Senegal - Railway Project : Credit 0096 - Credit Agreement - Conformed

CREDIT NUMBER 96 SE Development Credit Agreement (Railway Project) BETWEEN REPUBLIC OF SENEGAL AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED SEPTEMBER 29, 1966 CREDIT NUMBER 96 SE Development Credit Agreement (Railway Project) BETWEEN REPUBLIC OF SENEGAL AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED SEPTEMBER 29, 1966 ~Dopopment Turbit Agrr~ment AGREEMENT, dated September 29, 1966, between REPUB- LIC OF SENEGAL (hereinafter called the Borrower) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS the Borrower and the R6gie des Chemins de Fer du Senegal (hereinafter called the Regie), an agency of the Borrower, have requested the Association to assist in financing part of the R4gie's Second Four-Year Invest- ment Plan, 1965/1966-1968/1969 (hereinafter called the Investment Plan); WHEREAS the Regie will, with the Borrower's assistance, carry out such Investment Plan and the Borrower will as part of such assistance make available to the Regie the proceeds of the development credit provided for herein; WHEREAS by an agreement of even date herewith (here- inafter called the Mali Development Credit Agreement), between the Republic of Mali and the Association, the Association has agreed to make a development credit to the Republic of Mali to assist in financing part of a program for the rehabilitation and modernization of the railways of the Republic of Mali (hereinafter called the Rehabilitation Program); WHEREAS the Investment Plan and the Rehabilitation Program will be carried out simultaneously in view of the complementary nature of the Senegal and Mali railway systems; WHEREAS the Association is willing on the basis of the foregoing, to make a development credit available on the 4 terms and conditions provided herein, and in a project agreement of even date herewith between the R,gie and the Association; Now THEREFORE the parties hereto hereby agree as follows: ARTICLE I Credit Regulations; Special Definitions SECTION 1.01. The parties to the Development Credit Agreement accept all the provisions of Development Credit Regulations No. 1 of the Association dated June 1, 1961, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said Development Credit Regulations No. 1 as so modified being hereinafter called the Regulations): (a) The second sentence of Section 2.02 is amended by deleting the words "at the same rate" and substituting therefor the words "at the rate of one-half of one percent (1/, of 1 ) per annum ". (b) Section 3.01 is deleted and the following new Section is substituted therefor: "Section 3.01. Currencies in which Cost of Goods is to be Paid and Proceeds of the Credit (ire to be Withdrawn. (a) Except as the Borrower and the Association shall otherwise agree, the cost of goods financed out of the proceeds of the Credit shall be paid in the respective currencies of the countries from which such goods are acquired. (b) The proceeds of the Credit shall be withdrawn from the Credit Account: (i) on account of expenditures for goods pro- duced in (including services supplied from) the territories of the Borrower, in such currency or currencies as the Association 5 shall from time to time reasonably select; (ii) in all other cases, in the etrrency in which the cost of the goods financed out of such proceeds has been paid or is payable. (c) The Borrower and the Association may from time to time agree on any other currency in which withdrawals shall be made." (c) A new Section 3.04 is inserted after Section 3.03 as follows: "Section 3.04. Purch(se of urreicy of lithdrawd with Other Ourrenc. If with(lrawal shall be made in any currency which the Association shall have pur- chased with another cur1rency for the purposes of such withdrawal, the portion of the Credit so withdrawn shall be deemed to have beeni withdrawn from the Credit Account in such other currency for the purposes of Section 3.03.'' (d) Section 3.04 is re-numbered Section 3.05. (e) The first sentence of Section 4.01 is deleted. (f) The words "or the Project Agreement" are inserted in Section 6.02 after the words "the Development Credit Agreement". (g) Section 8.04 is deleted. SECTION 1.02. Unless the context otherwise requires, the following terms wherever used in this Development Credit Agreement have the following meanings: (a) the term "Project Agreement" means the agreement of even date herewith between the Association and the R6gie; (b) the term "Subsidiary Loan Agreement" means the loan agreement b)etween the Borrower and the Regie referred to in Section 4.02 of this Agreement; 6 (c) the term "Railways" means the railways owned, oper- ated or administered by the Regie and includes all railway property, equipment and materials owned, operated or administered by the R6gie; (d) the term "International Traffic Agreement" means the agreement dated June 8, 1963, between the Borrower an(l th- Repulmic of Mali relating to international railway traffic, as the same may from time to time be amended by agreement of the parties thereto; (e) the terni "Customs Agreement" means the Accord douanier dated June 8, 1963, between the Borrower and the Republic of Mali, as the same may from time to time be amended by agreement of the parties thereto; (f) the term "Railway Convention" means the Conven- tion. dated June 8, 1963, between the R6gie and the R'gie du Chemin de Fer du Mali, as the same may from time to time be amended by agreement of the parties thereto; and (g) the term "Statutes" means the Decree No. 64.835 of December 17, 1964, published in the Journal Officiel No. 3720 of January 9, 1965, of the Borrower, relating to the recr- ganization of the Regie. A-ATICLE II The Credit SECTION 2.01. The Association agrees to make available to the Borrower, on the terms and conditions in the Develop- ment Credit Agreement set forth or referred to, a develop- ment credit in an amount in various currencies equivalent to nine million dollars ($9,000,000). SECTION 2.02. The Association shall open a Credit Account on its books in the name of the Borrower and shall credit fo si-h Credit Accoinit the amoni of the Credit. The amount of the Credit may be withdrawn from the Credit Account as provided in, and subject to the rights of cancel- 7 lation and suspension set forth in, the Development Credit Agreement. SE:CTION 2.03. Except as the Association shall otherwise agree, the Borrower shall be entitled, subject to the pro- visions of the Development Credit Agreement, to withdraw from the Credit Account: (a) such amounts as shall have been expended for the reasonable cost of goods to be financed out of the proceeds of the Credit; and (b) if the Association shall so agree, such amounts as shall be required by the Borrower to meet payments under the foregoing; provided, however, that no withdrawals shall be made on account of expenditures prior to January 1, 1965. SECTION 2.04. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1o) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. SECTION 2.05. Service charges shall be payable semi- annually on February 1 and August 1 in each year. SECTION 2.06. The Borrower shall repay the principal of the Credit withdrawn from the Credit Account in semi- annual instalments payable on each February 1 and August 1 commencing February 1, 1977 and ending August 1, 2016, each instalment to and including the instal- ment payable on August 1, 1986 to be one-half of one per cent (/, of 1o) of such principal amount, and each instal- ment thereafter to be one and one-half per cent (11/2o) of such principal amount. ARTICLE III Use of Proceeds of the Credit SECTION 3.01. The Borrower shall cause the proceeds of the Credit to be applied exclusively to financing the cost of goods required to carry out the Project. The specific goods 8 to be financed out of the proceeds of the Credit and the methods and procedures for procurement of such goods shall be determined by agreement between the Borrower, the Association and the R6gie, subject to modification by further agreement between them. SECTION 3.02. Except as the Borrower and the Associ- ation shall otherwise agree, the Borrower shall cause all goods financed out of the proceeds of the Credit to be used exclusively in the carrying out of the Project. ARTICLE IV Particular Covenants SECTION 4.01. The Borrower shall cause the Project to be carried out with due diligence and efficiency and in con- formity with ound engineering, railway and financial practices. SECTION 4.02. The Borrower shall enter into a Subsidiary Loan Agreement with the R6gie, satisfactory to the Associ- ation, which shall provide for the relending of the proceeds of the (redit or the e(Iiuivalent thereof by the Borrower to the R'gie and shall contain appropriate provisions with respect to the financing and carrying out of the Project and other obligations of the Borrower and the Regie under the Development Credit Agreement and the Project Agreement. Except as the Association shall otherwise agree, the Bor- rower shall not amend, assign, abrogate or waive any provision of the Subsidiary Loan Agreement. SECTION 4.03. (a) The Borrower shall at all times make available to the Regie, promptly as needed, all funds, facili- ties, services and other resources which shall be required for the carrying out of the Project. (b) The Borrower shall cause the Regie punctually to perform all its obligations under the Project Agreement, shall take all action which shall be necessary on its part to 9 enable the Regie to perform such obligations and shall not take or permit any action to be taken that would interfere with the performance of such obligations by the Regie. SECTION 4.04. (a) The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, each of them shall furnish to the other all such information as it shall reason- ably request with regard to the general status of the Credit. On the part of the Borrower, such information shall include information with respect to financial and economic con- ditions in the territories of the Borrower and the inter- national balance of payments position of the Borrower. (b) The Borrower and the Association shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Credit and the maintenance of the service thereof. The Borrower shall promptly inform the Association of any condition which interferes with, or threatens to interfere with, the accom- plishment of the purposes of the Credit or the maintenance of the service thereof. (c) The Borrower shall afford all reasonable opportunity for accredited representatives of the Association to visit any part of the territories of the Borrower for purposes related to the Credit. SECTION 4.05. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes, and free from all restrictions, imposed under the laws of the Borrower or laws in effect in its territories. SECTION 4.06. The Development Credit Agreement and the Project Agreement shall be free from any taxes that shall be imposed under the laws of the Borrower or laws in effect in its territories on or in connection with the exe- cution, delivery or registration thereof. 10 SECTIOx 4.07. (a) The Borrower shall from time to time take or cause to be taken such steps (including, but without limitation, adjustments in the rates and fares of the R6gie) as shall be required to provide the Regie with revenues sufficient, by such date or dates as shall be agreed upon between the Borrower, the Association and the R6gie: (i) to ensure a reasonable return on the Regie's net fixed assets, after covering all operating expenses, including ade- quate maintenance and depreciation; and (ii) to enable the Regie, out of its cash resources, to meet debt interest and amortization, to establish and maintain adequate working capital, aiid to fiiiance a material part of its capital expendi- tures. (b) Without prejudice to the provisions of paragraph (a) of Section 4.03 of this Agreement, the Borrower shall make arra: -ements, satisfactory to the Association, promptly to provide the Regie or cause the Regie to be provided, during such time as the R6gie's revenues shall be insufficient to meet the items in paragraph (a) (ii) of this Section, with funds sufficient to meet such items. SECTION 4.08. The Borrower shall take or cause the Regie to take such action as shall be reasonable in the circum- stances to facilitate railway operations between its terri- tories and the territories of the Republic of Mali, in accord- ance with the International Traffic Agreement, the Customs Agreement and the Railway Convention. ARTICLE V Remedies of the Association SECTION 5.01. (i) If any event specified in paragraph (a) or paragraph (c) of Section 5.02 of the Regulations shall occur and shall continue for a period of thirty days, or (ii) if any event specified in paragraph (b) of Section 5.02 of the Regulations or in paragraphs (a), (b) or (c) of Section 5.02 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower, then at any 11 subsequent time during the continuance thereof the Associ- ation, at its option, may declare the principal of the Credit then outstanding to be due and payable immediately, and upon any such declaration such principal shall become due and payable immediately, anything i1 the Development Credit Agreement to the contrary iotwi%hstanding. SECTION 5.02. Pursuant to paragraph (j) of Section 5.02 of the Regulations, the following are specified as additional events for the purposes of said Section: (a) The Regie shall have failed to perform any of its covenants or agreements under the Project Agreement; (b) The International Traffic Agreement, the Customs Agreement, the Railway Convention or the Statutes shall have been amended, suspended, waived, terminated or repealed so as to affect adversely the ability of the Borrov er or the R6gie to carry out the covenants or agreements set forth in this Agreement or in the Project Agreement; (c) Railway traffic between the territories of the Bor- rower and the territories of the Republic of Mali shall have been substantially interrupted for other than technical reasons, unless such reasons shall be manifestly beyond the Borrower's control; (d) The right of the Republic of Mali to make with- drawals under the Mali Development Credit Agreement shall have been suspended or terminated in whole or in part and as a result thereof, it will be improbable that the pur- pose of the Project will be achieved; and (e) Failure by the Borrower to fulfill an obligation to make payment of principal or interest or any other payment required under this Development Credit Agreement or under any other development credit agreement between the Borrower and the Association or under any loan agreement or guarantee agreement between the Borrower and the Bank or under any bond delivered pursuant to any such agreement even though payment has been made by other persons. 12 ARTICLE VI Effective Date; Termination SECTION 6.01. The following events are specified as additional conditions to the effectiveness of this Develop- ment Credit Agreement within the meaning of Section 8.01 (b) of the Regulations: (a) That either concurrently with or prior to the Devel- opment Credit Agreement becoming effective, the Project Agreement, the Subsidiary Loan Agreement and the Mali Development Credit Agreement shall become or shall have become effective and constitute valid and binding obligations of the respective parties to those agreements in accordance with their respective terms; and (b) That arrangements, satisfactory to the Association, shall have been made with respect to the employment by the Regie of the consultants and technicians referred to in Section 2.03 of the Project Agreement. SECTION 6.02. The following are specified as additional matters, within the meaning of Section 8.02 (b) of the Regulations, to be included in the opinion or opinions to be furnished to the Association: (a) That the Project Agreement has been duly author- ized or ratified by, and executed and delivered on behalf of, the R'gie, that all acts, consents and approvals necessary therefor have been duly and validly performhed or givell, and that such Project Agreement coi]stitutes a valid and binding olligation of the Rgie iii accordance with its terms; and (b) That the Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the parties thereto, that all acts, consents and approvals necessary therefor have been duly and validly performed or given, and that such Subsidiary Loan Agree- ment constitutes a valid and binding obligation of the parties thereto in accordance with its terms. 13 SECTION 6.03. If this Development Credit Agreement shall not have come into force and effect by January 1, 1967, this Development Credit Agreement and all obligations of the parties hereunder shall terminate, unless the Associ- ation, after consideration of the reasons for the delay, establishes a later date for purposes of this Section. The Association shall promptly notify the Borrower and the Regie of such later date. SECTION 6.04. Upon termination of the Project Agree- ment in accordance with its terms, the obligations of the Borrower under Sections 4.01, 4.02, 4.03, 4.07 and 4.08 of this Agreement shall forthwith terminate. ARTICIQ4 VII Miscellaneous SECTION 7.01. The Closing Date shall be June 30, 1970 or such other date as may from time to time be agreed between the Borrower and the Association. SECTION 7.02. The following addresses are specified for the purposes of Section 7.01 of the Regulations: For the Borrower: Ministire du Plan et du D6veloppement Dakar Senegal Alternative address for cables and radiograms: Ministere Plan Dakar For the Association: International Development Association 1818 H Street, N.W. Washington, D. C. 20433 United States of America 14 Alternative address for cables and radiograms: Indevas Washington, D. C. SECTION 7.03. The Ministre du Plan et du Developpement of the Borrower is designated for the purposes of Section 7.03 of the Regulations. SECTION 7.04. The Borrower irrevocably designates the R6gie for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.03 of this Agreement and Article IV of the Regulations. IN WITNESS WHEREOF the parties hereto acting through their representatives thereunto duly authorized, have caused this Development Credit Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF SENEGAL By s/ H. THIAM Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By s/ GEORGE D. WOODS President 15 SCHEDULE Description of the Project The Project consists of the major part of the Investment Plan. The purpose of the Project is to rehabilitate and modernize the Railways, to improve their safety and increase their capacity to meet higher levels of traffic and to permit them to operate more efficiently, and to achieve and maintain a sound financial position, taking into account the complementary nature of the Senegal and Mali railway systems. The Project includes: 1. The relaying with 36 kg/m rails of the Khombole- Guinguineo-Kaolack line (approximately 130 km); the com- pletion of the doubling of the Dakar-Thibs line and the construction of the Dagoudane-Pikine marshalling yard (approximately 18 km); and the welding and ballasting of approximately 147 km of other lines. 2. The acquisition and operation of 8 main-line loco- motives, 3 shunting locomotives, 5 railcars, 14 trailers, 16 gangears and 1 breakdown crane; the acquisition of com- ponent parts for about 100 freight cars and the assembly of such freight cars; the acquisition of adequate spare parts and of adequate workshop, track maintenance, signalling and other related equipment. 3. The employment of consultants and technicians to assist the Regie in improving its operations and adminis- tration.