Conformed Copy - C2801 - Orissa Water Resources Consolidation Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2801 IN Project Agreement (Orissa Water Resources Consolidation Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and STATE OF ORISSA Dated January 5, 1996 CREDIT NUMBER 2801 IN PROJECT AGREEMENT AGREEMENT, dated January 5, 1996, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and STATE OF ORISSA (Orissa). WHEREAS (A) the Association has received a letter dated July 11, 1995, from Orissa describing sector reforms that constitute the framework for improving the development of water resources in Orissa including policy, institutional and administrative reforms (hereinafter called the Policy Reform Program), and declaring Orissa's commitment to carry out such Policy Reform Program; (B) by the Development Credit Agreement of even date herewith between India (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to one hundred ninety- four million eight hundred thousand Special Drawing Rights (SDR 194,800,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Orissa agree to undertake such obligations toward the Association as are set forth in the Development Credit Agreement, and in this Agreement; and WHEREAS Orissa, in consideration of the Association's entering into the Development Credit Agreement with the Page 2 Borrower, has 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 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) Orissa declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement, and, to this end, shall carry out the Project through DOWR, with due diligence and efficiency and in conformity with appropriate administrative, financial, and water resource management practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Association and Orissa shall otherwise agree, Orissa shall carry out the Project in accordance with the Implementation Program set forth in Schedule 2 to this Agreement. Section 2.02. 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 1 to this Agreement. Section 2.03. Orissa 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 (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. Section 2.04. (a) Orissa shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit. (b) Orissa shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by Orissa of its obligations under this Agreement. Section 2.05. For the purposes of Section 9.07 of the General Conditions, and without limitation thereto, Orissa shall: (a) prepare, on the basis of guidelines acceptable to the Association, and furnish to the Association not later than six (6) months after the Closing Date or such later date as may be agreed for this purpose between Orissa and the Association, a plan for the future operation of the Project; and (b) afford the Association a reasonable opportunity to exchange views with Orissa on said plan. Page 3 (c) thereafter, carry out said plan with due diligence and efficiency and in accordance with appropriate practices, taking into account the Association's comments thereon. ARTICLE III Financial Covenants Section 3.01. (a) Orissa shall maintain 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 Orissa responsible for carrying out the Project or any part thereof. (b) Orissa shall: (i) have its records and accounts referred to in paragraph (a) of this Section 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 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 shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, accounts and financial statements as well as the audit thereof, as the Association 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 becomes effective. Section 4.02. (a) This Agreement and all obligations of the Association and of Orissa thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) the date twenty (20) years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify Orissa 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 Page 4 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 Orissa: Chief Secretary Government of Orissa Secretariat Bhubaneswar 751001 Orissa, India Telex: 953-6756210 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 Orissa may be taken or executed by its Chief Secretary or such other person or persons as Orissa shall designate in writing, and Orissa shall furnish to the Association 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 instrument. 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 By /s/ Heinz Vergin Acting Regional Vice President South Asia STATE OF ORISSA By /s/ N. Valluri Authorized Representative SCHEDULE 1 Procurement and Consultants' Services Page 5 Section I: Procurement of Goods and Works Part A: General Goods and works shall be procured in accordance with the provisions of Section I of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in January 1995 (the Guidelines) and the following provisions of this Section, as applicable. Part B: International Competitive Bidding 1. Except as otherwise provided in Part C of this Section, goods and works shall be procured under contracts awarded in accordance with the provisions of Section II of the Guidelines and paragraph 5 of Appendix 1 thereto. 2. The following provisions shall apply to goods to be procured under contracts awarded in accordance with the provisions of paragraph 1 of this Part B: (a) Grouping of Contracts To the extent practicable, contract for goods shall be grouped in bid packages estimated to cost $200,000 equivalent or more each. (b) Preference for Domestically Manufactured Goods and Domestic Contractors The provisions of paragraphs 2.54 and 2.55 of the Guidelines and Appendix 2 thereto shall apply to goods manufactured in the territory of the Borrower, and works to be carried out by domestic contractors. Part C: Other Procurement Procedures National Competitive Bidding 1. Except as provided in paragraph 4 below, works for scheme completion under Part A.1 of the Project (except Naraj barrage), and system improvement under Part B.1 of the Project (except Janivilli Anicut) shall be procured under contracts awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines. 2. Except as provided in paragraph 3 below, materials and equipment, including maintenance equipment, estimated to cost $200,000 equivalent or less per contract and $20,000,000 equivalent or less in the aggregate, may be procured under contracts awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines. 3. National Shopping (i) Equipment and materials estimated to cost $25,000 equivalent or less per contract, and $4,500,000 equivalent or less in the aggregate, and (ii) vehicles estimated to cost $100,000 equivalent or less per contract and $2,000,000 equivalent or less in the aggregate, may be procured under contracts awarded on the basis of national shopping procedures in accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. 4. Direct Contracting/Force Account Works which meet the requirements of paragraphs 3.7, 3.8 and 3.15 of the Guidelines, and estimated to cost $20,000 equivalent or less per contract, and $29,900,000 equivalent or less in the aggregate, may, with the Association