F6FICIAL CREDIT NUMBER 1459 SESPECIAL FUND CREDIT NUMBER SF-14 SE

Project Agreement(Dakar Container Port Project)

among

INTERNATIONAL DEVELOPMENT ASSOCIATION

and

INTERNATIONAL DEVELOPMENT ASSOCIATIONas ADMINISTRATOR of the SPECIAL FUND

established with funds contributed bycertain members of the

International Development Association

and

PORT AUTONOME DE DAKAR

Dated 0Inc O , 1984

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CREDIT NUMBER 1459 SESPECIAL FUND CREDIT NUMBER SF-14 SE

PROJECT GREEMENT

AGREEMENT, dated 'I - tC , 1984, betweenINTERNATIONAL DEVELOPMENT ASSOCIATION, acting on its own behalfand as ADMINISTRATOR of the SPECIAL FUND established with fundscontributed by certain members of the International DevelopmentAssociation (hereinafter called the Association) and PORTAUTONOME DE DAKAR (hereinafter called PAD).

WHEREAS by the Development Credit Agreement of even dateherewith between the Republic of Senegal (hereinafter called theBorrower) and the Association, the Association has agreed to makeavailable to the Borrower an amount in various currenciesequivalent to two million six hundred thousand Special DrawingRights (SDR 2,600,000), on the terms and conditions set forth inthe Development Credit Agreement, but only on condition that PADagree to undertake such obligations toward the Association as arehereinafter set forth;

WHEREAS by the Special Fund Credit Agreement of even dateherewith between the Borrower and the Association, acting asAdministrator of the Special Fund established by Resolution No.IDA 82-6, adopted on October 26, 1982 by the Executive Directorsof the Association, the Association, acting as such Administra-tor, has agreed to make available to the Borrower an amount invarious currencies, equivalent to four million seven hundredthousand Special Drawing Rights (SDR 4,700,000) on the terms andconditions set forth in the Special Fund Credit Agreement and onthe further condition that PAD undertake such obligations as arehereinafter set forth;

WHEREAS by a subsidiary loan agreement to be entered intobetween the Borrower and PAD, the proceeds of the creditsprovided for under the Development Credit Agreement and theSpecial Fund Credit Agreement will be made available to PAD onthe terms and conditions therein set forth; and

WHEREAS PAD, in consideration of the Association's enteringinto the Development Credit Agreement and the Special Fund CreditAgreement with the Borrower, has agreed to undertake the obliga-tions hereinafter set forth;

NOW THEREFORE the parties hereto hereby agree as follows:

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ARTICLE I

Definitions

Section 1.01. Wherever used in this Agreement, unless thecontext shall otherwise require, the several terms defined inthe Development Credit Agreement and in the Special Fund CreditAgreement and in the General Conditions (as so defined) in eachcase have the respective meanings therein set forth, except that

the term "Association" means either the International Development

Association or the Administrator or both, as the contextrequires.

ARTICLE II

Execution of the Project

Section 2.01. PAD declares its commitment to the objectives

of the Project as set forth in Schedule 2 to the DevelopmentCredit Agreement and to the Special*Fund Credit Agreement and,to this end, shall carry out the Project described in said

Schedule with due diligence and efficiency and in conformitywith appropriate administrative, financial, engineering and port

practices.

Section 2.02. In order to assist PAD in carrying out PartsA.5 and B of the Project, PAD shall employ consultants whose

qualifications, experience and terms and conditions of employment

shall be satisfactory to the Association, such consultants to be

selected in accordance with principles and procedures satis-

factory to the Association on the basis 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.

Section 2.03. Except as the Association shall otherwise

agree, procurement of the goods and civil works required for the

Project and to be financed out of the proceeds of the Credit or

the Special Fund Credit shall be governed by the provisions ofthe Schedule to this Agreement.

Section 2.04. (a) PAD undertakes to insure, or make adequate

provision for the insurance of, the imported goods to be financed

out of the proceeds of the Credit or the Special Fund Credit

and relent to it by the Borrower against hazards incident to theacquisition, transportation and delivery thereof to the place of

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use or installation, and for such insurance any indemnity shallbe payable in a currency freely usable by PAD to replace orrepair such goods.

(b) PAD shall cause all goods and services financed out ofthe proceeds of the Credit or the Special Fund Credit and relentto it by the Borrower to be used exclusively for the purposes ofthe Project.

Section 2.05. (a) PAD shall furnish to the Association,promptly upon their preparation, the plans, specifications,reports, contract documents and construction and procurementschedules for the Project, and any material modifications thereofor additions thereto, in such detail as the Association shallreasonably request.

(b) PAD shall: (i) maintain records and procedures adequateto record and monitor the progress of the Project (including itscost and the benefits to be derived from it), to identify thegoods and services financed out of the proceeds of the Credit orthe Special Fund Credit, and to disclose their use in theProject; (ii) enable the Association's representatives to visitthe facilities and construction sites included in the Projectand to examine the goods financed out of the proceeds of theCredit and the Special Fund Credit and any relevant records anddocuments; (iii) furnish to the Association quarterly progressreports of such scope as the Association shall reasonablyrequest; and (iv) furnish to the Association at regular intervals

all such information as the Association shall reasonably requestconcerning the Project, its cost and, where appropriate, the

benefits to be derived from it, the expenditures of such proceedsand the goods and services financed out of such proceeds.

(c) Upon the award by PAD of any contract for goods, worksor services to be financed out of the proceeds of the Credit orthe Special Fund Credit, the Association may publish a descrip-tion thereof, the name and nationality of the party to whom thecontract was awarded and the contract price.

(d) Promptly after completion of the Project, but in anyevent not later than six months after the Closing Date or suchlater date as may be agreed for this purpose between PAD and theAssociation, PAD shall prepare and furnish to the Association areport, of such scope and in such detail as the Association shallreasonably request, on the execution and initial operation of the

Project, its cost and the benefits derived and to be derived from

it, the performance by PAD and the Association of their respec-

tive obligations under the Project Agreement and the accomplish-ment of the purposes of the Credit and the Special Fund Credit.

(e) PAD shall enable the Association's representatives to

examine all plants, installations, sites, works, buildings,property and equipment of PAD and any relevant records and

documents.

Section 2.06. PAD shall duly perform all its obligations

under the Subsidiary Loan Agreement. Except as the Association

shall otherwise agree, PAD shall not take or concur in any action

which would have the effect of amending, abrogating, assigning or

waiving the Subsidiary Loan Agreement or any provision thereof.

Section 2.07. (a) PAD shall, at the request of the Associa-

tion, exchange views with the Association with regard to the

progress of the Project, the performance of its obligations under

this Agre(!ent, and the Subsidiary Loan Agreement, and other

matters relating to the purposes of the Credit and the SpecialFund Credit.

(b) PAD shall promptly inform the Association of any condi-

tion which interferes or threatens to interfere with the progress

of the Project, the accomplishment of the purposes of the Credit

and the Special Fund Credit, or the performance by PAD of its

obligations under this Agreement and the Subsidiary Loan Agree-ment.

ARTICLE III

Management and Operations of PAD

Section 3.01. PAD shall carry on its operations and conduct

its affairs in accordance with sound administrative, financial

and port practices under the supervision of qualified and

experienced management assisted by competent staff in adequate

numbers.

Section 3.02. PAD shall at all times operate and maintain

its plant, machinery, equipment and other property, and from

time to time, promptly as needed, make all necessary repairs and

renewals thereof, all in accordance with sound engineering,financial and port practices.

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Section 3.03. To permit sound operation of its container

terminal and adequate maintenance of the container handling

equipment to be operated in such terminal, PAD shall ensure thatall necessary office space and workshop facilities shall beavailable in a timely manner.

Section 3.04. PAD shall take out and maintain with

responsible insurers, or make other provisions satisfactory to

the Association for, insurance against such risks and in suchamounts as shall be consistent with appropriate practice.

Section 3.05. PAD shall take all necessary measures,

including all arrangements as may be required with stevedoringenterprises, to ensure that:

(i) sufficient modern container handling equipment

willI be available at all times to permit operation

of PAD's container terminal included in Part A of

the Project in accordance with Section 3.01 of

this Agreement; and

(ii) sheds for stuffing and unstuffing of containerswill be made available at a reasonable fee tostevedoring enterprises which, because of the size

of their operations, do not own such sheds.

Section 3.06. PAD shall duly exercise its rights and comply

with its obligations under the agreement referred to in Section

5.01 (b) of the Development Credit Agreement.

ARTICLE IV

Financial Covenants

Section 4.01. PAD shall maintain records adequate to reflect

in accordance with consistently maintained appropriate accounting

practices its operations and financial condition.

Section 4.02. PAD shall:

(a) have its accounts and financial statements (balance

sheets, statements of income and expenses and related statements)for each fiscal year audited, in accordance with appropriateauditing principles consistently applied, by independent auditors

satisfactory to the Association;

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(b) furnish to the Association as soon as available, but inany case not later than six months after the end of each suchyear: (i) certified copies of its financial statements for suchyear as so audited, and (ii) the report of such audit by saidauditors, of such scope and in such detail as the Associationshall have reasonably requested; and

(c) furnish to the Association such other informationconcerning said accounts, financial statements, records andexpenditures, as well as the audit thereof, as the Associationshall from time to time reasonably request.

Section 4.03. Except as the Association shall otherwise

agree:

(a) PAD shall, from time to time take, or cause to betaken, all such measures (including, without limitation, adjust-ments of the structure or levels of its tariffs) as shall berequired to produce, for each of its fiscal years after itsfiscal year ending on June F", 1984, funds from internal sourcesequivalent to not less than 40% of the annual average capitalexpenditures of PAD incurred, or expected to be incurred, duringthe year, the prior fiscal year, and next following fiscal year.

(b) For the purpose of this Section:

(i) The term "funds from internal sources" means thedifference between:

(1) the sum of gross revenues from all sourcesrelated to its current operations, net non-operating income and any reduction in non-cash working capital; and

(2) the sum of all expenses of current opera-tions, including maintenance and adminis-

tration (excluding depreciation and othernon-cash operating charges), interest or

other charges on debt (excluding interestduring construction), repayment of loans(including sinking fund payments, if any),all taxes or payments in lieu of taxes, allcash dividends and other cash distributionsof surplus, increase in net working capital

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other than cash, and any other cash outflowsother than cash expenditures related tocurrent operations.

(ii) The term "capital expenditures" means all expendi-tures incurred on account of fixed or capitalassets, including interest during construction ofthe container terminal.

Section 4.04. Except as the Associ.tion shall otherwiseagree:

(a) PAD shall, from time to time, take, or cause to betaken, all such measures (including, without limitation,adjustments of the structure or levels of the tariffs for allservices of PAD) as shall be required to produce, for each of itsfiscal years after its fiscal year ending on June 30, 1987, anannual return of not less than 6% of the average current netvalue of PAD's fixed assets in operation.

(b) For the purpose of this Section:

(i) The annual return shall be calculated by dividingPAD's net operating income for the fiscal year inquestion by one-half of the sum of the current netvalue of PAD's fixed assets in operation at thebeginning and at the end of that fiscal year.

(ii) The term "net operating income" means grossrevenues from all sources related to PAD'scurrent operations less all expenses related toPAD's current operations, including administra-tion, adequate maintenance and taxes or anypayments in lieu of taxes, and provision fordepreciation on a straight-line basis at a rateof not less than 2.5% per annum of the averagecurrent gross value of PAD's fixed assets inoperation. Interest and other charges on mediumand long-term debt shall not be deducted fromgross revenues.

(iii) The term "current net value of PAD's fixed assetsin operation" means the gross value of PAD'sfixed assets in operation less the amount ofaccumulated depreciation, as valued from time to

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time in accordance with sound and consistentlymaintained methods of valuation satisfactory tothe Association.

Section 4.05. (a) Except as the Association shall otherwiseagree, PAD shall: (i) as soon as possible upon its completion andnot later than March 31, 1987, review with the Borrower and theAssociation the recommendations of the tariff study to be carriedout under Part B.2 (d) of the Project; and (ii) before March 31in each of its fiscal years after its fiscal year ending onJune 30, 1984 on the basis of forecasts to be prepared by PAD ona basis satisfactory to the Association, review the adequacy ofall its tariffs to meet the requirements of Sections 4.03 and4.04 of this Agreement and shall furnish to the Association theresults of such review upon its completion.

(b) If any such review shall show that PAD would not meetthe said requirements in the course of PAD's fiscal year coveredby such review, PAD shall promptly take all the necessarymeasures (including, without limitation, adjustments of

the structure of levels of its tariffs) in order to meet such

requirements.

Section 4.06. Except as the Association shall otherwiseagree, PAD shall take all necessary measures to reduce itsaccounts receivable to a level of not more than 40% of grossrevenues by June 30, 1985, 35% by June 30, 1986, 30% by June 30,1987 and 25% by June 30, 1988, and thereafter maintain itsaccounts receivable at such latter level. For the purposes ofthis Section:

(a) the term "accounts receivable" means all amounts due toPAD on account of services rendered by PAD; and

(b) the term "gross revenues" means gross revenues from allsources related to PAD's current operations.

Section 4.07. Except as the Association shall otherwiseagree, PAD shall not incur any debt unless a reasonable forecastof the revenues and expenditures of PAD shows that the projectedinternal cash generation of PAD for each fiscal year during theterm of the debt to be incurred shall be at least two times theprojected debt service requirement of PAD in such year on alldebt of PAD, including the debt to be incurred. For the purposes

of this Section:

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(a) The term "debt" means any indebtedness of PAD maturingby its terms more than one year after the date on which it isoriginally incurred.

(b) Debt shall be deemed to be incurred: (i) under a loancontract or agreement or other instrument providing for such debtor further modification of its terms of payment, on the date ofsuch contract, agreement or instrument; and (ii) under aguarantee agreement, on the date the agreement providing for suchguarantee has been entered into but only to the extent that theguaranteed debt shall be outstanding.

(c) The term "internal cash generation of PAD" means grossrevenues of PAD from all sources, adjusted to take account ofPAD's rates in effect at the time of the incurrence of debt eventhough they were not in effect during the twelve-month period to

which such revenues relate, less all operating expenses of PAD,including expenses chargeable to administration, maintenance andtaxes (or payments in lieu of taxes), but before provision fordepreciation of assets and interest and other charges on debt.

(d) The term "debt service requirement" means the aggregate

amount of amortization (including sinking fund payments, if any)of, and interest and other charges on, debt.

(e) The term "reasonable forecast" means a forecast pre-pared by PAD in the fiscal year in which the debt in question isto be incurred, which both the Association and PAD accept asreasonable and as to which the Association has notified PAD ofits acceptability, provided that no event has occurred since such

notification which has, or may reasonably be expected in thefuture to have, -a material adverse effect on the financialcondition or future results of PAD.

(f) Whenever for the purposes of this Section it shall benecessary to value, in terms of currency of the Borrower, debtpayable in another currency, such valuation shall be made on thebasis of the prevailing lawful rate of exchange at which suchother currency is, at the time of such valuation, obtainable forthe purposes of servicing such debt, or, in the absence of suchrate, on the basis of a rate of exchange acceptable to theAssociation.

Section 4.08. Until the steps referred to in Section3.02 (ii) of the Development Credit Agreement and in Section3.02 (ii) of the Special Fund Credit Agreement shall have been

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taken, PAD shall take all necessary measures required on its part

to: (i) maintain its special account (hereinafter called the

Special Account) established at the Borrower's Treasury fromwhich PAD shall be able to transfer in a timely manner to its

commercial bank accounts all funds necessary for carrying out the

project and for covering all its renewal expenses; (ii) transfer

on a daily basis to the Special Account 30% of its gross revenues

in fiscal year 1984-1985 and 40% in the following fiscal years;

and (iii) ensure that, until the completion of the Project, atleast 50% of the transfers referred to in paragraph (i) above bemade into PAD's bank accounts from which shall be debited thefunds necessary for carrying out the Project.

ARTICLE V

Effective Date; Termination;

Cancellation and Suspension

Section 5.01. This Agreement shall come into force and

effect on the date upon which the Development Credit Agreement

and the Special Fund Credit Agreement become effective.

Section 5.02. (a) This Agreement and all obligations of the

Association and of PAD thereunder shall terminate on the earlier

of the following two dates:

(i) either the date on which the Development CreditAgreement or the date on which the Special FundCredit Agreement shall terminate in accordancewith their terms whichever date shall be the

later; or

(ii) a date 25 years after the date of this Agreement.

(b) If either the Development Credit Agreement or the

Special Fund Credit Agreement terminates in accordance with their

respective terms before the date specified in paragraph (a) (ii)of this Section, the Association shall promptly notify PAD of

this event.

Section 5.03. All the provisions of this Agreement shall

continue in full force and effect notwithstanding any cancella-tion or suspension under the General Conditions.

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ARTICLE VI

Miscellaneous Provisions

Section 6.01. Any notice or request required or permitted to

be given or made under this Agreement and any agreement between

the parties contemplated by this Agreement shall be in writing.Such notice or request shall be deemed to have been duly given or

made when it shall be delivered by hand or by mail, telegram,cable, telex or radiogram to the party to which it is required or

permitted to be given or made at such party's address hereinafter

specified or at such other address as such party shall have

designated by notice to the party giving such notice or makingsuch request. The addresses so specified are:

For the Association:

International Development Association

1818 H Street, N.W.Washington, D.C. 20433United States of America

Cable address: Telex:

INDEVAS 440098 (ITT)Washington, D.C. 248423 (RCA) or

64145 (WUI)

For PAD:

Port Autonome de Dakar14, Boulevard de la LibgrationDakarS6n6gal

Cable address: Telex:

PORCOMER 406 SG

Section 6.02. Any action required or permitted to be

taken, and any document required or permitted to be executed,under this Agreement on behalf of PAD may be taken or executed by

PAD's Director General or such other person or persons as PAD's

Director General shall designate in writing, and PAD shall

furnish to the Association sufficient evidence of the authority

and the authenticated specimen signature of each such person.

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Section 6.03. This Agreement may be executed in several

counterparts, each of which shall be an original, and all

collectively but one instrument.

IN WITNESS WHEREOF, the parties hereto, acting through their

representatives thereunto duly authorized, 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 4ritten.

INTERNATIONAL DEVELOPMENT ASSOCIATION

acting for itself and as ADMINISTRATOR of

the SPECIAL FUND established with funds

contributed by certain members of the

International Development Association

4(//'ij Regional Vice PresidentWestern Africa

PORT AUTONOME DE DAKAR

ByA/u thorize Re 4 aAuthorized Representative

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SCHEDULE

Procurement

A. International Competitive Bidding

1. Except as provided in Part B hereof, goods and civil worksshall be procured under contracts awarded in accordance withprocedures consistent with those set forth in the current editionof the "Guidelines for Procurement under World Bank Loans andIDA Credits" published by the Bank in March 1977 (hereinaftercalled the Guidelines), on the basis of international competitivebidding as described in Part A of the Guidelines; provided,however, that in the case of goods and civil works to be financedout of the proceeds of the Special Fund Credit, the eligibilityrestrictions set forth in Section 2.02 (b) of the Special FundCredit Agreement shall apply and such restrictions shall bestated in the tender documents for the procurement of such goodsand civil works.

2. For goods and works to be procured on the basis of inter-national competitive bidding, in addition to the requirements ofparagraph 1.2 of the Guidelines, PAD shall prepare and forward to

the Association as soon as possible, and in any event not laterthan 60 days prior to the date of availability to the public ofthe first tender or prequalification documents relating thereto,as the case may be, a general procurement notice, in such formand detail and containing such information as the Associationshall reasonably request; the Association will arrange for the

publication of such notice in order to provide timely notifica-tion to prospective bidders of the opportunity to bid for the

goods and works in question. PAD shall provide the necessaryinformation to update such notice annually so long as any goodsor works remain to be procured on the basis of internationalcompetitive bidding.

3. For the purpose of evaluation and comparison of bids for the

supply of goods to be procured on the basis of international com-

petitive bidding: (i) bidders shall be required to state in theirbid the c.i.f. (port of entry) price for the imported goods, orthe ex-factory price or off-the-shelf price of other goods,offered in such bid; (ii) customs duties and other import taxeslevied in connection with the importation, or the sales andsimilar taxes levied in connection with the sale or delivery,pursuant to the bid, of the goods shall not be taken into account

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in the evaluation of the bids; and (iii) the cost of inland

freight and other expenditures incidental to the delivery of thegoods to the place of their use or installation shall beincluded.

B. Other Procurement Procedures

Individual works included in Part A.4 of the Project may beprocured following competitive bidding advertised locally inaccordance with the Borrower's procurement procedures acceptableto the Association, provided that under such procedures the

selection method of the lowest evaluated bid ("appel d'offres")shall be applied.

C. Review of Procurement Decisions by the Association

1. Review of prequalification. PAD shall, before qualification

is invited, inform the Association in detail of the procedure to

be followed, and shall introduce such modifications in said

procedure as the Association shall reasonably request. The list

of prequalified bidders, together with a statement of theirqualifications and of the reasons for the exclusion of any

applicant for prequalification shall be furnished by PAD to theAssociation for its comments before the applicants are notifiedof PAD's decision, and PAD shall make such additions to, dele-

tions from, or modifications in, the said list as the Association

shall reasonably request.

2. Review of invitations to bid and of proposed awards and

final contracts

With respect to all contracts, other than those referred to

under Part B above, estimated to cost the equivalent of $100,000

or more:

(a) Before bids are invited, PAD shall furnish to theAssociation, for its comments, the text of the invitations to bid

and the specifications and other bidding documents, together with

a description of the advertising procedures to be followed forthe bidding, and shall make such modifications in the saiddocuments or procedures as the Association shall reasonablyrequest. Any further modification to the bidding documents shall

require the Association's concurrence before it is issued to theprospective bidders.

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(b) After bids have been received and evaluated, PADshall, before a final decision on the award is made, inform theAssociation of the name of the bidder to which it intends toaward the contract and shall furnish to the Association, insufficient time for its review, a detailed report, by the con-sultants referred to in Section 2.02 of this Agreement, on theevaluation and comparison of the bids received, together with therecommendations for award of the said consultants and such otherinformation as the Association shall reasonably request. TheAssociation shall, if it determines that the intended award wouldbe inconsistent with the Guidelines or this Schedule, promptlyinform PAD and state the reasons for such determination.

(c) The terms and conditions of the contract shall not,without the Association's concurrence, materially differ fromthose on which bids were asked or prequalification was invited.

(d) Two conformed copies of tie contract shall be furnished

to the Association promptly after its execution and prior to the

submission to the Association of the first application for with-drawal of funds from the Credit Account in respect of suchcontract.

3. With respect to each contract not governed by the preceding

paragraph, PAD shall furnish to the Association, promptly after

its execution and prior to the submission to the Association of

the first application for withdrawal of funds from the Credit

Account in respect of such contract, two conformed copies of such

contract, together with the analysis of the respective bids,recommendations for award and such other information as theAssociation shall reasonably request. The Association shall, ifit determines that the award of the contract was not consistentwith the Guidelines or this Schedule, promptly inform PAD andstate the reasons for such determination.

4. Before agreeing to any material modification or waiver of

the terms and conditions of a contract, or granting an extensionof the stipulated time for performance of such contract, orissuing any change order under such contract (except in cases ofextreme urgency) which would increase the cost of the contract by

more than 5% of the original price, PAD shall inform the Associa-tion of the proposed modification, waiver, extension or change

order and the reasons therefor. The Association, if it determines

that the proposal would be inconsistent with the provisions ofthis Agreement, shall promptly inform PAD and state the reasonsfor its determination.

INTERNATIONAL DEVELOPMENT ASSOCIATION

CERTIFICATE

I hereby certify that the foregoing is a true

copy of the original in the archives of the Interna-

tional Development Association.

In witness whereof I have signed this Certifi-

cate and affixed the Seal of the Association

thereunto the day of

198

FOR SECRETARY