Conformed Copy - C2241 - Dam Safety Project - Project Agreement 2

Page 1 CREDIT NUMBER 2241 IN LOAN NUMBER 3325 IN PROJECT AGREEMENT (Dam Safety Project) among INTERNATIONAL DEVELOPMENT ASSOCIATION and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and STATE OF MADHYA PRADESH, STATE OF ORISSA, STATE OF RAJASTHAN, and STATE OF TAMIL NADU Dated June 10, 1991 CREDIT NUMBER 2241 IN LOAN NUMBER 3325 IN PROJECT AGREEMENT AGREEMENT, dated June 10, 1991, among INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association), and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and STATE OF MADHYA PRADESH (Madhya Pradesh), STATE OF ORISSA (Orissa), STATE OF RAJASTHAN (Rajasthan) and STATE OF TAMIL NADU (Tamil Nadu), (collectively "the Project States" and individually "the Project State") acting by their respective Governors. WHEREAS (A) by the Development Credit Agreement of even date herewith between India and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to ninety-six million two hundred thousand Special Drawing Rights (SDR 96,200,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that the State of Madhya Pradesh, the State of Orissa, the State of Rajasthan and the State of Tamil Nadu agree to undertake such obligations toward the Association as are set forth in this Agreement: (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 twenty-three million dollars ($23,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the State of Madhya Pradesh, the State of Orissa, the State of Page 2 Rajasthan and the State of Tamil Nadu agree to undertake such obligations toward the Bank as are set forth in this Agreement; WHEREAS the State of Madhya Pradesh, the State of Orissa, the State of Rajasthan and the State of Tamil Nadu 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 Agreement; 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, and in the General Conditions (as so defined in the Development Credit Agreement and the Loan Agreement, respectively) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) The Project States declare their commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement, and, to this end, shall carry out Part B of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and dam safety practices, and shall provide, or cause to be provided, 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 Association, the Bank and the Project States shall otherwise agree, the Project States shall carry out Part B of the Project in accordance with the Implementation Program set forth in Schedule 2 to this Agreement. Section 2.02. Except as the Association and the Bank shall otherwise agree, procurement of the goods, works and services required for the Project and to be financed out of the proceeds of the Credit and the Loan shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.03. The Project States 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 to Part B of the Project. Section 2.04. (a) The Project States shall, at the request of the Association and the Bank, exchange views with the Association and the Bank with regard to the progress of Part B of the Project, the performance of their obligations under this Agreement, and other matters Page 3 relating to the purposes of the Credit and Loan. (b) The Project States shall promptly inform the Association and the Bank of any condition which interferes or threatens to interfere with the progress of Part B of the Project, the accomplishment of the purposes of the Credit or the Loan, or the performance by the Project States of their obligations under this Agreement. ARTICLE III Financial Covenants Section 3.01. (a) The Project States shall maintain records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of Part B of the Project. (b) The Project States shall: (i) have their records and accounts referred to in paragraph (a) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association and the Bank; (ii) furnish to the Association and the Bank as soon as available, but in any case not later than nine months after the end of each such year: (A) certified copies of their records and accounts for such year as so audited, and (B) the report of such audit by said auditors, of such scope and in such detail as the Association and the Bank shall have reasonably requested; and (iii) furnish to the Association and the Bank such other information concerning said records, accounts and financial statements as well as the audit thereof, as the Association and the Bank 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 the Project States 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 have terminated in accordance with their respective terms; or (ii) the date twenty (20) years after the date of this Agreement. (b) If the Development Credit Agreement or the Loan Page 4 Agreement or both of the said Agreements terminate in accordance with their respective terms before the date specified in paragraph (a) (ii) of this Section, the Association or the Bank or both shall promptly notify the Project States 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. 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) 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 (WUI) or 82987 (FTCC) For the State of Madhya Pradesh: Chief Secretary Government of Madhya Pradesh Vallabh Bhavan Bhopal, India 462006 Telex: 953 705418 For the State of Orissa: Page 5 Chief Secretary Government of Orissa Bhubanashwar 751001 India Telex: 953 0675210 For the State of Rajasthan: Chief Secretary Government of Rajasthan Secretariat Jaipur 302001, India Telex: 953 0365444 - SECTT IN For the State of Tamil Nadu: Chief Secretary Government of Tamil Nadu Fort St. George, Madras, PIN 600009 India Telex: 953 0418238 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 any Project State may be taken or executed by its Chief Secretary or such other person or persons as such Project State shall designate in writing, and such Project State shall furnish to the Association and the Bank 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 the Project States and so long as the Development Credit Agreement shall not have terminated prior to the termination of the Loan Agreement: (a) the obligations of the Project States to consult 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, the Project States 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. Page 6 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 By /s/ Attila Karaosmanoglu Regional Vice President Asia STATE OF MADHYA PRADESH STATE OF ORISSA STATE OF RAJASTHAN STATE OF TAMIL NADU By /s/ Anil Kumar Authorized Representative SCHEDULE 1 Procurement and Consultants' Services Section I: Procurement of Goods and Works Part A: International Competitive Bidding Except as provided in Part D hereof, civil works, equipment and vehicles 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 equipment and vehicles 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 through 4 of Appendix 2 thereto. Part C: Preference for Domestic Contractors In the procurement of works in accordance with the procedures described in Part A 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 1. (a) Except as provided in paragraph 2 hereof, contracts for civil works estimated to cost less than the equivalent of $10,000,000 per contract may be awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Page 7 Association and the Bank. (b) Bidders for civil works estimated to cost the equivalent of $2,000,000 or more per contract shall be prequalified as described in paragraph 2.10 of the Guidelines. 2. Civil works estimated to cost less than the equivalent of $200,000 per contract may be carried out through force account or unit price contract, provided, however, that the aggregate thereof shall not exceed $10,000,000. 3. Except as provided in paragraph 4 hereof, equipment and vehicles estimated to cost less than the equivalent of $200,000 per contract may be procured on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association and the Bank. 4. Equipment and vehicles estimated to cost less than the equivalent of $20,000 per contract up to an aggregate amount not exceeding the equivalent of $4,000,000 may be procured under quotations solicited from a list of at least three suppliers eligible under the Guidelines, in accordance with procedures satisfactory to the Association and the Bank. Part E: 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 (i) each contract awarded under Part A above; (ii) each contract for civil works estimated to cost the equivalent of $200,000 or more; and (iii) each contract for equipment and vehicles 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 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 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 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 sub-paragraph (b) shall not apply to contracts on account of which the Association and the Bank have 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 the Development Credit Agreement. 2. The figure of 15% is hereby specified for purposes of para-graph 4 of Appendix 1 to the Guidelines. Page 8 Section II: Employment of Consultants In order to assist the Borrower and the Project States in carrying out the Project, the Borrower and the Project States shall employ consultants whose qualifications, 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. SCHEDULE 2 Implementation Program 1. Each Project State shall: (a) cause its DSO: (i) to establish priority criteria for carrying out inspection of Category II Dams in such State; (ii) to establish and maintain a schedule of inspection of such Dams, making such revisions thereto as may be required, based on such criteria; and (iii) to carry out inspection of such Dams in accordance with such schedule following procedures and guidelines issued by NCDS; (b) cause its DSO to analyze, collate and maintain data obtained from the inspection of Category II Dams pursuant to sub-paragraph (a) hereof and, promptly thereafter, provide to DSC reports and recommendations relating thereto; (c) cause its DSO to carry out detailed investigation of those Category II Dams identified by DSC pursuant to sub-paragraph (a) of paragraph 2 hereof in accordance with the schedule furnished by DSC pursuant to sub- paragraph (b) (iii) of paragraph 2 hereof, and, promptly after such investigation, provide to DSC reports and recommendations relating thereto; (d) maintain its DSO with adequate staff, equipment and facilities necessary for the purpose of enabling it to efficiently carry out its functions including those set forth in sub-paragraphs (a) and (b) of this paragraph; and (e) ensure that incremental staff of DSO employed for the purposes of implementing the Project be placed in regular employment status by August 31, 1996. 2. Each Project State shall cause its DSC: (a) to identify those Category II Dams that require further detailed investigation based on reports and recommendations received from DSO pursuant to sub-paragraph (b) of sub-paragraph 1 hereof; (b) (i) to establish priority criteria for carrying out detailed investigation of such identified Dams; (ii) to establish and Page 9 maintain a schedule of detailed investigation of such identified Dams, making such revisions thereto as may be required, based on such criteria; and (iii) to furnish such schedule to DSO for the purpose of carrying out detailed investigation of such identified Dams; and (c) to identify those Category II Dams that require remedial works based on the reports and recommendations received from DSO pursuant to sub-paragraphs (b) and (c) of paragraph 1 hereof. 3. Each Project State shall cause its DSC: (a) to establish criteria for selecting from among Category I Dams and such Category II Dams identified pursuant to sub-paragraph (c) of paragraph 2 hereof, those Dams at which remedial works are to be carried out under Part B.4 of the Project and select such Dams in accordance with such criteria; (b) to establish priority criteria for the Selected Dams and prioritize such Dams in accordance with such criteria; and (c) to furnish to DOI/WR the names of the Selected Dams in the order of priority established pursuant to sub-paragraph (b) of this paragraph for the purpose of preparing plans of action for carrying out remedial works at such Dams. 4. Each Project State shall cause its DOI/WR: (a) to prepare, promptly after receiving the names of the Selected Dams pursuant to sub-paragraph (c) of paragraph 3 hereof, plans of action for carrying out remedial works at such Dams; and (b) to carry out such plans of action subject to the provisions of paragraph 5 hereof. 5. Prior to carrying out the plans of action for remedial works at the Selected Dams pursuant to sub-paragraph (b) of paragraph 4 hereof each Project State shall: (a) obtain the recommendation of the DSRP for such plans, including the concept of the remedial works and the adequacy of their design: (b) obtain the approval of CWC with respect to the computation of the design flood hydrology of the Selected Dams where such computation has not been made by CWC; (c) confirm to CWC that the procedures in respect of the inspection, investigation, identification, selection, prioritization, preparation of the plans of action for remedial works of the Selected Dams and the recom-mendation of such plans by DSRP are in accordance with the provision of paragraphs 1, 2, 3, 4 and 5 (a) hereof; and (d) obtain all necessary approvals related to the environmental impact assessments of the Selected Dams pursuant to paragraph 9 (b) hereof. Page 10 6. Each Project State shall provide to CWC such information as it may reasonably request for the purpose of enabling it to fulfill its obligations under sub-paragraph (b) of paragraph 5 hereof and Section 3.04 (c) of the Development Credit Agreement. 7. Each Project State shall, during the implementation of the Project, maintain its DSRP with composition, functions and terms of reference satisfactory to the Association and the Bank. 8. Each Project State shall ensure that senior design staff of DOI/WR associated with formulating the plans of action for remedial works at the Selected Dams referred to in paragraph 4 (a) hereof undertake regular field visits for the purpose of reviewing construction activities and advising on quality assurance measures during the implementation of such Plans. 9. Each Project State shall: (a) identify any adverse environmental impact resulting from carrying out the plans of action for remedial works at the Selected Dams referred to in paragraph 4 (b) hereof; (b) where such adverse environment impacts are identified, prepare environmental impact assessments of such remedial works at the Selected Dams indicating mitigation measures to be taken, including a time-table for implementing such measures, and obtain all necessary approvals relating thereto; and (c) implement such measures in accordance with such time-table. 10. Without limitation to the generality of Section 9.06 of the General Conditions of the Association, Section 9.07 of the General Conditions of the Bank and Section 2.04 of this Agreement, each Project State shall, by October 31, 1992 and by October 31 of each subsequent year during the implementation of the Project, furnish to the Association and the Bank annual reports on the progress of Part B of the Project. 11. Each Project State shall: (a) cause all large dams and related structures in such State to be inspected at least once in every five years and otherwise in accordance with the procedures and guidelines issued by NCDS; and (b) provide adequate funds for the maintenance of those Selected Dams with respect to which remedial works are carried out under Part B.4 of the Project. 12. Each Project State shall in consultation with the Borrower, the Association and the Bank and in accordance with terms of reference and methodology satisfactory to the Association and the Bank, undertake and complete by March 31, 1994 a mid-term review of Part B of the Project with particular emphasis on the process established under the Project for inspection and investigation of dams, selection of dams for remedial works, formulation and implementation of plans of action for such works, and the staffing, training and functioning of the respective roles of DSO, DSC and DSRP of each such State.