Haiti - Seventh Transport Project : Credit 1756 - Credit Agreement - Conformed

OFFICIAL CREDIT NUMBER 1756 HA Development Credit Agreement (Seventh Transport Project) between REPUBLIC OF HAITI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated /2 , 1987 CREDIT NUMBER 1756 HA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated F'AE-LA( (2- 1987, between REPUBLIC OF HAITI (the Bo ower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; 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, (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 have the respec- tive meanings therein set forth and the following additional terms have the following meanings: (a) "DDT" means Direction des Transports, a directorate within the Borrower's Ministry of Public Works, Transport and Communications; (b) "APN" means Autorite Portuaire Nationale, a public agency of the Borrower established under a Decree dated March 15, 1985, published in Le Moniteur of July 11, 1985; (c) "APN Statutes" means Decree dated March 15, 1985, as published in Le Moniteur of July 11, 1985; (d) "SEMANAH" means Service Maritime et de Navigation d'Haiti, an agency establLshed pursuant to a Decree published in Le Moniteur on March 11, 1982, under the Borrower's Ministry of Public Works, Transport and Communications; -2- (e) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and APN pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement; (f) "1987-1991 Investment Program" means the program of transport investments for the fiscal years 1987 through 1991 to be carried out by the Bo:rower and included in the Annex to Schedule 2; (g) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; (h) "Project Account" means the account referred to in Section 3.03 of this Agreement; (i) "Gourde" means the Borrower's currency unit; and (j) "Fiscal Year" or "FY" means the Borrower's and APN'o fiscal year commencing on October 1 and ending on September 30. 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 sixteen million six hundred thousand Special Drawing Rights (SDR 16,600,000). 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, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association 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 dollars a special account in a commercial bank satisfactory to the Association on terms and conditions -3- 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. Section 2.03. The Closing Date shall be June 30, 1991 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 on 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 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 March 15 and September 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 15 and September 15 commencing March 15, 1997, and ending September 15, 2036. Each installment to and including the installment payable on September 15, 2006, shall be one-half of one percent (1/2 of 1%) of such principal amount, and each installment thereafter shall be one and one-half percent (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. -4- 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: (i) carry out Parts A and B of the Project as follows: Part A through DDT and Part B with the participation of SEMANAH with due diligence and efficiency and in conformity with appropriate administrative, financial, economic and engineering practices; (ii) cause APN to carry out Part C of the Project with due diligence and efficiency and in conformity with appropriate financial, economic and engineering practices; and (iii) provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) The Borrower shall relend to APN the proceeds of the Credit allocated for Part C of the Project, in an amount not to exceed $280,000 equivalent under a subsidiary loan agreement to be entered into between the Borrower and APN, under terms and conditions which shall have been approved by the Association, including, inter alia, a term of 7 years including 2 years of grace and interest at the rate of 5% per annum, and APN's obligation to carry out Part C of the Project in accordance with the provisions of this Agreement. (c) The Borrower shall exercise its rights under the Sub- sidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the pur- poses of the Credit, and except as the Association shall other- wise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. (d) Without limitation upon the provisions of paragraph (a) of this Section, the Borrower shall carry out the Project in accordance with the Implementation Program set forth in Sched- ule 4 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Associa- tion. 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 3 to this Agreement. -5- Section 3.03. The Borrower shall: (a) establish and there- after maintain, in the Borrower's Banque de la Republic d'Haiti, a project account to be used for expenditures required for the carrying out of the Project; (b) deposit therein an amount in Gourdes equivaleit to $400,000; and (c) replenish such account so that the aggregate amounts available in such account do not fall below the amount of counterpart funds required by the Borrower to meet, together with the proceeds of the Cre,;7, two months of estimated expenditures under the Project. Section 3.04. The Borrower shall: (a) establish, and there- after maintain, a Project Coordination Unit composed of the Directors of DDT, APN, SEMANAH and of a senior representative of the Ministry of Economy and Finance, chaired by the Director of DDT, and with powers and responsibilities to, inter alia, oversee, coordinate, monitor and report to the Association on the progress of, the carrying out of the Project; (b) appoint, and thereafter maintain, as a full-time Project Implementation Officer, a qualified engineer with not less than ten years of professional experience in the transport sector, of which at least five years shall include his or her substantive parti- cipation in the implementation of road projects financed by international organizations, and with powers and responsibi- lities for the daily supervision of the carrying out of the Project under the guidance of the chairman of the Project Coordination Unit referred to in paragraph (a) of this Section; and (c) provide, promptly as needed, the funds, facilities, services and other resources, required for the operation of such unit. Section 3.05. The Borrower shall: (a) at all times cause its: (i) public roads network to be maintained and all necessary repairs thereof to be made, all in accordance with appropriate practices; and (ii) road maintenance equipment to be maintained and all necessary repairs, renewals and replacements thereof to be made, all in accordance with appropriate engineering practices; (b) make available to DDT the yearly amounts required for purposes of paragraph (a) of this Section and for the operations of its road maintenance service in amounts which, unless otherwise agreed by the Association, shall not be lower than: (i) $8,800,000 equivalent for Fiscal Year 1988; (ii) $9,700,000 -6- equivalent for Fiscal Year 1989; (iii) $10,600,000 equivalent for Fiscal Year 1990; and (iv) $11,800,000 equivalent for Fiscal Year 1991; and (c) not later than June 30, 1987 and every June 30, there- after: (i) furnish to the Association for its comments, the pro- gram to be carried out under Part A.5 of the Project, including the technical assistance required for such program, and the selection of the sites where the works will be carried out; and (ii) promptly thereafter carry out such program taking into account, the comments, if any, made by the Association. Section 3.06. The Borrower shall: (a) commencing in 1987 and not later than June 30 each year, inform the Association of any proposal of the Borrower to modify the 1987-1991 Investment Program; (b) afford the Association a reasonable opportunity to exchange views with the Borrower on any such proposal; (c) not commit itself to, or incur any capital expenditure (other than those included in the 1987-1991 Investment Program) unless the Borrower shall have determined, to the satisfaction of the Association, that: (i) the proposed expenditures are economically justified in the context of the Borrower's priorities for national economic development and for the development of the transport sector, and (ii) the Borrower has secured adequate financing for such expenditure, including the recurrent costs associated with it; and (d) without limitation to the provisions of paragraph (c) of this Section, and in the event that it undertakes to carry out any improvements in its Cap Haitien Airport (other than those included in the 1987-1991 Investment Program): (i) restrict such improvements, in each Fiscal Year, to those that can be financed exclusively out of one-third of the amounts collected by the Borrower in the previous Fiscal Year from its air passenger departure tax; and (ii) not apply the proceeds of any grant or external indebtedness to the financing of such improvements. Section 3.07. The Borrower shall: (a) (i) ensure that the weight of vehicles using the Borrower's public roads network shall not exceed 18 tons per single axle or a total weight of 40 tons per vehicle, and (ii) to that end, and not later than March 31, 1987: (A) provide DDT with an amount equivalent to $240,000, and (B) appoint, on a full-time basis, a qualified chief for DDT's weight control services; and (b) not later than June 30 each year during Project implementation, review with the Association the actions taken or to be taken for the enforcement of such axle load restrictions. -7- Section 3.08. The Borrower shall provide all such amounts as shall be required by SEMANAH for the carrying out of Part B of the Project and which, unless otherwise agreed by the Asso- ciation shall not be lower than: (a) $800,000 equivalent for fiscal year 1988; (b) $900,000 equivalent for fiscal year 1989; (c) $1,000,000 equivalent for fiscal year 1990; and (d) $1,200,000 equivalent for fiscal year 1991. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall: (i) maintain or cause to be maintained separate records and accounts adequate to re- flect in accordance with sound accounting practices the opera- tions, resources and expenditures, in respect of Parts A and B of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof; and (ii) cause APN to maintain separate records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of Part C of the Project. (b) The Borrower shall: (i) (A) have the accounts referred to in paragraph (a) (i) of this Section, for each fiscal year audited, and (B) cause APN to audit the accounts referred to in paragraph (a) (ii) of this Section, all in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish, and cause APN to furnish, to the Associa- tion, as soon as available, but in any case not later than four months after the end of each such year, a certified copy of the report of such audits by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish and cause APN to furnish, to the Associa- tion such other information concerning the said accounts and the audit thereof and said records as the Association shall from time to time reasonably request. -8- (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, separate records and accounts reflecting such expenditures; (ii) retain or cause to be retained, until at least one year after the completion of the audit for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other docu- ments) evidencing such expenditures; (iii) enable the Association's representatives to examine such records; and (iv) ensure that such separate accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report thereof contains, in respect of such separate accounts, a separate opinion by said auditors as to whether the pro- ceeds of the Credit withdrawn in respect of such expenditures were used for the purposes for which they were provided. Section 4.02. The Borrower shall cause APN to, not later than October 1, 1987, put into effect the schedule of tariffs and charges for the use of international ports contained in APN's final report entitled "Port-au-Prince International Port: Structure and level of taxes for 1987-1989" and published on July 1986, as amended, if required, to take into account the comments, if any, to be provided by the Association upon its review of such report. Section 4.03. The Borrower shall cause APN to: (a) not later than July 1, 1987, furnish to the Association for its comments the schedule of tariffs and charges to be applied by APN for the use of cabotage ports; and (b) put into effect, not later than October 1, 1987, such schedule of tariffs and charges as amended if required to take into account the comments, if any, made by the Association. -9- ARTICLE V Other Covenants Section 5.01. The Borrower shall, and shall cause APN to: (a) take out and maintain with responsible insurers, or make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice; (b) carry on its operations and conduct its affairs in accordance with sound administrative, financial, economic and engineering practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers; and Cc) at all times, operate and maintain its plants, machinery, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and economic practices. ARTICLE VI Remedies of the Association Section 6.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) APN shall have failed to perform any of its obligations under the Subsidiary Loan Agreement; (b) The APN Statutes shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of APN to perform any of its obligations under the Subsidiary Loan Agreement; and (c) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of APN or for the suspension of its operations. Section 6.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional events are specified: - 10 - (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; and (b) the events specified in paragraphs (b) and (c) of Section 6.01 of this Agreement shall occur. ARTICLE VII Effective Date; Termination Section 7.01. 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) that the unit referred to in Section 3.04 (a) of this Agreement shall have been established in form and substance satisfactory to the Association and that the officer referred to in Section 3.04 (b) shall have been appointed; (b) that the Borrower shall have opened the Special Account in accordance with the provisions of Section 2.02 (b) of this Agreement; and (c) that the Borrower shall have opened the Project Account in accordance with the provisions of Section 3.03 of this Agree- ment; and shall have made the deposit referred to in paragraph (b) of such Section. Section 7.02. The date M (6117 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 7.03. The obligations of the Borrower under Arti- cles III, IV and V of this Agreement and the provisions of Section 6.02 of this Agreement shall cease and determine 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. - 11 - ARTICLE VIII Representative of the Borrower; Addresses Section 8.01. The Minister of Economy and Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 8.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministere de 1'Economie et des Finances Palais des Ministeres Port-au-Prince Haiti Cable address: Telex: Minist&re de 1'Economie 2030347 et des Finances Port-au-Prince, Haiti 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) - 12 - 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. REPUBLIC OF HAITI By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Latin America and the Caribbean - 13 - 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) Works for Parts A 11,320,000 80% and B of the Project (2) Goods for Part A 1,180,000 100% of foreign of the Project expenditures, 100% of local expenditures (ex-factory) and 85% of other local expendi- tures (off- the-shelf) (3) Technical Assistance, Training, Consultants' Services and Audits: (a) for Parts A 2,450,000 ) and B of the ) Project ) 100% (b) for Part C of 210,000 ) the Project ) (4) Unallocated 1,440,000 TOTAL 16,600,000 14 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of SDR 990,000, may be made in respect of Part A.1 of the Project, and of engineering studies for Parts A.2, B.1 and B.2 of the Project, on account of payments made for expenditures before that date but after October 1, 1986; and (b) payments for expenditures under Part C of the Project until the Subsidiary Loan Agreement shall have been executed by the Borrower and APN and a legal opinion or opinions satisfactory to the Association shall have been furnished to the Association specifying that the Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and APN and is legally binding upon the parties thereto in accordance with its terms. 15 SCHEDULE 2 Description of the Project The objectives of the Project are: (a) the improvement and development of the Borrower's road network and coastal shipping infrastructure in support of its agriculture and industry devel- opment; and (b) the strengthening of the Borrower's transport institutions. The Project is part of the 1987-1991 Investment Program and 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: Roads and Bridges 1. Rehabilitation of about 38 bridges and drainage struc- tures located on departmental and secondary roads. 2. Construction of the Fer-a Cheval bridge, and the Guayamouc bridge at Hinche in the Departement du Centre. 3. Rehabilitation of the North Road between Gonaives and Cap Haitien of about 35 kilometers. 4. Acquisition and utilization of tools, equipment and spare parts for road maintenance. 5. Strengthening of DDT's skills in planning, road maintenance, equipment management, staff training and a program for improving and developing labor-based techniques for construction of secondary roads. Part B: Maritime Services 1. Construction of a slipway and a yard for the inspection of boats. 2. Establishment of a training center for seamen. 3. Strenthening of SEMANAH's administration, management and operation. - 16 - Part C: Port Management 1. Carrying out of engineering studies and designs for the improvement of the cabotage port of Jeremie. The Project is expected to be completed by December 31, 1990. - 17 - ANNEX TO SCHEDULE 2 1987-1991 Investment Program A. Road Subsector (a) Engineering Studies & Design Road Name Length Estimated Cost (km) ($ Million) 1. Gross Morne-Port de Paix 50 0.6 2. Hinche-St. Raphael-Trou du Nord 91 1.2 3. Mirebalais-Belladere 74 0.9 (b) Construction/Rehabilitation 1. Mirebalais-Pont Sonde 74 38.0 2. Trou Cayman-Terre Rouge 11 6.0 3. Secondary and Tertiary Roads 750 36.0 4. Bridge and Culvert Rehabilitation - 20.0 5. Equipment and Tools 2.0 6. Technical Assistance and Training - 5.0 Sub-total 884 109.7 B. Ports and Maritime Subsector Investment Item Estimated Cost ($ Million) (a) APN 1. Port Maintenance and other Equipment 2.0 2. Repair of Jeremie Port, including Engineering 1.0 3. Miscellaneous items for the Cap Haitien Port 3.0 4. Rehabilitation of La Tortue and Ille a Vache Ports 2.0 - 18 - 5. Technical Assistance and Data Processing Equipment 1.0 Investment Item Estimated Cost ($ Million) (b) SEMANAH 1. Coastal Radio Communications and Navaids 1.2 2. Slipways and Yard, Boat Inspection 1.4 3. Training Center and Equipment 1.0 4. Technical Assistance, Institutional Strengthening 0.5 Sub-total 13.1 C. Civil Aviation Subsector 1. Expansion of Terminal Building Hall at Port-au-Prince Airport 0.4 2. Equiptaent and Facilities for Port-au-Prince Airport 1.2 3. Safety Equipment at Cap Haitien Airport 0.5 Sub-total 2.2 Summary (A+B+C) A. Road Sub-sector 109.7 B. Port and Maritime Subsector 13.1 C. Civil Aviation Subsector 2.2 Grand Total (A+B+C) 125.0 - 19 - SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part 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 May 1985 (the Guidelines). 2. Bidders for the works included in Parts A.2, A.3, B.1 and B.2 of the Project shall be prequalified as described in para- graph 2.10 of the Guidelines. Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the proce- dures described in Part A.1 hereof, goods manufactured in Haiti 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. Part C: Preference for Domestic Contractors In the procurement of works in accordance with the proce- dures described in Part A.1 hereof, the Borrower may grant a margin of preference to domestic contractors 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. Part D: Other Procurement Procedures Works estimated to cost less than the equivalent of $100,000 per contract, up to an aggregate amount not to exceed the equiv- alent of $1,100,000; and goods estimated to cost less than the equivalent of $50,000 per contract, up to an aggregate amount not to exceed the equivalent of $200,000 may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. - 20 - Part F: Review by the Association of Procurement Decisions 1. Review of prequalification: With respect to the prequalification of bidders as provided in Part A.2 hereof, 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 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. 3. The figure of 15% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. - 21 - Section II. Employment of Consultants In order to assist the Borrower in carrying out the Project, the Borrower shall employ, or cause to be employed, consultants whose 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 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. - 22 - SCHEDULE 4 Implementation Program Action 1. Commencement of work by the following consultants (a) Transport management ) expert to study the ) restructuring of DDT ) included under Part A.5 ) of the Project ) ) June 30, 1987 (b) Transport planner and ) economist for DDT ) included under Part A.5 ) of the Project ) 2. Commencement of work in SEMANAH, on a full time and permanent basis, of the following officers: (a) technical operations ) officer ) ) June 30, 1987 (b) Training officer ) - 23 - SCHEDULE 5 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categori-s" means Categories (i), (2) and (3) (a) and (b) 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 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 SDR 1,320,000 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 Association 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 - 24 - 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 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 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 directly by the Borrower from the Credit Account in accordance with the provisions of 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 outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Project, 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 eli- gible Categories shall follow such procedures as the Association shall specify by notice to the Borrower. Such further withdrawals 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 have been or will be utilized in making payments for eligible expenditures. - 25 - 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