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CONFORMED COPY
CREDIT NUMBER 3683-ALB
Development Credit Agreement
(Road Maintenance Project)
between
ALBANIA
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated July 15, 2002
CREDIT NUMBER 3683-ALB
DEVELOPMENT CREDIT AGREEMENT
AGREEMENT, dated July 15, 2002, between ALBANIA (the Borrower) and 
INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association).
WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and priority of 
the Project described in Schedule 2 to this Agreement, has requested the Association to assist in 
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the financing of the Project; 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 set forth in this Agreement;
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
General Conditions; Definitions
Section 1.01. The “General Conditions Applicable to Development Credit Agreements” 
of the Association, dated January 1, 1985 (as amended through October 6, 1999) (the General 
Conditions), constitute an integral part of this Agreement. 
Section 1.02. Unless the context otherwise requires, the several terms defined in the 
General Conditions have the respective meanings therein set forth and the following additional 
terms have the following meanings:
(a)
“EMP” means the environmental management plan, satisfactory to the 
Association, prepared and adopted by the Borrower on March 11, 2002, describing the 
environmental and social mitigation, monitoring and institutional measures under the Project;
(b)
“FY” means the fiscal year of the Borrower;
(c)
“Financial Monitoring Report” or “FMR” means each report prepared in 
accordance with Section 4.02 of this Agreement;
(d)
“GRD” means the General Road Directorate of the Borrower established through 
the Decision of Council of Ministers on “Establishing of GRD” (No. 614) on December 29, 
1993;
(e)
“PIP” means the Project Implementation Plan, adopted by the Borrower and 
satisfactory to the Association, setting out the operational and administrative procedures for the 
implementation of the Project;
(f)
“PIU” means Project Implementation Unit established within the General Road 
Directorate of the Borrower;
(g)
“Project Account” means the account referred to in Section 6.01 of this 
Agreement, maintained by the Borrower in local currency and to be used for financing the 
Borrower’s contribution to Project expenditures; and
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(h)
“Special Account” means the account referred to in Section 2.02 (b) of this 
Agreement.
ARTICLE II
The Credit
Section 2.01. The Association agrees to lend to the Borrower, on the terms and 
conditions set forth or referred to in the Development Credit Agreement, an amount in various 
currencies equivalent to thirteen million five hundred thousand Special Drawing Rights (SDR 
13,500,000).
Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in 
accordance with the provisions of Schedule 1 to this Agreement 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.
(b)
The Borrower may, for the purposes of the Project, open and maintain in Dollars 
a
special deposit account in a bank on terms and conditions satisfactory to the Association, 
including appropriate protection against set-off, seizure or attachment.  Deposits into, and 
payments out of, the Special Account shall be made in accordance with the provisions of 
Schedule 5 to this Agreement.
Section 2.03. The Closing Date shall be June 30, 2007 or such later date as the 
Association shall establish.  The Association shall promptly notify the Borrower of such later 
date.
Section 2.04. (a) The Borrower shall pay to the Association a commitment charge on the 
principal amount of the Credit not withdrawn from time to time at a rate to be set by the 
Association as of June 30 of each year, but not to exceed the rate of one-half of one percent (1/2 
of 1%) per annum.
(b)
The commitment charge shall accrue: (i) from the date sixty days after the date 
of this Agreement (the accrual date) to the respective dates on which amounts shall be withdrawn 
by the Borrower from the Credit Account or canceled; and (ii) at the rate set as of the June 30 
immediately preceding the accrual date and at such other rates as may be set from time to time 
thereafter pursuant to paragraph (a) above.  The rate set as of June 30 in each year shall be 
applied from the next date in that year specified in Section 2.06 of this Agreement.
(c)
The commitment charge shall be paid: (i) at such places as the Association shall 
reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the 
Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 
of the General Conditions or in such other eligible currency or currencies as may from time to 
time be designated or selected pursuant to the provisions of that Section.
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Section 2.05. The Borrower shall pay to the Association a service charge at the rate of 
three-fourths of one percent (3/4 of 1%) per annum on the principal amount of the Credit 
withdrawn and outstanding from time to time.
Section 2.06. Commitment charges and service charges shall be payable semiannually on 
April 15 and October 15 in each year.
Section 2.07. (a)  Subject to paragraphs (b), (c) and (d) below, the Borrower shall repay 
the principal amount of the Credit in semiannual installments payable on each April 15 and 
October 15 commencing October 15, 2012 and ending April 15, 2042.  Each installment to and 
including the installment payable on April 15, 2022 shall be one percent (1%) of such principal 
amount, and each installment thereafter shall be two percent (2%) of such principal amount.
(b)
Whenever: (i) the Borrower's per capita gross national product (GNP), as 
determined by the Association, shall have exceeded for three consecutive years  the level 
established annually by the Association for determining eligibility to access the Association's 
resources; and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the 
Association may, subsequent to the review and approval thereof by the Executive Directors of 
the Association and after due consideration by them of the development of the Borrower's 
economy, modify the repayment of installments under paragraph (a) above by:
(A)
requiring the Borrower to repay twice the amount of each such 
installment not yet due until the principal amount of the Credit shall 
have been repaid; and
(B)
requiring the Borrower to commence repayment of the principal amount 
of the Credit as of the first semiannual payment date referred to in 
paragraph (a) above falling six months or more after the date on which 
the Association notifies the Borrower that the events set out in this 
paragraph (b) have occurred, provided, however, that there shall be a 
grace period of a minimum of five years on such repayment of principal.
(c)
If so requested by the Borrower, the Association may revise the modification 
referred to in paragraph (b) above to include, in lieu of some or all of the increase in the amounts 
of such installments, the payment of interest at an annual rate agreed with the Association on the 
principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the 
judgment of the Association, such revision shall not change the grant element obtained under the 
above-mentioned      repayment modification.
(d)
If, at any time after a modification of terms pursuant to paragraph (b) above, the 
Association determines that the Borrower's economic condition has deteriorated significantly, the 
Association may, if so requested by the Borrower, further modify the terms of repayment to 
conform to the schedule of installments as provided in paragraph (a) above.
Section 2.08. The currency of the United States of America is hereby specified for the 
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purposes of Section 4.02 of the General Conditions.
ARTICLE III
Execution of the Project
Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project 
as set forth in Schedule 2 to this Agreement, and, to this end, shall carry out the Project through 
PIU with due diligence and efficiency and in conformity with appropriate administrative, 
financial, engineering and environmental practices, and shall provide, promptly as needed, the 
funds, facilities, services and other resources required for the Project.
(b)
Without limitation upon the provisions of paragraph (a) of this Section and 
except as the Borrower and the Association shall otherwise agree, the Borrower shall carry out 
the Project in accordance with PIP and the Implementation Program set forth in Schedule 4 to 
this Agreement.
Section 3.02. 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 this Agreement.
Section 3.03. For the purposes of Section 9.06 of the General Conditions and without 
limitation thereto, the Borrower shall:
(a)
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 Borrower and the Association, a plan for the future operation 
of the Project; and
(b)
afford the Association a reasonable opportunity to exchange views with the 
Borrower on said plan.
ARTICLE IV
Financial Covenants
Section 4.01. (a)  The Borrower shall maintain a financial management system, including 
records and accounts, and prepare financial statements in a format acceptable to  the Bank, 
adequate to reflect the operations, resources and expenditures related to the Project.
(b)
The Borrower shall:
1.
have the records, accounts and financial statements referred to in paragraph (a) of this 
Section and the records and accounts for the Special Account for each fiscal year audited, in 
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accordance with auditing standards acceptable to the Bank, consistently applied, by independent 
auditors acceptable to the Bank;
2.
furnish to the Bank as soon as available, but in any case not later than six months after 
the end of each such year, (A) certified copies of the financial statements referred to in paragraph 
(a) of this Section for such year as so audited, and (B) an opinion on such statements, records and 
accounts and report of such audit, by said auditors, of such scope and in such detail as the Bank 
shall have reasonably requested; and
3.
furnish to the Bank such other information concerning such records and accounts, and 
the audit thereof, and concerning said auditors, as the Bank may from time to time reasonably 
request.
(c)
For all expenditures with respect to which withdrawals from the Loan Account 
were made on the basis of or statements of expenditure, the Borrower shall:
(i)
maintain or cause to be maintained, in accordance with paragraph (a) of 
this 
Section, records and separate accounts reflecting such expenditures;
(ii)
retain, until at least one year after the Bank has received the audit report 
for 
the fiscal year in which the last withdrawal from the Loan Account was 
made, 
all records (contracts, orders, invoices, bills, receipts and other 
documents) 
evidencing such expenditures;
(iii)
enable the Bank’s representatives to examine such records; and
(iv)
Ensure that such records and accounts are included in the annual audit 
referred to in paragraph (b) of this Section and that the report of such 
audit 
contains a separate opinion by said auditors as to whether all statements 
of 
expenditure submitted during such fiscal year, together with the 
procedures 
and internal controls involved in their preparation, can be relied 
upon to support 
the related withdrawal.
Section 4.02.  (a) Without limitation upon the Borrower’s progress reporting obligations 
set out in Schedule 4 to this Agreement the Borrower shall  cause PIU to prepare and furnish to 
the Association a Financial Monitoring Report, in form and substance satisfactory to the 
Association, which:
1.
sets forth sources and uses of funds for the Project, both cumulatively and for the period 
covered by said report, showing separately funds provided under the Credit, and explains 
variances between the actual and planned uses of such funds;
2.
describes physical progress in Project implementation, both cumulatively and for the 
period covered by said report, explains variances between the actual and planned Project 
implementation; and
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(b)
The first FMR shall be furnished to the Association not later than 45 days after 
the end of first calendar quarter after the Effective Date, and shall cover the period from the 
incurrence of the first expenditure under the Project through the end of such first calendar 
quarter; thereafter, each FMR shall be furnished to the Association not later than 45 days after 
each subsequent calendar quarter, and shall cover such calendar quarter.
ARTICLE V
Remedies of the Association
Section 5.01. Pursuant to Section 6.02 (l) of the General Conditions, the following 
additional event is specified, namely, that PIP shall have been amended, suspended, abrogated, 
repealed or waived so as to affect materially and adversely, in the opinion of the Association, the 
carrying out of the Project.
Section 5.02. Pursuant to Section 7.01 (h) of the General Conditions, the following 
additional event is specified, namely that the event specified in Section 5.01 of this Agreement 
shall occur.
ARTICLE VI
Effective Date; Termination
Section 6.01. The following events are specified as additional conditions to the 
effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of 
the General Conditions, namely, that the Borrower has opened a Project Account in a 
commercial bank on terms and conditions acceptable to the Association with an initial deposit in 
local currency equivalent to $300,000.
Section 6.02. The date ninety (90) days after the date of this Agreement is hereby 
specified for the purposes of Section 12.04 of the General Conditions.
ARTICLE VII
Representative of the Borrower; Addresses
Section 7.01. Minister of Finance of the Borrower 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:
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Ministry of Finance
Bulevardi “Deshmoret e Kombit”
Tirana
Albania
Facsimile:
355 42 28494
For the Association:
International Development Association
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
Facsimile:
INDEVAS
248423 (MCI) or
(202) 477-6391
Washington, D.C.
 64145 (MCI)
IN WITNESS WHEREOF, the parties hereto, 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.
ALBANIA
By: 
/s/ Z. Fatos Tarifa 
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
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By: 
/s/ Kathryn Ann Funk
Authorized Representative
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 amounts 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
SDR Equivalent)
to be Financed
(1)
Works
10,600,000
80%
(2)
Goods
100% of foreign
expenditures,
(a) under Part B (3) of the Project
200,000
100% of local
(b) under Parts A, B (1), (2) 
400,000
expenditures (ex-factory
 
and (4) of the Project
cost) and 80% of local 
expenditures for other
items procured locally
(3)
Consultants’
2,300,000
85%
services, training and audit
TOTAL
13,500,000
2.
For the purposes of this Schedule:
(a)
the term “foreign expenditures” means expenditures in the currency of any 
country other than that of the Borrower for goods or services supplied from the territory of any 
country other than that of the Borrower; and
(b)
the term “local expenditures” means expenditures in the currency of the 
Borrower or for goods or services supplied from the territory of the Borrower.
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in 
respect of: (a) payments made for expenditures prior to the date of this Agreement; and (b) 
payments made under Category (2) (a) unless the Association has received an acceptable plan for 
the use of the equipment, including staff to receive and use the equipment, methods and 
procedures for equipment usage, and organizational and operational changes required to 
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effectively utilize this equipment.
4.
The Association may require withdrawals from the Credit Account to be made on the 
basis of statements of expenditure for expenditures for: (a) goods under contracts costing less 
than $100,000 equivalent each; (b) works under contracts costing less than $100,000 equivalent 
each; (c) training and services of consulting firms costing less than $100,000 equivalent each; (d) 
training and services of individual consultants costing less than $50,000 equivalent each, under 
such terms and conditions as the Association shall specify by notice to the Borrower.
SCHEDULE 2
Description of the Project
The objective of the Project is to improve the overall quality, maintenance and safety of 
the Borrower’s road networks.
The Project consists of the following parts, subject to such modifications thereof as the 
Borrower and the Association may agree upon from time to time to achieve such objectives:
Part A
: Maintenance of the Road Network
1.
Maintenance and repair of about 500 km of national roads and bridges, selected in 
accordance with criteria satisfactory to the Association.
2.
Maintenance and repair of about 500 km of rural roads and bridges, selected in 
accordance with criteria satisfactory to the Association.
3.
Strengthening the capacity of the Borrower for more effective management of the Project 
through: (a) provision of equipment, materials and supplies required for the increased 
management of roads and bridges and road databank implementation; and (b) provision of 
consultant’s services and training to support PIU in procurement and implementation.
Part B
: Improvement of Traffic Safety
Provision of goods, works and consultant’s services and training for: (1) improvement of 
roads in blackspot locations; (2) installation of traffic control devices; (3) provision of safety 
enforcement and emergency response equipment, such as laser/radar speed management 
equipment, breathalyzer, blood testing equipment, first aid kits and hardware and software for an 
accident database; and (4) strengthening of the Borrower’s institutional capacity to monitor and 
manage road safety activities.
* * *
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The Project is expected to be completed by December 31, 2006.
SCHEDULE 3
Procurement and Consultants’ Services
Section I
. Procurement of Good and Works
Part A
: General
Goods and works shall be procured in accordance with (a) the provisions of Section I of 
the “Guidelines for Procurement under IBRD Loans and IDA Credits” published by the Bank in 
January 1995 and revised in January and August 1996, September 1997 and January 1999 (the 
Guidelines) and the provisions of the following Parts of this Section I.
Part B
: International Competitive Bidding
1.
Except as otherwise provided in Part C of this Section, goods and works shall be 
procured under contracts awarded in accordance with the provisions of Section II of the 
Guidelines and paragraph 5 of Appendix 1 thereto.
2.
The following provision shall apply to goods and works to be procured under contracts 
awarded in accordance with the provisions of paragraph 1 of this Part B.
Preference for domestically manufactured goods
The provisions of paragraphs 2.54 and 2.55 of the Guidelines and Appendix 2 thereto 
shall apply to goods manufactured in the territory of the Borrower.
Part C
: Other Procurement Procedures
1.
National Competitive Bidding
(a)
General
Works estimated to cost less than $1,000,000 equivalent per contract, up to an aggregate 
amount not to exceed $9,000,000 equivalent, may be procured under contracts awarded in 
accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines.
Improvement of Bidding Procedures
In order the ensure economy, efficiency, transparency and broad consistency with the 
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provision of Section 1 of the Guidelines:
(i)
invitation to bid shall be advertised in at least one national newspaper 
with a wide circulation, at least 30 days prior to the deadline for the 
submission of bids;
(ii)
pre-qualification shall be conducted for large or specialized works;
(iii)
minimum experience, technical and financial requirements shall be 
stated clearly in the pre-qualification documents or, in the case of 
post-qualification, in the bidding documents;
(iv)
foreign bidders shall not be precluded from bidding and no preference of 
any kind shall be given to national bidders in the bidding process.  
Government-owned enterprises in Albania shall be permitted to bid only 
if they are legally and financially autonomous and operate under 
commercial law of the Borrower;
(v)
procuring entities should use the Bank's regional standard NCB bidding 
documents, approved by the Bank prior to their issue to bidders;
(vi)
bids shall be opened in public in one location, immediately after the 
deadline for submission of bids in the presence of the representatives of 
bidders;
(vii)
a single-envelope procedure shall be used for the submission of bids;
(viii)
where pre-qualification has not been undertaken, post-qualification shall 
be conducted only on the lowest evaluated bidder; no bid shall be 
rejected at the time of bid opening on qualification grounds;
(ix)
bidders who contract as a joint venture shall be held jointly and severally 
liable;
(x)
bidders should be required to submit bid and performance securities in 
an amount appropriate to the estimated value of the contract and in a 
form acceptable to the Borrower;
(xi)
contract shall be awarded to the lowest evaluated, substantially 
responsive bidder who is determined to be qualified to perform in 
accordance with pre-defined and pre-disclosed evaluation criteria; and
(xii)
contracts of long duration (more than 18 months) shall contain 
appropriate price adjustment provisions.
2.
International Shopping
Goods estimated to cost less than $100,000 equivalent per contract, up to an aggregate 
amount not to exceed $280,000 equivalent, may be procured under contracts awarded on the 
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basis of international shopping procedures in accordance with the provisions of paragraphs 3.5 
and 3.6 of the Guidelines.
3.
Procurement of Small Works
Works estimated to cost less than $100,000 equivalent per contract, up to an aggregate 
amount not to exceed $1,200,000 equivalent, may be procured under lump-sum, fixed-price 
contracts awarded on the basis of quotations obtained from three (3) qualified domestic 
contractors in response to a written invitation. The invitation shall include a detailed description 
of the works, including basic specifications, the required completion date, a basic form of 
agreement acceptable to the Association, and relevant drawings, where applicable.  The award 
shall be made to the contractor who offers the lowest price quotation for the required work, and 
who has the experience and resources to complete the contract successfully.
Part D
: Review by the Association of Procurement Decisions
1.
Procurement Planning
Prior to the issuance of any invitations to prequalify for bidding or to bid for contracts, 
the proposed procurement plan for the Project shall be furnished to the Association for its review 
and approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the Guidelines.  
Procurement of all goods and works shall be undertaken in accordance with such procurement 
plan as shall have been approved by the Association, and with the provisions of said paragraph 1.
2.
Prior Review
(a)
With respect to each contract under Parts B.1 and C.1 of this Section estimated 
to cost the equivalent of $100,000 or more, the procedures set forth in paragraphs 2 and 3 of 
Appendix 1 to the Guidelines shall apply.
(b)
With respect to each contract under Part C.2 and with respect to the first two 
contracts under Part C.3 of this Section, the following procedures shall apply:
(i)
prior to execution of any contract under shopping procedures, the 
Borrower shall provide to the Association a report on the comparison 
and evaluation of quotations received;
(ii)
prior to the execution of any contract procured under shopping 
procedures, the Borrower shall provide to the Association a copy of the 
specifications and the draft contract; and
(iii)
the procedures set forth in paragraphs 2(f), 2(g) and 3 of Appendix 1 to 
the Guidelines shall apply.
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3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the procedures set 
forth in paragraph 4 of Appendix 1 to the Guidelines shall apply.
Section II
. Employment of Consultants
Part A
: General
Consultants’ services shall be procured in accordance with (a) the provisions of the 
Introduction and Section IV of the “Guidelines:  Selection and Employment of Consultants by 
World Bank Borrowers” published by the Association in January 1997 and revised in September 
1997 and January 1999, subject to the modifications thereto set forth in paragraph 2 of this Part 
A (the Consultant Guidelines), and (b) the provisions of the following Parts of this Section II.
Part B
: Quality- and Cost-based Selection
Except as otherwise provided in Part C of this Section, consultants’ services shall be 
procured under contracts awarded in accordance with the provisions of Section II of the 
Consultant Guidelines, paragraph 3 of Appendix 1 thereto, Appendix 2 thereto, and the 
provisions of paragraphs 3.13 through 3.18 thereof applicable to quality- and cost-based selection 
of consultants.
Part C
: Other Procedures for the Selection of Consultants
1.
Selection Based on Consultants’ Qualifications
Services for training and organization of seminars estimated to cost less than $100,000 
equivalent per contract may be procured under contracts awarded in accordance with the 
provisions of paragraphs 3.1 and 3.7 of the Consultant Guidelines.
2.
Individual Consultants
Services for training and technical assistance to the PIU shall be procured under 
contracts awarded to individual consultants in accordance with the provisions of paragraphs 5.1 
through 5.3 of the Consultant Guidelines.
Part D
: Review by the Association of the Selection of Consultants
1.
Selection Planning
Prior to the issuance to consultants of any requests for proposals, the proposed plan for 
the selection of consultants under the Project shall be furnished to the Association for its review 
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and approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the Consultant 
Guidelines.  Selection of all consultants’ services shall be undertaken in accordance with such 
selection plan as shall have been approved by the Association, and with the provisions of said 
paragraph 1.
2.
Prior Review
(a)
With respect to each contract for the employment of consulting firms estimated 
to cost the equivalent of $100,000 or more, the procedures set forth in paragraphs 1, 2 (other than 
the third subparagraph of paragraph 2(a)) and 5 of Appendix 1 to the Consultant Guidelines shall 
apply.
(b)
With respect to each contract for the employment of individual consultants 
estimated to cost the equivalent of $50,000 or more, the qualifications, experience, terms of 
reference and terms of employment of the consultants shall be furnished to the Association for its 
prior review and approval.  The contract shall be awarded only after the said approval shall have 
been given.
3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the procedures set 
forth in paragraph 4 of Appendix 1 to the Consultant Guidelines shall apply.
SCHEDULE 4
Implementation Program
1.
The Borrower shall:
(a)
maintain policies and procedures adequate to enable it to monitor and evaluate 
on an ongoing basis, in accordance with indicators satisfactory to the Association, the carrying 
out of the Project and the achievement of the objectives thereof;
(b)
prepare, under terms of reference satisfactory to the Association, and furnish to 
the Association, on or about August 31, 2004, a report integrating the results of the monitoring 
and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress 
achieved in the carrying out of the Project during the period preceding the date of said report and 
setting out the measures recommended to ensure the efficient carrying out of the Project and the 
achievement of the objectives thereof during the period following such date; and
(c)
review with the Association, by September 30, 2004, or such later date as the 
Association shall request, the report referred to in paragraph (b) of this Section, and, thereafter, 
take all measures required to ensure the efficient completion of the Project and the achievement 
of the objectives thereof, based on the conclusions and recommendations of the said report and 
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the Association’s views on the matter.
2.
The Borrower shall take or cause to be taken, all measures necessary for the carrying out 
of the EMP in a timely manner.
3.
The Borrower shall prepare and submit to the Association an annual implementation 
work program and the budget for the Project, including a statement that sufficient funds shall be 
available in the Project Account to cover the expected expenditure for the succeeding year, by 
November 30 of each year.
4.
The Borrower shall increase, until completion of the Project, the allocation for annual 
budget of the GRD for road maintenance by at least 5 percent each year, starting from the level 
set forth in FY 2001.
5.
Pursuant to Section 9.08 of the General Conditions, the Borrower shall ensure that all 
land acquisitions required for Part B of the Project shall be in accordance with procedures for 
compensation and replacement which shall have been approved by the Association.
6.
The Borrower shall, by June 30, 2003, adjust the tax on leaded and unleaded gasoline in 
order to have the average retail price of the leaded gasoline to be at least 5% higher than that of 
the unleaded gasoline.
SCHEDULE 5
Special Account
1.
For the purposes of this Schedule:
(a)
the term “eligible Category” means Categories (1), (2) and (3) set forth in the 
table in paragraph 1 of Schedule 1 to this Agreement.
(b)
the term “eligible expenditures” means expenditures 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 allocated from time to time to the eligible Categories in accordance with the provisions of 
Schedule 1 to this Agreement; and
(c)
the term “Authorized Allocation” means an amount equivalent to $1,000,000 to 
be withdrawn from the Credit Account and deposited into the Special Account pursuant to 
paragraph 3(a) of this Schedule, provided, however, that unless the Association shall otherwise 
agree, the Authorized Allocation shall be limited to an amount equivalent to $500,000 until the 
aggregate amount of withdrawals from the Credit Account plus the total amount of all 
outstanding special commitments entered into by the Association pursuant to Section 5.02 of the 
General Conditions shall be equal to or exceed the equivalent of SDR 2,500,000.
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2.
Payments out of the Special Account shall be made exclusively for eligible expenditures 
in accordance with the provisions of this Schedule.
3.
After the Association has received evidence satisfactory to it that the Special Account 
has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to 
replenish the Special Account shall be made as follows:
(a)
For withdrawals of the Authorized Allocation, the Borrower shall furnish to the 
Association a request or requests for deposit into the Special Account of an amount or amounts 
which do not exceed the aggregate amount of the Authorized Allocation.  On the basis of such 
request or requests, the Association shall, on behalf of the Borrower, withdraw from the Credit 
Account and deposit into the Special Account such amount or amounts as the Borrower shall 
have requested.
(b)
(i)
For replenishment of the Special Account, the Borrower shall furnish to 
the Association requests for deposits into the Special Account at such 
intervals as the Association shall specify.
(ii)
Prior to or at the time of each such request, the Borrower shall furnish to 
the Association the documents and other evidence required pursuant to 
paragraph 4 of this Schedule for the payment or payments in respect of 
which replenishment is requested.  On the basis of each such request, the 
Association shall, on behalf of the Borrower, withdraw from the Credit 
Account and deposit into the Special Account such amount as the 
Borrower shall have requested and as shall have been shown by said 
documents and other evidence to have been paid out of the Special 
Account for eligible expenditures.  All such deposits shall be withdrawn 
by the Association from the Credit Account under the respective eligible 
Categories, and in the respective equivalent amounts, as shall have been 
justified by said documents and other evidence.
4.
For each payment made by the Borrower out of the Special Account, the Borrower shall, 
at such time as the Association shall reasonably request, furnish to the Association such 
documents and other evidence showing that such payment was made exclusively for eligible 
expenditures.
5.
Notwithstanding the provisions of paragraph 3 of this Schedule, the Association shall not 
be required to make further deposits into the Special Account:
(a)
if, at any time, the Association shall have determined that all further withdrawals 
should be made by the Borrower directly from the Credit Account in accordance with the 
provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this 
Agreement;
(b)
if the Borrower shall have failed to furnish to the Association, within the period 
of time specified in Section 4.01 (b)(ii) of this Agreement, any of the audit reports required to be 
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furnished to the Association pursuant to said Section in respect of the audit of the records and 
accounts for the Special Account;
(c)
if, at any time, the Association shall have notified the Borrower of its intention 
to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit 
Account pursuant to the provisions of Section 6.02 of the General Conditions; or
(d)
once the total unwithdrawn amount of the Credit allocated to the eligible 
Categories, minus the total amount of all outstanding special commitments entered into by the 
Association pursuant to Section 5.02 of the General Conditions with respect to  the Project, shall 
equal the equivalent of twice the amount of the Authorized Allocation.
Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the 
Credit allocated to the eligible Categories shall follow such procedures as the Association shall 
specify by notice to the Borrower.  Such further withdrawals shall be made only after and to the 
extent that the Association shall have been satisfied that all such amounts remaining on deposit 
in the Special Account as of the date of such notice will be utilized in making payments for 
eligible expenditures.
6.
(a)
If the Association shall have determined at any time that any payment out of the 
Special Account: (i) was made for an expenditure or in an amount not eligible pursuant to 
paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the 
Association, the Borrower shall, promptly upon notice from the Association: (A) provide such 
additional evidence as the Association may request; or (B) deposit into the Special Account (or, 
if the Association shall so request, refund to the Association) an amount equal to the amount of 
such payment or the portion thereof not so eligible or justified.  Unless the Association shall 
otherwise agree, no further deposit by the Association into the Special Account shall be made 
until the Borrower has provided such evidence or made such deposit or refund, as the case may 
be.
(b)
If the Association shall have determined at any time that any amount outstanding 
in the Special Account will not be required to cover further payments for eligible expenditures, 
the Borrower shall, promptly upon notice from the Association, refund to the Association such 
outstanding amount.
(c)
The Borrower may, upon notice to the Association, refund to the Association all 
or any portion of the funds on deposit in the Special Account.
(d)
Refunds to the Association made pursuant to paragraphs 6 (a), (b) and (c) of this 
Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in 
accordance with the relevant provisions of this Agreement, including the General Conditions.
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