Conformed Copy - C2493 - Primary Education and Teacher Development Project - Development Credit Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2493 UG Development Credit Agreement (Primary Education and Teacher Development Project) between THE REPUBLIC OF UGANDA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated June 22, 1993 CREDIT NUMBER 2493 UG DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 22, 1993, between THE REPUBLIC OF UGANDA (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS: (A) the Association has received a letter dated April 16, 1993, from the Borrower describing a program of objectives, policies and actions designed to strengthen the Borrower's education sector (hereinafter called the Program) and declaring the Borrower's commitment to the execution of the Program; (B) the Borrower, having committed itself to the execution of the Program and as part of the Program, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; and (C) the Borrower has obtained from the United States Agency for International Development (USAID) Grant No. 617-0131 (the USAID Project Grant) in an amount equivalent to $25,000,000 to assist in financing the Project on the terms and conditions set forth in an agreement (the USAID Project Grant Agreement) dated August 31, 1992 between the Borrower and USAID; and Page 2 WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon the terms and conditions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Development Credit Agreements" of the Association, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the General Conditions), constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth, and the following additional terms have the following meanings: (a) "DEO" means District Education Officer; (b) "EASL" means East African School of Librarianship; (c) "EPU" means the Education Planning Unit in MOES; (d) "TDMS" means the Teacher Development and Management Systems; (e) "MOES" means the Ministry of Education and Sports; (f) "NAEP" means the National Assessment of Educational Performance; (g) "NCDC" means the National Curriculum Development Center; (h) "NURP" means the Northern Reconstruction Project, as set out in Schedule 2 to the Development Credit Agreement (Credit Number 2362 UG) between the Borrower and the Association dated June 12, 1992; (i) "PAPSCA" means the Alleviation of Poverty and Social Costs of Adjustment Project, as set out in Schedule 2 to the Development Credit Agreement (Credit Number 2088 UG) between the Borrower and the Association dated February 8, 1990; (j) "PIU" means the Project Implementation Unit in MOES; (k) "PTC" means a Primary Teachers College that has been selected to be part of TDMS network of the Project; (l) "TTC" means a Teacher Training College; (m) "TU" means the Textbook Unit in MOES; (n) "UNEB" means the Uganda National Examinations Board; (o) "Project Preparation Advance" means the project preparation advance granted by the Association to the Borrower pursuant to an exchange of letters dated October 22, 1991 and February 25, 1992 between the Borrower and the Association; (p) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; and (q) "Project Account" means the account referred to in Section 3.02 (a) of this Agreement. ARTICLE II The Credit Page 3 Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to thirty-eight million Special Drawing Rights (SDR 38,000,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit. (b) The Borrower shall, for the purposes of the Project, open and maintain in Dollars a special deposit account in a commercial bank in Uganda on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure or attachment. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 5 to this Agreement. (c) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. Section 2.03. The Closing Date shall be June 30, 2000 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge on the principal amount of the Credit not withdrawn from time to time at a rate to be set by the Association as of June 30 of each year, but not to exceed the rate of one-half of one percent (1/2 of 1%) per annum. (b) The commitment charge shall accrue: (i) from the date sixty days after the date of this Agreement (the accrual date) to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or cancelled; and (ii) at the rate set as of the June 30 immediately preceding the accrual date or at such other rates as may be set from time to time thereafter pursuant to paragraph (a) above. The rate set as of June 30 in each year shall be applied from the next payment date in that year specified in Section 2.06 of this Agreement. (c) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semiannually on February 15 and August 15 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semi- annual installments payable on each February 15 and August 15 commencing August 15, 2003 and ending February 15, 2033. Each installment to and including the installment payable on February 15, Page 4 2013 shall be one percent (1%) of such principal amount, and each installment thereafter shall be two percent (2%) of such principal amount. (b) Whenever: (i) the Borrower's gross national product per capita, as determined by the Association, shall have exceeded $790 in constant 1985 dollars for five consecutive years; and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the Association may, subsequent to the review and approval thereof by the Executive Directors of the Association and after due consideration by them of the development of the Borrower's economy, modify the terms of repayment of installments under paragraph (a) above by requiring the Borrower to repay twice the amount of each such installment not yet due until the principal amount of the Credit shall have been repaid. If so requested by the Borrower, the Association may revise such modification to include, in lieu of some or all of the increase in the amounts of such installments, the payment of interest at an annual rate agreed with the Association on the principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the judgment of the Association, such revision shall not change the grant element obtained under the above-mentioned repayment modification. (c) If, at any time after a modification of terms pursuant to paragraph (b) above, the Association determines that the Borrower's economic condition has deteriorated significantly, the Association may, if so requested by the Borrower, further modify the terms of repayment to conform to the schedule of installments as provided in paragraph (a) above. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement and, to this end, shall carry out the Project, through MOES with due diligence and efficiency, and in conformity with appropriate educational, financial and administrative practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (a) Without limitation upon the provisions of paragraph (a) of this Section and, except as the Borrower and the Association shall otherwise agree, the Borrower shall carry out the Project in accordance with the Implementation Program set forth in Schedule 4 to this Agreement. Section 3.02. (a) With reference to Section 3.01 (a), the Borrower shall: (i) provide in its budgets amounts sufficient to cover its counterpart contributions to the costs of the Project; (ii) open and maintain, until the completion of the Project, a Project Account in a commercial bank in the name of PIU to be used exclusively for expenditures under the Project; (iii) deposit into the Project Account an initial amount of the Uganda Shillings equivalent to $200,000 (the Initial Deposit); and (iv) thereafter at the beginning of each quarter deposit into the Project Account (commencing from the quarter immediately following the quarter in which this Agreement becomes effective), the amount estimated to be required during such quarter to cover the expenditures for the Project which are not covered by withdrawals from the Credit Account or the USAID Project Grant, and which may not have been covered by the Initial Deposit. (b) The Borrower's counterpart contributions under paragraph (a) of this Section will be assessed on the basis of the annual work plan to be submitted to the Association in accordance with paragraph 4 (c) of Schedule 4 to this Agreement. Page 5 Section 3.03. 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 Schedule 3 to this Agreement. Section 3.04. The Borrower shall ensure that no later than three months after the Effective Date and thereafter for the duration of the Project, EPU and PIU shall be fully staffed and operational with staff whose experience and qualifications are satisfactory to the Association. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower 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 the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a) of this Section, including those for the Special Account 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 6 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 the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association's representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section, and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, Page 6 together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. ARTICLE V Remedies of the Association Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) a situation has arisen which shall make it improbable that the Program, or a significant portion thereof, will be carried out. (b) (i) Subject to subparagraph (ii) of this paragraph, the right of the Borrower to withdraw the proceeds of the USAID Project Grant made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cancellation or termination is not caused by the failure of the Borrower to perform any of its obligations under such agreement; and (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Project Account has been opened and the Uganda Shillings equivalent to $200,000 has been deposited therein; and (b) the Borrower has submitted sample standard tender documents for Parts A (2) (a) and (b) and B (3) (b) (vii) of the Project. Section 6.02. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. The Borrower's Minister responsible for Finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Finance and Economic Planning P.O. Box 8147 Kampala, Uganda Cable address: Telex: FINSEC 61170 Page 7 Kampala 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) 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. THE REPUBLIC OF UGANDA By /s/ Stephen K. Katenta-Apuli Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Edward V.K. Jaycox Regional Vice President Africa SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Civil Works 14,850,000 100% of foreign expenditures and 80% of local expenditures (2) Equipment and 2,950,000 100% of foreign Furniture expenditures and 90% of local expenditures (3) Vehicles 1,160,000 100% of foreign expenditures (4) Books and Printed 1,530,000 100% of foreign Page 8 Items expenditures and 90% of local expenditures (5) Consultants' 4,770,000 100% Services (6) Training and 1,100,000 100% Studies Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (7) Incremental 3,040,000 100% Recurrent Expenditures (8) Refunding of 1,020,000 Amounts due Project pursuant to Preparation Section 2.02 (c) Advance of this Agreement (9) Unallocated 7,580,000 __________ TOTAL 38,000,000 ========== 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower; and (c) the term "incremental recurrent expenditures" means expenditures incurred for incremental staff salaries and allowances, office supplies and operation of vehicles financed under the Project, including fuel and maintenance. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. SCHEDULE 2 Description of the Project The objective of the Project is to assist the Borrower in reforming and improving the pattern of resource mobilization and resource allocation in the education sector, and in financing specific investment expenditures in the related areas of primary education and primary teacher training. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree from time to time to achieve such objectives: Part A: Improving Primary School Teaching and Management 1. Establishment of TDMS, the integrated teacher development and management support system that functionally links coordinating primary schools and outreach schools to PTCs. 2. Construction and rehabilitation of teacher training and primary school facilities through: Page 9 (a) Construction and rehabilitation of about 16 PTCs and construction of one Tutor Training Wing attached to one of the PTCs; (b) Construction and rehabilitation of about 200 Coordinating Primary Schools involved in TDMS including construction of staff houses; and (c) Construction and rehabilitation of about 2,640 classrooms in outreach schools. 3. Provision of learning resources through: (a) Acquisition and distribution of student textbooks and teachers' guides; and (b) Acquisition and distribution of supplementary reading materials. 4. Building capacity for the development of learning resources: Revitalization of local printing and publishing through: (a) technical assistance and study tours for local publishers and printers and the staff of the TU and NCDC; (b) training courses conducted by the TU, NCDC and other relevant training institutions on behalf of professional associations for publishers and printers; (c) publishing and printing courses conducted by the EASL for publishers and printers; (d) training courses in editorial, design, illustration and management offered through the TU and NCDC by the EASL and the School of Media Development and Graphic Arts and other relevant training insitutions; and (e) courses in printing management, operating and maintenance and bookvending through the TU, NCDC and EASL and other relevant training institutions. Part B: Enhancing Strategic MOES Functions 1. (a) Strengthening of the EPU, including capacity building to conduct the annual census of schools, school mapping and improvement of the annual budgeting process. (b) Establishment and equipping of a project preparation department and a research, monitoring and evaluation department in EPU and training of their staff with a view to preparing project documents and conducting preinvestment studies. (c) Carrying out of a National Assessment of Education Performance Study. (d) Carrying out of a comprehensive policy study on secondary schools. (e) Carrying out of a book sector policy review and strategy. 2. (a) Strengthening MOES, TDMS and school management through: (i) development of management training materials; (ii) development of a training diffusion network; Page 10 (iii) training of trainers in management techniques; (iv) establishment of an in-service training capacity in the TDMS unit of the PIU and at the PTCs; and (v) carrying out ongoing in-service management training for head teachers, DEOs, inspectors and local school management committees. (b) Design and implementation of new personnel records and accounting as well as management information systems throughout the primary education system from the school and the DEO levels up to the MOES. 3. (a) Curriculum reform through: (i) development of syllabi for four core subject areas; (ii) training of textbook writers; (iii) writing of textbooks and related teacher guides; (iv) training of children's literature writers, illustrators and designers; and (v) writing of supplementary reading materials. (b) Examination reform through: (i) establishment of national curriculum committees for each examined subject to monitor validity; (ii) phased introduction of a system of continuous assessment; (iii) increasing the number of examination questions testing higher-order cognitive skills; (iv) provision of feedback information to teachers on pupil performance in the national examinations; (v) creation of systems of formal information exchange between the inspectorate, PTCs, NCDC and UNEB; (vi) introduction of a research program to monitor qualitative aspects of examinations; and (vii) construction of a new UNEB office including a secure printing facility, as well as improvement of UNEB's administration and acquisition of office equipment. 4. Reorganization and expansion of PIU and rehabilitation of its offices. * * * The Project is expected to be completed by December 31, 1999. SCHEDULE 3 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 Page 11 "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1992 (the Guidelines). For fixed-price contracts, the invitation to bid referred to in paragraph 2.13 of the Guidelines shall provide that, when contract award is delayed beyond the original bid validity period, the successful bidder's bid price will be increased for each week of delay by two predisclosed correction factors acceptable to the Association, one to be applied to all foreign currency components and the other to the local currency component of the bid price. Such an increase shall not be taken into account in bid evaluation. 2. Prequalification as provided in paragraph 2.10 of the Guidelines shall take place of bidders for Parts A (2) (a) and B (3) (vii) of the Project and of bidders for printing contracts for supplementary materials under Part A (3) (b) of the Project. 3. Goods to be procured through international competitive bidding shall be exempted from preshipment price inspection by a third party. Part B: Preference for Domestic Contractors In the procurement of works under Parts A (2) (a) and B (3) (vii) of the Project 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 C: Preference for Domestic Manufacturers In the procurement of printing contracts for school textbooks under Part A (3) of the Project in accordance with the procedures described in Part A hereof, goods manufactured in Uganda 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 D: Other Procurement Procedures 1. (a) Works under Part A (2) (b) of the Project, up to an aggregate amount equivalent to $3,800,000, and (b) furniture under Part A (2) and Part B (3) (vii) of the Project, up to an aggregate amount equivalent to $2,600,000, may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association which shall include: (a) public opening of bids, (b) specified evaluation criteria, (c) confirmation of foreign bidders' eligibility to participate in the bidding process, and (d) awards to be made to the lowest responsive competitive bidder. 2. Works under Part A (2) (c) of the Project may be procured on the basis of force account with the use of local labor. 3. Equipment that has to be compatible with existing units, as well as miscellaneous supplies estimated to cost less than the equivalent of $50,000, may, up to an aggregate amount equivalent to $1,000,000, 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 Association. Part E: Review by the Association 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: Page 12 (a) With respect to each work contract estimated to cost the equivalent of $250,000 or more and each contract for goods and equipment 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 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 Association pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 5 to this Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which withdrawals from the Credit 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 1. In order to assist the Borrower in carrying out the Project, the Borrower shall employ experts and consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association 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. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts shall not apply to contracts estimated to cost less than $100,000 equivalent each. However, this exception to prior Association review shall not apply to the terms of reference for such contracts nor to the employment of individuals, to single source selection of firms, to assignments of a critical nature as reasonably determined by the Association and to amendments of contracts raising the contract value to $100,000 equivalent or above. SCHEDULE 4 Implementation Program Project Management 1. MOES shall continue to maintain PIU within its organization. PIU, in collaboration with TDMS coordinating committees in each District, shall be responsible for the management, implementation and coordination of the Project and shall be reorganized and expanded by assigning a separate project manager to each donor assisted project, by creating TDMS and a Textbook Unit within PIU, by reinforcing the Construction Department and establishing a TDMS coordinating committee in each District (DEO). In addition, construction, procurement, finance and administration functions shall be expanded and streamlined, whilst within operational departments, staff and resources will be shared across projects in Page 13 order to realize economies of scale. 2. The responsibilities of PIU and the TDMS coordinating committee shall include but not be limited to: (a) detailed planning of each phase of the Project and modification of the overall targets when required; (b) ensuring the coordinated and logical development of the various elements of the Project; (c) the selection of the primary schools to be constructed and rehabilitated and the PTCs to be constructed and rehabilitated on the basis of guidelines, criteria and procedures consistent with the Program; (d) the management of all Project funds and their disbursement; (e) the annual evaluation and report on the progress of the Project; and (f) updating the list of local experts and reporting on their progress as part of the annual report of activities. Project Monitoring and Review 3. Project monitoring will be the responsibility of PIU and EPU and will assess the financial and physical progress of the various components as well as the progress in implementing the policy measures supported by the Project on the basis of indicators approved by the Association. PIU shall develop formats for monitoring implementation in close consultation with the implementing agencies and the Association. These formats shall be used by all implementing agencies and shall be consolidated by the PIU in semiannual progress reports. The semiannual reports in turn shall be used by EPU and PIU in their preparation of comprehensive annual progress reports and annual work plans for all Project components for the following year. 4. The Borrower shall ensure the submission to the Association by MOES of: (a) a semiannual progress report within eight weeks of the end of the first half of each fiscal year; (b) an annual progress report by September 30 of each year for the previous fiscal year; and (c) an annual work plan, satisfactory to the Association, for the following fiscal year by: (i) September 30, 1993, in the first year of Project implementation, and (ii) March 31 of each year in succeeding years of Project implementation. This work plan is subject to the Association's approval. 5. The Borrower and the Association shall convene joint semi- annual implementation review meetings, to which external agencies supporting the Project shall also be invited to attend. These reviews shall address planning and budgeting, and performance evaluation and policy implementation issues: (a) major policies in the sector and recurrent financing levels; (b) assess performance on the implementation of the various Project components; (c) where necessary, modify Project implementation targets and strategies; and Page 14 (d) prepare future work programs and budgets. 6. (a) The Borrower shall carry out a midterm review in 1996 jointly with the Association to which external agencies supporting the Project shall also be invited, in accordance with terms of reference satisfactory to the Association to address issues including: (i) major sectoral policies and recurrent financing levels; (ii) implementation performance, targets and strategies; and (iii) future work programs and budgets and shall soon thereafter implement the recommendations of such a review. (b) At least three months prior to the date scheduled for the midterm review, the Borrower shall furnish the Association with such reports as it may request. Part A of the Project 7. TDMS, which is an integrated support system that functionally links primary schools to PTCs to provide field-based upgrading and continuous in-service training for school managers and instructional staff (headmasters, district education officers and inspectorate staff and teachers) in certain districts, shall be organizationally divided into three levels: the national, the district and the local level. At the national level, it shall consist of a TDMS Advisory Committee, TDMS management committee and the TDMS Department in the PIU. At the district level, it shall consist of the TDMS coordinating committee for planning and implementation purposes and participating TDMS, PTCs whose function is to provide a complete range of inputs and support to primary education in the district and, for that purpose, these PTCs are linked at the local level to Coordinating Primary Schools, each of which, is in itself connected to a network of surrounding Outreach Schools. Tutors for the PTCs will be trained at the Tutor Training Wing to be attached to one of the PTCs. PTCs shall have four tasks: (a) preservice training of new teachers; (b) in-service upgrading of practicing teachers; (c) ongoing in-service training to bring new methods, texts and learning materials to teachers in the schools; and (d) management training and support for headteachers, DEOs, PTA and management committee representatives. The Coordinating Schools will serve as a location for the gathering of teachers from the Outreach Schools, for structured in-service courses, meetings, production of instructional materials, informal sharing and mutual assistance. The TDMS districts, as well as the core PTCs, will be selected in accordance with guidelines, criteria and procedures consistent with the Program, and a full TDMS network will be implemented in the districts selected. Additional support for TDMS will be given as follows: (a) support for the TDMS department in the PIU and TDMS coordinating committees; (b) development and distribution of a new Grade III curriculum, syllabus and supporting materials; and (c) assistance to UNEB to take full responsibility for Grade III examination and certification. 8. Areas that receive assistance for primary classroom reconstruction under PAPSCA or NURP shall be excluded from Part A (2) (c) of the Project. 9. The Borrower shall, no later than August 31, 1994, submit to the Association a detailed training program, satisfactory to the Association, for local capacity building of the publishing and printing industry. Part B of the Project 10. The Borrower shall, by December 31, 1994, submit for review and comments by the Association: (a) a revised primary curriculum which maintains the proportional instructional time for the core subjects; Page 15 (b) a detailed plan for improving the examination process; (c) the terms of reference of NAEP; and (d) a teacher training module on continuous assessment. UNEB shall carry out the NAEP every three years in collaboration with EPU. The NAEP is to ascertain national levels of achievement in targeted subject areas, as well as additional information of importance to planning. 11. The Borrower shall, not later than December 31, 1993, submit to the Association revised terms of reference, satisfactory to the Association, for the Book Sector Policy Review. 12. The purpose of the Book Sector Policy Review and strategy is to provide baseline data for developing policy on the generation, publication, production and distribution of textbooks. It would also assess policy and programmatic issues such as publishing rights, physical specification for textbooks, tendering procedures and bookvending. It shall also investigate the factors affecting book life in Ugandan schools. 13. The school mapping activity will consist of a detailed mapping of all existing primary schools in the country beginning with the Project TDMS districts, including information on location, physical facilities, books and equipment, land, water, utilities, proximity to other institutions, and accessibility. Data will be collected by utilizing teams from the TDMS network as well as EPU staff. 14. The analysis of costs and finance entails a detailed analysis of all expenditures in a nationally representative sample of primary schools. Data is to be collected on resources provided for education from all sources and an assessment to be made as to how educational funds are actually spent. In addition, this activity will assess the impact of school charges on student participation and differences by family income and pupil gender. SCHEDULE 5 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories 1 through 7 set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit allocated from time to time to the eligible Categories, in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount equivalent to US$3,500,000 to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Association a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account such amount or Page 16 amounts as the Borrower shall have requested. (b) (i) For replenishment of the Special Account, the Borrower shall furnish to the Association requests for deposits into the Special Account at such intervals as the Association shall specify. (ii) Prior to, or, at the time of each such request, the Borrower shall furnish to the Association the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the Special Account for eligible expenditures. All such deposits shall be withdrawn by the Association from the Credit Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Association shall not be required to make further deposits into the Special Account: (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Credit allocated to the eligible Categories, less the amount of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Project, shall equal the equivalent of twice the amount of the Authorized Allocation. Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to the eligible Categories shall follow such procedures as the Association shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of the Special Account: (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) deposit into the Special Account (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. Page 17 (b) If the Association shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions.