India - Third Bombay Water Supply And Sewerage : Loan 2769 - Maharashtra Agreement - Conformed

OFFICIAL 11!19a i ' ?r '1 -T f1 CREDIT NUMBER 1750 IN LOAN NUMBER 2769 IN Maharashtra Agreement (Third Bombay Water Supply and Sewerage Project) among INTERNATIONAL DEVELOPMENT ASSOCIATION and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and STATE OF MAHARASHTRA Dated , 1987 CREDIT NUMBER 1750 IN LOAN NUMBER 2769 IN MAHARASHTRA AGREEMENT AGREEMENT, dated fl", 1987, among INTERNATIONAL DEVELOPMENT KSSOCIATION (the Association), INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank), and the STATE OF MAHARASHTRA, acting by its Governor (hereinafter called Maharashtra). WHEREAS (A) by the Development Credit Agreement of even date herewith between INDIA, acting by its President (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to one hundred five million five hundred thousand Special Drawing Rights (SDR 105,500,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Maharashtra agrees to undertake such obligations toward the Association as are set forth in this Agreement; (B) by the Loan Agreement of even date herewith between the Borrower and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to forty million dollars ($40,000,000) on the terms and conditions set forth in the Loan Agreement, but only on condition that Maharashtra agrees to undertake such obligations towards the Bank as are set forth in this Agreement; (C) by an agreement of even date herewith among the Association, the Bank and the Municipal Corporation of Greater Bombay (hereinafter called BMC), BMC has agreed to undertake certain obligations in respect of the carrying out of the Project; (D) the proceeds of the Credit and the Loan provided for under the Development Credit Agreement and the Loan Agreement respectively will be made available by the Borrower to Maharashtra in accordance with the Borrower's standard arrangements for developmental assistance to the states of India; (E) by a subsidiary loan agreement to be entered into between Maharashtra and BMC, the proceeds of the Credit and the Loan provided for under the Development Credit Agreement and the Loan Agreement respectively will be made available to BMC on the terms and conditions set forth in said Subsidiary Loan Agreement; and -2- WHEREAS Maharashtra, in consideration of the Association's entering into the Development Credit Agreement and the Bank's entering into the Loan Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the Development Credit Agreement and in the General Conditions applicable thereto (as so defined), in the Loan Agreement, and in the General Conditions applicable thereto (as so defined) and in- the Preamble to this Agreement have the respective meanings therein set forth. ARTICLE II Particular Covenants Section 2.01. (a) Maharashtra declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement, and, to this end, without any limitation or restriction upon any of its obligations under this Agreement, shall cause BMC to perform in accordance with the Provisions of the Project Agreement all the obligations of BMC therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable BMC to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) Maharashtra shall relend the proceeds of the Credit and the Loan to BMC under a subsidiary loan agreement to be entered into between Maharashtra and BMC, under terms and condi- tions which shall have been approved by the Association which shall include the following terms: (i) proceeds to be made available for a term of 25 years from the date of the first advance by Maharashtra to BMC, including a grace period of five years; - 3 - (ii) interest to be charged at the rate of 8.75% per annum, payable semiannually or annually, on amounts withdrawn and outstanding; and (iii) proceeds to be made available promptly as required to enable BMC to meet expenditures required for the Project. (c) Maharashtra shall, under suitable financing arrange- ments with BMC, ensure that funds not less than 60% of the annual capital expenditures are made available on the same terms and conditions as those enumerated in the preceding paragraph to enable BMC to complete the Project. (d) Maharashtra shall exercise its rights under the Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower, Maharashtra, and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, Maharashtra shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 2.02. (a) Maharashtra 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 under the Subsidiary Loan Agreement, and other matters relating to the purposes of the Credit. (b) Maharashtra 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, or the performance by Maharashtra of its obligations under this Agreement and under the Subsidiary Loan Agreement. Section 2.03. Maharashtra shall make available water from the Bhatsai reservoir as required for the Project. Section 2.04. Maharashtra shall take all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for the carrying out of the Project and, if requested by the Association, shall furnish to the Association, promptly after such acquisi- tion, evidence satisfactory to the Association that such land and rights in respect of land are available for purposes related to the Project. -4- ARTICLE III Effective Date; Termination; Cancellation and Suspension Section 3.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 3.02. (a) This Agreement and all obligations of the Association, of the Bank and of Maharashtra thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement and the Loan Agreement shall terminate in accordance with their respective terms; or (ii) the date 25 years after the date of th. Agree- ment. (b) If the Development Credit Agreement and the Loan Agreement terminate in accordance with their respective terms before the date specified in paragraph (a) (ii) of this Section, the Association and the Bank shall promptly notify Maharashtra of this event. Section 3.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- tion or suspension under the General Conditions. ARTICLE IV Miscellaneous Provisions Section 4.01. 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: -5- 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 the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT), Washington, D.C. 248423 (RCA) or 64145 (WUI) For Maharashtra: The Chief Secretary to the Government of Maharashtra Sachivalaya, Bombay India Cable address: Telex: RESTIS 011-2443 Bombay Section 4.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of Maharashtra may be taken or executed by a Secretary to the Government of Maharashtra or such other person or persons as Maharashtra shall designate in writing, and Maharashtra shall furnish to the Association sufficient evidence -6- of the authority and the authenticated specimen signature of each such persnn. Section 4.03. 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 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. INTERNATIONAL DEVELOPMENT ASSOCIATION By 4 Regional Vice President South Asia INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By O#40e Regional Vice President South Asia STATE OF MAHARASHTRA By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Bank for Reconstruction and Development and the International Development Association. FOR SECRETARY