Conformed Copy - C1967 - Economic Management and Social Action Project - Amendment 3

Page 1 October 21, 1992 His Excellency Evariste Marson Minister of Finance Ministry of Finance Antananarivo Madagascar Re: Credit No. 1967 MAG (Economic Management and Social Action Project) Amendments to Schedule I of the Development Credit Agreement Excellency: We refer to the above-mentioned Development Credit Agreement between the democratic Republic of Madagascar (the Borrower) and the International Development Association (the Association) dated December 15, 1988. We also refer to discussions held with your representatives during the last supervision mission and the letters re: 019/PASAGE/CN, 020/PASAGE/CN and 021/PASAGE/CN from His Excellency Bruno Bearino, Minister of Budget and Plan p.i., requesting the financing of the project coordination services out of the proceeds of the Credit, a reallocation of Credit proceeds no longer required for the components "Health" and "Food Security" and a simplification of the disbursement categories. Further to these requests, I am pleased to inform you that the Association hereby agrees to the following changes in the table under paragraph 1 of Schedule I to the Development Credit Agreement: The sub-categories (a) Training and (b) Consultants' services and studies under Categories (1), (4), (5), (6), (8), (9) and (10) are merged into a single sub- category under said Categories, with a disbursement percentage of expenditures to be financed at 100%; said disbursement percentage will also apply to Category (11). The sub-categories (a) through (g) under Category (2) and Category (3) are merged under a single Category entitled "Parts A.3 and A.4 of the Project." A new Category (12) is created, entitled "Materials, equipment, vehicles, consultants' services and operating costs for Part C.4 of the Project" with an amount of DTS 130,000 reallocated from Category (13) Unallocated and a disbursement percentage of expenditures to be financed at 100%. Categories (12) and (13) are consequently renumbered (13) and (14), respectively. An amount of DTS 700,000 from sub- category I (c) is reallocated to Category (II), and an amount of DTS 300,000 from Category (2) is reallocated to Category (13) Unallocated, now renumbered (14). As a result of these changes, a revised table is set forth in the Annex to this letter, including paragraph 2 in which a new sub-paragraph (c) has been added defining incremental "operating costs." As a result of these changes, a revised table is set forth in the Annex to this letter, including paragraph 2 in which a new sub-paragraph (c) has been added defining "operating costs." In addition, the Association hereby agrees to the addition of a new Part C.4 in Schedule 2, Description of the Project, which reads: "Part C: Economic Management Page 2 (4) Strengthening the services of the Ministry of Plan for Project Coordination." Please indicate your agreement to the foregoing by signing and dating the form of confirmation on the enclosed copy of this letter and returning it to us. Very truly yours, Jerome Chevallier Director, P.I. Africa-South Central & Indian Ocean Department CONFFIRMED DEMOCRATIC REPUBLIC OF MADAGASCAR By Authorized Representative Date: 9 NOV 1992 Annex Page 1 of 5 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 Loan Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Part A.1 of the Project: (a) Training, 275,000 100% consultants'ser- vices and studies (b) - (c) Equipment 290,000 100% of foreign and vehicles expenditures and 85% of local expenditures (d) Operating costs - 85% (2) Parts A.3 and A.4 1,220,000 100% of foreign of the Project: expenditures and 85% of local expenditures (3) - (4) Part A.5 of the Project: (a) Training, 860,000 100% Page 3 consultants' ser- vices and studies (b) - (c) Equipment and 680,000 100% of foreign vehicles expenditures and 85% of local expenditures (d) Operating costs 40,000 85% (e) Civil works 2,665,000 100% of foreign expenditures and 85% of local expenditures (5) Part A.6 of the Project: (a) Training, 32,000 100% consultants' ser- vices and studies (b) - (c) Equipment and 30,000 100% of foreign vehicles expenditures and 85% of local expenditures (d) Operating costs 45,000 85% (6) Part A.7 of the Project: (a) Training, 2,436,000 100% consultants' ser- vices and studies (b) - (c) Equipment and 200,000 100% of foreign vehicles expenditures and 85% of local expenditures (d) Operating costs 99,000 85% (7) Part B.2 of the Project: (a) Equipment and 250,000 100% of foreign vehicles expenditures and 85% of local expenditures (b) Operating costs 350,000 85% (8) Part C.1 of the Project: (a) Training, 1,000,000 100% consultants' ser- vices and studies (b) - (c) Equipment and 680,000 100% of foreign vehicles expenditures and 85% of local expenditures Page 4 (d) Operating costs 165,000 85% (9) Part C.2 (i) of the Project: (a) Training, 720,000 100% consultants' ser- vices and studies (b) - (c) Equipment and 45,000 100% of foreign vehicles expenditures and 85% of local expenditures (d) Operating costs 65,000 85% (10) Part C.2 (ii) of the Project: (a) Training, 580,000 100% consultants, ser- vices and studies (b) - (c) Equipment and 90,000 100% of foreign vehicles expenditures and 85% of local expenditures (d) Operating costs 60,000 85% (11) Consultants, 1,560,000 100% services and studies under Part C.3 of the Project (12) Materials, equipment, 130,000 100% vehicles, consultants' Services and operating costs for Part C.4 of the Project (13) Refunding of 1,165,000 Amount due pur- Project Prepara- suant to Section tion Advance 2.02 (c) of this Agreement (14) Unallocated 1,368,000 TOTAL 17,100,000 2. For the purpose 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; (b) The term "local expenditures" means expenditures in the currency of the Borrower for goods or services supplied from the territory of the Borrower; and (c) The term "operating costs" means expenditures related to operation and maintenance of Project vehicles, travel within Madagascar and travel allowances of Project Page 5 staff, office supplies for activities relating to the Project, and salaries of local contractual staff for Project coordination.