Gujarat) Sardar Sarovar Dam and Power Project; and (ii) pursuant to the provisions of the Decision, the supply of hydroelectric power to Gujarat, Madhya Pradesh and Maharashtra resulting from the Project described in Schedule 2 to the Development Credit Agreement (Gujarat) Sardar Sarovar Dam and Power Project. Section 2.08. Gujarat shall maintain: (a) the Narmada High Power Committee, at all times, with such powers, functions, membership and responsibilities as shall be required to enable such Committee to adequately undertake its responsibilities for the coordination and timely interaction among the various departments and agencies of Gujarat responsible for the carrying out of the Project or a Part thereof; and (b) the Narmada Planning Group, at all times, with such powers, functions, responsibilities, membership, staffing, orga- nization and funds as shall be required to enable it to adequate- ly undertake its responsibilities for carrying out planning studies of the Narmada River Development Program, including those required to develop a Plan for the operation and maintenance of the hydroelectric power and water delivery and drainage facili- ties under the Sardar Sarovar Project. Section 2.09. For purposes of enabling the Narmada Develop- ment Department to adequately implement and manage the Sardar Sarovar Project, Gujarat shall: -7. (a) maintain, within the Narmada Development Department, the Central Procurement Unit, headed by a qualified and experienced officer and assigned, at all times, with such powers, functions, responsibilities, staffing, organization and funds as shall be required to enable it to adequately undertake its res- ponsibilities for the procurement of all goods and services re- quired for the implementation of the Sardar Sarovar Project; and (b) by December 31, 1985, establish and, thereafter, maintain within the Narmada Development Department, a cell responsible for the monitoring and evaluation of the various activities under the Sardar Sarovar Project, such. cell to be headed by a qualified and experienced officer and assigned, at all times, with such powers, functions, responsibilities, staffing, organization and funds as shall be required to enable it to accomplish its purposes. Section 2.10. Gujarat shall adopt and, thereafter, imple- ment, within its State boundaries, a rehabilitation and resettle- ment plan for the Oustees, satisfactory to the Association, which plan shall include the principles and objectives set forth or referred to in Schedule 3 to the Development Credit Agreement (Narmada River Development (Gujarat) Sardar Sarovar Dam and Power Project), and the institutional arrangements provided for in Schedule 2 to this Agreement. Section 2.11. (a) Gujarat shall, in collaboration with Madhya Pradesh and Maharashtra, prepare and furnish to the Association, for its approval: (i) by December 31, 1985, a work plan for the environ- mental effects derived and to be derived from the implementation of the- Sardar Sarovar Project, which work plan shall include (A) suitable train- ing programs for the Project's staff of Gujarat, Madhya radesh and Maharashtra, including plans, schedules, syllabi and provision of funds, and (B) studies and implementation schedules therefor, for fish and fisheries, forest and wildlife, and public health aspects; (ii) by June 30, 1989, a suitable training program of operation and maintenance of the facilities under the Sardar Sarovar Project, including plans, schedules, syllabi and provision of funds; and -8- (iii) by December 31, 1985, a suitable training program on resettlement and rehabilitation of the Oustees for the Project's staff of Gujarat, Madhya Pradesh and Maharashtra,including plans, schedules, syllabi and provision of funds. (b) Gujarat shall, in coordination with Madhya Pradesh and Maharashtra, implement the work plan and training programs referred to-in paragraph (a) above, as so approved. Section 2.12. (a) Gujarat shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, and construction and procurement schedules for Parts A through 0 (i) of the Project, located within Gujarat's State boundaries, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) Gujarat shall: (i) maintain records and procedures adequate to record and monitor the progress of Parts A through 0 (i) of the Project, located within Gujarat's State boundaries (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 to disclose their use in such Parts of the Project; (ii) enable the Association's representatives to visit the facilities and construction sites included in such Parts of the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) furnish to the Association at regular intervals all such informa- tion as the Association shall reasonably request concerning such Parts of the Project, their cost and, where appropriate, the benefits to be derived from them, the expenditures of such pro- ceeds and the goods and services financed out of such proceeds. (c) Upon the award by Gujarat of any contract for goods, works or services to be financed out of the proceeds of the 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. (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 Gujarat and the Association, Gujarat shall, in coordination with Madhya Pradesh and Maharashtra prepare and furnish to the Association a -9- report, of such scope and in such detail as the Association shall reasonably request, on the execution and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by Gujarat and the Association of their respective obligations under the Gujarat Project Agreement, the performance by Madhya Pradesh and the Association of their respective obligations under the Madhya Pradesh Project Agree- ment, the performance by Maharashtra and the Association of their resp.,ctive obligations under the Maharashtra Project Agreement, the performance by the Borrower in carrying out Part P of the Project and the accomplishment of the purposes of the Credit. Section 2.13. Without limitation to the generality of para- graph (b) of Section 2.12 of this Agreement, Gujarat shall furnish to the Association semiannual and annual reports, of such scope and in such detail as the Association shall reasonably request, on the progress of Parts A through 0 (i) of the Project (located within Gujarat's State boundaries), such reports to be furnished within three months after the end of each reporting period. Section 2.14. (a) Gujarat shall, at the request of the Association, exchange views with the Association with regard to the progress of Parts A through 0 (i) of the Project (located within Gujarat's State boundaries), the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit. - (b) Gujarat shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of Parts A through 0 (i) of the Project (located within Gujarat's State boundaries), the accomplishment of the purposes of the Credit, or the performance by Gujarat of its obligations under this Agreement. Section 2.15. Gujarat shall take, or cause to be taken, all such action as shall be necessary to acquire, within its State boundaries, 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. - 10 - Section 2.16. Gujarat shall, at all times, cause the facili- ties provided under the Project to be efficiently maintained, as well as the vehicles and equipment provided under the Project efficiently operated and maintained, and all necessary repairs and renewals thereof to be made, all in accordance with sound engineering and financial practices. Section 2.17. Gujarat shall, within its State boundaries, take all such measures as shall be considered necessary to minimize the risk of malaria, filaria, schistosomiasis, and other water-related diseases that may result from the implementation of the Project. Section 2.18. Gujarat shall: (a) by April 1, 1985, for the purposes set forth in para- graphs (b) and (c) of this Section, establish and, thereafter, maintain the Dam Safety Panel with terms of reference and member- ship satisfactory to the Association; (b) cause the Dam Safety Panel to review the adequacy of the plans and designs of the dams, spillways, by-pass tunnel, weir, powerhouses, channels, related structures and facilities included in the Project; (c) cause the Dam Safety Panel to: (i) conduct semiannual reviews during design and construction of the dams, spillways, by-pass tunnel, weir, powerhouses, channels, related structures and facilities included in the Project, to examine, inter alia, whether there is any need for making changes in the design and/or construction of such dams, spillways, by-pass tunnel, weir., powerhouses, channels, related structures and facilities; (ii) not later than seven days from the date of each of the above- mentioned reviews, furnish to the Association and Gujarat a report of its findings, conclusions and recommendations; and (d) under arrangements satisfactory to the Association, cause the dams, spillways, by-pass tunnel, weir, powerhouses, channels, related structures and facilities constructed under the Project to be periodically inspected in accordance with sound engineering practice in order to determine whether there are any deficiencies in the condition of such structures, or in the quality and adequacy of maintenance or methods of operation of the same, which may endanger their safety. - 11 - ARTICLE III Financial Covenants Section 3.01. Gujarat shall cause its departments and other agencies and authorities responsible for carrying out Parts A through 0 (i) of the Project or any part thereof to: (a) 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 Parts A through 0 (i) of the Project; and (b) furnish to the Association copies of their accounts and financial statements related to such Parts of the Project for (J 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. Gujarat shall cause its departments and other agencies and authorities responsible for carrying out Parts A through 0 (i) of the Project or any part thereof to: (a) have their accounts and financial statements related to such Parts of the Project for each fiscal year audited, in accor- dance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (b) furnish to the Association immediately following 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 (c) furnish, or cause to be furnished, to the Association such other information concerning said accounts and records, financial ste.ements and the audit thereof as the Association shall from time to time reasonably request. Section 3.03. Except as the Association shall otherwise agree, Gujarat shall, by a date not later than six months before the commissioning of the first turbine-generator unit under either Part C or F of the Project, enter into a bulk supply contract, satisfactory to the Association, with appropriate electric utility organization[s] for the sale of electricity - 12 - generated from the facilities installed under the project; such contract shall include a sales price or sales prices, such that the present value of the annual revenues over the expected life of the power facilities, discounted at an appropriate rate, shall be greater than the sum of the present value of Gujarat's share of annual operation and maintenance cost over the expected life of the facilities, similarly discounted, and of Gujarat's share of annual investment costs of the said facilities, similarly discounted. Such prices shall be subject to review and, if required, revised every three years from the date of the said contract. For purposes of this Section, the term "appropriate rate" means a financial reference rate or rates which will reflect an acceptable real rate of return to capital -and expected future inflation. 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 (Narmada River Development (Gujarat) Sardar Sarovar Dam and Power Project) and the Loan Agreement (Narmada River Development (Gujarat) Sardar Sarovar Dam and Power Project) become effecti*e. Section 4.02. (a) This Agreement and all obligations of the Association and of Gujarat thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement (Narmada River Development (Gujarat) Sardar Sarovar Power and Dam Project) and the Loan Agreement (Narmada River Development (Gujarat) Sardar Sarovar Dam and Power Project) shall terminate in accordance with their respective terms; or (ii) a date 20 years after the date of this Agreement. (b) If the aforementioned Development Credit Agreement and Loan Agreement terminate in accordance with their terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify Gujarat of this event. - 13 - 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. 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: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For Gujarat: Chief Secretary Government of Gujarat Gandhinagar, Gujarat 382010, India Cable address: Telex: CHIEFSEC 285-SCGJ-IN -Gandhinagar, India - 14 - 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 Gujarat may be taken or executed by the Chief Secretary or such other person or persons as Gujarat shall designate in writing, and Gujarat 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. 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. INTERNATIONAL DEVELOPMENT ASSOCIATION By e f^c?Ct Regional Vice President South Asia STATE OF GUJARAT B y / Authorized Representative - 15 - SCHEDULE 1 Procurement A. International Competitive Bidding 1. Except as provided in Part D 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 August 1984 (hereinafter called the Guidelines). 2. Bidders for: (a) civil works contracts for the dam under Part A of the Project, the powerhouse under Part B of the Project, and the irrigation by-pass tunnel under Part H of the Project; and (b) fabrication contracts for the gates for the dam under Part A of the Project, shall be pre-qualified as described in paragraph 2.10 of Part A of the Guidelines. B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the proce- dures described in Part A (1) of this Schedule, goods manufac- tured in India may be granted a margin of preference in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraphs 1 through 4 of Appendix 2 thereto. C. Preference for Domestic Contractors In the procurement of works in accordance with the proce- dures described in Part A (1) of this Schedule, the Borrower may grant a margin of preference in accordance with and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraph 5 of Appendix 2 thereto. D. Other Procurement Procedures 1. Contracts for civil works estimated to cost the equivalent of $6,000,000 each or less, may be procured on the basis of competitive bidding advertised locally, in accordance with proce- dures satisfactory to the Association. 7 -16- 2. Audio visual and other specialized equipment under Part K of the Project may be procured through local shopping on the basis of at least three price quotations from qualified sources. E. Review by the Association of Procurement Decisions 1. Review of.prequalification: With respect- to the pre-qualification of bidders as provided for in Part A (2) of this Schedule, the procedures set forth in paragraph 1 of Appendix 1 to the Guidelines shall apply. 2. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract for civil works estimated to cost the equivalent of $1,000,000 or more, and with respect to each contract for goods estimated to cost the equivalent of $100,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. (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. (c) The provisions of the preceding sub-paragraphs (a) and (b) shall not apply to contracts on account of which the Associa- tion has authorized withdrawals from the Credit Account on the basis of statements of expenditure. 3. The figure of 15% is hereby specified for purposes of para- graph 4 of Appendix 1 to ths Guidelines. - 17 SCHEDULE 2 Institutional Arrangements Gujarat shall: (a) maintain the Resettlement and Rehabilitation Wing, within the Narmada Development Department, responsible for planning, coordinating and implementing the resettlement and rehabilitation of the Oustees, as the case may be, within Gujarat's State boundaries pursuant to the provisions of the Decision and the objectives and principles set forth or referred to in Schedule 3 to the Development Credit Agreement (Gujarat) Sardar Sarovar Dam and Power Project, such Wing to be headed by a I qualified and experienced officer and assigned, at all times, with such powers, functions, responsibilities, staffing and funds as shall be required to enable it to accomplish its purposes. (b) commencing on March 31, 1985 and thereafter until March 31, 1995, employ suitable research institutions, satis- factory to the Association, for purposes of monitoring and evaluating the implementation of the Plan for Resettlement an&- Rehabilitation of the Oustees within Gujarat's State boundaries, such research institutions tQ prepare and furnish to the Narmada Development Department semiannual and annual reports of their findings and recommendations. Gujarat undertakes to take into account such findings and recommendations in the implementation of the Plan for Resettlement and Rehabilitation of the Oustees; (c) commencing on September 30, 1985 and thereafter until March 31, 1995, prepare and furnish to the Borrower and the Association semiannual and annual reports on the implementation of the Plan for Resettlement and Rehabilitation of the Oustees, which reports shall include those of the research institutions provided for in paragraph (b) of this Schedule. Such reports shall be furnished within three months after the end of each reporting period; and (d) by March 31, 1985, establish and, thereafter, main- tian a committee for purposes of advising the Resettlement and Rehabilitation Wing of the Narmada Development Department with regard to the implementation of the Plan for Resettlement and Rehabilitation of the Oustees, such committee to be headed by a qualified and experienced officer and include in its membership - 18 - representatives of Gujarat's social science research institu- tions, Oustees interest groups, including non-governmental social workers and welfare organizations from Gujarat, and of the Oustees relocated within Gujarat's State boundaries. Such com- mittee shall be assigned, at all times, with such functions, responsibilities, staffing and funds as shall be required to enable it to accomplish its purposes. 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 day of 198- FOR SECRETARY 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 4Ae- day of 198F SC T FOR SECRETARY