Loan Agreement. Public Disclosure Authorized. Public Disclosure Authorized. Public Disclosure Authorized. between FEDERATIVE REPUBLIC OF BRAZIL.

Transcription

1 Public Disclosure Authorized -. LOAN NUMBER 1839 BR Public Disclosure Authorized Loan Agreement (Second Urban Transport - Porto Alegre - Project) Public Disclosure Authorized between FEDERATIVE REPUBLIC OF BRAZIL and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Public Disclosure Authorized Dated, 1980

2 LOAN NUMBER 1839 BR LOAN AGREEMENT AGREEMENT, dated -, 1980, between FEDERATIVE REPUBLIC OF B#ZIL (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in t4e financing the cost of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Project will be carried out, as hereinafter and in the Project Agreement (as this term is defined in Section 1.02 of this Agreement) provided, by the State of Rio Grande do Sul (hereinafter called the State), Empresa de Trens Urbanos de Porto Alegre (hereinafter called TRENSURB), Fundaao Metropolitana de Planejamento - METROPLAN (hereinafter called METROPLAN), Rede Ferroviaria Federal S.Ao - RFFSA (hereinafter called RFFSA), Empresa Brasileira de Planejamento de Transportes (hereinafter called GEIPOT), and Emeresa Brasileira de Transportes Urbanos (hereinafter called EBTU) with the Borrower's assistance and, as part of such assistance, the Borrower, through EBTU, will make the proceeds of the Loan available to TRENSURB as hereinafter provided; and WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in a project agreement of even date herewith between the Bank and the State, TRENSURB, METROPLAN, RFFSA, GEIPOT and EBTU; NOW THEREFORE the parties hereto hereby agree as follows: 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).

3 - 2 - Section Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project Agreement" means the agreement between the Bank and the State, TRENSURB, METROPLAN, RFFSA, GEIPOT and EBTU of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; (b) "EBTU" means Empresa Brasileira de Transportes Urbanos - EBTU, an empresa p6blica under the supervision of the Borrower's Ministry of Transport, authorized by Lei No of November 14, 1975 and established by Decreto No of April 12, 1976, both of the Borrower; (c) "GEIPOT" means Empresa Brasileira de Planejamento de Transportes, an empresa p6blica under the supervision of the Borrower's Ministry of Transport, established by Lei No of August 20, 1973, of the Borrower; (d) "METROPLAN" means Fundago Metropolitana de Planejamento - METROPLAN, a foundation under the supervision of the Secretariat of the Interior, Development and Public Works of the State of Rio Grande do Sul, established by Lei No of October 29, 1974, of the State of Rio Grande do Sul; (e) "RFFSA" means Rede Ferrovidria Federal S.A., a corporation, established by Lei No of March 16, 1957, of the Borrower; (f) "TRENSURB" means Empresa de Trens Urbanos de Porto Alegre authorized by Decreto No of April 17, 1980 of the Borrower and established by resolution of the general meeting of its shareholders on April 25, 1980; (g) "NEP" means Nucleo Executivo de Projecto, the office within TRENSURB to be established pursuant to Section 3.01 of the Project Agreement for the purpose of carrying out the initial execution of the Project; (h) "Convenio" means the agreement to be entered into between EBTU (on behalf of the Borrower) and TRENSURB pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Convenio;

4 - 3 - (i) "Metropolitan Region of Porto Alegre" means that area consisting of about 5,718 km 2 and comprising the following fourteen municipalities: Alvorada; Cachoeirinha; Campo Bom; Canoas; Estancia Velha; Esteio; Gravatai; Guaiba; Novo Hamburgo; Porto Alegre; Sgo Leopoldo; Sapiranga; Sapucaia do Sul; and Viam9o; and (j) "commencement of TRENSURB's operations" means the date on which TRENSURB's passenger train service begins. 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 and fifty-nine million dollars ($159,000,000). 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 and to be financed out of the proceeds of the Loan. Section Except as the Bank may otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Loan, shall be governed by the provisions of Schedule 1 to the Project Agreement. Section The Closing Date shall be December 31, 1984 or such later date as the Bank may 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. Section The Borrower sliall pay interest at the rate of eight and twenty-five hundredths per cent (8.25%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time.

5 Section Interest and other charges shall be payable semiannually 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. Section The President of EBTU and any other person authorized in writing by him is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. ARTICLE III Execution of the Project Section 3.01i (a) Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall enable all parties to the Project Agreement, with the exception of the Bank, to perform in accordance with the provisions of the Project Agreement all their obligations therein set forth, shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable such parties to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall: (i) make the proceeds of the Loan available to EBTU as agent for the Borrower for purposes of the Project; and (ii) cause EBTU to relend the equivalent of such proceeds in the currency of the Borrower to TRENSURB under a Convenio to be entered into between EBTU (on behalf of the Borrower) and TRENSURB under terms and conditions which shall have been approved by the Bank; the Convenio shall provide, inter alia, that the amount so relent pursuant to clause (ii) of this paragraph shall be repaid over a period of twelve years after the expiry of three years from the commencement of TRENSURB' s operations and shall bear interest at the rate of 5.0% per annum on the principal amount withdrawn and outstanding from time to time and that, for purposes of repayment, the value of the currency borrowed shall be subject to monetary correction in accordance with changes in the Borrower's National Treasury Bond Index.

6 - 5 - (c) The Borrower shall cause EBTU to exercise its rights under the Convenio in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan, and except as the Bank may otherwise agree, the Borrower shall cause EBTU not to assign, amend, abrogate or waive the Convenio or any provision thereof. Section The Borrower shall cause the Municipality of Porto Alegre to carry out Part D (1) of the Project described in Schedule 2 to the Loan Agreement with due diligence and efficiency and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. 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 secuv ty 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 aember. 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 Baick 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: (i) to any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) to any lien arising in the ordinary course

7 - 6 - 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 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 ensure that no construction of any new highway between Porto Alegre and Scharlau is begun before a feasibility study, satisfactory to the Bank, regarding such construction is completed and reviewed by the Borrower and the Bank. Section On the basis of a review to be undertaken not less than once every six months, as and from the commencement of TRENSURB's operations or whenever tariffs of passenger services competitive with those of TRENSURB are adjusted, if adjusted more frequently, the Borrower shall authorize such adjustments in TRENSURB's tariffs so as to permit TRENSURB to cover at least all of its operating expenses as defined in Section 3.09 of the Project Agreement. Section Not less than once per year, the Borrower, through EBTU, shall inform the Bank of its National Urban Transport Investment Plan. ARTICLE V Remedies of the Bank Section For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) EBTU or TRENSURB shall have failed to perform any of its covenants, agreements or obligations under the Project Agreement or Convenio; or (b) an event shall have occurred or any action shall have been taken which will materially and adversely affect the ability

8 -7- of EBTU or of TRENSURB to carry out its covenants, agreements and obligations set forth in the Project Agreement or Convenio; or (c) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of EBTU, TRENSURB, METROPLAN, RFFSA or GEIPOT or for the suspension of its operations without having made adequate alternative arrangements for the carrying out of the Project; or (d) any party to the Project Agreement, with the exception of the Bank, EBTU and TRENSURB, shall have failed to perform any covenant, agreement or obligation of such party under the Project Agreement, unless any of the other parties concerned shall have remedied the default; or (e) an event shall have occurred or any action shall have been taken which will materially and adversely affect the ability of any of the parties to the Project Agreement, with the exception of the Bank, EBTU and TRENSURB to carry out its covenants, agreements and obligations set forth in the Project Agreement. Section For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) any of the events specified in paragraphs (a) and (d) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty -days aftir notice thereof shall have been given by the Bank to the Borrower, the State, METROPLAN, RFFSA, GEIPOT and EBTU; and (b) any of the events specified in paragraphs (b), (c) and (e) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section (c) of the General Conditions: (a) the Project Agreement has been executed on behalf of each of the parties thereto;

9 -8- (b) the Loan Agreement has been duly registered by the Banco Central do Brasil; (c) NEP has been established and staffed in accordance with the provisions of Section 3.01 of the Project Agreement; and (d') thereto. the Convenio has been executed on behalf of the parties Section The following are specified as.dditional matters, within the meaning of Section (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the Loan Agreement has been duly registered by Banco Central do Brasil; (b) that, with the exception of the Bank, the Project Agreement has been duly authorized or ratified by each of the parties thereto, and is legally binding upon such parties in accordance with its terms; (c) that the Convenio has been duly authorized or ratified by the parties thereto, and is legally binding upon such parties in accordance with its terms; and (d) that all necessary acts, consents and approvals to be performed or given by the Borrower, its political subdivisions or agencies, any agency of any such volitical subdivision, or otherwise to be performed cr given in order to authorize the carrying out of the Project and to enable the Borrower, the State, TREN- SURB, METROPLAN, RFFSA, GEIPOT and EBTU to perform all of their respective obligations in this Agreement and the Project Agreement and the Convenio contained (including the obligations thereof relating to procurement of goods and civil works for the Project) together with all necessary powers and rights in connection therewith, have been duly rnd validly performed or given and that no other such acts, consents or approvals are required in order to authorize the carrying out of the Project and to enable the Borrower, the State, TRENSURB, METROPLAN, RFFSA, GEIPOT and EBTU to perform all of their respective obligations in this Agreement and the Project Agreement and the Convenio contained. Section The date gv4 /9fv, is hereby specified for the purposes of Section of the General Conditions.

10 -9- ARTICLE VII Representatives of the Borrower; Addresses Section The Ministro da Fazenda 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: Ministerio da Fazenda Esplanada dos Ministerios, Bloco Brasilia D.F. Brazil Cable address: MINIFAZ Brasilia Telex: MFAZ BR For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C United States of America Cable address: INTBAFRAD Washington, D.C. Telex: (ITT) (RCA) or (WUI) 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

11 District of Columbia, United States of America, as of the day and year first above written. FEDERATIVE REPUBLIC OF BRAZIL Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Regional Vice President Latin America and the Caribbean

12 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) Track superstructure 9,340,000 ) 100% of for- ) eign expendi- ) tures for (2) Unit trains and related 89,370,000 ) imported spare parts ) goods and 100% ) of ex-factory (3) Signaling and 14,190,000 ) costs for electri:fication ) locally pro- ) duced goods (4) Maintenance equipment 2,220,000 ) (5) Consultants'services 1,710,000 60% and technical assistance (6) Unallocated 42,170,000 TOTAL 159,000, For the purpose of this Schedule, the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower. 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 Borrower on goods or services,

13 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. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. 5. 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 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.

14 SCHEDULE 2 Description of the Project The purpose of the Project is to provide an institutionally sound and economically and financially viable suburban passenger rail mass transit system for the Metropolitan Region of Porto Alegre. The Project consists of the following Parts: Part A: Permanent Way Works (1) Laying of two broad gauge (1.6 m) railway tracks and all related materials between the central market of Porto Alegre and the Municipality of Sapucaia (about 26.7 km), including construction and placement of related fencing, signals, telecommunications and two power substations and catenary. (2) Construction and equipping of fourteen passenger stations, including an underground tunnel connection between the airport passenger station and the Porto Alegre Airport Terminal. (3) Construction of a total of about sixteen pedestrian underpasses or overpasses, about ten road vehicle bridges and about six railway brilges. (4) Construction and equipping of a unit train maintenance depot and an administration building. (5) Construction of satellite automobile parking lots near several passenger stations with a total capacity of about 13,500 automobile parking spaces. Part B: Unit Trains Acquisition and utilization of about 25 electric unit trains (and related spare parts), each train consisting of two motorized coaches and two non-motorized coaches (each such coach being approximately 22 m in length, 2.9 m in width and 3.9 m in height). Part C: Land Expropriation (1) Expropriation of about 339,000 m 2 of land for the construction under Part A (5), for the construction of some underpasses and overpasses under Part A (3) and for the construction of the power substations under Part A (1).

15 (2) Expropriation of the land required for the future provision of about 9,000 automobile parking spaces at satellite automobile parking lots in addition to those under Part A (5). (3) Expropriation of about 63,000 m 2 of land for the future continuation of the rail system to Novo Hamburgo. Part D: Parking Restriction Program (1) A program to eliminate all commuter related day-term street and open-lot automobile parking in the central business district and within the first ring road of Porto Alegre within three months of the commencement of TRENSURB's operations and to prevent the construction of new automobile parking garages in such area in accordance with the urban transport plan of the Municipality of Porto Alegre. (2) A program to enforce Part D (1). Part E: Studies and programs (1) An assessment of the appropriate measures to be taken by TRENSURB with -respect to its staffing, the training of its personnel (before and after the commencement of TRENSURB's operations), its organizational structure, management, method of accounting, finances and operations and the implementation of such measures. (2) The preparation of a detailed program aimed at restricting the use of automobiles in the Metropolitan Region of Porto Alegre and the monitoring of such program's implementation and the identification of the locations and sizes of the satellite automobile parking lots under Part A (5) of the Project. (3) The identification of bus routes to be discontinued and bus routes to serve as feeder links. to TRENSURB's railway line, and recommendatiors regarding bus companies adversely affected. (4) The identification of appropriate commercial development at various locations along or near TRENSURB's railway line and recommendations regarding the planning and organizational conditions necessary or appropriate for such development; and the updating and revision of METROPLAN's land use master plan.

16 (5) The carrying out of an economic and financial feasibility study of the possible extension of the Project train system from Sapucaia to Novo Hamburgo and, in the event that such extension is justified on the basis of such study, decisions as to: (a) appropriate changes in TRENSURB's operations, including staffing, management, accounts and tariffs as well as appropriate changes in bus routes; and (b) the financing plan for the required increase in capital investment. (6) The preparation of a study of the levels and structure of all transport tariffs in the Metropolitan Region of Porto Alegre, including charges for satellite and other automobile parking and recommendations on how such tariffs should be set. The Project is expected to be completed by June 30, 1984.

17 SCHEDULE 3 Amortization Schedule Date Payment Due Payment of Principal (expressed in dollars)* On each May 15 and November 15 beginning November 15, 1983 through May 15, ,625,000 * 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 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 1.65% More than three years but not more than six years before maturity 3.30% More than six years but not more than eleven years before maturity 6.00% More than eleven years but not more than thirteen years bafore mat,rity 7.15% More than thirteen years before maturity 8.25%

19 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Bank for Reconstruction and Development. In witness whereof I have signed this Certificate and affixed the Seal of the Bank thereunto this day of, FOR SECRETARY