C LOAN NUMBER 1803 AL

Loan Agreement

(Fifth Education Project)

between

DEMOCRATIC AND POPULAR REPUBLIC OF ALCERIA

and

INTERNATIONAL BANK FOR RECONSTRUCTIONAND DEVELOPMENT

Dated , 1980

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LOAN NUMBER 1803 AL

LOAN AGREEMENT

AGREEMENT, dated 9O.LC Lk , 1980, betweenDEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA (hereinafter called theBorrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOP-MENT (hereinafter called the Bank).

ARTICLE I

General Conditions; Definitions

Section 1.01. The parties to this Agreement accept allthe provisions of the General Conditions Applicable to Loanand Guarantee Agreements of the Bank, dated March 15, 1974,with the same force and effect as if they were fully set forthherein (said General Conditions Applicable to Loan and GuaranteeAgreements of the Bank being hereinafter called the GeneralConditions).

Section 1.02. Wherever used in this Agreement, unless thecontext otherwise requires, the several terms defined in theGeneral Conditions have the respective meanings therein set forthand the following additional terms have the following meanings:

(a) "ITC" means Industrial Training Centers (Centres deformation ouvriere or CFO), agencies of MOLI;

(b) "MTC" means Maintenance Training Centers (Centresde formation technique pour les metiers de l'artisanat or CFTA);

(c) "NIMTI" means National Institute for Maintenance TradeInstructors (Centre pilote de formation de formateurs pourl'artisanat or CPFF), an agency of MOLI;

(d) "NIMTA" means National Institute for Maintenance TradesAdministration (Institut national des metiers or INM), an agencyof MOLI;

(e) "M13HE" means the Borrower's Ministry of Higher Educationand Scientific Research (Ministere de l'enseignement sup6rieuret de la recherche scientifique or MESRS);

(f) "MOLI" means the Borrower's Ministry of Light Industries(Ministere des industries l'geres or MIL); and

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(g) "MOL" means the Borrower's Ministry of Labor andVocational Training (Ministere du travail et de la formationprofessionnelle or MTFP).

ARTICLE II

The Loan

Section 2.01. The Bank agrees to lend to the Borrower,on the terms and conditions in the Loan Agreement set forthor referred to, an amount in various currencies equivalent toeighty-seven million dollars ($87,000,000).

Section 2.02. The amount of the Loan may be withdrawnfrom the Loan Account in accordance with the provisions ofSchedule 1 to this Agreement, as such Schedule may be amended fromtime to time by agreement between the Borrower and the Bank, forexpenditures made (or, if the Bank shall so agree, to be made) inrespect of the reasonable cost of goods and services required forthe Project described in Schedule 2 to this Agreement and to befinanced out of the proceeds of the Loan.

Section 2.03. Except as the Bank and the Borrower shallotherwise agree, procurement of the goods and civil works to befinanced out of the proceeds of the Loan, shall be governed by theprovisions of Schedule 4 to this Agreement.

Section 2.04. The Closing Date shall be December 30, 1984or such later date as the Bank shall establish. The Bank shallpromptly notify the Borrower of such later date.

Section 2.05. The Borrower shall pay to the Bank a commitmentcharge at the rate of three-fourths of one per cent (3/4 of 1%)per annum on the principal amount of the Loan not withdrawnfrom time to time.

Section 2.06. The Borrower shall pay interest at the rateof eight and twenty-five hundredths per cent (8.25%) per annumon the principal amount of.the Loan withdrawn and outstanding fromtime to time.

Section 2.07. Interest and other charges shall be payablesemiannually on January 1 and July 1 in each year.

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Section 2.08. The Borrower shall repay the principal amount

of the Loan in accordance with the amortization schedule set

forth in Schedule 3 to this Agreement.

ARTICLE III

Execution of the Project

Section 3.01. The Borrower shall carry out the Project

through MOLI and MOHE with due diligence and efficiency and in

conformity with appropriate administrative and construction

practices, and shall provide, promptly as needed, the funds,

facilities, services and other resources required for the purpose.

Section 3.02. In order to assist the Borrower in equipment

procurement, architecture and educational briefs, and the imple-

mentation of the technical assistance program described in Part E

of the Project, the Borrower shall employ architectural and educa-

tional experts whose qualifications, experience and terms and

conditions of employment shall be satisfactory to the Borrower and

the Bank.

Section 3.03. (a) The Borrower undertakes to insure, or

make adequate provision for the insurance of, the imported goods

to be financed out of the proceeds of the Loan against hazards

incident to the acquisition, transportation and delivery thereof

to the place of use or installation, and for such insurance any

indemnity shall be payable in a currency freely usable by the

Borrower to replace or repair such goods.

(b) Except as the Bank shall otherwise agree, the Borrower

shall cause all goods and services financed out of the proceeds

of the Loan to be used exclusively for the Project.

Section 3.04. (a) The Borrower shall furnish to the Bank,

promptly upon their preparation, the plans, specifications,

reports, contract documents and construction and procurement

schedules for the Project, and any material modifications thereof

or additions thereto, in such detail as the Bank shall reasonably

request.

(b) The Borrower: (i) shall maintain records and procedures

adequate to record and monitor the progress of the Project (in-

cluding its cost and the benefits to be derived from it), to

identify the goods and services financed out of the proceeds of

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the Loan, and to disclose their use in the Project; (ii) shallenable the Bank's accredited representatives to visit the facili-ties and construction sites included in the Project and to examinethe goods financed out of the proceeds of the Loan and any rele-vant records and documents; and (iii) shall furnish to the Bank atregular intervals all such information as the Bank shall reason-ably request concerning the Project, its cost and, where appro-priate, the benefits to be derived from it, the expenditureof the proceeds of the Loan and the goods and services financedout of such proceeds.

(c) As soon as possible after completion of the Project, butin any event not later than six months after the Closing Date orsuch later date as may be agreed for this purpose between theBorrower and the Bank, the Borrower shall prepare and furnish tothe Bank a report, of such scope and in such detail as the Bankshall reasonably request, on the execution and initial operationof the Project, its cost and the benefits derived and to bederived from it, the performance by the Borrower and the Bank oftheir respective obligations under the Loan Agreement and theaccomplishment of the purposes of the Loan.

Section 3.05. The Borrower shall take all such action asshall be necessary to acquire as and when needed all such land andrights in respect of land as shall be required for the construc-tion and operation of the facilities included in the Project andshall furnish to the Bank, as soon as possible after such acqui-sition, documents certifying that such land and rights in respectof land are available for purposes related to the Project.

Section 3.06. The Borrower shall, not later than three monthsprior to the start of the first class, appoint to the CFTAat Oran, Souk-El-Haad and Annaba, respectively, and to the CFOat El Asnam, Ain-Beida and Djelfa, respectively, ad hoc com-mittees whose functions shall include assistance with continuouscurriculum reform, recruitment of teaching staff and of students,teaching methods and job placement, and whose members' names andfunctions shall be furnished to the Bank.

Section 3.07. The Borrower shall through the relevantnational agencies undertake regular consultations to ensurecoordination of vocational training programs.

Section 3.08. The Borrower shall furnish to the Bank for itsreview and comments, at least three months before the scheduledopening of the institutes included in Parts A (ii), B and C of the

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Project, the tracer studies component of an evaluation system tobe developed for such institutes analyzing training progress, jobplacement and career development, and shall consider any commentsmade by the Bank on such tracer studies component.

Section 3.09. The Borrower shall furnish to the Bank at theend of each school year for five years following the entrance intoprofessional life of the first graduates, from the institutes

included in Parts A (ii), B and C of the Project the results ofthe tracer studies referred to in Section 3.08.

Section 3.10. Part E of the Project shall be implementedin accordance with the schedule set forth in the Exhibit toSchedule 2 to this Loan Agreement.

Section 3.11. The Borrower shall furnish the Bank for itsreview and comments not later than six months before the openingof the institutes included in Parts A, B, C and D of the Project,equipment maintenance plans for said institutes.

Section 3.12. The Borrower shall provide:

(a) in an adequate and timely manner, the required physicalfacilities for the installation and operation of the computer-based management system included in Part D of the Project;

(b) adequate facilities including workshops and equipment

at the Institut National de la Productivite et du D6veloppementIndustriel at Boumerdes and, if necessary, also in other edu-cational institutes of the MOLI to train (i) sixty NIMTI traininginstructors during the 1980/1981 school year, and (ii) administra-tors and instructors for the ITC as agreed between the Borrowerand the Bank; and

(c) through the Societe Nationale d'Etudes, de Gestion,de Rgalisations et d'Exploitations Industrielles, technical ex-perts in such numbers, for such minimum periods, and in such

specialties as agreed between the Borrower and the Bank for thetraining of administrators and instructors and the start-up of theITC.

ARTICLE IV

Other Covenants

Section 4.01. (a) The Borrower undertakes that, exceptas the Borrower and the Bank shall otherwise agree, no lien shallbe created on any public assets (as hereinafter defined), as

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security for any external debt, which will or might result in apriority for the benefit of the creditor of such external debt inthe allocation, realization or distribution of foreign exchange.

(b) The foregoing undertaking shall not apply to: (i)any lien created on property, at the time of purchase thereof,solely as security for payment of the purchase price of suchproperty; and (ii) any lien arising in the ordinary course ofbanking transactions and securing a debt maturing not more thanone year after its date.

(c) As used in this Section, the term "public assets"means assets of the Borrower, of any subdivision thereof and ofany entity owned or controlled by the Borrower or any suchsubdivision.

Section 4.02. The Borrower shall maintain or cause to bemaintained records adequate to reflect in accordance with consis-tently maintained sound accounting practices the operations,resources and expenditures, in respect of the Project, of thedepartments or agencies of the Borrower responsible for carryingout the Project or any part thereof.

ARTICLE V

Terminatio

Section 5.01. The date P, 1980,is hereby specified for the purposes of Section 12.04 of theGeneral Conditions.

ARTICLE VI

Representative of the Borrower; Addresses

Section 6.01. The Minister of Finance of the Borrower isdesignated as representative of the Borrower for the purposesof Section 11.03 of the General Conditions.

Section 6.02. The following addresses are specified forthe purposes of Section 11.01 of the General Conditions:

For the Borrower:

Ministere des FinancesPalais du GouvernementAlgerAlg&rie

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Cable address: Telex:

FINPLAN 52062Alger

For the Bank:

International Bank forReconstruction and Development

1818 H Street, N.W.Washington, D.C. 20433United States of America

Cable address: Telex:

INTBAFRAD 440098 (ITT)Washington, D.C. 248423 (RCA) or

64145 (WUI)

IN WITNESS WHEREOF, the parties hereto, acting through

their representatives thereunto duly authorized, have causedthis Agreement to be signed in their respective names in theDistrict of Columbia, United States of America, as of the day andyear first above written.

DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA

ByAuthorized Representative

INTERNATIONAL BANK FORRECONSTRUCTION AND DEVELOPMENT

By -IS "OaykM 04 Regional Vice President

Europe, Middle East and North Africa

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SCHEDULE 1

Withdrawal of the Proceeds of the Loan

1. The table below sets forth the Categories of items to befinanced out of the proceeds of the Loan, the allocation of theamounts of the Loan to each Category and the percentage ofexpenditures for items so to be financed in each Category:

Amount of theLoan Allocated % of(Expressed in Expenditures

Category Dollar Equivalent) to be Financed

(1) Civil works (ex- 46,900,000 48%cluding studenthousing)

(2) Furniture and 24,200,000 100% of foreignequipment expenditures,

100% of localexpenditures(ex-factory)and 75% of localexpenditures(ex-store)

(3) Experts' 9,500,000services:

(a) foreign 100% of foreignexperts expenditures

(b) local 100% of foreignexperts expenditures and

80% of localexpenditures

(4) Fellowships 800,000 100% of foreignexpenditures

(5) Unallocated 5,600,000

TOTAL 87,000,000

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2. For the purposes of this Schedule:

(a) the term "foreign expenditures" means expenditures

in the currency of any country other than the Borrower and for

goods or services supplied from the territory of any country other

than the Borrower; and

(b) the term "local expenditures" means expenditures in

the currency of the Borrower or for goods or services supplied

from the territory of the Borrower.

3. The disbursement percentages have been calculated in compli-

ance with the policy of the Bank that no proceeds of the Loan

shall be disbursed on account of payments for taxes levied

by, or in the territory of, the Borrower on goods or services,

or on the importation, manufacture, procurement or supply thereof;

to that end, if the amount of any such taxes levied on or in

respect of any item to be financed out of the proceeds of the Loan

decreases or increases, the Bank may, by notice to the Borrower,

increase or decrease the disbursement percentage then applicable

to such item as required to be consistent with the aforementioned

policy of the Bank.

4. Notwithstanding the provisions of paragraph 1 above, no

withdrawals shall be made in respect of payments made for expendi-

tures prior to the date of this Agreement.

5. Notwithstanding the allocation of an amount of the Loan

or the disbursement percentages set forth in the table in para-

graph 1 above, if the Bank has reasonably estimated that the

amount of the Loan then allocated to any Category will be insuf-

ficient to finance the agreed percentage of all expenditures

in that Category, the Bank may, by notice to the Borrower: (i)

reallocate to such Category, to the extent required to meet the

estimated shortfall, proceeds of the Loan which are then allocated

to another Category and which in the opinion of the Bank are

not needed to meet other expenditures; and (ii) if such realloca-

tion cannot fully meet the estimated shortfall, reduce the

disbursement percentage then applicable to such expenditures in

order that further withdrawals under such Category may continue

until all expenditures thereunder shall have been made.

6. If the Bank shall have reasonably determined that the

procurement of any item in any Category is inconsistent with

the procedures set forth or referred to in this Agreement, no

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expenditures for such item shall be financed out of the proceedsof the Loan and the Bank may, without in any way restrictingor limiting any other right, power or remedy of the Bank underthe Loan Agreement, by notice to the Borrower, cancel such amountof the Loan as, in the Bank's reasonable opinion, representsthe amount of such expenditures which would otherwise have beeneligible for financing out of the proceeds of the Loan.

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SCHEDULE 2

Description of the Project

The Project consists of the following Parts:

Part A:

Design, construction and equipping at Souk-El-Haad of:

(i) the NIMTA;

(ii) the NIMTI; and

(iii) staff and student housing.

Part B:

Design, construction and equipping at Oran, Souk-El-Haad andAnnaba of:

(i) three MTC; and

(ii) staff and student housing.

Part C:

Design, construction and equipping at El Asnam, Ain-Beida and

Djelfa of:

(i) three ITC; and

(ii) staff and student housing.

Part D:

Installation of a computer-based management informationsystem in MOHE and at the Universities at Algiers (SocialSciences), USTA (Science and Technology), Annaba, Constantineand Oran.

Part E:

Setting up of an administrative and pedagogical organization,in accordance with international standards, at the NIKTI, the MTC,

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and the ITC, and introduction of the computer-based management

information system in MOHE through 36 man-years of fellow-

ships for 55 students and 67 man-years of consultants for 37

experts as set forth in the Exhibit to this Schedule, and through

other technical assistance as agreed between the Borrower and

the Bank.

The Project is expected to be completed by June 30, 1984.

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EXHIBIT TO SCHEDULE 2

Experts' Services and Fellowships

Experts FellowshipsNumber Man-Years Number Man-Years

NIMTA 4 16 6 2

NIMTI 22 38 8 7

MTC included 7 11 - -in Part B ofthe Project

ITC included 3 1 5 3

in Part C ofthe Project

Part D of 1 1 36 24

the Project

37 67 55 36

NIMTA experts will include a coordinator/co-director and

three specialists in training, artisan organization (studies and

research), and construction, and fellowship training will be

provided for their replacement. NIMTI experts will include a

coordinator, seventeen specialist teachers and four visiting

specialists on equipment; fellowship training will be provided for

teachers of priority specialisms. MTC experts will include advi-

sors to directors and assistants to workshop supervisors in the

three centers and a visiting consultant on equipment installation.

ITC experts will include three visiting consultants on metal and

wood, construction materials and food processing; fellowship

training for one administrator and four training supervisors. For

Part D of the Project, an expert for management information

systems is included and fellowship training on data processing.

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SCHEDULE 3

Amortization Schedule

Payment of PrincipalDate Payment Due (expressed in dollars)*

On each January 1 and July 1

beginning July 1, 1984through July 1, 1998 3,000,000

* To the extent that any portion of the Loan is repayable ina currency other than dollars (see General Conditions,Section 4.02), the figures in this column represent dollarequivalents determined as for purposes of withdrawal.

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Premiums on Prepayment

The following percentages are specified as the premiumspayable on repayment in advance of maturity of any portion ofthe principal amount of the Loan pursuant to Section 3.05 (b)of the General Conditions:

Time of Prepayment Premium

Not more than three yearsbefore maturity 1.30%

More than three years but notmore than six yearsbefore maturity 2.60%

More than six years but notmore than eleven yearsbefore maturity 4.80%

More than eleven years but notmore than fourteen yearsbefore maturity 6.10%

More than fourteen years but notmore than seventeen yearsbefore maturity 7.40%

More than seventeen yearsbefore maturity 8.25%

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SCHEDULE 4

Procurement

A. International Competitive Bidding

1. Except as provided in Part C hereof, goods and civil worksshall be procured under contracts awarded in accordance withprocedures consistent with those set forth in the "Guidelines forProcurement under World Bank Loans and IDA Credits" published bythe Bank in March 1977 (hereinafter called the Guidelines), on thebasis of international competitive bidding as described in Part Aof the Guidelines.

2. For goods and works to be procured on the basis of inter-national competitive bidding, in addition to the requirementsof paragraph 1.2 of the Guidelines, the Borrower shall prepareand forward to the Bank as soon as possible, and in any eventnot later than 60 days prior to the date of availability to thepublic of the first tender or prequalification documents relatingthereto, as the case may be, a general procurement notice, in suchform and detail and containing such information as the Bank shallreasonably request. The Borrower shall provide the necessaryinformation to update such notice annually so long as any goods orworks remain to be procured on the basis of international competi-tive bidding.

3. (a) Furniture and equipment shall be grouped to the extentpossible so as to permit bulk procurement.

(b) Bid documents shall specify that equipment suppliersshall be required to provide a minimum of three weeks of trainingfor the personnel necessary for the proper operation of theequipment, at or around the installation time, in the use andmaintenance of the equipment, and that suppliers of the computer-based management information system included in Part D of theProject shall install or cause to be installed humidity andtemperature control systems.

4. For the purpose of evaluation and comparison of bids forthe supply of goods to be procured on the basis of internationalcompetitive bidding: (i) bidders shall be required to statein their bid the c.i.f. (port of entry) price for the importedgoods, or the ex-factory price or off-the shelf price of othergoods offered in such bid; and (ii) customs duties and other

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import taxes levied in connection with the importation, or thesales and similar taxes levied in connection with the sale ordelivery, pursuant to the bid, of the goods shall not be takeninto account in the evaluation of the bids.

B. Preference for Domestic Manufacturers

In the procurement of goods in accordance with the proceduresdescribed in Part A of this Schedule, goods manufactured inthe Democratic and Popular Republic of Algeria (hereinafter calledfor the purposes of this Schedule "Algeria") may be granted amargin of preference in accordance with, and subject to, thefollowing provisions:

1. All bidding documents for the procurement of goodsshall clearly indicate any preference which will be granted,the information required to establish the eligibility of a bidfor such preference and the following methods and stages that willbe followed in the evaluation and comparison of bids.

2. After evaluation, responsive bids will be classifiedin one of the following three groups:

(1) Group A: bids offering goods manufactured inAlgeria if the bidder shall have established to thesatisfaction of the Borrower and the Bank that themanufacturing cost of such goods includes a valueadded in Algeria equal to at least 20% of theex-factory bid price of such goods.

(2) Group B: all other domestic bids.

(3) Group C: bids offering any other goods.

3. In order to determine the lowest evaluated bid of eachgroup, all evaluated bids in each group shall first be comparedamong themselves, without taking into account customs duties andother import taxes levied in connection with the importation,and sales and similar taxes levied in connection with the sale ordelivery, pursuant to the bids, of the goods. Such lowest eval-uated bids shall then be compared with each other, and if, as aresult of this comparison, a bid from group A or group B is thelowest, it shall be selected for the award.

4. If, as a result of the comparison under paragraph3 above, the lowest bid is a bid from group C, all group C bids

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shall be further compared with the lowest evaluated bid from

group A after adding to the evaluated bid price of the importedgoods offered in each group C bid, for the purpose of this further

comparison only, an amount equal to: (i) the amount of customsduties and other import taxes which a non-exempt importer wouldhave to pay for the importation of the goods offered in suchgroup C bid; or (ii) 15% of the c.i.f. bid price of such goodsif said customs duties and taxes exceed 15% of such price. Ifthe group A bid in such further comparison is the lowest, it

shall be selected for the award; if not, the bid from groupC which as a result of the comparison under paragraph 3 is thelowest evaluated bid shall be selected.

C. Other Procurement Procedures

Small furniture and equipment items or groups of items

estimated to cost less than $100,000 equivalent, and items of aspecialized nature for which international competitive bidding asdescribed in Part A of the Guidelines would not be practical, maybe procured according to procurement procedures satisfactory tothe Bank, including but not limited to the solicitation of quota-

tions from at least three reliable manufacturers or suppliers;provided, however, that the total value of all furniture and

equipment so provided shall not exceed $3,100,000 equivalent.

D. Review of Procurement Decisions by the Bank

1. Review of invitations to bid and of proposed awards and

final contracts:

With respect to all contracts for civil works, furniture

and equipment estimated to cost the equivalent of $100,000 ormore:

(a) Before bids are invited, the Borrower shall furnish

to the Bank, for its comments, the text of the invitations tobid and the specifications and other bidding documents, together

with a description of the advertising procedures to be followed

for the bidding, and shall make such modifications in the said

documents or procedures as the Bank shall reasonably request.

Any further modification to the bidding documents shall require

the Bank's concurrence before it is issued to the prospective

bidders.

(b) After bids have been received and evaluated, the Bor-

rower shall, before a final decision on the award is made, inform

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the Bank of the name of the bidder to which it intends to awardthe contract and shall furnish to the Bank, in sufficient time forits review, a detailed report, by the experts referred to inSection 3.02 of this Agreement, on the evaluation and comparisonof the bids received, together with the recommendations foraward of the said experts and such other information as theBank shall reasonably request. The Bank shall, if it determinesthat the intended award would be inconsistent with the Guidelinesor this Schedule, promptly inform the Borrower and state thereasons for such determination.

(c) The terms and conditions of the contract shall not,without the Bank's concurrence, materially differ from thoseon which bids were asked or ptequalification invited.

(d) Two conformed copies of the contract shall be furnishedto the Bank promptly after its execution and prior to the sub-mission to the Bank of the first application for withdrawalof funds from the Loan Account in respect of such contract.

2. With respect to each contract not governed by the precedingparagraph, the Borrower shall furnish to the Bank, promptly afterits execution and prior to the submission to the Bank of thefirst application for withdrawal of funds from the Loan Accountin respect of such contract, two conformed copies of such con-tract, together with the analysis of the respective bids, recom-mendations for award and such other information as the Bank shallreasonably request. The Bank shall, if it determines that theaward of the contract was not consistent with the Guidelines orthis Schedule, promptly inform the Borrower and state the reasonsfor such determination.

3. Before agreeing to any material modification or waiverof the terms and conditions of a contract, or granting an exten-sion of the stipulated time for performance of such contract, orissuing any change order under such contract (except in cases ofextreme urgency) which would increase the cost of the contract bymore than 20% of the original price, the Borrower shall informthe Bank of the proposed modification, waiver, extension orchange order and the reasons therefor. The Bank, if it determinesthat the proposal would be inconsistent with the provisions ofthis Agreement, shall promptly inform the Borrower and statethe reasons for its determination.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

CERTIFICATE

I hereby certify that the foregoing is a true

copy of the original in the archives of the Interna-

tional Bank for Reconstruction and Develop-

ment.

In witness whereof I have signed this Certifi-

cate and affixed the Seal of the Bank thereunto

this J, U day of JV A& , 191.

FOR SECRETARY