LOAN NUMBER 8995-PK Project Agreement (Karachi Mobility Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and PROVINCE OF SINDH LOAN NUMBER 8995-PK PROJECT AGREEMENT AGREEMENT between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (“Bank”) and PROVINCE OF SINDH (“Project Implementing Entity”) (“Project Agreement”) in connection with the Loan Agreement (“Loan Agreement”) of the Signature Date between ISLAMIC REPUBLIC OF PAKISTAN (“Borrower”) and the Bank, concerning Loan No. 895-PK. The Bank and the Project Implementing Entity hereby agree as follows: ARTICLE I — GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to the Loan Agreement) apply to and form part of this Agreement. 1.02. Unless the context requires otherwise, in this Agreement the capitalized terms have the meanings ascribed to them in the Loan Agreement or the General Conditions and the terms used in italics are referring to locations on the territory of the Project Implementing Entity. ARTICLE II — PROJECT 2.01. The Project Implementing Entity declares its commitment to the objectives of the Project. To this end, the Project Implementing Entity shall carry out the Project through SMTA in accordance with the provisions of Article V of the General Conditions and the Schedule to this Agreement, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. ARTICLE III — REPRESENTATIVE; ADDRESSES 3.01. The Project Implementing Entity’s Representative is its Chairperson, Planning and Development Board. -2- 3.02. For purposes of Section 10.01 of the General Conditions: (a) the Bank’s address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Bank’s Electronic Address is: Telex: Facsimile: E-mail: 248423(MCI) or 1-202-477-6391 PakistanCMU@worldbank.org 64145(MCI) 3.03. For purposes of Section 10.01 of the General Conditions: (a) the Project Implementing Entity’s address is: Planning and Development Department Government of Sindh Tughlaq House Karachi, Pakistan; and (b) the Project Implementing Entity’s Electronic Address is: Facsimile: 92-21-99211922; and -3- AGREED as of the later of the two dates written below. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By _________________________________/ps1/ Authorized Representative Patchamuthu Illangovan Name: __________________________/pn1/ Country Director Title: __________________________ /pt1/ 18-Nov-2019 Date: __________________________/pd1/ PROVINCE OF SINDH By __________________________________/ps2/ Authorized Representative Ghulam Abbas Detho Name: ___________________________/pn2/ Secretary Transport, Govt. of Sindh Title: ___________________________ /pt2/ 26-Nov-2019 Date: ___________________________/pd2/ -4- SCHEDULE Execution of the Project Section I. Implementation Arrangements A. Institutional Arrangements. The Project Implementing Entity shall ensure, and shall cause SMTA to ensure, that the following implementation arrangements are maintained throughout the implementation of the Project. 1. SMTA Board. The SMTA Board, which comprises high level representatives of all the key stakeholders for the implementation of the Project, shall provide oversight of the implementation of the Project. For this purpose, the SMTA Board shall meet quarterly, or as often as desirable. 2. SMTA. (a) SMTA shall be responsible for carrying out the activities of the Project, in collaboration with other relevant stakeholders. SMTA shall ensure that it has qualified staff in adequate number for the carrying out of its activities. (b) Without limitation to the generality of the foregoing provision, no later than January 1, 2020, the Project Implementing Entity shall take all actions needed to ensure that the responsibility for the maintenance and rehabilitation of the existing roads under the Project has been transferred to SMTA, including the contracting of civil works and the management of the supervision consultants. 3. SMTA Project Management Team. (a) SMTA shall establish, no later than one (1) month after the Effective Date, and thereafter maintain throughout the period of implementation of the Project, under the leadership of the Project Director, a team of experts (whether civil servants or consultants) in adequate number, each with terms of reference, qualifications and experience satisfactory to the Bank (the “Project Management Team”), as and when their expertise will be needed in the views of the Bank for the efficient management of Project and the achievement of its development objective. -5- (b) Without limitation to the provisions of Section I.A.3(a) of this Schedule: (i) the Project management Team shall be responsible for the coordination and implementation of the Project activities, including: (i) procurement; (ii) planning and budgeting; (iii) implementation of the Safeguards Instruments; (iv) monitoring and evaluation; (v) reporting; and (vi) communication. (ii) SMTA shall no later than one (1) month after the Effective Date, recruit a Project Director, an additional procurement and contract management specialist, a financial management specialist, a social management specialist, a gender specialist, an environmental specialist, a communication specialist, as well as engineers and technical staff as needed at that time. (c) Without limitation to the provisions of Section I.A.3(a) of this Schedule: (i) no later than March 31, 2020, SMTA shall recruit firm on the basis of terms of reference, qualifications and experience satisfactory to the Bank to support SMTA for infrastructure project management; (ii) no later than March 31, 2020, SMTA shall recruit a firm on the basis of terms of reference, qualifications and experience satisfactory to the Bank to support SMTA for the design, procurement and supervision of construction contracts and works for the Project; and (iii) prior to the signing of the first civil work contract for the Project, the Project Implementing Entity shall recruit a third-party monitoring firm to implement a continuous program of result monitoring and evaluation. 4. The Project Implementing Entity shall ensure that none of the functions assigned to SMTA pursuant to the provisions included in or referred to in this Agreement are transferred or delegated by SMTA to any other entity, without the prior written agreement of the Bank and only on the basis of terms of reference, qualification and experience satisfactory to the Bank. 5. The Project Implementing Entity shall take all reasonable measures to build a strong and sustainable work force for the implementation of the Project, and to limit or when unavoidable mitigate to the extent possible the adverse impact of change of staff on the successful implementation of the Project and the achievement of its objective. -6- B. Counterpart Funds. 1. Without limitation to the provisions of Section 5.03 of the General Conditions, the Project Implementing Entity shall provide an amount at least equivalent to eighteen million four hundred thousand Dollars ($18,400,000) for the financing of the Project, to be disbursed as provided in the Annual Work Plans and Budgets. C. Safeguards. 1. The Project Implementing Entity shall ensure, and shall cause SMTA to ensure, that: (a) the Project is carried out with due regard to appropriate health, safety, social, and environmental standards and practices, and in accordance with the Safeguards Instruments and the provisions of this Section I.C; and (b) all measures are taken to implement the Compensation and Livelihood Rehabilitation Plan in a manner and timeframe satisfactory to the Bank. To this end, the Project Implementing Entity shall ensure that: (i) funds are made available to cover all the costs of implementing the Compensation and Livelihood Rehabilitation Plan; (ii) prior to carrying out activities which involve displacement, Affected Persons shall be compensated at full replacement cost, resettled and provided with resettlement assistance in accordance with the Compensation and Livelihood Rehabilitation Plan, as applicable; and (iii) the implementation, monitoring and evaluation of such Compensation and Livelihood Rehabilitation Plan is completed and reported in a manner satisfactory to the Bank. 2. The Project Implementing Entity shall ensure, and cause SMTA to ensure, that the obligation to comply with the relevant Safeguard Instruments is incorporated: (a) in the contracts between SMTA (or any other entity contributing in the implementation of the Project) and the relevant contractors and any entity (including any engineer) supervising the Project’s civil works; and (b) in the contracts between the relevant contractors and the contractors’ subcontractors. 3. The Project Implementing Entity shall ensure, and cause SMTA to ensure, that all the bidding documents and contracts include the obligation of the relevant contractors and subcontractors to: (i) adopt and implement measures to assess and manage the risks and impacts of labor influx; and (ii) adopt and enforce codes of conduct that should be provided to and signed by all workers; as applicable to such civil works commissioned or carried out pursuant to said contracts. -7- 4. Except as the Bank shall otherwise agree, the Project Implementing Entity shall ensure, and cause SMTA to ensure, that none of the provisions of the Safeguard Instruments is abrogated, amended, repealed, suspended or waived. In case of any inconsistencies between the provisions of any of the Safeguard Instruments and the provisions of this Agreement, the provisions of this Agreement shall prevail. 5. The Project Implementing Entity shall ensure, and cause SMTA to ensure, that: (a) all consultancies related to technical assistance, design and capacity building under the Project, the application of whose results could have environmental, social and health and safety implications, shall only be undertaken pursuant to terms of reference reviewed and found satisfactory by the Bank; and (b) such terms of reference shall require the technical assistance, design and capacity building activities to take into account the requirements of the applicable Bank Policies. 6. Without limitation upon its other reporting obligations under this Agreement, the Project Implementing Entity shall, and shall cause SMTA to: a) regularly collect, compile, and submit to the Borrower and the Bank, quarterly, and promptly in a separate report whenever the circumstances warrant or required by the Bank, information on the status of compliance with the Safeguards Instruments. Such information shall include: (i) measures taken in furtherance of the Safeguards Instruments; (ii) conditions, if any, which interfere or threaten to interfere with the smooth implementation of the Safeguards Instruments; and (iii) remedial measures taken or required to be taken to address such conditions; b) promptly furnish to the Bank a copy of each progress report prepared and submitted by any entity (including any engineer) supervising the Project’s civil works, the Project’s contractors and/or subcontractors; and c) promptly upon receipt, furnish to the Bank any notification received from any entity (including any engineer) supervising the Project’s civil works, the Project’s contractors and/or subcontractors regarding any incident that have might occurred during Project implementation. 6. The Project Implementing Entity shall maintain, or shall cause SMTA to maintain, throughout Project implementation, and publicize the availability of, a grievance redress mechanism, in form and substance satisfactory to the Bank, to hear and determine fairly and in good faith all complaints raised in relation to the Project, and take all measures necessary to implement the determinations made by such mechanism in a manner satisfactory to the Bank. -8- D. Annual Work Plans and Budgets 1. Each year, throughout the implementation of the Project, the Project Implementing Entity shall prepare or cause SMTA to prepare: (a) a draft annual work plan and budget (including related cash forecasts) for the Project (including Training and Incremental Operating Costs) for each subsequent year of Project implementation, of such scope and detail as the Bank shall have reasonably requested. Such draft annual work plan and budget shall include all Project activities financed from the funds of the Loan, the Counterpart Funds, as well as any other sources of funds as may become available for the Project from time to time; (b) the evidence, in form and substance satisfactory to the Bank, that all environmental and social safeguard obligations related to the activities listed in the draft annual work plan and budget to be satisfied prior to their implementation pursuant to the provisions of the Safeguard Instruments have been satisfied, and measures are in place to comply with the environmental and social safeguard obligations related to the activities listed in the draft annual work plan and budget to be complied with during their implementation pursuant to the provisions of the Safeguard Instruments, all in form and substance acceptable to the Bank; and (c) starting from the second year of implementation, an analysis of the compliance and divergence with the Annual Work Plan and Budget for the previous year of Project implementation. 2. The Project Implementing Entity shall furnish to the Bank, as soon as available, but in any case not later than April 30 of each year, the annual work plan and budget for the following year of the implementation of the Project and the evidences referred to in Section I.D.1 of this Schedule, for the Bank’s review and approval; except for the annual work plan and budget for the Project for the first year of implementation of the Project, and the evidence which may be required for the implementation of the activities included in the draft annual work plan and budget for such period, which shall be furnished for the Bank’s review and approval no later than one (1) month after the Effective Date. 3. The Project Implementing Entity shall, or shall cause SMTA to, ensure that: (a) the Bank’s comments are reflected in the final version of each annual work plan and budget; and (b) once the annual work plan and budget has been approved by the Bank (once approved, an “Annual Work Plan and Budget”), the Project is carried out in accordance with the relevant Annual Work Plan and Budget, each year of implementation of the Project. -9- 4. Only activities included in an Annual Work Plan and Budget will be eligible to a financing from the proceeds of the Loan. 5. Annual Work Plans and Budgets may be revised as needed during Project implementation subject to the Bank’s prior approval. The Project Implementing Entity shall, and shall cause SMTA to, not amend, suspend, abrogate, or waive said Annual Work Plans and Budgets or any provision thereof, without the prior written agreement of the Bank. 6. The Project Implementing Entity shall ensure that training shall be carried out based on Annual Work Plans and Budgets, which shall, inter alia, identify: (a) particulars of the training envisaged; (b) the personnel to be trained; (c) the selection method of the institution or individuals conducting such training; (d) the institution conducting such training if identified; (e) the purpose and justification for such training; (f) the location and duration of the proposed training; and (g) the estimate of the cost of such training. - 10 - E. Project Operations Manual 1. No later than three (3) months after the Effective Date, the Project Implementing Entity shall, or shall cause SMTA to, prepare and adopt a manual for the implementation of the Project (the “Project Operations Manual”) and ensure that it will be at all time -at adoption and during Project implementation- in form and substance acceptable to the Bank. 2. The Project Operations Manual shall set forth: (a) the detailed institutional arrangements for the implementation of the Project activities, including allocation of responsibilities, required staff and minimum qualifications thereof; (b) the administrative, accounting, auditing, internal control, asset management, reporting, financial, procurement and disbursement (flow of funds) procedures for the Project, which procedures shall be consistent with those included or referred to in this Agreement; (c) (i) the procedural steps for the updating of the Procurement Plan; (ii) an outline of the mechanism for the settlement of procurement complaints; and (iii) the disclosure of critical procurement information (website maintenance); (d) the guidelines for training and capacity building activities under the Project; and (e) the plan for monitoring and supervision of Project activities, including all technical, environmental and social aspects in relation thereto. 3. (a) The Project Implementing Entity shall ensure, and shall cause SMTA to ensure, that the Project is carried out in accordance with the Project Operations Manual. (b) The Project Implementing Entity shall obtain from the Bank written agreement prior to assigning, amending, abrogating, or waiving the Project Operations Manual, or any provision thereof, or permitting any entity participating in the implementation of the Project, to do so. 4. In the event of any conflict between the provisions of the Project Operations Manual and those of the Loan Agreement and this Agreement, the provisions of the Loan Agreement and this Agreement shall prevail, in this order of priority. - 11 - Section II. Project Monitoring, Reporting and Evaluation A. Reports 1. The Project Implementing Entity shall, and shall cause SMTA to, monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 5.08 (b) of the General Conditions and on the basis of indicators acceptable to the Bank. Each such Project Report shall cover the period of one calendar six-month period and shall be furnished to the Borrower not later than one (1) month after the end of the period covered by such report for incorporation and forwarding by the Borrower to the Bank of the overall Project Report. 2. The Project Implementing Entity shall, or shall cause SMTA to, provide to the Borrower not later than five (5) months after the Closing Date, for incorporation in the report referred to in Section 5.08 (c) of the General Conditions, all such information as the Borrower or the Bank shall reasonably request for the purposes of that Section. B. Mid-term Review 1. No later than thirty-six (36) months after the Effective Date, or such other period as may be agreed with the Bank, the Project Implementing Entity shall carry out jointly with SMTA, the Bank and the Borrower, a mid-term review of the Project to assess the status of its implementation, and compliance with the legal covenants included or referred to in this Agreement. To this end the Project Implementing Entity shall, or shall cause SMTA to: (a) prepare and furnish to the Bank, at least one (1) month before such review, a report, in scope and detail satisfactory to the Bank and integrating the results of the monitoring and evaluation activities, on the progress achieved in the carrying out of the Project during the period preceding the date of such report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives of the Project during the period following such date; and (b) review jointly with the Bank the report referred to in the preceding paragraph and thereafter take all measures required to ensure the efficient completion of the Project and the achievement of the objectives of the Project, based on the conclusions and recommendations of such report and the Bank’s views on the matter.