On the ratification of the Loan Agreement (Routine Operations) (Road Rehabilitation Project) between the Republic of Kazakhstan and the Asian Development Bank dated October 18, 1996

Home / RLA / On the ratification of the Loan Agreement (Routine Operations) (Road Rehabilitation Project) between the Republic of Kazakhstan and the Asian Development Bank dated October 18, 1996

The Law of the Republic of Kazakhstan dated March 5, 1997 N 81-I

To ratify the Loan Agreement (Routine Operations) (Road Rehabilitation Project) between the Republic of Kazakhstan and the Asian By the Development Bank dated October 18, 1996.

President

Republic of Kazakhstan

LOAN AGREEMENT

(Normal operations)

(Road rehabilitation project)

between

BY THE REPUBLIC OF KAZAKHSTAN

and

BY THE ASIAN DEVELOPMENT BANK

dated October 18, 1996

LOAN AGREEMENT

(Normal operations)

LOAN AGREEMENT dated October 18, 1996 between the REPUBLIC OF KAZAKHSTAN (hereinafter referred to as the Borrower) and the ASIAN DEVELOPMENT BANK (hereinafter referred to as the Bank). BEARING IN MIND that (A) The Borrower has applied to the Bank for a Loan for the purposes of the Project described in Annex 1 to this Loan Agreement: (C) The Government of the Borrower (hereinafter referred to as the Government) has requested technical assistance from the Bank for (i) institutional strengthening of the road sector (hereinafter referred to as the Advisory technical assistance), and (ii) detailed design of selected priority road sections (hereinafter referred to as the Technical Assistance of the Project Preparation Day), and the Bank has agreed to provide the Government with technical assistance for such purposes in the amount of seven hundred and fifty thousand dollars ($750,000) and two hundred and fifty thousand dollars ($250,000), respectively: and (C) the Bank has agreed to provide the Borrower with a loan from the Bank's ordinary capital resources on the terms set out below; the parties HEREBY agree as follows:

ARTICLE I Loan Provisions: Definitions Section 1.01. All provisions included in the Bank's Regulations on Loans of Ordinary Operations dated July 1, 1986 hereby apply to this Loan Agreement to the same extent as if they were fully set forth in this document, however, subject to the following modifications (the aforementioned Provisions on Loans of Ordinary Transactions, as amended, are hereinafter referred to as the Loan Provisions): (a) Section 2.01(17) is deleted and replaced by the following: "The term "dollar" or "dollars" or the "$" sign means a dollar or dollars in the currency of the United States of America." (B) Sections 2.01(26) and (27) are deleted and the following new Section 2.01(26) is inserted: "Dollar Pool" means the pooled fund of unpaid dollar loans used by the Bank for the purpose of financing dollar loans provided by the Bank from ordinary capital funds. (c) The last sentence of the first paragraph of Section 3.02 is omitted. (d) Section 3.02(b)(ii) is deleted and replaced by the following: "(ii) 'Eligible loans' in relation to the loan means unpaid loans from the Bank in the dollar pool received after June 30, 1992." (e) The last sentence of Section 3.06(a) is omitted, and the words "on a date acceptable to the Bank" in Section 3.06(b) are omitted. (f) Section 4.02 is omitted and replaced with the following: "Withdrawals from the loan account will be made in dollars." (g) Section 4.03(a) is deleted and replaced by the following: "The principal amount of the loan must be repaid in dollars.(h) Section 4.04 is deleted and replaced with the following: "Interest on any portion of the loan must be paid in dollars. (i) In Section 4.05, the words "and collection for any special obligations under Section 5.02" are omitted. (j) Section 4.09 has been omitted and the following new Section 4.09 has been inserted: Notwithstanding all contrary terms in these Terms, withdrawals from the loan account in respect of the loan, in exceptional cases where the Bank determines that it cannot allocate dollars for the purposes of such withdrawals, will be made in such currency or currencies as the Bank deems appropriate acceptable. The corresponding principal amounts of the loan must be repaid and the corresponding interest must be paid in such currency or currencies. The interest rate that will be applied to the principal loan amounts paid in such currency or currencies will be based on the value at which such currency or currencies were purchased by the Bank, plus the difference between the purchase and sale price, and both may be changed from time to time by the Bank within reasonable limits. Section 1.02. Several terms defined in the Loan Provisions, wherever used in this Loan Agreement, unless the context requires otherwise, have the relevant meanings set out below, and the following additional terms have the following meanings: (a) "DAT" means the Department of Motor Transport of the Ministry of Transport, or any of its successors; (B) "KIIC" means the Committee on the Use of Foreign Capital of the Borrower, or any of its successors; (c) "DD" means the Department of Highways of the Ministry of Transport, or any of its successors; (d) "UOE" ("MIU") means the Office of Operations established within the DD, as described in paragraph 1 (b) of Annex 6 to this Loan Agreement; (e) "ME" means the Ministry of Economy of the Borrower, or any of its successors; (f) "MTK" means the Ministry of Transport or Communications of the Borrower, or any of its successors; (g) "PIU" means the Project Management Group based within the DD, as described in paragraph 1 (a) of Annex 6 to this Loan Agreement; (h) "Project Implementation Agency", for the purposes and within the meaning of the Loan Provisions, means the DD that is responsible for the implementation of the Project; (i) "Project Equipment" means the equipment to be purchased and constructed within the framework of the Project; (j) "NCP" means the Project Supervisory Committee, as described in paragraph 2 of Annex 6 to this Loan Agreement; and (k) "OGD" means the Person Responsible for the State road network within the DD, or any of his successors.  

ARTICLE II Loan Section 2.01. The Bank agrees to provide the Borrower with an amount of fifty million dollars ($50,000,000) from the Bank's Ordinary Capital Funds. Section 2.02. The Borrower will pay interest to the Bank as determined and in accordance with Section 3.02 of the Loan Regulations. Section 2.03. (a) The borrower will pay a commission fee of three quarters of one percent (0.75%) per year. Such fee will accrue to the Loan amounts (less amounts withdrawn from time to time) for consecutive periods beginning sixty (60) days after the date of this Loan Agreement, as follows: for the first period of twelve months, for $7,500,000; for the second period of twelve months -for $22,500,000; during the third period of twelve months - for $42,500,000; and after that for the full amount of the Loan. (B) If any Loan amount is cancelled, the amount of each portion of the Loan specified in paragraph (a) of this Section will be reduced in the same proportion as the cancelled portion applied to the full amount of the Loan prior to such cancellation. Section 2.04. Interest and other fees on the Loan will be paid once every six months on March 1 and September 1 of each year. Section 2.05. The Borrower will pay the principal amount of the loan withdrawn from the loan account in accordance with the depreciation schedule set out in Appendix 2 to this Loan Agreement.

ARTICLE III Use of Loan Funds Section 3.01. The Borrower will ensure that the Loan funds are used to finance Project costs in accordance with the provisions of this Loan Agreement. Section 3.02. Goods, services and other items of expenditure to be financed from the Loan and the allocation of Loan amounts among various categories of such goods, services and other items of expenditure comply with the provisions of Annex 3 to this Loan Agreement, and such Annex may be supplemented from time to time by agreement between the Borrower and the Bank. Section 3.03. Except where the Borrower and the Bank may agree otherwise, all goods and services to be financed from the Loan will be procured in accordance with the provisions of Annexes 4 and 5 to this Loan Agreement. The Bank may refuse to finance a contract under which goods or services were purchased not in accordance with the procedures agreed between the Borrower and the Bank, or where the terms of the contract do not satisfy the Bank. Section 3.04. Except in cases where the Borrower and the Bank may agree otherwise. The Borrower takes all measures to ensure that all goods and services financed from the Loan are used exclusively for the implementation of the Project. Section 3.05. 3The final date for withdrawal from the loan account for the purposes of Section 8.03 of the Loan Regulations is November 30, 2000 or another date that may be agreed from time to time between the Borrower and the Bank.

ARTICLE IV SPECIAL CONDITIONS Section 4.01. (a) The Borrower shall take all measures to carry out the Project with due diligence and efficiency, and in accordance with reasonable administrative, financial, engineering and road practices, and taking into account environmental conditions. (B) When executing the Project and using the Project equipment, the Borrower will fulfill or contribute to the fulfillment of all obligations set out in Annex 6 to this Loan Agreement. Section 4.02. The Borrower provides, as required, the funds, equipment, services, and other resources that are required, in addition to the Loan funds, to complete the Project, and to maintain and operate the Project equipment. Section 4.03. (a) When executing a Project, the Borrower must ensure that qualified consultants and contractors are hired that are acceptable to the Borrower and the Bank, to the extent and on such terms that satisfy the Borrower and the Bank. (B) The Borrower will ensure that the Project is completed in accordance with plans, design standards, specifications, work schedules and construction methods acceptable to the Borrower and the Bank. The Borrower must provide or ensure that, immediately after their preparation, such plans, design standards, specifications, work schedules and any significant material modifications are provided to the Bank, with such details as the Bank may reasonably request. Section 4.04. The Borrower will ensure that the activities of its offices and agencies in relation to Project execution and the use of Project equipment are carried out and coordinated in accordance with reasonable administrative policies and procedures. Section 4.05. (a) The Borrower will prepare arrangements to the satisfaction of the Bank to insure the Project equipment to the extent, against such risks and for such amounts as are consistent with reasonable practice. (B) Without limiting the general meaning of the above, the Borrower guarantees or takes measures to insure the goods imported for the Project and to be financed from the Loan against the risks associated with their acquisition, transportation and delivery to the place of use or installation, and for such insurance any amount is paid in the currency, freely used to replace or repair such goods. Section 4.06. (a) The Borrower maintains or takes measures to maintain records and accounts sufficient to identify the goods, services and other items of expenditure financed from the Loan and to disclose their use in the Project, to record progress during the Project (including its cost) and to reflect, in accordance with the current the applicable accounting principles, operations and financial position of the Department of Roads and other agencies of the Borrower responsible for the implementation of the Project and the use of the Project equipment or any part thereof. (B) The Borrower (i) maintains or takes measures to maintain separate accounts for the Project; (ii) annually subjects the accounts and related financial statements to audit in accordance with appropriate standards by independent auditors whose qualifications, experience and contractual terms are acceptable to the Bank; (iii) to provide the Bank, to the extent possible, but in any case no later than nine (9) months after the end of each relevant fiscal year, certified copies of such audited accounts and financial statements, and auditors' reports on the results of the audit (including the auditors' conclusion on the use of the Loan funds and compliance with the terms of this Loan Agreement), all in English; and (iv) provide the Bank with such other information regarding such accounts, financial statements and their audit as may be requested from time to time by the Bank. (c) The Borrower will provide the Bank with the opportunity, at the request of the Bank, to discuss from time to time with the Borrower's auditors the Borrower's financial statements on the Project and its financial transactions related to the Project, to authorize and require the participation of representatives of such auditors in any discussions at the request of the Bank, provided that any such discussion will be conducted only in the presence of an authorized representative The Borrower, unless the Borrower agrees otherwise. Section 4.07. (a) The Borrower will provide or arrange to provide the Bank with all such reports and information as the Bank reasonably requests regarding (i) the Loan, the disbursement of funds and the performance of appropriate actions; (ii) goods, services and other items of expenditure financed from the Loan; (iii) the Project; (iv) the management, operations and financial condition of the DD and other agencies of the Borrower responsible for the execution of the Project and the use of the Project equipment, or any part thereof; (v) the financial and economic situation in the Borrower's territory, and the state of the Borrower's international balance of payments; and (vi) any other issues related to the purpose of the Loan. (B) Without limiting the general meaning of the above, the Borrower will provide and take measures to provide the Bank with quarterly reports on the implementation of the Project and on the operation and management of the Project equipment. Such reports shall be submitted in such form, with such details and within such time as the Bank reasonably requests, and, among other things, indicate the success achieved and the problems encountered in the quarter under review, the measures taken and expected to address these problems, the proposed action program and expected progress during the next quarter.. (c) Shortly after the physical completion of the Project, but in any case no later than (3) three months thereafter, or at such later date as may be agreed for these purposes between the Borrower and the Bank, the Borrower shall prepare and submit to the Bank a report in such form and with such details as the Bank may request, with sufficient justification, the completion and initial action of the Project, including its cost, in fulfilling the Borrower's obligations under the Loan Agreement and achieving the objectives of the Project. Section 4.08. The Borrower will provide an opportunity for the Bank's representatives to check the Project, the goods financed from the Loan, and any relevant records and documents. Section 4.09. The Borrower ensures that the Project's equipment is operated, maintained and repaired in accordance with reasonable administrative, financial, engineering, road, operational and operational practices, taking into account environmental conditions. Section 4.10. (a) It is the mutual intention of the Borrower and the Bank that no other external debt to a lender other than the Bank will take precedence over the Loan by holding the Borrower's assets for debt. To this end, the Borrower will take measures to ensure that (i) except in cases where the Bank may agree otherwise, if any withholding is imposed on any assets of the Borrower for debts as a guarantee of any external debt, such a right would obviously be proportionate and would guarantee payment of the principal amount, interest and other fees on the Loan; and (ii) that the Borrower, when creating or facilitating the creation of any such right, should immediately take urgent precautions in this regard. (B) The provisions of paragraph (a) of this Section will not apply to (i) any retention-of-title right at the time of purchase, solely as a guarantee of payment of the purchase price of such property; or (ii) any retention-of-title right arising from the normal course of banking transactions. transactions and guarantees of debt, the repayment date of which comes no earlier than one year after its date. (c) The term "Borrower's assets", as used in paragraph (a) of this Section, includes the assets of any administrative unit or agency of the Borrower, and the assets of any agency of any such administrative unit, including the National Bank of Kazakhstan and any other institution acting as the central bank for the Borrower.

ARTICLE V Entry into Force Section 5.01. A period of ninety (90) days after the date of this Loan Agreement is set for the entry into force of the Loan Agreement for the purposes of Section 9.04 of the Loan Regulations.

ARTICLE VI

Other matters

Section 6.01. The Borrower's Minister of Finance is appointed as the Borrower's representative for the purposes of Section 11.02 of the Loan Regulations.

Section 6.02. For the purposes of Section 11.01 of the Loan Regulations, the following addresses are indicated:

For the Borrower

------------

Ministry of Finance

97 Ablay Khan Ave.

Almaty 480091

Republic of Kazakhstan

Fax number:

(7-3272) 636-984

(7-3272) 622-770

For the Bank

----------

Asian Development Bank

N/A 789

0980 Manila, Philippines

Telegraphic address:

ASIANBANK

MANILA

Telex:

29066 ADB PH (RCA)

42205 ADB PM (ITT)

63587 ADB PN (ETPI)

Fax number:

(63-2) 741-7961

(63-2) 632-6816

(63-2) 631-7961

IN CONFIRMATION OF THIS, the parties, acting through their duly authorized representatives, have ensured that this Agreement is signed in their respective names and delivered to the Bank's head office on the date and year indicated above.

REPUBLIC OF KAZAKHSTAN

--------------------

Authorized representative

ASIAN DEVELOPMENT BANK

------------------------

Authorized representative

APPENDIX 1

Project Description

Goals

-----

1. The objectives of the Project are: (i) rehabilitation of the road section between Gulshad and Akchatau in the direction of Almaty-Akmola; and (ii) improvement of road maintenance and operation in the direction of Almaty-Akmola; (iii) establishment of a permanent operation system.

Scope of work

-----------

2. The scope of work on the Project includes:

Part A

-------

Road construction works to restore about 192 kilometers of the road section between Gulshad and Akchatau in the direction of Almaty-Akmola;

Part B

-------

Road maintenance of selected road sections in the direction of Almaty-Akmola, including the provision of road maintenance equipment; and the establishment of a road maintenance system.

3. The project also includes the provision of consulting services.

The project is expected to be completed by May 30, 2000.

APPENDIX 2

Depreciation schedule

(Road rehabilitation project)

Payment term Payment of the principal amount

(in dollars)

March 1, 2001 $ 413,900

September 1, 2001 434,600

March 1, 2002 456,300

September 1, 2002 479,300

March 1, 2003 503,100

September 1, 2003 528,300

March 1, 2004 554,700

September 1, 2004 582,400

March 1, 2005 611,500

September 1, 2005 642,100

March 1, 2006 674,200

September 1, 2006 707,900

March 1, 2007 743,300

September 1, 2007 780,500

March 1, 2008 819,500

September 1, 2008 860,500

March 1, 2009 903,500

September 1, 2009 948,700

March 1, 2010 996,100

September 1, 2010 1,045,900

March 1, 2011 1,098,200

September 1, 2011 1,153,100

March 1, 2012 1,210,800

September 1, 2012 1,271,300

March 1, 2013 1,334,900

September 1, 2013 1,401,600

March 1, 2014 1,471,700

September 1, 2014 1,545,300

March 1, 2015 1,622,600

September 1, 2015 1,703,700

March 1, 2016 1,788,900

September 1, 2016 1,878,300

March 1, 2017 1,972,200

September 1, 2017 2,070,900

March 1, 2018 2,174,400

September 1, 2018 2,283,100

March 1, 2019 2,397,300

September 1, 2019 2,517,100

March 1, 2020 2,643,000

September 1, 2020 2,775,300

Total: 50,000,000 dollars

PRE-PAYMENT BONUSES

The following interest is defined as the premium payable for repayment in advance of the due date of any portion of the principal amount of the Loan in accordance with Section 3.06(B) of the Loan Regulations.

Pre-payment time Prize

----------------------------- -------

The interest rate (expressed as a percentage for the year) applied to the remaining unpaid Loan amount on the day of prepayment, multiplied by:

No more than three years before the due date of 0.13

More than 3 years, but not more than 6 years before

The due date is 0.25

More than 6 years, but not more than 11 years before

Due date 0.46

More than 11 years, but not more than 16 years before

Due date 0.67

More than 16 years, but not more than 20 years before

Due date 0.83

More than 20 years, but not more than 22 years before

Due date 0.92

More than 22 years before the due date

payment of 1.00

APPENDIX 3

Allocation and withdrawal of loan funds

The general part

-----------

1. The table attached to this Appendix contains

The categories of goods, services, and other items to be financed and the Loan funds, and the distribution of Loan amounts by each Category (hereinafter referred to as the Table). (The reference to "Category" or "Categories" in this Appendix refers to the Category or Categories of the Table).

Taxes

------

2. No funds are withdrawn from the loan account in respect of

no local taxes.

Bank financing interest

------------------------------

3. The Category items listed in the Table will be financed from the Loan funds based on the interest shown in the Table below, unless otherwise agreed with the Bank.

4. Notwithstanding paragraph 5 of this Annex, any contract awarded to a local supplier after an international competitive bidding process in accordance with the relevant provisions of Annex 4 to this Loan Agreement shall be financed from the loan on the following basis: (a) if the products purchased from a local supplier are locally produced, 100% of the cost of the ex-factory supplied products will be financed (excluding any taxes): and (b) if the products purchased from a local supplier were fully imported, then the currency component of the contract price is financed.

Local expenses ---------------  

5. (a) Loan funds up to an amount equivalent to $8.6million may be withdrawn from the loan account in foreign currency for the purpose of financing local expenses. (b) Unless specifically provided for in this paragraph and specifically agreed with the Bank, no amounts will be deducted from the loan account in respect of any local Project costs. Interest and commission fee ----------------------------  

6. The amount allocated to Category 4 is intended to finance interest and commission on the Loan during the Project implementation period. The Bank will have the right to withdraw from the loan account and pay itself, on behalf of the Borrower, the amounts required for payment, upon maturity, of interest and commission fees. Redistribution -----------------

7. Despite the allocation of the loan funds and interest withdrawals shown in the Table and subject to the terms of paragraph 5 of this Section. (a) if the loan amount allocated for any Category proves insufficient to finance all agreed expenses for that Category, the Bank may, by notifying the Borrower, (i) redistribute to that Category, to the extent necessary to cover a certain deficit, the Loan amounts that were allocated to another Category, but which, in the opinion of the Bank are not required for other expenses, and (ii) if such a reallocation cannot fully cover the calculated deficit, reduce the deductible percentage for such expenses, so that further withdrawals in this category can continue until all expenses in this Category have been incurred; (B) if the loan amount previously allocated to any Category,

exceeds all agreed expenses in this Category, the Bank may, by notifying the Borrower, redistribute such excess amount to any other Category.

Retroactive financing

----------------------------

8. Withdrawals from the loan account may be made to cover the allowable costs incurred under the Project prior to the effective date, but not earlier than July 1, in connection with the selection and hiring of consultants, subject to a maximum amount equivalent to $1,500,000.

Addendum to Appendix 3

table

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ALLOCATION AND WITHDRAWAL OF LOAN FUNDS

(Road Rehabilitation project)

--------------------------------------------------------------------

CATEGORY ! THE SHARE OF FINANCING BY THE BANK

--------------------------------------------------------------------

But-! Position !The allocated amount!A percentage!Grounds for withdrawal from

Mer! ! ($) ! ! Loan accounts

--------------------------------------------------------------------

Dorozhnostro- ! 27 000 000 ! 75 ! percentage of total expenses*

it is necessary ! !------ !-------------------------

jobs ! ! !(54% - in foreign currency

! ! !currency, 24% - in local currency

! ! !currency)

-----------------!----------------!-------!-------------------------

Equipment! 5 500 000 ! 100 ! in a foreign currency

-----------------!----------------!-------!-------------------------

Consultation-! 4,800 000 ! 100 !share in foreign currency

excellent services ! !-------!-------------------------

! ! 79 !share in local currency

-----------------!----------------!-------!-------------------------

Percentages and ! 6 200 000 ! 100 !percentage of the amounts

commission fee ! ! !to be paid

collection ! ! !

-----------------!----------------!-------!-------------------------

Unallocated! 6 500 000 ! !

-----------------!----------------!-------!-------------------------

total: ! 50 000 000 ! !

--------------------------------------------------------------------

*The footnote. Exempt from local taxes.

APPENDIX 4 Procurement

1. Unless otherwise agreed with the Bank, the procedures referred to in the following paragraphs of this Annex will be applied to purchases of goods and services to be financed from the loan. The term "services" in this Appendix does not include consulting services.  

2. Purchases of goods and services are subject to the provisions of the "Asian Development Bank Loan Procurement Guidelines", updated from time to time, revised in January 1995, which was provided to the Borrower.

3. Purchases of goods and services are carried out without any restrictions in relation to or with preference to any particular supplier or contractor, or a particular class of suppliers or contractors, unless otherwise provided in paragraph 5 below.

4. (a) Each road rehabilitation contract and equipment supply contract will be awarded to review compliance with the terms of this Loan Agreement based on an international competitive bidding process as described in Chapter II of the Procurement Manual. Bidders for work contracts must be pre-selected prior to bidding. (B) For contracts awarded on the basis of international competitive bidding, the Bank is provided with a General Procurement Notice as soon as possible and in any case no later than 90 days before the publication of either the first pre-selection invitation or the first invitation to participate in the competitive bidding for the Project (which the Bank will publish separately) in such form, with such details, and with the content of such information as the Bank reasonably requests. The Bank is provided annually with the necessary information to update such a General Procurement Notice as soon as it is necessary to purchase any goods or works based on international competitive bidding. (c) For contracts awarded through international competitive bidding, procurement activities are subject to review by the Bank and in accordance with the procedures set out in Chapter IV of the Procurement Manual. Each draft pre-selection invitation and draft invitation to international competitive bidding submitted to the Bank for approval in accordance with such procedures is received by the Bank at least 42 days before publication and contains such information so that the Bank can arrange for a separate publication of such invitation.  

5. When comparing local bids with foreign bids according to the system of international competitive bidding, limits of preferences may be provided for the Borrower's choice and in accordance with the provisions of the Addendum to this Annex for goods produced in Kazakhstan, provided that the bidder offering such goods confirms to the satisfaction of the Borrower and the Bank that the added value is at least 20% of the ex-factory price for such goods specified in the tender offer. 6. The road maintenance works to be financed by the Borrower, with an estimated cost equivalent to $13,500,000, will be carried out by the Project Agency based on the current invoice. Addendum to Appendix 4 (Page 1) Preference for domestically produced goods ----------------------------------------------------- 1. When purchasing goods through international competitive bidding, preference limits are set for goods manufactured in the Borrower's country in accordance with the following provisions, provided that the bidder confirms to the satisfaction of the Borrower and the Bank that the value added is at least 20% of the ex-factory price indicated in the tender offer. (a) In order to apply the preference for domestically produced goods, all eligible bids are first classified into the following three categories: (i) Category I: bids for goods manufactured in the Borrower's country that meet the minimum value added requirement; (ii) Category II: bids for other goods, manufactured in the Borrower's country; (iii) Category III: bids offering imported goods. (b) The lowest bid in each category is then determined by comparing all prices within each Category, excluding customs duties and other import taxes imposed in connection with importation, sales taxes and similar taxes imposed in connection with the sale or delivery of goods under the terms of the bid. (c) Such bids with the lowest price are further compared with each other, and if, as a result of such comparison, the price in Category I or Category II turns out to be the lowest, it is selected for the conclusion of the contract. (d) If, however, as a result of the comparison under subparagraph (c) above, the lowest price turns out to be in category III, then it is further compared with the lowest bid from Category I. Only for the purpose of further comparison, the lowest price in Category III is adjusted upward by adding either: (i) the amount of customs duties and other import taxes that an importer who is not exempt from payment must pay for the import of goods offered in category III: or

Addendum to Appendix 4

--------------------------

(Page 2)

(ii) 15% of the CIF bid price for such goods if the customs duties and import taxes referred to in paragraph (i) above exceed 15% of the CIF bid price. If, after such a comparison, the bid from Category I has the lowest price, then it is selected for the award of the contract: otherwise, the contract is awarded to the bid with the lowest price from Category III. 2. Bidders applying for a preference must provide the necessary information to establish the right to a preference, including the minimum value added. 3. The bidding documents must contain a clear description

the preference provided, the information necessary to establish the right of this competitive offer to preference, and the procedures that should be followed when comparing the prices offered, i.e. everything as described above.

APPENDIX 5

Consultants

1. The services of consultants are used in the implementation of the Project, in particular in relation to:

(a) Detailed design;

(B) Construction supervision;

(d) control and evaluation of profits.

The contractual terms of the consultants are determined by agreement between the Borrower and the Bank.

2. The selection, recruitment and services of consultants are subject to the provisions of this Annex and the provisions of the "Guidelines on the Use of Consultants by the Asian Development Bank and its Borrowers" dated April 1979, as amended from time to time, which were provided to the Borrower.  

3. Consultants will be selected and hired by the Borrower in accordance with the following procedures. (a) An invitation to submit proposals. The invitation to submit proposals and all related documents are approved by the Bank prior to their publication. For this purpose, three copies of the draft invitation for proposals, the list of invited consultants, the proposed criteria for evaluating proposals and other related documents are submitted to the Bank. A period of at least 45 days is provided for making proposals. A copy of the final invitation, together with all related documents, is provided to the Bank for information immediately after the issue. (B) Draft contract. The draft contract with the consultants must be submitted to the Bank for approval long enough before the start of the evaluation of proposals. (c) Proposals for selection. After evaluating the proposals received and before starting negotiations with the consultants selected for the negotiations, the approval of the choice made by the Bank must be obtained. For this purpose, three copies of (i) the evaluation of proposals (together with one set of each proposal not previously provided to the Bank) are provided to the Bank immediately after the evaluation of proposals; (ii) justification of the choice. (d) Execution of the contract. After the negotiations are completed, but before the contract is signed. The Bank is provided with (i) a negotiated contract for approval, and (ii) an evaluation of the proposals. Immediately after signing the contract, the Bank is provided with three copies of the signed contract. If any significant addition to the contract is proposed after its initialing, the proposed amendments are provided to the Bank for prior approval.

APPENDIX 6

Project Execution and action

Project equipment; other issues

IMPLEMENTATION MEASURES

A. Project Execution

---------------------

1. (a) The Project Implementation Management Group (RIU), based under the Department of Roads, will be responsible for the daily implementation of the Project and ensure the necessary contact between the DD, contractors, suppliers and the Bank. The Project Manager, appointed by the DD, will act as the head of the RIU, and must at all times have the support of a sufficient number of qualified road engineers, logistics and soil engineers, bridge engineers, and related financial and other employees. (B) The borrower before March 31, 1997 should establish an appropriately staffed Operations Implementation Office (MIU), headed by an Operations Manager, to carry out the Project's operational activities and to assist the PIU in the day-to-day execution of the Project. (c) The Borrower must ensure that the PIU and MIU are appropriately staffed throughout the duration of the Project and that they are assisted by consultants who must be hired to provide detailed design, construction supervision, and assistance in the maintenance and operation of the road.

B. The Project's Supervisory Committee

---------------------------------

2. The Project Supervisory Committee (NCC), founded by the Ministry of Transport, should exist during the Project period and will (i) monitor and coordinate all Project activities, including contact between agencies involved in the Project and sectoral reforms agreed with the Bank: (ii) review the status of the Project: (iii) monitor progress and resolve difficulties encountered: (iv) serve as a meeting to discuss and review the impact of the Project on the development of the region: The NCP will be headed by the Minister of Transport and Communications, or his representative, and its members will include the Director of the DD, the Project Manager, and representatives from the KIIC and the Ministry of Economy, NCP

It must meet at least twice a year, and more frequently if necessary.

REIMBURSEMENT OF PRODUCTION COSTS

3. By June 30, 1998, the borrower, taking into account the recommendations of the technical assistance consultants, will take appropriate measures to improve the reimbursement of production costs by road users.

OTHER ISSUES

A. Profit control and valuation

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4. The Borrower, with the help of consultants who will be hired within the framework of the Project, (a) will establish a profit monitoring and evaluation system for recording basic data, including traffic data, and collecting statistical data for profit monitoring.

To the Project: and (B) oblige the DD to evaluate the profits from the Project, monitor and report on the physical, financial, economic and social aspects of the Project during implementation The project.

B. Interim review

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5. The Borrower and the Bank will conduct an interim review of the Project in 1998. The main objectives of the review will be:

(a) review the progress made by the Borrower in implementing sectoral reforms;

(B) verify the Project's completion and determine compliance with the required standards;

the loan.

C. Environmental protection

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6. The Borrower (i) guarantees the inclusion of appropriate environmental protection and safety measures in the development of the Project; and (ii) will carry out the Project, use and operate the Project equipment in accordance with the Initial Environmental Assessment prepared within the framework of Technical Assistance funded by the Bank (T.P.No. 2285-KAZ: Preparation of a Road Rehabilitation Program), and the Bank's "Environmental Protection Guidelines for Selected Infrastructure Projects." IV. POLICY ISSUES

A. Regulatory reforms

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7. The borrower must, by June 30, 1997, establish a Committee on Legal Reforms in the Transport Sector (CRTC), which, with the assistance of consultants funded through Technical Advisory Assistance, (i) will bring the existing Road Legislation into line with modern standards and submit it to Parliament; (ii) issue instructions relevant to The Regulation on Policy in the Road Sector (PPDS); (iii) undertake a comprehensive review of the existing legislation in the transport and road sectors, and make any additions required to ensure compliance with the revised Road Legislation and PPDS. 8. The CPTC will be headed by the Minister of Transport and Communications or his representative, and its members will include representatives of the Ministry of Justice, the Ministry of Justice, the Ministry of Justice and one member of the Parliamentary Standing Committee on Transport and Communications.

B. Sectoral reforms

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9. The borrower must, by December 31, 1997, oblige the Ministry of Transport to establish a National Advisory Committee on Transport (NCT), as required by the PPDS, the NCT will be headed by the ITC or its representative, and its members will include representatives of the Ministry of Energy, DD, DAT, state transport enterprises and the private sector.

President

Republic of Kazakhstan

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