Loan Agreement OCUMENTS. Public Disclosure Authorized LOAN NUMBER 1870 TH. Public Disclosure Authorized. (National Sites and Services Project)

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized OCUMENTS Loan Agreement LOAN NUMBER 1870 TH (National Sites and Services Project) Public Disclosure Authorized between KINGDOM OF THAILAND and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Public Disclosure Authorized Dated, 1980

2 LOAN NUMBER 1870 TH LOAN AGREEMENT AGREEMENT, dated, 1980, between KINGDOM OF THAILAND (hereinafter called the Borrower) and INTERNA- TIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (here.inafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Project will be carried out in part by the Borrower's National Housing Authority (hereinafter called NHA) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to NHA part of the proceeds of the Loan as hereinafter provided; (C) the Project will be carried out in part by the Bangkok Metropolitan Administration (hereinafter called BMA) with the T;orrower's assistance and, as part of such assistance, the Borrower will make available to BMA part of the proceeds of the Loan 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 NHA; 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). 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

3 -2- 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 NHA 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) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and NHA 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 Subsidiary Loan Agreement; (c) "GHB" means the Government Housing Bank; (d) "KTB" means the Krung Thai Bank Limited; (e) "MEA" means the Metropolitan Electricity Authority; (f) "MWWA" means the Metropolitan Water Works Authority; (g) "PEA" means the Provincial Electricity Authority; (h) "PWWA" means the Provincial Water Works Authority; and (i) "SU0" means the Slum Upgrading Office in the Research and Construction Department of NBA. 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 twenty nine million dollars ($29,000,000). 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.

4 -3- Section Except as the Bank shall 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 the Schedule to the Project Agreement. Section The Closing Date shall be December 31, 1984 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. Section The Borrower shall pay interest at the rate of eight and one quarter.per cent (8.25%) per annum-on the principal amount of the Loan withdrawn and outstanding from time to time. Section Intere.st and other charges shall be payable semiannually on March 1 and September 1 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 Sectiod (a) Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall cause NHA to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take or cause to be taken by BMA, GHB, KTB, MEA, MWWA, PEA, PWWA, and the other agencies and authorities of the Borrower and of any political and administrative subdivision of the Borrower concerned in the execution of the Project, all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable NHA 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 make the equivalent of twenty-five million five hundred thousand dollars ($25,500,000) out of the

5 -4- proceeds of the Loan available to NHA, partly as a loan and partly as a grant, under a subsidiary loan agreement t be entered into between the Borrower and NHA under terms and conditions satisfactory to the Bank, provided, however, that in the event that funds shall become available to the Borrower from any other source for the purpose of carrying out in a timely manner any or all of Part E (ii), (iii) and (iv) of the Project, then the amount of the proceeds of the Loan to be made available to NHA as aforesaid shall be increased accordingly. (c) The Borrower shall exercise its rights under the Subsidiary Loan Agreement 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 shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section The Borrower shall (i) cause BMA to carry out Part A (vii) of the Project (construction of the link road) with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and public utility practices, (ii) for such purpose make available out of the proceeds of the Loan to BMA, as a grant, the equivalent of approximately one million five hundred thousand dollars ($1,500,000), and (iii) except as the Bank shall otherwise agree, cause BMA to procure all civil works to be financed out of the proceeds of the Loan under Part A (vii) of the Project in accordance with the provisions of the Schedule to the Project Agreement (for which purpose all references in such Schedule to NHA shall be deemed to be references to BMA). Section The Borrower shall (i) carry out the housing finance study under Part E (ii) of the Project through its Ministry of Finance, with the participation of NHA and GHB, (ii) provide or cause to be provided, promptly as needed, all funds and facilities required for the purpose, (iii) by December 31, 1980 employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank to assist the Borrower's Ministry of Finance, NHA and GHB to carry out such study, and (iv) by August 31, 1981, review with the Bank the results of such study and a program to implement its recommendations. Section (a) The Borrower shall through its Ministry of the Interior by March 31, 1981, employ, under Part E (iii) of the

6 -5- Project, consultants whose qualifications, experience and terms and conditio- of employment shall be satisfactory to the Bank to assist in carrying out a study of municipal finance and administration which will, inter alia, identify measures to increase revenues from existing taxes, fees and charges, and review with the Bank the results of such study. (b) The Borrower shall: (i) review with the Bank by December 31, 1980, a program to be carried out by BMA to systematically update property registration in its jurisdiction and to improve collection of the Land Development and House and Rent Taxes; and (ii) cause BMA, by March 31, 1981, to employ, under Part E (iii) of the Project, consultants whose qualifications, experience, and terms and conditions of employment shall be satisfactory to the Bank to assist BMA in carrying out a financial management study which would, inter alia, identify measures to increase revenues from existing taxes, fees and charges, and to review with the Bank the results of such study. Section The Borrower shall by March 31, 1981 or such other date as the Borrower and the Bank may agree employ, under Part E (iv) of the Project, consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank to assist in the preparation of future urban development projects in selected regical cities. Section The Borrower shall, by October 31, 1980, establish or cause to be established, with powers, responsibilities and composition satisfactory to the Bank, a committee to coordinate the implementation of slum improvement and employment generation activities by the agencies and authorities concerned. Section (a) The Borrower shall cause KTB to: (i) provide the funds and resources required for the lending program for small businesses and industries under Part D of the Project on prevailing market terms for commercial and industrial loans; and (ii) prepare quarterly reports on progress of such program for submission to the Bank through NHA. (b) The Borrower shall, by October 31, 1980 or such later date as may be agreed between the Borrower and the Bank, introduce and thereafter maintain during the implementation of the Project under arrangements satisfactory to the Bank, a scheme to guarantee a portion of each loan from KTB under Part D of the Project to a

7 recipient approved by NHA in a slum improved by NHA, such guarantees to be available in an aggregate amount equivalent to at least two hundred and ten thousand dollars ($210,000), and for which guarantees the recipients will be required to pay an appropriate fee. 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; 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

8 -7- 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 cause: (a) all infrastructure, utilities and community facilities constructed or installed under or in connection with the Project to be adequately equipped, staffed, operated and maintained by the respective agency or authority concerned; and (b) BMA and other municipal authorities concerned to provide satisfactory garbage collection services in Project areas under Parts A, B and C of the Project. Section The Borrower shall, with respect to each slum area improved by NHA, and by the time of completion of. the basic infrastructure improvements in that area, cause BMA to take all appropriate measures within its powers to regulate land use and construction in that area to ensure, inter alia, that private landlords will not redevelop improved residential properties for commercial use throughout the economic life of the infrastructure improvements. Section The Borrower shall cause BMA to prepare and furnish to the Bank, by December 31, 1981, for review by the Bank, a plan for future development of the area surrounding the Lat Krabang site to be developed under Part A of the Project and the industrial estate being constructed by the Industrial Estate Authority of Thailand with Bank assistance under Loan No TH. Section The Borrower shall ta4e, or cause to be taken: (a) all such action as shall be necessary to transfer or lease to NHA, as and when it is needed, all such public land or rights in respect of public land as shall be required by NHA for carrying out the Project and shall furnish to the Bank, promptly after such transfer or lease, an English translation of evidence satisfactory to the Bank that such land and rights in respect of land are available; and (b) all reasonable measures to ensure that the execution and operation of the Project are carried out with due regard to ecological and environmental factors.

9 -8- Section The Borrower shall cause its appropriate agencies and authorities to provide, from their -wn resources, in slum improvement areas, high priority social and economic programs identified by SUO, which shall for such purpose solicit the views of local residents and community committees. Section The Borrower shall, through its Ministry of Education, construct, in a timely manner, the secondary school at Lat Krabang, and provide all resources necessary for such purpose. 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, namely, that: (a) NHA shall have failed to perform any covenant, agreement or obligation of NHA under the Project Agreement; and (b) an extraordinary situation shall have arisen which shall make it improbable that NHA will be able to perform its obligations under the Project Agreement. Section For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (h) thereof namely, that the event specified in paragraph (a) of Section 5.01 of this Agreement shall occur and shall continue for a period of 60 days after notice -thereof shall have been given by the Bank to the Borrower and NHA. ARTICLE VI Effective Date; Termination Section The following event is specified as an additional condition to the effectiveness of the Loan Agreement within the meaning of Section (c) of the General Conditions, namely, that the Subsidiary Loan Agreement has been executed on behalf of the Borrower and NHA. Section The following are specified as additional 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:

10 -9- (a) that the Project Agreement has been duly authorized or ratified by NHA, and is legally binding upon NHA in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and NHA and is legally binding upon the Borrower and NHA in accordance with its terms. Section The date /frvemhx- 6, /9O, is hereby specified for the purposes of Section of the General Conditions. ARTICLE VII Representatives 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: Minister of Finance Ministry of Finance Bangkok Thailand Cable address: MINANCE Bangkok Telex: TH-2823 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)

11 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. KINGDOM OF THAILAND By SI [19OA llm'qn6 Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Regional Vice President East Asia and Pacific

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) Civil works 22,800,000 65% (2) Equipment and mate- 680,000 rials (a) imported directly (b) manufactured locally 100% of foreign expenditures 100% of local expenditures (ex-factory) (c) other locally 65% procured (3) Building materials 790,000 65% of loans loans disbursed (4) Technical assistance 80, % services and training (5) Unallocated 4,650,000 TOTAL 29,000, For the purposes of this Schedule: in (a) the term "foreign expenditures" means expenditures the currency of any country other than the Borrower and for

13 goods or services supplied from the territory of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower and for goods or services supplied from the territory of 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, 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 except that withdrawals in an aggregate amount not exceeding the equivalent of $100,000 may be made in respect of Category 1 on account of payments made for such expenditures before that date but after May 1, 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

14 of the Loan and the Bank may, without in any way restricting or limitina 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 SCHEDULE 2 Description of the Project Part A: Sites and Services in Bangkok Development of about 3,500 residential and commercial shophouse units on a 100 ha (equivalent to 625 rai) site at Lat Krabang, including (i) site preparation and on-site infrastructure consisting of roads, drainage, water supply, sewage treatment plant, sewerage and electricity connections, and flood protection; (ii) core houses with sanitary facilities; (iii) building materials loans for house completion through self-help; (iv) community facilities; (v) areas for commercial use and for small-scale industry; (vi) off-site infrastructure including an access road and power supply line; and (vii) a road (approximately 6.7 kms in length with 8 m wide paved surface) linking the above site to the industrial site at Lat Krabang. Part B: Sites and Services in the Regional Cities of Chiang Mai, Songkhla, Chantaburi, Khon Kaen and Nakhon Sawan Development of about 3,250 residential and commercial shophouse units on approximately 50 ha (equivalent to rai), including (i) site preparation and on-site infrastructure; (ii) core houses with sanitary facilities; (iii) building materials loans for house completion through self-help; (iv) community facilities; (v) areas for commercial use and for small-scale industry; and (vi) off-site infrastructure. Part C: Bangkok Slum Improvement Provision of basic infrastructure services, community facilities and socio-economic programs for approximately 12,000 households; Part D: Employment Generation Provision of loans and technical assistance for small businesses and industries in Project areas. Part E: Technical Assistance (i) Strengthening of NHA through the provision of about 5 man-months of advisory services in monitoring and evaluation, selected equipment and training of staff.

16 (ii) Carrying out of a study of housing finance (focusing primarily on sources of funds and institutional relationships and practices) through the provision of about 12 man-months of advisory services to the Ministry of Finance, NHA, and GHB to identify measures to mobilize additional domestic resources for housing and to increase low-income families' access to housing finance. (iii) Strengthening of municipal finance and administration through the carrying out of studies and through the provision of about 107 man-months of advisory services to the Ministry of Interior and BMA in the fields of municipal finance and administration, property valuation and property taxation, and training of staff. (iv) Preparation.of urban development projects in selected regional cities through the provision of about 50 man-months of professional services to the Ministry of Interior. The Project is expected to be completed by December 31, 1983.

17 SCHEDULE 3 Amortization Schedule Date Payment Due Payment of Principal (expressed in dollars)* On each March 1 and September 1 beginning March 1, 1986 through March 1, ,000 On September 1, ,015,000 * 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 1.25% before maturity More than three years but 2.50% not more than six years before maturity More than six years but 4.55% not more than eleven years before maturity More than eleven years 6.60% but not more than sixteen years before maturity More than sixteen years 7.40% but not more than eighteen years before maturity More than eighteen years 8.25% before maturity

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,1982 FOR SECRETARY