Tanzania - Second Highway Project - Credit Agreement : Credit 0142 - 2 - Conformed

Dctdopment Zredit agreement (Tan-Zam Highway Project) BETWEEN KINGDOM OF SWEDEN AND UNITED REPUBLIC OF TANZANIA DATED FEBRUARY 24, 1969 f)t'dopment Eredit agreement (Tan-Zam Highway Project) BETWEEN KINGDOM OF SWEDEN AND UNITED REPUBLIC OF TANZANIA DATED FEBRUARY 24, 1969 Bctclopment Credit 3gretment (Tan-Zam Highway Project) between the KINGDOM OF SWEDEN and the UNITED REPUBLIC of TANZANIA (hereinafter called the Agreement). The Kingdom of Sweden and the United Republic of Tanzania, desiring to strengthen the traditional cooperation and cordial rela- tions between the two countries, have agreed that as a contribu- tion to the economic and social development of Tanzania, the Kingdom of Sweden (hereinafter called the Lender) shall extend to the United Republic of Tanzania (hereinafter called the Bor- rower) a development credit (hereinafter called the Swedish Credit) to assist in the financing of the reconstruction of the Morogoro-lyayi section of the Tan-Zam Highway (hereinafter called the Project). The Borrower has entered into a development credit agreement of even date (hereinafter called the Association Agreement) with the International Development Association (hereinafter called the Association) with regard to further assistance towards the financing of the Project. The Borrower has also entered into a loan agreement of even date (hereinafter called the Bank Agreement) with the Inter- national Bank for Reconstruction and Development (hereinafter called the Bank) with regard to further assistance towards financ- ing the Project. The Lender, the Borrower, the Association and the Bank have also entered into an agreement of even date (hereinafter called the Disbursement Agreement) in respect of the allocation and disbursement of the proceeds of financing under the aforemen- tioned agreements. 4 ARTICLE I The Swedish Credit 1. The Lender shall make available to the Borrower a develop- ment credit in an amount of seventy-eight million Swedish Kronor (SKr 78,000,000) subject to the provisions of the Agree- ment, of which the attached Annex forms an integral part, and to such other provisions as may be agreed upon between the Parties. 2. The Credit shall be available for withdrawal in an amount of SKr 39,000,000 on the effective date of the Agreement and in its entirety on July 1, 1970. ARTICLE II Use of the Proceeds of the Swedish Credit 1. The Borrower shall use the proceeds of the Swedish Credit, in accordance with this Agreement and the Disbursement Agree- ment, to assist, jointly with the loan and the credit provided for under the Bank and the Association Agreements, respectively, exclusively in i1nancing the Project as described in Schedule 1 to the Agreement. 2. The specific allocation of the proceeds of the Swedish Credit and the provisions for changes in such allocation are set forth in the Disbursement Agreement. 3. The Borrower shall cause the goods and services financed out of the proceeds of the Swedish Credit to be used exclusively in the carrying out of the Project. ARTICLE III The Special Account 1. The amount to be made available in accordance with Article I shall be paid by the Lender, as required to meet requests by the 5 Borrower for withdrawals, to the credit of an account in Swedish Kronor opened in the books of the Sveriges Riksbank, Stockholm, acting as agent for the Lender. The account, which shall be held in favour of the Borrower, shall be denominated "Government of Tanzania, Special Account No. 4" (hereinafter called the Special Account). ARTICLE IV Withdrawal from the Special Account 1. The Borrower or its designated agent shall be entitled, subject to the provisions of this Agreement, the Disbursement Agreement and such other provisions as may be agreed upon between the Parties, to withdraw from the Special Account such proportion of the reasonable cost of goods and services required for the Project and to be financed by the Lender, the Bank and the Asso- ciation as agreed in accordance with the terms of the Disbursement * Agreement. 2. If for purposes of financing the Project a currency other than Swedish Kronor shall be required and if a request shall be made to withdraw any proceeds of the Swedish Credit in such other currency, the Sveriges Riksbank shall remit the requested foreign currency amount and shall debit the Special Account with the Swedish Kronor equivalent of such amount calculated on the basis of the current market selling rate, or if no such current rate applies, such rate as may be reasonably determined by the Lender. 3. No withdrawals shall be made on account of expenditures made before the date of signature of the Agreement. The closing date for withdrawals shall be December 31, 1972 or such other date as may be agreed upon between the Parties. ARTICLE V Service of the Swedish Credit 1. The Borrower shall pay to the Lender a service charge at the rate of three-fourths of one percent ( of 1%) per annum on 6 the principal amount of the Swedish Credit withdrawn from the Special Account and outstanding from time to time. The service charge shall be payable semi-annually on March 1 and September 1 each year. The service charge shall be computed on the basis of a 360-day year of twelve 30-day months. 2. The Boriower shall repay to the Lender the principal of the Swedish Credit withdrawn from the Special Account in semi- annual instalments payable on March 1 and September 1 com- mencing March 1, 1979 and ending September 1, 2018, each instalment to and including the instalment payable on September 1, 1988 to be one-half of one per cent (1/2 of 1%) of such principal amount and each instalment thereafter to be one and one-half per cent (112%) of such principal amount. The Bor- rower shall have the right to repay in advance of maturity all or any part of the principal amount of one or more maturities of the Swedish Credit specified by the Borrower. 3. The principal of and service charge on the Swedish Credit shall be paid by the Borrower in Swedish Kronor to the Sveriges Riksbank in favour of the Lender. 4. The principal of and service charge on the Swedish Credit shall be paid without deduction for, and free from, any taxes and .charges and free from all restrictions imposed under the laws of the Borrower or laws in effect in its territories. ARTICLE VI Particular Covenants 1. The Borrower shall carry out and maintain the Project with due diligence and efficiency and in conformity with sound engi- neering, administrative and financial practices. 2. The Borrower shall at all times make or cause to be made available, promptly as needed, all funds, facilities, services and other resources required for carrying out and maintaining the Project. 3. The Borrower shall maintain or cause to be maintained records adequate to identify the goods and services jointly financed out of the proceeds of the Swedish Credit as well as the loan and the credit provided for under the Bank and Association Agree- ments, to disclose the use thereof in the Project, and to record the progress of the Project (including the cost thereof). 4. The Borrower and the Lender shall cooperate fully to ensure that the purpose of the Swedish Credit will be accomplished. To that end, each of them shall furnish or cause to be furnished to the other all such information as it shall reasonably request with regard to the Swedish Credit. The information to be pro- vided by the Borrower to the Lender shall include the following documents and reports regarding the Project, namely, progress reports, analysis of bids, recommendations for award, contract documents and construction schedules. The Borrower shall fur- thermore promptly inform the Lender of any condition which interferes with, or threatens to interfere with, the accomplishment of the purpose of the Swedish Credit or the service thereof. 5. The Borrower shall afford all reasonable opportunity for accredited representatives of the Lender to visit any part of the territories of the Borrower for purposes related to the Swedish Credit and to inspect all relevant goods, works, records and documents. 6. Except as the Lender shall otherwise agree, the Borrower shall cause the goods and services financed out of the proceeds of the Swedish Credit to be procured through international competitive bidding in accordance with methods and procedures satisfactory to the Lender. The bidding procedures shall, inter alia, afford Swedish suppliers adequate opportunities of bidding for the goods 8 and services to be financed in connection with the Project, and no less favourable treatment than that accorded to suppliers from other countries. ARTICLE VII Miscellaneous 1. The Borrower shall furnish to the Lender evidence of the authority of the person or persons who will, on behalf of the Borrower, take any action or execute any document under the Agreement, and the authenticated specimen signature of each such person. 2. Any notice or request under the Agreement and any agreement between the Parties contemplated by the Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when delivered through diplomatic channels. ARTICLE VIII Effective Date; Termination 1. The Agreement shall become effective after it has been signed by duly authorized representatives of the Parties and concurrently with the Bank and Association Agreements becoming effective. 2. The Agreement and all obligations of the Parties hereunder, except those set forth in Article V and in the Annex, shall termi- nate on a date 25 years after the date of the Agreement or the date upon which both Parties shall have fulfilled all obligations, including those set forth in Article V, arising from the Agreement, whichever shall be the earlier. IN WITNESS WHEREOF, The Kingdom of Sweden and the United Republic of Tanzania, acting through their representatives there- 9 unto duly authorized, have caused the Agreement to be signed. Done in the District of Columbia, United States of America, on the 24th day of February, 1969, in two original copies in English. For the For the KINGDOM OF SWEDEN UNITED REPUBLIC OF TANZANIA /s/ HUBERT DE BESCHE /s/ G. M. RUTABANZIBWA S 10 SCHEDULE 1 Description of Project The Project consists of the following: (1) The reconstruction to two-lane asphalt paved standard and the partial realignment of the Morogoro-Iyayi section of the Tan-Zam Highway, including the installation of one weigh bridge for use in connection with such road section; and (2) The provision of consultants' services for the engineering supervision of the above works. The Project is expected to be completed by the end of 1971. ANNEX The following provisions shall govern the rights and obligations under the Agreement, of which they are considered an integral part with the same force and effect as if they were fully set forth therein. Paragraph 1: Cancellation and suspension The Borrower may by notice to the Lender cancel any amount of the Swedish Credit which the Borrower shall not have with- drawn prior to the giving of such notice. If any of the following events shall have happened and be con- tinuing, the Lender may by notice to the Borrower suspend, in whole or in part, the right of the Borrower to make withdrawals from the Special Account: (a) A default shall have occurred in the payment of principal or service charge under the Agreement or in the payment of principal, service charge or intere,t Lnder any other financial commitment entered into by the Borrower in relation to the Lender. (b) The Borrower shall have failed to meet any other obliga- tion under the Agreement and shall not have rectified such failure after notice by the Lender. (c) An extraordinary situation shall have arisen which shall make it improbable that the Dorrower will be able to perform its obligations under the Agreement. (d) The right of the Borrower to withdraw the proceeds of the Loan provided for in the Bank Agreement and/or of the Credit provided for under the Association Agree- ment shall have been suspended or terminated, in whole or in part. (e) The outstanding principal of the Loan provided for in the Bank Agreement and/or the outstanding principal 12 of the Credit provided for under the Association Agree- ment shall have been declared, or become, due and pay- able in advance of the agreed maturity thereof. (f) The Borrower shall have cancelled any part of the Loan provided for in the Bank Agreement and/or the Credit provided for in the Association Agreement without the Borrower's having cancelled a corresponding proportion of the Swedish Credit. The right of the Borrower to make withdrawals from the Special Account shall continue to be suspended in whole or in part, as the case may be, until the event or events which gave rise to such suspension shall have ceased to exist or until the Lender shall have notified the Borrower that the right to make withdrawals has been restored, whichever is the earlier; provided, however, that in the case of any such notice of restoration, the right to make withdrawals shall be restored only to the extent and subject to the conditions specified in such notice, and no such notice shall affect or impair any rights, power or remedy of the Lender in respect of any other or subsequent event described in this Paragraph. If (a) the right of the Borrower to make withdrawals from the Special Account shall have been suspended with respect to any amount of the Swedish Credit for a continuous period of thirty days, or (b) by the date specified in Article IV, Section 3, of the Agreement as the closing date an amount of the Swedish Credit shall remain unwithdrawn from the Special Account, the Lender may by notice to the Borrower terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice such amount of the Swedish Credit shall be cancelled. The Parties are providing in a separate Exchange of Letters for cancellation of the Swedish Credit in case of partial replacement of the financing facilities offered under the Swedish Credit. 13 Notwithstanding any cancellation or suspension all the provisions of the Agreement shall continue in full force and effect except as in this Paragraph specifically provided. Paragraph 2: Remedies of the Lender If any event specified in sub-paragraphs (a), (d) or (f) of Paragraph 1 shall occur and shall continue for a period of thirty days, or if any event specified in sub-paragraphs (b) or (c) of Paragraph 1 shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Lender to the Borrower, or if the event specified in sub-paragraph (e) of Paragraph 1 shall occur, then at any subsequent time the Lender, at his option, may declare the principal of the Swedish Credit then outstanding to be due and payable immediately, and upon any such declaration such principal shall become due and payable immediately, anything in the Agreement to the contrary not- withstanding. Paragraph 3: Failure to Exercise Rights No delay in exercising, or omission to exercise any right, power or remedy accruing to either Party under the Agreement upon any default shall impair any such right, power or remedy or be construed to be a waiver thereof or an acquiescence in such default; nor shall the action of such Party in respect of any de- fault, or any acquiescence in any default, affect or impair any right, power or remedy of such Party in respect of any other or subsequent default. Paragraph 4: Arbitration (a) Any controversy between the Parties to the Agreement and any claim by either Party against the other arising under the Agreement which cannot be settled in a satis- factory manner through diplomatic channels, within six months, shall at the request of either Party be submitted 14 to arbitration by an Arbitral Tribunal as hereinafter provided. (b) The Parties to such arbitration shall be the Lender and the Borrower. (c) The Arbitral Tribunal shall consist of three arbitrators appointed as follows: one arbitrator shall be appointed by the Lender; a second arbitrator shall be appointed by the Borrower; and the third arbitrator (hereinafter called the presiding arbitrator) shall be appointed by agreement of the Parties or, if they shall not agree, by the President of the International Court of Justice or failing appoint- ment by him, by the Secretary General of the United Nations. If either of the Parties shall fail to appoint an arbitrator, such arbitrator shall be appointed by the pre- siding arbitrator. In case any arbitrator appointed in accordance with this Paragraph shall resign, die or become unable to act, a successor arbitrator shall be appointed in the same manner as herein prescribed for the appointment of the original arbitrator and such successor shall have all the powers and duties of such original arbitrator. (d) Arbitration proceedings may be instituted under this Para- graph upon notice by the Party instituting such proceed- ing to the other Party. Such notice shall contain a state- ment setting forth the nature of the controversy or claim to be submitted to arbitration, the nature of the relief sought, and the name of the arbitrator appointed by the Party instituting such proceeding. Within thirty days after the giving of such notice, the adverse Party shall notify the Party instituting the proceeding of the name of the arbitrator appointed by such adverse Party. (e) If, within sixty days after the giving of such notice insti- tuting the arbitration proceeding, the Parties shall not have agreed upon a presiding arbitrator, either Party 15 may request the appointment of a presiding arbitrator as provided in subparagraph (c) of this Paragraph. (f) The Arbitral Tribunal shall convene at such time and place as shall be fixed by the presiding arbitrator. There- after, the Arbitral Tribunal shall determine where and when it shall sit. (g) Subject to the provisions of this Paragraph and except as the Parties shall otherwise agree, the Arbitral Tribunal shall decide all questions relating to its competence and shall determine its procedure. All decisions of the Arbitral Tribunal shall be by majority vote. (h) The Arbitral Tribunal shall afford to the Parties a fair hearing and shall render its award in writing. Such award may be rendered by default. An award signed by a major- ity of the Arbitral Tribunal shall constitute the award of such Tribunal. A signed counterpart of the award shall be transmitted to each Party. Any such award rendered in accordance with the provisions of this Paragraph shall be final and binding upon the Parties to the Agreement. Each Party shall abide by and comply with any such award rendered by the Arbitral Tribunal in accordance with the provisions of this Paragraph. (i) The provisions for arbitration set forth in this Paragraph shall be in lieu of any other procedure for the determi- nation of controversies between the Parties to the Agree- ment and any claims by either Party against the other Party arising thereunder. (j) Service of any notice or process in connection with any proceeding under this Paragraph or in connection with any proceeding to enforce any award rendered pursuant to this Paragraph shall be made through diplomatic channels.