Loan Number 4012 RU
LOAN AGREEMENT
(ENTERPRISE HOUSING DIVESTITURE PROJECT)
BETWEEN RUSSIAN FEDERATION AND INTERNATIONAL BANK
FOR RECONSTRUCTION AND DEVELOPMENT
(Washington, 29.VII.1996)
Agreement, dated July 29, 1996, between Russian Federation (the
Borrower) and International Bank for Reconstruction and
Development (the Bank).
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 Bank to assist in the financing
of the Project;
(B) the Project will be carried out with the participation of
the Participating Cities (as hereinafter defined) with the
Borrower's assistance and, as part of such assistance, the
Borrower will make available to the Participating Cities part of
the proceeds of the Loan as provided in this Agreement; and
whereas the Bank has agreed, on the basis, inter alia, of the
foregoing, to extend the Loan to the Borrower upon the terms and
conditions set forth in this Agreement and in the Project
Agreement of even date herewith between the Bank and the Project
Center for Enterprise Housing Divestiture (CPIU);
now therefore the parties hereto hereby agree as follows:
Article I
General Conditions; Definitions
Section 1.01. The "General Conditions Applicable to Single
Currency Loan and Guarantee Agreements for Single Currency Loans"
of the Bank, dated May 30, 1995 (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 and in the
Preamble to this Agreement have the respective meanings therein
set forth and the following additional terms have the following
meanings:
(a) "Project Agreement" means the agreement between the Bank
and the CPIU of even date herewith, as the same may be amended
from time to time, and such term includes all schedules and
agreements supplemental to the Project Agreement;
(b) "Participating Cities" means the Cities of Ryazan,
Vladimir, Petrozavodsk, Volkhov, Cherepovets, Orenburg;
(c) "Participating City Subsidiary Loan Agreements" means the
agreements to be entered into among the Borrower, the
Participating Cities, and the Governments of the Oblast or
Republic in which the Participating Cities are located pursuant to
Section 3.01(b) of this Agreement, as the same may be amended from
time to time, and such term includes all schedules to the said
Agreements;
(d) "Participating City Subsidiary Loans" mean the loans to be
provided out of the proceeds of the Loan to the Participating
Cities under the Participating Cities Subsidiary Loan Agreements;
(e) "CPIU" means a foundation or other independent organization
created by the Borrower for the purposes of this Agreement;
(f) "LIG" or "LIGs" mean the local implementation group or
groups established by the Participating Cities pursuant to the
provisions of sub-point (iii) of Section 3 of Schedule 1 to this
Agreement;
(g) "Special Account" means the account referred to in Section
2.02(b) of this Agreement; and
(h) "Project Preparation Advance" means the project preparation
advance granted by the Bank to the Borrower pursuant to an
exchange of letters dated July 31, 1995 and August 21, 1995
between the Borrower and the Bank.
Article II
The Loan
Section 2.01. The Bank agrees to lend to the Borrower, on the
terms and conditions set forth or referred to in the Loan
Agreement, an amount equal to three hundred million Dollars (USD
300,000,000).
Section 2.02. (a) The amount of the Loan may be withdrawn from
the Loan Account in accordance with the provisions of Schedule 1
to this Agreement for expenditures made (or, if the Bank shall so
agree, to be made) in respect of the reasonable cost of goods and
services required for the Project described in Schedule 2 to this
Agreement and to be financed out of the proceeds of the Loan.
(b) The Borrower may, for the purposes of the Project, open and
maintain in Dollars a special deposit account in a commercial bank
on terms and conditions satisfactory to the Bank, 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.
(c) Promptly after the Effective Date, the Bank shall, on
behalf of the Borrower, withdraw from the Loan Account and pay to
itself the amount required to repay the principal amount of the
Project Preparation Advance withdrawn and outstanding as of such
date and to pay all unpaid charges thereon. The unwithdrawn
balance of the authorized amount of the Project Preparation
Advance shall thereupon be cancelled.
Section 2.03. The Closing Date shall be December 31, 2002 or
such later date as the Bank shall establish. The Bank shall
promptly notify the Borrower of such later date.
Section 2.04. The Borrower shall pay to the Bank a commitment
charge at the rate of three-fourths of one percent (3/4 of 1%) per
annum on the principal amount of the Loan not withdrawn from time
to time.
Section 2.05. (a) The Borrower shall pay interest on the
principal amount of the Loan withdrawn and outstanding from time
to time, at a rate for each Interest Period equal to LIBOR Base
Rate plus LIBOR Total Spread.
(b) For the purposes of this Section:
(i) "Interest Period" means the initial period from and
including the date of this Agreement to, but excluding, the
first Interest Payment Date occurring thereafter, and after
the initial period, each period from and including an Interest
Payment Date to, but excluding the next following Interest
Payment Date.
(ii) "Interest Payment Date" means any date specified in
Section 2.06 of this Agreement.
(iii) "LIBOR Base Rate" means, for each Interest Period,
the London interbank offered rate for six-month deposits in
single currency for value the first day of such Interest
Period (or, in the case of the initial Interest Period, for
value the Interest Payment Date occurring on or next preceding
the first day of such Interest Period), as reasonably
determined by the Bank and expressed as a percentage per
annum.
(iii) "LIBOR Total Spread" means, for each Interest
Period:
(A) one half of one percent (1/2 of 1%);
(B) minus (or plus) the weighted average margin, for
such Interest Period, below (or above) the London
interbank offered rates, or other reference rates,
for six-month deposits, in respect of the Bank's
outstanding borrowings or portions thereof allocated by
the Bank to fund single currency loans or portions thereof
made by it that include the Loan; as reasonably determined
by the Bank and expressed as a percentage per annum.
(c) The Bank shall notify the Borrower of LIBOR Base Rate and
LIBOR Total Spread for each Interest Period, promptly upon the
determination thereof.
(d) Whenever, in light of changes in market practice affecting
the determination of the interest rates referred to in this
Section 2.05, the Bank determines that it is in the interest of
its borrowers as a whole and of the Bank to apply a basis for
determining the interest rates applicable to the Loan other than
as provided in said Section, the Bank may modify the basis for
determining the interest rates applicable to amounts of the Loan
not yet withdrawn upon not less than six (6) months' notice to the
Borrower of the new basis. The basis shall become effective on the
expiry of the notice period unless the Borrower notifies the Bank
during said period of its objection thereto, in which case said
modification shall not apply to the Loan.
Section 2.06. Interest and other charges shall be payable May
15 and November 15 in each year.
Section 2.07. The Borrower shall repay the principal amount of
the Loan in accordance with the amortization schedule set forth in
Schedule 3 to this Agreement.
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, without any limitation or restriction
upon any of its other obligations under the Loan Agreement, shall
carry out the Project with the participation of the Participating
Cities. To that end, the Borrower shall act through the CPIU,
shall cause the CPIU to perform in accordance with the provisions
of the Project Agreement all the obligations of the CPIU therein
set forth, shall take or cause to be taken all action, including
the provision of funds, facilities, services and other resources,
necessary or appropriate to enable the CPIU to perform such
obligations and the Participating Cities to carry out their
obligations in respect of the Project, and shall not take or
permit to be taken any action which would prevent or interfere
with such performance.
(b) The Borrower shall: (i) make available to the CPIU the
proceeds of the Loan allocated from time to time to Categories 1
(b) and 4 of the table set forth in paragraph 1 of Schedule 1 to
this Agreement; and (ii) relend the proceeds of the Loan allocated
from time to time to each of the sub-Categories of Category 2 of
such table to the respective Participating City and the pro-rated
portion allocated to Categories 1 (a), 3, one-half of 5 and 6 of
such table under subsidiary loan agreements (the Participating
City Subsidiary Loan Agreement) to be entered into among the
Borrower, each of the Participating Cities, and the Government of
the Oblast or Republic in which the Participating Cities are
located, providing for Participating City Subsidiary Loans, under
terms and conditions acceptable to the Bank which shall include:
(i) the principal amount of each Participating City Loan
will be denominated in Dollars and be the equivalent amount
withdrawn from the Loan Account, or the payment out of the
Special Account, and the Participating Cities shall carry the
foreign exchange risk;
(ii) each Participating City shall pay:
(1) interest on the principal amount of the
Participating City Subsidiary Loan withdrawn and
outstanding from time to time, at a variable interest rate
equal to the rate applicable pursuant to the provisions
of Section 2.05 of this Agreement plus a mark-up of up to
250 basis points; and
(2) a commitment charge on the amount relent to the
respective Participating City Subsidiary Loan not
withdrawn from time to time at the same rate as applicable
under the provisions of Section 2.04 of this Agreement;
(iii) the Participating City Subsidiary Loan shall have a
grace period of six years and a final maturity of 14 to 15
years; and
(iv) the implementation responsibilities of the respective
Participating City in respect of Parts A.4, В and С of the
Project.
(e) The Borrower shall exercise its rights under each
Participating City Subsidiary Loan Agreement in such manner as to
protect the interests of the Borrower and the Bank and to
accomplish the purposes of the Loan, and, except as the Bank shall
otherwise agree, the Borrower shall not assign, amend, abrogate or
waive any Participating City Subsidiary Loan Agreement or any
provision thereof.
Section 3.02. Except as the Bank 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 Loan
shall be governed by the provisions of Schedule 4 to this
Agreement.
Section 3.03. The Bank and the Borrower hereby agree that the
obligations set forth in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and
9.09 of the General Conditions (relating to insurance, use of
goods and services, plans and schedules, records and reports,
maintenance and land acquisition, respectively) shall be carried
out by the CPIU or the respective Participating City.
Article IV
Financial Covenants
Section 4.01. (a) For all expenditures with respect to which
withdrawals from the Loan Account were made on the basis of
statements of expenditure, the Borrower shall:
(i) maintain or cause to be maintained in accordance with
sound accounting practices, records and accounts reflecting
such expenditures;
(ii) ensure that all records (contracts, orders, invoices,
bills, receipts and other documents) evidencing such
expenditures are retained 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; and
(iii) enable the Bank's representatives to examine such
records.
(b) The Borrower shall:
(i) have the records and accounts referred to in paragraph
(a) (i) of this Section and those for the Special Account for
each fiscal year audited, in accordance with appropriate
auditing principles consistently applied, by independent
auditors acceptable to the Bank;
(ii) furnish to the Bank as soon as available, but in any
case not later than six months after the end of each such year
the report of such audit by said auditors, of such scope and
in such detail as the Bank shall have reasonably requested,
including a separate opinion by said auditors as to whether
the 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 withdrawals; and
(iii) furnish to the Bank such other information
concerning said records and accounts and the audit thereof as
the Bank shall from time to time reasonably request.
Article V
Remedies of the Bank
Section 5.01. Pursuant to Section 6.02(l) of the General
Conditions, the following additional events are specified:
(a) The CPIU shall have failed to perform any of its
obligations under the Project Agreement.
(b) A Participating City shall have failed to perform any of
its obligations in respect of Project execution under the
respective Participating City Subsidiary Loan Agreement.
(c) As a result of events which have occurred after the date of
the Loan Agreement, an extraordinary situation shall have arisen
which shall make it improbable that the CPIU will be able to
perform its obligations under the Project Agreement.
(d) The charter of the CPIU shall have been amended, suspended,
abrogated, repealed or waived so as to affect materially and
adversely the ability of the CPIU to perform any of its
obligations under the Project Agreement.
(e) An authority having jurisdiction shall have taken any
action for the dissolution or disestablishment of the CPIU or for
the suspension of its operations.
Section 5.02. Pursuant to Section 7.01(h) of the General
Conditions, the following additional events are specified:
(a) the events specified in paragraphs (a) or (b) of Section
5.01 of this Agreement shall occur in respect of an obligation so
as to affect materially and adversely the execution of the Project
and shall continue for a period of sixty days after notice thereof
shall have been given by the Bank to the Borrower;
(b) the events specified in paragraphs (d) and (e) of 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 Loan Agreement within the
meaning of Section 12.01(c) of the General Conditions:
(a) at least two Participating City Subsidiary Loan Agreements
have been executed on behalf of the Borrower and two Participating
Cities.
Section 6.02. The following are specified as additional
matters, within the meaning of Section 12.02(c) of the General
Conditions, to be included in the opinion or opinions to be
furnished to the Bank:
(a) that the Project Agreement has been duly authorized or
ratified by the CPIU and is legally binding upon the CPIU in
accordance with its terms; and
(b) that the Participating City Subsidiary Loan Agreements
referred to in Section 6.01(a) of this Article have been duly
authorized or ratified by the Borrower and the respective
Participating City and are legally binding upon the Borrower and
the respective Participating City in accordance with their terms.
Section 6.03. 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. The Minister of Finance or any Deputy 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:
Ministry of Finance
Ilyinka Street 9
103009 Moscow
Russian Federation
Telex:
12008
For the Bank:
International Bank for
Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
Cable address: Telex:
INTBAFRAD 197688 (TRT),
Washington, D.C. 248423 (RCA),
64145 (WUI) or
82987 (FTCC)
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.
SCHEDULE 1
WITHDRAWAL OF THE PROCEEDS OF THE LOAN
1. The table below sets forth the Categories of items to be
financed out of the proceeds of the Loan, the allocation of the
amounts of the Loan to each Category and the percentage of
expenditures for items so to be financed in each Category:
-------------------------------T--------------T------------------¬
¦ Category ¦Amount of the ¦ % of ¦
¦ ¦Loan Allocated¦ Expenditures ¦
¦ ¦(Expressed in ¦ to be Financed ¦
¦ ¦ Dollar ¦ ¦
¦ ¦ Equivalent) ¦ ¦
+------------------------------+--------------+------------------+
¦(1) Technical Assistance ¦ ¦ ¦
¦ under Part A (1) of the ¦ ¦ ¦
¦ Project ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(a) Engineering, Procurement, ¦ 20,500,000 ¦ 100% ¦
¦ and Technical Services ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(b) Other Consultants' ¦ 5,500,000 ¦ 100% ¦
¦ Services ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(2) Parts B of the Project in:¦ ¦ ¦
¦ ¦ ¦ ¦
¦(a) Ryazan: ¦ 59,100,000 ¦ ¦
¦ ¦ ¦ ¦
¦ (i) Works ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures and ¦
¦ ¦ ¦80% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦ ¦
¦ (ii) Goods ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures, ¦
¦ ¦ ¦100 % of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦(ex-factory cost) ¦
¦ ¦ ¦and 80% of local ¦
¦ ¦ ¦expenditures for ¦
¦ ¦ ¦other items ¦
¦ ¦ ¦procured locally ¦
¦ ¦ ¦ ¦
¦(a) Ryazan (contd.) ¦ ¦ ¦
¦ ¦ ¦ ¦
¦ (iii) Consultants' services¦ ¦ 100% ¦
¦ ¦ ¦ ¦
¦(b) Vladimir: ¦ 54,500,000 ¦ ¦
¦ ¦ ¦ ¦
¦ (i) Works ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures and ¦
¦ ¦ ¦80% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦ ¦
¦ (ii) Goods ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures, ¦
¦ ¦ ¦100% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦(ex-factory cost) ¦
¦ ¦ ¦and 80% of local ¦
¦ ¦ ¦expenditures for ¦
¦ ¦ ¦other items ¦
¦ ¦ ¦procured locally ¦
¦ ¦ ¦ ¦
¦ (iii) Consultants' services¦ ¦ 100% ¦
¦ ¦ ¦ ¦
¦(c) Petrozavodsk: ¦ 34,800,000 ¦ ¦
¦ ¦ ¦ ¦
¦ (i) Works ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures and ¦
¦ ¦ ¦80% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦ ¦
¦ (ii) Goods ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures, ¦
¦ ¦ ¦100% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦(ex-factory cost) ¦
¦ ¦ ¦and 80% of local ¦
¦ ¦ ¦expenditures for ¦
¦ ¦ ¦other items ¦
¦ ¦ ¦procured locally ¦
¦ ¦ ¦ ¦
¦ (iii) Consultants' services¦ ¦ 100% ¦
¦ ¦ ¦ ¦
¦(d) Volkhov ¦ 10,900,000 ¦ ¦
¦ ¦ ¦ ¦
¦ (i) Works ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures and ¦
¦ ¦ ¦80% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦ ¦
¦ (ii) Goods ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures, ¦
¦ ¦ ¦100% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦(ex-factory cost) ¦
¦ ¦ ¦and 80% of local ¦
¦ ¦ ¦expenditures for ¦
¦ ¦ ¦other items ¦
¦ ¦ ¦procured locally ¦
¦ ¦ ¦ ¦
¦ (iii) Consultants' Services¦ ¦ 100% ¦
¦ ¦ ¦ ¦
¦(e) Cherepovets ¦ 27,300,000 ¦ ¦
¦ ¦ ¦ ¦
¦ (i) Works ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures and ¦
¦ ¦ ¦80% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦ ¦
¦ (ii) Goods ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures, ¦
¦ ¦ ¦100% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦(ex-factory cost) ¦
¦ ¦ ¦and 80% of local ¦
¦ ¦ ¦expenditures for ¦
¦ ¦ ¦other items ¦
¦ ¦ ¦procured locally ¦
¦ ¦ ¦ ¦
¦ (iii) Consultants' services¦ ¦ 100% ¦
¦ ¦ ¦ ¦
¦(f) Orenburg: ¦ 59,100,000 ¦ ¦
¦ ¦ ¦ ¦
¦ (i) Works ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures and ¦
¦ ¦ ¦80% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦ ¦
¦ (ii) Goods ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures, ¦
¦ ¦ ¦100% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦(ex-factory cost) ¦
¦ ¦ ¦and 80% of local ¦
¦ ¦ ¦expenditures for ¦
¦ ¦ ¦other items ¦
¦ ¦ ¦procured locally ¦
¦ ¦ ¦ ¦
¦ (iii) Consultants' ¦ ¦ 100% ¦
¦ services ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(3) Upstream retrofits under ¦ 5,000,000 ¦ ¦
¦ Part C of of the Project: ¦ ¦ ¦
¦ ¦ ¦ ¦
¦ (i) Works ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures and ¦
¦ ¦ ¦80% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦ ¦
¦ (ii) Goods ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures, ¦
¦ ¦ ¦100% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦(ex-factory cost) ¦
¦ ¦ ¦and 80% of local ¦
¦ ¦ ¦expenditures for ¦
¦ ¦ ¦other items ¦
¦ ¦ ¦procured locally ¦
¦ ¦ ¦ ¦
¦ ¦ ¦ ¦
¦ (iii) Consultants' services¦ ¦ 100% ¦
¦ ¦ ¦ ¦
¦(4) Operating cost of the ¦ 3,000,000 ¦ 100% ¦
¦ CPIU ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(5) Refunding of Project ¦ 3,000,000 ¦Amount due ¦
¦ Preparation Advance ¦ ¦pursuant to ¦
¦ ¦ ¦Section 2.02(c) ¦
¦ ¦ ¦of this Agreement ¦
¦ ¦ ¦ ¦
¦(6) Unallocated ¦ 17,300,000 ¦ ¦
¦ ¦ ¦ ¦
¦TOTAL ¦ 300,000,000 ¦ ¦
L------------------------------+--------------+-------------------
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;
(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; and
(c) the term "operating cost" means expenditures on account of
the Project incurred by the CPIU for rental of premises, purchase
or rental of small equipment, utility services, fees for
maintenance of premises, including minor renovations, or
equipment, and office supplies.
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; nor
(b) expenditures under each of the sub-Categories of Category
(2) of this Schedule unless:
(i) the respective Participating City Subsidiary Loan
Agreement has been signed with the respective Participating
City;
(ii) the Bank has received a legal opinion, satisfactory
to the Bank of counsel acceptable to the Bank that the
respective Participating City Subsidiary Loan Agreement has
been duly authorized or ratified by the Borrower and the
respective Participating City and is legally binding upon the
Borrower and the respective Participating City; and
(iii) the respective Participating City has established
a local implementation group (LIG) with responsibilities and
staffing acceptable to the Bank.
4. The Bank may require withdrawals from the Loan Account to be
made on the basis of statements of expenditure for expenditures
for goods, works and services provided by consulting firms under
contracts not exceeding (USD)100,000 equivalent and for
expenditures for services provided by individual consultants,
under such terms and conditions as the Bank shall specify by
notice to the Borrower.
SCHEDULE 2
DESCRIPTION OF THE PROJECT
The objectives of the Project are to accelerate the sustainable
divestiture of enterprise housing throughout Russia by
demonstrating within the Participating Cities a combination of
housing reforms and investments designed to transfer housing to
the private sector and lower its operating cost.
The Project consists of the following parts, subject to such
modifications thereof as the Borrower and the Bank may agree upon
from time to time to achieve such objectives:
Part A
Housing Divestiture and Associated Reforms
1. Provision of technical assistance through the CPIU to
strengthen the Participating Cities' technical, institutional and
financial capacity for the purpose of the process of
implementation of the enterprise housing divestiture program.
2. Provision of technical assistance through the CPIU to the
Participating Cities in the following areas:
(a) cost recovery for housing maintenance and utility services:
(b) establishment and implementation of a system of providing
housing allowances to protect vulnerable households;
(c) formation of condominium associations, including the legal
and regulatory framework necessary therefor; and
(d) competitive bidding for housing maintenance.
3. Dissemination of experience emanating from the Project
reforms and investments, both among Participating Cities and
throughout Russia by means of periodic meetings, seminars,
newsletters, and other media.
4. Provision of housing allowances by the Participating Cities
to protect vulnerable households in Participating Cities.
Part B
Energy Efficiency Investments in
Housing Facilities in Participating Cities
1. Acquisition and installation of metering equipment.
2. Investments for the retrofitting of housing facilities to
reduce energy consumption and lower operating costs in accordance
with eligibility and priority criteria acceptable to the Bank.
3. Capital repairs of housing facilities, including repair of
roofs, doors, walls and windows.
Part C
Upstream Retrofits in Participating Cities
1. The repair of existing utility networks outside of the
building boundaries to permit these networks to function as
designed.
2. The retrofitting of existing networks outside of the
building boundaries with equipment or materials designed to
improve the efficiency of these networks.
* * *
The Project is expected to be completed by June 30, 2002.
SCHEDULE 3
AMORTIZATION SCHEDULE
----------------------------------T------------------------------¬
¦ Date Payment Due ¦ Payment of Principal ¦
¦ ¦ (Expressed in Dollars) <*> ¦
+---------------------------------+------------------------------+
¦On each May 15 and November 15 ¦ ¦
¦ ¦ ¦
¦ beginning November 15, 2002 ¦ ¦
¦ through November 15, 2010 ¦ 16,665,000 ¦
¦ ¦ ¦
¦And on May 15, 2011 ¦ 16,695,000 ¦
L---------------------------------+-------------------------------
--------------------------------
<*> The figures in this column represent the amount in Dollars
to be repaid, except as provided in Section 4.04(d) of the General
Conditions.
SCHEDULE 4
PROCUREMENT AND CONSULTANTS' SERVICES
Section I. PROCUREMENT OF GOODS AND WORKS
Part A
General
Goods and works shall be procured in accordance with the
provisions of Section I of the "Guidelines for Procurement under
IBRD Loans and IDA Credits" published by the Bank in January 1995
(the Guidelines) and the following provisions of this Section, as
applicable.
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 provisions shall apply to goods and works to
be procured under contracts awarded in accordance with the
provisions of paragraph 1 of this Part B.
(a) Grouping of contracts
To the extent practicable, contracts for goods shall be grouped
in bid packages estimated to cost USD 300,000 equivalent or more
each and contracts for works in bid packages of USD 1,000,000
equivalent or more each.
(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.
3. National Competitive Bidding
Metering and retrofit equipment estimated to cost USD 300,000
equivalent or less per contract and USD 3.4 million equivalent or
less in the aggregate, and works estimated to cost USD 1 million
or less per contract and USD 34.5 million equivalent or less in
the aggregate may be procured under contracts awarded in
accordance with the provisions of paragraphs 3.3 and 3.4 of the
Guidelines.
4. International Shopping
Goods estimated to cost USD 300,000 equivalent or less per
contract and USD 1.9 million equivalent or less in the aggregate,
may be procured under contracts awarded on the basis of
international shopping procedures in accordance with the
provisions of paragraphs 3.5 and 3.6 of the Guidelines.
5. National Shopping
Goods estimated to cost less than USD 50,000 equivalent per
contract, up to an aggregate amount not to exceed USD 2.4 million
equivalent, may be procured under contracts awarded on the basis
of national shopping procedures in accordance with the provisions
of paragraphs 3.5 and 3.6 of the Guidelines.
6. Procurement of Small Works
Works estimated to cost USD 150,000 equivalent or less per
contract, and not to exceed USD 745,000 in the aggregate, shall be
procured under lump-sum, fixed price contracts awarded on the
basis of quotations obtained from three 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 Bank, 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 successfully complete the contract.
7. Direct Contracting
Goods which are of a proprietary nature may, with the Bank's
prior agreement, be procured in accordance with the provisions of
paragraph 3.7 of the Guidelines.
Part C
Review by the Bank of Procurement Decisions
1. Procurement Planning
Prior to the issuance of any bids for contracts, the proposed
procurement plan for the Project shall be furnished to the Bank
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 a proposed
procurement plan, which shall be furnished and have been approved
by the Bank, and in accordance with the provisions of paragraph 1
of Appendix 1 to the Guidelines.
2. Prior Review
With respect to each contract for goods and works estimated to
cost the equivalent of USD 300,000 or USD 1,000,000 or more
respectively, the procedures set forth in paragraphs 2 and 3 of
Appendix 1 to the Guidelines shall apply.
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
1. Consultants services shall be procured under contracts
awarded in accordance with the provisions of the "Guidelines for
the Use of Consultants by World Bank Borrowers and by The World
Bank as Executing Agency" published by the Bank in August 1981
(the Consultant Guidelines). For complex, time-based assignments,
and lump-sum assignment, such contracts shall be based on the
standard form of contract for consultants' services issued by the
Bank, with such modifications thereto as shall have been agreed by
the Bank. Where no relevant standard contract documents have been
issued by the Bank, other standard forms acceptable to the Bank
shall be used.
2. Notwithstanding the provisions of paragraph 1 of this
Section, the provisions of the Consultant Guidelines requiring
prior Bank review or approval of budgets, short lists, selection
procedures, letters of invitation, proposals, evaluation reports
and contracts, shall not apply to (a) contracts for the employment
of consulting firms estimated to cost less than USD 100,000
equivalent each or (b) contracts for the employment of individual
consultants estimated to cost less than USD 50,000 equivalent
each. However, said exceptions to prior Bank review shall not
apply to (a) the terms of reference for such contracts, (b) single-
source selection of consulting firms, (c) assignments of a
critical nature, s reasonably determined by the Bank, (d)
amendments to contracts for the employment of consulting firms
raising the contract value to USD 100.000 equivalent or above, or
(e) amendments to contracts for the employment of individual
consultants raising the contract value to (USD) 50,000 equivalent
or above.
SCHEDULE 5
SPECIAL ACCOUNT
1. For the purposes of this Schedule:
(a) the term "eligible Categories" means Categories (1) through
(4) 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 Loan
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 USD 1 million to be withdrawn from the Loan Account and
deposited into the Special Account pursuant to paragraph 3 (a) of
this Schedule, provided, however, that unless the Bank shall
otherwise agree, the Authorized Allocation shall be limited to an
amount equivalent to USD 300,000 until the aggregate amount of
withdrawals from the Loan Account plus the total amount of all
outstanding special commitments entered into by the Bank pursuant
to Section 5.02 of the General Conditions shall be equal to or
exceed the equivalent of USD 1 million.
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 Bank 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 Bank 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 Bank shall, on behalf of the
Borrower, withdraw from the Loan 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 Bank requests for deposits into the
Special Account at such intervals as the Bank shall specify.
(ii) Prior to or at the time of each such request, the
Borrower shall furnish to the Bank 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 Bank shall,
on behalf of the Borrower, withdraw from the Loan 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 Bank from the Loan
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 Bank shall
reasonably request, furnish to the Bank 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 Bank shall not be required to make further deposits
into the Special Account:
(a) if, at any time, the Bank shall have determined that all
further withdrawals should be made by the Borrower directly from
the Loan 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 Bank,
within the period of time specified in Section 4.01(b)(ii) of this
Agreement, any of the audit reports required to be furnished to
the Bank pursuant to said Section in respect of the audit of the
records and accounts for the Special Account:
(c) if, at any time, the Bank 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 Loan Account pursuant to the
provisions of Section 6.02 of the General Conditions; or
(d) once the total unwithdrawn amount of the Loan allocated to
the eligible Categories minus the total amount of all outstanding
special commitments entered into by the Bank 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 Loan Account of the
remaining unwithdrawn amount of the Loan allocated to the eligible
Categories shall follow such procedures as the Bank shall specify
by notice to the Borrower. Such further withdrawals shall be made
only after and to the extent that the Bank 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 Bank 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
Bank, the Borrower shall, promptly upon notice from the Bank:
(A) provide such additional evidence as the Bank may
request; or
(B) deposit into the Special Account (or, if the Bank
shall so request, refund to the Bank) an amount equal to
the amount of such payment or the portion thereof not so
eligible or justified. Unless the Bank shall otherwise
agree, no further deposit by the Bank 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 Bank 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 Bank, refund to the Bank such
outstanding amount.
(c) The Borrower may, upon notice to the Bank, refund to the
Bank all or any portion of the funds on deposit in the Special
Account.
(d) Refunds to the Bank made pursuant to paragraphs 6 (a), (b)
and (c) of this Schedule shall be credited to the Loan Account for
subsequent withdrawal or for cancellation in accordance with the
relevant provisions of this Agreement, including the General
Conditions.
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