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                                                           CONFORMED COPY                                                      LOAN NUMBER 3828 KO                          PUTA Project Agreement                (Pusan Urban Transport Management Project)                                  between                   INTERNATIONAL BANK FOR RECONSTRUCTION                              AND DEVELOPMENT                                    and                       PUSAN URBAN TRANSIT AUTHORITY                            Dated March 3, 1995                                                      LOAN NUMBER 3828 KO                          PUTA PROJECT AGREEMENT    AGREEMENT, dated March 3, 1995, between INTERNATIONAL BANKFOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and PUSAN URBANTRANSIT AUTHORITY (PUTA).    WHEREAS (A) by the Loan Agreement of even date herewithbetween Republic of Korea (the Borrower) and the Bank, the Bankhas agreed to make available to the Borrower an amount invarious currencies equivalent to one hundred million dollars($100,000,000), on the terms and conditions set forth in theLoan Agreement, but only on condition that PUTA agree toundertake such obligations toward the Bank as are set forth inthis Agreement;    (B) by a subsidiary loan agreement to be entered intobetween the Borrower and PUTA, a portion of the proceeds of theloan provided for under the Loan Agreement will be relent toPUTA on the terms and conditions set forth in said SubsidiaryLoan Agreement; and    WHEREAS PUTA, in consideration of the Bank’s entering intothe Loan Agreement with the Borrower, has agreed to undertakethe obligations set forth in this Agreement;Public Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure Authorized    NOW THEREFORE the parties hereto hereby agree as follows:                                 ARTICLE I                                Definitions    Section 1.01. Unless the context otherwise requires, theseveral terms defined in the Loan Agreement and the GeneralConditions (as so defined) have the respective meanings thereinset forth.                                ARTICLE II                         Execution of the Project    Section 2.01. PUTA declares its commitment to the objectivesof the Project as set forth in Schedule 1 to the LoanAgreement, and, to this end, shall carry out Part B of theProject with due diligence and efficiency and in conformitywith appropriate administrative, financial, engineering,transport and environmental practices, and shall provide, orcause to be provided, promptly as needed, the funds,facilities, services and other resources required for Part B ofthe Project.    Section 2.02. Except as the Bank shall otherwise agree,procurement of the goods and consultants’ services required forPart B of the Project and to be financed out of the proceeds ofthe Loan shall be governed by the provisions of the Schedule tothis Agreement.    Section 2.03. PUTA shall carry out the obligations set forthin Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of theGeneral Conditions (relating to insurance, use of goods andservices, plans and schedules, records and reports, maintenanceand land acquisition, respectively) in respect of the ProjectAgreement and Part B of the Project.    Section 2.04. PUTA shall duly perform all its obligationsunder the PUTA Subsidiary Loan Agreement. Except as the Bankshall otherwise agree, PUTA shall not take or concur in anyaction which would have the effect of amending, abrogating,assigning or waiving the PUTA Subsidiary Loan Agreement or anyprovision thereof.    Section 2.05. (a) PUTA shall, at the request of the Bank,exchange views with the Bank with regard to the progress ofPart B of the project, the performance of its obligations underthis Agreement and under the PUTA Subsidiary Loan Agreement,and other matters relating to the purposes of the Loan.    (b)   PUTA shall promptly inform the Bank of any conditionwhich interferes or threatens to interfere with the progress ofPart B of the Project, the accomplishment of the purposes ofthe Loan, or the performance by PUTA of its obligations underthis Agreement and under the PUTA Subsidiary Loan Agreement.    Section 2.06. PUTA shall, by April 30 of each year,commencing on April 30, 1995, prepare and furnish to the Bankfor its review and comments a report of such scope and suchdetail as the Bank shall reasonable request, on theenvironmental impact of the operation of Line 1 andconstruction and operation of Phase I/ Line 2 of the Pusan CitySubway System, including  implementation of the environmentalmitigation measures identified in the Environmental ImpactAssessment prepared by PUTA and approved by the Borrower’sMinistry of Environment on October 28, 1991.    Section 2.07. By March 31, 1996, PUTA shall:    (a) in coordination with the Borrower’s Ministry of Financeand Economic Planning Board and under the overall supervisionof MOT, carry out a study to identify alternative long-termfinancing strategies for undertaking subway projects in PusanCity; and    (b) in coordination with Pusan City and under the overallsupervision of MOT, carry out the study under Part B (ii) ofthe Project.                                ARTICLE III                     Management and Operations of PUTA    Section 3.01. PUTA shall carry on its operations and conductits affairs in accordance with sound administrative, financial,engineering, transport and environmental practices under thesupervision of qualified and experienced management assisted bycompetent staff in adequate numbers.    Section 3.02. PUTA shall at all times operate and maintainits plant, machinery, equipment and other property, and fromtime to time, promptly as needed, make all necessary repairsand renewals thereof, all in accordance with sound engineering,financial, transport and environmental practices.    Section 3.03. PUTA shall take out and maintain withresponsible insurers, or make other provision satisfactory tothe Bank for, insurance against such risks and in such amountsas shall be consistent with appropriate practice.                                ARTICLE IV                            Financial Covenants      Section 4.01. PUTA shall maintain procedures and recordsadequate to: (a) monitor and record the progress of Part B ofthe Project (including its cost and the benefits to be derivedfrom it); and (b) to reflect in accordance with consistentlymaintained sound accounting practices the operations andfinancial condition of PUTA.      Section 4.02. PUTA shall:      (i)       have its records, accounts and financial                statements (balance sheets, statements of income                and expenses and related statements), including                the records and accounts referred to in Section                4.01 of this Agreement, for each fiscal year                audited in accordance with sound auditing                principles consistently applied, by independent                auditors acceptable to the Bank;      (ii)      furnish to the Bank, as soon as available but in                any case not later than six months after the end                of each such year: (A) certified copies of said                financial statements for such year as so audited;                and (B) the report of such audit by said                auditors, of such scope and in such detail as the                Bank shall have reasonably requested; and      (iii)     furnish to the Bank such other information                concerning the said records, accounts and                financial statements and the audit thereof as the                Bank shall from time to time reasonably request.    Section 4.03. (a) Except as the Bank shall otherwise agree,PUTA shall produce for each of its fiscal years after itsfiscal year ending on December 31, 1995, total operatingrevenues equivalent to not less than the total operatingexpenses.    (b)   For the purposes of this Section:          (i)   The term "total operating revenues" means                revenues from the system riders’ fares plus                revenues from advertizing in the subway stations                and railcars.         (ii)   The term "total operating expenses" means all                expenses related to operations, including                salaries, administration, adequate maintenance,                materials, fuel, depreciation of equipment and                rolling stock, taxes and payments in lieu of                taxes, and a reserve for the replacement of                equipment and rolling stock.    Section 4.04.  PUTA shall by October 31 of each year,commencing on October 31, 1995 and thereafter, exchange viewswith the Bank on its proposed annual debt management plan, andinvestment plan and budget for its forthcoming fiscal year, andthereafter, taking into account the Bank’s comments, finalizesuch plans and budget.                                 ARTICLE V                       Effective Date; Termination;                        Cancellation and Suspension    Section 5.01. This Agreement shall come into force andeffect on the date upon which the Loan Agreement becomeseffective.    Section 5.02. This Agreement and all obligations of the Bankand of PUTA thereunder shall terminate on the date on which theLoan Agreement shall terminate in accordance with its terms,and the Bank shall promptly notify PUTA thereof.    Section 5.03. All the provisions of this Agreement shallcontinue in full force and effect notwithstanding anycancellation or suspension under the General Conditions.                                ARTICLE VI                         Miscellaneous Provisions    Section 6.01. Any notice or request required or permitted tobe given or made under this Agreement and any agreement betweenthe parties contemplated by this Agreement shall be in writing.Such notice or request shall be deemed to have been duly givenor made when it shall be delivered by hand or by mail,telegram, cable, telex or radiogram to the party to which it isrequired or permitted to be given or made at such party’saddress hereinafter specified or at such other address as suchparty shall have designated by notice to the party giving suchnotice or making such request. The addresses so specified are:    For the Bank:          International Bank for            Reconstruction and Development          1818 H Street, N.W.          Washington, D.C. 20433          United States of America          Cable address:                 Telex:                INTBAFRAD                      248423 (RCA)                Washington, D.C.               82987 (FTCC)                                               64145 (WUI) or                                               197688 (TRT)    For PUTA:          Pusan Urban Transit Authority          861-1 Beomchun-Dong          Pusanjin-Gu          Pusan, Korea    Section 6.02. Any action required or permitted to be taken,and any document required or permitted to be executed, underthis Agreement on behalf of PUTA may be taken or executed byits Chairman of the Board of Directors or such other person orpersons as the Chairman of the Board of Directors shalldesignate in writing, and PUTA shall furnish to the Banksufficient evidence of the authority and the authenticatedspecimen signature of each such person.    Section 6.03. This Agreement may be executed in severalcounterparts, each of which shall be an original, and allcollectively but one instrument.    IN WITNESS WHEREOF, the parties hereto, acting through theirduly authorized representatives, have caused this Agreement tobe signed in their respective names in the District ofColumbia, United States of America, as of the day and yearfirst above written.                             INTERNATIONAL BANK FOR                               RECONSTRUCTION AND DEVELOPMENT                             By /s/ Russell Cheetham                                                  Regional Vice President                                                   East Asia and Pacific                             PUSAN URBAN TRANSIT AUTHORITY                             By /s/ Shin Myoung Ho                                                Authorized Representative                                 SCHEDULE                   Procurement and Consultants’ ServicesSection I.  Procurement of GoodsPart A: International Competitive Bidding1.        Rail cars shall be procured under contracts awarded inaccordance with procedures consistent with those set forth inSections I and II of the "Guidelines for Procurement under IBRDLoans and IDA Credits" published by the Bank in May 1992 (theGuidelines).    (a)   When contract award is delayed beyond the original bidvalidity period, such period may be extended once, subject toand in accordance with the provisions of paragraph 2.59 of theGuidelines, by the minimum amount of time required to completethe evaluation, obtain necessary approvals and clearances andaward the contract. The bid validity period may be extended asecond time only if the bidding documents or the request forextension shall provide for appropriate adjustment of the bidprice to reflect changes in the cost of inputs for the contractover the period of extension. Such an increase in the bid priceshall not be taken into account in the bid evaluation. Withrespect to each contract made subject to the Bank’s priorreview in accordance with the provisions of Part C.1 (a) ofthis Section, the Bank’s prior approval will be required for:    (i)   a first extension of the bid validity period if the          period of extension exceeds sixty (60) days; and    (ii)  any subsequent extension of the bid validity period.    (b)   In the procurement of rail cars in accordance with thisPart A, PUTA shall use the relevant standard bidding documentsissued by the Bank, with such modifications thereto as the Bankshall have agreed to be necessary for the purposes of theProject.  Where no relevant standard bidding documents havebeen issued by the Bank, PUTA shall use bidding documents basedon other internationally recognized standard forms agreed withthe Bank.Part B: Preference for Domestic Manufacturers    In the procurement of rail cars in accordance with theprocedures described in Part A.1 hereof, goods manufactured inthe Republic of Korea may be granted a margin of preference inaccordance with, and subject to, the provisions of paragraphs2.55 and 2.56 of the Guidelines and paragraphs 1 through 4 ofAppendix 2 thereto.Part C: Review by the Bank of Procurement Decisions1.        Review of invitations to bid and of proposed awards andfinal contracts:    (a)   With respect to each contract for rail cars estimatedto cost the equivalent of $200,000 or more, the procedures setforth in paragraphs 2 and 4 of Appendix 1 to the Guidelinesshall apply.    (b)   With respect to each contract not governed by thepreceding paragraph, the procedures set forth in paragraphs 3and 4 of Appendix 1 to the Guidelines shall apply.2.        The figure of 15% is hereby specified for purposes ofparagraph 4 of Appendix 1 to the Guidelines.Section II. Employment of Consultants1.  In order to assist PUTA in carrying out Part B of theProject, PUTA shall employ consultants whose qualifications,experience and terms and conditions of employment shall besatisfactory to the Bank. Such consultants shall be selected inaccordance with principles and procedures satisfactory to theBank on the basis of the "Guidelines for the Use of Consultantsby World Bank Borrowers and by the World Bank as ExecutingAgency" published by the Bank in August 1981 (the ConsultantGuidelines). For complex, time-based assignments, PUTA shallemploy such consultants under contracts using the standard formof contract for consultants’ services issued by the Bank, withsuch modifications as shall have been agreed by the Bank. Whereno relevant standard contract documents have been issued by theBank, PUTA shall use other standard forms agreed with the Bank.2.  Notwithstanding the provisions of paragraph 1 of thisSection, the provisions of the Consultant Guidelines requiringprior Bank review or approval of budgets, short lists,selection procedures, letters of invitation, proposals,evaluation reports and contracts shall not apply to: (a)contracts for the employment of consulting firms estimated tocost less than $100,000 equivalent each; (b) contracts for theemployment of individuals estimated to cost less than $50,000equivalent each. However, this exceptions to prior Bank reviewshall not apply to: (i) the terms of reference for suchcontracts; (ii) single source selection of consulting firms;(iii) assignments of a critical nature, as reasonablydetermined by the Bank; (iv) amendments to contracts foremployment of consulting firms raising the contract value to$100,000 equivalent or above; or (v) amendments to contractsfor employment of individual consultants raising the contractvalue to $50,000 equivalent or above.

PUTA project agreement (Pusan urban transport management project) between International Bank for Reconstruction and Development and Pusan urban transit authority

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PUTA project agreement (Pusan urban transport management project) between International Bank for Reconstruction and Development and Pusan urban transit authority

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