LOAN NUMBER __-IND PROJECT AGREEMENT (Calcutta Environmental Improvement Project) betwoon ASIAN DEVELOPMENT BANK and ‘STATE OF WEST BENGAL CALCUTTA MUNICIPAL CORPORATION DATED PAGIIND 26466PROJECT AGREEMENT PROJECT AGREEMENT dated between ASIAN DEVELOPMENT BANK (hereinafter called the Bank) of the one part and the State of West Bengal (hereinafter called the State) and the Caleutta Municipal Corporation WHEREAS (A) by a Loan Agreement of even date herewith between India (nereinater called the Borrower) and the Bank, the Bank has agreed to make to the Borrower a loan of ‘wo hundred and fity milion dollars ($250,000,000) on the terms and conditions set forth in the Loan Agreement, but only on condition thatthe proceeds of the Loan be made available to the State acting through the Iiation and Waterways Department (WO), and through the ‘Municipal Affairs Department of tha State to the Calcutta Municipal Corporation (CMC) and that the State and CMC agree to undertake certain obligations towards the Bank as hereinafter inthis Project Agreement set fori; and (8) _ the State and CMC, in consideration ofthe Bank entering into the Loan ‘Agreement with the Borrower, have agreed to undertake the obligations hereinafter set fort, NOW THEREFORE the parties hereto agree as folows: ARTICLE| Definitions: Section 1.01 Wherever used in this Project Agreement, unless the Context otherwise requires, the sevaral terms defined in the Loan Agreement and in the Loan Regulations (as so defined) have the respective meanings therein set forth, ARTICLE tt Particular Covenants ‘Section 2.01 (2) The State, acting through IWD, and the CMC shal carry out the Project with due dligence and efficiency, and in conformity with sound administrative, financial, engineering, environmental, urban development and public utilty practices. (©) _ Inthe carrying out ofthe Project and operation of the Project facilties, the State and CMC shal perform al obligations set forth in the Loan Agreement to the extent that they are applicable to them,‘Section 2.02. ‘The State and CMC shall make available, promptly as needed, the funds, facies, services, equipment, land and other resources which are required, in addition o the proceeds ofthe Loan, for the carrying out ofthe Project In the carrying out of the Project, the State, ‘employ competent and quaified consultants and contractors, acceptable to the Bank, to an extent and upon terms and conditions satisfactory to the Bank (©) Except as the Bank may otherwise agree, all goods and services to be financed out ofthe proceeds of the Loan shall be procured in accacdanee with the provisions Of Schedule 4 and Schedule 5 to the Loan Agreement. The Bank may refuse to finance a Contract where goods or services have not been procured under procedures substantially in accordance with those agreed between the Borrower and the Bank or where the terms and, conditions ofthe contract are not satistactory to the Bank. ‘Section 2.04 ‘The State, acting through IVD, and CMC shall carry out the Project in accordance with plans, design standards, specications, work schedules and construction methods acceptable to the Bank. The Slats, acting trough IWD, and CMC ‘shal furnish, or cause to be furnished, to the Bank, promply ater their preparation, such plans, design standards, specifications and work schedules, and any material modifications ‘subsequently made therein, in such detall as the Bank shail reasonably request, Section 2.05. (2) The State and CMC shall take out and maintain “with responsible insurers, or make other arrangements satisfactory to he Bank for insurance of Project facilities to such extent and against such risks and in such amounts as shall be Consistent with sound practice, (&) Without limiting the generality of the foregoing, the State and CMC Lndertakes to insure, or cause tobe insured, the goods to be imported for the Project and to be financed out of the proceeds of the Loan against hazards incident to the acquisiton, transportation and delivery erect tothe place of use or installation, and for such insurance ‘any indemnity shall be payable in a currency freely usable o repiaca of repair such goods, Section 2.06. The State and CMC shall maintain, or cause to be maintained, records and accounts adequate to identily the goods and services and other items of expenditure financed out of the proceeds of the Loan, to cisciose the use thereot in the Project. to record the progress ofthe Project (ineisting the cost thereat) and to reflect, in accordance with consistently maintained sound accounting principles, its operations and financial condition, Section 2.07 (2) _The Bank, tho State and CMC shall cooperate fully to ensure thatthe purposes of the Loan wil be accomplished, (&) The State and CMC shall promptly inform the Bank of any condition which interferes with, or threatens to interfere with, the progress of the Project, the performance of is obligations under this Project Agreement or the Onianding Agreement, of the accomplishment of te purposes of the Loan,(6) The Bank, the State and CMC shall from te to time, atthe request of either party, exchange views through their representatives wit regard to any matters relating tothe Project, the State and CMC and the Loan, Section 2.08. (2) The State and CMC shall fumish to the Bank al ‘such reports and information as the Bank shall reasonably request concemming () the Loan, {and the expentiture of the proceeds thereof; (i) the goods and services and other tems of ‘expenditure financed out of such proceeds: i) the Project (the administration, operations ‘and financial condition ofthe State and CMC in connection wit the Project: and (v) any other ‘matters relating tothe purposes of the Loan. (©) Without limiting the generality of the foregoing, the State and CMC shall fumish to the Bank quarterly reports on the execution of the Project and on the ‘operation and management of the Project facies. Such reports shall be submited in suck form and in such detail and within such a period as the Bank shall reasonably request, and ‘shal indicate, among other things, progress made and problems encountered during the quarter under review, steps taken or proposed to be taken to remedy these problems, and proposed program of activities and expected progress during the folowing quarter. (©) Promptly ater physical completion of the Project, but in any event not later than three (3) months thereafter or such later date as the Bank may agree for this Purpose, the State and CMC shall prepare and furnish tothe Eank a report i such form and In such detail as the Bank shall reasonably request, on the execution and inital operation of the Project, including its cost, the performance by the State ard CMC of its obigations under this Project Agreement and the accomplishment ef the purposes ofthe Loan, Section 2.08. (®) The State and CHC shall () maintain separate ‘accounts for the Project and for its overall operations; (i) have such accounts and related financial statements (balance sheet, statement of income and expenses, ard. relaed statements) audited anrwvally, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifcations, experience and terms of reference are ‘acceptable to the Bank; and (i) furnish to the Bank, promptly after their preparaton but in any event not later than 12 months after the close of the fiscal year to which they relate, Certified copies of such aucited accounts and financial statements and the report of the ‘usitors relating thereto (including the auditors opinion on the use of the Loan proceeds and compliance win the covenants of the Loan Agreement as well as on the use of the procedures for imprest accauntlstatement of expenditure), allin the English language The ‘State and CMC: shall imigh to he Elank such further information concoming ouch accounts {and financial statements and the audit thereof as the Bank shal from time to tme reasonably request. (©) __ The State and CMC shall enable the Bank, upon the Bank's request, to Giscuss the State and CMC's Projectelated financial statements and their financial affairs from time to time with the State and CMC's auditors, and shal authorize and require any representative of such aucitors to participate in any such discussions requested by the Bank, provided that any such discussion shall be conducted only in he presence of an authorized officer of the State and CMC unless the State and CMC shall ohenwise agree. Section 2.10. ‘The State, acting through INO, and CMC shall enable the Bank’s representatives to inspect the Project, the goods franced out of the proceeds of‘the Loan, all other plants, sites, works, properties and equipment of the State, acting through TWO, and CMC, and any relevant records and documents. ‘Section 2.11 (a) The State and CMC shall, promptly as required, take all action within its statutory powers to carry on its operations, and to acquire, maintain land renew all ighs, properties, powers, prvieges and franchises which are necessary in the Carrying out of the Projector inthe conduct o its business. (©) The State and CMC shail at all imes conduct its Project business in accordance with sound administrative, ‘nancial, engineering, enviconmental, urban evelopment and public utity practices, and under the supervision of competent and ‘experienced management and personnel (©) The State, acting trough IW, and CMC shal at all times operate and maintain its plants, equipment’ and other propery, and from time to time, promptly as heeded. make al necessary repairs and renewals thereof, all in accordance. with sound ‘administrative, nancial, engineering, environmental, urban development and public utlty practices, and mantenance and operational practices Section 2.12 Except as the Bank may otherwise agree, the State and CMC shall not sel, lease or otherwise dispose of any ofits assets which shall be required for the efficient carryng on ofits operations or the disposal of which may prejudice its ably to perform satisfactory any of ts obligations under this Project Agreement Section 2.13, Except as the Bank may otherwise agree, the State and [CMC shail apply he proceeds of the Loan to the financing of expenditures on the Project in ‘accordance with the provisions of the Loan Agreement and this Project Agreement, and shall ‘ensure that all goods and services financed cut of such proceeds are used exclusively in the ‘carrying out of the Project, Section 2.14 Except as the Bank may otherwise agree, the State and [CMC shall duly gerform all its obigatons under the Onlending Agreement, and shall not take, or concur in. any action which Would have the effect of assigning, amending, abrogating ‘oF waiving any rights or obligations ofthe parties under the Oniending Agreement. Section 2.15, ‘The State and CMC shall promptly notify the Bank of ‘any proposal fo anend, suspend or repeal any provision of the CMC's and WD's statutory Powers which may materially affect the Project and shall afford the Bank an adequate ‘opportunity to comment on such proposal prior to taking any action thereon, ARTICLE I Etfective Date; Termination Section 3.01 ‘This Project Agreement shall come into force and effect ‘on the date on which the Loan Agreement shall come ino Yorce ang eect, Ine Bank shall promptly not the State and CMC of such date.Section 3.02. Al the provisions of this Project Agreement shall continue in full force and effect notwithstanding any cancallaton or suspension under the Loan Agreement ARTICLE IV Miscellaneous Section 4.01 ‘Any notice or request required or permitted to be given ‘or made under this Project Agreement and any agreement between the partes contemplated by this Project Agreement shall be in writing. Such notice or request shall be deemed to hhave been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or facsimile to the paty to which itis required or permited to be given or made at is address hereinafter spectfied, or at such other address a such party shall have designates by notice to the party giving such notice or making such request. The addresses so spectied the Bank ‘Asian Development Bank P.O. Box 788 (0980 Mania, Phiippines Cable Address: ASIANBANK. MANILA, ‘Telex Numbers: 20088 ADS PH (RCA) 142208 AD PM (ITT) (63587 ADB PN (ETP) Facsimile Numbers: (632) 626-2444 (682) 636-2305, Focthe State ‘Secretary to the Government of West Bengal Municipal Afairs Deparment ‘Writers’ Building Calcutta 700 001 Telex Number: 033-2151216Facsimile Number: 033-2351632 For OMe Municipal Commissioner ‘Calcutta Municipal Corporation SSN, Bannerjee Road Calcutta 7 00013, Facsimile Number: (033 2440201 Section 4.02. (@)__ Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Project ‘Agreement or under Section 7.01 of the Loan Agreement by or on behalf ofthe State and CMC may be taken or executed by the Secretary, [WD and Municipal Commissioner respecively, or by such other person or persons as he shall so designate in witing notified to the Bank, (©) _The State and CMC shall furnish to the Bank sufficient evidence of the authorty of each person who will act under paragraph (a) of this Section, tozether win tne ‘autherticated specimen signature of each such person, Section 4.03 No delay in exercising, or omission to exercise, ‘any right, power or remedy accruing to either party under this Project Agreement upon any ‘efault shal mpair any such right, ower or remedy or be construed to be a waiver thereof of ‘an acquiescence in such default; nor shal the action of such party in respect of any defaut, ‘or any acquiescence in any defaui, affect or impair any right, power or remedy of such party in respect of any other or subsequent defaultIN WITNESS WHEREOF the parties hereto, acting through their ‘representatives thereunto duly authorized, have caused this Project Agreement to be signed in ther respective names and to be delivered at the principal office of the Bank, as ofthe day and year ist above writen. [ASIAN DEVELOPMENT BANK Os ‘STATE OF WEST BENGAL By ‘Authorized Representaive CALCUTTA MUNICIPAL CORPORATION By ‘Authorized Representaive