Malagasy - Road Project : Credit 0090 - Credit Agreement - Conformed

CREDIT NUMBER 90 MAG Development Credit Agreement (Roai Project) BETWEEN * MALAGASY REPUBLIC AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED AUGUST 2, 1966 CREDIT NUMBER 90 MAG Development Credit Agreement (Road Project) BETWEEN MALAGASY REPUBLIC AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED AUGUST 2, 1966 AGREEMENT, dated August 2, 1966 between the MALAGASY REPUBLIC (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). ARTICLE I Credit Regulations SECTION 1.01. The parties to this 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 Devel- opment Credit Regulations No. 1 as so modified being here- inafter 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 per cent ('/ of 1%) per annum". (b) Section 3.01 is deleted and the following new Sec- tion is substituted therefor: "SECTION 3.01. Currencies in which Cost of Goods is to be Paid and Proceeds of the Credit are to be Withdrawn.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 (b) The proceeds of the Credit shall be withdrawn from the Credit Account: 4 (i) on account of expenditures in currency of the Borrower or for goods produced in (including services supplied from) the territories of the Borrower, in such currency or currencies as the Association shall from time reasonably select; (ii) in all other cases, in the currency 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 with- drawals shall be made." (c) A new Section 3.04 is inserted immediately after Section 3.03 as follows: "SECTION 3.04. Purchase of Currency of Withdrawal with Other Currency. If withdrawal shall be made in any currency which the Association shall have purchased with another currency for the purpose of such withdrawal, the por- tion of the Credit so withdrawn shall be deemed to have been withdrawn from the Credit Account in such other currency for the purposes of Section 3.03." (d) Section 3.04 is renumbered as Section 3.05. (e) Section 8.04 is deleted. ARTICLE II The Credit SECTION 2.01. The Association agrees to make available to the Borrower, on the terms and conditions in this Agreement set forth or referred to, a development credit in an amount in various currencies equivalent to ten mil- lion dollars ($10,000,000). 5 SECTION 2.02. The Association shall open a Credit Ac- count on its books in the name of the Borrower and shall credit to such Credit Account the amount of the Credit. The amount of the Credit may be withdrawn from the Credit Account as provided in, and subject to the rights of cancellation and suspension set forth in, this Agreement and the Regulations. SECTION 2.03. Except as the Association shall otherwise agree, the Borrower shall be entitled, subject to the pro- visions of this Agreement and of the Regulations, to with- draw from the Credit Account: (a) such amounts as shall be the equivalent of seventy eight per cent (or such other percentage as may from time to time be established by agreement between the Borrower and the Association) of such amounts as shall have been expended for the reasonable cost of goods re- quired to carry out the Project; and (b) if the Association shall so agree, the equivalent of a like percentage of such amounts as shall be required to meet payments to be made for the reasonable cost of such goods; provided, however, that no withdrawals shall be made on account of expenditures prior to June 1, 1965. SECTION 2.04. The Borrower shall pay to the Associa- tion a service charge at the rate of three-fourths of one per cent (3/4 of 1%c) 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 April 15 and October 15 in each year. SECTION 2.06. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable 6 on each April 15 and October 15 commencing October 15, 1976, and ending April 15, 2016 each installment to and including the installment payable on April 15, 1986 to be one-half of one per cent (/ of 1c) of such principal amount, and each installment thereafter to be one and one- half per cent (11 %.) of such principal amount. ARTICLE III Use of Proceeds of the Creiit SECTION 3.01. The Borrower shall cause the proceeds of the Credit to be applied exclasively to financing the cost of goods required to carry out the Project described in the Schedule to this Agreement. The specific goods to be fi- nanced 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 and the Association, subject to modification by further agreement between them. SECTION 3.02. Except as the Borrower and the Associa- tion 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. (a) The Borrower shall carry out or cause the Project to be carried out with due diligence and efficiency and in conformity with sound engineering and financial practices and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Except as the Association shall otherwise agree, the roads included in the Project shall be constructed by 7 contractors satisfactory to the Borrower and the Associa- tion, employed under contracts satisfactory to the Bor- rower and the Association. (c) Except as the Association shall otherwise agree, the Borrower shall, in the carrying out of the Project, employ or cause to be employed engineering consultants acceptable to, and to an extent and upon terms and condi- tions satisfactory to, the Association. (d) The general design standards to be used for the roads included in the Project shall be as determined from time to time by agreement between the Borrower and the Association. (e) The Borrower shall furnish or cause to be fur- nished to the Association, promptly upon their preparation, the plans, specifications, and work schedules for the Project and any material modifications subsequently made therein, in such detail as the Association shall request. (f) The Borrower shall maintain records adequate to identify the goods financed out of the proceeds of the Credit, to disclose the use thereof in the Project and to record the progress of the Project (including the cost thereof) ; shall enable the Association's representatives to inspect the Project, the goods and any relevant records and documents; and shall furnish to the Association all such information as the Association shall reasonably re- quest concerning the ex-enditures of the proceeds of the Credit, the Project and the goods. (g) The Borrower shall furnish to the Association all such information as the Association shall reasonably re- quest with regard to the Borrower's highway development plans and the implementation thereof. SECTION 4.02. (a) The Borrower and the Association shall cooperate fully to assure that the purposes of the 8 Credit will be accomplished. To that end, each of them shall furnish to the other all such information as it shall rea- sonably 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 conditions 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. (c) The Borrower shall promptly inform the Association of any condition which interferes with, or threatens to in- terfere with, the accomplishment of the purposes of the Credit or the maintenance of the service thereof. (d) The Borrower shall afford all reasonable opportu- nity for accredited representatives of the Association to visit any part of the territories of the Borrower for pur- poses related to the Credit. SrCTION 4.03. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories and free from all restric- tions imposed under the laws of the Borrower or laws in effect in its territories. SECTION 4.04. This 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 execution, delivery or registration thereof. SECTION 4.05. The Borrower shall, at all times, ade- quately maintain or cause to be adequately maintained the main roads in its highway system in accordance with sound 9 engineering practices and with due regard to economic requirements. 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 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 subsequent time the Association, 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, any- thing in this Agreement to the contrary notwithstanding. ARTICLE VI Miscellaneous SECTION 6.01. The Closing Date shall be December 31, 1970 or such other date as may from time to time be agreed between the Borrower and the Association. SECTION 6.02. If this Development Credit Agreement shall not have come into force and effect by October 31, 1966, this Development Credit Agreement and all obliga- tions of the parties hereunder shall terminate, unless the Association, after consideration of the reasons for the delay, establishes a later date for purposes of this Section. The Association shall promptly notify the Borrower of such later date. SECTION 6.03. The obligations of the Borrower under Sections 4.01, 4.02 and 4.05 of this Agreement shall termi- nate on the date on which this Agreement shall terminate 10 or on a date twenty-five years after the date of this Agree- ment, whichever shall be the earlier. SECTION 6.04. The following addresses are specified for the purposes of Section 7.01 of the Regulations: For the Borrower: Miiiistre des Finances et du Commerce Tananarive Malagasy Republic Alternative address for cablegrams and radiograms: Ministre Finances Tananarive Malagasy Republic For the Association: terna mal Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Alternative address for cablegrams and radiograms: Indevas Washington, D.C. SECTION 6.05. The Minister of Finance and Commerce of the Borrower is designated for the purposes of Section 7.03 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 11 Columbia, United States of America, as of the day and year first above written. MALAGASY REPUBLIC By R. G. RALISOIT Authorized Represcntative INTERNATIONAL DEVELOPMENT ASSOCIATION By J. BURKE KNAPP Vice President 12 SCHEDULE Description of Project The Project consists of: (a) The engineering, reconstruction, asphalt paving, and supervision of construction of two sections between Km 165 and Andramy, presently totalling 160 kms, of the National Road No. 4 linking Tananarive to Majunga. (b) The final design, including a review of the economic justification, of a section of 13 kms of the National Road No. 4 between Andramy and Boinakely and of the bridge over the Betsiboka River at Boinakely.