CONFORMED COPY
CREDIT NUMBER 4306-VN
Financing Agreement
(MekongDelta Transport Infrastructure Development Project)
between
SOCIALISTREPUBLIC OF VIETNAM
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated November 22, 2007
- 1 -
CREDIT NUMBER 4306-VN
FINANCING AGREEMENT
AGREEMENT dated November 22, 2007, between SOCIALIST REPUBLIC OF VIETNAM (“Recipient”) and INTERNATIONAL DEVELOPMENT ASSOCIATION (“Association”). The Recipient and the Association hereby agree as follows:
ARTICLE I – GENERAL CONDITIONS; DEFINITIONS
1.01.The General Conditions (as defined in the Appendix to this Agreement) constitute an integral part of this Agreement.
1.02.Unless the context requires otherwise, the capitalized terms used in the Financing Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement.
ARTICLE II - FINANCING
2.01.The Association agrees to extend to the Recipient, on the terms and conditions set forth or referred to in this Agreement, a credit in an amount equivalent to one hundred thirty-seven million two hundred thousand Special Drawing Rights (SDR 137,200,000) (“Credit”) to assist in financing the project described in Schedule 1 to this Agreement (“Project”).
2.02.The Recipient may withdraw the proceeds of the Financing in accordance with Section IV of Schedule 2 to this Agreement.
2.03.The Maximum Commitment Charge Rate payable by the Recipient on the Unwithdrawn Financing Balance shall be one-half of one percent (1/2 of 1%) per annum.
2.04The Service Charge payable by the Recipient on the Withdrawn Credit Balance shall be equal to three-fourths of one percent (3/4 of 1%) per annum.
2.05.The Payment Dates are May 15 and November 15 in each year.
2.06.The principal amount of the Credit shall be repaid in accordance with repayment schedule set forth in Schedule 3 to this Agreement.
2.07.The Payment Currency is Dollars.
ARTICLE III - PROJECT
3.01.The Recipient declares its commitment to the objectives of the Project. To this end, the Recipient shall carry out Parts A, B, C.3(b), D and E of the Project through MOT and Parts C.1, C.2 and C.3(a) and E of the Project through the Project Provinces in accordance with the provisions of Article IV of the General Conditions.
3.02.Without limitation upon the provisions of Section 3.01 of this Agreement, and except as the Recipient and the Association shall otherwise agree, the Recipient shall ensure that the Projectis carried out in accordance with the provisions of Schedule 2 to this Agreement.
ARTICLE IV – EFFECTIVENESS; TERMINATION
4.01.The Additional Conditions of Effectiveness consist of the following:
(a)An integrated financial management software program for recording and reporting financial transactions under the Project, acceptable to the Association, shall have been developed and adopted by PMU-1 and PMU-W.
(b)A financial management manual shall have been prepared and adopted by each of PMU-1 and PMU-Win accordance with the provisions of paragraph A.3(b) of Section I of Schedule 2 to this Agreement.
(c)Relevant staff of PMU-1 and PMU-W shall have completed training, satisfactory to the Association, in the areas of financial management, procurement, disbursements and safeguard procedures.
(d)VIWA and VRA shall have adopted the Project Implementation Plan in accordance with the provisions of paragraph A.3(a) of Section I of Schedule 2 to this Agreement.
4.02.The Additional Legal Matters consist of the following:
(a)the Resettlement Policy Framework has been duly approved by the Ministry of Transport pursuant to the authorization of the Recipient’s Prime Minister and the First Year Implementation RAPs have been duly adopted by MOT and the Project Provinces concerned; and
(b)the Resettlement Policy Framework is legally binding upon the Recipient and the First Year Implementation RAPs are legally binding on the Recipient and the Project Provinces concerned, all in accordance with their respective terms.
4.03.The Effectiveness Deadline is the date ninety (90) days after the date of this Agreement.
ARTICLE V — REMEDIES OF THE ASSOCIATION
5.01.The Co-financing Deadline for the effectiveness of the Co-financing Agreement is December 31, 2007.
ARTICLE VI – REPRESENTATIVE; ADDRESSES
6.01.The Recipient’s Representative is the Governor, or a Deputy Governor, of State Bank of Vietnam.
6.02.The Recipient’s Address is:
State Bank of Vietnam
49 Ly Thai To
Hanoi, Vietnam
Cable:Telex:Facsimile:
VIETBANK 412248(84-4) 825 0612
HanoiNHTWVT
6.03.The Association’s Address is:
International Development Association
1818 H Street, N.W.
Washington, D.C.20433
United States of America
Cable:Telex:Facsimile:
INDEVAS248423 (MCI) or(1-202) 477- 6391
Washington, D.C.64145 (MCI)
AGREED atHanoi, Socialist Republic of Vietnam, as of the day and year first above written.
SOCIALISTREPUBLIC OF VIETNAM
By: /s/ Mr. Nguyen Van Giau
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
By: /s/ Mr. Ajay Chhibber
Authorized Representative
SCHEDULE 1
Project Description
The objective of the Projectis to assist the Recipient in relieving key bottlenecks of the main transport corridors in the Mekong Delta region and improving access of the poor to those corridors.
The Project consists of the following parts:
PART A:National Road Corridors
Improving the standard of national trunk roads connecting to the main economic hub of the Mekong Delta, including:
1.Widening and upgrading selected national highways, constructing bridges, providing culverts and raising road levels in flood prone areas.
2. Providing technical assistance for engineering design and construction supervision related to the implementation of Part A.1 of the Project.
Part B: National Waterway Corridors
Improving the standard of trunk waterways connecting the northern and coastal delta areas to Can Tho City and Ho Chi Minh City, including:
1.Widening and deepening selected national waterways, establishing bank protection in selected areas, constructing shiplocks, improving bridges and providing 24-hour aids to navigation.
2.Providing technical assistance for engineering design and construction supervision related to the implementation of Part B.1 of the Project.
Part C:Connecting the Poor to the Supply Corridors
Improving feeder waterways, roads, ports and landing stages at the district and provincial levels in the Project Provinces to link poorer and remotely located producer communities to the main supply corridors, including:
1.(a)Upgrading and rehabilitating secondary roads, constructing bridges and culverts, raising road levels in flood prone areas and providing erosion protection from neighboring waterways; and (b)widening and deepening canals,establishing bank protection, raising bridges and providing 24-hour aids to navigation.
2.Enhancing the infrastructure of provincial ports and rural landing stages, including: (a)construction ofroadsto provide access to said ports and construction of landing stages, new wharfs and storage areas; (b)rehabilitation of landing stages; and (c)provision of equipment.
3.Providingtechnical assistance for: (a)carrying out feasibility studies, engineering design and construction supervision related to implementation of Parts C.1, and C.2of the Project; and (b)establishing a regional support center, based at the Southern Transport College in Can Tho City, to support the Project Provinces in Project implementation and to develop a training program for the improvement of technical and management skills of relevant government personnel in the implementation of the Project.
Part D:Institutional Support to Ministry of Transport
Providing institutional support to the Ministry of Transport, including:
1.Providing technical assistance to relevant departments within the Ministry of Transport for: (a)the development of appropriate policies and planning frameworks governing multi-modal transport;(b)building the technical capacity of relevant policy makers, managers and operators to better plan and manage multi-modal transport operations, and (c)development of a training program for foregoing activities.
2.Providing technical assistance to: (a)the Vietnam Inland Waterway Administrationto improve the management of inland waterways (including reorganization, asset management and maintenance, and cost recovery); (b)port authorities at the ProjectProvincelevel to improve port administration and management; and (c)develop a training program for the foreogoing activities.
3.Carrying out the training programs developed under Parts C.3(b), D.1 and D.2 of the Project.
4.Providing technical assistance for carrying out independent Project audits, including integrated Project implementation audits and Project financial audits.
5.Providing technical assistance for the preparation of future transport projects to be implemented in the Red River Delta area.
Part E:Resettlement
Resettlement and rehabilitation of Displaced Persons in connection with the carrying out of the Project.
SCHEDULE 2
Project Execution
SectionI.Institutional and Other Arrangements
A.Project Management.
1.The Recipient shall maintain, throughout the period of implementation of the Project, the following organizations,with terms of reference, staffing and other resources acceptable to the Association:
(a)The Project Steering Committee(“PSC”),established by MOT and responsible for providing overall coordination and oversight of Project implementation.
(b)The Project Management Unit-Number 1 (“PMU-1”) established within MOT and responsible, inter alia, for the implementation, supervision, monitoring and evaluation of activities under Parts A and E of the Project, under the authority of VRA, PSC and MOT.
(c)The Project Management Unit-Waterways (“PMU-W”) established within MOT and responsible, inter alia, for the implementation, supervision, monitoring and evaluation of activities under Parts B, C.3(b), D and E of the Project, under the authority of VIWA, PSC and MOT.
2.The Recipient shall cause:
(a)The Provincial People’s Committee of each ProjectProvince to maintain,until completion of the Project, its Provincial Department of Transport (“PDOTs”), with sufficient funds and competent staff in adequate numbers as shall be required for carrying out Parts C.1, C.2 and C.3(a) and E of the Project within its respective Province.
(b)Each Project Province to maintain, until completion of the Project, its Provincial Project Management Unit (“PPMU”), established in the Project Province’s PDOT and which PPMU is responsible, under the supervision of its respective PDOT, for the implementation of activities under Parts C.1, C.2, C.3(a) and E of the Project in the Project Province concerned; such PPMU to be: provided with sufficient resources; under the direction of qualified managers; and staffed with competent personnel in adequate numbers, including financial officers with qualifications and experience and under terms of reference acceptable to the Association.
3.The Recipient shall, through MOT, cause VRA, VIWA and the ProjectProvinces:
(a)To adopt, and thereafter to carry out,a Project Implementation Plan satisfactory to the Bank, which includes: (i)the action plan to improve fairness and transparency in Procurement, setting out procedures to mitigate against acts of manipulation and collusion in the procurement process; (ii)the Procurement Plan; and (iii)the schedule for implementation of Project activities.
(b)To prepare, adopt and apply a Financial Management Manual, acceptable to the Association and consistent with the provisions of paragraph 1 of Section II(B) of this Schedule 2, setting forth:(i)guidelines and procedures for financial management and control, record keeping, reporting, auditing; and (ii)the structure and procedure, with respect to financial management, for reporting and coordinating between the different levels of implementing agencies, and additionally, to provide training for relevant staff on the policies and procedures for financial management, control and reporting in accordance with said Financial Management Manual and the related provisions of this Agreement, all in a manner satisfactory to the Association.
(c)Not to amend, revise or waive the provisions of the Project Implementation Plan or the provisions of the Financial Management Manual, or any part thereof, without the prior concurrence of the Association.
4.The Recipient, through MOT, shall:
(a)by no later than six (6) months following the date of this Agreement, appoint an independent external auditor under terms of reference acceptable to the Association and in a manner consistent with the provisions of Section II of this Schedule 2;
(b)by no later than twelve (12) months following the Effective Date, mobilize staff of the MOT Inspectorate to work with consultants, hired pursuant to the provisions of Part D.4 of the Project, to develop terms of reference, scope and methodology for internal audit acceptable to the Association; and
(c)carry out, through independent consultants, audits of Project activities,selected in agreement with the Association, to assess the quality of construction, and compliance with fiduciary and safeguard procedures; such audits to be carried out every six (6) months, beginning on June 1, 2008, and in accordance with terms of reference satisfactory to the Association. By September 1 of each year, beginning in 2008, the Recipient shall furnish the results of said audit, together with a time bound action plan for the remediation of any identified problems, to the Association and, thereafter, the Recipient shall implement said plan, taking into account the Association’s comments thereon.
5.The Recipient shall take all steps necessary to ensure that PMU-1 and PMU-W and each of the PPMUs shall carry out its respective activities under the Project and, to that end, shall, on a timely basis and in accordance with the Project Implementation Plan, make available to PMU-1 and PMU-W and each of the PPMUs the proceeds of the Credit and other funds allocated for such purposes.
B.Selection of Roads and Waterways under Part C of the Project.
6.By December 15 in each year, commencing in 2007, the Recipient, through MOT,shall furnish to the Association for its concurrence, a proposed annual work program, procurement plan and budget for Project activities in the following calendar year, including, a proposed list of roads, waterways and other infrastructure to be included under Part C of the Project; provided, however, that roads in forest reserved areas or traversing forest reserved areas or buffer zones of forest reserved areas shall not form part of any annual work program.
C.Environment, Resettlement and Ethnic Minorities.
7.The Recipient shall carry out the following and cause the following to be carried out:
(a)implementthe First Year Implementation EMPs, the Environmental Safeguard Framework, and the environmental assessments and the environmental management plans prepared pursuant thereto, all in a manner satisfactory to the Association, and necessary to ensure that the Project is implemented in accordance with sound environmental practices and standards;
(b)provide to the Association for its prior review any revision proposed to be introduced into any of the First Year Implementation EMPs, the Environmental Safeguard Framework or environmental management plans prepared in accordance with said Framework and approved by the Association, as the case may be, in order to achieve their respective objectives, and thereafter introduce such revision into the documents as shall have been agreed with the Association; and
(c)maintain policies and procedures adequate to enable it to monitor and evaluate, in accordance with guidelines acceptable to the Association, the implementation of the First Year Implementation EMPs, the Environmental Safeguard Framework or environmental management plans prepared in accordance with said Framework and accepted by the Association as being satisfactory, and the achievement of their respective objectives.
8.The Recipient shall carry out the following and cause the following to be carried out:
(a)prior to commencing any works under this Project, implement the First Year Implementation RAPs and the Resettlement Policy Framework, in a manner satisfactory to the Association;
(b) wherever implementation of the Project or any part thereof, would give rise to Displaced Persons, provide to the Association for its review, resettlement action plans prepared in accordance with the principles and procedures set forth in the Resettlement Policy Framework and, thereafter, implement in a manner satisfactory to the Association, such resettlement action plans as shall have been accepted by the Association as being satisfactory;
(c)provide to the Association for its prior review any revision proposed to be introduced into any of the First Year Implementation RAPs, the Resettlement Policy Framework and said resettlement action plan prepared in accordance with said Framework and accepted by the Association as being satisfactory, as the case may be, to achieve their respective objectives, and thereafter introduce such revision into the First Year Implementation RAP, said Framework or said plan as shall have been agreed with the Association; and
(d)maintain policies and procedures adequate to enable it to monitor and evaluate, in accordance with guidelines acceptable to the Association, the implementation of the First Year Implementation RAPs, the Resettlement Policy Framework and any resettlement action plan prepared in accordance with said Framework and accepted by the Association as being satisfactory, and the achievement of their respective objectives.
9.The Recipient shall carry out the following and cause the following to be carried out:
(a)prior to commencing any works under this Project, implementthe First Year Ethnic Minorities Development Plan and the Ethnic Minorities Development Framework in a manner satisfactory to the Association, designed to provide meaningful consultation with, and the informed participation of, ethnic minority groups within the Project area, and to ensure that benefits under the Project are socially and culturally acceptable to such groups;
(b)whenever implementation of the Project or any part thereof would take place in areas where an ethnic minority community reside, prepare and provide to the Association for its review an ethnic minorities development plan prepared in accordance with the principles and procedures set forth in the Ethnic Minorities Development Framework and with the full participation of such ethnic minority community, designed to ensure that Project activities adequately address the needs, cultural practices and preferences of such community; and, thereafter, implement in a manner satisfactory to the Association, such ethnic minorities development plan as shall have been accepted by the Association as being satisfactory;
(c)provide to the Association for its review any proposed revision of the First Year Ethnic Minorities Development Plan or the Ethnic Minorities Development Framework or any of said ethnic minorities development plans, and thereafter only introduce such revision into the First Year Ethnic Minorities Development Plan or said plans as shall have been agreed with the Association; and
(d)maintain policies and procedures adequate to enable them to monitor and evaluate, in accordance with guidelines acceptable to the Association, the implementation of the First Year Ethnic Minorities Development Plan,the Ethnic Minorities Development Framework and said ethnic minorities development plans, and the achievement of their objectives.