Selanjutnya
/ .
I
A.I . D. Loan No.
497 -U- 043
LOAN AGREEMENT
(Indonesia:
Rural Sani tation Manpower Development)
between the
GOVERNMENT OF THE REPUBLIC OF INDONESIA
and the
GOVERNMENT OF THE UNITED STATES OF AMERICA
Da ted :
October 28 , 197 6
TABLE OF CONTENTS
ARTICLE AND SECTION
ARTICLE I
TITLE
PAGE
The Loan
Section 1 . 01 - The Loan . ...•.•. . ... . . . . . . . . . . . . . . . . • . . . . •
Section 1 . 02 - The Projec t . . . . . . . . . . . . . . . . .. . •...........
ARTICLE II
2
2
3
3
3
Conditions Precedent to Disbursement
Section 3 . 0 1 - Conditions Precedent to Initial Disbursement
or Reimburseme nt. . . . . . . . . . . .... . .. . .......
Section 3 . 02 - Conditions Precedent to Disbursement or
Reimbursement for Procurement of Any
Offshore Goods and Services ... . .. .. ..... . .
Section 3 . 03 - Conditions P recedent to Commencement
of Construction. . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 3 . 04 - Terminal Dates for Meeting Conditions
Precedent to In itial Disbursement or
Reimbursement ..... .. .... .. .... . .... . . .. . . .
Section 3 . 05 - Notification of Meet i ng of Conditions
Precedent to I n it ial Disburs e ment or
Rei1nbursement ... . . . . . . . . • . . . . . • . . . . . . . . . . .
ART ICLE IV
1
Loan Terms
Section 2 . 01 - Interest . . . . . . . .. . .... . ..... .. . . . . . . . . . ...
Section 2 . 02 - Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 2 . 03 - Application , Currency and Place of
Payment . . . . . . . . . .. .. . . ... . . . . . . . . . . . . . . ...
Section 2 . 04 - Prepayment . . . . . . . . . . . . . . . . . . . . . . ..... . ....
Section 2 . 05 - Re negotiatio n of t he Terms of the Loan ....
ARTICLE III
l
3
4
5
5
6
General Cove nants and Warranties
Section 4.01 - General Execution Covenants . . . . . . . . . . . . . ..
Section 4.02 - Funds and Other Resources to be
Provide d by the Borrower. . . . . . . . . . . .......
Section 4 . 03 - Commenc e ment of Construction for
Reimbur s able Units of Wo rk . . . . . . . . . . . . . ...
Section 4.04 - Continuing Consultat i on . .. . .. . . . . . . . . . .. . .
Section 4 . 05 - Management ...... . .... ... . . . . . . . . . . . . . . . . . .
Section 4 . 06 - Operation and Ma i n t e n ance . . . . . . . . . . . . . . . . .
Section 4 . 07 - Taxa tion .. .. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .
Sec tion 4 . 08 - Utilization o f Goods and Services . . . . . . . . .
Section 4 . 09 - Disclosure of Mater ja l Facts and
Circumstances .. . . . . • . . . . . . . . • . . . . . . . . . . . . .
Section 4 . 10 - Commissions , Fees and Other Payme nts . . .. . .
Section 4 . 11 - Maintenance and Audit of Records .. ... •. .. .
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6
7
7
8
8
8
8
9
9
10
11
ARTI CLE AND SECTI ON
T I TLE
PAGE
Section 4 . 1 2 - Reports .....•...••...•.....•..............
Section 4 . 13 - I nspections ........•.......... . ••.••......
ARTICLE V
P ro curement
Section 5 . 01 - Procurement with Loan Funds . . . . . . . . . . . . . . .
Section 5 . 02 - Eligib ility Date ...••....•......•. . .......
Secti on 5 . 03 - Implementation of Procurement and
Reimbursement Requirements ..•.............
Section 5 . 04 - Plans , Specificatio ns , and Contracts ......
Section 5 . 05 - Reasonable Price .....•....••....•..•.....•
Section 5 . 06 - Shipping a n d Insurance . . . . . . . . . . . . . . . . . . . .
Section 5 . 07 - Port Cha i ges ........••...•.....•... .. .....
Section 5 . 08 - Notifica ti on to Potential Suppliers .......
Section 5 . 09 - In fo rmation and Marking ...•. .. ....... . ....
ARTICLE VI
Section
Section
Section
Se ctio n
Sect ion
12
12
14
14
16
16
16
16
17
19
19
19
Cance l lation and Suspension
Section 7.01 - Cancellation by t he Borrower .•............
Section 7 . 02 - Events o f Default; Acce l eration .........•.
Section 7 . 03 - Suspension of Disbursement or Reimburse ment . . . . . . . . . . . . . . . . . . . . . . ... .... .........
Section 7 . 04 - Cancellation by A . I.D . . . . . . . . . . . . . . . .. ... .
Section 7 . 0 5 - Continued Effect i veness of Agreement ......
Section 7 . 06 - Refunds . ......•...•...... .. .... . ....•.....
Section 7 . 07 - Expens es of Collection .......• .... ..•.....
Section 7 . 08 -- Nonwaive r of Remedies . . . . . . . . . . . . . ........
ARTI CLE VIII
12
12
Disbursement an d Reimbursement
Section 6 . 0 1 - Disbursement fo r Un it ed States Dollar Costs
Letters of Commitment to Unit e d States
Banks .... . . . . . . • . . . . . . . . . • . . . . . . . . • . . . • . . .
Sectio n 6 . 02 - Re i mbursement fo r Pr edete rm ined Costs fo r
Units of Work or Training Comp l eted ....••.
Section 6 . 03 - Other Forms of Disbursement . . • . . . . . . . . . . .
Sect io n 6 . 04 - Date of Disburse inen t. . . . . . . . . . . . . . . . . . . . . .
Section 6 . 05 - Terminal Date for Disbursement ....•.•.....
ARTI CLE VII
11
11
20
20
21
22
22
22
24
24
Miscellaneous
8 . 01
8 . 02
8.03
8 . 04
8 . 05
-
Communications .••.•.•..•.••.•.............
Representatives ....... . •...•... . ..........
Impl e mentation Letters . . . . . . . . . . ... .......
Promissory Notes ....• ..• • .. .. ......... ....
Termination Upon Full Payment .. .. ... ......
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24
25
25
25
26
I
LOAN AGREEMENT dated
between the REPUBL IC OF
INDONES il\ ( "Borrower " ) and the UNITED STATES OF AMERICA , acting through
the AGENCY FOR INTERNATIONAL DEVELOPMENT ( "A. I . D. " ) .
ARTICLE I
The Loan
SECTI ON 1.01 .
The Lo a n .
A. I.D . agrees to lend to the
Borrower pursuant to the Foreig n Assistance Ac t of 1961 , as amended ,
an amount not to exceed Six Million Eight Hundred Thousand Dollars
($6 , 800 , 000)
("Loan") to assist the Borrower in carrying out th t:
Project referred to in Sect ion 1 . 02 ( "Project") .
The Loan shall be
used exclusively to f inance the United States dollar costs ("Doll ar
Costs " ) of goods and services to be listed in Implementati on Letters
referred to i n Section 8 . 03
( " Implementation Letters " ) , and part of
the local currency costs o f goo ds and services requir ed for the
Project ( "Lo ca l Currency Costs") .
The aggregate amount of di sburse -
ments under the Loan is hereinafter r eferred to as "Principal. "
SECTION 1 . 02 .
The Project .
The Project sha l l c o nsist of
assistance to t he Ministry of Health (MOH ) in carrying out a manpowe r
development training program aimed at developing a s ys tem that wil l
allow Indones ia to meet its quantitative and qualitative manpower
r-
needs for professional; supervisory - level , and techni ca l , f ieldl evel workers (Sanitation Technologists and Sanitarians ) to implement
the Government of Indonesia rural water supply/sanitation program.
Out of the existing educational system for rural sanitarians , two
Schools for Sanitation Technol ogists and nine School s for Sanitarians
having esti mated annua l outputs of 100 and 360 graduates, resp ect ively,
will be es tablished.
Instructors fo r these institutions will receive
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upgrading training .
All existing MOH personnel engaged in rural
environmental sanitation programs wi ll likewise rec eive S?ec ial training to improve their knowledge and skills so that they may perform
the ir responsibilit ies more effective ly.
The total Project budget
will not be le ss than the Rupiah equival en t o f fourteen million
,......
United States dollars ($14,000 , 000) , o f which the Borrower shall
provide not less than the Rupiah equ ivalent of seven mi llion, two
hundred tho usand United States dollars ($7 , 200 , 000 ) .
ARTICLE II
Loan Terms
SECTI ON 2.01.
Interest .
The Borrower shall pay t o A. I . D.
interest which shall accrue at the rate o f two percent (2%) per
annum for ten years following the date of th e first disbursement
hereund e r and at the rate of three perce nt (3%) per annum t he reafter
on the outstanding balance of Principal and on any due and u npaid
interest .
Interest on the outstanding balance shall accrue from the
date of each respective disbursement (as such date is defin ed in
Section 6.04), and shall be computed on the basis of a 36 5 -day year .
Interest shall be payable semi - annually .
terest shall be payable s emi - annually .
The first payment of in Th e first payment of interest
shall be d ue and payable no la ter than six (6) months after the
_ f irst disbursement for Dollar Costs or reimbursement for Loca l Costs
h ereund e r, o n a date to be specified by A. I . D.
SECTION 2 . 02.
Repayment .
The Borrowe r shall repa y
ｾ ｯ＠
A.I.D. the Principal within fo rty (40) years from the da t e of th e
first disbursement or reimb u rsement hereunder in si xty -one (61)
approximately equal semi - annual installme nts of Principa l and
- 3-
interest.
The f i rst installment of Pri n cipal shall be payable nine
and one-half
ＨＹｾＩ＠
years a fter the date on which the fi rs t
payment is due in acco rdan ce with Section 2.01.
inte r est
A.I.D. shall provide
the Borrower with an amort i zation schedu l e in accordance with this
Sec tion after the final disbursement or r eimbursement u n der the
Loan.
SECTION 2.03 .
Application, Currency and Place of Payment .
All payments of interest and Principal he reunder shall be made in
Unit ed States dollars and shall be a pplied fir st to the paymen t of
i nterest due and then to the repayment o f Principal.
Except as
A. I.D. may otherwise specify in writing , a ll s uch payments shall be
made to the Controller , Agency for Interna ti o nal Development, Washing ton, D.C., U.S.A., a nd shall be deemed made when r eceived by the
Of fic e of the Controller .
SECTION 2 .0 4 .
Prepayment .
Upon payment of all in terest and
refunds then due , the Bo r rower may prepay , without penalty , all or
any part of the Principal .
Any such prepayment shall be applied to
the installments of Principal in the inv e r se order of their ma turity.
SECTION 2.05.
Renegotiation of the Terms of the Loan .
The
Borrower agrees to negotiate with A. I. D., at such time or tim e s a s
ｾ
A. I . D. may r equ est , a n acceleration of the repayment of the Lo 3 n in
ｴ ｨ･＠
event that the re is any significant improvement in the i nter nal
and external economic and fi n a ncial position and pro s pects o f the
Republic of Indonesia .
ARTI CLE III
Conditions Precedent to Disbursement or Reimburs e ment
SECTION 3 . 01 .
Conditions Precedent to Initial Disbu rs em e nt
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or Reimbursement .
Prior to the first disbursement or reimbursement
or to the issuance of the first Letter of Commi tment under the Loan ,
the Borrower shall , except as A.I . D. may otherwise agree in writing,
fur nish to A.I . D. in form and substance sat i sfactory to A. I.D . :
(a)
An opinion of the Minister of Justice o f the
Bo rrower that this Agreement has been dul y authorized and/or ratified
by , and executed on behalf of , the Borrower , and that it cons titutes
a valid and legally binding obligat ion of the Borrower in accordance
with all of it s terms;
(b)
A statement of the names of the persons holding
or acting in the office of the Borrower specifi ed in Section 8 . 02,
and a specimen signature of each person speci fied in such statement;
(c)
( i)
Written assurance that the est imated annual
expenditures (other t han t he costs to be fi nanced under the Loan)
for each year during which the Proj ect is being conducted will b e
made available to permit the work of the Project to proceed on a
timely basis ;
(ii)
a budgetary allocation for the Project for t he
Indonesian fiscal year 1976-77; and ( iii )
an approved payment
authorization for payment of Indo n es ian curren cy in th e amount required for the f i rst three months of Project operations ; a nd
(d)
A plan f or Proj e ct evaluat ion that identifi es
progress indicators to be measured ,
ｭ
･
ｾ ｮｳ＠
o f collecting base-line
data, methodology for verifying progress , timing o f evaluation , and
the orga nization respon s ibl e for eva luation .
SECTION 3.02 .
Conditions Precedent to Disbur sement o r
imbursement f or Procurement o f Any Offshor e Goods a nd Serv ice s .
ｒ
ｾＭ
Prior
to the procurement f or the Project of any goods and services hav ing
- 5both their sour ce and origin in Code 941 of the A. I . D. Geographic Code
Book , the Bor r ower , Ministry of Health , and A . I . D. s h al l revi e w and
approv e in writing the li sts o f items to b e procured a long with the ir
specifications , the description of serv i ces to be acquired , and
,__ estimated costs .
SECTI ON 3 .03 .
Construction .
Conditions Pr ecedent to Commencemen t o f
Prior to the commencement of cons t r uction of the
School f or Sanitarians and Sanitation Tech nologists f or which re imburseme nt wi ll be sought by the Borrowe r and t h e Ministry o f Hea l th
u n der t h e Loan , the Borrower and th e Ministry of Health sha l l
f urnish
to A.I . D. in form and substance satisfactory to A.I.D .:
(a)
Time phased i mpl ementation plan s e t t ing forth
de tail ed cost estimates 7
(b)
Site location and boundary surve y maps , together
with documentation indicating the entity in which l and ownership is
ves t ed;
(c)
Borrower ' s c onsulting and construction contractor
prequalification s tandards , Borrower ' s lists o f prequa lifi ed consulting
and cons t ruction contractors including a certification that all
contracto r s listed meet the applicab l e pr e qualif i catio n standards
of the Borrower approved by th e Borrower and A. I . D. , and J or rowe r's
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sta n dard cons ul ting and co ns truction contract f orms .
SECTION 3.04 .
Term i nal Dates for Meeting Conditions Preceden t
to Initial Disbursement or Reimbursement .
I f all of the conditions
specified in Section 3 . 0 1 have not been met within 12 0 days from the
date of this Agreement , or such l a ter dat e as A. I . D. may a g ree to in
writing , A.I . D., at its option , may ter minate this Ag r eement by giving
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wri t ten notice to t he Borrower . Upo n the giv i ng o f such notice , th is
Agreement and all obligations of the parties he r eunder sha ll terminate .
SECTION 3 . 05 .
Noti f i catio n of Meeting of Conditions Pre -
ced e n t to Initial Disbursement or Re i mbu r sement .
A. I. D. shall notify
the Borrower upon determinat ion by A. I . D. that the condit i ons specified
ｾ Ｍ
in Section 3 . 01 and 3 . 0 2 have been met .
ARTI CLE IV
Genera l Covenants and Warra nt i es
SECTION 4 . 01 .
(a)
General Execution Covenants .
The Borrower shall c arr y out t he Project or c ause
th e Proj ec t to be carried out , with due dil i gence and efficiency , a nd
in conform i t y wi th acceptable eng i n eering , constructi on , f i na ncial ,
administrative , techn ical and mana gement practices .
(b)
The Bor r owe r shall cause t he MOH to c a rry o ut th e
Project in confo rmity wi th al l o f the plans , specifications , c ontra cts,
schedul es , and othe r arrangements, and with all modifications t he r eto ,
appr o ved b y A. I. D. pur s uant to this Agreement .
(c)
Except a s A.I.D . may otherwise agre e , th e Borrower
shall ensure that at all times during the e xecutio n o f the Pr oj ec t
appropriate contracts , a cceptab l e to A . I . D., with consultants acce ptable
ｬＢＭｾ､
to A.I. D., are i n f orce and ef f ect for the provision o f techni cal
ｶｩｳｯｲ
ｹ＠
services needed for t he Project .
(d)
The Borrower sha l l ens ure that all f inanc ia l and
technica l suppor t required to effectivel y operate and main t ain t h e
schools constru cted und er t he Project shall be provided both dur ing
implementa tion and afte r c ompletion o f the Proj ect .
(e)
The Borrowe r s hall ensure tha t each stud e n t grad uate d
- 7from the Schools for Sanitarians and Sanitation Tech i.o l ogists will be
guaran teed a position within the Indonesian Government i n the general
field of sanitation.
(f)
The Borrower shall submit to A.I . D. , p romptly upon
prepa r ation , in fo rm and substance satisfactory to A.I.D. , job
descri p tions f or Sanitarians and Sanitation Technologists to be
uti l ized by the Ministry of Heal th.
SECTION 4.02 .
the Borrower .
Funds and Other Resources to be Provided by
The Borrower shall provide promptly as ne e ded all funds ,
in addition to the Loan, and all other resources required for the
pun c tual and effective carrying ou t , compl etio n, maintenance , repair ,
and ope ration of th e Project .
Notwithstanding any other provi s ion of
this Loan Agreement , the Borrower shall provide not less than 25% o f
the total cost o f goods and services to be u sed in the Proj e ct which
shall not be disbursed or reimbursed by A. I . D. in a n y form .
SECTION 4 . 0 3 .
Units of Work .
Commencement of Co nstru ction fo r Reimb u rsable
Prior to the commence men t of cons t ruct ion for any
unit of wo r k relating to the construction of school fac iliti es fo r
which r e imbursement will be 3ought by the Borrower under the Loan ,
th e Borrower shall provide to A . I . D. , and A.I.D . sha ll r eview and
approve in writing , the fi n a l plans , specifi c ations and cost estimate
f or the unit of work, and names o f the contrac tors and the co n rac t s
under which the work is to be performe d .
the cost estimate is reas o nable .
estimate shall become the ｰｲ･､ｴ
A.I .D. shall determine that
When approved by A.I . D., the co st
･ ｲｭｩｾ･､＠
cos t
for the unit of work to
which i t applies and on wr.ich r eimburs ement may be made pursuant to
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Section 6 . 02 .
Continuing Consultation .
SECTION 4.04 .
The Borrower , The
Ministry of Health and A. I . D. shal l coo perate f ully t o assure that
the purposes of the Loan will be accomplished .
To t h is en d , the
.-.Borrower, the c onsultan l s and A.I.D . shall from time to time , at t he
request of a n y party , exchange views through their r e pr e sentatives
with regard to the progress of th e Proj ect a nd i ts e ffec tiven ess , the
p e rformance by the Borrower and the Ministry of Health o f t heir obligations under this Agreement , the performance of the c onsultants ,
contractors , and suppliers e n gaged in the Project , and othe r matters
r e lating to th e Project .
SECTION 4 . 05 .
Management.
The Borrower and t he Ministry of
He alth shall provide quali fied and e xp e ri e nc ed mana gement for the Pro ject and t hey shall provid e such staff as may be appropriate f or the
maintenance and operat i on of the Project.
SECTION 4 . 06 .
Operation and Ma i ncenanc e .
Th e Borrower and
the Ministry o f Hea l th shall cau se the Pro ject when completed to be
ope rat ed , maintained , and repaired in con f ormity with
｡｣
｣ ｾ ｰｴ｡ ｢ｬ･＠
e ngi -
n ee ring, f inancial and a dmin i str a tive pra c c ices in such manner as to
e nsur e the c on t i n u ing and successful a chiev e me nt of the purposes of
th e Proj ect .
SECTION 4 . 07
Taxation .
Thi s
ａｧ
ｲ ･ｾ
Ｒ ｮｴ
Ｌ＠
thP Loan , an d an y
ev id ence o f indebtedness i s sued in connecti on herewith shall be free
fro m, and the Principal an d in te r est s hall b e p aid without de ducti on
f or a nd f r ee f rom , a ny taxation o r fees i mposed under the l a ws in
effect within Indonesia.
To t he ex tent tha t
(a) any expatriate con-
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Section 6 .0 2 .
Continuing Consultation .
SECTION 4 . 04 .
The Borrower , The
Ministry of Health and A . I.D . sha ll coo pe rate f ul ly t o assure that
th e purposes o f the Loan will b e accomplished .
.-Borrower , the
｣ ｯｮ
ｳｵｬｴ｡ｮ
ｾ ｳ＠
To this e n d , the
and A. I . D. shall f rom time to time , at the
r eq uest of a n y party , exchange vi ews through their representati v e s
with regard to the progress o f the Proj ect a nd i ts effec tiveness , the
p erformance by the Borrower and the Ministry of Hea l th of their obli gation s under th i s Agreemen t , the performance of the c onsultants ,
contractors , and suppl i ers engaged in the Proj e ct, and other matt e rs
r e la ting to the Pro ject .
Management .
SECTION 4 . 05 .
The Bor r ower and t h e Ministry o f
Health shall provide qualified and experienced management for th e Project and they shall provid e such staff as may be appr op r iate f or the
ma inte n ance and operation of the Project .
SECTION 4 . 06 .
Operation and Main ce n ance .
Th e Borrower and
the Ministry of Health shall cau s e the Pro ject when completed to be
operated , ma inta i ned , and repa i red i n conformity with
｡｣
｣ｾ
ｰｴ｡｢ｬ･＠
e ngi-
neering , financial a nd a dmi n istrative pra c c ices in s uch mann e r as to
e n sure the con t i n u ing and successful a ch ievement of the purpose s of
th e Project .
SECTION 4 . 07
Taxation .
This Agreew2nt , the Loan , and an y
ev i dence of indebtedness i s sued in conne ctio n he r ewith shall b e f ree
from , and the Pr incipa l and in terest shall be p aid without deduction
for and f ree from , any taxation or fees i mposed under the laws in
effect wi t hin I ndones ia .
To the ex t e n t tha t
(a ) any expatriate con-
- 9-
tractor , includin9 any expatriate university , any expa triate personne l
of such expatriate contractor financed hereunder , and any property or
transacti o ns relat i_ig to such contracts and (b) any fo reign commod ity
procurement t r ansa ction f i n anced hereunder , are n ot e xempt from iden ,. . . . tifiable taxes , tariffs , duties , and other levies imposed under laws
in effe c t in Indonesia , the Bor rower shall pay or reimburse t he same
under Section 4 . 02 of this Ag r eemen t with funds other than tho se proTaxes , t ariffs , duties , and other levi es imposed
vided under the Loan .
under l aws in effec t
in Indonesia on Indo nesian contracto r s , consul -
ta nts and cormnodity procurement transa c tions shall n ot be fi n a n ced
with funds provi ded unde r the Loan.
SECTION 4.08 .
Utilization of Goods and Services .
(a) Goods and serv i ces fin a nced tinder the Loan shall b e used
exclusively fo r the Project , except as A.I . D. may o the rw ise a0re e in
writing .
Upon completion of the Project , or at such oth er t ime as
g oods financed und e r the
Loan can n o longer be usefully employed for
the Project, the Bo rrower may u se s u ch goods in such ma nner as t o fur ther the objectives sought in carry i n g out the Project .
(b) Ex cept as A . I . D. may oth e rwise agree
1
writing, no good s
or services f inanced und er the Loan s h all be used to p r omote or a s sis t
-
any foreign a id projec t or activity associated wit h o r financed by a n y
countr y not incl u ded in Code 935 of the A. I .D . Geographic Co de Book
as in effect at the time o f s 1.!c h u se .
SECTION 4 .09
Di sclosure of Mate rial · Fa cts and Circums tances .
The Borrowe r r epr e s ents a nd wa r r ants that all facts a nd circumsta nces
that i t has dis closed or caus e d to be disc l os e d to A. I . D. in the
I
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course of obtaining the Loan are accurate and complete, and that it
has disclosed to A. I . D., accura tely and completely, all facts and
circumstances that might materially af fect the Pr oject and t !le dis charge of its obligations under this Agreement .
The Borrower shall
promptly inform A.I . D . of any facts and circumstances that may here after arise and might materially affect , or that it is reasonabl e to
b el ieve might materially affect , the Project or the discharge of the
Borrower ' s obligations under
SECTION 4 . 10 .
ｴｨ
ｾ ｳ＠
Agreement .
Commissions, Fees and Other Payments.
(a) Borrower warrants and covenants that in connection with
obtaining the Loan , or taking any action under or with respec t to
this Agreement , it has not paid, and will not pay or agree to pay , nor
to the best of its knowledge has there been paid nor will there be
paid or agreed to be paid by any other person or entity , commissions ,
fees , or other payments o f any kind, except as regu l ar compensation
to t he Borrower ' s full time officers and employees or as compensa tion
for bona fide pro fess ional , technical , or comparable services .
'fhe
Borrower shall promptly report to A. I . D. Any payment or agr een,ent to
pay for such bona f ide professional , technical, or comparable serv ices
to which it is a party or of which it has knv1 ledge (indicating whe ...- ther such payment has been made or is to be
made on a continge nt ba-
sis) , and if the amount o f any such payment i s deemed unreasonable by
A. I . D., the same shall be adjusted in a manner satisfactory to A. I . D.
(b) The Borrower warrants and covenants that no payments have
been or will be received by the Borrower or a ny official of the Borrower , in connection with the procurement of goods and services finance d
- 11he r eunder, except fees , t a xes, or similar payments legally established
in Indonesia .
SECTION 4.11.
Maintenance and Audit o f Records.
The Borrower and the Ministry of Health shall maintain , or cause to
.- be maintained, in accordance with sound accounting principles and
practices consistently applied , books and record s relating both to
the Project and to this Agreement .
Such books and records shall,
without limitation, be adequate to show:
(a) The
ｲｾ
｣･ｩｰｴ＠
and use made of goods and services acquired
with funds disbursed or reimbursed pursuant to this Agreeme nt;
(b) The nature and extent of solicitations of prospective
suppliers of goods and services acquired;
(c) The basis of the award of contracts and orders to
successful b idders; and
(d) The progress of the Project .
Such books and r ecords shall be annually audited , in accordance with
sound audit ing standards and shall be ma intained for f iv e years a f ter
the date of the l a st disbursement or r e i mb ur sement by A. I . D. or until
all sums due A.I.D. under this Agreement h ave been paid , whichever
date shall first occur .
SECTION 4 . 12 .
Reports.
The Borrowe r shall furnish to A. I.D.
r-such information and reports relating to t he Loan a nd to the Project
as A.I.D. may re as onably request .
SECTION 4.13.
Inspections .
The authoriz ed representatives
of the Borrower a nd A.I . D. s hall have the right at al l reasonable
times to inspect the Proj ect , the utilization of all goods and ser-
-12vices financed under the Loan, and the Borrower ' s books , records and
other documents relating to th e Project and the Loan.
The Borrower
and A. I.D. shall cooperate to facilitate inspections and travel of
their authorized representatives and the Borrower shall permit
representatives of A.I . D. to visit the proj ect area or a ny part of
Indonesia for any purpose relating to the Loan .
ARTICLE V
Procurement
SECTION 5 .01.
Procurement with Loan Funds .
Except as A. I . D.
may otherwise agree in writing, disbursements made pursuant to Secti on
6 . 01 shall be used exclusive ly to finance the procurement f or the
Project 0£ goods and services having both their source and origin in
countries included i n Code 941 of the A.I . D. Geographic Code Book as
in effect at the time or d o rs are placed for such goods .
SECTION 5.02 .
Eligibility Da t e.
Except as A. I . D. may other-
wise agree in writing , no d isbu rs ements f or goods or services may be
made und e r the Loan pursuant to orders or contracts f irmly placed or
entered into prior to the date o f th i s Ag reement and no r2 imbursement
may be made for any construction prior to t h '· satisfaction o f conditions
precedent set forth in Sections 3 . 01 , 3 . 03 , 4 . 03 and 6 . 02.
SE CT I 0 N 5 . 0 3 .
,.,....... rnent Requir eme nt s .
Implementati on o f Pro curement a nd Re imburse -
The definitions applicable to t he e li g ibility
requiremen ts of Section 5 . 01 will be set f or t h in d e tail in Implementation Le tt e rs.
SECTION 5.04 .
ｐｬ｡ｮｾ
Ｌ＠
Specifications and Contracts .
In order
for th e r e to be mutual agreement on the f ollowing matters, and except
as the Parties may otherwise agree in writing :
13(a)
The Borrower will furnish to A. I . D. upon preparation:
(1)
Any plans , specifications, procure ment o r c ons truc tion schedules , standard construction contr acts
o r othe r contracts and documentation r e l at in g to
goo ds or s e rvices to be financ ed by A. I.D., i n cluding documentation rela ting to t he prequalifi cation and selection o f contractors and to the
so l icitation of bids and proposals .
Material
modifications in such documentation will likew i se
be furnished A. I . D. on preparation;
(2 )
Such documentation will also be furnished to
A. I . D. , upon preparation, r e lating to any goods
or serv i c e s which, though not finance d by A. I. u . ,
are deemed by it to be of major i mportan ce to
the Project .
Aspects o f t h e Project involving
matters und e r th i s subsec t i o n
(a)
(2) will be
iden t i f ied in Impl e me n t ation Letters ;
(b )
Bid docume nts relat ed to the pre q ual i f icatio n of
con t r ac tors , and d ocuments relat ed to the solicitation of proposals
for g ood s and se rvices financed under the Loan wi ll be duly approved
by A. I . D. in writing prior to their issuance ;
,_
(c)
Contracts a nd contrac t ors finan ced by A. I . D. for
professional services , and for such other services as may be specif ield i n Imp l e me ntation Letters , will be duly approv e d by A.I . D. in
writing prior to execution o f the c ontra ct .
Mate ri a l mod i f i cat i ons
in such contracts wi l l also be duly approved in wr iting by A. I . D.
prior to e xe c ution .
-14-
SECTION 5 . 05 .
Reasonable Price .
No mo re t han reaso nable
pr i c es shall be paid for any g oods or services fi nanced in whole or
in part , under the Loan , as more fu lly describ ed in Implementation
Let ters.
Such items shall be p ro cured on a fair and on a competitive
basis in accordance with procedures therefor prescribed in Implementa tion Letters .
SECTION 5 . 06 .
(a)
Shipping and Insurance .
Goods procur ed fr om the Uni t ed States and fina n ced
under the Loan with disbu r sements mad e p urs uan t t o Section 6 . 01
shall be transported to Indonesia on flag ca r riers of any country
included in Code 93 5 of the A. I .D . Ge ograph ic Code Book as in effect
a t the time of shipment .
(b)
( 1)
Gross Tonnag e .
At least fifty percent (50%) of
the gross t onnage of all commodit i es (computed separately f or dr y
bulk carriers , dry cargo li ners and tankers) financed hereunder with
disbursements made pursuant to Sec t ion 6 . 01 which may be tran s ported on ocean vessels shall be transported on privately- owned
United States-flag commercial vessels .
(2 )
Revenue .
Additionally ,
at le a st f i fty percent (50%) of the gro s s freight r e ve n ue generated
by all sh i pments f inanced h e reunder with disbursement s made pursuant
to Sect i on 6 . 01 and transported to In d onesia on dry cargo liner3
,,.....sha ll be paid to or for the b e n e 1.t of privately-owned United
0
States-flag commercial vessels unless A. I . D. shall determine tha t
such vessels are not available at fai r and reasonabl e rates f or
U. S. - flag commercia l vessels .
(3)
Complianc e .
Compliance with the
requirements of (1) and (2) above must be achieved with £ espec t to
cargo transported from U. S . ports and also t o cargo transported f rom
-15non - U. S . ports and also to cargo transported from non - U. S. ports,
computed separately.
(4)
Reporting .
Within ninety (90) days fo llow-
ing the end of each calendar quarter , o r s uch other period as A. I . D.
may specify in writing, Borrower shall furnish A. I . D. with a state ment , in form and substance satisfactory to A. I . D. , reporting on
/-
compliance with the requirements of this Section .
(c)
(or aircraft)
No such goods may be transported on any ocean vessel
(1) which A.I . D. , in a notice to th e Borrower , has
designated as inel i g i ble to carry A. I . D. - f inanced goods or (2) which has
been chartered for the carriage of A.I . D. -f i nanced goods unless such
charter has been approved by A. I . D.
(d)
Marine insurance on goods financed unde r t he Loan
ma y a l so be financed under the Lo an wi th disbursements made pursuant
to Section 6.01 , provided (i) such insurance is p laced at t he lowest
available competitive r a te in Indonesia or in a country includeJ
in Code 941 of the A.I . D. Geographic Code Book as in effect at the
time of placemen t , and (ii) claims thereunder are payable in the
currency in which such goods were financed .
If the g overnment of the
Bor r ower, by statut e , decree, rule , regulat i on, or practice dis-criminates with respect to A. I . D. - f inanced procurement again st any
marine insurance company authorized to do business in any State of
r-the United States , then all goods shipped to the country of the
Borrower financed unde r the Loan shall be insured against marine
risks and such insurance shall be placed in the Unit ed States with a
company or companies authorized to do a ma rine insurance business in a
State of the United States.
-16SECTION 5.07 .
Po rt Charges.
With r espect to ocean freight
costs which qualify as eligible for financing under the Loan , and
except as A. I . D. may otherwis e agree in writin g , A. I.D . wil l fi nance
ni n ety percent (90%) o f all ocean f r eight cos t s o f each s hi pment ,
and ninety - eight percent (98%) of such costs on any shipment under
free-out terms .
The remaining ten percent (10%) , or two pe rcent
(2%) of fr ee-out s h ipments, represent po r t c harg es in Indonesia a nd
Borrower covenants that it shall make availabl e foreign exchange to
finance said port charges in accordance with procedures which may
be prescribed by A. I.D . in I mplemen tation Letters .
SECTION 5 . 08 .
Notification to Potential Su ppliers .
I n o rd e r
that all United States firms shall have the opportunity to parti.cipate
in fu rnish i ng goods and services to be financed under the Loan a s
Dollar Costs as defined in Section 5 . 01 , the Borrower shall furnish
to A. I . D. such information
ｷｩｴ
regard thereto , and at such time s ,
ｾ＠
as A. I . D. may request in Implementation Letters .
SECTI ON 5 . 09 .
Inforrra tion and Marking .
Borrower s ha ll giv e
pub l ic i ty t o the Loan and the Project as being assisted by United
States aid , identify the Subproject sites , and mark goods
ｦｾ
ｮ ｡ ｮ｣
･ ､＠
under the Loan , as prescribed in Implementation Letters .
ARTICLE VI
Disbursemen t and Rei mburs ement
SECTION 6 . 01.
Disbursement for United States Dol l ar Costs -
Letters of Commitment to United States Banks .
Upo n satisfaction of
conditions precedent pursuant to Sections 3.01 and 3 . 02, t h e Bo rrower
may , from time to time , r equest
ｾ
Ｎ ｉ
Ｎ ｄ
Ｎ＠
to issue Letters of Commitment
for specified amounts to one or more United States banks , satis fa ctory
- 17 to A.I.D. , committing A.I . D. to reimburse such bank or banks for pay ments made by
to consultants or suppl iers, through the use of
ｴｨ･ｾ＠
Letters of Credit or otherwis e , for Dollar Costs of goods and services
procured for the Project in accordance with th e terms and conditions
of this Agreement .
Payment by a bank to a consultant or s upplier
will be made by the bank upon presentation of such supporti n g
documentation as A. I . D. may pre scribe in Letters of Commitment and
Impl ementat ion Letters .
Banking charges incurred in connection
with Letters of Commitment and Letters of Credit sha ll be for the
account of the Borrower and may be financed under the Loan .
SECTION 6 . 02 .
Units
Reimbursement for Predetermined Costs for
of Work or Training Completed .
(a)
Upon satisfaction by the Borrower of the condition s
contained in Sections 3 .01, 3.02 and 4 . 03 , the Borrower may , from
time to time , subm i t a request to A. I.D . for reimbursement of an
agreed upon portion of the predetermined Local Currency costs for
unit s
option ,
of work completed , pur s uant to Section 4 . 03 .
ｮｾ
ｹ＠
A. I.D . , at its
finance such predetermined Local Currency Costs eith er :
(i)
by making such local currency available from
currency of the country of the Bo rrowe r obtained by
A. I . D. with U. S . dollars , whether by purchase or from
such currency a lready owned by the U. S . Government; or
(ii)
by
(aa)
requesting theEorrower to make availabl e
the local currency fo r such c ost s , and
(bb)
thereafter maki ng available to the Borrower,
through the opening or amendment by A. I.D . of Special
r
-18-
Letters of Cr e dit in favor of the Borrower or its
designee, an amount of U. S . dollars equivalent to
the amount of local currency made available by the
Borrower , which dollars will be utilized for procurement from the United States under appropriate
procedures described in Implementation Letters .
The U. S. dollar equivalent of the local cur rency made available
hereunder will be , in the case o f local currency, made available
as described in paragraph (i) above , the amount of U. S . dollars
required by A.I . D. to obtain the local currency calculated using
the high est official rate of exchan ge at which the Bank Indonesia
sells local currency for U. S . dollars in effect on the date o f
disbursement , and in t he case of paragraph (ii) above , an amount
calculated at the rate of e xchange speci f ied in the appl icab l e
Specia l Letter of Credit Implementatio n Memorandum as of the date
o f the opening or amendment o f the Special Letter of Cr edit .
(b)
Each request for reimbursement shall contain certi fi c a-
tio n s that (i) the units of work have been comp l eted according to
approved plans, specif i ca tion s and contracts pursuant to Section
4.03, and (ii ) that reimbursement has not and wil l not be obtaine d
from any other source .
(c)
All certifications submitted with such requests are
subject to verification by A. I . D.
I f any units of work are f ound not
satisfactorily completed in accordance with previously approv ed p lans
and specifications pursuant to Section 4 . 03, or to have been reimbursed
from ano t her source , A . I . D. will deduc t the requested amount f or that
unit of work or training from the reimbursement request be fo r e
r
-19 app roving the request.
Other Forms of Disbursement.
SECTION 6.03 .
Disbursemen t
of the Loan may also be made through such other means as the Borrower
and A. I . D. may agree to in writing .
SECTION 6 . 04 .
,,......
Date of Di sbursement .
shall be deemed to occur
Disbursement by A. I .D .
(a ) on the date on wh ich A . I . D. makes
disburseme nt pursuant to Section 6 . 01 to the Borrower, to its
designee, or to a banking institution pursuant to a Letter of
Commitment ;
(b) in the case of disbursements made pu r suant to
Section 6 . 02
(a)
(i) , on the date on which A.I . D . disburs e s the
local currency to the Borrowe r or its designee ;
(c) on the date on
which A. I . D. opens or amends the Specia l Let te r of Credit referred
to in Section 6 . 02
(a)
(ii); or
(d)
in the c a se of disburseme n ts
made pursuant to Section 6 .03 , on the date on which A. I . D. mak es
d i sbur sement pursuant to the t e rms of such other disbursement
documents .
SECTION 6 . 05 .
Terminal Date for Disbursement .
Ex cep t as
A. I . D. may otherwise agree i n writin g , no Letter of Commitmen t or
othe r document making a commitme nt for payment wil l b e i ss u ed o r
amended p u r suant t o requests received by A . I . D. after fou r years
ｾｧｲ･ｭｮｴ
and nine mo n t h s next succeeding the date o f execution of this
Ｌ＠
and no disbursements or reimbursements will be ma de
against documentation received by A.I . D. or any bank naking pay ments hereunder a ft e r five years next succ e eding t he date of execu tion o f this Agre e ment .
After the l atter dat e , A. I . D. may at any
time or times reduce the amount of th e Loan by a l l or any part
thereof for which documentation was no t rec e ived by such d ate .
-2 0ARTICLE VII
cancellation and Suspension
SECTION 7 . 0 1.
Cancellation by the Borrowe r .
The Borrower may ,
with th e prior written consent of A.I . D., by written notice to l\ .I . D. ,
ｾ
cancel any part o f the Loan (i) which , prior to the giving of such
ｮ ｯｴ
ｩ ｣･
Ｌ＠
A.I.D. has not disbursed or committed itself to disburs e ,
or (ii) which has not been uti l ized through reimburs ement or through
payments made through other procedures .
SECTION 7 . 02 .
o f the f o llowing eve nts
(a)
Events of De fa ult; Acceleration .
I f any one
( " Events of Default") shall occur:
The Borrower shall have f a iled to pay when due any
interest or installment o f Prin c i pal r equi red under this Ag r eement ;
(b)
The Borrower shall have faile d to comply with any othe r
provision of this Ag reement , inc l udi n g , but without limita tion , the
obligation to ca rr y out the Pro j e c t wi th due d ili ge n ce and e ffic i e ncy ;
or
(c)
The Borrower shall have f ai led to pay when d ue any
interes t or any ins ta llment of Principal or a ny o th e r p ayment required under any other loan agreement , any gua ran ty agr e e ment , or
any other agr eement betwee n the Borrower or a ny of its age nci es and
the Gove rnme nt o f the United States , or any o f i ts agenc i es , then
A.I.D . ma y , at its option, giv e to t he Bor rower notice that all or
,,,- .
any part of the unrepaid Principa l shall be due and p3yable sixty
(60 ) days thereafter , a n d , unless the Event o f De f ault is cured
within s ixty (60) d ays :
(i)
such unrepaid Principal and any acc rued
inte r est he r eun der shall be due and paya bl e immedia tely ;
- 21 and
( i i)
the amoun t of any fur t her di sbu rsements
made under then ou ts tandi ng Letters of Credi t or
any r e imburs e ment or otherwise shall b ecome due
and payable as soon as made .
SECTION 7 . 03 .
Sus pe nsion o f Di sburs ement o r Reimburs ement .
In the eve nt that at any time :
(a)
An event o f default has occurred ;
(b)
An event occur s that A. I.D . determin es to be an extra -
ordinary situation that makes it improbable e ither that the purpose
o f the Loan will be attained o r tha t
t he Borrower will b e able to
perform its o bl igations under this Agr eement;
(c)
A. I . D. determ i ne s tha t
the ov era ll Projec t
is not being
car ri ed out satis f actorily i n acco r dance with agreed upon s tandards
and criteria ; er
(d)
Any disbursement o r re i mbursement b y A.I . D. would be in
violation o f the legislation gover ning A. I . D. ; then A. I . D. may , at
i ts option :
(i)
sus pend or cance l o utstand ing commitment
do c umen ts to the extent that they have not been
utili zed through the i ssua n ce of irr e vocable Letters
of Credit or through bank payme nt s made othe r than
und e r
irrevocable Letters o f Cr edit , in wh i ch
･ｶ
･ｮｾ＠
A. I . D. sha l l g i ve no tic e to the Borrower promptly
therea f ter ;
( ii)
dec lin e to make disbursemen ts other than unde r
outstanding commi t ment documents;
- 22-
(iii)
decline to issue additional corrunitment documents
or make additional reimbursements ; and
(iv)
at A. I . D. 's e xpense, direct that title to goods
financed under the Loan shall be transferred to A. I . D.
i f the goods are from a source outsid e Indonesia , are
in a deliverable state and have not been offloaded in
ports of entry of Indonesia .
Any disbursements or re-
imbur sements made or to be made under the Loan with
respect to such transferred goods shall be deducted
from Principal .
SECTION 7 . 04 .
cancellation by A. I . D.
Following any, suspension
of disbursements or reimbursements pursuant to Section 7 . 03 , i f the
cause or causes for such suspension of disbursements or reimburs ements shall have not been eliminated or c orrected within sixty (60)
days fro m the date o f such suspension , A. I . D. may , at its option ,
at any time or times thereafter, cancel all or any part of the Loan
that is not then either disbursed or subject to irrevoca ble Letters
of credit .
SECTION 7 . 05 .
Continued Effectiveness of Agreement .
Not -
withstanding any cancellation , suspension of disbursement or
ｾ
r eimbursement , or acceleration of repayment , the provisions o f this
ｾ＠
Agreement shall continue in fu ll force and effect until the payment
in full of all Principal and any accrued interest hereunder .
SECTION 7 . 06 .
(a)
Re f unds.
In the case of any disbursement or reimbursement not
supported by valid documentation in accordance with the t e rm s of
this Agreement , or of any disbur s°-ments or reimbursements not made
-23or u sed in accordance with the terms of t h i s Agreement , A. I.D.,
notwithstanding the availability or exe rcis e of any of the other
r emedies provided for under this Agreement , may•equir e the Borrower
to refund such amount in United States dollars to A. I . D. within
sixty (60) days after receipt of a request therefore .
Such amou.nt
shall be made available first for the cost of goods and services
procured and reimbursement fo r acceptably completed units of
work or tr a ining for the Project hereunde r , to the extent justified,
the re mainder , if any , shall be applied to the installments of
Principal in the inverse order of t heir maturit y and the amount
o f the Loan shall be reduced by the amoun t of such remainder.
Notwithstanding any other provision i n this Agreement, A. I . D.'s
right to r equ ir e a
ｾ ･ｦｵｮ､＠
with respect to any d i sbursement or
reimbursement under the Loan shall cont inue for five years follow ing the date of such disbu r sement or reimbursement .
(b )
In the event that A. I.D . receives a refund from
an y cont r acto r, s upplier , or bank i ng insti tution, or from any
other third party connected with th e Loan , with respect to goods
or services f i nanced under the Loan, and such r efund relates to
an unr easonable price for goods or serv i ces , or to goods that did
not confo rm to specif i cat ions, or to services that were inad equate ,
r-
A. I . D. shall f i rst make such refund available fo r the cost of
goods and services procured and re imbursement for acceptably
compl eted units of work Jr training for the Project hereunder, to
th e extent justified , t he r ema inder to be appli ed to the ins tallments of Princi pal in the inverse order of their maturity and the
amount of the Loan shall be reduced by the amount of such remainder .
-24SECTION 7.07 .
Expenses of Collection.
All r easonable
costs incurred by A.I.D. , othe r than salaries of its staff , in
connect ion with the co l lection of any r efund or in conn ect ion
with amoun ts due A. I.D . b y reason of the occurrence of any of
the events specified in Section 7.02 ma y be cha r ged to the Borrower
and r eimburs ed to A. I . D. in such manner as A. I . D. may spe cify .
SECTION 7.08.
Nonwaive r of Remedies .
No delay in
exercisi ng or om ission to e x e r c ise any right , power , or remedy
accruing to A. I . D. unde r th i s Agreement shall be construed as
a waiv e r o f any of such rights , powers , or remedies .
ARTICLE VIII
Miscellaneous
SECTION 8 . 0 1.
Communications.
An y not ice , request ,
document , or other c ommunication given , made , or sent by the
Borrower or A. I.D. pursuant to this Agr eement shall be in writing
or by te l egram, cabl e or rad i o g ram and sha ll be de e me d to have
been duly g ive n, made , or sent to t h e party to wh i c h it is
addresse d when i t s hall be delivered to such party by hand or by
ma il , te l egra m, cabl e , or rad iogram at the following address :
TO BORROWER :
Mail Address:
Depar temen Luar Neger i
Taman Pej ambon 6
Jakarta , Indonesia
cable Address:
DEPLU Jakarta
TO A. I. D. :
Mail Address :
United States Agency f or Inte rna tional De velopme n t
American Embassy
Jakarta, Indonesia
- 24SECTION 7.07 .
Expenses of Collection.
All reasonabl e
costs incurred by A.I . D., othe r than salaries of its staff , in
connection with the col l ection of any refund or in connection
with a mounts due A.I.D. by reason of the occurrence of any of
the ev e nts specified in Section 7 . 02 may be charged to the Borrower
and reimbursed to A. I .D. in such manner as A. I . D. may sp e cify .
SECTION 7.08.
Nonwaiv e r of Remedies.
No delay in
exerci s ing or om ission to exerc ise any right , power , or remedy
ac c ruin g to A. I . D. under this Agreement shall b e con strue d as
a waiv e r of any of such rights, powers , or reme dies .
ARTICLE VIII
Miscellaneous
SECTION 8 . 01 .
Communications.
Any noti ce , r e que st ,
document , or othe r communica t ion given , made , or s e nt by the
Borrowe r or A. I . D. pursuant to th is Agreement shall b e in writing
or by telegram , cab l e or r adiogram and shall be de eme d t o hav e
b een duly given , made , or sent to the party to wh i ch it i s
a d d ressed when it shall be delivered to such par t y by ha nd or by
mail , te l egram , cable, or r adiogram at the following add re ss:
TO BORROWER:
Mail Addr e ss:
Departe men Lua r Neger i
Taman Pe jambon 6
Jakart a , Indones i a
Cable Address :
DEPLU Jakarta
TO A.I . D.:
Mail Address:
United States Ag e ncy f or Int e rna tional De v e lopme nt
American Embassy
Jakarta, Indon e sia
- 25-
USA ID AMEMB Jaka rta
Cable Address :
Othe r add res ses may be substituted for the a bove upon th e givin g of
notic e .
All not i ces , r equests , commu nications, and d ocument s
submitted to A. I.D. he r eunder shal l be in English , except as
I
A.I . D. Loan No.
497 -U- 043
LOAN AGREEMENT
(Indonesia:
Rural Sani tation Manpower Development)
between the
GOVERNMENT OF THE REPUBLIC OF INDONESIA
and the
GOVERNMENT OF THE UNITED STATES OF AMERICA
Da ted :
October 28 , 197 6
TABLE OF CONTENTS
ARTICLE AND SECTION
ARTICLE I
TITLE
PAGE
The Loan
Section 1 . 01 - The Loan . ...•.•. . ... . . . . . . . . . . . . . . . . • . . . . •
Section 1 . 02 - The Projec t . . . . . . . . . . . . . . . . .. . •...........
ARTICLE II
2
2
3
3
3
Conditions Precedent to Disbursement
Section 3 . 0 1 - Conditions Precedent to Initial Disbursement
or Reimburseme nt. . . . . . . . . . . .... . .. . .......
Section 3 . 02 - Conditions Precedent to Disbursement or
Reimbursement for Procurement of Any
Offshore Goods and Services ... . .. .. ..... . .
Section 3 . 03 - Conditions P recedent to Commencement
of Construction. . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 3 . 04 - Terminal Dates for Meeting Conditions
Precedent to In itial Disbursement or
Reimbursement ..... .. .... .. .... . .... . . .. . . .
Section 3 . 05 - Notification of Meet i ng of Conditions
Precedent to I n it ial Disburs e ment or
Rei1nbursement ... . . . . . . . . • . . . . . • . . . . . . . . . . .
ART ICLE IV
1
Loan Terms
Section 2 . 01 - Interest . . . . . . . .. . .... . ..... .. . . . . . . . . . ...
Section 2 . 02 - Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 2 . 03 - Application , Currency and Place of
Payment . . . . . . . . . .. .. . . ... . . . . . . . . . . . . . . ...
Section 2 . 04 - Prepayment . . . . . . . . . . . . . . . . . . . . . . ..... . ....
Section 2 . 05 - Re negotiatio n of t he Terms of the Loan ....
ARTICLE III
l
3
4
5
5
6
General Cove nants and Warranties
Section 4.01 - General Execution Covenants . . . . . . . . . . . . . ..
Section 4.02 - Funds and Other Resources to be
Provide d by the Borrower. . . . . . . . . . . .......
Section 4 . 03 - Commenc e ment of Construction for
Reimbur s able Units of Wo rk . . . . . . . . . . . . . ...
Section 4.04 - Continuing Consultat i on . .. . .. . . . . . . . . . .. . .
Section 4 . 05 - Management ...... . .... ... . . . . . . . . . . . . . . . . . .
Section 4 . 06 - Operation and Ma i n t e n ance . . . . . . . . . . . . . . . . .
Section 4 . 07 - Taxa tion .. .. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .
Sec tion 4 . 08 - Utilization o f Goods and Services . . . . . . . . .
Section 4 . 09 - Disclosure of Mater ja l Facts and
Circumstances .. . . . . • . . . . . . . . • . . . . . . . . . . . . .
Section 4 . 10 - Commissions , Fees and Other Payme nts . . .. . .
Section 4 . 11 - Maintenance and Audit of Records .. ... •. .. .
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6
7
7
8
8
8
8
9
9
10
11
ARTI CLE AND SECTI ON
T I TLE
PAGE
Section 4 . 1 2 - Reports .....•...••...•.....•..............
Section 4 . 13 - I nspections ........•.......... . ••.••......
ARTICLE V
P ro curement
Section 5 . 01 - Procurement with Loan Funds . . . . . . . . . . . . . . .
Section 5 . 02 - Eligib ility Date ...••....•......•. . .......
Secti on 5 . 03 - Implementation of Procurement and
Reimbursement Requirements ..•.............
Section 5 . 04 - Plans , Specificatio ns , and Contracts ......
Section 5 . 05 - Reasonable Price .....•....••....•..•.....•
Section 5 . 06 - Shipping a n d Insurance . . . . . . . . . . . . . . . . . . . .
Section 5 . 07 - Port Cha i ges ........••...•.....•... .. .....
Section 5 . 08 - Notifica ti on to Potential Suppliers .......
Section 5 . 09 - In fo rmation and Marking ...•. .. ....... . ....
ARTICLE VI
Section
Section
Section
Se ctio n
Sect ion
12
12
14
14
16
16
16
16
17
19
19
19
Cance l lation and Suspension
Section 7.01 - Cancellation by t he Borrower .•............
Section 7 . 02 - Events o f Default; Acce l eration .........•.
Section 7 . 03 - Suspension of Disbursement or Reimburse ment . . . . . . . . . . . . . . . . . . . . . . ... .... .........
Section 7 . 04 - Cancellation by A . I.D . . . . . . . . . . . . . . . .. ... .
Section 7 . 0 5 - Continued Effect i veness of Agreement ......
Section 7 . 06 - Refunds . ......•...•...... .. .... . ....•.....
Section 7 . 07 - Expens es of Collection .......• .... ..•.....
Section 7 . 08 -- Nonwaive r of Remedies . . . . . . . . . . . . . ........
ARTI CLE VIII
12
12
Disbursement an d Reimbursement
Section 6 . 0 1 - Disbursement fo r Un it ed States Dollar Costs
Letters of Commitment to Unit e d States
Banks .... . . . . . . • . . . . . . . . . • . . . . . . . . • . . . • . . .
Sectio n 6 . 02 - Re i mbursement fo r Pr edete rm ined Costs fo r
Units of Work or Training Comp l eted ....••.
Section 6 . 03 - Other Forms of Disbursement . . • . . . . . . . . . . .
Sect io n 6 . 04 - Date of Disburse inen t. . . . . . . . . . . . . . . . . . . . . .
Section 6 . 05 - Terminal Date for Disbursement ....•.•.....
ARTI CLE VII
11
11
20
20
21
22
22
22
24
24
Miscellaneous
8 . 01
8 . 02
8.03
8 . 04
8 . 05
-
Communications .••.•.•..•.••.•.............
Representatives ....... . •...•... . ..........
Impl e mentation Letters . . . . . . . . . . ... .......
Promissory Notes ....• ..• • .. .. ......... ....
Termination Upon Full Payment .. .. ... ......
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24
25
25
25
26
I
LOAN AGREEMENT dated
between the REPUBL IC OF
INDONES il\ ( "Borrower " ) and the UNITED STATES OF AMERICA , acting through
the AGENCY FOR INTERNATIONAL DEVELOPMENT ( "A. I . D. " ) .
ARTICLE I
The Loan
SECTI ON 1.01 .
The Lo a n .
A. I.D . agrees to lend to the
Borrower pursuant to the Foreig n Assistance Ac t of 1961 , as amended ,
an amount not to exceed Six Million Eight Hundred Thousand Dollars
($6 , 800 , 000)
("Loan") to assist the Borrower in carrying out th t:
Project referred to in Sect ion 1 . 02 ( "Project") .
The Loan shall be
used exclusively to f inance the United States dollar costs ("Doll ar
Costs " ) of goods and services to be listed in Implementati on Letters
referred to i n Section 8 . 03
( " Implementation Letters " ) , and part of
the local currency costs o f goo ds and services requir ed for the
Project ( "Lo ca l Currency Costs") .
The aggregate amount of di sburse -
ments under the Loan is hereinafter r eferred to as "Principal. "
SECTION 1 . 02 .
The Project .
The Project sha l l c o nsist of
assistance to t he Ministry of Health (MOH ) in carrying out a manpowe r
development training program aimed at developing a s ys tem that wil l
allow Indones ia to meet its quantitative and qualitative manpower
r-
needs for professional; supervisory - level , and techni ca l , f ieldl evel workers (Sanitation Technologists and Sanitarians ) to implement
the Government of Indonesia rural water supply/sanitation program.
Out of the existing educational system for rural sanitarians , two
Schools for Sanitation Technol ogists and nine School s for Sanitarians
having esti mated annua l outputs of 100 and 360 graduates, resp ect ively,
will be es tablished.
Instructors fo r these institutions will receive
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upgrading training .
All existing MOH personnel engaged in rural
environmental sanitation programs wi ll likewise rec eive S?ec ial training to improve their knowledge and skills so that they may perform
the ir responsibilit ies more effective ly.
The total Project budget
will not be le ss than the Rupiah equival en t o f fourteen million
,......
United States dollars ($14,000 , 000) , o f which the Borrower shall
provide not less than the Rupiah equ ivalent of seven mi llion, two
hundred tho usand United States dollars ($7 , 200 , 000 ) .
ARTICLE II
Loan Terms
SECTI ON 2.01.
Interest .
The Borrower shall pay t o A. I . D.
interest which shall accrue at the rate o f two percent (2%) per
annum for ten years following the date of th e first disbursement
hereund e r and at the rate of three perce nt (3%) per annum t he reafter
on the outstanding balance of Principal and on any due and u npaid
interest .
Interest on the outstanding balance shall accrue from the
date of each respective disbursement (as such date is defin ed in
Section 6.04), and shall be computed on the basis of a 36 5 -day year .
Interest shall be payable semi - annually .
terest shall be payable s emi - annually .
The first payment of in Th e first payment of interest
shall be d ue and payable no la ter than six (6) months after the
_ f irst disbursement for Dollar Costs or reimbursement for Loca l Costs
h ereund e r, o n a date to be specified by A. I . D.
SECTION 2 . 02.
Repayment .
The Borrowe r shall repa y
ｾ ｯ＠
A.I.D. the Principal within fo rty (40) years from the da t e of th e
first disbursement or reimb u rsement hereunder in si xty -one (61)
approximately equal semi - annual installme nts of Principa l and
- 3-
interest.
The f i rst installment of Pri n cipal shall be payable nine
and one-half
ＨＹｾＩ＠
years a fter the date on which the fi rs t
payment is due in acco rdan ce with Section 2.01.
inte r est
A.I.D. shall provide
the Borrower with an amort i zation schedu l e in accordance with this
Sec tion after the final disbursement or r eimbursement u n der the
Loan.
SECTION 2.03 .
Application, Currency and Place of Payment .
All payments of interest and Principal he reunder shall be made in
Unit ed States dollars and shall be a pplied fir st to the paymen t of
i nterest due and then to the repayment o f Principal.
Except as
A. I.D. may otherwise specify in writing , a ll s uch payments shall be
made to the Controller , Agency for Interna ti o nal Development, Washing ton, D.C., U.S.A., a nd shall be deemed made when r eceived by the
Of fic e of the Controller .
SECTION 2 .0 4 .
Prepayment .
Upon payment of all in terest and
refunds then due , the Bo r rower may prepay , without penalty , all or
any part of the Principal .
Any such prepayment shall be applied to
the installments of Principal in the inv e r se order of their ma turity.
SECTION 2.05.
Renegotiation of the Terms of the Loan .
The
Borrower agrees to negotiate with A. I. D., at such time or tim e s a s
ｾ
A. I . D. may r equ est , a n acceleration of the repayment of the Lo 3 n in
ｴ ｨ･＠
event that the re is any significant improvement in the i nter nal
and external economic and fi n a ncial position and pro s pects o f the
Republic of Indonesia .
ARTI CLE III
Conditions Precedent to Disbursement or Reimburs e ment
SECTION 3 . 01 .
Conditions Precedent to Initial Disbu rs em e nt
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or Reimbursement .
Prior to the first disbursement or reimbursement
or to the issuance of the first Letter of Commi tment under the Loan ,
the Borrower shall , except as A.I . D. may otherwise agree in writing,
fur nish to A.I . D. in form and substance sat i sfactory to A. I.D . :
(a)
An opinion of the Minister of Justice o f the
Bo rrower that this Agreement has been dul y authorized and/or ratified
by , and executed on behalf of , the Borrower , and that it cons titutes
a valid and legally binding obligat ion of the Borrower in accordance
with all of it s terms;
(b)
A statement of the names of the persons holding
or acting in the office of the Borrower specifi ed in Section 8 . 02,
and a specimen signature of each person speci fied in such statement;
(c)
( i)
Written assurance that the est imated annual
expenditures (other t han t he costs to be fi nanced under the Loan)
for each year during which the Proj ect is being conducted will b e
made available to permit the work of the Project to proceed on a
timely basis ;
(ii)
a budgetary allocation for the Project for t he
Indonesian fiscal year 1976-77; and ( iii )
an approved payment
authorization for payment of Indo n es ian curren cy in th e amount required for the f i rst three months of Project operations ; a nd
(d)
A plan f or Proj e ct evaluat ion that identifi es
progress indicators to be measured ,
ｭ
･
ｾ ｮｳ＠
o f collecting base-line
data, methodology for verifying progress , timing o f evaluation , and
the orga nization respon s ibl e for eva luation .
SECTION 3.02 .
Conditions Precedent to Disbur sement o r
imbursement f or Procurement o f Any Offshor e Goods a nd Serv ice s .
ｒ
ｾＭ
Prior
to the procurement f or the Project of any goods and services hav ing
- 5both their sour ce and origin in Code 941 of the A. I . D. Geographic Code
Book , the Bor r ower , Ministry of Health , and A . I . D. s h al l revi e w and
approv e in writing the li sts o f items to b e procured a long with the ir
specifications , the description of serv i ces to be acquired , and
,__ estimated costs .
SECTI ON 3 .03 .
Construction .
Conditions Pr ecedent to Commencemen t o f
Prior to the commencement of cons t r uction of the
School f or Sanitarians and Sanitation Tech nologists f or which re imburseme nt wi ll be sought by the Borrowe r and t h e Ministry o f Hea l th
u n der t h e Loan , the Borrower and th e Ministry of Health sha l l
f urnish
to A.I . D. in form and substance satisfactory to A.I.D .:
(a)
Time phased i mpl ementation plan s e t t ing forth
de tail ed cost estimates 7
(b)
Site location and boundary surve y maps , together
with documentation indicating the entity in which l and ownership is
ves t ed;
(c)
Borrower ' s c onsulting and construction contractor
prequalification s tandards , Borrower ' s lists o f prequa lifi ed consulting
and cons t ruction contractors including a certification that all
contracto r s listed meet the applicab l e pr e qualif i catio n standards
of the Borrower approved by th e Borrower and A. I . D. , and J or rowe r's
!-
sta n dard cons ul ting and co ns truction contract f orms .
SECTION 3.04 .
Term i nal Dates for Meeting Conditions Preceden t
to Initial Disbursement or Reimbursement .
I f all of the conditions
specified in Section 3 . 0 1 have not been met within 12 0 days from the
date of this Agreement , or such l a ter dat e as A. I . D. may a g ree to in
writing , A.I . D., at its option , may ter minate this Ag r eement by giving
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wri t ten notice to t he Borrower . Upo n the giv i ng o f such notice , th is
Agreement and all obligations of the parties he r eunder sha ll terminate .
SECTION 3 . 05 .
Noti f i catio n of Meeting of Conditions Pre -
ced e n t to Initial Disbursement or Re i mbu r sement .
A. I. D. shall notify
the Borrower upon determinat ion by A. I . D. that the condit i ons specified
ｾ Ｍ
in Section 3 . 01 and 3 . 0 2 have been met .
ARTI CLE IV
Genera l Covenants and Warra nt i es
SECTION 4 . 01 .
(a)
General Execution Covenants .
The Borrower shall c arr y out t he Project or c ause
th e Proj ec t to be carried out , with due dil i gence and efficiency , a nd
in conform i t y wi th acceptable eng i n eering , constructi on , f i na ncial ,
administrative , techn ical and mana gement practices .
(b)
The Bor r owe r shall cause t he MOH to c a rry o ut th e
Project in confo rmity wi th al l o f the plans , specifications , c ontra cts,
schedul es , and othe r arrangements, and with all modifications t he r eto ,
appr o ved b y A. I. D. pur s uant to this Agreement .
(c)
Except a s A.I.D . may otherwise agre e , th e Borrower
shall ensure that at all times during the e xecutio n o f the Pr oj ec t
appropriate contracts , a cceptab l e to A . I . D., with consultants acce ptable
ｬＢＭｾ､
to A.I. D., are i n f orce and ef f ect for the provision o f techni cal
ｶｩｳｯｲ
ｹ＠
services needed for t he Project .
(d)
The Borrower sha l l ens ure that all f inanc ia l and
technica l suppor t required to effectivel y operate and main t ain t h e
schools constru cted und er t he Project shall be provided both dur ing
implementa tion and afte r c ompletion o f the Proj ect .
(e)
The Borrowe r s hall ensure tha t each stud e n t grad uate d
- 7from the Schools for Sanitarians and Sanitation Tech i.o l ogists will be
guaran teed a position within the Indonesian Government i n the general
field of sanitation.
(f)
The Borrower shall submit to A.I . D. , p romptly upon
prepa r ation , in fo rm and substance satisfactory to A.I.D. , job
descri p tions f or Sanitarians and Sanitation Technologists to be
uti l ized by the Ministry of Heal th.
SECTION 4.02 .
the Borrower .
Funds and Other Resources to be Provided by
The Borrower shall provide promptly as ne e ded all funds ,
in addition to the Loan, and all other resources required for the
pun c tual and effective carrying ou t , compl etio n, maintenance , repair ,
and ope ration of th e Project .
Notwithstanding any other provi s ion of
this Loan Agreement , the Borrower shall provide not less than 25% o f
the total cost o f goods and services to be u sed in the Proj e ct which
shall not be disbursed or reimbursed by A. I . D. in a n y form .
SECTION 4 . 0 3 .
Units of Work .
Commencement of Co nstru ction fo r Reimb u rsable
Prior to the commence men t of cons t ruct ion for any
unit of wo r k relating to the construction of school fac iliti es fo r
which r e imbursement will be 3ought by the Borrower under the Loan ,
th e Borrower shall provide to A . I . D. , and A.I.D . sha ll r eview and
approve in writing , the fi n a l plans , specifi c ations and cost estimate
f or the unit of work, and names o f the contrac tors and the co n rac t s
under which the work is to be performe d .
the cost estimate is reas o nable .
estimate shall become the ｰｲ･､ｴ
A.I .D. shall determine that
When approved by A.I . D., the co st
･ ｲｭｩｾ･､＠
cos t
for the unit of work to
which i t applies and on wr.ich r eimburs ement may be made pursuant to
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Section 6 . 02 .
Continuing Consultation .
SECTION 4.04 .
The Borrower , The
Ministry of Health and A. I . D. shal l coo perate f ully t o assure that
the purposes of the Loan will be accomplished .
To t h is en d , the
.-.Borrower, the c onsultan l s and A.I.D . shall from time to time , at t he
request of a n y party , exchange views through their r e pr e sentatives
with regard to the progress of th e Proj ect a nd i ts e ffec tiven ess , the
p e rformance by the Borrower and the Ministry of Health o f t heir obligations under this Agreement , the performance of the c onsultants ,
contractors , and suppliers e n gaged in the Project , and othe r matters
r e lating to th e Project .
SECTION 4 . 05 .
Management.
The Borrower and t he Ministry of
He alth shall provide quali fied and e xp e ri e nc ed mana gement for the Pro ject and t hey shall provid e such staff as may be appropriate f or the
maintenance and operat i on of the Project.
SECTION 4 . 06 .
Operation and Ma i ncenanc e .
Th e Borrower and
the Ministry o f Hea l th shall cau se the Pro ject when completed to be
ope rat ed , maintained , and repaired in con f ormity with
｡｣
｣ ｾ ｰｴ｡ ｢ｬ･＠
e ngi -
n ee ring, f inancial and a dmin i str a tive pra c c ices in such manner as to
e nsur e the c on t i n u ing and successful a chiev e me nt of the purposes of
th e Proj ect .
SECTION 4 . 07
Taxation .
Thi s
ａｧ
ｲ ･ｾ
Ｒ ｮｴ
Ｌ＠
thP Loan , an d an y
ev id ence o f indebtedness i s sued in connecti on herewith shall be free
fro m, and the Principal an d in te r est s hall b e p aid without de ducti on
f or a nd f r ee f rom , a ny taxation o r fees i mposed under the l a ws in
effect within Indonesia.
To t he ex tent tha t
(a) any expatriate con-
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Section 6 .0 2 .
Continuing Consultation .
SECTION 4 . 04 .
The Borrower , The
Ministry of Health and A . I.D . sha ll coo pe rate f ul ly t o assure that
th e purposes o f the Loan will b e accomplished .
.-Borrower , the
｣ ｯｮ
ｳｵｬｴ｡ｮ
ｾ ｳ＠
To this e n d , the
and A. I . D. shall f rom time to time , at the
r eq uest of a n y party , exchange vi ews through their representati v e s
with regard to the progress o f the Proj ect a nd i ts effec tiveness , the
p erformance by the Borrower and the Ministry of Hea l th of their obli gation s under th i s Agreemen t , the performance of the c onsultants ,
contractors , and suppl i ers engaged in the Proj e ct, and other matt e rs
r e la ting to the Pro ject .
Management .
SECTION 4 . 05 .
The Bor r ower and t h e Ministry o f
Health shall provide qualified and experienced management for th e Project and they shall provid e such staff as may be appr op r iate f or the
ma inte n ance and operation of the Project .
SECTION 4 . 06 .
Operation and Main ce n ance .
Th e Borrower and
the Ministry of Health shall cau s e the Pro ject when completed to be
operated , ma inta i ned , and repa i red i n conformity with
｡｣
｣ｾ
ｰｴ｡｢ｬ･＠
e ngi-
neering , financial a nd a dmi n istrative pra c c ices in s uch mann e r as to
e n sure the con t i n u ing and successful a ch ievement of the purpose s of
th e Project .
SECTION 4 . 07
Taxation .
This Agreew2nt , the Loan , and an y
ev i dence of indebtedness i s sued in conne ctio n he r ewith shall b e f ree
from , and the Pr incipa l and in terest shall be p aid without deduction
for and f ree from , any taxation or fees i mposed under the laws in
effect wi t hin I ndones ia .
To the ex t e n t tha t
(a ) any expatriate con-
- 9-
tractor , includin9 any expatriate university , any expa triate personne l
of such expatriate contractor financed hereunder , and any property or
transacti o ns relat i_ig to such contracts and (b) any fo reign commod ity
procurement t r ansa ction f i n anced hereunder , are n ot e xempt from iden ,. . . . tifiable taxes , tariffs , duties , and other levies imposed under laws
in effe c t in Indonesia , the Bor rower shall pay or reimburse t he same
under Section 4 . 02 of this Ag r eemen t with funds other than tho se proTaxes , t ariffs , duties , and other levi es imposed
vided under the Loan .
under l aws in effec t
in Indonesia on Indo nesian contracto r s , consul -
ta nts and cormnodity procurement transa c tions shall n ot be fi n a n ced
with funds provi ded unde r the Loan.
SECTION 4.08 .
Utilization of Goods and Services .
(a) Goods and serv i ces fin a nced tinder the Loan shall b e used
exclusively fo r the Project , except as A.I . D. may o the rw ise a0re e in
writing .
Upon completion of the Project , or at such oth er t ime as
g oods financed und e r the
Loan can n o longer be usefully employed for
the Project, the Bo rrower may u se s u ch goods in such ma nner as t o fur ther the objectives sought in carry i n g out the Project .
(b) Ex cept as A . I . D. may oth e rwise agree
1
writing, no good s
or services f inanced und er the Loan s h all be used to p r omote or a s sis t
-
any foreign a id projec t or activity associated wit h o r financed by a n y
countr y not incl u ded in Code 935 of the A. I .D . Geographic Co de Book
as in effect at the time o f s 1.!c h u se .
SECTION 4 .09
Di sclosure of Mate rial · Fa cts and Circums tances .
The Borrowe r r epr e s ents a nd wa r r ants that all facts a nd circumsta nces
that i t has dis closed or caus e d to be disc l os e d to A. I . D. in the
I
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course of obtaining the Loan are accurate and complete, and that it
has disclosed to A. I . D., accura tely and completely, all facts and
circumstances that might materially af fect the Pr oject and t !le dis charge of its obligations under this Agreement .
The Borrower shall
promptly inform A.I . D . of any facts and circumstances that may here after arise and might materially affect , or that it is reasonabl e to
b el ieve might materially affect , the Project or the discharge of the
Borrower ' s obligations under
SECTION 4 . 10 .
ｴｨ
ｾ ｳ＠
Agreement .
Commissions, Fees and Other Payments.
(a) Borrower warrants and covenants that in connection with
obtaining the Loan , or taking any action under or with respec t to
this Agreement , it has not paid, and will not pay or agree to pay , nor
to the best of its knowledge has there been paid nor will there be
paid or agreed to be paid by any other person or entity , commissions ,
fees , or other payments o f any kind, except as regu l ar compensation
to t he Borrower ' s full time officers and employees or as compensa tion
for bona fide pro fess ional , technical , or comparable services .
'fhe
Borrower shall promptly report to A. I . D. Any payment or agr een,ent to
pay for such bona f ide professional , technical, or comparable serv ices
to which it is a party or of which it has knv1 ledge (indicating whe ...- ther such payment has been made or is to be
made on a continge nt ba-
sis) , and if the amount o f any such payment i s deemed unreasonable by
A. I . D., the same shall be adjusted in a manner satisfactory to A. I . D.
(b) The Borrower warrants and covenants that no payments have
been or will be received by the Borrower or a ny official of the Borrower , in connection with the procurement of goods and services finance d
- 11he r eunder, except fees , t a xes, or similar payments legally established
in Indonesia .
SECTION 4.11.
Maintenance and Audit o f Records.
The Borrower and the Ministry of Health shall maintain , or cause to
.- be maintained, in accordance with sound accounting principles and
practices consistently applied , books and record s relating both to
the Project and to this Agreement .
Such books and records shall,
without limitation, be adequate to show:
(a) The
ｲｾ
｣･ｩｰｴ＠
and use made of goods and services acquired
with funds disbursed or reimbursed pursuant to this Agreeme nt;
(b) The nature and extent of solicitations of prospective
suppliers of goods and services acquired;
(c) The basis of the award of contracts and orders to
successful b idders; and
(d) The progress of the Project .
Such books and r ecords shall be annually audited , in accordance with
sound audit ing standards and shall be ma intained for f iv e years a f ter
the date of the l a st disbursement or r e i mb ur sement by A. I . D. or until
all sums due A.I.D. under this Agreement h ave been paid , whichever
date shall first occur .
SECTION 4 . 12 .
Reports.
The Borrowe r shall furnish to A. I.D.
r-such information and reports relating to t he Loan a nd to the Project
as A.I.D. may re as onably request .
SECTION 4.13.
Inspections .
The authoriz ed representatives
of the Borrower a nd A.I . D. s hall have the right at al l reasonable
times to inspect the Proj ect , the utilization of all goods and ser-
-12vices financed under the Loan, and the Borrower ' s books , records and
other documents relating to th e Project and the Loan.
The Borrower
and A. I.D. shall cooperate to facilitate inspections and travel of
their authorized representatives and the Borrower shall permit
representatives of A.I . D. to visit the proj ect area or a ny part of
Indonesia for any purpose relating to the Loan .
ARTICLE V
Procurement
SECTION 5 .01.
Procurement with Loan Funds .
Except as A. I . D.
may otherwise agree in writing, disbursements made pursuant to Secti on
6 . 01 shall be used exclusive ly to finance the procurement f or the
Project 0£ goods and services having both their source and origin in
countries included i n Code 941 of the A.I . D. Geographic Code Book as
in effect at the time or d o rs are placed for such goods .
SECTION 5.02 .
Eligibility Da t e.
Except as A. I . D. may other-
wise agree in writing , no d isbu rs ements f or goods or services may be
made und e r the Loan pursuant to orders or contracts f irmly placed or
entered into prior to the date o f th i s Ag reement and no r2 imbursement
may be made for any construction prior to t h '· satisfaction o f conditions
precedent set forth in Sections 3 . 01 , 3 . 03 , 4 . 03 and 6 . 02.
SE CT I 0 N 5 . 0 3 .
,.,....... rnent Requir eme nt s .
Implementati on o f Pro curement a nd Re imburse -
The definitions applicable to t he e li g ibility
requiremen ts of Section 5 . 01 will be set f or t h in d e tail in Implementation Le tt e rs.
SECTION 5.04 .
ｐｬ｡ｮｾ
Ｌ＠
Specifications and Contracts .
In order
for th e r e to be mutual agreement on the f ollowing matters, and except
as the Parties may otherwise agree in writing :
13(a)
The Borrower will furnish to A. I . D. upon preparation:
(1)
Any plans , specifications, procure ment o r c ons truc tion schedules , standard construction contr acts
o r othe r contracts and documentation r e l at in g to
goo ds or s e rvices to be financ ed by A. I.D., i n cluding documentation rela ting to t he prequalifi cation and selection o f contractors and to the
so l icitation of bids and proposals .
Material
modifications in such documentation will likew i se
be furnished A. I . D. on preparation;
(2 )
Such documentation will also be furnished to
A. I . D. , upon preparation, r e lating to any goods
or serv i c e s which, though not finance d by A. I. u . ,
are deemed by it to be of major i mportan ce to
the Project .
Aspects o f t h e Project involving
matters und e r th i s subsec t i o n
(a)
(2) will be
iden t i f ied in Impl e me n t ation Letters ;
(b )
Bid docume nts relat ed to the pre q ual i f icatio n of
con t r ac tors , and d ocuments relat ed to the solicitation of proposals
for g ood s and se rvices financed under the Loan wi ll be duly approved
by A. I . D. in writing prior to their issuance ;
,_
(c)
Contracts a nd contrac t ors finan ced by A. I . D. for
professional services , and for such other services as may be specif ield i n Imp l e me ntation Letters , will be duly approv e d by A.I . D. in
writing prior to execution o f the c ontra ct .
Mate ri a l mod i f i cat i ons
in such contracts wi l l also be duly approved in wr iting by A. I . D.
prior to e xe c ution .
-14-
SECTION 5 . 05 .
Reasonable Price .
No mo re t han reaso nable
pr i c es shall be paid for any g oods or services fi nanced in whole or
in part , under the Loan , as more fu lly describ ed in Implementation
Let ters.
Such items shall be p ro cured on a fair and on a competitive
basis in accordance with procedures therefor prescribed in Implementa tion Letters .
SECTION 5 . 06 .
(a)
Shipping and Insurance .
Goods procur ed fr om the Uni t ed States and fina n ced
under the Loan with disbu r sements mad e p urs uan t t o Section 6 . 01
shall be transported to Indonesia on flag ca r riers of any country
included in Code 93 5 of the A. I .D . Ge ograph ic Code Book as in effect
a t the time of shipment .
(b)
( 1)
Gross Tonnag e .
At least fifty percent (50%) of
the gross t onnage of all commodit i es (computed separately f or dr y
bulk carriers , dry cargo li ners and tankers) financed hereunder with
disbursements made pursuant to Sec t ion 6 . 01 which may be tran s ported on ocean vessels shall be transported on privately- owned
United States-flag commercial vessels .
(2 )
Revenue .
Additionally ,
at le a st f i fty percent (50%) of the gro s s freight r e ve n ue generated
by all sh i pments f inanced h e reunder with disbursement s made pursuant
to Sect i on 6 . 01 and transported to In d onesia on dry cargo liner3
,,.....sha ll be paid to or for the b e n e 1.t of privately-owned United
0
States-flag commercial vessels unless A. I . D. shall determine tha t
such vessels are not available at fai r and reasonabl e rates f or
U. S. - flag commercia l vessels .
(3)
Complianc e .
Compliance with the
requirements of (1) and (2) above must be achieved with £ espec t to
cargo transported from U. S . ports and also t o cargo transported f rom
-15non - U. S . ports and also to cargo transported from non - U. S. ports,
computed separately.
(4)
Reporting .
Within ninety (90) days fo llow-
ing the end of each calendar quarter , o r s uch other period as A. I . D.
may specify in writing, Borrower shall furnish A. I . D. with a state ment , in form and substance satisfactory to A. I . D. , reporting on
/-
compliance with the requirements of this Section .
(c)
(or aircraft)
No such goods may be transported on any ocean vessel
(1) which A.I . D. , in a notice to th e Borrower , has
designated as inel i g i ble to carry A. I . D. - f inanced goods or (2) which has
been chartered for the carriage of A.I . D. -f i nanced goods unless such
charter has been approved by A. I . D.
(d)
Marine insurance on goods financed unde r t he Loan
ma y a l so be financed under the Lo an wi th disbursements made pursuant
to Section 6.01 , provided (i) such insurance is p laced at t he lowest
available competitive r a te in Indonesia or in a country includeJ
in Code 941 of the A.I . D. Geographic Code Book as in effect at the
time of placemen t , and (ii) claims thereunder are payable in the
currency in which such goods were financed .
If the g overnment of the
Bor r ower, by statut e , decree, rule , regulat i on, or practice dis-criminates with respect to A. I . D. - f inanced procurement again st any
marine insurance company authorized to do business in any State of
r-the United States , then all goods shipped to the country of the
Borrower financed unde r the Loan shall be insured against marine
risks and such insurance shall be placed in the Unit ed States with a
company or companies authorized to do a ma rine insurance business in a
State of the United States.
-16SECTION 5.07 .
Po rt Charges.
With r espect to ocean freight
costs which qualify as eligible for financing under the Loan , and
except as A. I . D. may otherwis e agree in writin g , A. I.D . wil l fi nance
ni n ety percent (90%) o f all ocean f r eight cos t s o f each s hi pment ,
and ninety - eight percent (98%) of such costs on any shipment under
free-out terms .
The remaining ten percent (10%) , or two pe rcent
(2%) of fr ee-out s h ipments, represent po r t c harg es in Indonesia a nd
Borrower covenants that it shall make availabl e foreign exchange to
finance said port charges in accordance with procedures which may
be prescribed by A. I.D . in I mplemen tation Letters .
SECTION 5 . 08 .
Notification to Potential Su ppliers .
I n o rd e r
that all United States firms shall have the opportunity to parti.cipate
in fu rnish i ng goods and services to be financed under the Loan a s
Dollar Costs as defined in Section 5 . 01 , the Borrower shall furnish
to A. I . D. such information
ｷｩｴ
regard thereto , and at such time s ,
ｾ＠
as A. I . D. may request in Implementation Letters .
SECTI ON 5 . 09 .
Inforrra tion and Marking .
Borrower s ha ll giv e
pub l ic i ty t o the Loan and the Project as being assisted by United
States aid , identify the Subproject sites , and mark goods
ｦｾ
ｮ ｡ ｮ｣
･ ､＠
under the Loan , as prescribed in Implementation Letters .
ARTICLE VI
Disbursemen t and Rei mburs ement
SECTION 6 . 01.
Disbursement for United States Dol l ar Costs -
Letters of Commitment to United States Banks .
Upo n satisfaction of
conditions precedent pursuant to Sections 3.01 and 3 . 02, t h e Bo rrower
may , from time to time , r equest
ｾ
Ｎ ｉ
Ｎ ｄ
Ｎ＠
to issue Letters of Commitment
for specified amounts to one or more United States banks , satis fa ctory
- 17 to A.I.D. , committing A.I . D. to reimburse such bank or banks for pay ments made by
to consultants or suppl iers, through the use of
ｴｨ･ｾ＠
Letters of Credit or otherwis e , for Dollar Costs of goods and services
procured for the Project in accordance with th e terms and conditions
of this Agreement .
Payment by a bank to a consultant or s upplier
will be made by the bank upon presentation of such supporti n g
documentation as A. I . D. may pre scribe in Letters of Commitment and
Impl ementat ion Letters .
Banking charges incurred in connection
with Letters of Commitment and Letters of Credit sha ll be for the
account of the Borrower and may be financed under the Loan .
SECTION 6 . 02 .
Units
Reimbursement for Predetermined Costs for
of Work or Training Completed .
(a)
Upon satisfaction by the Borrower of the condition s
contained in Sections 3 .01, 3.02 and 4 . 03 , the Borrower may , from
time to time , subm i t a request to A. I.D . for reimbursement of an
agreed upon portion of the predetermined Local Currency costs for
unit s
option ,
of work completed , pur s uant to Section 4 . 03 .
ｮｾ
ｹ＠
A. I.D . , at its
finance such predetermined Local Currency Costs eith er :
(i)
by making such local currency available from
currency of the country of the Bo rrowe r obtained by
A. I . D. with U. S . dollars , whether by purchase or from
such currency a lready owned by the U. S . Government; or
(ii)
by
(aa)
requesting theEorrower to make availabl e
the local currency fo r such c ost s , and
(bb)
thereafter maki ng available to the Borrower,
through the opening or amendment by A. I.D . of Special
r
-18-
Letters of Cr e dit in favor of the Borrower or its
designee, an amount of U. S . dollars equivalent to
the amount of local currency made available by the
Borrower , which dollars will be utilized for procurement from the United States under appropriate
procedures described in Implementation Letters .
The U. S. dollar equivalent of the local cur rency made available
hereunder will be , in the case o f local currency, made available
as described in paragraph (i) above , the amount of U. S . dollars
required by A.I . D. to obtain the local currency calculated using
the high est official rate of exchan ge at which the Bank Indonesia
sells local currency for U. S . dollars in effect on the date o f
disbursement , and in t he case of paragraph (ii) above , an amount
calculated at the rate of e xchange speci f ied in the appl icab l e
Specia l Letter of Credit Implementatio n Memorandum as of the date
o f the opening or amendment o f the Special Letter of Cr edit .
(b)
Each request for reimbursement shall contain certi fi c a-
tio n s that (i) the units of work have been comp l eted according to
approved plans, specif i ca tion s and contracts pursuant to Section
4.03, and (ii ) that reimbursement has not and wil l not be obtaine d
from any other source .
(c)
All certifications submitted with such requests are
subject to verification by A. I . D.
I f any units of work are f ound not
satisfactorily completed in accordance with previously approv ed p lans
and specifications pursuant to Section 4 . 03, or to have been reimbursed
from ano t her source , A . I . D. will deduc t the requested amount f or that
unit of work or training from the reimbursement request be fo r e
r
-19 app roving the request.
Other Forms of Disbursement.
SECTION 6.03 .
Disbursemen t
of the Loan may also be made through such other means as the Borrower
and A. I . D. may agree to in writing .
SECTION 6 . 04 .
,,......
Date of Di sbursement .
shall be deemed to occur
Disbursement by A. I .D .
(a ) on the date on wh ich A . I . D. makes
disburseme nt pursuant to Section 6 . 01 to the Borrower, to its
designee, or to a banking institution pursuant to a Letter of
Commitment ;
(b) in the case of disbursements made pu r suant to
Section 6 . 02
(a)
(i) , on the date on which A.I . D . disburs e s the
local currency to the Borrowe r or its designee ;
(c) on the date on
which A. I . D. opens or amends the Specia l Let te r of Credit referred
to in Section 6 . 02
(a)
(ii); or
(d)
in the c a se of disburseme n ts
made pursuant to Section 6 .03 , on the date on which A. I . D. mak es
d i sbur sement pursuant to the t e rms of such other disbursement
documents .
SECTION 6 . 05 .
Terminal Date for Disbursement .
Ex cep t as
A. I . D. may otherwise agree i n writin g , no Letter of Commitmen t or
othe r document making a commitme nt for payment wil l b e i ss u ed o r
amended p u r suant t o requests received by A . I . D. after fou r years
ｾｧｲ･ｭｮｴ
and nine mo n t h s next succeeding the date o f execution of this
Ｌ＠
and no disbursements or reimbursements will be ma de
against documentation received by A.I . D. or any bank naking pay ments hereunder a ft e r five years next succ e eding t he date of execu tion o f this Agre e ment .
After the l atter dat e , A. I . D. may at any
time or times reduce the amount of th e Loan by a l l or any part
thereof for which documentation was no t rec e ived by such d ate .
-2 0ARTICLE VII
cancellation and Suspension
SECTION 7 . 0 1.
Cancellation by the Borrowe r .
The Borrower may ,
with th e prior written consent of A.I . D., by written notice to l\ .I . D. ,
ｾ
cancel any part o f the Loan (i) which , prior to the giving of such
ｮ ｯｴ
ｩ ｣･
Ｌ＠
A.I.D. has not disbursed or committed itself to disburs e ,
or (ii) which has not been uti l ized through reimburs ement or through
payments made through other procedures .
SECTION 7 . 02 .
o f the f o llowing eve nts
(a)
Events of De fa ult; Acceleration .
I f any one
( " Events of Default") shall occur:
The Borrower shall have f a iled to pay when due any
interest or installment o f Prin c i pal r equi red under this Ag r eement ;
(b)
The Borrower shall have faile d to comply with any othe r
provision of this Ag reement , inc l udi n g , but without limita tion , the
obligation to ca rr y out the Pro j e c t wi th due d ili ge n ce and e ffic i e ncy ;
or
(c)
The Borrower shall have f ai led to pay when d ue any
interes t or any ins ta llment of Principal or a ny o th e r p ayment required under any other loan agreement , any gua ran ty agr e e ment , or
any other agr eement betwee n the Borrower or a ny of its age nci es and
the Gove rnme nt o f the United States , or any o f i ts agenc i es , then
A.I.D . ma y , at its option, giv e to t he Bor rower notice that all or
,,,- .
any part of the unrepaid Principa l shall be due and p3yable sixty
(60 ) days thereafter , a n d , unless the Event o f De f ault is cured
within s ixty (60) d ays :
(i)
such unrepaid Principal and any acc rued
inte r est he r eun der shall be due and paya bl e immedia tely ;
- 21 and
( i i)
the amoun t of any fur t her di sbu rsements
made under then ou ts tandi ng Letters of Credi t or
any r e imburs e ment or otherwise shall b ecome due
and payable as soon as made .
SECTION 7 . 03 .
Sus pe nsion o f Di sburs ement o r Reimburs ement .
In the eve nt that at any time :
(a)
An event o f default has occurred ;
(b)
An event occur s that A. I.D . determin es to be an extra -
ordinary situation that makes it improbable e ither that the purpose
o f the Loan will be attained o r tha t
t he Borrower will b e able to
perform its o bl igations under this Agr eement;
(c)
A. I . D. determ i ne s tha t
the ov era ll Projec t
is not being
car ri ed out satis f actorily i n acco r dance with agreed upon s tandards
and criteria ; er
(d)
Any disbursement o r re i mbursement b y A.I . D. would be in
violation o f the legislation gover ning A. I . D. ; then A. I . D. may , at
i ts option :
(i)
sus pend or cance l o utstand ing commitment
do c umen ts to the extent that they have not been
utili zed through the i ssua n ce of irr e vocable Letters
of Credit or through bank payme nt s made othe r than
und e r
irrevocable Letters o f Cr edit , in wh i ch
･ｶ
･ｮｾ＠
A. I . D. sha l l g i ve no tic e to the Borrower promptly
therea f ter ;
( ii)
dec lin e to make disbursemen ts other than unde r
outstanding commi t ment documents;
- 22-
(iii)
decline to issue additional corrunitment documents
or make additional reimbursements ; and
(iv)
at A. I . D. 's e xpense, direct that title to goods
financed under the Loan shall be transferred to A. I . D.
i f the goods are from a source outsid e Indonesia , are
in a deliverable state and have not been offloaded in
ports of entry of Indonesia .
Any disbursements or re-
imbur sements made or to be made under the Loan with
respect to such transferred goods shall be deducted
from Principal .
SECTION 7 . 04 .
cancellation by A. I . D.
Following any, suspension
of disbursements or reimbursements pursuant to Section 7 . 03 , i f the
cause or causes for such suspension of disbursements or reimburs ements shall have not been eliminated or c orrected within sixty (60)
days fro m the date o f such suspension , A. I . D. may , at its option ,
at any time or times thereafter, cancel all or any part of the Loan
that is not then either disbursed or subject to irrevoca ble Letters
of credit .
SECTION 7 . 05 .
Continued Effectiveness of Agreement .
Not -
withstanding any cancellation , suspension of disbursement or
ｾ
r eimbursement , or acceleration of repayment , the provisions o f this
ｾ＠
Agreement shall continue in fu ll force and effect until the payment
in full of all Principal and any accrued interest hereunder .
SECTION 7 . 06 .
(a)
Re f unds.
In the case of any disbursement or reimbursement not
supported by valid documentation in accordance with the t e rm s of
this Agreement , or of any disbur s°-ments or reimbursements not made
-23or u sed in accordance with the terms of t h i s Agreement , A. I.D.,
notwithstanding the availability or exe rcis e of any of the other
r emedies provided for under this Agreement , may•equir e the Borrower
to refund such amount in United States dollars to A. I . D. within
sixty (60) days after receipt of a request therefore .
Such amou.nt
shall be made available first for the cost of goods and services
procured and reimbursement fo r acceptably completed units of
work or tr a ining for the Project hereunde r , to the extent justified,
the re mainder , if any , shall be applied to the installments of
Principal in the inverse order of t heir maturit y and the amount
o f the Loan shall be reduced by the amoun t of such remainder.
Notwithstanding any other provision i n this Agreement, A. I . D.'s
right to r equ ir e a
ｾ ･ｦｵｮ､＠
with respect to any d i sbursement or
reimbursement under the Loan shall cont inue for five years follow ing the date of such disbu r sement or reimbursement .
(b )
In the event that A. I.D . receives a refund from
an y cont r acto r, s upplier , or bank i ng insti tution, or from any
other third party connected with th e Loan , with respect to goods
or services f i nanced under the Loan, and such r efund relates to
an unr easonable price for goods or serv i ces , or to goods that did
not confo rm to specif i cat ions, or to services that were inad equate ,
r-
A. I . D. shall f i rst make such refund available fo r the cost of
goods and services procured and re imbursement for acceptably
compl eted units of work Jr training for the Project hereunder, to
th e extent justified , t he r ema inder to be appli ed to the ins tallments of Princi pal in the inverse order of their maturity and the
amount of the Loan shall be reduced by the amount of such remainder .
-24SECTION 7.07 .
Expenses of Collection.
All r easonable
costs incurred by A.I.D. , othe r than salaries of its staff , in
connect ion with the co l lection of any r efund or in conn ect ion
with amoun ts due A. I.D . b y reason of the occurrence of any of
the events specified in Section 7.02 ma y be cha r ged to the Borrower
and r eimburs ed to A. I . D. in such manner as A. I . D. may spe cify .
SECTION 7.08.
Nonwaive r of Remedies .
No delay in
exercisi ng or om ission to e x e r c ise any right , power , or remedy
accruing to A. I . D. unde r th i s Agreement shall be construed as
a waiv e r o f any of such rights , powers , or remedies .
ARTICLE VIII
Miscellaneous
SECTION 8 . 0 1.
Communications.
An y not ice , request ,
document , or other c ommunication given , made , or sent by the
Borrower or A. I.D. pursuant to this Agr eement shall be in writing
or by te l egram, cabl e or rad i o g ram and sha ll be de e me d to have
been duly g ive n, made , or sent to t h e party to wh i c h it is
addresse d when i t s hall be delivered to such party by hand or by
ma il , te l egra m, cabl e , or rad iogram at the following address :
TO BORROWER :
Mail Address:
Depar temen Luar Neger i
Taman Pej ambon 6
Jakarta , Indonesia
cable Address:
DEPLU Jakarta
TO A. I. D. :
Mail Address :
United States Agency f or Inte rna tional De velopme n t
American Embassy
Jakarta, Indonesia
- 24SECTION 7.07 .
Expenses of Collection.
All reasonabl e
costs incurred by A.I . D., othe r than salaries of its staff , in
connection with the col l ection of any refund or in connection
with a mounts due A.I.D. by reason of the occurrence of any of
the ev e nts specified in Section 7 . 02 may be charged to the Borrower
and reimbursed to A. I .D. in such manner as A. I . D. may sp e cify .
SECTION 7.08.
Nonwaiv e r of Remedies.
No delay in
exerci s ing or om ission to exerc ise any right , power , or remedy
ac c ruin g to A. I . D. under this Agreement shall b e con strue d as
a waiv e r of any of such rights, powers , or reme dies .
ARTICLE VIII
Miscellaneous
SECTION 8 . 01 .
Communications.
Any noti ce , r e que st ,
document , or othe r communica t ion given , made , or s e nt by the
Borrowe r or A. I . D. pursuant to th is Agreement shall b e in writing
or by telegram , cab l e or r adiogram and shall be de eme d t o hav e
b een duly given , made , or sent to the party to wh i ch it i s
a d d ressed when it shall be delivered to such par t y by ha nd or by
mail , te l egram , cable, or r adiogram at the following add re ss:
TO BORROWER:
Mail Addr e ss:
Departe men Lua r Neger i
Taman Pe jambon 6
Jakart a , Indones i a
Cable Address :
DEPLU Jakarta
TO A.I . D.:
Mail Address:
United States Ag e ncy f or Int e rna tional De v e lopme nt
American Embassy
Jakarta, Indon e sia
- 25-
USA ID AMEMB Jaka rta
Cable Address :
Othe r add res ses may be substituted for the a bove upon th e givin g of
notic e .
All not i ces , r equests , commu nications, and d ocument s
submitted to A. I.D. he r eunder shal l be in English , except as