Conformed Copy - L3531 - Henan Highway Project - Project Agreement

Page 1 CONFORMED COPY LOAN NUMBER 3531-CHA (Henan Highway Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and HENAN PROVINCE Dated December 16, 1992 LOAN NUMBER 3531-CHA PROJECT AGREEMENT AGREEMENT, dated December 16, 1992, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and HENAN PROVINCE (Henan). WHEREAS by the Loan Agreement of even date herewith between People's Republic of China (the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to one hundred twenty million dollars ($120,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that Henan agrees to undertake such obligations toward the Bank as are set forth in this Agreement; and WHEREAS Henan, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Page 2 Section 1.01. Unless the context otherwise requires, the several terms defined in the Preamble to this Agreement, the Loan Agreement, and the General Conditions (as so defined) have the respective meanings therein set forth and the following terms have the following meanings: (a) "HAB" means the Highway Administration Bureau, an agency of Henan, and includes any successor or successors thereto; (b) "HGHCA" means the High-Grade Highway Construction Authority, an agency of Henan, and includes any successor or successors thereto; (c) "HPCD" means the Henan Provincial Communication Department, a department of Henan, and includes any successor or successors thereto; (d) "HSRI" means the Highway Scientific Research Institute, an agency of Henan, and includes any successor or successors thereto; and (e) "MOC" means the Ministry of Communication of the Borrower and includes any successor or successors thereto. ARTICLE II Execution of the Project Section 2.01. (a) Henan declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Loan Agreement, and, to this end, shall carry out the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, and engineering 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 Bank and Henan shall otherwise agree, Henan shall carry out the Project in accordance with the Implementation Program set forth in Schedule 2 to this Agreement. Section 2.02. 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 onlent to Henan shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.03. Henan shall carry out the obligations set forth in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of the General Conditions (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. Section 2.04. (a) Henan shall, at the request of the Bank, exchange views with the Bank 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 Loan. (b) Henan shall promptly inform the Bank of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of Loan, or the performance by Henan of its obligations under this Agreement. ARTICLE III Financial Covenants Section 3.01. (a) Henan 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 Henan responsible for carrying out the Project or any part thereof. (b) Henan shall: Page 3 (i) have the 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 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 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 the Loan Agreement becomes effective. Section 4.02. This Agreement and all obligations of the Bank and of Henan thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms, and the Bank shall promptly notify Henan thereof. 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. 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 Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) For Henan: Henan People's Government No. 10 Wei-er Road Zhengzhou 450003 Henan Province People's Republic of China Page 4 Telex: 46034 HFEA CN 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 Henan, may be taken or executed by Governor or Vice Governor of Henan or such other person or persons as Governor or Vice Governor of Henan shall designate in writing, and Henan shall furnish to the Bank sufficient evidence of the authority and the authenticated specimen signature of each such person. 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 BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Shahid Javed Burki Acting Regional Vice President East Asia and Pacific HENAN PROVINCE By /s/ Zhao Xixin Authorized Representative SCHEDULE 1 Procurement and Consultants' Services Section I: Procurement of Goods and Works Part A: International Competitive Bidding 1. Except as provided in Part D hereof, goods and works 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 1992 (the Guidelines). 2. Bidders for civil works shall be prequalified as provided in paragraph 2.10 of the Guidelines. Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A.1 hereof, goods manufactured in People's Republic of China 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.1 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 Page 5 1. (a) Except as provided in sub-paragraph (b) hereof, items or groups of items of goods, up to an aggregate amount equivalent to $2,000,000, may be procured under contracts awarded through limited international bidding procedures on the basis of evaluation and comparison of bids invited from a list of at least three qualified suppliers eligible under the Guidelines and in accordance with the procedures set forth in Sections I and II of the Guidelines (excluding paragraphs 2.8, 2.9, 2.55 and 2.56 thereof). (b) Items or groups of items of goods, estimated to cost less than the equivalent of $200,000 per contract, up to an aggregate amount equivalent to $3,000,000, may be procured under contracts awarded on the basis of comparison of price quotations obtained from at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Bank. 2. Civil works for the 21.3 kilometer section of the Highway to the east of Luoyang under Part A.1 (a) of the Project, estimated to cost the equivalent of $12,700,000, may be procured under one contract awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Bank. 3. (a) Except as provided in sub-paragraph (b) hereof, civil works, under Parts A.1 (b) and B.1 of the Project, shall be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Bank. (b) Civil works, under Parts A.1 (b) and B.1 of the Project, estimated to cost less than the equivalent of $2,000,000 per contract, up to an aggregate amount equivalent to $33,000,000, may be procured under contracts awarded on the basis of comparison of price bids obtained from at least three contractors eligible under the Guidelines, in accordance with procedures acceptable to the Bank. Part E: Review by the Bank of Procurement Decisions 1. Review of prequalification: With respect to the prequalification of bidders as provided in Part A.2 hereof, the procedures set forth in paragraph 1 of Appendix 1 to the Guidelines shall apply. 2. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract for goods and civil works each estimated to cost the equivalent of $2,000,000 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 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, 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 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 4 to the Loan Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which withdrawals from the Loan Account are to be made on the basis of statements of expenditure. 3. The figure of 15% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II: Employment of Consultants Page 6 In order to assist Henan in carrying out the Project, Henan 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 2 Implementation Program 1. Henan shall, under the general supervision and guidance of MOC, carry out the Project as follows: (a) Parts A and C.1 (a) of the Project shall be carried out through HGHCA. (b) Parts B and C.1 (b) of the Project shall be carried out through HAB. (c) Part C.2 and C.4 of the Project shall be carried out through HPCD. (d) Part C.3 of the Project shall be carried out through HSRI. 2. Henan shall (a) by December 31, 1994, undertake and complete a study on trucking in accordance with terms of reference satisfactory to the Bank, (b) by March 31, 1993, establish a review panel comprising representatives of the Bank, Borrower and Henan for the purpose of reviewing the results and recommendations of the trucking study, (c) upon completion of the trucking study, to submit the same to the said review panel for its comments, and (d) take appropriate steps to implement the recommendations of the trucking study taking into account the comments, if any, made by the said review panel. 3. Henan declares its commitment to the preservation of the environment and, to this end, shall carry out the environmental protection measures stipulated in the Environmental Action Plan, prepared by Henan in respect of Part A of the Project, in a manner satisfactory to the Bank. 4. Henan declares its commitment to the Bank's policy on resettlement, and, to this end, shall carry out the land acquisition and resettlement activities pursuant to the Resettlement Action Plan, prepared by Henan in respect of Part A of the Project, in a manner satisfactory to the Bank. 5. Henan shall select Sub-projects in accordance with criteria and procedures satisfactory to the Bank and shall, inter alia, (a) submit, for the Bank's approval, each Sub-project proposal including an environmental action plan and a resettlement action plan therefor, and (b) ensure that during the execution of each Sub-project both the environmental action plan and resettlement action plan therefor are carried out in a manner satisfactory to the Bank. 6. Henan shall prepare and furnish to the Bank for review, by October 31, 1995, recommendations on appropriate toll levels for the Highway, taking into consideration the experience with operation of other toll highways in China. 7. Henan shall (a) by April 30, 1993, establish resettlement monitoring teams including qualified social scientists, acceptable to the Bank, to monitor the effectiveness and socio-economic impact of resettlement under the Project, and (b) by December 15, 1993, 1994 and 1995, submit to the Bank an annual monitoring report in respect thereof. 8. Henan shall carry out the training under Part C.2 of the Project in accordance with programs agreed by the Bank.