Conformed Copy - L3051 - Land Mobilization Project - Loan Agreement

Page 1 CONFORMED COPY LOAN NUMBER 3051 PNG (Land Mobilization Project) between THE INDEPENDENT STATE OF PAPUA NEW GUINEA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated September 25, 1989 LOAN NUMBER 3051 PNG LOAN AGREEMENT AGREEMENT, dated September 25, 1989, between THE INDEPENDENT STATE OF PAPUA NEW GUINEA (the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). 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 Bank to assist in the financing of the Project; and (B) the Borrower intends to obtain from the Government of Australia a grant (the Australian Grant) in an amount equivalent to $6,400,000 to assist in financing part of the Project on the conditions set forth in an agreement (the Grant Agreement) to be entered into between the Borrower and the Government of Australia; and WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to extend the Loan to the Borrower upon the terms and conditions set forth in this Agreement; Page 2 NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Loan and Guarantee Agreements" of the Bank, 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) "DLPP" means the Department of Lands and Physical Planning of the Borrower; (b) "Fiscal Year" and "FY" means the Borrower's fiscal year beginning January 1 and ending December 31; (c) "Kina" means the currency of the Borrower; (d) "PNGLIS" means the Papua New Guinea Land Information System; (e) "Program" means the Borrower's Land Mobilization Programme as set out in the Department of Lands and Physical Planning's document dated December 1988; and (f) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, an amount in various currencies equivalent to nineteen million six hundred thousand dollars ($19,600,000). Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Bank 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 Loan. (b) The Borrower shall, for the purposes of the Project, open and maintain in Kina a special account in the Bank of Papua New Guinea (its Central Bank) on terms and conditions satisfactory to the Bank. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 6 to this Agreement. Section 2.03. The Closing Date shall be June 30, 1994, or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.04. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.05. (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time at a rate per annum for each Interest Period equal to one- Page 3 half of one percent per annum above the Cost of Qualified Borrowings for the last Semester ending prior to the commencement of such Interest Period. (b) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower of the Cost of Qualified Borrowings for such Semester. (c) For purposes of this Section: (i) "Interest Period" means the six-month period commencing on each date specified in Section 2.06 of this Agreement, including the Interest Period in which this Agreement is signed. (ii) "Cost of Qualified Borrowings" means the cost of the outstanding borrowings of the Bank drawn down after June 30, 1982, expressed as a percentage per annum, as reasonably determined by the Bank. (iii) "Semester" means the first six months or the second six months of a calendar year. Section 2.06. Interest and other charges shall be payable semiannually on April 15 and October 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. 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 the Project through DLPP with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering 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 Bank shall otherwise agree, the Borrower shall carry out the Project in accordance with the Implementation Program set forth in Schedule 5 to this Agreement. Section 3.02. Except as the Bank 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 Loan shall be governed by the provisions of Schedule 4 to this Agree- ment. ARTICLE IV Financial 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 the Project of the departments or agencies of the Borrower responsible 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 Page 4 acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reason- ably request. (c) For all expenditures with respect to which withdrawals from the Loan 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 Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank's representatives to examine such records; and (iv) ensure that such records 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- dures and internal controls involved in their pre- paration, can be relied upon to support the related withdrawals. ARTICLE V Remedies of the Bank Section 5.01. Pursuant to Section 6.02 (k) of the General Conditions, the following additional event is specified: (i) Subject to subparagraph (ii) of this Section, the Grant Agreement shall have been suspended, cancelled or terminated, prior to its completion, in whole or in part. (ii) Subparagraph (i) of this section shall not apply if the Borrower establishes to the satisfaction of the Bank that: (A) such suspension, cancellation or termination is not caused by the failure of the Borrower to perform any of its obligations 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 obligations of the Borrower under this Agreement. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of this Agreement within the meaning of Section 12.01 (c) of the General Conditions: (a) the Borrower has employed the consultants to assist it Page 5 in the carrying out of Parts A.1 (a), A.1 (f), B.1 (a) and B.2 (b) of the Project; and (b) the conditions precedent to the effectiveness of the Grant Agreement have been fulfilled, subject only to those relating to the effectiveness of this Agreement. Section 6.02. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister for Finance and Planning of the Borrower 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: Minister for Finance and Planning Department of Finance and Planning Post Office Wards Strip Waigani, N.C.D. Papua New Guinea Cable address: Telex: TREASURER NE 23331 Boroko Papua New Guinea 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) 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. THE INDEPENDENT STATE OF PAPUA NEW GUINEA By /s/ Paul Pora Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Page 6 By /s/ A. Karaosmanoglu Regional Vice President Asia SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expen- ditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works 5,400,000 100% of expendi- tures incurred on or before December 31, 1989, and 90% thereafter (2) Equipment 5,100,000 100% of foreign and furniture expenditures, 100% of local expenditures (ex- factory cost) and 85% of local expenditures for other items pro- cured locally (3) Consultants' 4,400,000 100% services and contract staff (4) Incremental 3,700,000 80% in FY 1989, salaries of 70% in FY 1990, local staff 60% in FY 1991, 50% in FY 1992 and 40% in FY 1993 (5) Unallocated 1,000,000 TOTAL 19,600,000 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; (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; (c) the term "contract staff" means non-citizen government employees on fixed-term contracts with DLPP; and (d) the term "incremental salaries of local staff" means the salaries of employees of DLPP paid by the Borrower in each of the fiscal years set forth in paragraph 1, and which are in excess of the total paid for such salaries by the Borrower in FY 1988. 3. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $1,000,000, may be made on account of payments made for expenditures before Page 7 that date but after January 1, 1989. SCHEDULE 2 Description of the Project The objectives of the Project are: (i) to improve the management of land administration; (ii) to improve land use planning, policy, management, legislation, procedures, professional standards, quality of land services and physical facilities; (iii) to improve the capacity of DLPP to develop land policy, promote land registration, deliver land services, generate land-based revenues, and assist in the settlement of land disputes; (iv) to develop an improved and cost-effective system to expedite identification and allocation of alienated land; (v) to develop an acceptable and cost effective method of customary land mobilization; (vi) to develop a system for the decentralization of land administration to the provinces; and (vii) to develop an up- to-date land and resource information base available to all land users. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Bank may agree upon from time to time to achieve such objectives: Part A: Program Management 1. Management (a) Management and coordination of the Program, and provision of related technical assistance. (b) Establishment of regular meetings of the Program Management Committee and provision of secretariat support. (c) Establishment of the National Land Management Committee and provision of secretariat support. (d) Construction of three regional offices for DLPP (Mt. Hagen, Lae and Rabaul) construction of eight provincial offices for DLPP; construction of about 90 houses for DLPP staff in Mt. Hagen, Lae, Rabaul and in the eight provinces where provincial offices are constructed; construction of an extension of the building of the National Mapping Bureau of DLPP; and construction of a building for the Land Information Processing Center of DLPP. (e) Design and carrying out of publicity programs to encourage land mobilization, and provision of related technical assistance. (f) Coordination and management of the technical assistance provided under the Project, and provision of related technical assistance for coordination of Bank financed technical assistance. 2. Office of the Registrar of Titles (a) Study of the nature and the extent of incomplete processed land transactions within DLPP as identified through PNGLIS, and provision of related technical assistance. (b) Securing of title documentation by microfiche, and provision of related technical assistance. (c) Establishment of regional and provincial title offices and provision of technical support to such offices. 3. Office of the Surveyor General (a) Definition and maintenance of professional standards for the conduct of all cadastral surveys undertaken by the Operations Division in regional and provincial offices and private surveyors. Page 8 (b) Provision of technical support to regional and provincial surveyors. (c) Determination of an appropriate means of survey and demarcation to support customary land registration, and provision of related technical assistance. (d) Study of the role of private surveyors in undertaking surveys required for land allocation including review of DLPP survey fees. 4. Office of the Valuer General (a) Maintenance of a quality control role for all valuations. (b) Provision of technical support to regional and provincial valuers of DLPP's Operations Division. (c) Review of land lease rent determination policies in cooperation with the Policy and Programming Division of DLPP. (d) Investigation of the appropriateness of computer- assisted valuation techniques, and provision of related technical assistance. 5. Office of the Chief Physical Planner (a) Monitoring of the work output of physical planning staff working in the Operations Division and the provinces to ensure professional standards and adherence to procedures, and provision of technical support. (b) Preparation of physical planning manuals, and provision of related technical assistance. (c) Extension of the professional capacity of physical planners to include peri-urban and rural planning skills and to prepare rural physical planning exercises, and provision of related technical assistance. Part B: Institution Building 1. Policy and Institutional Infrastructure (a) Completion of the restructuring of DLPP, in association with the Department of Personnel Management, and improvement of management procedures and provision of related technical assistance. (b) Preparation of procedural manuals for DLPP, and provision of related technical assistance. (c) Review of the alienated land lease rent determination policies of DLPP in relation to leasehold properties, in cooperation with the Valuer General, and provision of related technical assistance. (d) Review of the existing rent collection systems in operation in DLPP and the Department of Finance and Planning, and provision of related technical assistance. (e) Preparation of draft legislative and procedural amendments to support improvements in administration procedures for alienated land, and provision of related technical assistance. (f) Review of the national land legislation for consolida- tion and simplification including a review of the role of the Land Board and drafting of new legislation, and provision of related technical assistance. (g) Study of different land allocation and transfer systems Page 9 for alienated land, comparing the present system of multilayered Government controls and interventions with other systems which would allow market forces to play a larger role in determining land allocation, transfers and values, and provision of related technical assistance. (h) Review of the development of a national framework legislation for customary land dealing and registration and the relationship of such a legislation to provincial governments to establish policy options for the mobilization and management of customary land, and provision of related technical assistance. (i) Review of existing land dispute settlement mechanisms and investigation of options for resolution of existing diffi- culties together with the Department of Justice and the Chief Magistrate, and provision of related technical assistance. (j) Provision of assistance to the Surveyor General in reviewing DLPP's fees for cadastral surveys and their influence on participation of private surveyors. (k) Drafting of an amendment to the Survey Coordination Act to require all organizations producing maps and aerial photography to deposit copies with the National Mapping Bureau. 2. Personnel Services (a) Recruitment of about 150 professionally competent staff for DLPP. (b) Development of appropriate staff training policies and programs, including management training, training in administra- tive procedures, and training for provincial government staff to support the introduction of customary land registration; and provision of related technical assistance. (c) Coordination of technical training requirements for DLPP, including overseas training and secondments. (d) Development of career path structures and regular staff appraisal mechanisms for all DLPP staff. (e) Conduct of ongoing personnel administration functions. Part C: Mobilizing Alienated Land The four regional offices of the Operations Division of DLPP to undertake the following activities in their respective regions: 1. Appointment of Regional Managers. 2. Appointment of Provincial Managers. 3. Establishment of coordinated work programs for the provincial offices and regional offices. 4. Promotion of the use of the lease-leaseback and tenure conversion mechanisms to customary landowners and their incorporation into land or business groups to support the mobilization of customary land. 5. Conduct of a stocktake of alienated land which has not been leased, including a survey of all parcels to determine current land use and occupancy, land use potential, evaluation of underutilized parcels, and undertaking appropriate allocation, forfeiture or release action on those parcels in response to the evaluation. 6. Undertaking of land acquisition as required for public purposes. Page 10 7. Provision of land services (land administration, surveys, valuation and physical planning) to existing and potential land users. 8. Collection of monies owed to the Government for lease rentals and other land-related service charges. 9. Handling of arrears in land administration processing. Part D: Mobilizing Customary Land 1. Liaison with and assistance to the provincial Land Management Committees in the formulation of a policy framework for customary land mobilization and registration for each province. 2. Provision of technical assistance to the provinces to draft customary land registration legislation. 3. Provision of assistance to the provinces to develop the necessary administrative procedures to support the legislation referred to in Part D.2 of the Project and associated procedural manuals. 4. Coordination of the establishment of organizational structures to administer the implementation of the legislation referred to in Part D.2 of the Project. Part E: Decentralization of Alienated Land Administration 1. Appointment by DLPP of staff to the Provincial Services Branch of the Policy and Programming Division. 2. Liaison with the provincial Land Management Committees to ensure that suitable land management policies are developed. 3. Liaison with the provinces and with the Department of Personnel Management to establish consolidated Lands Divisions within the departments of each province. 4. Provision of assistance to the provinces with the establishment of procedures and the development of procedures manuals. 5. Coordination of the transfer of DLPP staff to the provinces. Part F: Land and Resource Information 1. PNGLIS (a) Installation of PNGLIS in the regional offices of the Operations Division to support the land administration, survey, valuation and physical planning work programs and the collection of revenue. (b) Installation of PNGLIS in each of the DLPP provincial offices to provide enquiry-only access to the database. (c) Provision of training to staff on implementation of PNGLIS. (d) Completion of the land administration data verification exercise, and provision of related technical assistance. (e) Coordination of the data capture for surveys, valuation and physical planning to support their administrative processes. (f) Capture of the spatial references of the centroids of land parcels to enable spatial searches of the database to be conducted. (g) Investigation of the linkage of the PNGLIS with the Page 11 National Mapping Bureau's computer systems and strengthening of the spatial referencing of both systems; and provision of related technical assistance. (h) Investigation of the linkage of PNGLIS with the Papua New Guinea Resource Information System maintained by the Department of Agriculture and Livestock to strengthen the land use planning capabilities of the system; and provision of related technical assistance. (i) Provision of technical assistance for the management and operation of PNGLIS. 2. National Mapping Bureau (a) Policy Development and Coordination (i) Establishment of a Mapping Advisory Committee as a subcommittee to the National Land Management Committee to: develop specifications for standard mapping; decide on technologies for standard mapping; liaise and coordinate with academic institutions on teaching surveying and mapping; and coordinate mapping activities of other Government agencies which would continue to produce their own specialized maps. (ii) Assistance to the Policy and Programming Division in amending the Survey Coordination Act, to require all organizations producing maps or aerial photo- graphy to deposit copies with the National Mapping Bureau. (iii) Assistance to the Land Information Unit in their investigation into the linkage of PNGLIS and the National Mapping Bureau computer facilities. (iv) Establishment of work programs for the National Mapping Bureau's activities in liaison with the National Mapping Advisory Committee. (b) Geodetic Network Comprehensive adjustments of the geodetic network including provision of: (i) technical assistance; (ii) contractors' services for densification of the existing network; (iii) leveling and sea level determinations; (iv) computing equipment; (v) three global positioning systems for densification; and (vi) a geodetic network adjustment software package. (c) Topographic Maps Carrying out of a topographic mapping program including: (i) a pilot study to investigate and define the use of remote sensing technology for topographic mapping; including provision of related technical assistance; (ii) installation of remote sensing image processing systems in the National Mapping Bureau and training of staff; (iii) updating of about 280 sheets of 1:100,000 topographic maps; (iv) production of about 8 sheets of 1:25,000 topographic maps; and (v) continuation of urban large-scale mapping. (d) Cadastral Mapping Page 12 Increase of the production of cadastral map services by enlarging 1:100,000 scale topographic maps to allow completion of the series in about 15 years. (e) IGOS Mapping System Resolution of technical difficulties to make the IGOS digital mapping system fully operational. (f) Computing Section of the National Mapping Bureau (i) Establishment of a Computing Section of the National Mapping Bureau. (ii) Acquisition and installation of a scientific computer. * * * * The Project is expected to be completed by December 31, 1993. SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each April 15 and October 15 beginning October 15, 1994 through October 15, 2008 655,000 On April 15, 2009 605,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal. See General Conditions, Sections 3.04 and 4.03. Premiums on Prepayment The following premiums are specified for the purposes of Section 3.04 (b) of the General Conditions: Time of Prepayment Premium The interest rate (ex- pressed as a percentage per annum) applicable to the balance outstanding on the Loan on the day of prepayment multiplied by: Not more than three years 0.15 before maturity More than three years but 0.30 not more than six years before maturity More than six years but 0.55 not more than 11 years before maturity More than 11 years but not 0.80 more than 16 years before maturity More than 16 years but not 0.90 more than 18 years Page 13 before maturity More than 18 years before 1.00 maturity SCHEDULE 4 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A: International Competitive Bidding Goods 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 procedures described in Part A hereof, goods manufactured in Papua New Guinea 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: Other Procurement Procedures Civil works and furniture shall be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Bank. Part D: Review by the Bank of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract for civil works and each contract for goods estimated to cost the equivalent of $200,000 or more, and the first contract for civil works for the construction of a provincial office and for the construction of housing for DLPP staff under Part A.1 (d) of the Project, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contracts 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 Bank pursuant to said paragraph 2 (d) shall be furnished to the Bank 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 preceding 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, said 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 Bank pursuant to said paragraph 3 shall be furnished to the Bank as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 6 to this Agreement. (c) The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Bank has authorized withdrawals from the Loan Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (c)(ii) of this Agreement. 2. The figure of 10% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower in carrying out Parts A.1 Page 14 (a), (e) and (f); A.2 (b); A.3 (c); A.5 (b) and (c); B.1 (a), (b), and (d) through (i); B.2 (b); D.2; and F.1 (i) of the Project, the Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Bank 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. SCHEDULE 5 Implementation Program 1. In carrying out Part A.1 of the Project, the Borrower shall: (a) by December 31, 1989, complete the reorganization of DLPP in accordance with the plan set out in the Program; (b) by December 31, 1989, reinstitute regular meetings of the Program Management Committee; and (c) by December 31, 1989, establish the National Land Management Committee. 2. The Borrower shall: (a) by December 31, 1990, carry out Part A.2 (a) of the Project and furnish the recommendations of the study to the Bank for comments; and (b) thereafter, prepare and promptly carry out an action plan, taking into account the comments of the Bank on the recommendations of the study. 3. The Borrower shall, by December 31, 1990, carry out Part A.3 (d) of the Project and, thereafter, prepare and carry out an action plan acceptable to the Bank. 4. In carrying out Part B.1 of the Project, the Borrower shall: (a) by December 31, 1989, carry out Part B.1 (c) of the Project, and, by January 1, 1991, establish a system, taking into account the comments of the Bank on the results of the review; (b) by June 30, 1990, carry out Part B.1 (d) of the Project, and, by December 31, 1991, establish a system, taking into account the comments of the Bank on the results of the review; (c) by June 30, 1990, carry out Part B.1 (e) of the Project; (d) by December 31, 1992, carry out the study set forth in Part B.1 (g) of the Project; (e) by December 31, 1990, employ the consultants required to assist the Borrower in carrying out Part B.1 (h) of the Project; (f) by December 31, 1990, carry out the review set forth in Part B.1 (i) of the Project; by December 31, 1991, furnish to the Bank, for comments, a plan of action for the improvement of such mechanisms; and, thereafter, carry out such action plan taking into account the Bank's comments thereon; and (g) by December 31, 1990, carry out Part B.1 (k) of the Project. 5. In carrying out Part B.2 of the Project, the Borrower shall by December 31, 1989, appoint staff to the following positions in DLPP: Deputy Secretary, Technical Services; Assistant Secretary, Programme Management; Head, Policy and Research Branch; Assistant Secretary, Personnel Services; Regional Manager (Southern Region); Regional Manager (Northern Region); Regional Manager (Island Page 15 Region); and Regional Manager (Highlands Region). 6. In carrying out Part F.2 of the Project, the Borrower shall, by December 31, 1989, establish the Mapping Advisory Committee. 7. The Borrower shall, by April 30 in each year, until the completion of the Project, review with the Bank the implementation of the Program, and shall, thereafter, carry out such changes to the Program as agreed with the Bank. SCHEDULE 6 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1), (2), (3) and (4) 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 Loan 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 equiva- lent to $1,300,000 to be withdrawn from the Loan Account and deposited into the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Bank 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 shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Bank a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit in the Special Account such amount or amounts as the Borrower shall have requested. (b) (i) For replenishment of the Special Account, the Borrower shall furnish to the Bank requests for deposits into the Special Account at such inter- vals as the Bank shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Bank the documents and other evidence required pursuant to para- graph 4 of this Schedule for the payment or pay- ments in respect of which replenishment is requested. On the basis of each such request, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit into the Special Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been made out of the Special Account for eligible expenditures. All such deposits shall be withdrawn by the Bank from the Loan Account under the respective eligible Categories, and in the respective equiva- lent amounts, as shall have been justified by said documents and other evidence. Page 16 4. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Bank shall rea- sonably request, furnish to the Bank such documents and otherevidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Bank shall not be required to make further deposits into the Special Account: (a) if, at any time, the Bank shall have determined that all further withdrawals should be made by the Borrower directly from the Loan Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Loan allocated to the eligible Categories less the amount of any outstanding special commitment entered into by the Bank pursuant to Section 5.02 of the General Conditions with respect to the Project, shall equal the equivalent of twice the amount of the Authorized Allocation. Thereafter, withdrawal from the Loan Account of the remaining unwithdrawn amount of the Loan allocated to the eligible Categories shall follow such procedures as the Bank shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Bank shall have been satis- fied 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. 6. (a) If the Bank shall have determined at any time that any payment out of the Special Account: (i) was made for an expendi- ture or in an amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Bank, the Borrower shall, promptly upon notice from the Bank: (A) provide such additional evidence as the Bank may request; or (B) deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Bank shall otherwise agree, no further deposit by the Bank into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Bank 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 Bank, refund to the Bank such outstanding amount. (c) The Borrower may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Bank made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Loan Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions.