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August 4, 1999
His Excellency
Mustafa Nyang’anyi
Embassy of the United Republic of Tanzania
2139 R Street N.W.
Washington, D.C. 20008
Credit No. 3184-TA (Tax Administration Project)
Preference for Domestic Contractors
Dear Sir:
1.
We refer to the Development Credit Agreement of even date herewith between
United Republic of Tanzania (the Borrower) and International Development Association
(the Association) and to the provisions of Part B.2 (b) of Section I of Schedule 3
thereof for the grant of 7.5% margin of preference to eligible domestic contractors
bidding for construction contracts to be financed out of the proceeds of the above
Credit.
2.
We wish to confirm that in order to be accepted by the Association, the criteria
for classification of domestic contractors eligible for such preference must include
at least the following:
(a)
domestic bidders shall be eligible provided that they:
(i)
are registered in Tanzania;
(ii)
have majority ownership by nationals of Tanzania; and
(iii)
have not subcontracted more than 50% of the contract works
measured in terms
of value to foreign contractors; and
(b)
joint ventures between domestic and foreign firms shall be eligible for
the margin of preference provided:
(i)
the domestic partner or partners individually satisfy the criteria
for
eligibility set forth above;
(ii)
the domestic partner or partners would not be qualified for the
contract works
in question on technical or financial grounds without
the foreign
participation; and
(iii)
the domestic partner or partners will, under the arrangements
proposed, carry
out at least 50% of the contract works measured in
terms of value.
For the purpose of this paragraph, the term “foreign firm� means a firm that
does not meet the eligibility requirements for domestic bidders under either
sub-paragraphs (a)(i) or (ii) of this paragraph.
3.
In any contract awarded to a bidder who received preference as a domestic
contractor in accordance with the foregoing, appropriate provisions will be included
limiting the right of the contractor to sub-contract any portion of the works in
excess of the percentage indicated under subparagraphs (a) (iii) and (b) (iii) of the
preceding paragraph.
4.
Please confirm your agreement with the foregoing by signing the enclosed copy of
this letter and returning it to us.
Sincerely yours,
INTERNATIONAL DEVELOPMENT ASSOCIATION
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By /s/ Praful Patel
Acting Regional Vice President, Africa
CONFIRMED:
UNITED REPUBLIC OF TANZANIA
By /s/ Mustafa Nyang’anyi
Authorized Representative