Conformed Copy - C2409 - Rubber Project - Project Agreement 1

Page 1 CONFORMED COPY CREDIT NUMBER 2409 IN Project Agreement (Rubber Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and THE RUBBER BOARD Dated August 12, 1993 CREDIT NUMBER 2409 IN PROJECT AGREEMENT AGREEMENT, dated August 12, 1993, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and the RUBBER BOARD (the Board). WHEREAS (A) by the Development Credit Agreement of even date herewith between India (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to sixty-six million four hundred thousand Special Drawing Rights (SDR 66,400,000) on the terms and conditions set forth in the Development Credit Agreement, but only on condition that the Board agree to undertake such obligations toward the Association as are set forth in this Agreement; (B) by a Project Agreement of even date herewith between the Association and the National Bank for Agriculture and Rural Development (NABARD) (the NABARD Agreement) NABARD has agreed to undertake certain obligations in respect of the carrying out of the Project; and WHEREAS the Board, in consideration of the Association's entering into the Development Credit 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 Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) The Board declares its 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 Parts A (ii), B (ii), C, E and F, and shall assist NABARD in the carrying out of Parts A (i), B (i) and D of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial and agricultural 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 and the Board shall otherwise agree, the Board shall carry out Parts A (ii), B (ii), C, E and F of the Project in accordance with the Implementation Program set forth in Schedule 1 to this Agreement. Section 2.02. Except as the Association shall otherwise agree, procurement of goods and services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. Section 2.03. The Board 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 this Project Agreement and Parts A (ii), B (ii), C, E and F of the Project. Section 2.04. (a) The Board 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) The Board 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 the Board of its obligations under this Agreement. Article III Management and Operations of the Board Section 3.01. The Board shall carry on its operations and conduct its affairs in accordance with sound administrative, financial, and agricultural practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. The Board shall at all times operate and maintain its plants, machinery, equipment and other property, and from time to time, promptly as needed make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and agricultural practices. Section 3.03. The Board shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Page 3 Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. (a) The Board shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its operations and financial conditions in respect of Parts A (ii), B (ii), C, E and F of the Project. (b) The Board shall: (i) have its 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. (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 and accounts and the audit thereof as the Association shall from time to time reasonably request. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of the Board thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) the date 15 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify The Board of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE VI Miscellaneous Provisions Section 6.01. 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 Page 4 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 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) For the Board: The Rubber Board Shastri Road P.O. Box 280 Kottayam 686001 Kerala, India Cable address: Telex: RUBRBOARD 888 205 RUBR IN Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of the Board, may be taken or executed by the Chairman of the Board or such other person or persons as the Board shall designate in writing, and the Board shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 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 By /s/ Cosmas L. Robless Acting Regional Vice President South Asia THE RUBBER BOARD By /s/ N. Valluri Authorized Representative SCHEDULE 1 Implementation Program 1. For the purposes of implementation coordination and monitoring Page 5 progress of the Project, the Board shall (i) establish a Project Coordination Unit, with responsibilities and staff acceptable to the Association, and (ii) appoint a Project Coordinator with qualifi- cations and experience, and on terms and conditions satisfactory to the Association. 2. For the purpose of assisting in carrying out Part F of the Project, the Board shall select NGOs, in accordance with procedures and criteria agreed with the Association. 3. The Board shall (i) prepare, not later than March 31, 1994 and furnish to the Association, for the Association's review and comments, a five-year training plan, which shall be updated annually three months before the start of the fiscal year, in consultation with outside agencies participating in the training program, and (ii) thereafter implement such a plan. 4. Without limitation to the generality of Section 9.06 of the General Conditions, the Board shall prepare and furnish to the Association starting December 31, 1993, during Project imple- mentation, quarterly and annual reports on the progress of the Project, in form and substance agreed with the Association. 5. The Board shall, in conjunction with the Association and in accordance with terms of reference and methodology satisfactory to the Association, undertake and complete by December 31, 1995 a mid- term review of the Project, and, shall, promptly thereafter, carry out the agreed recommendations of such review in a manner acceptable to the Association. 6. The Board shall, not later than December 31, 1997, or such later date as may be agreed by the Association and the Board, phase out the polybag subsidy provided by the Board to rubber growers. 7. The Board shall, in accordance with a timetable agreed with the Association, phase out the input subsidies provided by the Board to smallholder rubber growers. 8. The Board shall, not later than March 31, 1994, prepare and furnish to the Association, for the Association's review and comments a plan for monitoring of copper residues in soil and water from selected locations within the Project States. 9. The Board shall, not later than March 31, 1994, appoint other incremental staff with qualifications and experience satisfactory to the Association. 10. The Board shall, not later than December 31, 1993, enter into contractual arrangements, satisfactory to the Association, with TRPC and TFDPC for assisting in establishing new rubber planting in Tripura under Part B of the Project. 11. The Board shall select the recipients of the planting assistance under Parts A (ii) and B (ii) of the Project in accordance with criteria agreed with the Association. SCHEDULE 2 Key Incremental Staff Designation No. of Posts Rubber Production Department 1. Deputy Rubber Production Commissioner 4 2. Development Officer 2 3. Assistant Development Officer 6 4. Field Officer 10 Page 6 Project Coordination Unit 5. Joint Director (Statistics and Planning) 1 6. Accounts Officer 1