CREDIT NUMBER 6462-PK Project Agreement (Khyber Pakhtunkhwa Integrated Tourism Development Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and PROVINCE OF KHYBER PAKHTUNKHWA CREDIT NUMBER 6462-PK PROJECT AGREEMENT AGREEMENT between INTERNATIONAL DEVELOPMENT ASSOCIATION (“Association”) and PROVINCE OF KHYBER PAKHTUNKHWA (“Project Implementing Entity”) (“Project Agreement”) in connection with the Financing Agreement (“Financing Agreement”) of the Signature Date between the ISLAMIC REPUBLIC OF PAKISTAN (“Recipient) and the Association, concerning Credit No. 6462. The Association 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 Financing Agreement) apply to and form part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the Financing Agreement or the General Conditions. 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 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 — TERMINATION 3.01. For purposes of Section 10.05 (c) of the General Conditions, the date on which the provisions of this Agreement shall terminate is twenty (20) years after the Signature Date. ARTICLE IV — REPRESENTATIVE; ADDRESSES 4.01. The Project Implementing Entity’s Representative is Additional Chief Secretary, Planning and Development Department. 2 4.02. For purposes of Section 11.01 of the General Conditions: (a) the Association’s address is: International Development Association 1818 H Street, NW Washington, DC 20433 United States of America; and (b) the Association’s Electronic Address is: Telex: Facsimile: E-mail: 248423(MCI) or 1-202-477-6391 CMUPakistan@worldbank.org 4.03. For purposes of Section 11.01 of the General Conditions: (a) the Project Implementing Entity’s address is: Planning & Development Department Civil Secretariat Shaibzada Abdul Qayyum Road Peshawar, Khyber Pakhtunkhwa Pakistan; and (b) the Project Implementing Entity’s Electronic Address is: Facsimile: +92- 919211369 3 AGREED as of the later of the two dates written below. INTERNATIONAL DEVELOPMENT ASSOCIATION By __________________________________/ps1/ Authorized Representative Patchamuthu Illangovan Name: _______________________________/pn1/ Country Director Title: ________________________________/pt1/ 15-Oct-2019 Date: ________________________________/pd1/ PROVINCE OF KHYBER PAKHTUNKHWA By ___________________________________/ps2/ Authorized Representative Kamran Rehman Khan Name: _____________________________/pn2/ Secretary Tourism Title: ______________________________/pt2/ 14-Nov-2019 Date: ______________________________/pd2/ 4 SCHEDULE Project Execution Section I. Implementation Arrangements A. Institutional Arrangements 1. The Project Implementing Entity shall vest the overall responsibility for the implementation of Project activities in DoT and C&W. To this end, the Project Implementing Entity, through DoT and C&W, shall: (a) no later than one (1) month after the Effective Date establish and thereafter maintain throughout the period of implementation of the Project, a Project steering committee, with composition and terms of reference satisfactory to the Association, and with responsibilities, including, inter alia, providing strategic guidance and facilitating the coordination among the Project Implementing Entity’s line departments (mainly DoT and C&W). (b) maintain throughout the period of implementation of the Project, a project management unit within DoT (“PMU-DoT”), with composition and terms of reference satisfactory to the Association, and with responsibilities including, inter alia, planning, marketing, heritage preservation, business registration and licensing, data collection and monitoring, and facilitating investments by the private sector. (c) maintain throughout the period of implementation of the Project, the project management unit within C&W (“PMU-C&W”), with composition and terms of reference satisfactory to the Association, and with responsibilities for the engineering and infrastructure development activities, including, inter alia, the rehabilitation/construction of roads, site development of tourist destinations and visitor facilities for tourists. (d) no later than one (1) month after the Effective Date, appoint and thereafter maintain through the period of implementation of the Project: (i) a full-time Project director with full administrative and financial powers, each for PMU-DoT and for PMU-C&W, for the sanctioning of expenditures and approval of payments; and (ii) a finance manager, each for PMU-DoT and for PMU-C&W, all with terms of reference satisfactory to the Association. 5 2. The Project Implementing Entity shall ensure that full financial and administrative authority for the Project is delegated to the respective Project directors in the PMU-DoT and PMU-C&W, as the case may be. B. Project Operations Manual 1. The Project Implementing Entity shall: (a) no later than three (3) months after the Effective Date, prepare and adopt a Project Operations Manual, in form and substance satisfactory to the Association, setting out, inter alia, the selection criteria/principles and procedures for the Sub-projects under Part 2 of the Project; (b) carry out the Project in accordance with the Project Operations Manual, including selecting Sub-projects under Part 2 (a), (b) and (c) in accordance therewith; and (c) except as the Association shall otherwise agree in writing, not amend, abrogate, or waive, or permit to be amended, abrogated or waived, the Project Operations Manual or any provisions thereof. 2. In the event of a conflict between the provisions of the Project Operations Manual and those of this Agreement or the Financing Agreement, the provisions of this Agreement and the Financing Agreement shall govern. C. Safeguards 1. The Project Implementing Entity shall ensure that 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. 2. The Project Implementing Entity shall take all measures to implement the Sub-project RAPs, as applicable, in a manner and timeframe satisfactory to the Association. To this end, the Project Implementing Entity shall ensure that: (a) sufficient funds are made available to cover all the costs of implementing the Sub-project RAPs. (b) prior to carrying out activities which involve the taking of land and other related assets, Affected Persons shall be compensated at full replacement cost, resettled and provided with assistance in accordance with the Sub-project RAPs, as applicable; and 6 (c) the implementation, monitoring and evaluation of such Sub-project RAPs are completed and reported in a manner satisfactory to the Association. 3. The Project Implementing Entity shall ensure that (a) for each activity under the Project for which the ESMF, and the RPF provide for the preparation of a Sub-project ESIA, and/or a Sub-project ESMP, and a Sub-project RAP: (i) proceed to have such Sub-project ESIA, and/or Sub-project ESMP and Sub-project RAP as appropriate: (A) prepared and disclosed in accordance with the ESMF and the RPF, respectively; (B) consulted upon adequately with people affected by the Project as per the ESMF and the RPF, respectively, and submitted to the Association for review and approval; and (C) thereafter adopted, prior to implementation of the activity; and (ii) take such measures as shall be necessary or appropriate to ensure compliance with the requirements of such Sub-project ESIA, and/or Sub-project ESMP and Sub-project RAP in a manner satisfactory to the Association; (b) for each activity under the Project for which the IPPF provides for the preparation of a Sub-project IPP, the Recipient shall: (a) prior to the carrying out of any said Sub-project activity, prepare and/or cause to be prepared upon adequate consultation with indigenous people affected by the Project, and thereafter furnish to the Association, a Sub-project IPP, in accordance with the IPPF and satisfactory to the Association; and (b) thereafter, adopt and implement, and/or cause to be adopted and implemented, said Sub-project IPP in accordance with its terms and in a manner satisfactory to the Association. 4. The Project Implementing Entity shall ensure that all bidding documents and contracts for civil works under the Project include the obligation of contractors, subcontractors and supervising entities to: (a) comply with the relevant aspects of Safeguard Instruments; (b) adopt and implement measures to assess and manage the risks and impacts of labor influx and workers’ camps; (c) adopt and enforce codes of conduct that should be provided to and signed by all workers, detailing measures on environmental, social, health and safety, gender-based violence and violence against children; all as applicable to such civil works commissioned or carried out pursuant to said contracts. 5. The Project Implementing Entity shall maintain, throughout Project implementation, and publicize the availability of a grievance mechanism, in form and substance satisfactory to the Association, 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 Association. 7 6. The Project Implementing Entity shall 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 Association; 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 Association Safeguards Policies. 7. Without limitation upon its other reporting obligations under this Agreement and the Financing Agreement, the Project Implementing Entity shall: (a) take all measures necessary on its part to regularly collect, compile, and submit to the Association, as part of the Project Reports, and promptly in a separate report whenever the Association may require, information on the status of compliance with the Safeguards Instruments, all such reports in form and substance acceptable to the Association, setting out, inter alia: (i) the status of implementation of the Safeguards Instruments; (ii) conditions, if any, which interfere or threaten to interfere with the implementation of the Safeguards Instruments; and (iii) corrective and preventive measures taken or required to be taken to address such conditions; (b) promptly furnish to the Association 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 notify the Association of any incident or accident related to or having an impact on the Project which has, or is likely to have, a significant adverse effect on the environment, the affected communities, the public or workers. 8. Except as the Association shall otherwise agree, the Project Implementing Entity shall 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 or the Financing Agreement, the provisions of this Agreement and/or the Financing Agreement shall prevail. 8 Section II. Project Monitoring, Reporting and Evaluation A. Project Reports. 1. The Project Implementing Entity shall 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 the indicators acceptable to the Association. Each such Project Report shall cover the period of one calendar semester, and shall be furnished to the Recipient and the Association not later than forty-five (45) days after the end of the period covered by such report. 2. The Project Implementing Entity shall provide to the Recipient and the Association, by not later than six (6) months after the Closing Date, the report referred to in Section 5.08 (c) of the General Conditions as well as all such additional information as the Recipient or the Association shall reasonably request for the purposes of such Section. 9