OFFICIALDOCUMENTS CREDIT NUMBER 1083 EGT

Development Credit Agreement(New Land Development/West Nubariya Project)

between

ARAB REPUBLIC OF EGYPT

and

INTERNATIONAL DEVELOPMENT ASSOCIATION

Dated 1981

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CREDIT NUMBER 1083 EGT

DEVELOPMENT CREDIT AGREEMENT

AGREEMENT, dated Fz , 1981, between

ARAB REPUBLIC OF EGYPT (hereinafter ailed the Borrower) and

INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the

Association).

WHEREAS (A) the Borrower has requested the Association to

assist in the financing of the Project described in Schedule 2 to

this Agreement by extending the credit as hereinafter provided;

(B) the Borrower intends to contract from the African Devel-

opment Fund (hereinafter called ADF) a loan (hereinafter called

ADF Loan) to assist in financing Part E of the Project, on the

terms and conditions included in an agreement (hereinafter called

ADF Loan Agreement) to be entered into between the Borrower and

ADF; and

(C) the Borrower has established within its Ministry of Land

Reclamation, for the purpose of coordinating the activities of

the Borrower's agencies involved in Project implementation, a

central coordination committee (hereinafter called the Central

Coordination Committee);

WHEREAS the Association has agreed, on the basis inter alia

of the foregoing, to extend the credit to the Borrower upon the

terms and conditions hereinafter set forth;

NOW THEREFORE the parties hereto hereby agree as follows:

ARTICLE I

General Conditions; Definitions

Section 1.01. The parties to this Agreement accept all the

provisions of the General Conditions Applicable to Development

Credit Agreements of the Association, dated June 30, 1980, with

the same force and effect as if they were fully set forth herein

(said General Conditions Applicable to Development Credit

Agreements of the Association being hereinafter called the

General Conditions).

Section 1.02. Wherever used in this Agreement, unless the

context otherwise requires, the several terms defined in the

Preamble to this Agreemnt and in the General Conditions have the

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respective meanings therein set forth and the following additionalterms have the following meanings:

(a) "Project area" means a net area of about 24,000 feddansadjacent to the already reclaimed lands in the West Nubariyaarea, located in the northwestern part of Egypt;

(b) "Project Unit" means the project unit to be establishedpursuant to the provisions of Part B (1) of Schedule 3 to thisAgreement;

(c) "MLR" means the Ministry of Land Reclamation of theBorrower, which undertakes the major responsibility for theimplementation of the Project;

(d) "Project Center" means the village to be selected as theProject Center from among the main villages established under theProject;

(e) "PBDAC" means the Principal Bank for Development andAgricultural Credit, a banking institution of the Borrower estab-lished and operating under the Borrower's Law No. 117 of 1976;

(f) "BDAC" means the Bank for Development and AgriculturalCredit operating in the Project area, an affiliate of PBDAC,established in accordance with PBDAC's Law;

(g) "Implementing Agencies" means all the agencies of theBorrower involved in the implementation of the Project as providedin Schedule 3 to this Agreement, and which include, in additionto MLR, the Project Unit and PBDAC, the Ministries of Irrigation(MOI), Agriculture (MOA), Health (MOH) and Education (MOE), theRural Electricity Authority (REA), the Alexandria General WaterAuthority (AGWA) and the Regional Implementation Committee(RIC);

(h) "Subsidiary Loan Agreement" means the agreement to beentered into between the Borrower and PBDAC pursuant to theprovision of Section 3.07 of this Agreement, and the term"Subsidiary Loan" means the loan provided in said Agreement;

(i) "Egyptian Pounds" means the currency of the Borrower;and

(j) "Project preparation advance" means the Project prepara-tion advance provided by the Association to the Borrower pursuant

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to an exchange of letters between the Borrower and the Associa-

tion, dated January 11, 1980.

ARTICLE II

The Credit

Section 2.01. The Association agrees to lend to the Borrower,

on the terms and conditions in the Development Credit Agreement

set forth or referred to, an amount in various currencies equiva-

lent to sixty million nine hundred thousand Special Drawing Rights

(SDR 60,900,000).

Section 2.02. (a) The amount of the Credit may be withdrawn

from the Credit Account in accordance with the provisions of

Schedule 1 to this Agreement, as such Schedule may be amended from

time to time by agreement between the Borrower and the Associa-

tion, for expenditures made (or, if the Association shall so

agree, to be made) in respect of the reasonable cost of goods and

services required for the Project and to be financed out of the

proceeds of the Credit.

(b) As of the Effective Date, the Association shall, on

behalf of the Borrower, withdraw from the Credit 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 service charges thereon. The unwith-

drawn balance of the authorized amount of the Project preparation

advance shall be cancelled as of the same date, and the balance of

the amount of the Credit allocated to Category (7) of the table in

paragraph 1 of Schedule 1 to this Agreement shall be reallocated,

as of the same date, to Category (5) of said table.

Section 2.03. Except as the Association shall otherwise

agree, procurement of the goods and civil works to be financed out

of the proceeds of the Credit, shall be governed by the provisions

-f Schedule 4 to this Agreement.

Section 2.04. The Closing Date shall be December 31, 1987

or such later date as the Association shall establish. The

Association shall promptly notify the Borrower of such later

date.

Section 2.05. The Borrower shall pay to the Association

a service charge at the rate of three-fourths of one per cent

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(3/4 of 1%) per annum on the principal amount of the Creditwithdrawn and outstanding from time to time.

Section 2.06. Service charges shall be payable semiannuallyon March 15 and September 15 in each year.

Section 2.07. The Borrower shall repay the principal amountof the Credit in semiannual installments payable on each March 15and September 15 commencing March 15, 1991, and ending Septem-ber 15, 2030, each installment to and including the installmentpayable on September 15, 2000, to be one-half of one per cent (1/2of 1%) of such principal amount, and each installment thereafterto be one and one-half per cent (1-1/2%) of such principal amount.

Section 2.08. The currency of the United States of Americais hereby specified for the purposes of Section 4.02 of theGeneral Conditions.

ARTICLE III

Execution of the Project

Section 3.01. The Borrower shall carry out the Project (sub-stantially tarough its Ministry of Land Reclamation with theassistance of the other Implementing Agencies as stated in Sched-ule 3 to this Agreement) with due diligence and efficiency and inconformity with appropriate engineering, agricultural, financialand administrative practices, and shall provide, promptly asneeded, the funds, facilities, services and other resourcesrequired for the purpose.

Section 3.02. The Borrower shall take all governmental andadministrative action required to ensure that each of the Imple-menting Agencies shall duly perform, through adequate and suit-ably qualified staff, the functions assigned to it under Schedule3 to this Agreement towards the implementation of the Project.

Section 3.03. The Borrower shall empower the Central Coordi-nation Committee, inter alia, to: (a) approve the annual workplans under the Project; (b) ensure that funds required for theexecution of the Project are included in the proposed annualbudgets of the Implementing Agencies; and (c) review the execu-tion of the Project and contact the Implementing Agencies inconnection with the performance of their responsibilities statedin Schedule 3 to this Agreement.

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Section 3.04. Except as the Borrower and the Association

may otherwise agree, the Borrower shall cause MLR to employ in

accordance with a time-schedule satisfactory to the Borrower and

the Association, and in consultation with the concerned Implement-

ing Agencies: (a) engineering consultants in order to assist in

the preparation of the detailed design and tender documents

and in the supervision of construction works under the Project;

(b) agricultural consultants in order to assist in the preparation

and implementation of agricultural research and extension programs

for the Project area; and (c) technical and managerial consul-

tants on a short-term basis in order to assist in solving special

problems encountered during the period of Project execution, all

with qualifications and experience and under terms and conditions

satisfactory to the Borrower and the Association.

Section 3.05. The Borrower shall ensure the establishment, in

accordance with the provisions of Schedule 3 to this Agreement

and by December 31, 1981, of the Project Regional Implementation

Committee and the assignment to it of the responsibilities stated

in said Schedule.

Section. 3.06. In order to secure the irrigation water

required for the Project area, the Borrower shall: (a) ensure

the completion by its Ministry of Irrigation, not later than

December 31, 1983, of (i) the reconstruction of the lining of the

Nasr Canal on about 5 km and repair of the remaining lined part to

km 27, (ii) the enlargement of the canal Riyah-el Nassiri from km

20 to km 73, (iii) the extension of the Nasr Canal to km 67, and

(iv) the construction of pumping stations 4 and 5; (b) review

regularly with the Association the irrigation water requirements

for such area; and (c) take all action necessary to ensure the

supply to such area of such quantity of irrigation water as shall

be necessary for obtaining optimum yields from the selected

cropping patterns.

Section 3.07. The Borrower shall ensure:

(a) the procurement of the agricultural machinery provided

under Part C (1) of the Project by MLR; and

(b) the distribution, for use only in the Project area, of

such machinery by PBDAC, through its BDAC operating in the Project

area, to farmers or groups of farmers (including agricultural

cooperatives) or individuals residing in the Project area. For

this purpose, the Borrower shall relend to PBDAC out of the

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proceeds of the Credit the equivalent of the amount allocatedunder Category (4) of the table set forth in paragraph 1 ofSchedule 1 to this Agreement, or such other amount as shall beallocated from time to time to said Category, under a SubsidiaryLoan Agreement acceptable to the Association pursuant to whichPBDAC shall, inter alia:

(i) repay the equivalent in terms of Egyptian Poundsof the proceeds of the Credit so relent (suchequivalent to be determined as of the respectivedates of withdrawal of the proceeds from the CreditAccount) in no more than ten equal or approximatelyequal annual installments after a grace period ofnot more than five years;

(ii) pay interest at the rate of 5% per annum on theprincipal amount of the Subsidiary Loan withdrawnand outstanding from time to time; and

(iii) further relend, through its BDAC operating in theProject area, the equivalent in terms of EgyptianPounds of the amount so relent to it to farmers andgroups of farmers (including agricultural coopera-tives) or other individuals in the Project area forthe purchase of such machinery. Amounts so relentshall represent not more than 90% of the purchaseprice of such machinery and shall carry an interestrate of not less than 8% per annum and a repaymentperiod of not more than ten years, including agrace period of not more than one year.

Section 3.08. (a) In order to secure the funds required forthe implementation of the bilharzia control program under Part Eof the Project, the Borrower shall: (i) take all action requiredto ensure the conclusion of the ADF Loan Agreement within sixmonths from the date of this Agreement; or (ii) provide theAssociation, within such period, with alternative arrangementssatisfactory to the Association, for financing said Part ofthe Project.

(b) The Borrower shall cause its Ministry of Health toexchange views with the Association in regard to the most appro-priate drug to be procured under Part E of the Project, for thechemotherapeutic treatment of S. mansoni.

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Section 3.09. The Borrower shall enact, by December 31, 1981,

the selection criteria for settlers in the Project area, which

shall include, inter alia, provisions whereby such settlers shall

be recuired to participate in training and educational programs,and, when necessary, in the land reclamation works under the

Project for a specified period.

Section 3.10. (a) The Borrower undertakes to insure, or

make adequate provision for the insurance of, the imported goods

to be financed out of the proceeds of the Credit against hazards

incident to the acquisition, transportation and delivery thereof

to the place of use or installation, and for such insurance

any indemnity shall be payable in a currency freely usable by

the Borrower to replace or repair such goods.

(b) Except as the Association shall otherwise agree, the

Borrower shall cause all goods and services financed out of

the proceeds of the Credit to be used exclusively for the Project.

Section 3.11. (a) The Borrower shall furnish to the Associa-

tion, promptly upon their preparation, the plans, specifications,

reports, contract documents and work and procurement schedules

for the Project, and any material modifications thereof or addi-

tions thereto, in such detail as the Association shall reasonably

request.

(b) The Borrower: (i) shall maintain records and procedures

adequate to record and monitor the progress of the Project

(including its cost and the benefits to be derived from it), to

identify the goods and services financed out of the proceeds of

the Credit, and to disclose their use in the Project; (ii) shall

enable the Association's accredited representatives to visit the

facilities and construction sites included in the Project and to

examine the goods financed out of the proceeds of the Credit and

any relevant records and documents; and (iii) shall furnish to the

Association at regular intervals all such information as the

Association shall reasonably request concerning the Project, its

cost and, where appropriate, the benefits to be derived from it,

the expenditure of the proceeds of the Credit and the goods and

services financed out of such proceeds.

(c) Promptly after completion of the Project, but in any

event not later than six months after the Closing Date or such

later date as may be agreed for this purpose between the Borrower

and the Association, the Borrower shall prepare and furnish to the

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Association a report, of such scope and in such detail as theAssociation shall reasonably request, on the execution and initialoperation of the Project, its cost and the benefits derived and tobe derived from it, the performance by the Borrower and theAssociation of their respective obligations under the DevelopmentCredit Agreement and the accomplishment of the purposes of theCredit.

ARTICLE IV

Other Covenants

Section 4.01. (a) The Borrower shall cause the ImplementingAgencies to maintain separate Project accounts adequate to reflectin accordance with consistently maintained appropriate accountingpractices the operations, resources and expenditures in respect ofthe Project.

(b) The Borrower shall cause the Implementing Age9ciesto furnish annually, through MLR, to the Association a statementin such form and details as the Association shall reasonablyrequest, covering all expenditures and sources of funds in respectto the Project.

Section 4.02. (a) The Borrower shall: (a) ensure the carryingout by MLR, through the Project Unit, of monitoring and evaluationactivities of all engineering, agricultural and social aspects ofthe Project; and (b) ensure the preparation and the furnishing tothe Association, during the period of Project implementation andthereafter for the next 5 years, of an annual report coveringthe findings of such activities and the analysis thereof.

(b) The Borrower shall maintain within MOH a supervision andevaluation unit, satisfactory to the Borrower and the Association,which shall be responsible for the overall supervision and evalua-tion of the bilharzia control program under Part E of the Project.

Section 4.03. The Borrower shall: (a) ensure that MLR willcomplete, by December 31, 1982, a revision of existing studiesregarding the cropping pattern for the Project area, with a viewto determining the pattern most economically advantageous and thedesirability of sugar beet growing in such area; and (b) exchangeviews with the Association on the findings of such revisions andtake appropriate steps for the implementation of its recommenda-tions.

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Section 4.04. The Borrower shall cause all the Implementing

Agencies, each within its respective jurisdiction, at all times

to operate and maintain in accordance with programs or requests

made by the Project Unit all machinery, equipment, buildings,

roads and facilities provided under the Project and to make

promptly all necessary repairs and renewals thereof, in accordance

with appropriate engineering, agricultural and financial

practices.

Section 4.05. The Borrower shall (a) take into consideration,

in the assessment of the land tax to be collected from settlers in

the Project area, the recovery of the operation and maintenance

costs of the main irrigation and drainage facilities serving the

Project area, and (b) recover from said settlers (i) on an annual

basis, the maintenance cost of the irrigation and drainage

facilities within the Project area, and (ii) after a grace period

for the first three cultivation years, the full capital cost of

land reclamation works and of settlers' houses in the Project

area over a period of not more than 25 years.

(b) The Borrower shall cause its agencies responsible

for potable water, electricity and telephone services in the

Project area to charge consumers in said area in accordance with

said agencies' normal billing rates applicable to rural areas.

Section 4.06. Upon the completion of the b,.lharzia control

program referred to in Part E of the Project, the Borrower shall

cause its Ministry of Health to continue such program as part

of its activities, and shall provide said Ministry with all such

equipment and materials as shall be required for the purpose.

ARTICLE V

Effective Date; Termination

Section 5.01. The following events are specified as addi-

tional conditions to the effectiveness of the Development Credit

Agreement within the meaning of Section 12.01 (b) of the General

Conditions:

(a) the Borrower has concluded the contract or contracts for

the construction works referred to in Section 3.06 (a) (i) of this

Agreement; and

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(b) the Borrower has established the Project Unit and hasappointed suitably qualified and experienced persons as itsdirector general and heads of its engineering and agriculturalsections.

Section 5.02. The date , is hereby specifiedfor the purposes of Sectiok 12.04 of the General Conditions.

Section 5.03. The obligations of the Borrower under Section4.01 of this Agreement shall cease and determine on the date onwhich the Development Credit Agreement shall terminate or on adate twelve years after the date of this Agreement, whichevershall be the earlier.

ARTICLE VI

Representatives of the Borrower; Addresses

Section 6.01. The Minister of Economy and the Under Secretaryof Economy for International Finance of the Borrower aredesignated as representatives of the Borrower for the purposes ofSection 11.03 of the General Conditions.

Section 6.02. The following addresses are specified forthe purposes of Section 11.01 of the General Conditions:

For the Borrower:

Ministry of Economy8 Adly StreetCairoArab Republic of Egypt

Cable address: Telex:

MINISTRY OF ECONOMY 348 GAFEC UNCairo

For the Association:

International Development Association1818 H Street, N.W.Washington, D.C. 20433United States of America

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Cable address: Telex:

INDEVAS 440098 (ITT)

Washington, D.C. 248423 (RCA) or64145 (WUI)

IN WITNESS WHEREOF, the parties hereto, acting through their

representatives thereunto duly authorized, have caused thisAgreement to be signed in their respective names in the Districtof Columbia, United States of America, as of the day and yearfirst above written.

ARAB REPUBLIC OF EGYPT

By 0-40 &L/44 4'Authorized Representative

INTERNATIONAL DEVELOPMENT ASSOCIATION

By/I gAr 1Regional Vice President

Europe, Middle East and North Africa

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SCHEDULE 1

Withdrawal of the Proceeds of the Credit

1. The table below sets forth the Categories of items to befinanced out of the proceeds of the Credit, the allocation of theamounts of the Credit to each Category and the percentage ofexpenditures for items so to be financed in each Category:

Amount of theCredit Allocated % of(Expressed in Expenditures

Category SDR Equivalent) to be Financed

(1) Civil works: 40%

(a) irrigation works 7,240,000

(b) other works 30,800,000

(2) Goods, equipment and 1,990,000 100% of for-materials for other eign expendi-than Parts C (1) and tures, 100%E of the Project of local ex-

penditures ex-factory and75% of local

expenditures

(3) Goods under Part E 9,900,000 100% of for-of the Project eign expendi-

tures, 100%of local ex-penditures ex-factory and75% of localexpenditures

(4) Machinery under 2,130,000 100% of for-Part C (1) of eign expendi-Project tures, 100%

of local ex-penditures ex-factory and75% of localexpenditures

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Amount of theCredit Allocated % of(Expressed in Expenditures

Category SDR Equivalent) to be Financed

(5) Consultants' 2,820,000 85%services

(6) Overseas training 80,000 100% of for-eign expendi-tures

(7) Project prepara- 760,000 100%tion advance

(8) Unallocated5,180,000

TOTAL 60,900,000

2. For the purposes of this Schedule:

(a) the term "foreign expenditures" means expenditures inthe currency of any country other than the Borrower and for goodsor services supplied from the territory of any country other thanthe Borrower; and

(b) the term "local expenditures" means expenditures inthe currency of the Borrower and for goods or services suppliedfrom the territory of the Borrower.

3. Disbursement under Category (3) in the table set forth inparagraph 1 of this Schedule shall be made only after the Borrower(a) shall have concluded the ADF Loan Agreement, or (b) shall haveprovided the Association with the financing arrangements referredto in Section 3.08 of this Agreement.

4. The disbursement percentages have been calculated in com-pliance with the policy of the Association that no proceeds of theCredit shall be disbursed on account of payments for taxes leviedby, or in the territory of, the Borrower on goods or services, oron the importation, manufacture, procurement or supply thereof; to

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that end, if the amount of any such taxes levied on or in respect

of any item to be financed out of the proceeds of the Creditdecreases or increases, the Association may, by notice to theBorrower, increase or decrease the disbursement percentage then

applicable to such item as required to be consistent with theaforementioned policy of the Association.

5. Notwithstanding the provisions of paragraph 1 above, nowithdrawals shall be made in respect of payments made forexpenditures prior to the date of this Agreement.

6. Notwithstanding the allocation of an amount *of the Creditor the disbursement percentages set forth in the table inparagraph 1 above, if the Association has reasonably estimatedthat the amount of the Credit then allocated to any Categorywill be insufficient to finance the agreed percentage of allexpenditures in that Category, the Association may, by notice tothe Borrower: (i) reallocate to such Category, to the extentrequired to meet the estimated shortfall, proceeds of the CTeditwhich are then allocated to another Category and which in theopinion of the Association are not needed to meet otherexpenditures; and (ii) if such reallocation cannot fully meet theestimated shortfall, reduce the disbursement percentage thenapplicable to such expenditures in order that further withdrawalsunder such Category may continue until all expenditures thereundershall have been made.

7. If the Association shall have reasonably determined that theprocurement of any item in any Category is inconsistent withthe procedures set forth or referred to in this Agreement, noexpenditures for such item shall be financed out of the proceedsof the Credit and the Association may, without in any wayrestricting or limiting any other right, power or remedy of theAssociation under thexDevelopment Credit Agreement, by notice tothe Borrower, cancel such amount of the Credit as, in theAssociation's reasonable opinion, represents the amount of suchexpenditures which would otherwise have been eligible forfinancing out of the proceeds of the Credit.

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SCHEDULE 2

Description of the Project

The objectives of the Project are (a) to increase agricul-

tural production, (b) to improve income distribution and generate

employment by selecting from overpopulated rural areas of small-

holders for settlement in the Project area, and (c) to initiate a

process for restructuring and strengthening agricultural institu-

tions in the reclaimed lands. The Project consists of:

Part A: Irrigation, Drainage and Land Levelling

The carrying out of irrigation and drainage works required

for the reclamation of a net area of about 24,000 feddans of

desert land for intensive agriculture. Such works consist of:

(1) extension of the Nasr Canal from km 55 to km 67;

(2) construction of off-take structures in the Nasr

Canal and of an irrigation distribution system;

(3) construction of a regional main drain;

(4) construction of a field drainage system and a network

of open branch drains;

(5) primary land levelling, to be followed by the construc-

tion of the tertiary canals and field channels; and

(6) final land levelling after the initial leaching.

Part B: Settlement of Smallholders

Settlement of about 4,000 families in, the Project area in

16 satellite villages and 4 main villages (one of such to be

selected as the Project Center), to be established under the

Project. Such settlement involves:

(1) construction of a road network linking the new villages

to the Project center and to main population centers,

and of village roads and streets;

(2) establishment of a domestic water supply network,

including the construction of storage reservoirs

and booster stations;

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(3) establishment of a distribution network for the supplyof electricity to the Project area, including theinstallation of 11 KV lines, low voltage network andstreet lighting;

(4) establishment of telephone network, including theinstallation of overhead lines, manual and centralexchanges;

(5) construction of houses for settlers;

(6) construction of buildings and provision of equipmentand facilities for agricultural services; and

(7) provision of facilities for community services, includ-ing:

(a) construction of schools in 20 villages iR theProject area, comprising classrooms, workshops andother facilities for students in grades 1 through9, and one secondary school for students in grades10 through 12;

(b) establishment of a rural health center at theProject center, a rural health unit at each mainvillage (other than the Project Center) and abranch clinic at each satellite village;

(c) construction of buildings for social services;and

(d) construction of staff houses.

Part C: Agricultural Machinery

(1) Provision for sale to farmers or groups of farmers orother individuals in the Project area, for use only inthe Project area, of about 150 tractors together withimplement sets (three of such tractors shall be allo-cated for training and research purposes), about 40threshers and about 40 trailers.

(2) Establishment, equipping and operating of a majorworkshop for tractor repair and overhaul at the Project

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Center and a satellite workshop for tractor minor repair

at each main village (other than the Project Center).

(3) Provision of sample machinery for testing purposes.

Part D: Field Trials, Training

(1) The establishment of a training farm and the conducting

on it of cropping procedures for the Project area.

(2) Provision of facilities for continuing the field trials

currently undertaken on the Maryut Farm.

(3) Provision of training fellowships for extensionists and

subject matter specialists.

Part E: Bilharzia Control

The provision, for supporting the current programs for

bilharzia control in middle and upper Egypt and for extending such

program to the Giza Governorate and to the Project area, of

about 950 tons of molluscicide, 2,000,000 courses of Metrifonate

and 260,000 courses of an appropriate drug for S. mansoni, in

addition to transport and related equipment.

The Project is expected to be completed by December 31, 1986.

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SCHEDULE 3

Responsibilities of the Implementing Agencies

Except as otherwise agreed between the Borrower and theAssociation or warranted by practical necessities, the Borrowershall adopt such procedures as shall ensure the carrying out bythe Implementing Agencies of their responsibilities towards theexecution of the Project in accordance with the provisions of thisSchedule.

A. At the Central Level

The general responsibility of carrying out the Projectrests with:

(1) The Ministry of Land Reclamation (MLR)

MLR shall be responsible for:

(a) the overall planning and coordination of Project activi-ties, utilizing the services of the Central Coordination Commit-tee;

(b) the preparation of the detailed design for irrigationand drainage works and, in collaboration with the concernedImplementing Agencies, the design for roads, domestic watersupply, Project buildings and settlers' houses, electrificationand telecommunications works;

(c) the preparation of all tender documents and the execu-tion of all contracts, for the procurement of works or goodsrequired for the implementation of the Project, with the exclusionof Part A (1), (2) and (3) and Part E of the Project;

(d) the employment of consultants;

(e) the carrying out, with the assistance of MOA and otherappropriate agencies, of programs for agricultural research,extension and training of settlers;

(f) the adoption of criteria for selection of settlers andthe carrying out of settlement operations, including the provisionof financial assistance in the initial period of settlement(including the provision of food to settlers), administrative

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assistance for the establishment of cooperatives and the carrying

out of plans for community development and for other socialactivities;

(g) the monitoring and evaluation of all Project activities,except Part E thereof;

(h) the distribution of irrigation water within the Projectarea;

(i) the maintenance of all irrigation and drainage facili-ties, except the Nasr Canal and the regional main drain, and ofProject buildings and staff houses; and

(j) the provision of domestic animals of selected breeds forsale to settlers.

(2) The Ministry of Irrigation (MOI)

MOI shall be responsible for:

(a) the completion of the ongoing works for securing irriga-

tion water for the Project area, and the preparation of all tenderdocuments and the execution of all contracts for the procurementof works or goods required for the implementation of Part A (1),(2) and (3) of the Project;

(b) the operation of the five pumping stations of the NasrCanal and control of water delivery from it according to the needsof the Project area; and

(c) the maintenance of all irrigation water works up tothe offtake structure on the Nasr Canal, and of the regional maindrain.

(3) The Ministry of Agriculture (MOA)

MOA shall be responsible, in addition to its assistance toMLR, for providing agricultural extension and research staffto the Project Unit.

(4) The Ministry of Health (MOH)

MOH shall be responsible for:

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(a) the preparation, not later than December 31, 1981, of

plans satisfactory to the Association for implementing thebilharzia control program (Part E of the Project) in the differentareas covered by such program, and the carrrying out of such

program, including the procurement of goods under it; and

(b) planning, establishing, staffing, operating and main-taining the health facilities included in the Project.

(5) The Ministry of Education (MOE)

MOA shall be responsible for:

(a) the preparation of curricula for schools and teacher

training courses under the Project;

(b) the provision of plans for and the supervison of schoolconstruction;

(c) the staffing and operating of the Project schools;

(d) the carrying out of functional literacy programs in theProject area; and

(e) the maintenance of school buildings and staff houses.

(6) The Rural Electricity Authority (REA)

REA shall participate in the preparation of plans for elec-trification in the Project area, and shall be responsible formaking the electrical connections, operating and maintaining the

electricity network and charging and collecting electricity feesfrom customers.

(7) Alexandria General Water Authority (AGWA)

AGWA shall participate in the preparation of plans fordomestic water supply in the Project area and shall be responsiblefor:

(a) making the water connection and operating and maintain-ing the domestic water supply network; and

(b) charging and collecting water fees from customersaccording to its regular rates.

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(8) The Principal Bank for Development and Agricultural

Credit (PBDAC)

PBDAC shall prepare plans for its buildings in the Project

area and shall be responsible for:

(a) providing credit to settlers for the purchase of agri-

cultural machinery pursuant to Section 3.07 of this Agreement;

(b) staffing and operating its offices in the Project

area for the provision of agricultural credit to settlers; and

(c) maintaining its buildings and staff houses.

B. At the Regional Level

(1) The Project Unit

(a) Organization: The Project Unit shall be established

at the Project Center and shall be headed by a qualified and

experienced director general. It shall include four sections for

engineering, agriculture, community development and administration

and finance.

(b) Responsibilities: The Project Unit shall be responsible

for the supervision of construction works and for the day-to-dayactivities under the Project; in this connection, the Project

Unit shall (A) prepare an annual work program for the Project,

together with the budgetary requirements thereof, for submissionto MLR, and (B) operate and maintain the Project facilities, and

provide all engineering, agricultural, administrative and socialservices in the Project area.

(2) The Regional Implementation Committee (RIC)

(a) Organization: RIC will be composed of representativesfrom the regional offices or departments of the Implementing

Agencies, which are responsible for the Project area, and shallinclude, after the settlement activities, representatives of

farmers in the Project area.

(b) Responsibilities: RIC shall coordinate, at the regionallevel, the activities of the Implementing Agencies related to the

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carrying out of the Project and to the operation and maintenanceof the facilities established under it.

The Project is expected to be completed by December 31, 1986.

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SCHEDULE 4

Procurement

A. International Competitive Bidding

1. Except as provided in Part C hereof, goods and civil worksshall be procured under contracts awarded in accordance withprocedures consistent with those set forth in the "Guidelines forProcurement under World Bank Loans and IDA Credits" published bythe Bank in March 1977 (hereinafter called the Guidelines), on thebasis of international competitive bidding as described in Part Aof the Guidelines.

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, the Borrower shall prepare andforward to the Association as soon as possible, and in any eventnot later than 60 days prior to the date of availability to thepublic of the first tender or prequalification documents relatingthereto, as the case may be, a general procurement notice, in suchform and detail and containing such information as the Association

shall reasonably request; the Association will arrange for thepublication of such notice in order to provide timely notificationto prospective bidders of the opportunity to bid for the goods andworks in question. The Borrower shall provide the necessary

information to update such notice annually so long as any goods orworks remain to be procured on the basis of international compe-titive bidding.

3. For the purpose of evaluation and comparison of bids for thesupply of goods to be procured on the basis of internationalcompetitive bidding: (i) bidders shall be required to statein their bid the c.i.f. (port of entry) price for the importedgoods, or the ex-factory price or off-the-shelf price of othergoods, offered in such bid; and (ii) customs duties and otherimport taxes levied in connection with the importation, or thesales and similar taxes levied in connection with the sale ordelivery, pursuant to the bid, of the goods shall not be takeninto account in the evaluation of the bids.

B. Preference for Domestic Manufacturers

In the procurement of goods in accordance with the proceduresdescribed in Part A of this Schedule, goods manufactured in

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Arab Republic of Egypt may be granted a margin of preference inaccordance with, and subject to, the following provisions:

1. All bidding documents for the procurement of goods shallclearly indicate any preference which will be granted, theinformation required to establish the eligibility of a bid forsuch preference and the following methods and stages that will befollowed in the evaluation and comparison of bids.

2. After evaluation, responsive bids will be classified inone of the following three groups:

(1) Group A: bids offering goods manufactured inArab Republic of Egypt if the bidder shall haveestablished to the satisfaction of the Borrower andthe Association that the manufacturing cost of suchgoods includes a value added in Arab Republic ofEgypt equal to at least 20% of the ex-factory bidprice of such goods.

(2) Group B: all other domestic bids.

(3) Group C: bids offering any other goods.

3. In order to determine the lowest evaluated bid of eachgroup, all evaluated bids in each group shall first be comparedamong themselves, without taking into account customs duties andother import taxes levied in connection with the importation, andsales and similar taxes levied in connection with the sale ordelivery, pursuant to the bids, of the goods. Such lowest evalu-ated bids shall then be compared with each other, and if, as aresult of this comparison, a bid from group A or group B is thelowest, it shall be selected for the award.

4. If, as a result of the comparison under paragraph 3above, the lowest bid is a bid from group C, all group C bidsshall be further compared with the lowest evaluated bid fromgroup A after adding to the evaluated bid price of the importedgoods offered in each group C bid, for the purpose of this furthercomparison only, an amount equal to: (i) the amount of customsduties and other import taxes which a non-exempt importer wouldhave to pay for the importation of the goods offered in suchgroup C bid; or (ii) 15% of the c.i.f. bid price of such goodsif said customs duties and taxes exceed 15% of such price. Ifthe group A bid in such further comparison is the lowest, it

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shall be selected for the award; if not, the bid from group C

which as a result of the comparison under paragraph 3 is the

lowest evaluated bid shall be selected.

C. Other Procurement Procedures

1. Contracts for civil works under the Project, estimated

to cost not more than the equivalent of $500,000 per contract and

$2,000,000 in the aggregate may be awarded under competitive

bidding advertised locally pursuant to the Borrower's applicable

procedures.

2. Contracts for equipment estimated to cost not more

than $50,000 equivalent per contract and $400,000 in the aggregate

may be awarded on the basis of quotations obtained from not less

than three reliable suppliers.

3. Contracts for proprietary equipment estimated to cost

not more than $300,000 in the aggregate may be purchased directly

from reliable suppliers.

D. - Review of Procurement Decisions by the Association

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

final contracts:

With respect to all contracts estimated to cost the equiva-

lent of $500,000 or more for civil works and $100,000 or more for

goods:

(a) Before bids are invited, the Borrower shall furnish to

the Association, 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

for the bidding, and shall make such modifications in the said

documents or procedures as the Association shall reasonably

request. Any further modification to the bidding documents shall

require the Association's concurrence before it is issued to the

prospective bidders.

(b) After bids have been received and evaluated, the Bor-

rower shall, before a final decision on the award is made, inform

the Association of the name of the bidder to which it intends to

award the contract and shall furnish to the Association, in

sufficient time for its review, a detailed report on the evalua-

tion and comparison of the bids received and such other informa-

tion as the Association shall reasonably request. The Association

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shall, if it determines that the intended award would be inconsis-

tent with the Guidelines or this Schedule, promptly inform the

Borrower and state the reasons for such determination.

(c) The terms and conditions of the contract shall not,without the Association's concurrence, materially differ from

those on which bids were asked or prequalification invited.

(d) Two conformed copies of the contract shall be furnishedto the Association promptly after its execution and prior tothe submission to the Association of the first application for

withdrawal of funds from the Credit Account in respect of such

contract.

2. With respect to each contract not governed by the precedingparagraph, the Borrower shall furnish to the Association, promptlyafter its execution and prior to the submission to the Associationof the first application for withdrawal of funds from the CreditAccount in respect of such contract, two conformed copies ofi suchcontract, together with the analysis of the respective bids,recommendations for award and such other information as theAssociation shall reasonably request. The Association shall, if itdetermines that the award of the contract was not consistent withthe Guidelines or this Schedule, promptly inform the Borrower andstate the reasons for such determination.

3. 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 bymore than 25% of the original price, the Borrower shall inform

the Association 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 of this Agreement, shall promptly inform the Borrowerand state the reasons for 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