CREDIT NUMBER /5 7BD
DOCUMENTS
Development Credit Agreement
(Flood Rehabilitation Project)
between
PEOPLE'S REPUBLIC OF BANGLADESH
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated , 1985
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CREDIT NUMBER / 7 BD
DEVELOPMENT CREDIT AGREEMENT
AGREEMENT, dated , 1985,between PEOPLE'S REPUBLIC OF B LADESH (the Borrower) andINTERNATIONAL DEVELOPMENT ASSOCIATN (the Association).
WHEREAS (A) the Borrower, having satisfied itself as to thefeasibility and priority of the Project described in Schedule 2to this Agreement, has requested the Association to assist in thefinancing of the Project; and
WHEREAS the Association has agreed, on the basis, interalia, of the foregoing, to extend the Credit to the Borrower uponthe terms and conditions set forth in this Agreement;
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
General Conditions; Definitionn
Section 1.01. The General Conditions Applicable to Develop-ment Credit Agreements of the Association, dated January 1, 1985,with the modifications set forth in Schedule 6 to this Agreement(the General Conditions) constitute an integral part of thisAgreement.
Section 1.02. Unless the context otherwise requires, theseveral terms defined in the General Conditions have the respec-tive meanings therein set forth and the following additionalterms have the following meanings:
(a) "BWDB" means the Bangladesh Water Development Boardestablished and operating pursuant to the Bangladesh Water andPower Development Board Order, 1972 (P.O. No. 59 of 1972);
(b) "RHD" means the Roads and Highways Department of theMinistry of Communications of the Borrower;
(c) "IWTA" means the Inland Water Transport Authorityestablished under the Inland Water Transport Authority Ordinance,1958 (EP Ordinance No. LXXV of 1958);
(d) "LGD" means the Local Government Division within theMinistry of Local Government, Rural Development and Cooperativesof the Borrower;
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(e) "Implementing Agencies" means BWDB, RHD, IWTA and LGDcollectively;
(f) "Bangladesh Bank" means the Central Bank of Bangladeshestablished under Bangladesh Bank Order, 1972 (President's OrderNo. 127, 1972);
(g) "Rehabilitation Works" means any program of reconstruc-tion or repair, including the provision of equipment and techni-cal assistance therefor, selected or proposed to be selected bythe Borrower under the Project pursuant to Section 3.02 of thisAgreement; and
(h) "Special Account" means the account referred to in Sec-tion 2.02 (b) of this Agreement.
ARTICLE II
The Credit
Section 2.01, The Association agrees to lend to the Bor-rower, on the terms and conditions set forth or referred to inthe Development Credit Agreement, an amount in various currenciesequivalent to thirty-one million three hundred thousand SpecialDrawing Rights (SDR 31,300,000).
Section 2.02. (a) The amount of the Credit may be withdrawnfrom the Credit Account in accordance with the provisions ofSchedule 1 to this Agreement, as such Schedule may be amendedfrom time to time by agreement between the Borrower and the Asso-ciation, for expenditures made (or, if the Association shall soagree, to be made) in respect of the reasonable cost of goods andservices required for the Project described in Schedule 2 to thisAgreement and to be financed out of the proceeds of the Credit.
(b) the Borrower shall, for the purposes of the Project,open and maintain in dollars a special account in BangladeshBank on terms and conditions satisfactory to the Association.Deposits into, and payments out of, the Special Account shall bemade in accordance with the provisions of Schedule 4 to thisAgreement.
Section 2.03. The Closing Date shall be December 31, 1987or such later date as the Association shall establish. The
Association shall promptly notify the Borrower of such laterdate.
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Section 2.04. (a) The Borrower shall pay to the Associationa commitment charge at the rate of one-half of one per cent (1/2of 1%) per annum on the principal amount of the Credit not with-drawn from time to time. The commitment charge shall accrue froma date sixty days after the date of the Development Credit Agree-ment to the respective dates on which amounts shall be withdrawnby the Borrower from the Credit Account or shall be cancelled.
(b) The commitment charge shall be paid: (i) at such placesas the Association shall reasonably request; (ii) without re-strictions of any kind imposed by, or in the territory of, theBorrower; and (iii) in the currency specified in this Agreementfor the purposes of Section 4.02 of the General Conditions or insuch other eligible currency or currencies as may from time totime be designated or selected pursuant to the provisions of thatSection.
Section 2.05. The Borrower shall pay to the Association aservice charge at the rate of three-fourths of one per cent (3/4of 1%) per annum on the principal amount of the Credit withdrawnand outstanding from time to time.
Section 2.06. Commitment charges and service charges shallbe payable semiannually on April 15 and October 15 in each year.
Section 2.07. The Borrower shall repay the principal amountof the Credit in semiannual installments payable on each April 15and October 15 commencing October 15, 1995 and ending April 15,2035. Each installment to and including the installment payableon April 15, 2005, shall be one-half of one per cent (1/2 of 1%)of such principal amount, and each installment thereafter shallbe one and one-half per cent (1-1/2%) of such principal amount.
Section 2.08. The currency of the United States of Americais hereby specified for the purposes of Section 4.02 of theGeneral Conditions.
ARTICLE III
Execution of the Project
Section 3.01. (a) The Borrower declares its commitment tothe objectives of the Project as set forth in Schedule 2 to thisAgreement, and, to this end, shall carry out the Project throughthe Implementing Agencies with due diligence and efficiency and
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in conformity with appropriate administrative, financial andengineering practices, and shall provide, promptly as needed, thefunds, facilities, services and other resources required for theProject.
(b) Without any limitation to the generality of paragraph(a) above, the Borrower shall ensure that adequate funds will beallocated for the operation and maintenance of the RehabilitationWorks.
Section 3.02. Without limitation or restriction on the Bor-rower's obligations under Section 3.01 of this Agreement, theBorrower shall, or shall cause the Implementing Agencies to,select Rehabilitation Works to be carried out under the Projectin accordance with criteria satisfactory to the Associationincluding those set forth in Schedule 5 to this Agreement.
Section 3.03. Except as the Association shall otherwiseagree, procurement of the goods, works and consultants' servicesrequired for the Project and to be financed out of the proceedsof the Credit shall be governed by the provisions of Schedule 3to this Agreement.
Section 3.04. The Borrower shall cause the ImplementingAgencies to construct and improve all works included in theProject in accordance with design standards and constructionspecifications satisfactory to the Association.
Section 3.05. The Borrower shall:
(a) carry out a study, under terms of reference satisfac-tory to the Association, for the purpose of strengthening theexisting flood preparedness system;
(b) by December 31, 1986, furnish to the Association forits comments the findings and recommendations of such study; and
(c) thereafter implement such recommendations as the Bor-
rower and the Association shall have agreed upon.
ARTICLE IV
Other Covenants
Section 4.01. (a) The Borrower shall maintain or cause to be
maintained records and accounts adequate to reflect, in accordance
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with sound accounting practices the operations, resources and ex-penditures, in respect of the Project, of the Implementing Agen-cies.
(b) The Borrower shall, or shall cause the ImplementingAgencies to:
(i) have the accounts referred to in paragraph (a) ofthis Section, including the Special Account, foreach fiscal year audited in accordance with appro-priate auditing principles consistently applied,by independent auditors acceptable to the Asso-ciation;
(ii) furnish to the Association, as soon as available,but in any case not later than nine months afterthe end of each such year, a certified copy of thereport of such audit by the said auditors, of suchscope and in such detail as the Association shallhave reasonably requested; and
(iii) furnish to the Association such other informationconcerning the said accounts and the audit thereofand said records as the Association shall fromtime to time reasonably request.
(c) For all expenditures with respect to which withdrawalsare requested from the Credit Account on the basis of statementsof expenditure, the Borrower shall, or shall cause the Implement-ing Agencies to:
(i) maintain, in accordance with paragraph (a) of thisSection, separate records and accounts reflectingsuch expenditures;
(ii) retain, until one year after the Closing Date, allrecords (contracts, orders, invoices, bills, re-ceipts and other documents) evidencing such expen-ditures;
(iii) enable the Association's representatives to exam-ine such records; and
(iv) ensure that such separate accounts are included inthe annual audit referred to in paragraph (b) of
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this Section and that the report thereof contains,in respect of such separate accounts, a separateopinion by the said auditors as to whether theproceeds of the Credit withdrawn in respect ofsuch expenditures have been used for the purposefor which they were provided.
ARTICLE V
Termination
Section 5.01. The date 60 days after the date of thisAgreement is hereby specified for the purposes of Section 12.04of the General Conditions.
ARTICLE VI
Representative of the Borrower; Addresses
Section 6.01. The Secretary or any Additional Secretary,Joint Secretary, Deputy Secretary or Section Officer of theExternal Resources Division of the Ministry of Finance of theBorrower is designated as representative of the Borrower for thepurposes of Section 11.03 of the General Conditions.
Section 6.02. The following addresses are specified for thepurposes of Section 11.01 of the General Conditions:
For the Borrower:
External Resources DivisionMinistry of FinanceGovernment of the People's
Republic of BangladeshDhaka, Bangladesh
Cable address: Telex:
BAHIRSAMPAD 642226 SETU BJ
Dhaka
For the Association:
International Development Association1818 H Street, N.W.Washington, D.C. 20433United States of America
Cable address: Telex:
INDEVAS 440098 (ITT)Washington, D.C. 248423 (RCA) or
64145 (WUI)
IN WITNESS WHEREOF, the parties hereto, acting through their
duly authorized representatives, 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.
PEOPLE'S REPUBLIC OF BANGLADESH
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /5/Regional Vice President
South Asia
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SCHEDULE 1
Withdrawal of the Proceeds of the Credit
1. The table below sets forth the Categories of items to be
financed out of the proceeds of the Credit, the allocation of the
amounts of the Credit to each Category and the percentage of
expenditures for items so to be financed in each Category:
Amount of theCredit Allocated % of
(Expressed in Expenditures
Category SDR Equivalent) to be Fi-nanced
(1) BWDB
(a) Civil works 2,100,000 95%
(includingconstructionmaterials)
(b) Consultants' 525,000 100%
services
(2) RHD
(a) Civil works 12,570,000 95%
(includingconstructionmaterials)
(b) Equipment 2,000,000 100% of foreign
expenditures,100% of local
expenditures (ex-factory cost) and
70% of local ex-
penditures for
other items pro-cured locally
(c) Consultants' 325,000 100%
services
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Amount of theCredit Allocated % of(Expressed in Expenditures
Category SDR Equivalent) to be Financed
(3) IWTA
(a) Civil works 195,000 95%(includingconstructionmaterials)
(b) Equipment 1,400,000 100% of foreignexpenditures,100% of localexpenditures (ex-factory cost) and70% of local ex-penditures forother items pro-cured locally
(4) LGD
(a) Civil works 5,630,000 95%(includingconstructionmaterials)
(b) Consultants' 325,000 100%services
(5) Special Account Amounts to be de-posited pursuant
(a) BWDB 750,000 to paragraph 3(a)of Schedule 4 to
(b) RHD 2,000,000 this Agreement
(c) IWTA 530,000
(d) LGD 950,000
(6) Unallocated 2,000,000
TOTAL 31,300,000
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2. For the purposes of this Schedule:
(a) the term "foreign expenditures" means expenditures in
the currency of any country other than that of the Borrower for
goods or services supplied from the territory of any country
other than that of the Borrower; and
(b) the term "local expenditures" means expenditures in the
currency of the Borrower or for goods or services supplied from
the territory of the Borrower.
3. Notwithstanding the provisions of paragraph 1 above, no
withdrawals shall be made in respect of payments made for ex-
penditures prior to the date of this Agreement except that with-
drawals, in an aggregate amount not exceeding the equivalent of
SDR 6,300,000, may be made in respect of Categories (2), (3) and
(4) on account of payments made for expenditures before that date
but after October 1, 1984.
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SCHEDULE 2
Description of the Project
The objectivea of the Project are to assist the Borrower inthe financing of a high priority program to restore flood damagedfacilities in the Borrower's territory.
The Project consists of the following parts, subject to suchmodifications thereof as the Borrower and the Association mayagree upon from time to time to achieve such objectives:
Part A:
Restoration, by BWDB, of irrigation, drainage and flood pro-tection works comprising, inter alia: the compacted filling ofembankment breaches; the resectioning, strengthening and protect-ing of damaged embankments; the retirement of embankments wherethe existing location is no longer tenable; and the repair orreplacement of damaged or destroyed water control structures.
Part B:
Restoration, by RHD and LGD, of roads and associatedstructures comprising, inter alia: the compacted filling ofembankment breaches; the resectioning, strengthening andprotecting of eroded embankments; reconstruction of damagedculverts, bridges and retaining walls; restoration of roadshoulders; and the repair and strengthening of damaged pavement.
Part C:
Provision to RHD of additional equipment and material toenable RHD to carry out its construction programs under Part B ofthe Project.
Part D:
Provision to IWTA of navigational aids and other equipmentto replace the flood damaged equipment, including, inter alia,the provision of steel lantern buoys, mooring gear, dredger pipe,steel pontoons, shore beacons, markers, gauges and recorders aswell as two work boats and a tug boat.
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Part E:
Repair, by IWTA, of jetties and landing stages damaged by
the floods.
Part F:
Provision of technical assistance to BWDB, RHD and LGD.
The Project is expected to be completed by June 30, 1987.
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SCHEDULE 3
Procurement and Consultants' Services
Section I. Procurement of Goods and Works
Part A. International Competitive Bidding
Except as provided in Part C hereof, goods shall be procuredunder contracts awarded in accordance with procedures consistentwith those set forth in Sections I and II of the "Guidelines forProcurement under IBRD Loans and IDA Credits" published by theBank in August 1984 (the Guidelines).
Part B. Preference for Domestic Manufacturers
In the procurement of goods in accordance with the pro-cedures described in Part A hereof, goods manufactured inBangladesh may be granted a margin of preference in accordancewith, and subject to, the provisions of paragraphs 2.55 and2.56 of the Guidelines and paragraphs 1 through 4 of Appendix 2thereto.
Part C. Other Procurement Procedures
1. Contracts for civil works shall be awarded on the basis oflocal competitive bidding procedures satisfactory to the Associa-tion, provided, however, that installation of sluice gates may becarried out through force account.
2. Contracts for pontoons, buoys and workboats may be awardedon the basis of competitive bidding, advertised locally, inaccordance with procedures satisfactory to the Association.
Part D. Review by the Association of Procurement Decisions
1. Review of invitations to bid and of proposed awards andfinal contracts:
(a) With respect to each contract estimated to cost theequivalent of $150,000 or more, the procedures set forth inparagraphs 2 and 4 of Appendix 1 to the Guidelines shall apply.Where payments for such contract are to be made out of theSpecial Account, such procedures shall be modified to ensure thatthe two conformed copies of the contract required to be furnished
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to the Association pursuant to said paragraph 2 (d) shall be
furnished to the Association prior to the making of the first
payment out of the Special Account in respect of such contract.
(b) With respect to each contract not governed by the pre-ceding paragraph, the procedures set forth in paragraphs 3 and 4
of Appendix 1 to the Guidelines shall apply. Where payments forsuch 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 together with the other information
required to be furnished to the Association pursuant to said
paragraph 3 shall be furnished to the Association as part of theevidence to be furnished pursuant to paragraph 4 of Schedule 4
(the Special-Account Schedule) to this Agreement.
(c) The provisions of the preceding subparagraphs (a) and
(b) shall not apply to contracts on account of which the Associa-
tion has authorized withdrawals from the Credit Account on the
basis of statements of expenditure. Such contracts shall be
retained in accordance with Section 4.01 (c) (ii) of this Agree-ment.
2. The figure of 15% is hereby specified for purposes of para-
graph 4 of Appendix 1 to the Guidelines.
Section II. Employment of Consultants
In order to assist the Borrower in carrying out the Project,
the Borrower shall employ or cause to be employed consultants
whose qualifications, experience and terms and conditions of
employment shall be satisfactory to the Association. Such con-
sultants shall be selected in accordance with principles and
procedures satisfactory to the Association on the basis of the
"Guidelines for the Use of Consultants by World Bank Borrowersand by the World Bank as Executing Agency" published by the Bankin August 1981.
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SCHEDULE 4
Special Account
1. For the purposes of this Schedule:
(a) the term "Category" means a category of items to befinanced out of the proceeds of the Credit as set forth in thetable in paragraph 1 of Schedule 1 to this Agreement;
(b) the term "sub-category" means any of the four sub-categories of Category (5);
(c) the term "eligible expenditures" means expenditures inrespect of the reasonable cost of goods and services required forthe Project and to be financed out of the proceeds of the Creditallocated from time to time to Categories (1), (2), (3) and (4)in accordance with the provisions of Schedule 1 to this Agree-ment; and
(d) the term "Authorized Allocation" means an amount indollars equivalent to the aggregate amount allocated to allsub-categories which is to be withdrawn from the Credit Accountand deposited in the Special Account pursuant to paragraph 3 (a)of this Schedule.
2. Payments out of the Special Account shall be made exclusive-ly for eligible expenditures in accordance with the provisions ofthis Schedule.
3. After the Association has received evidence satisfactory tothe Association that the Special Account has been duly opened,withdrawals of the Authorized Allocation and subsequent with-drawals to replenish the Special Account may be made as follows:
(a) On the basis of a request or requests by the Borrower,in respect of one or more sub-categories, for a deposit ordeposits which add up to the aggregate amount of the AuthorizedAllocation but which do not exceed the respective amountsallocated to each sub-category, the Association shall, on behalfof the Borrower, withdraw from the Credit Account and deposit inthe Special Account such amount or amounts in respect of suchsub-category or sub-categories as the Borrower shall haverequested.
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(b) The Borrower shall furnish to the Association requests
for replenishment of the Special Account at such intervals as the
Association shall specify. On the basis of such requests, the
Association shall withdraw from the Credit Account and deposit
into the Special Account such amounts as shall be required to
replenish the Special Account with amounts not exceeding the
amount of payments made out of the Special Account for eligible
expenditures. Except as the Association may otherwise agree, each
such deposit shall be withdrawn by the Association from the
Credit Account under the respective Categories (1), (2), (3) and
(4) and in the respective equivalent amounts, as shall have been
justified by the evidence supporting the request for such deposit
furnished pursuant to paragraph 4 of this Schedule.
4. For each payment made by the Borrower out of the Special
Account for which the Borrower requests replenishment pursuant to
paragraph 3 (b) of this Schedule, the Borrower shall furnish to
the Association, prior to or at the time of such request, such
documents and other evidence as the Association shall reasonably
request, showing that such payment was made for eligible expen-
ditures.
5. (a) Notwithstanding the provisions of paragraph 3 of this
Schedule, no further deposit into the Special Account shall be
made by the Association when either of the following situations
first arises:
(i) the Association shall have determined that all
further withdrawals can be made directly by the
Borrower from the Credit Account in accordance
with the provisions of paragraph (a) of Section
2.02 of this Agreement; or
(ii) unless otherwise agreed by the Association, when
the total unwithdrawn amount of the Credit allo-
cated to Categories (1), (2), (3) and (4) for the
Project, minus the amount of any outstanding
qualified agreement to reimburse made by the Asso-
ciation and of any outstanding special commitment
entered into by the Association pursuant to
Section 5.02 of the General Conditions with
respect to the Project, shall be equal to the
equivalent of twice the amount of the Authorized
Allocation.
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(b) Thereafter, withdrawal from the Credit Account of theremaining unwithdrawn amount of the Credit allocated to Cate-gories (1), (2), (3) and (4) for the Project shall follow suchprocedures as the Association shall specify by notice to theBorrower. Except as the Association shall otherwise agree, suchfurther withdrawals shall be made only after and to the extentthat the Association shall have been satisfied that all suchamounts remaining on deposit in the Special Account as of thedate of such notice have been or will be utilized in makingpayments for eligible expenditures.
6. (a) If the Association shall have determined at any timethat any payment out of the Special Account: (i) was made for anyexpenditure or in any amount not eligible pursuant to paragraph 2of this Schedule, or (ii) was not justified by the evidencefurnished pursuant to paragraph 4 of this Schedule, the Borrowershall, promptly upon notice from the Association, deposit intothe Special Account (or, if the Association shall so request,refund to the Association) an amount equal to the amount of suchpayment or the portion thereof not so eligible or justified.Unless otherwise agreed by the Association, no further deposit bythe Association into the Special Account shall be made until theBorrower has made such deposit or refund.
(b) If the Association shall have determined at any timethat any amount outstanding in the Special Account will not berequired to cover further payments for eligible expenditures, theBorrower shall, promptly upon notice from the Association, refundto the Association such outstanding amount.
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SCHEDULE 5
Criteria for the Selection ofRehabilitation Works
1. Unless the Association shall otherwise agree, all townprotection works, and other Rehabilitation Works estimated tocost the equivalent of $500,000 or more, may be undertaken onlyafter prior review and approval by the Association of the scopeof such works and of the expenditures involved.
2. Rehabilitation Works not covered under the preceding para-graph do not need prior approval by the Association but must beselected in accordance with the following criteria:
(a) damages to be repaired are:
(i) a consequence of the 1984 floods, or
(ii) damages which, if not repaired, will vitiate orseriously diminish the effectiveness of otherflood damages being repaired under the Project;
(b) reconstruction would restore structures to theiroriginal specifications or to such higher specifica-tions as may now be warranted to ensure its integrityover a reasonable life; and
(c) other external sources of finance are not available.
INTERNATIONAL DEVELOPMENT ASSOCIATION
CERTIFICATE
I hereby certify that the foregoing is a true
copy of the original in the archives of the Interna-
tional Development Association.
In witness whereof I have signed this Certifi-
cate and affixed the Seal of the Association
thereunto the day of
198F C
FOR SECRETARY
