Loan Agreement CONFORMED COPY LOAN NUMBER 1146 JM INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT THE WATER COMMISSION, KINGSTON, JAMAICA

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1 Public Disclosure Authorized LOAN NUMBER 1146 JM CONFORMED COPY Public Disclosure Authorized Loan Agreement (Kingston Sewerage and Water Supply Project) Public Disclosure Authorized BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND THE WATER COMMISSION, KINGSTON, JAMAICA Public Disclosure Authorized DATED JULY 23, 1975

2 CONFORMED COPY LOAN NUMBER 1146 JM Loan Agreement (Kingston Sewerage and Water Supply Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND THE WATER COMMISSION, KINGSTON, JAMAICA DATED JULY 23, 1975

3 LOAN AGREEMENT AGREEMENT, dated July 23, 1975, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and THE WATER COMMISSION, KINGSTON, JAMAICA (hereinafter called the Borrower). ARTICLE I General Conditicns; Definitions Section The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). Section Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "the Wate Commission, Kingston, Jamaica" or "Borrower" means The Water Commission (Corporate Area) established by the Kingston and Saint Andrew Water Commission Act; (b) "J$" or "Jamaican dollars" means the currency of the Guarantor; and (c) "Prior Loan Agreement" means the Loan Agreement dated May 14, 1969 between the Borrower and the Bank. ARTICLE H The Loan Section The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to fifteen million dollars ($15,000,000). Section (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the

4 4 Bank and the Borrower, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan. (b) On or before each of the semi-annual interest payment dates specified in Section 2.07 of this Agreement, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amounts required to pay, on such date, interest and other charges on the Loan accrued and payable on or before the date set forth, and up to the amount allocated, in Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Bank and the Borrower. Section Except as the Bank shall otherwise agree, the goods, works and services (other than consultants' services) for the Project to be financed out of the proceeds of the Loan shall be procured in accordance with the provisions of Schedule 4 to this Agreement. Section The Closing Date shall be September 30, 1979 or such other date as shall be agreed between the Bank and the Borrower. Section The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section The Borrower shall pay interest at the rate of eight and one-half per cent (8-1/2%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section Interest and other charges shall be payable semi-annually on April 15 and October 15 in each year. Section The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appropri-te engineering, financial and public

5 5 utility practices and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section In order to assist the Borrower in carrying out the Project, the Borrower shall employ engineering and management consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Section (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Bank shall otherwise agree, all goods and services financed out of the proceeds of the Loan shall be used exclusively for the Project until its completion. Section (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Loan, and to disclose the use thereof in the Project; (ii) shall, without limitation upon the provisions of paragraph (c) of this Section, enable the Bank's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning the Project, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. (c) The Borrower shall enable the Bank's representatives to examine all plant, installations, sites, works, buildings, property and equipment of the Borrower and any relevant records and documents. Section The Borrower shall take all such action as shall be necessary to acquire as and when needed all such land, and rights in respect of land (including

6 6 water rights) as shall be required for the construction and operation of the facilities included in the Project and shall furnish to the Bank, promptly after such acquisition, evidence satisfactory to the Bank that such land and rights in respect of land are available for purposes related to the Project. ARTICLE IV Management and Operations of the Borrower Section The Borrower shall at all times manage its affairs, plan the development of its properties and facilities and maintain its financial position in accordance with appropriate administrative, engineering, public utility and financial practices tinder the supervision of experienced and competent management; and shall cause its plant, equipment, properties and facilities to be maintained and all necessary renewals and repairs thereto to be made, all in accordance with appropriate administrative, engineering, public utility and financial practices. Section The Borrower shall take out and maintain with responsible insurers, or make other provision satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section (a) The Borrower shall take all steps necessary to acquire, maintain and renew all rights, powers, privileges and franchises which are necessary or useful in the conduct of its operations. (b) The Borrower shall not sell or otherwise dispose of any of its property or assets which shall be required for the efficient conduct of its operations. ARTICLE V Financial Covenants Section The Borrower shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section The Borrower shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each financial year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of its financial

7 7 statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning the accounts and financial statements of the Borrower and the audit thereof as the Bank shall from time to time reasonably request. Section (a) The Borrower represents that at the date of this Agreement no lien exists on any of its assets as security for any debt except as otherwise currently reported to the Bank or stated in writing. (b) The Borrower undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower as security for any debt, such lien will ipso facto equally and ratably secure the. payment of the principal of, and interest and other charges on, the Loan, and in the creation of any such lien express provision will be made to that effect, at no cost to the Bank; provided, however, that the foregoing provisions of this paragraph shall not apply to: (A) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; or (B) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after the date on which it is originally incurred. Section (a) Except as the Bank shall otherwise agree, the Borrower shall take from time to time all necessary action (including, but not limited to, cost savings and the adjustment and maintenance of rates and charges for its water supply and sewerage services) to.provide revenues and savings sufficient to produce an annual real rate of return on the average value of the Borrower s net fixed assets in operation of at least 1% in the financial year 1976, 2% in the financial years 1977 and 1978, 3% in the financial year 1979 and 4% in the financial year 1980 and thereafter. (b) (i) (ii) For the purposes of paragraph (a) of this Section: "financial year" in relation to any year referred to above means the 12 months period ending March 31 of that year; the annual real rate of return on the average value of the Borrower's net fixed assets in operation shall be calculated on a basis to be determined by the Bank in agreement with the Borrower. Section (a) Except as the Bank shall otherwise agree, the Borrower shall not incur any debt unless the consolidated net revenues of the Borrower

8 8 for the financial year next preceding the date of such incurrence or for a later twelve-month period ended prior to the date of such incurrence, whichever is the greater, shall be not less than 1.5 times the maximum consolidated debt service requirement for any succeeding financial year on all the debt of the Borrower including the debt to be incurred. For the purposes of this Section: (i) (ii) (iii) (iv) (v) the term "debt" means all debt, including debt assumed or guaranteed by the Borrower, except debt incurred in the ordinary course of business and maturing by its terms on demand or less than one year after its incurrence; the term "incur" with reference to any debt includes any modification of the terms of payment of such debt. Debt shall be deemed to be incurred (A) under a contract or loan agreement, on the date such contract or loan agreement providing for such debt is entered into and (B) under a guarantee agreement, on the date the agreement providing for such guarantee is entered into but only to the extent that the underlying debt is outstanding; the term "consolidated net revenues" means gross operating revenues of the Borrower, adjusted to take account of tariffs in effect at the time of the incurrence of debt even though they were not in effect during the entire financial year or twelve-month period to which such revenues relate, less all operating expenses, including adequate maintenance, taxes, if any, and administrative expenses, but before provision for depreciation and debt service requirements; the term "consolidated debt service requirements" means the aggregate amount of amortization (including sinking fund payments, if any), interest and other charges on debt of the Borrower; and whenever it shall be necessary to value in the currency of the Guarantor debt payable in another currency, such valuation shall be made on the basis of the rate of exchange at which such other currency is obtainable by the Borrower, at the time such valuation is made, for the purposes of s-irvicing such debt, or, if such other currency is not obtainable, at the rate of exchange that will be reasonably determined by the Bank.

9 9 (b) Except as the Bank shall otherwise agree, the Borrower shall not make or commit itself during the period ending March 31, 1979 to any capital expenditures, outside those provided in the Project, exceeding in any financial year the aggregate sum of $500,000. ARTICLE VI Other Obligations of the Borrower Section The Borrower shall, within six months after the date of this Agreement, or such other period as shall be agreed between the Borrower and the Bank, prepare a program satisfactory to the Bank for the reorganization of the Borrower's administrative, financial and technical departments including improved office accomodation with due regard to lowering the Borrower's operating costs and promptly thereafter, shall implement said program. Section (a) The Borrower shall, not later than six months after the date of this Agreement, or such other period as shall be agreed between the Borrower and the Bank, prepare a program satisfactory to the Bank for the training of its technical, operating and administrative personnel and promptly thereafter, shall implement said program. (b) The Borrower shall (i) not later than March 31, 1977, or such other date as shall be agreed between the Borrower and the Bank, reduce its accounts receivable balance to a maximum of 2-1/2 months' billing, (ii) within six months of the date of this Agreement, or such other date as shall be agreed between the Borrower and the Bank, establish a system satisfactory to the Bank for discontinuing service to customers whose accounts are in arrears and thereafter maintain said system in operation, (iii) prepare and implement detailed procedures satisfactory to the Bank for billing and collection of amounts due from customers and (iv) take appropriate measures to eliminate unauthorized connections. Section The Borrower shall, not later than one year after the date of this Agreement, or such other period as shall be agreed between the Borrower and the Bank, complete the survey referred to in Part D(4) of the Project. Section The Borrower undertakes to carry out or cause to be carried out the sewer connections, including all necessary internal plumbing and water closets, of all properties falling within the areas included in Part C of the Project and shall submit to the Bank for its approval within nine months of the date

10 I 10 of this Agreement, or such other period as shall be agreed between the Borrower and the Bank, a technical and financial assistance program to owners and occupiers unable to meet the cost of such connections. ARTICLE VII Remedies of the Bank Section For the purposes of Section 6.02 of the General Conditions, the following additional event is specified, namely, a change shall have been made in the Kingston and Saint Andrew Water Commission Act so as to materially and adversely affect the operations or financial condition of the Borrower or the performance by the Borrower of its obligations under this Agreement. Section For the purposes of Section 7.01 of the General Conditions, the following additional event is specified, namely, the event specified in Section 7.01 of this Agreement shall occur. ARTICLE VIII Amendment of Prior Loan Agreement Section Sections 5.07 and 5.08 of the Prior Loan Agreement are hereby amended by deleting said Sections and substituting therefor Sections 5.04 and 5.05 of this Agreement, respectively. ARTICLE IX Effective Date; Termination Section The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01(c) of the General Conditions: (a) the Borrower shall have appointed a qualified full-time Project Manager to supervise the execution of the Project and an adequate number of competent and experienced support staff; (b) the Guarantor shall have made available to the Borrower the funds, and provided to the Bank the plan, referred to in Sections 2.04 and 2.05 of the Guarantee Agreement; and

11 11 (c) the assumption of duty of a full time qualified General Manager designate of the Borrower who will six months thereafter assume full responsibilities as General Manager. Section The date October 21, 1975 is hereby specified for the purposes of Section of the General Conditions. ARTICLE X Addresses Section The following addresses are specified for the purposes of Section of the General Conditions: For the Bank: International Bank for 188Reconstruction and Development 1818 H Street, N.W. Washington, D.C United States of America Cable address: For the Borrower: INTBAFRAD Washington, D.C. The Water Commission Kingston Jamaica Cable address: WATER COMMISSION Kingston, Jamaica IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed

12 12 in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ A. Krieger Regional Vice President Latin America and the Caribbean THE WATER COMMISSION, KINGSTON, JAMAICA By /s/ David Bicknell Authorized Representative

13 13 SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) (a) Pipes and 7,000,000 ) accessories, ) pumps and ) related equip- ) ment including ) equipment for ) wells ) 100% of foreign ) expenditures (b) Pipes and 1,000,000 ) plumbing ) accessories ) for house ) connections ) (2) Civil Works 1,800,000 15% (represent- (including ing the estimated drilling of foreign expendiw ells) ture component) (3) Consultants' 1,250, % of foreign services and expenditures technical assistance (4) Interest and other 2,450,000 Amounts due charges on the Loan accrued on or before October 14, 1978 (5) Unallocated 1,500,000 TOTAL 15,000,000

14 14 2. For the purposes of this Schedule, the term "foreign expenditures" means expenditures for goods or services supplied from, the territory, and in the currency, of any country other than the Guarantor. 3. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Guarantor on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if any event occurs which shall affect the amount of any such taxes included in the cost of any item to be financed out of the proceeds of the Loan, the Bank may, by notice to the Borrower, correspondingly adjust the disbursement percentage then applicable to such item. 4. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of expenditures prior to the date of this Agreement, except that withdrawals may be made in respect of Categories (1), (2) and (3) on account of expenditures incurred after December 1, 1974 in an aggregate amount not exceeding the equivalent of $300, Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph I above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category to the extent required to meet the estimated shortfall proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan.

15 15 SCHEDULE 2 Description of the Project The Project forms part of the Borrower's program to expand and improve the water supply system in the Kingston-St. Andrew area in Jamaica and to provide adequate sewerage services for sections of the Kingston-St. Andrew area. It consists of the following Parts: Part A: Part B: Part C: Part D: The development of additional sources of water in the Kingston-St. Andrew area which will require the construction of (i) a well field near the Tulloch Springs Pumping Station to produce an estimated average yield of about six million gallons per day, including the construction of a pipeline from the well field to the Tulloch Springs Pumping Station; (ii) a well field in the Rio Magno Valley north of the Tulloch Springs Pumping Station to produce an estimated average yield of about six million gallons per day, including the construction of a pipeline to convey water from the well field in the Rio Magno Valley to the Rio Cobre River or any of its tributaries (iii) a number of wells and related connections in the Liguanea Plains to produce an estimated average yield of about four million gallons per day; and (iv) intake works, pumping station and pipeline at Hall's Green to produce about one million gallons per day. The treatment of water and the improvement of the distribution system which will include: (i) the installation of a filtration plant near the Tulloch Springs Pumping Station; (ii) a pumping station at Mona Reservoir and a pumping main to the Hope Filter Plant for the transfer of two million gallons per day; (iii) establishment of pressure zones; (iv) leak detection and repair programs; (v) replacement of defective mains; and (vi) installation of meters or measuring devices at all sources of production. The provision of sewerage services within the Lower Western Sewer District and the Upper Central Sewer District of Kingston-St. Andrew, including plumbing installations, house connections, laterals, street sewers, pumping stations and trunk mains, to convey sewage from the Lower Western Sewer District and Upper Central Sewer District to the Greenwich Treatment Plant. (1) A water resources desk study to (i) evaluate north and south Blue Mountain schemes, the Wag Water scheme, the Linstead Basin scheme,

16 16 and to recommend the next major water scheme; and (ii) prepare a plan and recommendations for the integrated development and allocation of the water resources (including sewage effluent) of the Kingston metropolitan area; (2) A study to determine the potential yield of the water resources of the Linstead Basin; (3) Studies for the stabilization of Hermitage Dam; and (4) Water and sewer connection survey, including (i) an inventory of the number and size of its sewer and water connections, and (ii) the updating of its records of said connections. Part E: The strengthening of the organization, adiinistration and financial practices of the Borrower by: (1) the provision of management advisory services; and (2) the carrying out of a staff training program in administration and in the operation of the Borrower's plant and facilities. The Project is expected to be completed by March 31, 1979.

17 17 SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars) * October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 October 15, ,000 April 15, ,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal.

18 18 Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05(b) of the General Conditions: Time of Prepayment Premium Not more than three 1% years before maturity More than three 2-1/4% years but not more than six years before maturity More than six years 4% but not more than eleven years before maturity More than eleven 5-1/2% years but not more than sixteen years before maturity More than sixteen years 7-1/4% but not more than twenty-three years before maturity More than twenty-three 8-1/2% years before maturity

19 19 SCHEDULE 4 Procurement A. General Procedures 1. Except as stated in paragraph 2 of this Part, contracts for pipes and accessories, pumps and equipment shall be let under procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in April 1972, as revised in October 1972 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. (i) Contracts for civil works (other than for drilling and equipping of wells) shall be awarded on the basis of competitive bidding advertised locally and in accordance with the Borrower's usual procurement procedures. (ii) Contracts for the drilling and equipping of wells included in Part A of the Project may be awarded pursuant to the procedures referred to in sub-paragraph (i) of this paragraph or by direct negotiation with qualified local contractors. B. Evaluation and Comparison of Bids. for Goods; Preference for Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the supply of goods: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for domestically-manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically-supplied goods, shall be excluded; and (iii) the cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. 2. Goods manufactured in Jamaica may be granted a margin of preference in accordance with, and subject to, the following provisions: (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the methods and stages that will be followed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following groups:

20 20 (1) Group A: bids offering goods manufactured in Jamaica if the bidder shall have established to the satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added in Jamaica equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Jamaica. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes on goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evaluated bid of each group. The lowest evaluated bid of each group shall then be compared with each other, and if, as a result of this comparison, a bid from Group A or Group B is the lowest, it shall be selected for the award. (d) If, as a result of the comparison under paragraph (c) above, the lowest bid is a bid from Group C, all Group C bids shall be further compared with the lowest evaluated bid from Group A after adding to the c.i.f. bid price of the imported goods offered in each Group C bid, for the purpose of this further comparison only, an amount equal to (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such Group C bid, or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the Group A bid is the lowest in such further comparison, it shall be selected for purposes of award; if not, the bid from Group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shall be selected. C. Review of Procurement Decisions by Bank I. Review of invitation to bid and of proposed awards and final contracts: With respect to all contracts for the drilling and equipping of wells, all other contracts for civil works estimated to cost the equivalent of $200,000 or more, and all contracts for pipes and accessories, pumps and equipment estimated to cost the equivalent of $50,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Bank, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to

21 21 be followed for the bidding, and shall make such modifications in the said documents or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. (b) Promptly after the bids have been received, the Borrower shall inform the Bank of the names of the bidders and the respective amounts of the bids. (c) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Bank of the name of the bidder to which it intends to award the contract and the reasons for the intended award and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, together with the recommendation for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. (d) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification invited. (e) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Loan and not governed by the preceding paragraphs, the Borrower shall furnish to the Bank, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such contract, together with the analysis of bids, recommendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. 3. In the case of contracts for drilling and equipping of wells which are to be awarded by direct negotiation with contractors, all the provisions of Part C(1) above shall apply except that description of advertising procedures need not be furnished to the Bank.