Public Disclosure Authorized His Excellency Lic. Rafael Calderon Technical Secretary of the Presidency Avenida Mexico Palacio Nacional Santo Domingo, Dominican Republic April 10, 2002 Public Disclosure Authorized Mr. Silvio Carrasco General Manager Instituto Nacional de Recursos Hidráulicos Centro de los Heroes Santo Domingo, Dominican Republic Dear Sirs: Re: Loan No. 3875-DO (Irrigated Land and Watershed Management Project) Amendment to the Loan Agreement Public Disclosure Authorized Public Disclosure Authorized Please refer to the Loan Agreement between the Dominican Republic (the Borrower) and the International Bank for Reconstruction and Development (the Bank) and the Project Agreement between the Bank and Instituto Nacional de Recursos Hidraulicos (INDRHI), both dated November 14, 1995, as amended. In response to the letters of October 26 and November 8, 2001 from Mr. Silvio Carrasco, Executive Director of INDHRI to the Bank in which it was requested to: (a) reallocate a portion of the Loan proceeds assigned to the Unallocated category to other disbursement categories (as said categories are set forth in the table in paragraph 1 of Schedule 1 to the Loan Agreement) for purposes of continuing the financing of Project activities; (b) amend the condition of disbursement for Project activities under Parts A.1 and A.3 through A.8 of the Project; (c) modify the dates in Sections 3.04 and 3.06 of the Loan Agreement concerning the preparation and implementation of the actions plans referred to in said sections; (d) modify the dates in Sections 2.08 and 2.10 of the Project Agreement concerning the carrying out of the studies under Part E (a) and (b) of the Project, and the preparation and presentation to the Bank of acceptable operational manuals which will set forth cost-recovery mechanisms for operation and maintenance costs, and capital costs to be applied to each Water Users Association (as said term is defined in Section 1.02 (w) of the Loan Agreement) that will benefit from the works under Parts A.1 and A.3 through A.8 of the Project; and (e) increase the procurement threshold for the local competitive bidding procedure, the Bank hereby agrees to amend the Loan Agreement and Project Agreement as follows: I. Loan Agreement: 1. Section 1.02 is hereby amended by: (a) deleting the word and at the end of paragraph (aa); (b) replacing the period at the end of paragraph (bb) by the word and ; and (c) adding a new paragraph (cc) which shall read as follows: Carta Constancia means the legal document issued by the Borrower s Registry of Land
Titles to an individual or a group of individuals who are in possession of a plot of land for purposes of: (i) evidencing the possession of said land by said individual or individuals, as the case may be; and (ii) thereafter granting final title of said land to said individual or individuals, as the case may be. 2. Sections 3.04 and 3.06 are hereby amended in their entirety to read as follows: Section 3.04. The Borrower shall: (a) by no later than December 31, 2001, prepare and furnish to the Bank an action plan, satisfactory to the Bank, to distribute final land titles to the farmers living in the Nizao Watershed Area, which shall include, inter alia, a timetable for its implementation; b) by no later than February 1, 2002, commence the implementation of the Action Plan; and (c)by no later than February 1, 2003, complete the implementation of the Action Plan. Section 3.06. By no later than July 1, 2002, the Borrower shall prepare and furnish to the Bank an action plan, satisfactory to the Bank, to: (a) raise, by no later than January 1, 2003, the level of the water charges to the Water Users Associations in the Irrigated Area in order to recover all operation and maintenance costs; and (b) introduce, by no later than January 1, 2003, measures that will enable INDRHI to recover from farmers holding more than 6.3 hectares of irrigated land a significant portion of the capital cost of the investments carried out or to be carried out under Parts A.1 and A.3 through A.8 of the Project.. 3. The table in paragraph 1 of Schedule 1 is hereby amended in its entirety to read as set forth in the Annex to this Amendment Letter. 4. Paragraph 3 (b) of Schedule 1 is hereby amended in its entirety to read as follows: (b) payments made for expenditures under Parts A.1 and A.3 through A.8 of the Project, unless the Bank has received evidence, satisfactory to the Bank, that at least 80% of the farmers living in each of the Irrigated Areas has met all the legal requirements for the issuance of the Carta Constancia, and that said farmers have formally filed a petition with the Borrower s Tribunal de Tierras for the issuance of the corresponding Carta Constancia ;. 5. Paragraph 4 of Schedule 1 is hereby amended in its entirety to read as follows: 4. The Bank may require withdrawals from the Loan Account to be made on the basis of statements of expenditure for expenditures under contracts for: (a) works and goods estimated to cost less than $1,000,000 and $200,000 equivalent, respectively (other than the first contract for works to be awarded under Part C.4 of Section I of Schedule 1 to the Project Agreement);(b) consulting firms and individual consultants estimated to cost less
than $50,000 or $20,000, respectively; and (c) all incremental operating costs, all under such terms and conditions as the Bank shall specify by notice to the Borrower.. II. Project Agreement: 1. Sections 2.08 and 2.10 are hereby amended to read in their entirety as follows: Section 2.08. Without limitation to the provisions of Section 2.01 of this Agreement, INDRHI shall: (a) by no later than June 30, 2003, complete the studies referred to in Part E (a) and (b) of the Project; (b) by no later than August 30, 2003, review jointly with the Bank the recommendations of such studies; and (c) immediately thereafter, implement such recommendations in a manner satisfactory to the Bank. Section 2.10. (a) INDRHI shall, by no later than January 1, 2003, prepare and furnish to the Bank an operational manual satisfactory to the Bank, which shall include, inter alia, a cost-recovery mechanism for operation and maintenance costs to be applied to each Water Users Association that will benefit from the works carried out, or to be carried out, by INDRHI under Parts A.1 and A.3 through A.8 of the Project. (b) INDRHI shall, by no later than January 1, 2003, prepare and furnish to the Bank an operational manual, satisfactory to the Bank, which shall include, inter alia, a cost recovery mechanism for capital costs to be applied to each Water Users Association that will benefit from the works carried out, or to be carried out, by INDRHI under Parts A.1 and A.3 through A.8 of the Project. (c) Except as the Bank shall otherwise agree, INDRHI shall not amend, suspend, terminate, waive or fail to enforce the operational manuals referred to in subparagraphs (a) and (b) above.. 2. Schedule 1 is hereby amended to read as follows: (a) in paragraph (c) of Part A of Section I of Schedule 1, the amount of $1,000,000 is hereby replaced by the amount of $2,000,000. (b) the following text shall replace the text in Part C.2 of Section I: 2. Works (other than works under Parts A.2 and B.2 of the Project) estimated to cost the equivalent of less than $2,000,000 but more than $200,000 per contract, up to an aggregate amount equivalent to $7,200,000, may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Bank.. (c) the following text shall replace the text in Part D.1(a): (a) With respect to: (i) each contract to be awarded pursuant to the provisions of Part A hereof; (ii) the first contract to be awarded pursuant to the provisions of Parts C.1, and C.4 hereof; and (iii) each contract for
works under Part C.2 hereof estimated to cost the equivalent of $1,000,000 or more, the procedures set forth in paragraphs 2 and 3 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Bank pursuant to said paragraph 2 (d) shall be furnished to the Bank prior to the making of the first payment out of the Special Account in respect of such contract.. III. Effectiveness: This Amendment Letter shall be executed in three counterparts each of which shall be an original. Upon receipt by the Bank of one fully executed original of this Amendment Letter, this amendment will be effective as of the date first above written. Please confirm your agreement to the foregoing amendments by signing and dating the three counterparts of this Amendment Letter. Very truly yours, International Bank for Reconstruction and Development By /s/ William Expertpm William Experton Acting Director Caribbean Country Management Unit Latin America and the Caribbean Region CONFIRMED AND AGREED: DOMINICAN REPUBLIC By: /s/ Rafael Calderón Authorized Representative Date: April 24, 2002 INSTITUTO NACIONAL DE RECURSOS HIDRAULICOS By: /s/ Silvio Carrasco Authorized Representative Date: April 24, 2002 Annex 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 (Expresses in Expenditures Category Dollar Equivalent) to be Financed (1) Civil work (a) Infrastructure 7,000,000 80% (b) Land leveling 2,400,000 80% (c) Under par A.2 of the 1,050,316 80% Project (2) Goods, others than those 2,520,000 100% of foreign required under Part C of the expenditures; Project 100% of local (expenditures ex-factory cost) ; 85% of local expenditures for others items procured locally (3) Consultant s Services 9,000,000 100% and Training, other that those required under Part C of the Project (4) Research and extension 1,400,000 100% of foreign services under Part C of expenditures the Project and the 60% of Local expenditures (5) Subgrants (a) under Part B.1 2,400,000) 100% of amounts of the Project ) disbursed under a Subgrant (b) under Part B.2 0) of the Project ) (6) Incremental Operating Costs 600,000 100% until withdrawal
applications have reached the the aggregate of $350,000; 80% until withdrawal applications have reached the aggregate of $500,000; and 50% thereafter (7) Unallocated 1,330,420.44 Cancellation On May 10, 2000 299,263.56 TOTAL 28,000,000.