India - Ninth Railway Project : Credit 0088 - Credit Agreement - Conformed

CREDIT NUMBER 88 IN Development Credit Agreement (Ninth Railway Project) BETWEEN INDIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 29, 1966 CREDIT NUMBER 88 IN Development Credit Agreement (Ninth Railway Project) BETWEEN 0 INDIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 29, 1966 AGREEMENT, dated June 29, 1966, between INDIA, acting by its President, (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT AssoCIATIoN (hereinafter called the Association). WHEREAS the International Bank for Reconstruction and Development has previously financed the foreign exchange costs of six projects forming a part of the programs for rehabilitation, modernization, expansion and increase in capacity of the railways owned and operated by the Bor- rower and has entered into loan agreements with the Bor- rower dated August 18, 1949; July 12, 1957; September 16, 1958; July 15, 1959; July 29, 1960 and October 13, 1961 providing for such projects; WHEREAS the Association has previously assisted in fi- nancing the foreign exchange costs of two projects forming part of the program included in the Borrower's Third Five- Year Plan, for the rehabilitation, modernization, expansion and increase in the capacity of, and more effective utiliza- tion of, the railways, and has entered into development credit agreements with the Borrower dated March 22, 1963 and October 26, 1964; WHEREAS the Borrower has requested the Association to assist in financing a ninth railway project; and WHEREAS the Association is willing to make a develop- ment credit available for such ninth railway project on the terms and conditions hereinafter provided; Now THEREFORE the parties hereto hereby agree as follows: 4 ARTICLE I Development Credit Regulations; Special Definitions 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, subject, however, to the following modifications thereof (said Development Credit Regulations No. 1 as so modified being hereinafter called the Regulations) with the same force and effect as if they were fully set forth herein: (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 (1/2 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 Credits 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: (i) on account of expenditures in currency of the Borrower or for goods produced in (including serv- ices supplied from) the territories of the Borrower, in such currency or currencies as the Association shall from time to time reasonably select; (ii) in all other cases, in the currency in which the cost of goods financed out of such proceeds has been paid or is payable. 5 (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 after Section 3.03 as follows: "'Section 3.04. Purchase of Cqurrency 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 portion 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. (f) Paragraph 5 of Section 9.01 is amended to read as follows: ''5. The term 'Borrower' means India, acting by its President." Section 1.02. Wherever used in this Dvelopment Credit Agreement, unless the context otherwise requires, the term "Railways" means the railways owned and operated by the Borrower and includes all railway property, equipment and materials of the Borrower. ARTICLE II The Credit SECTION 2.01. The Association agrees to make available to the Borrower, on the terms and conditions in the De- velopment Credit Agreement set forth or referred to, a development credit in an amount in various currencies equivalent to sixty-eight million dollars ($68,000,000). SECTION 2.02. The Association shall open a Credit Ac- count on its books in the name of the Borrower and shall 6 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 cancel- lation and suspension set forth in, the Development Credit Agreement. SECTION 2.03. Except as the Borrower and the Asso- ciation shall otherwise agree: (a) The Borrower shall be entitled, subject to the pro- visions of the Development Credit Agreement, to withdraw from the Credit Account (i) amounts expended for the reasonable cost of goods to be financed out of the proceeds of the Credit, and (ii) if the Association shall so agree, such amounts as shall be required to meet payments to be made for the reason-ble cost of the foregoing. (b) No withdrawals shall be made on account of (i) ex- penditures prior to December 1, 1965, or (ii) expenditures in the currency of the Borrower or for goods produced in (including services supplied from) the territories of the Borrower. SECTION 2.04. The Borrower shall pay to the Associa- tion a service charge at the rate of three-fourth of one per cent (3/4 of 1%) 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 15 and August 15 in each year. SECTION 2.06. 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, 1976 and ending February 15, 2016 each installment to and including the installment payable on February 15, 1986 to be one-half of one per cent ( of 1%) of such principal amount, and each installment thereafter to be one and one- half per cent (1'/2%) of such principal amount. 7 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, described in the Schedule to this Agreement. The specific goods 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 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 imported into and to be used in the territories of the Bor- rower exclusively in the carrying out of the Project. ARTICLE IV Particular Covenants SECTION 4.01. (a) The Borrower shall carry out the Project and conduct the operations of the Railways with due diligence and officiency and in conformity with sound engineering, financial and administrative practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Upon request from time to time by the Association, the Borrower shall promptly furnish or cause to be furnished to the Association the plans, specifications and work schedules for the Project and any material modifi- cations subsequently made therein, in such detail as the Association shall request. (c) The Borrower shall: (i) maintain or cause to be maintained records adequate to identify the goods financed out of the proceeds of the Credit, to disclose the use thereof 8 in the Project, to record the progress of the Project (in- cluding the cost thereof) and to reflect in accordance with consistently maintainpd sound accounting practices the operations and financia. ondition of the agency or agencies of the Borrower responsible for the carrying out of the Project or any part thereof or the operation of the Rail- ways; (ii) enable the Association's representatives to in- spect the Project, the goods, the Railways and any role- vant records and documents; and (iii) furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the expenditure of the proceeds of the Credit, the Project, the goods, and the administration, operations and financial condition of the agency or agencies of the Borrower respon- sible for the carrying out of the Project or any part there- of or the operation of the Railways. SECTION 4.02. (a) The Borrower and the Association shall cooperate fully to assure that the purposes of the Cr(dit 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 in- clude 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, the maintenance of the service thereof and the operations, administration and financial condition of the agency or agencies of the Borrower responsible for the carrying out of the Project or any part 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. 9 (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 4.03. 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 4.04. The Development Credit 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, issue, delivery or registra- tion thereof. 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 sub- sequent time during the continuance thereof the Associa- tion, 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 in this Agreement to the contrary notwithstanding. ARTICLE VI Termination; Miscellaneous SECTION 6.01. If this Development Credit Agreement shall not have come into force and effect by August 15, 1966, 10 the Development Credit Agreement and all obligations of the parties hereunder shall terminate, unless the Associa- tion, 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 6.02. The Closing Date shall be April 30, 1967 or such other date as may from time to time be agreed between the Borrower and the Association. SECTION 6.03. The following addresses are specified for the purposes of Section 7.01 of the Regulations: For the Borrower: The Secretary to the Government of India Ministry of Finance, Department of Economic Affairs New P Thi, India Alternative address for cables and radiograms: Ecofairs New Delhi For the Association: International Development Association 1818 H Street, N.W. Washington, D. C. 20433 United States of America Alternative address for cables and radiograms: Indevas Washington, D. C. SECTION 6.04. A Secretary to the Government of India in the Ministry of Finance is designated for the purposes of Section 7.03 of the Regulations. 11 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 Amerirs, as of the day and year first above written. INDIA By /s/ B. K. NEHRU Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ GEORE D. WOODS President 12 SCHEDULE Description of the Project The Project is the Railways' Program for the modern- ization, expansion and increase in the carrying capacity and effective utilization of the Railways, involving an invest- mo0ut, progr,-ami estimated to cost approxinately $690 million equivalont, (luring the thirteen-month peri.od from Decem- ber 1, 1963 to Deceniber 31, 1966. Such carrying capacity will be increased over such period by approximately 51, from 206 to 216 million originating tons. The Program includes, inter alia, the acquisition of about 90 electric locomotives and 85 diesel locomotives (together equivalent to approximately 420 steam units), 200 steam locomotives, 275 electric multiple units, 30 diesel railcars, 1060 passenger coaches, 33,000 wagons, as well as cranes, equipment for signalling, telecommunications, electrifica- tion, workshops, track, and other railway materials and equipment and services. The Program also includes the establishment of an economic section.