SPECIAL ACTION CREDIT NUMBER 53 SL OffICIAL DOCUMENS Special Action Credit Agreement (Integrated Agricultural Development Project II) between SIERRA LEONE and INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL ACTION ACCOUNT established with funds contributed by the MEMBER STATES of the EUROPEAN ECONOMIC COMMUNITY Dated 30 , 1980 SPECIAL ACTION CREDIT AGREEMENT AGREEMENT, dated A"X 30 , 1980, between SIERRA LEONE (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCI- ATION as ADMINISTRATOR of the Special Action Account established with funds contributed by the MEMBER STATES of the EUROPEAN ECONOMIC COMMUNITY. WHEREAS (A) by the Agreement, dated May 2, 1978, between the International Development Association (hereinafter called IDA) and the European Economic Community and its Member States there has been established by IDA a Special Action Account constituted by the funds which shall be contributed by the Member States of the European Economic Community and administered by IDA, acting as Administrator of such Special Action Account, for the purpose of, and in accordance with, the provisions of said Agreement; (B) the Borrower has requested of the Administrator assis- tance from the resources of the Special Action Account in the financing of a project described in Schedule 2 to this Agreement and the Administrator has determined that such assistance would be in accordance with the provisions of the Agreement of May 2, 1978 referred to above; (C) by an agreement dated July 2, 1975 (hereinafter called the IDA Credit Agreement) IDA agreed to make a development credit (hereinafter called the IDA Credit) to the Borrower in an aggre- gate principal amount equivalent to $5,000,000 to assist in financing the Integrated Agricultural Development Project II on the terms and conditions therein set forth; (D) by an agreement dated July 2, 1975 (hereinafter called the Bank Loan Agreement) the International Bank for Reconstruction and Development (hereinafter called the Bank) agreed to make a loan (hereinafter called the Bank Loan) to the Borrower in an aggregate principal amount equivalent to $5,000,000 to assist in financing the Integrated Agricultural Development Project II on the terms and conditions therein set forth; WHEREAS the Administrator has agreed, on the basis inter alia of the foregoing, to extend the Special Action Credit to the Borrower upon the terms and conditions hereinafter set forth. NOW THEREFORE the parties hereto hereby agree as follows: -2- 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 International Development Association, dated March 15, 1974, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said General Conditions Applicable to Development Credit Agreements of the International Development Association, as so modified, being hereinafter called the General Conditions): (a) the term "Association", wherever used in the General Conditions, means the International Development Association acting as the Administrator of the Special Action Account referred to in the Preamble to this Special Action Credit Agreement; (b) the terms "Development Credit Agreement" and "Credit", wherever used in the General Coiditions are amended to read "Special Action Credit Agreement" and "Special Action Credit", respectively; (c) Sections 4.01, 4.02, 4.03, 4.04 and the second sentence of Section 5.01 are deleted; and (d) in Sections 6.02 and 7.01, the term "Association" shall also include the International Development Association acting in its own capacity. Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Member States" means the Member States of the European Economic Community, i.e. Belgium, Denmark, The Federal Republic of Germany, France, Ireland, Italy, Luxembourg, The Netherlands and The United Kingdom; (b) "Administrator" means the International Development Association acting as Administrator of the Special Action Account referred to in the Preamble to this Special Action Credit Agree- ment; -3- (c) "EAPMU" means the project unit referred to in Section 3.03 (i) of this Agreement; (d) "NAPMU" means the project unit referred to in Section 3.03 (ii) of this Agreement; (e) "PESU" means the project evaluation and services unit referred to in Section 3.03 (iii) of this Agreement; (f) "FFC" means the Farmer Finance Company included in Part B (2) (d) of the Project; and (g) "Prior Credit Agreement" means the Development Credit Agreement, 323 SL, dated June 30, 1972, between the Borrower and IDA, as amended by the IDA Credit Agreement. ARTICLE II The Special Action Credit Section 2.01. The Administrator agrees to lend to the Bor- rower on the terms and conditions in the Special Action Credit Agreement set forth or referred to, the following currency amounts: Two million three hundred eleven thousand Belgian francs (BF2,311,000); Two hundred eighty- eight thousand Danish kroner (DK288,000); One million one hundred eleven thousand Deutsche marks (DM1,111,000); One million one hundred seventy- four thousand French francs (FF1,174,000); Two thousand six hundred Irish pounds (IrE2,600); One hundred thirty- six million two hundred forty thousand Italian lire (ItLl36,240,000); -4- Seventy-three thou- sand Luxembourg francs (LF73,000); Three hundred seven thousand Netherlands guilders (Dfl 307,000); and Two hundred eighty three thousand one hundred Pounds sterling (E283,100). Section 2.02. (a) The proceeds of the Special Action 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 Administrator, for expenditures made (or, if the Administrator 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 Special Action Credit. (b) Withdrawals shall be made only on account of expendi- tures: (i) in the currency of the Borrower; or (ii) for goods produced in, or services supplied from, (A) any of the Member States and (B) any developing country which is a member of the International Development Association and could be the recipient of a special action credit, as determined by the Administrator. (c) Withdrawals from the Credit Account shall be made in the respective currencies in which the expenditures to be financed out of the proceeds of the Special Action Credit have been paid or are payable or, at the option of the Administrator, in such currency or currencies as the Administrator shall from time to time select. Section 2.03. Except as the Administrator shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Special Action Credit shall be governed by 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 Administrator shall establish. The Admini- strator shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to the Administrator a service charge at the rate of three-fourths of one per cent (3/4 -5- of 1%) per annum, on each of the various currency amounts with- drawn from the Credit Account and outstanding from time to time. The amounts of service charge in various currencies so found, and additional service charges (if any) payable pursuant to Section 3.02 of the General Conditions, shall be payable in the currency of the United Kingdom of Great Britain and Northern Ireland, or in another currency selected by the Administrator in accordance with the provisions of paragraph (b) of this Section, after their conversion into such currency on the basis of exchange rates determined in accordance with the provisions of Section 4.05 of the General Conditions. (b) If the Administrator shall at any time determine that the currency so specified or selected is not freely convertible or freely exchangeable by the International Development Association for currencies of other members of the International Development Association for the purposes of its operations, service charges shall be payable in such other currency as the Administrator may select for such purposes and shall notify in writing to the Borrower, whereupon, commencing thirty days after the date of such notice, service charges shall be payable in such other currency. Section 2.06. Service charges shall be payable semiannually on May 1 and November 1 in each year. Section 2.07. (a) The Borrower shall repay the principal amount of the Special Action Credit in semiannual installments payable on each May 1 and November 1 commencing May 1, 1990 and ending November 1, 2029, each installment to and including the installment payable on November 1, 1999, 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. (b) Each of the installments payable pursuant to paragraph (a) of this Section shall be the aggregate of such amounts in the various currencies withdrawn from the Credit Account as shall be found by multiplying the total amount in each currency so with- drawn by the applicable installment percentage as specified in paragraph (a) of this Section, unless the Administrator shall otherwise specify by notice to the Borrower prior to each payment date for the purpose of avoiding the payment of fractional cur- rency amounts. -6- (c) If withdrawal shal have been made in a currency which the Administrator shall have purchased with one or more other currencies for the purpose of such withdrawal, the portion of the Special Action Credit so withdrawn shall, for the purpose of paragraph (b) of this Section, be deemed to have been withdrawn in the currency or currencies used by the Administrator for such purchase in the amounts of such currency or currencies so used. (d) The Administrator will, at the request of the Borrower and on such terms and conditions as the Administrator shall determine, use its best efforts to purchase any currency needed by the Borrower for payment of principal required under this Agree- ment upon payment by the Borrower of sufficient funds therefor in a currency or currencies to be specified by the Administrator from time to time. In purchasing the currencies required the Adminis- trator shall be acting as agent of the Borrower and the Borrower shall be deemed to have made any payment required under this Agreement only when and to the extent that the Administrator has received such payment in the currency or currencies required. ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appro- priate agricultural, financial, administrative and engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. In order to assist the Borrower in the prepara- tion of projects in its agricultural sector, the Borrower shall employ in its Ministry of Agriculture and Forestry consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Administrator. Section 3.03. Except as the Borrower and the Administrator shall otherwise agree, the Borrower shall, in carrying out the Project: (i) maintain within its Ministry of Agriculture and Forestry, as the project unit for Part B of the Project, the project unit referred to in Section 3.04 of the Prior Credit Agreement with such responsibilities, powers and staff as are specified in Schedule 4 to this Agreement; (ii) maintain within its Ministry of Agriculture and Forestry as the project unit for - 7 - Part A of the Project a second project unit with such responsibi- lities, powers and staff as are specified in Schedule 4 to this Agreement; (iii) maintain within its Ministry of Agriculture and Forestry the project evaluation and services unit included in Part C (1) of the Project with such responsibilities, powers and staff as are specified in Schedule 5 to this Agreement; and (iv) main- tain project coordinating committees, with composition and func- tions to be agreed between the Borrower and the Administrator, to advise NAPMU and EAPMU respectively on the planning and imple- mentation of Parts A and B of the Project. Section 3.04. The Borrower shall continue to employ, upon terms and conditions and with qualifications satisfactory to the Administrator: (i) the Project Manager, Accountant, Commercial Officer, Extension and Training Officer, Conservation and Land Development Officer, Livestock Officer and Construction Engineer of NAPMU; (ii) the Project Manager, Accountant, Commercial Officer, Extension and Training Officer and Conservation Land Development Officer of EAPMU; (iii) the Financial Controller and Commercial Services Officer of PESU; and (iv) the General Manager of the Borrower's Daru Oil Palm Company. Section 3.05. The Borrower shall continue to employ for the purpose of carrying out Part A of the Project, eight qualified professional officers or experienced technical officers and thirty agricultural field assistants. Section 3.06. (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 Special Action Credit against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Administrator shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Special Action Credit to be used exclusively for the Project. Section 3.07. (a) The Borrower shall furnish to the Adminis- trator, promptly upon their preparation, the plans, specifica- tions, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Administrator shall reasonably request. -8- (b) The Borrower: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and, where appropriate, the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Special Action Credit, and to disclose their use in the Project; (ii) shall enable the Administrator's accredited representatives to visit the facilities and construc- tion sites included in the Project and to examine the goods financed out of the proceeds of the Special Action Credit and any relevant records and documents; and (iii) shall furnish to the Administrator at regular intervals all such information as the Administrator shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Special Action Credit and the goods and services financed out of such proceeds. (c) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Administrator, the Borrower shall prepare and furnish to the Administrator a report, of such scope and in such detail as the Administrator shall reasonably request, on the execution and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Administrator of their respective obligations under the 'pecial Action Credit Agreement and the accomplishment of the purposes of the Special Action Credit. Section 3.08. The Borrower shall take or cauce 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 Administrator, promptly after such acquisition, evidence satisfac- tory to the Administrator that such land and rights in respect of land are available for purposes related to the Project. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, - 9 - of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall cause NAPMU, EAPMU, PESU and FFC to: (i) have their respective accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Administrator; (ii) furnish to the Administrator as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of their respective financial statements for such year as so audited and (B) the reports of such audits by said auditors, of such scope and in such detail as the Administrator shall have reasonably requested; and (iii) furnish to the Administrator such other information concerning their respective accounts and financial statements and the audits thereof as the Administrator shall from time to time reasonably request. ARTICLE V Remedies of the Administrator Section 5.01. (a) For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof, namely, that subject to para- graph (b) of this Section: (i) The right of the Borrower to withdraw the proceeds of the IDA Credit or Bank Loan shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor, -or (ii) the IDA Credit or Bank Loan shall have become due and payable prior to the agreed maturity thereof. (b) Paragraph (a) of this Section suiall not apply if: (i) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under the IDA Credit Agreement or Bank Loan Agreement; and (ii) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. - 10 - Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof namely, that the event specified in paragraph (a) (ii) of Section 5.01 of this Agreement shall occur. ARTICLE VI Termination Section 6.01. The date _ik%wau t23 &i is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. Section 6.02. The obligations of the Borrower under Article IV of this Agreement shall cease and determine on the date on which the Special Action Credit Agreement shall terminate or on a date fifteen years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of Finance of the Borrower or such other person or persons appointed by such Minister in writing is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: The Financial Secretary The Ministry of Finance Freetown Sierra Leone Cable address: MINFIN Freetown - 11 - For the Administrator: Administrator of the Special Action Account (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 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, 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. SIERRA LEONE By I*/l4 tot&LL~ 7Ltna u Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL ACTION ACCOUNT established with funds contributed by the MEMBER STATES of the EUROPEAN ECONOMIC COMMUNITY By //(J~r6 ~j~~bf7 /WuA Regional Vice President Western Africa - 12 - SCHEDULE 1 Withdrawals of the Proceeds of the Special Action Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Special Action Credit, the allocation of the amounts of the Special Action Credit to each Category and the percentage for items so to be financed in each Category: Amount of the Special Action Credit % of Allocated (Expressed Expenditures Category in Dollar Equivalents) to be Financed (1) Vehicles, heavy 214,000 plant and equip- ment (a) directly 100% of for- imported eign expendi- tures (b) imported 87% but locally procured (2) Small equipment 50,000 and spare parts (a) directly 100% of for- imported eign expendi- tures (b) imported but 70% locally procured (3) Fertilizer 348,000 100% of for- eign expendi- tures (4) Civil works for 1,000,000 70% road construc- tion - 13 - Amount of the Special Action Credit % of Allocated (Expressed Expenditures Category in Dollar Equivalents) to be Financed (5) Civil works 333,000 70% other than those included in Category (4), local staff and support services, and vehicles and plant operation (6) Farm inputs other 55,000 100% oi foreign than fertilizer-, expenditures or including seeds, 70% planting mate- rials, pesti- cides, fungi- cides, herbicides, tools, hired labor, spraying machines and drugs TOTAL 2,000,000 2. The total dollar amount shown in the foregoing table shall be adjusted from time to time as required to reflect the aggregate dollar equivalent of the unwithdrawn currency amounts in the Credit Account; the unallocated dollar amount shall be adjusted accordingly. 3. For the purposes of this Schedule the term "foreign expendi- tures" means expenditures in the currency of, and for goods produced in or services supplied from: (i) any of the Member States; and (ii) any developing country, other than the Borrower, which is a member of the International Development Association and could be the recipient of a Special Action Credit, as determined by the Administrator. - 14 - 4. The disbursement percentages have been calculated in com- pliance with the policy of the Administrator that no proceeds of the Special Action 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, procure- ment or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Special Action Credit decreases or increases, the Administrator 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 Administrator. 5. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for: (i) expenditures prior to the date of this Agreement; or (ii) expendi- tures in respect of Category (4) prior to agreement being reached between the Borrower and the Administrator on the design standards for and classification of the roads to be constructed and included in the Project. 6. Notwithstanding the allocation of an amount of the Special Action Credit or the disbursement percentages set forth in the table in paragraph 1 above, if the Administrator has reasonably estimated that the amount of the Special Action Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Administrator may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Special Action Credit which are then allocated to another Category and which in the opinion of the Administrator 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 expen- ditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 7. If the Administrator 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 Special Action Credit Agreement, no expenditures for such item shall be financed out of the proceeds of the Special Action Credit and the Admin- istrator may, without in any way restricting or limiting any other right, power or remedy of the Administrator under the Special Action Credit Agreement, by notice to the Borrower, cancel such - 15 - currency amounts of the Special Action Credit as, in the Adminis- trator's reasonable opinion, represent the currency amounts which would otherwise have been eligible for withdrawal out of the proceeds of the Special Action Credit in respect of such expendi- tures. - 16 - SCHEDULE 2 Description of the Project The Project will be carried out in two areas, namely the northern area centered on Makeni in the northern province of the Borrower, covering about 1,300 square miles with about 14,000 farming families, and the eastern area centered on Kenema in the eastern province of the Borrower, covering about 4,300 square miles and about 65,000 farming families. The Project consists of the following parts: Part A In the northern area: 1. Civil Works (a) Construction and upgrading of about 225 miles of feeder and crop extraction roads; (b) construction of 300 village wells; (c) establishment of 15 market centers; (d) construction of a training center; and (e) construction of houses, stores and offices. 2. Farm and Crop Development (a) Provision of extension and related farm services, including operational staff and supporting vehicles and equipment; (b) Provision of short- and medium-term credit upon terms and conditions described in Schedule 6 to this Agreement through a revolving credit fund for labor, pesticides, fertilizers, and improved planting material to increase the production of about 6,000 acres of inland swamp rice, about 25,000 acres of upland rice, and about 10,000 acres of groundnuts; and (c) Development of a seed multiplication farm. - 17 - 3. Investigations and Research (a) Investigation of the potential for future livestock development and establishment of three cattle farms; and (b) Researching methods of increasing wood fuel production for tobacco farmers. Part B In the eastern area: 1. Civil Works (a) Establishment of 12 market centers; (b) Construction of houses, stores and offices; and (c) Construction and upgrading of about 265 miles of feeder and crop extraction roads. 2. Farm and Crop Development (a) Expansion of extension and related farm services includ- ing operational staff and supporting vehicles and equipment; (b) Provision of short-, medium- and long-term credit upon terms and conditions described in Schedule 6 to this Agree- ment for labor, pesticides, fertilizers and improved planting material to increase the production of about 1,800 acres of inland swamp rice and up to about 36,000 acres of upland rice, to develop about 4,200 acres of inland swamp for rice production, and to establish about 1,000 acres of cocoa and about 1,600 acres of oil palm; (c) Continued development and improvement of seed multipli- cation farms; and (d) Establishment of a Farmer Finance Company to assume the activities of the existing revolving credit fund. Part C Central Support Services: 1. Establishment of and staffing of a project evaluation and services unit to assist the Borrower's Ministry of Agriculture and - 18 - Forestry in managing EAPMU, NAPMU and FFC and the Daru Oil Palm Company. 2. Assistance in the preparation of projects by the Borrower's Ministry of Agriculture and Forestry by providing consultants. The Project is expected to be completed by December 31, 1980. - 19 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Subject to the eligibility restrictions set forth in Section 2.02 (b) of this Agreement and except as provided in Part D and F hereof, goods and civil works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. For goods and works to be procured on the basis of inter- national competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, the Borrower shall prepare and forward to the Administrator as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender or prequalification documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Adminis- trator shall reasonably request; the Administrator will arrange for the publication of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods and works in question. The Borrower shall provide the necessary information to update such notice annually so long as any goods or works remain to be procured on the basis of interna- tional competitive bidding. 3. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international competitive bidding: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for the imported goods, or the ex-factory price or off-the-shelf price of other goods, offered in such bid; and (ii) customs duties and other import taxes levied in connection with the importation, or the sales and similar taxes levied in connection with the sale or delivery, pursuant to the bid, of the goods shall not be taken into account in the evaluation of the bids. B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A of this Schedule, goods manufactured in - 20 - Sierra Leone may be granted a margin of preference in accordance with, and subject to, the following provisions: 1. All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. 2. After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Sierra Leone if the bidder shall have established to the satisfaction of the Borrower and tiLe Admin- istrator that the manufacturing cost of such goods includes a value added in Sierra Leone equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other domestic bids. (3) Group C: bids offering any other goods. 3. In order to determine the lowest evaluated bid of each group, all evaluated bids in each group shall first be compared among themselves, without taking into account customs duties and other import taxes levied in connection with the importation, and sales and similar taxes levied in connection with the sale or delivery, pursuant to the bids, of the goods. Such lowest eva- luated 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. 4. If, as a result of the comparison under paragraph 3 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 evaluated bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to: (i) the amount of customs 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% "-f 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 - 21 - shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph 3 is the lowest evaluated bid shall be selected. C. Preference for Domestic Contractors With respect to the evaluation of bids for any contract for civil works included under Categories (4) and (5) of the table set forth in Schedule 1 to this Agreement and to be procured in accordance with the procedures described in Part A of this Sched- ule, the Borrower may grant a margin of preference of 7-1/2% to domestic contractors, in accordance with, and subject to, the following provisions: 1. Contractors applying for such preference shall be asked to provide, as part of the data for qualification, such informa- tion, including details of ownership, as shall be required to detErmine whether, according to the classification established by the 'orrower and accepted by the Administrator, a particular firm or g,oup of firms qualifies for a domestic preference. The bidding documents shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. 2. After bids have been received and reviewed by the Borrower, responsive bids will be classified into the following groups: (i) bids offered by domestic contractors eligible for preference; and (ii) bids offered by other contractors. For the purpose of evaluation and comparison of bids an amount equal to 7-1/2% of the bid amount shall be added to bids received under group (ii) above. D. Other Procurement Procedures (a) Individual contracts not exceeding the equivalent of $24,000 and not exceeding in the aggregate the equivalent of $200,000, for vehicles, plant, equipment, fertilizer, pesticides, drugs and tools shall be let on the basis of competitive bidding advertised locally and in accordance with procedures satisfactory to the Administrator. Contracts for other farm inputs such as - 22 - spraying machines and planting materials, shall be let through competitive bidding advertised locally. (b) Hired labor shall be procured through procedures accept- able to the Administrator. (c) Contracts for the construction of buildings, houses and the purchase of construction materials and furnishings shall be let on the basis of competitive bidding advertised locally and in accordance with procedures satisfactory to the Administrator. E. Review of Procurement Decisions by the Administrator 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts referred to in paragraph 1 of Section A of this Schedule: (a) Before bids are invited, the Borrower shall furnish to the Administrator, for its comments, the text of the invita- tions 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 Administrator shall reasonably request. Any further modification to the bidding documents shall require the Administrator's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Bor- rower shall, before a final decision on the award is made, inform the Administrator of the name of the bidder to which it intends to award the contract and shall furnish to the Administrator, in sufficient time for its review, a detailed report on the evalua- tion and comparison of the bids received, and such other informa- tion as the Administrator shall reasonably request. The Admini- strator 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, without the Administrator's concurrence, materially differ from those on which bids were asked or prequalification invited. - 23 - (d) Two conformed copies of the contract shall be furnished to the Administrator promptly after its execution and prior to the submission to the Administrator of the first application for withdrawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, the Borrower shall furnish to the Administrator, promptly after its execution and prior to the submission to the Administrator of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other inform- ation as the Administrator shall reasonably request. The Adminis- trator shall, if it determines that the award of the contract was not consistent with the Guidelines of this Schedule, promptly inform the Borrower and state the reasons for such determination. F. Procurement Without Contracting 1. Construction of roads shall be carried out by force account by the Borrower or by agreement by an agent acceptable to the Administrator. 2. Construction of wells shall be by villagers using materials financed out of the proceeds of the Special Action Credit. - 24 - SCHEDULE 4 EAPMU and NAPMU A. EAPMU 1. EAPMU shall consist of: (a) the Project Manager who shall have overall responsi- bility for the direction and coordination of the work of EAPMU and shall report directly to the Permanent Secretary of the Borrower's Ministry of Agriculture and Natural Resources; (b) the Accountant; (c) the Commercial Officer; (d) the Extension and Training Officer; (e) the Conservation and Land Development Officer; and (f) such supporting staff as shall be necessary for the efficient operation of EAPMU. 2. EAPMU shall be responsible, and have the necessary powers, for carrying out Part B of the Project. The head office of EAPMU shall be located at Kenema. B. NAPMU 1. NAPMU shall consist of: (a) the Project Manager who shall have overall responsi- bility for the direction and coordination of the work of NAPMU and shall report directly to the Permanent Secretary of the Borrower's Ministry of Agriculture and Forestry; (b) the Accountant; (c) the Commercial Officer; (d) the Extension and Training Officer; (e) the Conservation and Land Development Officer; - 25 - (f) the Livestock Officer; (g) the Construction Engineer; and (h) such supporting staff as shall be necessary for the efficient operation of NAPMU. 3. NAPMU shall be responsible, and have the necessary powers, for carrying out Part A of the Project. - 26 - SCHEDULE 5 PESU 1. PESU shall consist of: (a) the Financial Controller; (b) the Commercial Services Officer; (c) the Accountant; and (d) the Projects Economist. 2. PESU would be responsible to the Permanent Secretary of the Ministry of Agriculture and Forestry of the Borrower and would have the following functions: (a) undertaking continuous project evaluation; (b) providing EAPMU, NAPMU and other project management units with information relevant to decision making; (c) establishing priorities for new projects within the agricultural sector; (d) forward planning; (e) training and assisting the staff of EAPMU, NAPMU and other project management units in appropriate accounting, audit- ing, stores and procurement procedures; (f) processing reimbursement claims; (g) auditing EAPMU, NAPMU and other project management units; (h) establishing suitable credit systems for project farmers; (i) developing appropriate farm input supply systems; and - 27 - (j) carrying out any other functions as may be assigned to it by the Borrower. 3. The Financial Controller would be head of PESU and would be a member of the project advisory committee of the Borrower. - 28 - SCHEDULE 6 Terms and Conditions for Extension of Credit Extension of credit by the Borrower under Part A (2) (b) and Part B (2) (b) of the Project shall be in accordance with the following terms and conditions: (a) Except as the Administrator shall otherwise agree, interest rates for development loans shall be eight per cent (8%) per annum and for seasonal loans a fixed charge of ten per cent (10%) shall be made. (b) Amortization of the principal amount lent by way of development loans shall be in the case of oil palm over a term of thirteen years including four years of grace, in the case of cocoa over a term of twelve years including four years of grace, and in the case of swamp rice over a term of five years. (c) Interest payments shall be capitalized in the case of development loans for oil palm and cocoa. (d) Development loans shall be made available for the establishment of no more than ten acres of oil palm, no more than four acres of cocoa and no more than about three acres of swamp rice, except that in the case of such loans for the establishment of swamp rice, such loans may be made in respect of a reasonably greater area than three acres on condition that credit is extended to a group of farmers. 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 1-30 day of 198 . FOR SECRETARY