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The Gazette of India

EXTRAORDINARY

PART I—Section 1

PUBLISHED BY AUTHORITY

No. 17] NEW DELHI, SATURDAY, JANUARY 23, 1982/MAGHA 3,1903

Separate paging is given to this Part in order that it may be filed as a separate

compilation

1239 GI/81—1

(67)

68 THE GAZETTE OF INDIA : EXTRAORDINARY [PAR: I - S n c. 1] 69 70 THE GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. 1] 71 72 THE GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. 1] 73 ⁷⁴ THE GAZETTE OF INDIA : EXTRAORDINARY [PART I~SEC. 1] 75

1239 01/81—2

76 THE GAZETTE OF INDIA : EXTRAORDINARY [PART 1—SEC. 1 77 78 THE GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. 1]

MINISTRY OF COMMERCE

IMPORT TRADE CONTROL

Public Notice No. 5-ITC(PN)|82

New Delhi, the 23rd January, 1982

Subject : Licensing conditions in respect of import of goodt and service* under the Yen Credit of Yen 7.6 Billion for ihe implementation of the Lower Metter Hydro Electric Project of the Tamil Nadu State Electricity Board extendedby the Overseas Economic Co-opera- tion Fund (OECF) of Japan,

F. No. IPC/23/(24)/81.—The terms and conditions govern- ing the- issuance of import licence in respect of import of goods and-^crvices under the OECF Loan Agreement No, ID-P 14 of Yen 7.6 Billion for implementation of the Lower Mettur Hydro Hlectric Project of the Tamil Nadu State Electricity Board, as given in Appendix to this Public Notice are notified for information.

Appendix to Ministry of Commerce Public Notice No. 5-ITC(PN)/81 dated the 23rd January, 1982

LICENSING CONDITIONS IN RESPECT OF IMPORTS OF GOODS AND SERVICES UNDER THE YEN CREDIT OF YEN 7.6 BILLION FOR THE IMPLEMENTATION OF THE LOWER METTUR HYDRO ELECTRTC PROJECT OF THE TAMIL NADU STATE ELECTRICITY BOARD EXTENDED BY THE OVERSEAS ECONOMIC CO- OPERATION FUND (OECF) OF JAPAN :

Section I—-General conditions :

I(i) The Yen Credit of Y 7.6 billion extended by the Overseas Economic Co-operation Fund of Japan (OECF) for financing the import requirements of the Lower Mettur Hydro Electric Project of the Tamil Nadu State Electricity Board (TNSEB) is untied in favour of developing countries. Ac- cordingly the goods and Services to be procured under this credit can be imported from Japan and all countries enume- rated in the list at Annexurc-I which will bo eligible source countries under the credit.

l(ii) Import Licenced) under the Credit can be issued only for such items and for such value as have been specifically cleared by the DGTD/OO Committee. The value of import Ucence(s) issued under this credit should not exceed Y 8,500 million (CIF).

The rupee value of tfie import licence shall be determined with reference to the exchange rate notified by the Depart- ment of Revenue (Customs) and prevailing on the date of issue of the import licence and indicated in the body of the import l!cence(s) as per para 2 of the Public Notice No. 78- JTC(PN)/74 dated the 6th June, 1974, issued by the CCI&E, which also enjoins that the Customs Authorities and the authorised dealers in foreign exchange will make debits to the value of the licence (si at the exchange rate specified on the import Kcencc(s). The licence will bear the superscription "Japanese Yen Credit No. ID-P. 14". The first and second suffix to the licence code will be "S/JC". This will also be repeated in the letter from the CCT&E forwarding the im- port licence to T.N.S.E.B., a copy of which should be endorsed to the Ministry of Finance, Department of Econo- mic Affairs (Japan Section).

I(iii) Import ]icence(s) can be issued only in favour of

INSEB on CIF basis.

I(iv) Depending on the convenience of TNSEB more than one import licence may be issued under this credit, but the total value must not exceed Y 8,500 million (CIF) as speci- fied at (i) above.

I(v) The extension of the validity of the import licence, may on application by TNSEB, be granted upto 31st March, lWtfi. Requost for further extension, if any, should be re- ferred to the Department of Economic Affairs (Japan Sec- tion).

I(vi) Imports to be financed under the Credit are restricted to the list of goods and services attached to the import licence, duly attested by the licensing authorities.

I(vji) No remittance of foreign exchange will be permitted against the import licence. Any payment towards Indian Agent's commission should be made in Indian rupees to the agents in India. Such payments, however, will form part of the licence value and will, therefore be charged to the licence.

T(viii) Firm order must be placed on FOB basis on the Overseas supplier located in the countries mentioned in An- nexure-I and sent to the Department of Economic Affairs (Jap?n section) wilhin 4 months from the date of issue of the import I'cence. Freight and inrurance charge will be payable in India in Indian rupees. "Firm orders" means purchase orders placed by the Indian Licencee on the over- seas supplier duly signed by the letter or purchase contract

duly signed by both the Indian importer and the overseas supplier. Ordcre on Indian Agents of overseas suppliers and/ or order confirmation of such Indian Agents are not accept- able.

1(ix) This condition of the placement of contracts within 4 months period will be treated as not having been com- plied with unless complete contract documents reach the Ministry of Finance, Department of Economic Affairs (Japan Section) within four months from the date of issue of the import licence. If firm orders as explained in para I(viil) above cannot be placed within four months for valid reasons, the licencee should submit the import licence to the concern- ed licensing authorities giving reasons why ordering could not be completed within four months. Such requests for extension in the ordering period will be considered on merit by the licensing authorities who may grant extension upto a further maximum period of 4 months. If, however, extension is sought beyond 8 months from the date of issue of the im- port licence such proposals will invariably be referred by the licensing authorities to the Department of Economic Affairs (Japan Section), Ministry of Finance, North Block, New Delhi who will consider such extension on the merits of each case and communicate their decision to the licensing autho- rities for communication to the licencee. Only on production by the licencee of a letter from the licensing authorities sanctioning such extension will tho authorised dealers and departmental authorities permit the facility of letter of autho- rity for the establishment of letter of credit, acceptance of deposits of the rupee equivalent, etc. in respect of supply contracts entered into under the import licence.

l(x) All payments must be completed within 4 month from the expiry of the import licence. Individual payments must be arranged upon shipment of goods. The contract should provide for payment on cash basis i.e. on presentation of shipping documents. No credit facility of any kind will be pormltted to be availed of by the Indian importer from the Overseas supplier, The contract should provide for the period of delivery of goods as follows:

" months after the receipt of Letter of credit but to be completed latest by the end of ".

In fixing the terminal date for shipment it should be noted that this date should not be beyond 31st March, 1986.

Section II—Special point? to be kept in view while nego-

tiating a supply contract.

II(i) Tho FOB value of the contract should be expressed in Yen (Fraction of Yen should be omitted) and should exclude Indian Agent's commission, if any, which should be paid In Indian Rupees.

In no circumstances the contract value should be expressed in Indian rupees or in any other currency. Th© purchase order and the supplier's order confirmation should be in English, only.

ll(ii) The main guidelines for procurement of goods and services under the OECF Yen Credit (Project'Aid) are given in Annexure II. However, normally the procurement of goods and services should be made through Formal Open Interna- tional Tendering and the following points should be bome in rnind:—

(a) Invitations to bid shall have to be advertised in at least one newspaper -of general circulation in India.

(b) Bid.bonds ar bidding guarantees are a usual require- ment but they should not be set so high as to dis- courage suitable bidders.

(c) Bid bonds or guarantees should be released to un- successful bidder's as soon as possible after the bids have been opened.

Il(iii) In cases where Formal Open International Tendering is not considered appropriate the Fund will accept the follow- ing alternative procedures :~

(a) •Where the importer has convincing reasons or main- taining a reasonable standrdisation of his equip- ment.

80 THE GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. 1]

(b) Whero tho number of qualified suppliers is limited.

(c) Where the amounj; involved in the procurement is so small that foreign firms clearly would not bo inter- ested or that the advantages of formal open inter- national tendering would be outweighted by the administrative burden Involved.

(d) Where, in addition to the cases (a), (b) and (c) above, the Fund deems it inappropriate to follow the for- mal open international tendering procedures or the Fund deems such procedure inapplicable, e.g., in case of emergency procurement.

In the above mentioned cuse the following procurement pro- cedure may be applied in such Q manner as to comply with the formal open international tendering procedures to tho fullest possible extent as appropriate ;

(i) Formal Selective International Tendering.

(ii) Informal International Competitive Procurement,

,(i:i) Direct Purchases from a single- supplier.

TNSEB should submit immediately, in triplicate, copies of all notices and instructions to bidders, the bid form, the proposed contract, specifications and drawings, reports of the analysis of bids, proposal for awaids and all other documents relevant to bidding to the Ministry of Finance, Department of Economic Affair? (Japan Section) who will submit these documents to the OECP for its review as provided in para 1(2) of Schedule 5 of the Loan Agreement.

ll(iv) Tho payment to tho overseas supplier should be ar- ranged through an irrevocable letter of credit to be opened by the Bank of India, Tokyo in their favour under DECP Yen Credit (Project Aid) No. ID-P. 14 for 1981-82 the details of which are given in Section VI bdow:

Il(v) Only one contract should be entered into against the Import licence. In exceptional cases, more than one contract may be permitted to be entered into, for which prior approval of the Department of Economic Affairs (Japan Section), Ministry of Finance, should be obtained soon after the date of issue of the import licence.

II(vi) Eligibility of Supplier :

Suppliers shall be nationals of the eligible source coun- tries or juridical persons incorporated and registered in the eligible source countries and controlled by nationals of the eligible source countries.

Il(vii) Declaration in Contract:

The following statements of eligibility by tho supplier shall

be added to each contract.

"1, the undersigned, hereby certify that the goods to be supplied are produced in (eligible source country).

I, tho undersigned, further certify that to tho best of my information and belief, the portion imported from the non- eligible source countries is less than thirty per cent (30%) In accordance with the following formula;

Imported CIF Price+Import Duty

X 100"

Supplier's FOB Price

and

"I, the undersigned, hereby certify that^ r^—,

(Name of company) has been incorporated and registered In— (Nnme of eligible source country), and is controlled by nationals of the eligible source countries."

II(vlii) Permissible imports from non-eligible source coun-

tries.

Financing of uouds which contain materials originating from a no-n-el/gihln source country of countries may be made, provider) that the imported portion is less than thirty per cent (30%) on an item-by-itein basis in accordance with the following formulae;

Imported CIF Price + Import Duty

X100

Supplier's FOB Price

Section III—Conditions to be incorporated in the supply

contracts.

Ili(i) The following provisions should be specifically em-

bodied in the supply contract:

(a) The contract is arranged in accordance With the Loan Agreement between the Government of India end the Overseas Economic Co-operation Fund of Japan (OECF) dated the 15th October, 19S1 concerning Ihe Yen Credit No. ID-P. 14 (Project Aid) for l.ower Mettur Hydro electric Project on TNSEB and will he subject to the approval of Government of India and the Overseas Economic Co-operation Fund.

(b) Payments (o the supplier shall be made through an irrevocable letter of Credit to be issued by the Bank of India, Tokyo, under the Loan Agreement No. ID-P. 14 dutcd 15th October, 1981 between the Government of India and the Overseas Economic Co-operation Fund of Japan (OECF).

(c) The overseas suppliers agree to furnish such infor- mation and documents may be required under the Yen Credit arrangements by tho Government of India on the one hand and the OECF on the other.

(d) Ccitiflcates (triplicate) in the forms indicated in II(vil).

Ill(ii) in case" the supplier is located in Japan, the supply contract should contain a clause that the Japanese supplier agreen to make shipping arrangements in consultation with the Embassy of India, Tokyo and that for this purpose he would keep the Embassy of India, Tokyo, infoiimed of the delivery schedule of the goods involved and notify the Em- bassy of Tndia at [cast four weeks in advance of the shipping required so that suitable arrangements could*" be made. In exceptional cases, where the Indian importers require it, this period of notice may be reduced. The Japanese supplier should also agree to send a cable advice to the importer after each shipment giving the necessary details and a copy thereof should be sent to the Embassy of India, Tokyo.

Section IV—Contract Approval by OECF.

IV(i) Within the stipulated period for placement of firm orders the Ucencee should forward 4 copies of the contract duly signed by both T.N.S.E.B. and Overseas suppliers sup- ported by order confirmation in writing by the overseas sup- pi'er or their photo copies complete in all respects, together with two photo copies of the relevant valid import licence, to Japan Section, Department of Economic Affairs, Ministry of Finance, North Block, New Delhi.

IV(ii) The above procedure will also apply to all contract amendments causing essential modifications to the contents of contracts or in its price,

IV(iii) The Ministry of Finance (DEA) Japan Section will arrange to send one copy of the contract documents to the OECF for their approval for financing under Yen Credit No. ID-P. 14 (Project Aid) for Lower Mettur Hydro electric Project of TNSEB.

Section V—Payment to the overseas suppliers—Letter of

Credit Procedure.

V(i) On receipt of the intimation of the contract approval from the OECF, by the Ministry of Finance, Department of Economic Affairs, Japan Section, TNSEB and the CAA&A will be informed of the same. Whereafter the TNSEB should approach the Controller of Aid Accounts & Audit, (herein- after referred to as CAA&A) Department of Economic Affairs, Ministry of Finance, UCO Bank Building, Parliament Street, New Delhi with a request in the form attached as Annexure ITT for issue o£ a letter of authorisation. The CAA&A will issue a letter of authorisation as in the form attached fls Annexure-IV addressed to the Tokyo Branch of the Bank of Tndia for opening tin irrevocable Letter of Credit as in the

form attached as Annexure-V (for physical Imports) or An- dated 24th October, 1968, No. 132-LTC(PN)/71 dated 5th ncxure-Vl Xfor services) in favour of the overseas supplier October, 1971, No. 74-lTC(PN)/74 dated 31st May, 1974 concerned. Copies of the Lelter of Authorisation will be en- and No. 103-ITCfPN)/76 dated 12th October, 1976. dorsed to ihe OECF. the Embassy of India, Tokyo, the im- porter's Bank in India, and Japan section, Department of Vl(iii) The concerned Bank in India shall also furnish such Economic Affairs, Ministry of Finance. additional deposit in the same manner stipulated above as may be requested by the Government of India. Ministry of. V(ii) On receipt of the letter of authority, the Bunk of Finance, Department of Economic Affairs, on account of India, Tokyo, will establish an irrevocable letter of credit service charges within seven days after such a demand is made as per Anne\urc-V (applicable to physical imports) or VI by Ministry of Finance (Department of Economic Affairs) (applicable to services) in favour of the overseas suppliers while filling in the various columns in the challan it should concerned and will also forward a copy Of the same to the be ensured by the importers/their bankers that the informa- OECF, Embassy of India, Tokyo, (he importer's bank in tion prescribed in para 2 of Public Notice No. 132-n"C(PN)/ India and the CAA&A. 71 dated 5th October, 1971 is invariably indicated in the column "full particulars of remittances and authority (if any)" of the challan. The following particulars should invari- The abovo procedure of opening of letters of credit on ably be furnished in the treasury Challans :— the basis of the letters of authority from CAA&A would ipso facto apply to ail such amendments to letter of autho- (a) Ministry of Finance letter of authority No. and date. risation/letter of credit as may become necessary duo to contract amendment or otherwise. (b) Amount of Yen currency in respect of which depo- sits are to be made together with rate of conversion V(iii) The oveiseas supplier shall, 'after effecting shipment adopted. of goods, present through his bankers the documents specified in the letter of cred't to the Bank of India, Tokyo. If the (c) Date of payment to the overseas supplier. documents are found to be in order, the Bank of India, Tokyo . will release the amount specified in the documents to the Thereafter the Treasury Challans evidencing the rupee de- overseas supplier through his bankers and will thereafter posit should be sent by registered post to the CAA&A indi- obtain reimbursement of the said amount from the OECF. cating reference to the letter of authorisation issued by him and also enclosing copies of the invoice and shipping docu- V(iV) Banking charges payable to the Bank of India, Tokyo ments. for opening the letter of credit, for negotiations thereunder jf and charges, if any, of overseas supplier's bankers are to be NOTE : Importer's Bank in India should ensure that the borne by the overseas suppliers and hence not payable by the rupee deposits are invariably made within 10 days of the importer. Interest charges payable to the Bank of India, Tokyo receipt of the advice of payments and negotiable shipping for the period counting from the date of payment of the cost documents from the Bank of India, Tokyo and that tho of imports by them to the overseas supplier to the date of CAA&A Ministry of Finance (OEA), New Delhi Is kept reimbursement by the OECF shall bo settled by the concern- informed Of the fact immediately thereafter. ed importer's bank in India by remittances to the Bank of India, Tokyo through normal banking channel without affect- VI(iv) The concerned bank in India should also endorse ing the Government of India's account. the amount of rupee deposits on the exchange control copy of the licence and send the requisite 'S' Form to the Reserve Section VT—Responsibility for rupee deposit: Bank of Tndia, Bombay. VT(i) The Bank of India, Tokyo will forward the negotia- Section VIIT—Miscellaneous provisions : ble phipping documents to the accredited bankers of importer as indicated in the Appendix to the relevant Letter of Autho- VIII(i) Reports on the utilisation of the import licence. rity and the bankers will in turn ensure that the rupee The importer should send a monthly report, after the letter deposits are invariably made at RB[, New Delhi or S.B.I. of credit has been opened regarding shipments and payments Tis Hazar, Delhi before releasing the shipping document!. made thereagainst and about the balance left, to the Con- interest charges on the rupce-equivnlcnts of the Yen pay- troller of Aid Accounts & Audit, Department of Economic ments calculated @ 9 per cent per nnnum for the first 30 Affairs, Ministry of Finance, UCO Brink Building, Parliament days and @ 15 per cent per annum for the period in excess Street, New Delhi. thereof reckoned from the date of payment by the Bank of India, Tokyo to the Overseas Supplier to the date of actual Vlll(ii) Notifying Suppliers of Special Conditions. mpce deposit, have also to be deposited alongwith the princi- pal payment, in terms of Public Notice No. 46-TTC(PN)/76 The liconcee should apprise the supplier of any special dated lfith June, 1976. It should be noted that interest is provisions in the import licence which may affect the suppliers ^hargenble for both the days i.e. (he day on which payment in carrying out the transaction. " is made to the Overseas supplier and also the day on which rurjee deposit is made in Government Account vide Public VHT(iii) Disputes ; Notice No. 74-TTaPN)/74 dated 31st May, 1974 as modi- fied under Public Notice No. 103-TTC(PN)/76 dated 12th It should be understood that the Government of India will October, 1976. not undertake any responsibility for disputes, if any, that may arise between the licencec and the suppliers. The conditions The exchange rate to be adopted for computing the" rupee to be fulfilled by the supplier before payment by the Bank equivalent of the Yen pnyments made to the overseas suppliers of India, Tokyo must be cbarly spelt out by the importer will be the composite rate of ext-hnngi" applicable to the dote in Annexure-ITI under "Tt-rnis of Payment". Provisions deal- of payment which will be workrd out in accordance with ing with settlement of disputes should be included in the tho method prescribed in Public Noticei No. 109-TTC(PN)/74 conditions of contract. -rdated 3rd Anqnst, 1974 and No. 8-jTCfPN1/7fi dated I7th January, 1976 or ns- mav he notified by Gnvemmenf from VITKiv) Future Instructions : time to time through Public Notices of the CCT&E or through Exrhangc Control Circulars of the Reserve B:im\- of India. The licencee shall promptly comply with any directions, The Head of Account to which the above rupee deposits instructions or orders issued by the Government of India from shouM be credited is "K-Penosifs nrifi Advinces 843—-Civil time to time regarding any and all matters arising from or Drnnslf-s—DenosiN for purchase etc abroad—Purchase under pertaining to the import licence and for meeting all obliga- credits ft nun A 82 THE GAZETTE OF INDIA : EXTRAORDINARY [PART 1—SIC. 1]

VHICvi) 1.1st of Annexurcs :

Annexure-I List of eligible source countries.

Annexure-II Broad Guidelines for Procurement.

Annexure-III Request for issue of Letter of Authority.

Annrxure-IV Form of Letter of Authority.

Annexure-V Form of Letter of Credit (Applicable to

Physical Imports),

Annexurc-VI Form of Letter of Credit (Applicable to

Services).

ANNEXURE-I

LIST OF ELIGIBLE SOURCE COUNTRIES

A. Developing Countries and Territories

(al) Non-OPEC Developing Countries I. AFRICA, North of Sahara

Egypt Morocco Tunisia

II. AFRICA, South of Sahara

Angola Botswana Burundi Camoreon Capo Verde Islands Central African Rep. Chadd Comoro Islands Congo, People's Republic of Dahomay Equatorial Guinea (1) Ethiopia Gambia Ghana Guinea Ivory Coast

, Kenya

Lesotho Liberia

Malagasy Republic Malawi Mali Mauritania, Mauritius Moozambiquo Niger Portuguese Guinea Reunion Rhodesia Rwanda St. Hebne and dep. (2) • Sao Tomb and Principe Senegal Seychelles Sierra Leone Somalia Sudan Swaziland

Terro, AfarS and Isias Togo Uganda Un. Rep. of Tanzauia Upper Volta Zaire Republic Zambia

III. AMERICA, North and Cont

• Bahamas Barbados

Belize Bermuda Costa Rica Quba Dominican Republic El Salvador Guadoloupo Guatemala Haiti Honduras Jamaica Martinique Mexico Netherlands Antille.i Nicaragua Panama St. Pierre & Miquelon Trinidad and Tobago

(1) Formerly the territory of Spanish Guinea, including the

island of Fernando Po.

(2) Including the following islands : Ascension, Tristan da

Inacecssibles, Nightingale, Gough.

(3) Main islands, Aruba, Bonaire, Curacao, Sana, St.

Eustacit St. Martin (Southern part).

AMERICA. North & Central

—(Continued) West Indies (Br). n.i.e. (a) Associated States (I) (b) Dependencies (2)

IV. AMERICA, South

Argentina Bolivia Brazil Chile Colombia Falkland, Islands French Guiana Guyana Paraguay Peru Surinam Uruguay

V. ASIA, Middle East

Bahrain Israel Jordan Lebanon Qman Syrian Arab Republic United Arab Emirates(3) Yemen Arab Republic Yemen, People's D.R.(4)

VI. ASIA, South

Afghanistan Bangladesh Bhutan Burma India Maldivis Nepal Pakistan Sri Lanka

VII. ASIA, Far East

Brunei Hong Kong Khmer Republic Korea, Republic of Laos Macao Malaysia Philippines Singapore Taiwan Thailand Timor Viet-Nam, Rep. of Vict-Nam Dem. Rep.

VIII. OCEANIA

Cock Inlands Fiji Gilbert & Ellicfl Is. French Polynesia (5) Nauru New Calcndoni.i Now Hobriccs (Br. and Fi.) Niue Pacific Islands (US) (6) Papua New Guinea Solomon Islands (Br). Tonga Wallis and Futuna Western Samoa

IX. EUROPE

Cyprus Gibraltar Oreecc Malta Spain Turkey Yugoslavia

(1) Main Islands : Antiguc, Dominica, Grenada, St. Kitts (St. Caristophe), Nevis-Anguilla, St. Lucia and St.

Vincent.

(2) Main islands : Montscrrat, Cayman, Turks and Caicos,

and British Virgin Islands.

<3) Ajman, Dubai, Fujairah, Ras al Khaimah, Sharjah

and Ummal Quaiwain.

(4) Including Aden and various sultanates and emirates # (5) Comprising the Society Islands (including Tahiti), the Austral Islands, the Tuamotu-Gambier Group and the Marquesas Islands.

(Q Trust Territory of the Pacific Islands : Caroline Islands, Marshall Islands, and Marino Islands (except Guam)

(a2) Member of Association countries of OPEC

Algeria Bolivia Libyan Arab Republic Gabon Nigeria Ecuador Venezuela Iran Iraq Kuwait Qatar Saudi Arahia

1239 OI/81—3

Abu Dhabi Indonesia

ANNEXURE H

MAIN GUIDELINES FOR PROCUREMENT OF GOODS AND SERVICES UNDER THE PROJECT LOAN AS FORMULATED BY O.E.C.F.

I. Advertising:

For all contracts subject to Formal Open International Tendering, invitations to bid shall be advertised in at least one newspatier of general circulation in India.

II. Bidding Documents and Contracts:

II-1. Bid Bonds or Guarantees:

Bid bonds or bidding guarantees are a usual requirement but they should not be set so high as to discourage suitable bidders. Bid bonds or guarantees should be released to un- successful bidders as soon as possible after the bids have been opened.

11-2. Conditions of Contract:

The conditions of contract should clearly define the rights and obligations of th© Importer and the contractor or sup- plier, and th© powers and authority of the engineer, if one is employed by the importer, in the administration of the contract and any variations thereunder. In addition to the customary general conditions of contract, some of which are referred to in these Guidelines, special conditions appro- priate to the nature and location of the project should be In-

- eluded.

II-3. Type and Size of Contract :

Contracts can be let on the basis of unit prices for work performed or items supplied or of a lump sum price, or a combination of both for different portions of the contract, according to the nature of the goods or services to be provided and the bidding documents should clearly state the type of contract selected.

Contracts based principally on the reimbursement of actual costs are not acceptable by the Fund except in exceptional circumstances.

Single contracts for engineering, equipment and construc- tion to be provided by the same party (fTumkey Contracts") are acceptable if they offer technical and economic advan- tages for the borrower country.

II-4. Eligible suppliers:

Exporters or suppliers whose goods and services arc to be financed out of the proceeds of the Loan (hereinafter re- ferred to as "the eligible supplier") shall be nationals of the eligible source countries satisfying the following conditions.

(1) a majority of subscribed shares shall be held by na-

tionals of the eligible source countries,

(2) a majority of full-time directors shall be nationals

of the eligible source countries; and

(3) such juridical 'persons' shall be registered in the

eligible source countries.

. m - 1. Contract Price :

(al The contract price should be stated in Japanese Yen provided, however, that the portion of the contract price which the contractor will spend in the borro- wer'* country should be stated in the borrower's currency.

(b) Price Adjustment Clauses :

Bidding documents should contain a clear statement whether firm prices are required or escalation of the bid prices is acceptable.

A provision should be made for adjustment in the contract prices in the event changei occur in the

84 THE GAZETTE OF INDIA i EXTRAORDINARY [PART I—SEC. 1]

prices of the major cost constituents of the contract, such as labour and important materials.

The specific formula for price adjustments should be clearly defined in the bidding documents.

A ceiling on price adjustment should be included in contracts for the supply of goods, but it is not usual to include such a ceiling m contracts for civil works.

No price adjustments should normally be provided for goods to be delivered within one year.

The Guidelines do not attempt to identify the vari- ous methods by which contract prices may be ad- justed.

The bidding documents should state precisely the types of insurance to be provided by the successful bidder.

III-2, The contract duly signed by both parties or pur- chase order by the Indian importer placed on the overseas supplier supported by order confirmation in writing by the oveseas supplier, or their photo copies are also acceptable to the Fund.

IH-3. The following statement of eligibility by the supplier

shall be added to each contract.

"I(We) hereby state that my(our) company is an eligible supplier, as per cent ( %) of the shares arc held by nationals of (eligible source country), and per cent ( ) of the directors are nationals (eligible source country) and my (our) company has been registered in (eligible source country)".

IV-1. Standards :

If national standard to which equipment or materials must comply are cited, the specifications should state that commo- dities meeting Japan Industrial Standard or other internatio- nally accepted standards, which ensure an equal or higher quality than the standards mentioned, will also be accepted.

IV-2. Use of Brand Names :

Specifications should be based on performance capability and should only prescribe brand names, catalogue numbers, or products of specific manufacturer if specific spare parts are required or it has been determined that H degree of stan- dardization is necessary to maintain certain essential features. In the latter case the specifications should permit offers of alternative commodities which have similar characteristics and provide performance and quality at least equal to those specified.

IV-3. Guarantees, performance Bonds and Retention Money:

Bidding documents for civil works should require some form of surety to guarantee that the work will be continued until it is completed. This surety can be provided either by a bank guarantee or by a performance bond, the amount of which will vary with the type and magnitude of the work, but should be sufficient to protect the borrower in case of default by the contractor. Its Ufa, should extend sufficiently beyond completion of the contract to cover a reasonable warranty period. The amount of the guarantee or bond re- quired should be defined in the bidding documents.

In contracts for the supply of goods It is usually preferable to have a percentage of the total payment held as retention money to guarantee performance than to have a bank guaran- tee or bond, The percentage of the total payment to be held as retention money and the conditions for its ultimate pay- ment should be stipulated in the bidding documents If however, a bank guarantee or bond is preferred it should be for a nominal amount.

V, Liquidated Damage:

Liquidated damage clauses should be included in bidding documents when delays in completion or delivery will remit in extra cost. loss of revenues or loss of other benefits to the borrower. Provision may also be made for a bonus to be paid to contractors for completion of civil works contracts at or ahead of times specified in the contract when such earlier completion would be of benefit to the borrower.

VI. Force Majeure:

The conditions of the Contract included in the bidding documents should contain clauses, when appropriate, stipu- lating that a failure on the part of the parties to perform their obligations under the Contract shall not be considered a default under the Contract if such failure in the result of an even of force majeure (to be defined in the conditions of the Contract).

VII. Settlement of Disputes:

Provision dealing with the settlement of disputes should be included in the conditions of the Contract. It is desirable that the provisions should be based on "Rules of Conciliation and Arbitration" which have been prepared by the International Chamber of Commerce or on such other arrangements as may be mutually acceptable to the Indian Importer and the overseas supplier,

VIII. Language Interpretation :

Bidding documents should be prepared in English. If other language should be used in the bidding documents, English should be added to such documents and it is required to specify which is governing.

IX. Bid opening, Evaluation and Award of Contract:

IX-1. Time Interval between Invitation and submission of

Bids:

The time allowed for preparation of bids will depend to a large extent upon the magnitude and complexity of the contract. Generally not less than 30 days should be allowed for international bidding. The time allowed, however, should be governed by the circumstances relating to each contract.

1X-2. Bid Opening procedures:

The date, hour and place for the latest receipt of bids and for the bid opening should be announced in the invitations to bid and all bids should be opened publicly at the stipulat- ed time. Bids received after this time should be returned unopened. The name of the bidder and the total amount of each bid and of any alternative bids, If they have been re- quested or permitted, should be read aloud and recorded.

IX-3. Clarification) or Alternation of Bids:

No bidder should be permitted to alter his bid after the bids have been opened, Only clarifications not changing the substance of the bid may be accepted. The importer. may ask any bidder for a clarification of his bid but should not .ask any bidder to change the substance or the price, of his bid.

IX-4. Procedures to be confidential:

Except as may be required by law, no information relating to the examination, clarification and evaluation of bids and recommendations concerning award should be communicated after the public opening of bids to any persons not officially concerned with these procedures until the award of a contract to the successful bidder is announced.

TX-5. Examination of Bids :

Following the opening, it should be ascertained whether material errors in computation have been made in the bids, whether the bids are fully responsive to the bidding docu- ments, whether the required sureties have been provided, whe- ther documents have been properly signed and whether the bids are otherwise generally in order. If a bid does not subs- tantially conform to the specifications, or contains Inadmissi- ble reservations, or is not otherwise substantially responsive to the bidding documents, ft should be rejected. A technical analysis should then bo made to evaluate each responsive bid and to enable bids to bq compared.

IX-6. Post-qualification of Bidders :

In tho absence of prequalifications, the borrower should be determined whether the bidder whose bid has been evaluated the-iowe&t has the capability and financial resources effectively to carry out the contract concerned. If the bidder does not meet that test, his bid should be rejected.

IX-7. Evaluation and Comparison of Bids :

Bid evaluation must be consistent with the ternig and conditions set forth in the bidding documents. In addition to the bid price, adjusted to correct arithmetical errors other factors such as the time of completion of construction or the efficiency and compatibility of the equipment, tho avail- ability of service and spare parts, and the reliability of con- struction methods proposed should be taken into considera- tion. To the extent practicable these factors should be expres- sed in monetary terms according to criteria specified in the bidding documents. The amount of escalation for price adjust- ments, if any, included in the bids should not be taken into consideration.

The currency or currencies in which the price offered in each bid would be paid by the borrower if that bid were accepted should be valued in terms of a single currency select- ed by the borrower for comparison of all bids and stated in the bidding documents, The rates of exchange to be used in such valuation should be the selling rates published by an official source, and applicable to similar transactions on the day bids are opened unless there should be a change in the value of currencies before the award is made. In such cases the exchange rates at the time of the decision to notify the award lo the successful bidder should be used.

IX-8. Rejection of Bids :

Bidding documents usually provide that borrowers may reject all bids. However, all bids should not be rejected and new bids invited on the same specifications solely for the purpose of obtaining lower prices in the new bids, except in cases where the lowest evaluated bid exceeds the costs esti- mates by a substantial amount. Rejection of all bids may also be justified when (a) bids are not responsive to the intent of the bidding documents, or (b), there is a lack of compe- tition. If all bids are rejected, the borrower should review the cause or causes justifying the rejection and either consi- der revision of the specifications or modification in the pro- ject (or amounts of work on items called for in the original invitation to bids), or both. In special circumstances, after consultation with the Fund, the borrower may negotiate with one or two of the lowest bidders to try to obtain a satisfac- tory contract.

IX-9. Award of Contract:

The Award of a contract should be made to the bidder whose bid has been determined to be the lowest evaluated bid and who meets the appropriate standards of capability and financial resources. Such bidder should not be required, as a condition of award, to undertake responsibilities on commodities not stipulated in the specifications or to modify his bid.

(Project Aid) we furnish the following particulars lo enable you to issue the Letter of Authority to t h e . .. (name of tho Bank) which should be the same as given in (n) below for opening a letter of credit in favour of the overseas sup- plier concerned.

(a) Name and Address of the Indian importer.

(b) Number, date and value of the import licence and

date upto which it is valid.

(cj Method of procurement—whether it is based on direct purchase or Formnl Open International tendering in which case it should be indicated whether the contract has been awarded on the basis of technically suitable offer with reasons, if any.

(d) Brief description of the goods.

(f) Percentage of the import components from non-

eligible source countries, if any.

(g) Gross FOB value of contract (in Yen).

(h) Amount of Indian agents commission (in Yen), if

any.

(i) Net FOB value (In Yen) for which the Letter of

Authority is required.

(j) Number and date of the contract with overseas sup-

pliers.

ik) Name and Address of the Overseas Supplier:

(i) Nationality.

(ii) Percentage of tho shares held by Nationals of the ,

eligible source countries.

(iii) Nationality of the representative and/or President

of the supplier.

(iv) Percentage of Directors who are nationals of eli-

gible source countries.

(1) Payment terms and probable dates oil which pay-

ments under the contract will fall due.

(m) Expected date of completion of deliveries.

00 Documents to be presented at the time of payment to Bank of India, Tokyo (indicating No. of sets of each and their disposal).

(o) Shipment instructions (indicate if trans-shipment/

part-shipment permitted or not permitted).

(p) Name and address of the Importer's bank in India.

(q) Whether any contract(s) under the said licence has been placed and notified to the Japane§e authorities, and If so, the No., date and value of each such con- tract and the reference of the Ministry of Finance under which it has been notified to the O.E.C.F.

ANNEXURE IV

(Letter of Authority Form)

ANNEXURE m

REQUEST FOR ISSUE OF THE LETTER OF AUTHORITY

DATE :

To,

The Controller of Aid Accounts & Audit, Ministry of Finance, Department of Economic Affairs, U.C.O. Bank Building, 1st Floor, Parliament Street, New Delhi-110001.

Subject.—Import of from Japan under the Yen

Credit No. ID-P. 14 (Project Aid).

Sir,

(n connection wilh the import of

from • ••••under the above mentioned Yen Credit No. ID-P, 14

No. F.

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Economic Affairs)

New Delhi, the

This Bank of India, Tokyo Branch, Tokyo (Japan).

Subject,—Import under Yen Credit (Project Aid)—Loan

Agreement No. ID-P. 14—Issue of Letter of Aulho* rity for opening Letter of Credit.

Dear Sirs,

Tn accordance with the terms anj conditions of the agree- ment dated 25th March, 1980 entered into with your Bank,-

86 THE GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. i]

you are hereby authorized to open irrevocable Letter of Credit for an amount not exceeding Yen favouring M"/s as per attached details.

A copy each of the letter of credit opened by your Bank may be endorsed to the importer's Bank, to the OECF Em- bassy of India, Tokyo and to us.

Payments to the suppliers in terms of the letter of credit will be made initially out of your own funds. After payments, you must claim immediately reimbursements of the amounts paid by furnishing necessary documents to the OECF.

Interest charges payable to you, for the time lag between the dates of payment by you to the supplier and the date of its reimbursement by the OECF, shall be settled by you with the concerned importer's Bank in India through normal banking channels without affecting the Government of India's account. The other banking charges including those on ac- count of opening, maintenance and for the operation of the Letter of Credit as also those connected with handling nego- tiating documents and charges of overseas suppliers bankers if any, aic to be borne by the Overseas Suppliers and hence not payable by the importer and may therefore bo recovered from the Suppliers directly. As such no reimbursement of such chaiges is to be claimed from the OECF.

As and when any payment is made by you and reimburse- ment is made to you, an advice in the prescribed form should be sent to this Ministry.

This Lt-Ucr of Authority is intended for opening of L/C favouring the overseas suppliers. Subsequent amendments to L/C or furl her fresh L/C against this authorisation may not be acted upon in the absence of a specific authority from this Ministry.

This L.tfer of Authority will remain valid upto

Yours faithfully,

(ACCOUNTS OFFICER)

Copy forwarded to :—•

1. Importer with reference to their letter

No dated

2. Importers' Banker They are requested to arrange to deposit the rupee equivalent of the Yen pay- ment to the overseas suppliers on receipt of documents from the Bank of India, Tokyo Branch. The rupee equivalent of amounts disbursed to the suppliers will have to be calculated by applying the composite rate of conversion as prevailing on the date of payment to overseas suppliers in accordance with the Public Notice No. 8-ITC(PN)/76, dated 17th Janu- ary, 1976 or such other Public Notices as may be issued from time to time. Interest f§) 9 per cent per annum for the first thirty days and at the rate of 15 per cent per annum for period in excess thereof reckoned for the period between the date of payment to the srupplicr/date of reimbursements to Bank of India and the date on which the rupee equiva- lents are deposited into the Government Account, is also required to be deposited into the Government of India Ac- count in terms of. Public Notice No. 46-ITC(PN)/76- dated 16th June, 1976. The interest is payable for both the days i.e. the day on which payment is made to the Overseas Suppliers and also the date on which rupee deposit is made into Government Account. Any change in this rate will be intimated ;f and when made. It should be ensured that these deposits are made before the original set of import documents are handed over to the importer for Customs clearance.

These amounts should be deposited cither with the RBI, New Delhi or the S B.I., Tis Hazari, Delhi. In this connection their attention is also invited to the provisions of the Public Notices No. 184-1TC(PNV68, dated 30th August, 1968, 233- ITC(PN)/68, dated 24th October, 1968, 132 ITC(PN)/71, dated 5th October, 1971. No. 74-ITCfPN)/74, dated 31st May, 1974 and No. 103-rTC(PN)|76, dated 12th October, 1976. The head of Account to be credited is "K-Deposits & Advances—843—Civil Deposits—Deposit for purchases etc. abroad under Purchases under Credit/Loan Agreements"— Loans from the Government of Japan—7 <5 billion Yen Credit (Project Aid) No. ID-P. 14 (or 1981-82.

One copy of the shall an in original, in cases where the rupee equivalents are credited in cash at the RBI, New Delhi, or the S.B.I., Tis Hazari, Delhi as prescribed in Public Notice No. 132-rTC(PN)/71, dated 5th October, 1971, should be sent by them to the address given below alongwilh a forward- ing letter giving full details of the advice notes received from the Bank of India, Tokyo Branch.

The Controller of Aid Accounts & Audit, Ministry of Finance (Department of Economic Affairs), 1st Floor, UCO Bank Building, Parliament Street, New Delhi-1.

In cases where the rupee equivalents are remitted by means of demand drafts as laid down in the Public Notice dated 24th October, 1968 mentioned above, intimations thereof should be sent to the address given above. In all cases full particulars of the rupee- equivalents deposited should be furnished to this Department-

Interest charges payable to the Bank of India, Tokyo for the time lag between the dates of payment to the supplier and the date of its reimbursement to the Bank of India, Tokyo by the OECF shall be settled directly by you with the Bank of Tndia, Tokyo through normal banking channels with- out affecting Government of India's account.

3. The Director, Loan DepartmenWT, Overseas Economic Cooperation Fund, Takebashl Godo Building, 4-1, Ohtemachi J-Chome, Chiyoda-Ku, Tokyo 100, Japan.

4. Embassy of India, Tokyo.

5. The Under Secretary, Japan Section, Ministry of Finance

Department of Economic Affairs, New Delhi.

Accounts Officer.

ANNEXUBE V

Form OECF-LC T

Irrevocable Letter of Credit

(Applicable for goods)

Date:

To .. - This Letter of Credit h"n been issued pursuant to LOMI Agreement No

(N"me; nd addms uf dated the Supplier) between (Borrnwer) r nd THE OVERSEAS" ECONOMIC COOPERATION FUND.

Dear Sirs,

We advise you that we have opened our irrevocable credit

in your favour for account of No for a sum or sums not exceeding an aggregate amount of

(Sey yen

) available by your drafts a t sight for full invoice vaJue drr wn on us, to be accompanied by the following documents :

Signed commercial invoice in Full set of clean on board ocean bills of lading made out to order and blank endorsed and marked "Freight end "Notify