Conformed Copy - C2968 - Urban Infrastructure Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2968-MAG Project Agreement (Urban Infrastructure Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and AGENCE D'EXECUTION DES TRAVAUX D'INFRASTRUCTURES PUBLIQUES D'ANTANANARIVO Dated July 14, 1997 CREDIT NUMBER 2968-MAG PROJECT AGREEMENT AGREEMENT, dated July 14, 1997 between the INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and AGENCE D'EXECUTION DES TRAVAUX D'INFRASTRUCTURES PUBLIQUES D'ANTANANARIVO (AGETIPA). WHEREAS (A) by the Development Credit Agreement of even date herewith between Republic of Madagascar (the Borrower) and the Association, the Association has agreed to lend to the Borrower an amount in various currencies equivalent to twenty five million two hundred thousand Special Drawing Rights (SDR 25,200,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that AGETIPA agree to undertake such obligations toward the Association as are set forth in this Agreement; and (B) under a Convention to be entered into between the Borrower and AGETIPA, part of the proceeds of the Credit provided for under the Development Credit Agreement will be made available to AGETIPA on terms and conditions set forth in said Convention; and WHEREAS AGETIPA, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Page 2 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) AGETIPA 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 (other than Part A.2 thereof) with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering, environmental, and technical 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 AGETIPA shall otherwise agree, AGETIPA shall carry out the Project (other than Part A.2 thereof) in accordance with the Implementation Program set forth in Schedule 1 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 3 to the Development Credit Agreement. Section 2.03. AGETIPA 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) in respect of the Project Agreement. Section 2.04. AGETIPA shall duly perform all its obligations under the AGETIPA Convention and the Procedures Manual. Except as the Association shall otherwise agree, AGETIPA shall not take or concur in any action which would have the effect of assigning, amending, abrogating or waiving the AGETIPA Convention, the Procedures Manual or any provision thereof. Section 2.05. (a) AGETIPA 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 under the Convention, and other matters relating to the purposes of the Credit. (b) AGETIPA 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 AGETIPA of its obligations under this Agreement and under the AGETIPA Convention. (c) Without prejudice to the generality of the foregoing, AGETIPA shall participate fully in each annual review referred to in paragraph 2 (b) of Schedule 4 to the Development Credit Agreement and, to this end, shall: (a) furnish to the Borrower and the Association such reports as may be required for that purpose, and in such detail as the Borrower or the Association shall reasonably request, on the progress and status of the Project; and (b) following each such review, act promptly and diligently, in order to take, or assist the Borrower in taking, any corrective action deemed necessary to remedy any shortcoming noted in the implementation of the Project, or to implement, or assist the Borrower in implementing, such other measures as may have been agreed upon between the parties in furtherance of the objectives of the Project. ARTICLE III Management and Operations of AGETIPA Section 3.01. AGETIPA shall carry on its operations and conduct its affairs in accordance with sound administrative, financial engineering, environmental, and technical practices, under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Page 3 Section 3.02. AGETIPA shall at all times operate and maintain its plant, machinery, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound financial, engineering, environmental, and technical practices. Section 3.03. AGETIPA shall take out and maintain with responsible insurers, or make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. (a) AGETIPA shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its operations and financial condition. (b) AGETIPA shall: (i) have its records, accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each semester audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) have its administrative, technical and managerial performance for each semester audited by independent auditors acceptable to the Association, having regard to the provisions of this Agreement, the Development Credit Agreement, the AGETIPA Convention and the Procedures