Benin - Transport Infrastructure Rehabilitation And Maintenance Project : Credit 1807 - Credit Agreement - Conformed

OFFICIAL DOCUMEN TSW CREDIT NUMBER 1807 BEN Development Credit Agreement (Transport Infrastructure Rehabilitation and Maintenance Project) between PEOPLE'S REPUBLIC OF BENIN and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1987 CREDIT NUMBER 1807 BEN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated -2q< , 1987, between PEOPLE'S REPUBLIC OF BENIN ( e Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Ass/ciation to assist in the financing of the Project; (B) Parts A (a) through (e) and C (a) of the Project will be carried out by Port Autonome de Cotonou (PAC) with the Bor- rower's assistance and, as part of such assistance, the Borrower will make available to PAC part of the proceeds of the Credit as provided in this Agreement; (C) the Borrower intends to contract from Caisse Centrale de Cooperation Economique (CCCE) a loan (the CCCE Loan) in an amount equivalent to two million four hundred thousand dollars ($2,400,000) to assist in financing part of the Project on the terms and conditions set forth in an agreement (the CCCE Loan Agreement) to be entered into between the Borrower and CCCE; (D) the Borrower intends to contract from European Develop- ment Fund, European Economic Community (EDF) a grant (the EDF Grant) in an amount equivalent to twenty-three million dollars ($23,000,000) to assist in financing part of the Project on the terms and conditions set forth in an agreement (the EDF Conven- tion) to be entered into between the Borrower and EDF; (E) the Borrower intends to contract from the Republic of France, acting through the Fonds d'Aide et de Cooperation (FAC), a grant (the FAC Grant) in an amount equivalent to one million four hundred thousand dollars ($1,400,000) to assist in financing part of the Project on the terms and conditions set forth in an agreement (the FAC Grant Agreement) to be entered into between the Borrower and the Republic of France; (F) the Borrower intends to contract from Islamic Develop- ment Bank (IDB) a loan (the IDB Loan) in an amount of three million six hundred thousand Islamic Dinars (IslD 3,600,000) to assist in financing part of the Project on the terms and condi- tions set forth in an agreement (the IDB Loan Agreement) to be entered into between the Borrower and IDB; -2- (G) the Borrower intends to contract from Banque Ouest Africaine de D6veloppement (BOAD) a loan (the BOAD Loan) in an amount of two billion CFA Francs (CFAF 2,000,000,000) to assist in financing part of the Project on the terms and conditions set forth in an agreement (the BOAD Loan Agreement) to be entered into between the Borrower and BOAD; (H) the Borrower intends to contract from the African Development Fund (the African Fund) a loan (the African Fund Loan) in an amount equivalent to eight million six hundred thousand dollars ($8,600,000) to assist in financing part of the Project on the terms and conditions set forth in an agreement (the African Fund Loan Agreement) to be entered into between the Borrower and the African Fund; 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 and in the Project Agreement of even date herewith between the Association and PAC; 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 last sentence of Section 3.02 deleted (the General Conditions) constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project Agreement" means the agreement between the Association and PAC of even date herewith, as the same may be amended from time to time, and such term includes all schedules and agreements supplemental to the Project Agreement; (b) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and PAC pursuant to Section -3- 3.01 (d) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement; (c) "MET" means the Ministere de 1'Equipement et des Transports, the Borrower's ministry responsible for equipment and transport, or any successor thereto; (d) "DROA" means the Direction des Routes et Ouvrages d'Art, the Borrower's directorate of roads and bridges within MET, or any successor thereto; (e) "DEP" means the Direction des Etudes et de la Planifi- cation, the Borrower's directorate of studies and planning within MET, or any successor thereto; (f) "DFR" means the Direction du Fondz Routier, the Bor- rower's directorate of the road funds within MET, or any suc- cessor thereto; (g) "PAC" means Port Autonome de Cotonou, a public enter- prise established by the Borrower's Law No. 64-39 of December 31, 1964, and "PAC Statutes" means the Statutes of PAC approved by the Borrower's Decret No. 84-250 of June 22, 1984, as such Statutes may be amended from time to time; (h) "OBEMAP" means Office Beninois des Manutentions Portuaires, a public enterprise established by the Borrower's Decret No. 69-80 of March 27, 1969, and "OBEMAP Statutes" means the Statutes of OBEMAP appioved by the Borrower's Decret No. 84-375 of October 8, 1984 as such Statutes may be amended from time to time; (i) "Special Account" means the special account referred to in Section 2.02 (b) of this Agreement; (j) "Project Account" means the account referred to in Section 3.02 of this Agreement; (k) "Project Preparation Advances" means collectively the project preparation advances granted by the Association to the Borrower pursuant to an exchange of letters dated September 13, 1983, December 9, 1983, December 11, 1984, February 27, 1985 and May 13, 1985 between the Borrower and the Association; and -4- (1) "CFA Franc" or "CFAF" means the Franc de la Communaut6 Financiare Africaine, the common currency of the Borrower and the other members of the West African Monetary Union. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to fifteen million two hundred thousand Special Drawing Rights (SDR 15,200,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Association shall so agree, to be made) in respect of the reason- able cost of goods and services required for the Project 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 CFAF a special account (the Special Account) in the Cotonou branch of the Central Bank for West African Coun- tries on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 5 to this Agreement. (c) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advances withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advances shall thereupon be cancelled. Section 2.03. The Closing Date shall be March 31, 1995 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. 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 -5- 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 restrictions of any kind imposed by, or in 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 November 1, 1997, and ending May 1, 2037. Each installment to and including the installment payable on May 1, 2007 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 Republic of France is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. PAC is designated as representative of the Borrower for the purposes of taking any action required or per- mitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions in respect of Categories (1) through (3) set forth in the table in paragraph 1 of Schedule 1 to this Agreement. -6- ARTICLE III Execution of the Project Section 3.01 (a) 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 B and C (d) of the Project through DROA, Part C (c) of the Project through DEP and Part C (e) of the Project through DFR and shall cause OBEMAP to carry out Parts A (f) and C (b) of the Project, all with due diligence and efficiency and in conformity with appropriate road engineering, economic, financial and administrative practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Borrower and the Association shall otherwise agree, the Borrower shall carry out Parts B and C (b) through (e) of the Project in accordance with the Implementa- tion Program set forth in Schedule 4 to this Agreement. (c) Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Borrower shall cause PAC to perform in accordance with the provi- sions of the Project Agreement all the obligations of PAC therein set forth (including the obligations set forth in Section 4.02 (d) (ii) of the Project Agreement), shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable PAC to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (d) The Borrower shall relend the proceeds of the Credit allocated to Categories (1) through (3) of the table set forth in paragraph 1 of Schedule 1 to this Agreement to PAC under a sub- sidiary loan agreement to be entered into between the Borrower and PAC under terms and conditions which shall have been approved by the Association which shall include repayment terms over eighteen years including a three-year grace period and an annual interest rare of eight percent (8%), the foreign exchange risk being borne by PAC. (e) The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such manner as to protect the -7- interests of the Borrower and the Association and to accomplish the purposes of the Credit and, except as the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.02. Without any limitation upon any of its obligations under Section 3.01 of this Agreement, the Borrower shall: (a) establish and maintain a Project Account in a commer- cial bank on terms and conditions satisfactory to the Association to be used exclusively for the purpose of meeting expenditures under Parts B and C (c), (d) and (e) of the Project not financed out of the proceeds of the Credit; and (b) deposit or cause to be deposited in the Project Account, promptly before the beginning of each quarter of its fiscal year, the Borrower's contribution towards expenditures under Parts B and C (c), (d) and (e) of the Project during such quarter. Section 3.03. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services require' for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agreement. Section 3.04. The Borrower and the Association hereby agree that the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions (relating to in- surance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of Parts A (a) through (e) and C (a) of the Project shall be carried out by PAC pursuant to Section 2.03 of the Project Agreement. ARTICLE IV Other 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 Parts B and C (c), (d) and (e) of the Project of the departments or agencies of the Borrower responsi- ble for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in para- graph (a) of this Section including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent 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 said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records and accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account 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, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Associa- tion has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (ii), enable the Association's representatives to exa- mine such records; and (iv) ensure that such reports and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the proce- -9- dures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. (d) The Borrower shall cause OBEMAP to maintain records and accounts adequate to reflect in accordance with sound accounting practices the operations and financial condition of OBEMAP. (e) The Borrower shall cause OBEMAP to: (i) have its records, accounts and financial state- ments (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Asso- ciation; (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 copies of its financial statements for such year as so audited; and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, accounts and financial statements as well as the audit thereof, as the Association shall from time to time reasonably request. Section 4.02. Until the completion of the Project, by August 31 of each year or such other date as the Association may agree, the Borrower shall furnish to the Association for its approval its proposed annual investment plan (new investments and rehabilitation), as well as its proposed annual expenditures for recurrent needs, for the entire transport sector. ARTICLE V Remedies of the Association Section 5.01. -Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: - 10 - (a) PAC shall have failed to perform any of its obligations under the Project Agreement. (b) As a result of events which have occurred after the date o4 the Development Credit Agreement, an extraordinary situa- tion shall have arisen which shall make it improbable that PAC will be able to perform its obligations under the Project Agreement. (c) PAC Statutes shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of PAC to perform any of its obligations under the Project Agreement. (d) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of PAC or for the suspension of its operations. (e) (i) Subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower to withdraw the proceeds of any grant or loan made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor, or (B) any such loan shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obliga- tions under such agreement; and (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obliga- tions of the Borrower under this Agreement. - 11 - Section 5.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional events are specified: (a) the 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 Association to the Borrower; (b) the events specified in paragraphs (c) and (d) of Section 5.01 of this Agreement shall occur; and (c) any event specified in paragraph (e) (i) (B) of Section 5.01 of this Agreement shall occur, subject to the proviso of paragraph (e) (ii) of that Section. ARTICLE VI Effective Date; Termination Section 6.01. The 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 Subsidiary Loan Agreement has been executed on behalf of the Borrower and PAC; (b) the Borrower has opened the Project Account and deposited therein an amount of fifty million CFAF (CFAF 50,000,000); (c) PAC's tariffs, effective as of July 1, 1985, have been increased by: (i) 10% for ship dues and demurrage for goods; and (ii) 5% for other port tariffs except for the droits sur les marchandises; (d) all conditions precedent to the effectiveness of the EDF Convention, the IDB Loan Agreement and the BOAD Loan Agreement other than any related to the effectiveness of this Agreement, have been fulfilled; and (e) the Presidential Directive on an adequate increase in funds earmarked to the Borrower's Road Fund for road maintenance, derived from fuel taxes, has been signed. - 12 - Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association: (a) that the Project Agreement has been duly authorized or ratified by PAC and is legally binding upon PAC in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized by the Borrower and PAC and is legally binding upon the Borrower and PAC in accordance with its terms. Section 6.03. The date one-hundred twenty (120) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.04. The obligations of the Borrower under Arti- cle IV of this Agreement and the provisions of paragraphs (a) and (b) of Section 5.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on the date twenty years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. Except as provided in Section 2.09 of this Agreement, the Minister of the Borrower responsible for finance 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 Finance and Economy P.O. Box 302 Cotonou People's Republic of Benin - 13 - Cable address: Telex: MINIFINANCES MIFIN 5009 or Cotonou 5289 or MININDART 5252 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) 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. PEOPLE'S REPUBLIC OF BENIN By //C~4t4t/.kl2L Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION Regional Vice President Africa - 14 - 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 PAC Expenditures (1) Works for Part A 1,250,000 90% (c) and (d) of the Project (2) Equipment, tools 160,000 100% and spare parts for Parts A (d) and (e) and C (a) of the Project (3) Consultants' ser- 1,330,000 100% vices and training for Parts A and C (a) of the Project MET Expenditures (4) Road rehabilitation 2,650,000 90% and maintenance for Part B (b) of the Project (5) Building and 470,000 80% workshop repair for Part B (d) of the Project - 15 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (6) Equipment, tools 2,730,000 100% and spare parts for Parts B (c) and C (c) and (d) of the Project (7) Consultants' ser- 2,650,000 100% vices and training for Parts B (b) and C (c), (d) and (e) of the Project (8) Refunding of 770,000 Amount due pur- Project Prepara- suant to Section tion Advances 2.02 (c) of this Agreement (9) Unallocated 3,190,000 TOTAL 15,200,000 2. 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. - 16 - SCHEDULE 2 Description of the Project The objectives of the Project are to: (a) rehabilitate and maintain the Borrower's priority transport infrastructure in the port and highway sub-sectors; (b) strengthen the institutions responsible for road maintenance, transport planning, port management and cargo-handling; (c) increase private sector participation in road maintenance by reducing works carried out under force account; and (d) improve cost recovery and maintenance funding in the port and highway sub-sectors and in cargo-handling activities. 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: Port Rehabilitation Program (a) Repair of the old commercial quay, aprons and railway tracks; (b) repair of Eastern breakwater; (c) protection of the South bank of the new basin, strengthening of the cut-off breakwater and dredging of the access channel; (d) rehabilitation of transit sheds, workshops and ship repair facilities; (e) improvement of PAC maintenance facilities; and (f) improvement of OBEMAP maintenance facilities. Part B: Road Maintenance and Rehabilitation Program (a) Resurfacing of the following paved road sections: (i) Parakou-Malanville (about 317 km); (ii) Porto-Novo-Pobe (about 61 km); and (iii) Come-Zoungbonou-Lokossa-Dogbo (about 61 km). - 17 - (b) Rehabilitation and regravelling of gravel roads (about 1,000 km). (c) Acquisition of road maintenance equipment, spare parts and tools for equipment maintenance. (d) Construction/repair of DROA facilities. Part C: Institution Building Program (a) PAC: carrying out of a study for future maintenance dredging policy; improvement of its management system including internal audit, cost accounting, personnel administration and data processing; development of its maintenance capacity; establishment of operational statistics; and carrying out of a training program, including on-the-job training, fellowships and provision of training aids. (b) OBEMAP: improvement of operational statistics, cost accounting, organization of training and personnel administra- tion; modernization of workshops and improvement of equipment maintenance; and carrying out of a training program. (c) DEP: assistance for transport sector policy formula- tion; and carrying out of a training program, including fellow- ships, provision of training aids and assistance from similar experienced and qualified institutions. (d) DROA: assistance in the reorganization of the road and equipment maintenance system; and carrying out of a training program, including fellowships, provision of training aids and assistance from similar experienced and qualified institutions. (e) DFR: assistance for management improvement and establishment of an internal audit unit. The Project is expected to be completed by September 30, 1994. - 18 - SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A: International Competitive Bidding Except a8 provided in Part C 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). Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the proce- dures described in Part A hereof, goods manufactured in People's Republic of Benin 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 I through 4 of Appendix 2 thereto. Part C: Other Procurement Procedures 1. Equipment,, tools and spare parts estimated to cost less than the equivalent of $100,000 per contract, up to an aggregate amount not to exceed the equivalent of $1,000,000, and building and workshop repairs may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 2. Equipment, tools and spare parts estimated to cost less than the equivalent of $20,000 per contract, up to an aggregate amount not to exceed the equivalent of $600,000, may be procured under contracts awarded on the basis of comparison of price quotations solicited from a list of at least three suppliers eligible under the Guidelines, in accordance with procedures satisfactory to the Association; provided, however, that spare parts to be compatible with existing equipment may be purchased at reasonable prices directly from the original suppliers in accordance with proce- dures satisfactory to the Association. 3. Works for road maintenance under Part B (b) of the Project may be either: (i) procured under contracts awarded on the basis - 19 - of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association or, where appropriate, (ii) carried out under force account by DROA up to an aggregate amount not to exceed the equivalent of $3.6 million. Part D: 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 $100,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two 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 the Special Account 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 the Special Account, 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 5 to this Agreement. (c) The provisions of the preceding subparagraphs (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. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agree- ment. 2. The figure of 10% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower and PAC in carrying out the Project, the Borrower and PAC shall employ consultants whose - 20 - qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Associaticn 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. - 21 - SCHEDULE 4 Implementation Program 1. The Borrower shall carry out: (a) through DROA, its action plan covering the period 1988-1993 for road maintenance and management; and (b) through DEP, its action plan covering the period 1988-1993 for transport planning management; all with due diligence and efficiency. 2. The Borrower shall ensure that its Road Fund established and operating under the Borrower's Decret No. 84-98 of February 20, 1984 shall be used exclusively for road maintenance activities. 3. The Borrower shall: (a) ensure that its Centre National des Bureaux de Fret (CNBF) established and operating under the Borrower's Decret No. 84-68 of January 31, 1984 shall facilitate road transport activities in Benin; and (b) by December 31, 1988, shall evaluate the action of CNBF in consultation with the Asso- ciation to decide whether further reform is needed. 4. The Borrower shall: (a) ensure that OBEMAP enters, not later than December 31, 1987, into an action plan covering the period 1988-1993, acceptable to the Association and, thereafter, carries out said plan with due diligence and efficiency; said plan shall provide, inter alia, for installment payments by OBEMAP of its debt arrears to PAC; and (b) annually exchange views with the Association on OBEMAP's performance in comparison with targets acceptable to the Association and, in case that OBEMAP's performance falls significantly below said targets by December 31, 1988, reorganize its cargo-handling activities in a manner satisfactory to the Association. -22 - SCHEDULE 5 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1) through (7) set forth in the table in paragraph 1 of Schedule I 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 allocated from time to time to the eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount equivalent to CFAF 180,000,000 to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Except as the Association shall otherwise agree, payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account may be made as follows: (a) On the basis of a request or requests by the Borrower for a deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit in the Special Account such amount or amounts as the Borrower shall have requested. (b) The Borrower shall furnish to the Association requests for replenishment of the Special Account at such intervals as the Asso-iation shall specify. On the basis of such requests, the Association shall withdraw from the Credit Account and deposit into the Special Account such amounts as shall be required to replenish the Special Account with amounts not exceeding the amount of payments made out of the Special Account for eligible - 23 - expenditures. All such deposits shall be withdrawn by the Association from the Credit Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by the 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 the Special Account for which the Borrower requests replenishment pursuant to paragraph 3 (b) of this Schedule, the Borrower shall furnish to the Association, prior to or at the time of such request, such and other evidence as the Association shall reasonably request, showing that such payment was made for eligible expenditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Special Account shall be made by the Association when either of the following situations first arises: (i) the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (ii) the total unwithdrawn amount of the Credit allo- cated to the eligible Categories, minus the amount of any 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 from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to the eligible Categories 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 the Special Account as of the date of such notice will be utilized in making payments for eligible expenditures. - 24 - 6. (a) If the Association shall have determined at any time that any payment out of the Special Account: (i) was 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 shall, promptly upon notice from the Association, deposit into the Special Account (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. No further deposit by the Association into the Special Account 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 the Special Account 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. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY