Conformed Copy - C2916 - Ecodevelopment Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2916 IN GEF TRUST FUND GRANT NUMBER TF028479 IN Project Agreement (Ecodevelopment Project) among INTERNATIONAL DEVELOPMENT ASSOCIATION and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT acting as an Implementing Agency of the Global Environment Facility and STATE OF BIHAR STATE OF GUJARAT STATE OF KARNATAKA STATE OF KERALA STATE OF MADHYA PRADESH STATE OF RAJASTHAN STATE OF WEST BENGAL Dated September 30, 1996 CREDIT NUMBER 2916 IN GEF TRUST FUND GRANT NUMBER TF028479 IN PROJECT AGREEMENT AGREEMENT, dated September 30, 1996, among INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) acting as an implementing agency of the Global Environment Facility (GEF) and the STATES OF BIHAR, GUJARAT, KARNATAKA, KERALA, MADHYA PRADESH, RAJASTHAN AND WEST BENGAL (the Project States). WHEREAS (A) by the Development Credit Agreement of even date here- with between India (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to nineteen million five hundred thousand Special Drawing Rights (SDR 19,500,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that the Project States agree to undertake such obligations toward the Associa- tion as are set forth in the Development Credit Agreement and in this Page 2 Agreement; (B) by the Global Environment Facility Trust Fund Grant Agreement (Grant Agreement) of even date herewith between India (the Recipient) and the International Bank for Reconstruction and Development (the Bank) acting as an implementing agency of the Global Environment Facility (GEF), the Bank has agreed to make available to the Recipient an amount in various currencies equivalent to thirteen million nine hundred thousand Special Drawing Rights (SDR 13,900,000) (the Grant) on the terms and conditions set forth in the Grant Agreement; (C) parts A, B, C and D of the Project will be carried out by the States of Bihar, Gujarat, Karnataka, Kerala, Madhya Pradesh, Rajasthan and West Bengal (hereinafter called the Project States) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to the Project States part of the proceeds of the Credit, and part of the proceeds of the Grant, as provided in this Agreement; WHEREAS the Project States, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, and the Bank entering into the Grant Agreement with the Recipient, have agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the Development Credit Agreement, the Grant 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) Each of the Project States declares its commit- ment 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, B, C and D of the Project through its Forest Department with due diligence and efficiency and in conformity with appropriate admini- strative, financial and environmental practices, under the overall coordination of MOEF, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for Parts A, B, C and D of the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Association, the Bank and the Project States shall otherwise agree, each of the Project States shall carry out Parts A, B, C and D of the Project in accordance with the Implementation Program set forth in the Schedule to this Agreement. Section 2.02. Except as the Association and the Bank shall other- wise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Credit and the Grant shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. Section 2.03. (a) Each of the Project States shall carry out the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions applicable to the Development Credit Agree- ment, and in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of the General Conditions applicable to the Loan and Guarantee Agreements (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 and Parts A, B, C and D of the Project. (b) For the purposes of Section 9.07 of the General Conditions, and without limitations thereto, each of the Project States shall Page 3 prepare and furnish to the Association and the Bank, not later than six (6) months after the Closing Date or such later date as may be agreed for this purpose between the Association and the Bank and each of the Project States, a plan satisfactory to the Association and the Bank for the future operation of Parts A, B, C and D of the Project. Section 2.04. (a) Each of the Project States shall, at the request of the Association and the Bank, exchange views with the Association and the Bank with regard to the progress of Parts A, B, C and D of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit and the Grant. (b) Each of the Project States shall promptly inform the Asso- ciation and the Bank of any condition which interferes or threatens to interfere with the progress of Parts A, B, C and D of the Project, the accomplishment of the purposes of the Credit and the Grant, or the performance by such Project State of its obligations under this Agree- ment. ARTICLE III Financial Covenants Section 3.01. (a) Each of the Project States shall maintain records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of Parts A, B, C and D of the Project of the departments or agencies of such Project State responsible for carrying out Parts A, B, C and D of the Project. (b) Each of the Project States 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 con- sistently applied, by independent auditors acceptable to the Association and the Bank; (ii) furnish to the Association and the Bank as soon as available, but in any case not later than nine 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 Association and the Bank shall have reasonably requested; and (iii) furnish to the Association and the Bank such other information concerning said records, accounts and financial statements as well as the audit thereof, as the Association and 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 Development Credit Agreement and the Grant Agreement become effective. Section 4.02. (a) This Agreement and all obligations of the Association and the Bank and each of the Project States thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement and the Grant Agreement shall terminate in accordance with their terms; or (ii) the date twenty (20) years after the date of this Agreement. (b) If the Development Credit Agreement or the Grant Agreement Page 4 terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association and the Bank shall promptly notify each of the Project States of this event. 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 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 Bank: International Bank for Reconstruction and Development 1818 H Street N.W Washington, D.C. 20433 United States of America Cable Address: Telex: INTBAFRAD 197688 (TRT), Washington, D.C. 248423 (RCA), 64145 (WUI) or 82987 (FTCC) For Bihar: Chief Secretary Government of Bihar Patna Bihar, India For Gujarat: Chief Secretary Government of Gujarat Gandhinagar, Gujarat, India For Karnataka: Chief Secretary Government of Karnataka Bangalore Karnataka, India Page 5 For Kerala: Chief Secretary Government of Kerala Trivandrum, Kerala, India For Madhya Pradesh: Chief Secretary Government of Madhya Pradesh Bhopal, Madhya Pradesh, India For Rajasthan: Chief Secretary Government of Rajasthan Jaipur Rajasthan, India For West Bengal: Chief Secretary Government of West Bengal Calcutta West Bengal, India 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 any of the Project States may be taken or executed by its Chief Secretary or such other person or persons as such State shall designate in writing, and each Project State shall furnish to the Association and the Bank sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 5.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instru- ment. Section 5.04. As long as the Bank has not given notice to the contrary to the Project States, and so long as the Development Credit Agreement shall not have terminated prior to the termination of the Grant Agreement: (a) the obligation of the Project States to consult with, and furnish information, documents, plans, reports, records and statements to the Bank shall be satisfied to the extent performance in respect of such obligations is rendered to the Association; (b) the obligations of the Bank to consult with, and to furnish information to the Project States shall be satisfied to the extent such obligations are satisfied by the Association; and (c) all actions taken (including giving of approvals or granting of waivers) by the Association pursuant to the Development Credit Agreement shall be deemed to be taken pursuant to both the Development Credit Agreement and the Grant Agreement, and in the name and on behalf of the Association and the Bank. 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 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT acting as an implementing agency of the Page 6 Global Environment Facility By /s/ Heinz Vergin Acting Regional Vice President South Asia STATE OF BIHAR STATE OF GUJARAT STATE OF KARNATAKA STATE OF KERALA STATE OF MADHYA PRADESH STATE OF RAJASTHAN STATE OF WEST BENGAL By /s/ Sudhakar Rao Authorized Representative SCHEDULE Implementation Program 1. To assist in the implementation of Parts A, B, C, and D of the Project, each of the Project States shall: (a) fill, not later than July 31, 1997, all the permanent positions required for the Project, in accordance with a staff plan agreed with the Association and the Bank; and (b) ensure that no more than 33% of the senior executive field staff of the PAs, under normal circumstances, are transferred in one year during the Project implementation period. 2. To ensure that the PAs benefit from the training of recipients of degree fellowship and overseas training under the Project, each Project State shall take the necessary action for (i) selecting fellowship and overseas training recipients from staff who would have, at least, five years to retirement, except under circumstances acceptable to the Association; and (ii) placing such fellowship and overseas training recipients in job positions where they could make full use of their training for a minimum of three years following completion of such training. 3. Each of the Project States shall plan and implement the PA manage- ment activities under Part A of the Project in accordance with guide- lines and procedures agreed with the Association and the Bank. 4. Each of the Project States shall: (i) plan and implement the Village Ecodevelopment Program under Part B of the Project in accor- dance with procedures and criteria agreed with the Association and the Bank, (ii) submit the first three proposals under the Ecodevelop- ment Program under Part B of the Project for prior approval by the Association and the Bank, and (iii) adopt, not later than September 30, 1998, government orders satisfactory to the Association and the Bank on village ecodevelopment, consistent with the Project design. 5. (a) The Project States shall, in pursuing the objectives of the Project, not carry out any involuntary resettlement for any people resident within the PAs. (b) Each of the Project States shall ensure that activities outside the scope of the Project shall not undermine (i) effective biodiversity conservation within the PAs, or (ii) implementation of the ecodevelopment strategy under the Project. Activities shall be deemed to undermine effective biodiversity conservation or imple- mentation of the ecodevelopment strategy, if they cause: Page 7 (i) an increase in the level of encroachment into the PA, or displacement of people in and around the PA, that materially and adversely affects the objectives of the Project, without an effective resettlement and rehabilitation program to prevent encroachment and mitigate the effects of displacement; (ii) a disruption of migrations of ecologically important species, such as net loss of wildlife corridors; or (iii) fragmentation or other changes in the legal status of any part of the PA that materially and adversely affects (A) the viability of ecologically important ecosystems and species, or (B) the ecodevelopment strategy of increasing collaboration between local people and PA managers. (c) Any proposals for voluntary relocation of people under Part B (c) (ii) of the Project shall be prepared and implemented in accordance with criteria agreed with the Association and the Bank, and after prior approval of the Association and the Bank. (d) Each of the Project States shall prepare in accordance with procedures and guidelines agreed with the Association and the Bank an indicative list of ecodevelopment investments for people opting to remain within the PAs, and shall include such people in the village ecodevelopment activities under Part B (a), (B) (b) and B (c) (iii) of the Project. (e) Each of the Project States shall prepare and discuss with the Association and the Bank, a plan for encroachment control on the PAs, prior to submitting any plans for voluntary relocation, and shall thereafter implement such encroachment control plan. 6. Each of the Project States shall take all the necessary actions to ensure that the Project activities shall not erode the customary tenure rights over land and other assets of the tribal population in the PAs. 7. The Borrower shall cause each of the Project States, in collaboration with MOEF, to (i) furnish to the Association and the Bank, not later than September 30 of each year, starting September 30, 1997, for the Association and the Bank comments, a preliminary annual work plan, including updated Project cost tables, training and con- tracting plans and other matters as agreed with the Association; and (ii) shall thereafter implement the final work plans taking into account the Association and the Bank comments. 8. Each of the Project States shall, in collaboration with MOEF: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association, and the Bank, the carry- ing out of the Project and the achievement of the objective thereof; (b) prepare, under terms of reference satisfactory to the Association and the Bank, and furnish to the Association and the Bank, not later than March 31, 1999, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objective thereof during the period following such date; and (c) review with the Association and the Bank, by June 30, 1999, or such later date as the Association and the Bank shall request, the report referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Association and the Bank views on the matter. Page 8 9. Each of the Project States shall select the NGOs participating in implementation of Parts A, B, C and D of the Project in accordance with criteria agreed with the Association and the Bank.