CREDIT NUMBER 4865-BD

Project Agreement
(padma Multipurpose Bridge Project) between

INTERNATIONAL DEVELOPMENT ASSOCIATION and BANGLADESH BRIDGE AUTHORITY

Dated

A~..uJ 2.. e

,2011

PROJECT AGREEMENT

AGREEMENT dated

~~ '2B

, 2011, entered

into between INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association") and BANGLADESH BRIDGE AUTHORITY ("Project Implementing Entity") ("Project Agreement") in connection with the Financing Agreement ("Financing Agreement") of same date between People's Republic of Bangladesh ("Recipient") and the Association. The Association and the Project Implementing Entity hereby agree as follows:
ARTICLE I - GENERAL CONDITIONS; DEFINITIONS

1.01.

The General Conditions (as defmed in the Appendix to the Financing Agreement) constitute an integral part of this Agreement. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the Financing Agreement or the General Conditions.
ARTICLE II - PROJECT

1.02.

2.01.

The Project Implementing Entity declares its commitment to the objectives of the Project. To this end, the Project Implementing Entity shall carry out the Project with the assistance of the Cooperating Agencies in accordance with the provisions of Article V of the General Conditions, and shall provide promptly as needed, the funds, facilities, services and other resources required for the Project. Without limitation upon the provisions of Section 2.01 of this Agreement, and except as the Association and the Project Implementing Entity shall otherwise agree, the Project Implementing Entity shall carry out the Project in accordance with the provisions of the Schedule to this Agreement.
ARTICLE III - REPRESENTATIVE; ADDRESSES

2.02.

3.01. The Project Implementing Entity's Representative is its Executive Director. 3.02. The Association's Address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America

-2Telex: 248423(MCI) or 64145(MCI) Facsimile: 1-202-477-6391

3.03. The Project Implementing Entity's Address is: Setu Bhaban New Airport Road, Banani Dhaka 1212 Facsimile:

~VCJ

AGREED fu rnlAn~~~~People's Republic of Bangladesh, as of the day and year first above written.

i;n

INTERNATIONAL DEVELOPMENT ASSOCIATION

88029888414

By

Authorized Representative

BANGLADESH BRIDGE AUTHORITY

By

Authorized Representative

- 3SCHEDULE Execution of the Project

Section I.

Implementation Arrangements

A.

Institutional Arrangements 2. The Project Implementing Entity shall maintain, for purposes of carrying out the Project, the following organizations, each with terms of reference, staffmg and other resources acceptable to the Association, throughout the period of implementation of the Project: (a) the Project Coordination Committee chaired by the Minister of Fmance or another person acting on his or her behalf and responsible for providing strategic and policy guidance and inter agency coordination; the Project Steering Committee chaired by the Secretary of the Bridges Division and responsible for overall management decisions; and the Project Management Unit responsible for all aspects of Project implementation.

(b) (c)

3. The Project Implementing Entity shall maintain a Safety Review Panel composed of national and international experts to carry out safety reviews of the bridges under its jurisdiction (including the Jamuna and Padma Bridges), recommend solutions, guidelines and methodologies to improve safety of such bridges and to provide advice and supervision support during the implementation of bridge repairs. 4. The Project Implementing Entity shall by not later than June 30, 2011, establish and thereafter maintain a Project Audit Committee, with a composition and terms of reference acceptable to the Association, and which shall meet at least twice a year to review the Project Implementing Entity's external, internal and operational audit reports. 4. The Project Implementing Entity shall: (a) employ: (i) not later than June 30, 2011 construction supervision consultants (CSC) and; (ii) not later than September 30, 2011 management support consultants (MSC), under the terms of reference satisfactory to the Association; not later than December 31, 2011, establish and thereafter maintain, procurement documentation and record keeping systems, including a

(b)

5.

- 4website showing the status of procurement of various contracts and their performance, and a procurement complaint handling system, all in form and substance satisfactory to the Association; (c) not later than three (3) months prior to the completion of the Project, enter into a five (5) year contract with an internationally reputable firm, under terms of contracting and terms of reference satisfactory to the Association, for: (i) monitoring and operation and maintenance of the Padma Bridge and associated infrastructure; and (ii) carrying out of major repairs and their detailed design as guided by the Safety Review Panel;
(i) at least annually commencing not later than October 31, 2011 carry

(d)

out with the assistance of the Safety Review Panel review the safety of the bridges under BBA jurisdiction under terms of reference satisfactory to the Association (including the scope of in-depth reviews to be carried out every three (3) years during Project implementation); and (ii) discuss with BBA's Board and disclose to the Recipient's Cabinet of Ministers, the public and concerned stakeholders the results of such reviews and any recommendations that might be made by the Safety Review Panel as part of the reviews mentioned in (d)(i) above. B. Anti-Corruption 6. The Project Implementing Entity shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. 7. Without limitation to the provisions of paragraph 1 above, the Project Implementing Entity shall carry out the Governance and Accountability Action Plan approved by the Association on January 9, 2011 in accordance with its terms. C. 1. Safeguards The Project Implementing Entity shall: (a) take, with the assistance of the Cooperating Agencies, all necessary actions to minimize, to the extent possible, any involuntary loss by persons of shelter, productive assets or access to

productive assets or income or means of livelihood, temporarily or permanently, in carrying out the Project and activities described in subparagraph (b)(ii) below;

8.

-5(b) for this purpose: (i) prior to the commencement of any relevant works under the Project implement the applicable RAP in a manner satisfactory to the Association; and whenever modifications of Project design or works would impact Affected Persons, provide, before commencing any works related thereto, to the Association for its review, a resettlement action plan prepared in accordance with the principles and procedures set forth in the Resettlement Policy Framework and, thereafter, implement in a manner satisfactory to the Association such resettlement action plan as shall have been accepted by the Association.

(ii)

9. The Project Implementing Entity in carrying out the Project shall: (a) implement, with the assistance of the Cooperating Entities. the EMP in a manner satisfactory to the Association; (b) ensure that the Project is implemented in accordance with sound environmental practices and standards; and (c) Where applicable, shall avoid or mitigate against adverse impact on physical cultural resources. 10. The Project Implementing Entity shall, with the assistance of the Cooperating Entities: (a) maintain policies and procedures adequate to enable them to monitor and evaluate, in accordance with guidelines acceptable to the Association, the implementation of the EMPs (including, measures for avoidance of or mitigation against adverse impact on physical cultural resources), the RAPs, the Resettlement Policy Framework, and the Charlands Impact Monitoring and Management Framework and the achievement of the objectives of said plans and framework, including the engagement of experienced and qualified independent monitoring experts acceptable to the Association; and prepare, under terms of reference satisfactory to the Association, and furnish to the Association commencing, not later than September 30, 2011, quarterly reports, to be incorporated in the Project Reports referred

(b)

to in Section II.A.1 below, on the results of the monitoring and evaluation activities with respect to the EMPs, RAPs, and other components of the Social Action Plan, the Resettlement Policy Framework, and the Charland Impact Monitoring and Management Framework, together with any revisions proposed to be introduced into said plans and frameworks in order to achieve their respective objectives.

-6-

11. The Project Implementing Entity shall provide to the Association for its prior concurrence any proposed modification or waiver of any EMP or RAP or the Resettlement Policy Framework or the Charland Impact Monitoring and Management Framework, and put into effect only such modification or waiver as shall have been agreed by the Association.

Section II.

Project Monitoring. Reporting and Evaluation

A.

Project Reports 12. The Project Implementing Entity shall monitor and evaluate the progress of the Project and prepare Project Reports for the Project in accordance with the provisions of Section 5.08(b) of the General Conditions and on the basis of indicators acceptable to the Association. Each such Project Report shall cover the period of one (1) calendar quarter, and shall be furnished to the Association and the Project Coordination Committee not later two (2) weeks after the end of the period covered by such report. 13. Without limitation to the provisions of paragraph A.l of this Section, the Project Implementing Entity shall: (a) monitor the physical and financial progress of the Project, implementation of the Social Action Plan and EMP, and the Project impact studies referred to in Part E.2 of the Project; analyze the data on key performance indicators on a regular basis; prepare and furnish to the Association, not later than March 30 of each year, commencing March 30, 2011, consolidated annual reports of the progress of the Project, and not later than September 30 of each year, commencing September 30, 2011, annual work plans for the following year; and not later than October 31, 2014, carry out a mid-term review of the Project under terms of reference satisfactory to the Association.

(b) (c)

(d)

B.

Financial Management , Financial Reports and Audits 14. The Project Implementing Entity shall maintain a fmancial management system and prepare financial statements in accordance with consistently applied accounting standards acceptable to the Association, both in a manner adequate to reflect the operations and fmancial condition of the Project Implementing Entity, including the operations, resources and expenditures related to the Project.

15.

16.

-7 -

17. Without limitation on the provisions of Paragraph A.I of this Section, the Project Implementing Entity shall prepare and furnish to the Association, as part of the Project Report, not later than forty-five (45) days after the end of each calendar quarter, interim unaudited financial reports for the Project covering the quarter, in form and substance satisfactory to the Association. 18. The Project Implementing Entity shall have its fmancial statements referred to above audited by independent (external) auditors acceptable to the Association, in accordance with consistently applied auditing standards acceptable to the Association. Each audit of these fmancial statements shall cover the period of one (1) fiscal year of the Project Implementing Entity and include inter alia a special examination of the internal controls and compliance with the agreed-upon procurement procedures. The Project Implementing Entity shall ensure that the audited financial statements for each period shall be: (a) furnished to the Recipient and the Association not later than six (6) months after the end of the period; and (b) made publicly available in a timely fashion and in a manner acceptable to the Association. 19. Unless the Association shall otherwise agree, the Project Implementing Entity shall employ independent auditors acceptable to the Association to annually carry out the internal audits of the Project accounts. 20. The Project Implementing Entity shall, as soon as possible but in any event not later than before the award of civil works contracts for the main bridge or river training works included in Parts A.I and 2 of the Project, or by such later date as the Association may agree, raise the toll rates applicable to various vehicle categories for transit in the Jamuna Bridge by an overall average of not less than forty percent (40%) on the toll rates existing as of December 1, 2010. The Project Implementing Entity shall promptly notify the Association of such a raise once it is brought into effect. 6. The Project Implementing Entity shall: (a) no later than December 31, 2012 complete a study in accordance with a methodology and terms of reference satisfactory to the Association on: (i) the level and structure of tolls and other user charges to be levied on the J amuna Bridge and Padma Bridge after its completion; alternatives for implementation of formula based automatic adjustments of tolls linked to inflation or other appropriate indicators as well as the required legal instruments to implement any such adjustments; and proposals of institutional reforms of BBA as may be advisable to strengthen

its fmancial autonomy; and

- 8(ii) financial projections for the Project Implementing Entity, including future tolls and other charges;

(b) no later than June 30, 2013 based on such study, propose to the Association for its review: (i) the level and structure of tolls and user charges to be applied upon opening of the Padma Bridge for traffic, which shall generate an operating cash flow sufficient to cover debt service requirements of the Project Implementing Entity (net of operations and maintenance expenses) and the recommended toll adjustment regime and/or institutional reforms as the case may be; and future toll and financial projections for the Project Implementing Entity; and

(ii)

(c)

promptly thereafter increase the tolls and take all the measures proposed under paragraph (b)(ii) of this Section, modified as needed to take into account the Association's comments thereon, in accordance with the schedule for implementation of the increases identified. Procurement

Section IlL

All goods, works and services required for the Project and to be financed out of the proceeds of the Financing shall be procured in accordance with the provisions of Section ill of Schedule 2 to the Financing Agreement.

Section IV.

Operational and Social Safeguards Funds

1.

The Project Implementing Entity shall: (a) not later than the start of the civil works for the main bridge or the river training works included in Parts A and B of the Project: (i) open and maintain in a commercial bank or banks, under terms and conditions satisfactory to the Association a fund to finance expenditures of an emergency nature during construction of the Padma Bridge; and (ii) (b) deposit an amount equivalent to $15,000,000;

gradually thereafter increase the level of the fund referred to in (a) of this Section, to $50,000,000 equivalent; and

21.

22.

- 9-

(c)

not later than six (6) months prior to the completion of the Project establish a fund of $10,000,000 equivalent to address any outstanding environmental and social/resettlement issues that might arise after completion of the Project and closing of the Credit.

23. The Project Implementing Entity shall not later than June 30, 2011 establish in form and substance satisfactory to the Association a grievance redress mechanism, in order to receive and expeditiously handle any stakeholders' and/or Affected Persons' complaints related to the Project.