CREDIT NUMBER 2688 PAK Project Agreement (Population Welfare Program Project) among International Development Association and PROVINCE OF BALOCHISTAN and PROVINCE OF PUNJAB and PROVINCE OF SINDH and NORTH WEST FRONTIER PROVINCE and AZAD JAMMU AND KASHMIR and FEDERALLY ADMINISTERED TRIBAL AREAS Dated , 1995 CREDIT NUMBER 2688 PAK PROJECT AGREEMENT AGREEMENT, dated I , 1995, among the INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and PROVINCE OF BALOCHISTAN acting by its Governor (Balochistan) and PROVINCE OF PUNJAB acting by its Governor (Punjab) and PROVINCE OF SINDH acting by its Governor (Sindh) and NORTH WEST FRONTIER PROVINCE acting by its Governor (NWFP) and AZAD JAMMU AND KASHMIR acting by its President (AJK) and the FEDERALLY ADMINISTERED TRIBAL AREAS acting by the Governor of NWFP (FATA). WHEREAS by the Development Credit Agreement of even date herewith between the Islamic Republic of Pakistan (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to forty-five million Special Drawing Rights (SDR 45,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that Balochistan, Punjab, Sindh and NWFP (the Provinces), AJK and FATA agree to undertake such obligations toward the Association as are set forth in this Agreement; WHEREAS the Provinces, AJK and FATA, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, have agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, 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. The Provinces, AJK and FATA declare their commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement, and, to this end, shall carry out their respective activities under the Project, with due diligence and efficiency and in conformity with appropriate -2- administrative, financial and population practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for such activities. Section 2.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. Section 2.03. (a) The Provinces, AJK and FATA shall carry out the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of the Project Agreement and their respective activities under the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section, the Provinces, AJK and FATA shall: (i) prepare, on the basis of guidelines acceptable to the Association and furnish to the Association not later than six (6) months after the Closing Date or such later date as may be agreed for this purpose between the Association and the Provinces, AJK and FATA, a plan designed to ensure the continued achievement of the objectives of the Project; (ii) afford the Association a reasonable opportunity to exchange views with the Provinces, AJK and FATA on said plan; and (iii) thereafter, carry out said plan with due diligence and efficiency and in accordance with appropriate practices, taking into account the Association's comments thereon. Section 2.04. (a) The Provinces, AJK and FATA shall, at the request of the Association, exchange views with the Association with regard to the progress of their respective activities under the Project, the performance of their obligations under this Agreement and other matters relating to the purposes of the Credit. -3- (b) The Provinces, AJK and FATA shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of their respective activities under the Project, the accomplishment of the purposes of the Credit, or the performance by the Provinces, AJK and FATA of their respective obligations under this Agreement. Section 2.05. The Provinces, AJK and FATA shall ensure that no bans on recruitment of field staff are imposed in respect of the Population Welfare Sector. Section 2.06. The Provinces, AJK and FATA shall: (a) by March 31 of each Fiscal Year during the implementation of the Project, or such later date as may be acceptable to the Association, provide or cause to be provided to the Association, for its assessment and review, each proposed Sub- program to be carried out by the Provinces, AJK and FATA in the next following Fiscal Year; (b) by June 30 of each such Fiscal Year during the implementation of the Project, or such later date as may be acceptable to the Association, provide to the Association for its approval each such Sub-program modified in a manner satisfactory to the Association taking into account its comments and recommendations; and (c) carry out or cause to be carried out each such Sub- program in form and substance as approved by the Association and in a manner satisfactory to the Association. Section 2.07. The Provinces, AJK and FATA shall, through the Ministry of Population Welfare and not later than 60 days after the end of each six-month period of each Fiscal Year of Project implementation, furnish to the Association, in form and substance satisfactory to the Association, a progress report on the implementation of each Sub-program for which the Provinces, AJK and FATA are respectively responsible during such period. Section 2.08. The Provinces, AJK and FATA shall cooperate with the Borrower and the Association in carrying out the reviews of the Population Welfare Program, the Sub-programs and the Project pursuant to Section 3.11 of the Development Credit Agreement. ARTICLE III Financial Covenants Section 3.01. (a) The Provinces, AJK and FATA shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of their respective activities under the Project of the departments or agencies of the Provinces, AJ and FATA responsible for carrying out such activities. (b) The Provinces, AJK and FATA shall: (i) have the records and accounts referred to in paragraph (a) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than nine months after the end of each such year, the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) Curnish to the Association such other information concerning said records and accounts and the audit thereof as the Association shall from time to time reasonably request. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 4.02. (a) This Agreement and all obligations of the Association and of the Provinces, AJK and FATA thereunder shall terminate on the earlier of the following two dates: - 5 - (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) the date twenty 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 the Provinces, AJK and FATA of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE V Hiscellaneous Provisions Section 5.01. 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 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: Telex: INDEVAS 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) -6- For Balochistan: The Additional Chief Secretary Planning and Development Department Government of Balochistan Quetta, Pakistan Cable address: Telex: DEVELOPMENT 7875 BLNSE PK Quetta, Pakistan For Punjab: The Chairman Planning and Development Board Government of Punjab Lahore, Pakistan Cable address: Telex: DEVELOPMENT 82-04-4868 Lahore Punjab Secretariat Pakistan Lahore, Pakistan For Sindh: The Additional Chief Secretary Planning and Development Department Government of Sindh Karachi, Pakistan Cable address: Telex: DEVELOPMENT SINDR 952-23950 Karachi, Pakistan -7- For NWFP: The Additional Chief Secretary Planning, Environment and Development Department Government of North West Frontier Province Peshawar, Pakistan Cable address: Telex: DEVELOPMENT 952-52371 Peshawar, Pakistan For AJK: The Additional Chief Secretary Planning and Development Department Government of Azad Jammu and Kashmir Muzaffarabad, Azad Jammu and Kashmir For FATA: The Additional Chief Secretary Planning, Environment and Development Department Government of North West Frontier Province Peshawar, Pakistan Section 5.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of the Provinces, AJK and FATA may be taken or executed: (a) on behalf of Balochistan, Sindh, NWFP, AJK and FATA, by their respective Additional Chief Secretary (Development), Planning and Development Department; and (b) on behalf of Punjab, by the Chairman of its Planning and Development Board, or such other person or persons as the Provinces, AJK and FATA shall designate in writing, and the Provinces, AJK and FATA shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 5.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. -8- IN WITNESS WHEREOF, the parties Ihereto, 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. INTERNATIONAL DEVELOPMENT ASSOCIATION Regional Vice President South Asia PROVINCE OF BALOCHISTAN PROVINCE OF PUNJAB PROVINCE OF SINDH NORTH WEST FRONTIER PROVINCE AZAD JAMMU AND KASHMIR FEDERALLY ADMINISTERED TRIBAL AREAS By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY