CONFORMED COPY CREDIT NUMBER 693 TO DEVELOPMENT CREDIT AGREEMENT (Third Highway Project) between REPUBLIC OF TOGO and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated April 1, 1977 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated April 1, 1977, between REPUBLIC OF TOGO (hereinafter called the Borrower or Togo) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS the Borrower has requested the Association to assist in the financing of the foreign exchange cost of the Project des- cribed in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated March 15, 1974, with the same force and effect as if they were fully set forth herein, (said General Conditions Applicable to Development Credit Agree- ments of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the Gen- eral Conditions and in the Preamble hereto have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "MEPT" means the Borrower's Ministere de l'Equipement et des Postes et Telecommunications; (b) "DTP" means the Direction des Travaux Publics of MEPT; (c) "AR" means the Arrondissement Routes of DTP; (d) "MCT" means the Borrower's Ministere du Commerce et des Transports; and -3- (e) "1968 Credit Agreement" and "1973 Credit Agreement" mean the Development Credit Agreements between the Borrower and the Association dated October 10, 1968 and December 28, 1973, respec- tively. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equiva- lent to ten million dollars ($10,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement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 Association, for expenditures made (or, if the Association 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 Credit. Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods or for civil works required for the Project to be financed out of the proceeds of the Credit, shall be procured in accordance with the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1981 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 -5- of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semi-annually on May 15 and November 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each May 15 and November 15 commencing May 15, 1987 and ending November 15, 2026, each installment to and including the installment payable on November 15, 1996 to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. -6- ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out Parts A, B, C, D and F of the Project through MEPT and Parts E, G and H through MCT with due diligence and efficiency and in conformity with appro- priate engineering, administrative and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) The Borrower shall carry out the studies included in Parts F, G and H of the Project on or before December 31, 1979, December 31, 1978 and June 30, 1978, respectively, unless the Association shall otherwise agree. Section 3.02. In order to assist the Borrower in the super- vision of the construction of Parts A and B of the Project and for the carrying out of Parts D, E, F, G and H of the Project, the Borrower shall employ engineering and management consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 3.03. The Borrower shall: (i) make available, or cause to be made available, to the maintenance unit and the road planning and design unit of AR, on or before October 1, 1977 and May 1, 1.978, respectively, unless the Association shall otherwise agree, quali- fied and experienced personnel in sufficient number to enable such units to carry out satisfactorily all their respective tasks and functions as from such dates; and (ii) at all times operate such road planning and design unit under terms and conditions satis- factory to the Association. Section 3.04. On or before March 31, 1978, unless the Associ- ation shall otherwise agree, the Borrower shall establish within MCT and, thereafter, maintain a transport planning and coordina- tion unit which shall operate under terms and conditions satisfac- tory to the Association and be provided with qualified and exper- ienced personnel in sufficient number to enable it to carry out satisfactorily its tasks and functions as from such date. Section 3.05. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards inci- dent to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any in- demnity shall be payable in a currency freely usab le by the Bor- rower to replace or repair such goods. (b) Except as the Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project until its completion. Section 3.06. (a) The Borrower shall furnish to the Associa- tion for its approval, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifica- tions thereof or additions thereto, in such detail as the Associ- ation shall reasonably request. -8- (b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the pro- ceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited represen- tatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the pro- ceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. Section 3.07. The Borrover shall take or cause to be taken all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out the Project and shall furnish to the Association, promptly after such acquisition, evidence satisfactory to the Association that such land and rights in respect of land are available for purposes related to the Project. -9- ARTICLE IV Other Covenants Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consis- tently maintained appropriate accounting practices the operations, resources and expenditures of DTP, in respect of the Project, and of the depar-tments or agencies of the Borrower responsible for carrying ou' the Project or any part thereof. Section 4.02. The Borrower shall: (a) adopt such measures as shall be necessary to (i) ensure at all times that the dimensions and axle-loads of the vehicles using the national highway system of the Borrower shall not exceed limits consistent with the design standards of the roads included within such system, and (ii) ensure permanent and consistent enforce- ment of the Borrower's laws and regulations setting forth such limits; and (b) establish and maintain facilities to collect systemati- cally and periodically and to record such data as shall be required to assess the technical, economic and financial aspects of (i) the Borrower's highway system, and (ii) road transport activities within the territories of the Borrower. Section 4.03. The Borrower shall: (a) cause all roads within the highway system of the Borrower to be adequately maintained - 10 - and cause all necessary repairs thereof to be made, all in accor- dance with appropriate engineering practices; (b) cause all road maintenance equipment and workshops of the Borrower to be adequate- ly maintained and cause all necessary repairs and renewals thereof to be made, all in accordance with appropriate engineering pran- tices; and (c) provide, promptly as needed, the funds, facilitiea, services and other resources required for the foregoing. Section 4.04. (a) The provisions of Section 4.04 (b) of the 1968 Credit Agreement and those of Section 4.o4 (a) of the 1973 Credit Agreement are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein. (b) The provisions of Section 4.04 (a) of the 1968 Credit Agreement are hereby deleted and all consequential changes are hereby deemed effected. (c) The Borrower shall, promptly upon its completion, submit the recommendations of the study included in Part G of the Project to the Association for review and shall take all appropriate measures on or before December 31, 1979, unless the Association shall otherwise agree, for the implementation of such recommen- dations, as they may be revised after such review. - 11 - ARTICLE V Termination Section 5.01. The date June 30, 1977, is hereby specified for the purposes of Section 12.04 of the General Conditions. - .12- ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Ministre des Finances et de l'Economie of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Minist4re des Finances et de l'Economie B.P. 387 Lomg Republic of Togo Cable address: Telex: MINFINANCES 5286 Lomi, Togo For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 6145 (wUI) - 13 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment 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. REPUBLIC OF TOGO By /s/ Messanvi Kokou Kekeh Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Xavier de la Renaudiere Acting Regional Vice President Western Africa - 114 - 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 amount of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works under 4,8oo,ooo 57% Parts A and B of the Project (2) Goods for Part C 800,000 100% of foreign of the Project expenditures or 60% of local expenditures (for goods local- ly procured) (3) Consultants' ser- 1,300,000 100% of foreign vices for construc- expenditures tion supervision under Parts A and B of the Project and for studies under Parts F, G and H of the Project - 15 - Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (4) Technical assis- 1,100,000 100% of foreign tance and fellowships expenditures under Parts D and E of the Project (5) Unallocated 2,000,000 TOTAL 10,000,000 - 16 - 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; provided, however, that if the currency of the Bor- rower is also that of another country from the territory of which goods or services are supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures"; 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 compli- ance with the policy of the Association that no proceeds of the Credit 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 re- spect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association 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 Association. 4. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. - 17 - 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 1 above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allo- cated to another Category and which in the opinion of the Associ- ation 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 Association 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 expendi- tures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any -way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, can- cel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 18 - SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: reconstruction of the Aneho-Tabligbo road (45 km) to paved standards; Part B: construction of the Agou Notse road (51 km) to gravel standards; Part C: purchase of road maintenance and workshop equipment; Part D: provision of fellowships and technical assistance to DTP for road maintenance and for strengthening the road planning and design unit of AR; Part E: establishment within MCT of a transport planning and coordination unit; Part F: preinvestment studies of the Bassar-Mango road (137 km); Part G: study for the improvement of the operations of the Reseau des Chemins de Fer du Togo; and Part H: study for organizing the construction and maintenance of the Borrower's feeder road network. The Project is expected to be completed by December 31, 1980. - 19 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, contracts for the pur- chase of goods or for civil works included in Parts A and B of the Project shall be procured in accordance with procedures con- sistent with those set forth in Part A of the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in August 1975 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. Bidders for the civil works included in Parts A and B of the Project shall be prequalified as described in paragraph 1.3 of Part A of the Guidelines. B. Other Procurement Procedures Contracts for the procurement of workshop equipment under Part C of the Project estimated to cost the equivalent of $50,000 or less in the aggregate will be awarded on the basis of local procurement procedures acceptable to the Association. 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 - 20 - 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 the Borrower 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 (except those to be procured in accordance with local procedures) manufactured in Togo may be granted a margin of prefer- ence 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 infor- mation required to establish the eligibility of a bid for such preference and the following methods and stages that will be fol- lowed 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 Togo if the bidder shall have established to the satis- faction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in Togo equal to at least 20% of the ex-factory bid price of such goods. - 21 - (2) Group B: all other bids offering goods manufactured in Togo. (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 evalu- ated 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 fur- ther comparison only, an amount equal to: (i) the amount of cus- toms 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. - 22 - D. Review of Procurement Decisions by the Association 1. Review of prequalification. The Borrower shall, before quali- fication is invited, inform the Association in detail of the pro- cedure to be followed, and shall introduce such modifications in said procedure as the Association shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any appli- cant for prequalification shall be furnished by the Borrower to the Association for its comments before the applicants are notified of the Borrower's decision, and the Borrower shall make such addi- tions to, deletions from, or modifications in, the said list as the Association shall reasonably request. 2. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for civil works under Parts A and B of the Project and for the purchase of goods under Part C of the Project estimated to cost the equivalent of $200,000 or more: (a) Before bids are invited, the Borrower 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 re- quest. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. - 23 - (b) After bids have been received and evaluated, the Bor- rower 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 suf- ficient time for its review, a detailed report, prepared (only with respect to Parts A and B of the Project) by the consultants referred to in Section 3.02 of this Agreement, on the evaluation and comparison of the bids received, together with the recommenda- tions for award 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 the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, with- out the Association's concurrence, materially differ from those on which bids were asked or prequalification invited. (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 with- drawal of funds from the Credit Account in respect of such contract. 3. With respect to each contract to be financed out of the pro- ceeds of the Credit and not governed by the preceding paragraph, the Borrower 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, - 24- together with the analysis of the respective bids, recommendations for award and such other information as the Association shall rea- sonably request. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination.