Conformed Copy - C1997 - Shaanxi Agricultural Development Project - Amendment 2

Page 1 February 28, 1992 Mr. Wang Bingqian Minister of Finance Ministry of Finance Sanlihe Beijing 100820 People's Republic of China The Governor Shaanxi Provincial Government Xincheng, Xian Shaanxi Province People's Republic of China Re: Credit No. 1997-CHA (Shaanxi Agricultural Development Project) Amendment of Development Credit and Project Agreements Dear Minister Wang and the Governor: 1. We refer to the Development Credit Agreement (Shaanxi Agricultural Development Project) between the People's Republic of China (the Borrower) and the International Development Association (the Association), dated September 14, 1989, as amended (the Development Credit Agreement) and to the Project Agreement (Shaanxi Agricultural Development Project) between the Association and Shaanxi Province (Shaanxi), of the same date (the Project Agreement). We also refer to the letter from Mr. Luo Qing, Director, World Bank Department, Ministry of Finance, dated January 4, 1992, requesting a change in the procurement and disbursement procedures for certain earthworks and inclusion of financing of local training costs. 2. We are pleased to concur with these requests. Consequently, the Association hereby agrees to amend the Development Credit Agreement and the Project Agreement as set out below. 3. The Development Credit Agreement shall be amended: (a) in the table set out in paragraph 1 of Schedule 1: (i) by revising Category 1 to read "Civil works and Earthworks (other than in Category (2) below)"; (ii) by revising Category (2) to read "Earthworks for lateral drains and on-farm works for Parts A and B of the Project"; and (iii) by revising Category (6) to read "Consultants' services and overseas and local training and study tours"; and (b) in Schedule 2, by adding a new Part G, to read: Part G: Technical Assistance Provision of overseas and local training and study tours in water resources management and systems operation, irrigated agriculture extension and research, breeding and disease control, seed technology and seed processing and agroprocessing technology." 4. The Project Agreement shall be amended: (a) by revising Part C.2 of Section I of Schedule 1 to read: "2. Earthworks for pond, lateral canals and lateral drains and on farm works for irrigation shall be carried out by force account procedures Page 2 satisfactory to the Association."; and (b) by revising Part C.4 of Section I of Schedule 1 to read: 4. Contracts for earthworks for main, branch and other canals and drains up to the lateral canals and drains and civil works for structures and building construction shall be awarded in accordance with local competitive bidding procedures acceptable to the Association." 5. We also concur with the request for a reallocation of credit proceeds to correspond with the changes made in paragraphs 3 and 4 above. Consequently, SDR 10,610,000 is hereby reallocated from Category (2) to Category (1) of the table set out in paragraph 1 of Schedule 1 to the Development Credit Agreement. A revised table reflecting all amendments and reallocations to date, is attached for your reference. 6. Please confirm the agreement on behalf of the Borrower and Shaanxi to the amendments in paragraphs 3 and 4 above, respectively, by signing and dating the enclosed confirmation copy of this letter and returning it to us for our files. One original each should be retained by the Borrower and Shaanxi. Sincerely yours, By /s/ Shahid Javed Burki Director Country DepartmentII China and Mongolia CONFIRMED: PEOPLE'S REPUBLIC OF CHINA By /s/ Date: CONFIRMED: Shaanxi Province By /s/ Date: Cleared with and cc: Ms. N. Lichtenstein, Mr. D. Gunaratnam and Ms. N. Hwang (CR.1997-CHA) Revised as of February 1992 Amount of the Credit Allocated % of Expressed in Expenditures Category SDR Equivalent to be Financed (1) Civil Works and 24,180,000 55% earthworks (other than in Category (2) below) Page 3 (2) Earthworks for lateral drains and on-farm works 5,100,000 35% for Parts A and B of the Project (3) Equipment 27,130,000 100% of foreign expenditures, 100% of local expenditures (ex-factory cost) and 75% of local expenditures for other items procured locally (4) Special vehicles 1,860,000 100% of foreign expenditures, 100% of local expen- ditures (ex-factory cost) and 75% of local expenditures for other items procured locally (5) Materials: 100% of foreign expen- ditures, (a) for construction 13,680,000 100% of local expendi- tures (ex-factory cost) (b) fertilizer 3,650,000 and 75% of local expen- ditures for other items (c) breeding stock 380,000 procured locally (d) materials other than 900,000 (a), (b) and (c) above (6) Consultants' services and 1,910,000 100% overseas and local training and study tours Total 78,800,000