India - Andhra Pradesh Cyclone Emergency Reconstruction Project : Loan 3260 - Project Agreement - Conformed

OFFCIAL 1 DOCUMENTS CREDIT NUMBER 2179 IN LOAN NUMBER 3260 IN Project Agreement (Andhra Pradesh Cyclone Emergency Reconstruction Project) among INTERNATIONAL DEVELOPMENT ASSOCIATION and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and STATE OF ANDERA PRADESH Dated ,23, 1990 CREDIT NUMBER 2179 IN LOAN NUMBER 3260 IN PROJECT AGREEMENT AGREEMENT, dated 6z ?Z'962 23, 1990, among INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association), INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and STATE OF ANDHRA PRADESH (Andhra Pradesh). WHEREAS (A) by the Development Credit Agreement of even date herewith between India (the Borrower) and the Association, the Asso- ciation has agreed to make available to the Borrower an amount in various currencies equivalent to one hundred twenty-six million one hundred thousand Special Drawing Rights (SDR 126,100,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Andhra Pradesh agree to undertake such obligations toward the Association as are set forth in this Agree- ment; (B) by the Loan Agreement of even date herewith between the Borrower and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to forty million dollars ($40,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that Andhra Pradesh agree to undertake such obligations toward the Bank as are set forth in this Agreement; and WHEREAS Andhra Pradesh, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, and the Bank's entering into the Loan Agreement with the Borrower have agreed to undertake the obligations set forth in this Agree- ment; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the Development Credit Agreement, the Loan Agreement, the Preamble to this Agreement and in the General Condi- tions (as so defined in the Development Credit Agreement and the Loan Agreement, respectively) have the respective meanings therein set forth. -2- ARTICLE II Execution of the Project Section 2.01. (a) Andhra Pradesh hereby declares its commit- ment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement, and, to this end shall carry out the Project, with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering prac- tices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Andhra.Pradesh shall make available to the Beneficia- ries, in accordance with the Participation Agreements, a portion of the proceeds of the Credit made available to Andhra Pradesh by the Borrower under Section 3.01 (b) of the Development Credit Agreement. Section 2.02. 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 the Schedule to this Agree- ment. Section 2.03. Andhra Pradesh shall carry out the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions applicable to the Development Credit Agreement and in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of the General Conditions applicable to the Loan Agreement (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of the Project Agreement and the Project. Section 2.04. (a) Andhra Pradesh shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit. (b) Andhra Pradesh shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by Andhra Pradesh of its obligations under this Agreement. -3- Section 2.05. Without limitation to the provisions of Section 2.01 of this Agreement, Andhra Pradesh shall carry out such works under the Project as shall be acceptable to the Association. Section 2.06. Without limitation to the provisions of Section 2.01 of this Agreement, Andhra Pradesh shall carry out the works under the Project referred to in Section 2.05 of this Agreement in accordance with plans and technical and environmental design and standards acceptable to the Association. Section 2.07. Andhra Pradesh shall by December 31, 1993 increase the allocations for operations and maintenance of its affected irrigated areas by at least 80 percent of its present level. Section 2.08. Andhra Pradesh shall manage, monitor and evaluate the progress of the Project through the PMU. Section 2.09. Without limitation to the generality of Section 9.06 of the General Conditions of the Association and Section 9.07 of the General Conditions of the Bank, Andhra Pradesh shall, commencing on January 1, 1991, and thereafter, furnish to the Association semi-annual reports on the progress of the Project, of such scope and in such detail as the Association shall reasonably request; such reports shall be furnished to the Association within three months after the end of each reporting period. ARTICLE III Financial Covenants Section 3.01. (a) Andhra Pradesh shall maintain 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 Andhra Pradesh responsible for carrying out the Project. (b) Andhra Pradesh shall: (i) have the records and accounts referred to in paragraph (a) of this Section, for each fiscal year audited, in accordance with appropri-ate auditing principles consistently applied, 6y independent auditors acceptable to th Association; -4- (ii) furnish to the Association, as soon as available, but in any case not later than nine 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, accounts and financial statements as well as the audit thereof, as the Association shall from time to time reasonably request. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which both the Development Credit Agreement and the Loan Agreement become effective. Section 4.02. (a) This Agreement and all obligations of the Association, the Bank and of Andhra Pradesh thereunder shall terminate on the earlier of the following two dates: (i) the date on which both the Development Credit Agreement and the Loan Agreement shall terminate in accordance with their respective terms; or (ii) the date 20 years after the date of this Agreement. (b) If the Development Credit Agreement or the Loan Agreement or both of said Agreements terminate in accordance with their respective terms before the date specified in paragraph (a) (ii) of this Section, the Association and the Bank shall promptly notify Andhra Pradesh of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions applicable to the Development Credit Agreement or the Loan Agreement. -5- ARTICLE V Miscellaneous Provisions Section 5.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 197688 (TRT) Washington, D.C. 248423 (RCA) 64145 (WUI) or 82987 (FTCC) 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 197688 (TRT) Washington, D.C. 248423 (RCA) 64145 (UI) or 82987 (FTCC) -6- For Andhra Pradesh: Chief Secretary Government of Andhra Pradesh Hyderabad, Andhra Pradesh 500022, India Cable address: CHIEFSEC Hyderabad Andhra Pradesh, India Section 5.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of Andhra Pradesh, may be taken or executed by the Chief Secretary of Andhra Pradesh or such other person or persons as Andhra Pradesh shall designate in writing, and Andhra Pradesh shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 5.03. As long as the Bank has not given notice to the contrary to Andhra Pradesh and so long as the Development Credit Agreement shall not have terminated prior to the termination of the Loan Agreement: (a) the obligations of Andhra Pradesh to constilt with, and to furnish information, documents, plans, reports, records and statements to, the Bank shall be satisfied to the extent performance in respect of such obligations is rendered to the Association; (b) the obligations of the Bank to consult with, and to furnish information to, Andhra Pradesh shall be satisfied to the extent such obligations are fulfilled by the Association; and (c) all actions taken (including the giving of approvals or granting of waivers) by the Association pursuant to the Development Credit Agreement shall be deemed to be taken pursuant to both the Development Credit Agreement and the Loan Agreement, and in the name and on behalf of both the Association and the Bank. Section 5.04. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. --7- 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. INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Regional Vice President Asia STATE OF ANDHRA PRADESH Authorized Representative -8- SCHEDULE Procurement and Consultants' Services Section I: Procurement of Goods and Works PartA: International Competitive Bidding Except as provided in Part C hereof, equipment and materials 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 Contractors In the procurement of goods in accordance with the procedures described in Part A hereof, goods manufactured in India 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 and 4 of Appendix 2 thereto. Part C: Other Procurement Procedures 1. Except as provided in paragraphs 2 and 3 hereof, contracts for civil works shall be awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association and the Bank. 2. Civil works, estimated to cost less than $100,000 equivalent each, up to an aggregate amount not exceeding $25,000,000 equiva- lent, may be carried out through force account or may be procured under contracts awarded on the basis of bids invited from a list of at least three contractors eligible under the Guidelines, in accordance with procedures acceptable to the Association and the Bank. 3. Civil works, esti'mated to cost less than $50,000 equivalent each, up to an aggregate amount not exceeding $3,000,000 equivalent, may be procured under cost plus arrangements. 4. Except as provided in paragraph 5 hereof, equipment, materials and vehicles estimated to cost less than $200,000 equivalent per contract may be procured under contracts awarded on the basis of -9- competitive bidding, advertised locally, in accordance with proce- dures satisfactory to the Association and the Bank. 5. Equipment and materials, vehicles, and off the shelf items or groups of items estimated to cost less than the equivalent of $50,000 per contract, up to an aggregate amount not exceeding $2,000,000 equivalent may be procured using quotations solicite4 from a list of at least three suppliers eligible under the Guide- lines, in accordance with procedures satisfactory to the Associa- tion and the Bank. 6. Small contracts for civil works may be grouped in bid packages of up to $120,000 equivalent, provided, however, that the total of such groups does not exceed 40 percent of the total works for the minor irrigation component under Part A of the Project and 30 per- cent of the total works under the other Parts of the Project. 7. Goods and services to be financed under Part E (a) of the Project shall be purchased at a reasonable price, account being taken also of other relevant factors such as time of delivery and efficiency and, in the case of service, of their quality and the competence of the parties rendering them. Part D: Review by the Association and 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 for equipment, materials, and vehicles estimated to cost the equivalent of $5,000,000 and $500,000 or more, respectively, 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 and the Bank pursuant to said paragraph 2 (d) shall be furnished to the Association and 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 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 - 10 - shall be modified to ensure that the two conformed copies of the contract together with the other information required to be fur- nished to the Association and the Bank pursuant to said paragraph 3 shall be furnished to the Association and the Bank as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 3 to the Development Credit Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which the Association and the Bank have authorized withdrawals from the Credit Account or the Loan Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (a) (ii) of the Development Credit Agreement. 2. The figure of 15% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II: Employment of Consultants In order to assist Andhra Pradesh in carrying out of the Project, Andhra Pradesh shall employ consultants whose quali- fications, experience and terms and conditions of employment shall be satisfactory to the Association and the Bank. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association and 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. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Bank for Reconstruction and Development and the international Development Association. FOR SECRETARY