Conformed Copy - L3471 - Zhejiang Provincial Highway Project - Project Agreement

Page 1 CONFORMED COPY LOAN NUMBER 3471 CHA (Zhejiang Provincial Highway Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and ZHEJIANG PROVINCE Dated June 19, 1992 LOAN NUMBER 3471 CHA PROJECT AGREEMENT AGREEMENT, dated June 19, 1992, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and ZHEJIANG PROVINCE (Zhejiang). WHEREAS (A) 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 two hundred twenty million dollars ($220,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that Zhejiang agree to undertake such obligations toward the Bank as are set forth in this Agreement; (B) by Onlending Arrangements between the Borrower and Zhejiang, the proceeds of the Loan will, for the purposes of the Project, be onlent to Zhejiang; and WHEREAS Zhejiang, 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: Page 2 ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the Loan Agreement, the Preamble to this Agreement and the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) Zhejiang 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 Zhejiang shall otherwise agree, Zhejiang 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 Zhejiang shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.03. Zhejiang 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) Zhejiang shall, at the request of the Bank, exchange views with the Bank with regard to progress of the Project, the performance of its obligations under this Agreement, and other matters relating to the purposes of the Loan. (b) Zhejiang 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 Zhejiang of its obligations under this Agreement. ARTICLE III Financial Covenants Section 3.01. (a) Zhejiang 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 Zhejiang responsible for carrying out the Project or any part thereof. (b) Zhejiang shall: (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 Page 3 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 Zhejiang thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms, and the Bank shall promptly notify Zhejiang 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 Zhejiang: Zhejiang Provincial People's Government No.1 Sheng Fu Road Hangzhou 310025 Zhejiang Province People's Republic of China Cable address: Telex: 0074 HANGZHOU 35030 COSCO 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 Zhejiang, may be taken or executed by Governor or Vice Governor of Zhejiang or such other person or persons as Governor or Page 4 Vice Governor of Zhejiang shall designate in writing, and Zhejiang 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/ Marianne Haug Acting Regional Vice President East Asia and Pacific ZHEJIANG 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 Parts D.1 and D.2 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 1985 (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 1. Items or groups of items for goods, estimated to cost the equivalent of $200,000 or less 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. Page 5 2. (a) Civil works for the 700 meter section between Pengbu and the western terminus of the highway under Part A.1 (a) of the Project, estimated to cost the equivalent of $9,100,000 or less, may be procured under one contract awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Bank. (b) Civil works under Part A.1 (b) of the Project, estimated to cost the equivalent of $4,000,000 or less, may be procured under one contract awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Bank; except that civil works, estimated to cost the equivalent of $2,000,000 or less per contract, up to an aggregate amount equivalent to $5,800,000, 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. 3. Civil works under Part 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; except that civil works, estimated to cost the equivalent of $3,750,000 or less per contract, up to an aggregate amount equivalent to $42,000,000, 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 In order to assist Zhejiang in carrying out the Project, Zhejiang 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 Page 6 1. Zhejiang shall, under the general supervision and guidance of the Ministry of Communications (or any successor thereto) of the Borrower, carry out the Project as follows: (a) Part A of the Project shall be carried out through the Zhejiang Provincial Shanghai-Hangzhou-Ningbo Expressway Project Executive Commission (Commission), an agency of Zhejiang, or any successor thereto; (b) Part B of the Project shall be carried out through the Zhejiang Provincial Highway Administration Bureau (Bureau), an agency of Zhejiang Provincial Transport Department, or any successor thereto; and (c) Part C of the Project shall be carried out through the Commission and the Bureau. 2. Zhejiang shall: (a) establish and maintain, within its Highway Administration Bureau, a Road Development Program Unit (RDPU) for the purposes of providing overall management and supervision of the implementation of Part B.1 of the Project; (b) adequately staff the RDPU with qualified and experienced personnel and provide other necessary resources to enable it to achieve its purposes; and (c) adequately staff the transport administrations at the municipal prefectural and county level with qualified and experienced personnel and provide other necessary resources for the preparation and execution of the Sub-projects. 3. Zhejiang 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 (December 1991), prepared by Zhejiang in respect of Part A.1 of the Project, in a manner satisfactory to the Bank. 4. Zhejiang 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 (December 1991), prepared by Zhejiang in respect of Part A.1 of the Project, in a manner satisfactory to the Bank. 5. Zhejiang 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, (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, and (c) prepare, by June 30, 1993, and thereafter undertake, in consultation with the Bank, a plan to monitor the effectiveness and socio-economic impact of each resettlement, as agreed with the Bank. 6. Zhejiang shall prepare and furnish to the Bank for review, by June 30, 1996, recommendations on appropriate toll levels for the highway under Part A.1 of the Project, taking into consideration the experience with the operation of toll highways in China.