Selanjutnya

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LOAIJ

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AGREEMENT

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WATER

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RESOURCES
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SECTORAL LOAN
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A U G U S T

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THIS AGREEMENT MADE IN DUPLICATE
the 25th day of August 1976

BE'1WEEN:

THE GOVERNMENT OF CANADA,

herein represented by the Secretary of State for
External Affairs acting through the President of
the Canadian International Development Agency
(hereinafter referred to as "Canada"),
and

THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
(hereinafter referred to as "Indonesia")

WHEREAS Indonesia wishes to secure a development loan for projects in
the Water Resources sector; and
WHEREAS Canada is willing to make a development loan available for
this purpose on the terms and conditions provided herein;
Nmv THEREFORE the Parties hereto agree as follows:

ARTICLE I
The Loan
Section 1. 01
Canada shall
ｭｾ＼･＠

available to Indonesia on the terms and conditions

hereinafter set forth a Loan in an amount not to exceed ten million
Canadian dollars ( .$10,000,000.00) .
Section 1.02

Canada shall open on its books a Loan Account in the name of Bank
Indonesia acting for and on behalf of Indonesia; and shall credit to
such Account the full amount of the Loan.

Withdrawals, payments and

disbursements may be made from the Loan Account in accordance with
the provisions of this Agreement.

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Section 1.03
This Loan shall be free from interest, commitment or service charges.
Section 1.04

Repayment of the principal amount of the Loan shall be made in eighty
(80) semi-annual instalments of one hundred and VNenty-five thousand
Canadian dollars ('Pl25,000 . 00) each, due and payable on June

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and

December 31 in each succe.:>rling year commencing on December 31, 1986 and
ending on June 30, 2026.
Section 1 . 05
Indonesia shall have the right to prepay the principal amount in whole
or in part on any date without Notice to Canada.

The ammmt of any

such prepayment shall be applied to the Instalments of the principal
then remaining payable in the reverse order of their maturity.
Section 1 . 06
All payments as set forth herein shall be made by Indonesia in

Canadian dollars to the Receiver General for Canada, and shall be
deemed to have been paid when received by the Receiver General for
Canada.
Section 1.07
The Principal of the Loan shall be paid to Canada without any deductions whatsoever, and more particularly shall be free from any truces,
charges or other restrictions imposed under the laws of Indonesia and
those in effect in its territories or administrative, political or
juridical divisions or subdivisions .

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- 3Section 1 . 08
The Parties agree that they will negotiate, at the request of either
Canada or Indonesia, concerning acceleration of payments to the
Receiver General for Canada required to be made under this Agreement
at any time after six (6) months before the first payment of the
principal becomes due and payable.

Canada and Indonesia shall mutually

deterrnine whether such an acceleration should take place on the basis
of the capacity of Indonesia to service a more rapid liquidation of
its obligations in the light of its internal and external financial
and economic position.

ARTICLE II
Use of the Loan
Section 2. 01
Except as may otherwise be specifically agreed to by Canada, the proceeds of the Loan shall be used by Indonesia exclusively for the

purchase of agreed goods and services as described in Annex "A", and
the procedures for their procurement and payment shall be those set
forth in Annex "B" .

Each Annex shall be subject to such subsequent

modifications as may be agreed upon between Canada and Indonesia.
Section 2.02
Services, materials and equipment to be financed from the proceeds of
the Loan shall be used exclusively to carry out the Projects: the goods
and services procured in Canada and financed from the Loan shall have
an overall Canadian content of not less than sixty- six and two-thirds
percent (66 2/3%) unless otherwise agreed to by Canada.

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- 4 Section 2.03
Services, material and equipment contracted for prior to the effective
date of this Agreement may not be financed out of the proceeds of the
Loan except as may otherwise be agreed to by Canada.

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Section 2.04
Proceeds from the Loan shall not be used by Indonesia to meet the cost
of any taxes, fees or customs duties imposed directly or indirectly by
Indonesia on any services, material or equipment required for the
Project.

ARTICLE III

Withdrawals of Proceeds of Loan

Section 3.01
Withdrawals shall be deemed to occur on the dates on which payments
are made by Canada either directly to Indonesia or its designated agent,
or to a firm or banking institution in respect of goods and services
supplied under this Agreement.
Section 3.02
Subject to the conditions and limitations set forth herein, Indonesia

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shall be entitled to withdrawals from the Loan Account in such amounts
as are required to meet the costs of the goods, services and freight
and insurance which are eligible for financing as the costs become
due and payable in accordance with Annex 11 B11 •

- 5 Section 3.03
Indonesia or its designated agent shall provide Canada with a copy of
each contract or purchase order for the procurement of services,
materials and equipment in respect of which any withdrawal is to be
made and a copy of each irrevocable Letter of Credit issued under this

Agreement.
Section 3 . 04
Withdrawals from the Loan Account may be in favour of such persons or
agencies as may be designated by Indonesia and agreed to by Canada.
Section 3.05
Indonesia or its designated agent shall furnish or cause to be furnished
to Canada such documents and other evidence in support of the Letter(s)
of Credit as Canada may reasonably request, such evidence to be
sufficient in form and substance to establish that the amounts to be
withdra111111 are properly related to the pur!)Ose of the Project.

ARTICLE IV
Cancellation and Suspension
Section 4. 01

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Indonesia may, by sixty ( 60) days • written Notice to Canada, cancel all
or any part of the Loan not withdra\11111 by Indonesia prior to the giving
of such Notice and not required to meet outstanding financial obligations to suppliers or firms incurred under the Loan.

- 6 Section 4. 02
If any of the following events occur, Canada may suspend in whole or
in part the right of Indonesia to make withdrawals under the Loan
Agreement or declare the principal outstanding due and payable immediately and cancel that part of the loan not previously withdrawn:
(a)

a default by Indonesia in the payment of principal or in any
other payments or repayments required under this Agreement
and the Annexes hereto;

(b)

a default on the part of Indonesia in the performance of
any undertakings under this Agreement; and

(c)

any extraordinary situation which renders it impossible
for Indonesia to perfonn its obligations under this
Agreement.

Section 4.03
If the full amount of the Loan is not committed by September 30, 1981
the balance will be cancelled by sixty ( 60) days' written Notice from
Canada and the final instalment or instalments of the repayment to be
made shall be reduced accordingly unless otherwise agreed to by
Canada.

ARTICLE V

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General Undertakings
Section .5.01
Indonesia shall ensure that the Projects are carried out, operated and
maintained with due diligence and efficiency and in confonnity with
sound engineering, construction and financial practices.

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- 7 Section 5.02
Canada and Indonesia shall cooperate fully to ensure that the purpose
of the Loan will be accomplished, and each shall furnish to the
other all such information as shall reasonably be requested with regard
to the general status of the Loan.

Indonesia shall inform Canada as

soon as possible of any condition or contingency which interfere s with,
or threatens to interfere with, the accomplishment of the Projects or
any matter or thing in connection therewith.
Section 5.03
Indonesia shall afford accredited representatives of Canada all
reasonable opportunities to visit any part of the territories of
Indonesia for the purpose related to this Loan Agreement.
Section 5.04
This Agreement and any Annexes thereto shall be free from any taxes,
fees or other charges that may be imposed under the laws of Indonesia
and those in effect in its territories or administrative, political or
juridical divisions or subdivisions in connection with the execution,
issue, delivery and registration thereof.
Section 5. 05
It is understood and agreed by Indonesia and Canada, that the Articles
of this Agreement and Annexes

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A11 , "B" and "C" hereto, all form an

integral part of the present Agreement.
Section 5.06
Indonesia shall provide or cause to be provided as needed, all local
cost financing and resources which may be required to implement the
Projects.

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Section 5.07
For the purposes of this Agreement and Annex.es hereto Indonesia
shall include any agent or agents authorized by and on behalf of
Indonesia with regard to its rights, duties and obligations herein.

ARTICLE VI
Communications
Section 6.01
Any communications or docurnents given, made or sent by either Indonesia
or Canada pursuant to this Agreement or any Annex hereto shall be in
writing and shall be deemed to have been duly given, made or sent to
the party to which it is addressed at the time of its delivery by hand,
mail, telegram, cable or radiogram at its respective address, namely:
For Canada:
Mail Address:

Canadian International Development Agency
122 Bank Street
OTTAWA, Ontario
Canada, Kl.A OG4.

Cable Address:

CIDA, OTT AWA

and/or

Canadian Embassy

6, Jalan Budi Kemuliaan
Jakarta Pusat, Indonesia

Cable Address:

DOMCAN, Jakarta

For Indonesia:
Mail Address:

Department of Foreign Affairs
Jalan Pejambon 6
Jakarta, Indonesia

Cable Address:

DEPLU JAKARTA

and/or

Cable Address:

Bank Indonesia
Jalan Kebon Sirih No. 82-84
Jakarta, Indonesia
DELEGASI, JAKARTA

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Any one of the Parties may by written notice to the other Party
hereto, change the address to which any notice or request intended
for the Party so giving such notice shall be addressed.
Section 6. 03
All communications and documents pertaining to t his Agreement shall
be in the English language.

ARTICLE VII
Simultaneous Execution of Agreement
Section 7 . 01
This Agreement inay be simultaneously executed in several counterparts,
each of which so executed shall be deemed to be an original.
Section 7 . 02
This Agreement and Annexes "A",

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B11 and "C" attached hereto , which

fonn part of this Agreement, may be amended from time to time upon
agreement of the parties concerned.

Amendment to the main body of the

Agreement shall be executed by a formal amendment signed by the
authorized representatives.
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amendments to the Annexes may be

by an Ex.change of Letters between Indonesia and Canada.

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IN WI'INESS 1/'IHEREOF the Parties hereto have caused to be subscribed
the signature of their authorized representative at the City of
Jakarta as of the day and the year first above written.

SIGNED ON BEHALF OF
THE GOVERNMENT
OF CANADA

Signed

an J. MacEachen
Sec
ary of State for
E ernal Affairs

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SIGNED ON BEHALF OF
\ TIIE GOVERNMENT OF THE REPUBLIC
OF INDONESIA

Signed

H. Adam Malik
Minister of Foreign Affairs

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WATER

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A11
PROJECTS

LOAN AGREEMENT

BETWEEN THE GOVERNMENT OF TEE REPUBLIC OF INDONESIA

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THE GOVERJ!MEN T OF

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Use of the Loan
1.1

The proceeds of the Loan are to be used exclusively to
finance the purchase of certain engineering and consulting
services, equipment, and materials in Canada and f or the
payments of freight and insurance vl/hich are required for
development projects in Indonesia related to the development
of the Water Resources sector .

The equipment, materials

and services supplied under the Loan shall not exceed ten
million Canadian dollars ($10,000,000. 00) and shall be approved
through simple exchange of letters between Canada and
Indonesia.
1 . 2 Purchases under the Loan shall have an overall Canadian content of not less than sixty-six and tl,/1/()-thirds percent (66 2/3%)
and shall be eligible for export under Canadian export regulations and for import under Indonesian import regulations.

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1. 3

Atomic energy materials and equipment, arms, armaments, guns,
ammunition, and all other equipment or materials for primarily
military use or for the manufacture thereof are prohibited
for supply under this Loan .

1.4

At Canada's request, substaDtiation may be required from time
to time that the products and services purchased under this
Agreement are required for developmental purposes by Indonesia.

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WATER RESOURCES PROJECTS
LO AN AGREEMENT

BE'IWEEN THE GOVERNMENT OF THE REPUBLIC OF JJIDONESIA

- and THE GOVERNMENT OF CANADA

1.0

Procurement and Payment Procedures
1.1 Project proposals with definition and justification of the
project along with other supporting documentation (i.e.
equipment, materials and consulting services eligible for
financing under this Loan Agreement) will be supplied by
Indonesia for approval by Canada through simple exchange of
letters .
1.2 Equipment, materials and services eligible for financing
under this Loan Agreement will be procured by the Ministry
of Public Works and Electric Power, Directorate General of
Water Resources Development as the executing agency acting
on behalf of Indonesia.

2.0 Procurement of Consultant Services
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When consultant services are procured in Canada under this
Agreement, a competitive proposal call shall be made fro:n a
representative number of qualified Canadian finns, unless
otherwise agreed to by Canada.

Lists of Canadian flrms may

be obtained from the Canadian Embassy in Jakarta or from
Canada.

- 13 2. 2

The list of Canadian firms invited to propose shall be as
approved by Canada unless otherwise agreed to by Canada.

2. 3

The evaluation of the proposals and the selection of the
firm which Indonesia wishes to ernploy shall be made on
basis of:

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the qualifications of the firm to undertake the
assignment;

(b)

the projects of the same type that the firm has undertaken in the past;

(c)

the size of the staff of the firm;

(d)

the volume of V\Qrk now on hand and the extent to which
higher supervisory officials will be available ;

(e)

the numbers and qualifications of the firm's personnel
who are to be used on the work, the periods of their use
and the proportion of permanent to temporary staff;

(f)

firm's understanding of the project requirements and
approach to undertaking the project.

2. 4

The proposed financial terms and costs will be submitted
concurrently with the technical proposals but in separate and
sealed envelopes to be opened only after the selection of the
consultant invited for contract negotiat:ons.

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2.5

The firms shall not be required to tender or bid against
each other for appointments on the basis of fees .

They

should compete against each other only on the basis of qualifications, experience and competence .

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will be responsible for the negotiation of the
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contract.

The execution of the negotiated contract is

subject to the prior approval of Canad.a.
J . O Procurement of Equipment and Materials
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All procurement of equipment and materials shall be subject
to competitive tender procedures unless prior approval for
waiver is obtained from Canad.a.

3. 2

Before any purchase contracts are entered into, the prospective contracting party shall invite tenders from a
representative number of Canadian suppliers of the required
products unless otherwise agreed to by Canada.

J.3

A copy of each Invitation to Tender, together with a list
of Canadian suppliers invited to tender , shall be forwarded
by Indonesia to the Canadian Embassy in Jakarta or to Canada.

3.4

Tenders for materials, equipment and related services will be
called on the basis, as may be applicable in the particular
case , of supply, delivery to site, installation and erection,
construction, completion and warranty maintenance thereof .
Where applicable tenders shall be instructed to show separate
costs of supply FOB and insurance and freight, and the cost
of local operation in Indonesia in their bids .

3. 5 Lists of Canadian suppliers may be obtained from the Canadian
Embassy in Jakarta or from Canada.

The assessment of the

tenders received will be forwarded to Canada.

Prior to the

issuance of a purchasing contract, Bank Indonesia will obtain

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- 15 confirmation from Canada to the use of the Loan for each
transaction through Canada which will constitute clearance
for the transaction for Canadian content and tendering
regulations .

3. 6 The Canadian companies invited to tender shall be instructed
to:

3. 6.l include in their tender a declaration of the Canadian
content of the equipment and materials they are
offering for purchase;

3. 6. 2 send copies of all tenders to Canada at the same time
as they are forwarded to the recipient Indonesian
procurement agency; (the copies of tenders received by
Canada will be treated as a closed tender call and not
opened until the dates established by the recipient);

J. 6. J complete a Canadian Content Form including statement
that the price is fair and reasonable and forward it
to Canada with each copy of tender; and

3. 6. 4 subnit to Canada, technical specifications complying
with the Canadian quality standards for the equipment
and materials to be supplied.

3. 7 If other than the lowest evaluated tender with acceptable
Canadian content is to be approved, the concurrence of Canada
shall be obtained before the purchase contract is issued.

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J.8 Canada may upon receipt of formal advance application,
waive the requirement for competitive tenders in the situations specified hereunder:

J. 8.1 when procurement concerns equipment and materials
which are only available from a single source;

J. 8. 2 when procurement concerns equipment and materials
which by nature and specification are peculiar to a
specific manufacturing process or end equipment and
materials; and

J. 8. 3 when equipment and materials are to be procured under
such other conditions which appear to Canada to merit
a waiver from the tendering procedures.
Applications for waiver, supported by reasons therefore, must be forwarded through the Canadian Einbassy,
Jakarta to Canada.

No procurement action shall be

initiated until the notification of approval is given
by Canada.

J.8. 4 In these c a ses where competitive tenders waived the
Canadian supplier prior to shipment of equipment and
materials shall be instructed to complete a Canadian

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Content Form and forward it along with technical
specifications complying with Canadian quality standards
and all supporting documentation, as specified in the
Letter of Credit, to Canada for approval .

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3. 9 The Canadian supplier or the accredited Canadian selling
agent for Indonesia shall be responsible for:
(a)

arranging and paying for freight and insurance; and

(b)

inspection of the equipment and materials prior to
packing and shipping.

3.10

In those cases where special equipment and materials are required by the consultant to carry out his tasks as specified
in the contract, Indonesia may request the consultant to act
on its behalf to procure the required equipment and materials
in accordance with the foregoing procurement procedures .

4.0

Payment Procedures - Equipment , .Materials and Services

4.1 The Bank Indonesia shall, when a contract is awarded, open
through Canadian Bank letters of credit in favour of Canadian
suppliers.
4. 2

Canada shall confirm to the Canadian Bank that the Bank will
be reimbursed by Canada from the development loan funds ,
upon receipt of evidence of shipments having been made under
and in conformity with terms of letters of credit opened by
Bank Indonesia.

4. 3 All banking charges incurred by the Bank Indonesia in
connection with the opening of letter of credit through the
Canadian Bank will be reimbursed by Canada from the development loan funds .

Any interest charges that may be payable

by Bank Indonesia to the Canadian Bank in the event of that
bank advancing funds to meet payments to Canadia..r1 suppliers
will also be reimbursed by Canada from the development loan
funds.

Statements of disbursements will be prepared by

Canada and forwarded to Bank Indonesia at least on six monthly
basis.

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ANNEX "C"

RESPONSIBILITIES OF THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
1.0 With respect to equipment and materials, and to consultant
services provided from Canada, Indonesia will be responsible,
subject to the existing rules and regulations, for the following:

1.1

To arrange with Indonesian customs officials to properly
clear through Indonesian customs free of imports , customs
and other duties and tax.es all equipment and materials r equired to support and undertake the implementation of the
Project(s).

Indonesia will exempt the consultant and its

personnel (other than personnel who are citizens or permanent residents of Indonesia) from, or bear the cost of, any
tax.es, duties, fees, levies, and other irnpositions imposed
under its laws and regulations or the laws and regulations
in effect in its territories or ariy political s ubdiVision.

1.2 To provide at no cost to the loan account, local facilities
and services in accordance with local standards, to enable
the consultant to implement the project(s) .
Details of facilities and services requirements shall be
subject to individual contractual obligation.

1.3 To provide :
(a)

all Indonesian permits, licences and other sucl1 documents required to enable Canadian personnel to carry out
their respective responsibilities in Indonesia;

- 19 (b)

all export and exit permits required for the return
of any of the material, equipment or effects (including
personal effects) which are the p roperty of or are provided by the Goverrunent of Canada, the firm or individual
Canadian employed on the provision of servic es under
this .\greement; and

(c)

access to those parts of Indonesia required to enable
Canadian pers(mnel to carry out their responsibilities
in Indonesia.

1.4

To indemnify and save harmless, at no cost to the Loan
Account, Canada or its personnel engaged in the performance
of duties in connection with the Loan, from any civil liability arising from any claims resulting from:
(a)

injury or death of any such personnel during the performance of his duties relative to the Loan;

(b)

injury or death of any person arising from the work of
the project; and

(c)

property damage arising from the work of tne µr o ject(s).
This provision will not relieve any such personnel of
Canada f:-om liability for any fraudulent or criminal

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- 20 2. 0

dith respect to materials, equipment and related services
provided from Canada:
2. 1

Arrange for inspection and testing, as llecessary.

All

foreign exchange costs pertaining to inspection and testing
of materials and equipment procured in Canada for projects

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funded under this Loan will be reimbursable under this
Agreement, where these costs are not already reimbursable
under existing financing arrangements for the project(s)
concerned.
2. 2

Undertake to be responsible for arrangement of adequate
insurance for short shipments, losses or drunage

to the equip-

ment and materials during shipment and in transit.

If any

part of the lost or damaged equipment and materials is prefinanced for replacement out of the Loan Fund pending settlement of insurance claims, on settlernent of such claims the
amounts will be deposited to the account of the Loan Fund
and will be paid in Canadian dollars .

2. 3 Indonesia shall be responsible for the preparation and submission of cla:iJns to Canadian suppliers for short shipments,
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for the preparation and sul:rnission for insurance cla:iJns

in the event of losses or damage to coITlf'lodities while in

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transit.

2. 4 Demurrage resulting from failure to provide proper berthing
shall be to the account of Indonesia or its designated agent
and may be considered a liable charge against the Loan.