Public Disclosure Authorized CONFORMED COPY CREDIT NUMBER 775 SE Public Disclosure Authorized Project Agreement (Debi Lampsar Irrigation Project) Public Disclosure Authorized between INTERNATIONAL DEVELOPMENT ASSOCIATION and SOCIETE D'AMENAGEMENT ET D'EXPLOITATION DES TERRES DU DELTA DU FLEUVE SENEGAL Public Disclosure Authorized Dated March 17, 1978
CREDIT NUMBER 775 SE PROJECT AGREEMENT AGREEMENT, dated March 17, 1978, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and SOCIETE D'AMENAGEMENT ET D'EXPLOITATION DES TERRES DU DELTA DU FLEUVE SENEGAL (hereinafter called SAED). WHEREAS by the Development Credit Agreement of even date herewith between the Republic of Senegal (hereinafter sometimes called the Borrower or Senegal) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to twenty million dollars ($20,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that SAED agree to undertake such obligations toward the Association as hereinafter set forth; WHEREAS by a financing agreement of even date herewith between the Borrower and SAED, a portion of the proceeds of the credit provided for under the Development Credit Agreement will be made available to SAED on the terms and conditions therein set forth; and WHEREAS SAED, 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 1.01. 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 Section 2.01. SAED shall carry out the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices.
-2- Section 2.02. (a) For the supervision of the construction of Parts A and B of the Project, and for carrying out Part D (ii) of the Project, SAED shall employ by June 30, 1978, or such other date as the Association may agree, consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. (b) For carrying out Parts A, B and D (i) of the Project, SAED shall employ by June 30, 1978, or such other date as the Association may agree, technical specialists (including one financial controller, two agronomists, one mechanical engineer and one livestock specialist) whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 2.03. Except as the Association shall otherwise agree, procurement of goods and civil works to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.04. (a) SAED undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit made available to it by the Borrower 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 SAED to replace or repair such goods. (b) Except as the Association may otherwise agree, SAED shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclusively for the Project. Section 2.05. (a) SAED shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) SAED: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use in the Project; (ii) shall enable the
-3- Association'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 Credit and any relevant records and documents; and (iii) shall furnish to the Association at regular intervals all such information as the Association shall reasonably request concerning the Project, its cost and where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. (c) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between SAED and the Association, SAED shall prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower, the Association and SAED of their respective obligations under the Development Credit Agreement and the Project Agreement and the accomplishment of the purposes of the Credit. (d) SAED shall enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment of SAED; SAED undertakes to furnish to the Association any records and documents pertaining to the foregoing provided that the transmission of such records and documents shall be deemed to the reasonable by both the Association and SAED. Section 2.06. SAED shall duly perform all its obligations under the Secoi.d SAED Financing Agreement. Except as the Association shall otherwise agree, SAED shall not take any action which would have the effect of amending, abrogating, assigning or waiving the Second SAED Financing Agreement or any provision thereof. Section 2.07. (a) Without prejudice to the legal and/or administrative provisions which govern the tutelle of SAED, SAED shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement and under the Second SAED Financing Agreement, and other matters relating to the purposes of the Credit.
-4- (b) Without prejudice to the legal and/or administrative provisions which govern the tutelle of SAED, SAED shall promptly inform the Association of any condition which interferes or threatens to interfere with, the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by SAED of its obligations under this Agreement and under the Second SAED Financing Agreement. Section 2.08. Except as the Association shall otherwise agree, SAED shall conclude with each farmer or farmer group allocated land in the Project Area, an agreement in accordance with a form of agreement acceptable to the Borrower and the Association; such form of agreement shall provide inter alia that the amount of land allocated to a farmer pursuant to said agreement may be reduced should the original amount of land so allocated prove to be beyond the capacities of such farmer to work efficiently. SAED shall take all necessary steps to ensure that the provisions of said agreements shall be duly enforced at all times. Section 2.09. Except as the Association shall otherwise agree, SAED shall during the period of carrying out of the Project: (i) employ a qualified and experienced person to serve in the position of 'Directeur General and persons with qualifications and experience acceptable to the Association on terms and conditions satisfactory to the Association to serve in the positions of agent comptable particulier of SAED and of sub-project managers for the carrying out of each of the Parts A and B of the Project; (ii) (iii) employ such additional qualified and experienced staff as may be required to carry out the Project; and take all necessary steps on its part to ensure that the technical specialists referred to in Section 2.02 (b) of this Agreement shall be replaced only by personnel with qualifications and experience acceptable to the Association. Section 2.10. Except as the Association shall otherwise agree, SAED shall take all steps necessary on its part to establish and, thereaftei, maintain an account with BNDS, for the purpose of receiving the funds required for the Project. I
-5- ARTICLE III Management and Operations of SAED Section 3.01. SAED shall at all times manage its affairs, maintain its financial position, plan its future expansion and carry on its operations, all in accordance with appropriate administrative, financial, engineering and agricultural practices and under the supervision of experienced and competent management assisted by qualified and competent staff. Section 3.02. SAED shall at all times take all such action as shall be necessary on its part to acquire, maintain and renew all rights, powers and privileges which are necessary or useful in its operations. Section 3.03. SAED shall at all times operate, maintain, renew and repair its facilities, plant, equipment and machinery in accordance with appropriate engineering and management practices. Section 3.04. SAED shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.05. (a) Except as the Association shall otherwise agree, SAED shall charge and collect, from farmers or farmer groups to whom land in the Debi and Lampsar Sub-Project Areas has been allocated, and from other farmers or farmer groups to whom land in other improved areas administered by SAED has been allocated and where water is supplied under conditions at least as favorable as in the Debi and Lampsar Sub-Project Areas, annual consolidated fees for each hectare allocated to such farmers or farmer groups. (b) Without limitation or restriction to the provisions of paragraph (a) of this Section 3.05 of the Agreement, SAED shall: (i) not later than June 30, 1980, or such other date as the Association may agree, set and thereafter maintain and collect water charges for each hectare of land developed in the Project Area under the Project; such water charges shall be set at levels under which (I) as much as possible of irrigation infrastructure investment costs under the Project
- 6 - are recovered over the life of such investments consistent with the ability of farmers to pay while maintaining sufficient incentives for participating farmers, and (II) in addition thereto the operation and maintenance costs of the facilities constructed under the Project are recovered; and (ii) collect after the first year of participation of participating farmers charges on account of mechanization services provided to participating farmers to a reasonable provision for depreciation of equipment used in providing such services, the operation and maintenance costs of such equipment. (c) SAED shall consult with the Association, annually and in advance, in establishing annual consolidated fees to be imposed on farmers and farmer groups in accordance with paragraphs (a) and (b) of this Section. ARTICLE IV Financial Covenants Section 4.01. (a) SAED shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. (b) Without limitation or restriction upon the provisions of subsection (a), SAED shall: (i) establish and maintain separate accounts in respect of each Part of the Project, in which expenditures in respect of each such Part (including management and overhead costs and those on research and training) shall be recorded separately and in such detail as to identify the purpose and function of each expenditure; (ii) maintain individual accounts for farmers or farmer groups receiving credit for farm inputs and land cultivation services; and (iii) maintain a consolidated fee account, in which shall be recorded the amounts of all consolidated fees received from farmers in the Debi and Lampsar Sub-Project Areas and other areas managed by SAED. Section 4.02. SAED shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish
-7- to the Association as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its financial statements for such year as so audited, and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of SAED and the audit thereof as the Association shall from time to time reasonably request. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of SAED thereunder shall terminate on the earlier of the following two dates: (i) (ii) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or a date 30 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify SAED of this event. Section 5.03. 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 6.01. 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
-8- 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. 20433 United States of America Cable address: INDEVAS Washington, D.C. Telex: 440098 (ITT) 248423 (RCA) or 64145 (WUI) For SAED: Societe d'amenagement et d'exploitation des Terres du Delta du Fleuve Senegal (SAED) Botte Postale 74 Saint Louis Senegal Cable address: SAED Saint Louis - Senegal Telex: 7764 SG SL Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of SAED may be taken or executed by the Directeur General of SAED or such other person or persons as he shall designate in writing. Section 6.03. SAED 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 SAED, take any action or execute any documents required or permitted to be taken or executed by SAED pursuant to any of the provisions of this Agreement.
- 9 - Section 6.04. 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 in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By Is/ X. de la Renaudiere Acting Regional Vice President Western Africa SOCIETE D'AMENAGEMENT ET D'EXPLOITATION DES TERRES DU DELTA DU FLEUVE SENEGAL By Is! A. Coulbary Authorized Representative
- 10 - SCHEDULE Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, contracts for the purchase of goods or for civil works shall be procured in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. Contracts for similar items shall, to the extent practicable, be grouped into one single bid. 3. For goods and works to be procured on the basis of international competitive bidding under the Project, SAED shall prepare and forward to the Association as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender documents relating thereto, a general procurement notice, in such form and detail and containing such information as the Association shall reasonably request; the Association will arrange for the publication of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods and works in question. SAED shall provide the necessary information to update such notice annually so long as any goods or works remain to be procured on the basis of international competitive bidding. B. Other Procurement Procedures Notwithstanding the provisions of paragraph A.1 above: (i) contracts for equipment estimated to cost the equivalent of $15,000, or more but less than the equivalent of $100,000, may be awarded on the basis of local competitive bidding procedures of the Borrower acceptable to the Association; provided, however, that the aggregate amount of all contracts to be so awarded shall not exceed the equivalent of $1,000,000; and
- 11 - (ii) contracts for equipment estimated to cost less than the equivalent of $15,000 may be awarded by SAED through negotiated purchees, on the basis of at least three quotations for each of the contracts to be placed; provided, however, that the aggregate amount of all contracts to be so awarded shall not exceed the equivalent of $500,000. C. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the supply of goods except those to be procured in accordance with local procedures: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for domestically manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically supplied goods, shall be excluded; and (iii) the cost to SAED of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. 2. Goods manufactured in Senegal may be granted a margin of preference in accordance with, and subject to, the following provisions: (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Senegal if the bidder shall have established to the satisfaction of SAED and the Association that the manufacturing cost of such goods includes a value added in Senegal equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Senegal.
- 12 - (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes on goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evaluated bid of each group. Such lowest evaluated bids shall then be compared with each other, and if, as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. (d) If, as a result of the comparison under paragraph (c) above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to: (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid; or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shall be selected. D. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for equipment estimated to cost the equivalent of $100,000 or more: (a) Before bids are invited, SAED shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders.
- 13 - (b) After bids have been received and evaluated, SAED shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, in sufficient time for its review, a detailed report, by the consultants referred to in Section 2.02 (a) 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 Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform SAED and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding paragraph, SAED shall furnish to the Association, promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective 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 was not consistent with the Guidelines or this Schedule, promptly inform SAED and state the reasons for such determination.