Project Agreement CONFORMED COPY CREDIT NUMBER 419 MAS INTERNATIONAL DEVELOPMENT ASSOCIATION DEVELOPMENT WORKS CORPORATION DATED JULY 9, 1973

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1 Public Disclosure Authorized CREDIT NUMBER 419 MAS CONFORMED COPY Public Disclosure Authorized Project Agreement (Rural Development Project) Public Disclosure Authorized BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND DEVELOPMENT WORKS CORPORATION Public Disclosure Authorized DATED JULY 9, 1973

2 CONFORMED COPY CREDIT NUMBER 419 MAS Project Agreement (Rural Development Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND DEVELOPMENT WORKS CORPORATION DATED JULY 9, 1973

3 PROJECT AGREEMENT AGREEMENT, dated July 9, 1973, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and the DEVELOPMENT WORKS CORPORATION (hereinafter called DWC) of Mauritius. WHEREAS by a Development Credit Agreement of even date herewith between Mauritius (hereinafter called the Borrower), and the Association, the Association has agreed to make available to the Borrower a credit in various currencies equivalent to four million dollars ($4,000,000), on the terms and conditions set forth in the Development Credit Agreement, but subject to DWC agreeing to undertake such obligations toward the Association as are hereinafter set forth; and WHEREAS DWC, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project; Management and Operations of DWC Section DWC shall carry out the physical execution of the works under Parts A, B, C and D(i) of the Project described in Schedule 2 to the Development Credit Agreement, and carry out Parts E and F of the Project in so far as relating to DWC, and conduct its operations and affairs, all with due diligence and efficiency and in accordance with sound administrative, economic, financial and engineering

4 4 standards and practices, with qualified and experienced management and personnel, and in accordance with the Development Works Corporation Act, No. 50 of 1970, as amended. Section DWC shall create the position of Deputy General Manager of DWC, whose functions shall include the management of the operations of DWC under the Project. Section The Deputy General Manager, and any replacement to the position of General Manager, of DWC shall have qualifications and experience satisfactory to the Association. Section Except as the Association shall otherwise agree, the goods and services (other than services of consultants) required for the Project and to be financed out of the proceeds of the Credit shall be procured in accordance with, and subject to, the provisions set forth or referred to in Shedule 1 to this Agreement. Section (a) DWC undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit 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 DWC to replace or repair such golds. (b) Except as the Association shall otherwise agree, DWC shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section DWC shall, for the purpose specified in Section 2.02(b) of the Development Credit Agreement, provide to the Project Manager quarterly statements, certified by DWC, of the expenditures incurred by DWC under the Project. Section DWC shall establish a separate training department, whose organization, functions and staffing arrangements shall be satisfactory to the Association, to provide training under Part F(iii) of the Project. ARTICLE III Financial Covenants Section DWC shall maintain or cause to be maintained records adequate to record the progress of its operations under the Project (including the cost thereof)

5 5 and to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of DWC. Section DWC shall: (a) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, by the Director of Audit or other independent auditors acceptable to the Association, in accordance with sound auditing principles consistently applied; (b) furnish to the Association, as soon as available but in any case not later than six months after the end of each such year, certified copies of its audited financial statements for such year and an audit report by said auditors of such scope and in such detail as the Association shall have reasonably requested; and (c) furnish to the Association such other information concerning its accounts and financial statements and the audit thereof as the Association shall from time to time reasonably request. Section DWC shall establish and maintain internal accounting and auditing procedures satisfactory to the Association. ARTICLE IV Consultation, Information and Inspection Section (a) The Association and DWC shall cooperate fully to ensure that the purposes of the Credit will be accomplished. To that end, the Association and DWC shall from time to time, at the request of either party, exchange views through their representatives with regard to the performance of their respective obligations under this Agreement, the administration, operations and financial condition of DWC and other matters relating to the purpose of the Credit. (b) DWC shall furnish to the Association all such information as the Association shall reasonably request concerning the administration, operations and financial condition of DWC and its subsidiaries, if any. Section The Association and DWC shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accoipishment of the purposes of the Credit or the performance by either of them of its obligations under this Agreement. Section DWC shall enable the Association's representatives to inspect the records referred to in Section 3.01 of this Agreement and any relevant documents.

6 6 ARTICLE V Effective Date; Termination; Cancellation and Suspension Section This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section This Agreement and all obligations of the Association and of DWC thereunder shall terminate upon completion of the Project, provided that if the Development Credit Agreement terminates in accordance with its terms before the aforementioned date, the Association shall promptly notify DWC of this event and, upon the giving of such notice, this Agreement and all obligations of the parties thereunder shall forthwith terminate. Section All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Development Credit Agreement. ARTICLE VI Miscellaneous Provisions Section Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C United States of America Cable address: INDEVAS Washington, D.C.

7 7 For DWC: Development Works Corporation Quay Street Port Louis Mauritius Cable address: DWC Mauritius Section DWC shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of DWC, take any action or execute any documents required or permitted to be taken or executed by DWC pursuant to any of the provisions of this Agreement. Section This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / Shahid S. Husain (For) Regional Vice President Eastern Africa DEVELOPMENT WORKS CORPORATION By /s/ C. Jesseramsing Authorized Representative

8 8 SCHEDULE 1 Procurement A. 1. Bitumen, cement, steel rods, water-taps and pipes shall be procured on the basis of international competition under procedures consistent with the Guidelines for Procurement under World Bank Loans and IDA Credits, dated April 1972, as revised in October With respect to any contract for goods or services (other than services of consultants) to be financed out of the proceeds of the Credit, DWC shall furnish to the Association, promptly after its execution, two conformed copies of such contract, together with the particulars of advertising, analysis of bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract is not consistent with the procedures set forth or referred to herein, promptly inform DWC and the Borrower and state the reasons for such determination. B. 1. For the purpose of evaluation and comparison of bids, customs duties and other import taxes on imported goods, and sales and similar taxes on locally produced goods, shall be excluded, except to the extent hereinafter provided, and 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 locally produced goods. The cost of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be taken into account in the evaluation of bids in accordance with paragraph 4.7 of the Bank's Guidelines for Procurement. 2. For goods included in Categories 1, II, III and IV of the table set forth in paragraph 1 of Schedule 1 to the Development Credit Agreement, a margin of preference may be granted to goods manufactured in Mauritius in accordance with, and subject to, the following provisions: (a) After evaluation, responsive bids will be classified in one of the following groups: (1) Group A: bids offering goods manufactured in Mauritius, if the bidder shall have established to the satisfaction of DWC and the Association that the manufacturing cost of such goods includes a value added in Mauritius equal to at least 20%o of the ex-factory bid price of such goods.

9 9 (2) Group B: bids offering goods manufactured in Mauritius, other than bids classified in Group A. (3) Group C: bids offering any other goods. (b) 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 locally, to determine the lowest evaluated bid of each group. The lowest evaluated bids of the groups 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 purposes of award. (c) If, as a result of the comparison under paragraph (b) above, the lowest bid is a bid from Group C, all Group C bids shall be further compared with the lowest bid from Group A, as determined under paragraph (b) above, after adding to the c.i.f. bid price of goods to be imported offered in each Group C bid, for the purpose of this further comparison only, an amount equal to the smaller of (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of goods offered in such Group C bid, or (ii) 15% of the c.i.f. bid price of such goods. If the Group A bid in such further comparison is the lowest, it shall be selected for purposes of award; if not, the lowest bid from Group C, as determined under paragraph (b) above, shall be selected for purposes of award. 3. The bidding documents 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 to give effect to such preference.