Public Disclosure Authorized CONFORMED COPY LOAN NUMBER 1236 IND. Public Disclosure Authorized LOAN AGREEMENT. (Fourth Highway Project)

Transcription

1 Public Disclosure Authorized CONFORMED COPY LOAN NUMBER 1236 IND Public Disclosure Authorized Public Disclosure Authorized LOAN AGREEMENT (Fourth Highway Project) between REPUBLIC OF INDONESIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Public Disclosure Authorized Dated April 15, 1976

2 LOAN AGREEMENT AGREEMENT, dated April 15, 1976, between REPUBLIC OF INDONESIA (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank).

3 -2- ARTICLE I General Conditions; 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) "First Project" means the project described in Schedule 2 to the development credit agreemer-t (Highway Project) of June 20, 1969, between the Borrower and the Association, as such Schedule may be amended from time to time; (b) "Second Project" means the project described in Schedule 2 to the development credit agreement (Second Highway Project) of June 24, 1971, between the Borrower and the Association, as such Schedule may be amended from time to time; (c) "'Third Project" means the project described in Schedule 2 to the development credit agreement (Third Highway Project) of June 1, 1973, between the Borrower and the Association, as such Schedule may be amended from time to time; and

4 -3- (d) "DGH" means the Directorate General of Highways in the Borrower's Department of Public Works and Electric Power.

5 -4- ARTICLE II 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 one hundred thirty million dollars ($130,000,000). Section The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between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 Borrower and the Bank, 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. Section Except as the Bank shall otherwise agree, the goods and works 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 December 31, 1980, or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. 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.

6 -5- 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 May 15 and November 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.

7 -6- ARTICLE III Execution of the Project Section (a) The Borrower shall carry out the Project through DGH with due diligence and efficiency and in conformity with appropriate highway engineering, administrative and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Except as the Borrower and the Bank may otherwise agree, the general design standards for the roads, road sections and bridges included in Part A and Part B of the Project shall be those set forth or referred to in Schedule 5 to this Agreement. (c) The Borrower shall require the contractors carrying out the construction of the roads and bridges under the Project to design an appropriate maintenance program for each of such roads or bridges constructed by them. (d) The Borrower shall, until the Closing Date, through DGH review the implementation of its ongoing highway program, including the Project, at least semi-annually, and shall furnish to the Bank the results of such review for its comments. Section In order to assist the Borrower in the highway engineering, procurement, construction supervision, feasibility and other studies, staff training, and management and operational development included in the Project, the Borrower shall employ consultants and experts whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank.

8 -7- 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, re- - ports, 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, works and services financed out of the proceeds of the Loan, and to disclose the use thereof in the Project; (ii) shall enable the Bank's accredited 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 other components of the Borrower's highway program until 1980, the expenditure of

9 -8- the proceeds of the Loan and the goods, works and services financed out of such proceeds. 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 as shall be required for the construction of the roads, road sections and bridges included in the Project and shall, at the request of the Bank, furnish to the Bank evidence satisfactory to the Bank that such land and rights in respect of land are available for purposes related to the Project.

10 -9- ARTICLE IV Other Covenants Section (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property;

11 and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative subdivision thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained sound accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. Section (a) The Borrower undertakes that the roads (including bridges and other road structures) constructed under the Project or the Second Project or the Third Project or rehabilitated under the First Project shall be adequately maintained and that all necessary repairs thereof shall be made, all in accordance with appropriate highway engineering and financial practices; that the funds, equipment, workshop facilities and other resources required for the purpose shall be provided promptly as needed; and that the maintenance of every road or bridge constructed under the Project shall be carried out in

12 acco-dance with an appropriate maintenance program designed to meet the specific requirements of such road or bridge. (b) The Borrower shall continue to take all steps required to improve the maintenance of its national and provincial roads (including bridges and other road structures) other than those referred to in the preceding paragraph in order to reach as soon as possible in respect of all such roads an adequate level of maintenance in accordance with appropriate highway engineering and financial practices. (c) The Borrower undertakes that all maintenance and repair works on its national and provincial roads (including bridges and other road structures) shall be adequately prepared, that the expenditure of the national funds by its Provinces to finance such works shall be duly monitored and that upon their completion all such works shall be submitted to a detailed inspection, all in accordance with appropriate highway engineering, financial and accounting practices. Section The Borrower shall continue to collect and record, in accordance with appropriate statistical methods and procedures, such information concerning highway traffic, highway construction and highway maintenance costs and other data as shall be reasonably required for the formulation of a comprehensive transport policy and for proper planning of maintenance, improvements and extensions of its highway system. To that end, the Borrower shall inter alia carry out an expanded program of traffic counting including selective counts by vehicle type, and origin and destination surveys as required.

13 Section The Borrower shall periodically review and modify as necessary its regulations limiting the dimensions and axle-loads of vehicles as to their consistency with the structural and geometric design standards of its highway network (including its provincial highways), in particular upon completion of the stud included in Part E of the Project; and the Borrower shall continue to ensure that such regulations are effe.tively enforced. Section The Borrower shall, taking into account the findings produced by the study included in Part E of the Project, review the levels and structure of its road user charges and modify such levels or structure to the extent required to charge in an equitable manner the costs of construction, betterment and maintenance of roads to the users of such roads.

14 ARTICLE V Effective Date; Termination Section The following is specified as an additional condition to effectiveness within the meaning of Section (c) of the General Conditions, namely, that the following consultants are employed by the Borrower and have taken up their respective posts: (a) the consultants required for the construction supervision under Part A (1), (2), (4), (5) and (6) of the Project and for engineering under Part C (1) and (2) of the Project; (b) the consultants required for the construction supervision under Part A (7) of the Project; (c) the consultants required for the screening-feasibility studies under Part C (1) of the Project; (d) the management consultants required under Parts D, E, F and G of the Project; and (e) the consultants required to monitor the activities of the other consultants required for the Project. Section The date August 13, 1976, is hereby specified for the purposes of Section of the General Conditions.

15 ARTICLE VI Representative of the Borrower; Addresses Section The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section of the General Conditions. Section The following addresses are specified for the purposes of Section of the General Conditions: For the Borrower: Ministry of Finance Post Office Box 21 Jakarta Indonesia -o Cable address: For the Bank: MINFIN Jakarta International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C United States of America Cable address: INTBAFRAD Washington, D.C.

16 IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, 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. REPUBLIC OF INDONESIA By /s/ Roesmin Nurjadin Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ S. S. Kirmani Acting Regional Vice President East Asia and Pacific

17 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) Civil works for 38,000,000 60% Part A of the Project (2) Civil works for 38,000,000 60% Part B of the Project (3) Services of consul- 16,000,000 60% tants and experts (4) Unallocated 38,000,000 TOTAL 130,000,000

18 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 1,vied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement; and (b) expenditures on account of construction of road sections or bridges included in Part B of the Project, unless the Borrower and the Bank have agreed, taking into account the prices of the bids received for the civil works required for such construction, that the construction of such road section or bridge shall be economically feasible; road sections or bridges proposed to the Bank for selection under Part B of the Project pursuant to this paragraph 3 (b) after December 31, 1976, or such later date as the Bank may agree, shall not be eligible for financing out of the proceeds of the Loan. 4. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of

19 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. 5. 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.

20 SCHEDULE 2 Description of the Project The Project is part of the Borrower's on-going highway program and consists of the following parts: Part A. Construction, in accordance with the design standards set forth in Schedule 5 to this Agreement, of the following roads, including the necessary bridges: in Sumatra 1. a road of about 80 km connecting Padang with the trans-sumatra highway at Sawahtambang; 2. a road of about 208 km connecting Tebingtingi with Rantauprapat; in West Java 3. a road of about 22 km connecting Nagreg with the Bandung-Cirebon national highway at Cileunyi; in East Java 4. a road of about 44 km connecting Lumajang with Probolinggo;

21 a road of about 33 km connecting Jember with Bondowoso; in Bali 6. a road of about 122 km connecting Gilimanuk with Denpasar; and in North Sulawesi 7. a road of about 37 km between Kotamobagu and Inobonto, interconnecting the Duluduo- Kotamobagu and Inobonto-Kapitu roads. Part B. Construction of such road sections including bridges, with a combined length of about 550 km, as the Borrower and the Bank shall agree to be technically and economically feasible. Part C. 1. Screening-feasibility studies, together with preliminary engineering, for betterment of about 4,500 km of roads on Sumatra, Java and Bali and about 2,500 km of roads elsewhere in Indonesia. 2. Detailed engineering of about 4,100 km of roads for betterment on Sumatra, Java and Bali, identified by said screening-feasibility studies. 3. Detailed engineering of such multi-lane highway of about 70 km connecting Cikampek with Jakarta as the Borrower and the Bank shall agree to be technically and economically feasible.

22 I Part D. Strengthening of DGH's organization by the following measures: 1. improvement of DGH's planning activities, including, inter alia, a program designed to improve traffic data collection and analysis; 2. improvement of selected aspects of DGH's management, including program budgeting and control, through evaluation studies and the implementation of an action program agreed upon between the Borrower and the Bank; 3. development of DGH's regional road betterment offices; and 4. staff training. Part E. 1. A combined study of vehicle weights and dimensions and road user charges to determine the financial contributions to be made by various classes of vehicles towards the costs of road construction and maintenance. 2. A review of the administration and enforcement of the Borrower's highway legislation. Part F. Strengthening of the provincial public works departments of the Borrower by:

23 surveys covering the highway functions of all provincial public works departments, including, inter alia, assessments of the current capabilities of those departments to carry out highway works, resulting in programs of measures designed to improve the management and operations of such functions in each provincial public works department; and 2. training of staff working on the highway functions of such departments. Part G. Studies designed to produce realistic and practical recommendations for the development of the highway engineering and highway construction industries in Indonesia. The Project is expected to be completed by June 30, 1980.

24 SCHEDULE 3 Amortization Schedule Date Payment Due Payment of Principal (expressed in dollars)* May 15, ,290,000 November 15, ,345,000 May 15, ,400,000 November 15, ,460,000 May 15, ,525,000 November 15, ,590,000 May 15, ,655,000 November 15, ,725,000 May 15, ,800,000 November 15, ,875,000 May 15, ,955,000 November 15, ,040,000 May 15, ,125,000 November 15, ,215,000 May 15, ,310,000 November 15, ,405,000 May 15, ,510,000 November 15, ,615,000 May 15, ,725,000 November 15, ,845,000 May 15, ,965,000 November 15, ,090,000 May 15, ,220,000 November 15, ,360,000 May 15, ,500,000 November 15, ,650,000 May 15, ,805,000 November 15, ,965,000 May 15, ,135,000 November 15, ,310,000 * 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.

25 -24- Payment of Principal Date Payment Due (expressed in dollars)* May 15, ,495,000 November 15, ,685,000 May 15, ,885,000 November 15, ,090,000 May 15, ,310,000 November 15, ,535,000 May 15, ,770,000 November 15, ,015,000 May 15, ,270,000 November 15, ,535,000 * 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.

26 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 years before maturity 1% More than three years but not more than six years before maturity 2-1/4% More than six years but not more than eleven years before maturity 4% More than eleven years but not more than sixteen years before maturity 5-1/2% More than sixteen years but not more than twenty-one years before maturity 7-1/4% More than twenty-one years but not more than twenty-three years before maturity 8% More than twenty-three years before maturity 8-1/2%

27 SCHEDULE 4 Procurement A. International Competitive Bidding 1. Works and services shall be procured under contracts to be awarded in accordance with procedures consistent with those set forth in Part A of the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in August 1975 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. (a) Bidders for the works included in Part A or Part B of the Project shall be prequalified as described in paragraph 1.3 of Part A of the Guidelines. (b) Bid invitations shall, whenever feasible, be grouped together in order to attract international competition. B. Evaluation and Comparison of Bids for Civil Works; Preference for Domestic Contractors With respect to any contract for civil works included under Category (1) or (2) of the table set forth in Schedule 1 to the Loan Agreement, the Borrower may grant a margin of preference of 7-1/2% to domestic contractors, in accordance with, and subject to, the following provisions:

28 (a) Contractors shall be required to prequalify as provided in Part A of this Schedule and applicants for qualification applying also for such preference shall be asked to provide, as part of the information for qualification, such information, including details of ownership, as shall be required to determine whether, according to the classification established by the Borrower and accepted by the Bank, a particular firm or group of firms qualifies for a domestic preference. The bidding documents shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. (b) After bids have been received and reviewed by the Borrower, responsive bids will be classified into the following groups: (i) bids offered by domestic contractor for preference; and ;ligible (ii) bids offered by other contractors. For the purpose of evaluation and comparison of bids an amount equal to 7-1/2% of the bid amount shall be added to bids received under group (ii) above. C. Review of Procurement Decisions by Bank 1. Review of prequalification. The Borrower shall, before qualification is invited, inform the Bank in detail of the procedure to be followed and shall introduce such modifications in said procedure as the Bank shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and, where

29 applicable, of their eligibility for domestic preference under Part B above and of the reasons for the exclusion of any applicant for prequalification and for such eligibility shall be furnished by the Borrower to the Bank for its comments before the applicants are notified, and the Borrower shall make such additions to, deletions from, or modifications in, the said list as the Bank shall reasonably request. 2. Review of invitation to bid and of proposed awards and final contracts: With respect to all contracts for civil works: (a) Before bids are invited, the Borrower shall furnish to the Bank, for its comments: (i) under Part B of the Project, a copy of the feasibility study and the final design of the road section or bridge in respect of which bids are to be invited, and a copy of the appraisal report prepared for such road section or bridge by DGH on the basis of reliable traffic information and forecasts, showing, inter alia, the dimensions, unit cost per kilometer and expected benefits of the road section or bridge; and (ii) under both Part A and Part B of the Project, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding; and the Borrower 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.

30 (b) 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 shall furnish to the Bank, in sufficient time for its review, a detailed report, by the consultants referred to in Section 3.02 of this Agreement, on the evaluation and comparison of the bids received, together with the recommendations for award of the said consultants 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. (c) 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. (d) 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.

31 SCHEDULE 5 Highway Design Standards Classification II C III Terrain Flat Rolling Mountainous Flat Rolling Mountainous ADT in Passenger Car Units K2,000 (1,000 Design Speeds (km/h) Pavement Width (meters) Shoulder Width (meters) Surfacing 1/ 2/ 1/ 2/ Minimum Horizontal Radius (meters) Maximum Grade (%) Bridges In accordance with DGH's "Standard Loading Specification for Highway Bridges", 01/1969 1/ Surfacing selected can vary from single bituminous surface treatment to asphaltic concrete on the basis of economic considerations. 2/ Pavement structure is designed in accordance with DGH's "A Guide for Pavement Design", 1974, 04/PD/EM, and for a design life of about ten years, unless another design life would be economically warranted. NOTE: The above design standards are those most typical for roads and bridges included in the Project, although variations will occur to suit special conditions of traffic, land use or terrain.