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REGISTERED No. D. (D.N.)—72 The Gazette of India

EXTRAORDINARY

PART I—Section 1

PUBLISHED BY AUTHORITY

No. 34] NEW DELHI, WEDNESDAY, FEBRUARY 24,1982/PHALGLNA 5,1903

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

compilation

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MINISTRY OF COMMERCE

PUBLIC NOTICE NO. 10-ITC (PN)|82

New Delhi, the 24th February, 1982 *

Import Trade Control

Sub :—Licensing conditions for import of goods and services under the OECF loan agreements No. ID-P. 11 and I D. P. 12 (Telecommunications Projects Nos. Ill and IV)

FUe No. IPC/23/(Z6)/82 The terms and conditions governing the issuance of import licence in respect of goods and services under the Yen Credit of 5.0 Billion and Yen 9.4 Billion of the OECF Loan Aifreement No. ID-P. 11 and ID-P. 12 for financing the import requirements of the Telecommunications Projects Nos. Ill and IV of the DGP&T as given in Appendices I & II respectively to this Public Notice are notified for information.

MANI NARAYANSWAMT, Chief Controller of Imports & Exports.

APPENDIX I

LICENSING CONDITIONS IN RESPECT OF IMPORTS OF GOODS AND SERVICES UNDER THE YEN CREDIT OF Y 5.0 BILLION FOR TELECOMMUNICATIONS PROJECT (III). EXTENDED BY THE OVERSEAS ECONOMIC CO-OPERATION FUND (OECF) OF JAPAN

Section 1—General Conditions :

1. (i) The Yen Credit of Y 5.0 billion extended by the

Overseas Economic Cooperation Fund of Japan (OECF) for financing the import requirements of the Telecommuni- cations Project of the DGP&T is untied in favour of developing countries. Accordingly th© goods and services to be procured under this credit can be imported from Japan and all countries enumerated In the fist at Annexure-I which will be eligible source countries under the credit.

I (ii) Import licence(s) under the Credit can be issued only for such items and for such value as have 'been specifically cleaid by the DGTD]CG Committee. The value of import licenced) Issued under this credit should not exceed Yen 5,600 million, (CIF),

The rupee value of the import licence shall be determined with refernoe to the exchange rate notified by the Department of Revenue (Customs) and prevailing on the date of Issue of the. import licence and indicated in th© body of tho import licence(s) as. per para 2 of the Public Notice No. 78. ITC(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 licences) at the exchange rate specified on the import licence(s). The licence will bear the superscription "Japanese Yen Credit No. ID-P. 11". The first and second suffix to tho licence code will be "S|JC". This will also be repeated in the letter from the CCI&E forwarding tb*'import licence to D.G. P&T, a copy of which should be endorsed to the Ministry of Finance, Department of Economic Affairs (Japan Section).

I (iii) Import licenced) can be issued only in favour

of DGP&T on CIF basis.

I (iv) Depending on the convenience of DGP&T more than one. import licence may ibe issued under this credit, but the total value must not exceed Y 5,600 million (CIF) as specified at (i) abovo.

I (ix) This condition of the placement of contracts within 4 months period will tbo treated as not having been complied with unless complete contract documents reach the Ministry of Finance, Dpartment of Economic Affairs (Japan Sctioti) within four months from the date of issue of the import licence. If fiim orders as explained in para I (viii) above cannot be placed within four months for valid reasons, the license© should submit tho import licence to the concerned licensing authorities giving rensons why ordering could not be completed within four months. Such requests for extension in tho ordering period will be consi- dered 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 import licence such proposals will Invariably bo referred by iho licensing authorities to tho 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 authorities for communication to the licensee. Only on production by the licensee of a letter from the licensing authorities sanctioning such exten- sion will tho authorisd dealers and departmental authorities permit the facility of letter of authority for the establish- ment of letter of credit acceptance of deposits of the rupee equivalent, eto. in respect of supply contracts entered into under the import licence.

I (x) All payments must be completed within 4 months 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 permitted to be availed of by the Indian importer from the overseas supplier. The contract should provide for tho period of delivery of goods as follows:

Months after the receipt of Letter of credit

but to bo completed latest by the end of

In fixing the terminal date for shipment it should be noted that this date should not bo beyond 31-12-85.

Section-II—Special points to be kept in view while negotia- ting a supply contract.

H(i) The FOB value of the contract should bo expressed in Yen (Fraction of Yen should b© omitted) and should exclude Indian Agent's commission, if any, which should be paid in Indian rupees.

In tin circutnstances the contract value rliould be expressed

In Indian riippees or in any other currency.

I (v) The extension of the validity of tho import licence, may on application by DGP&T, be granted upto 31-12-85. Request for further extension, if any, should be referred to the Department of Economic Affaire (Japan Section).

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 (vii) No remittance of foreign exchange will bo per- mitted against th© import licence. Any payment towards Indian Agent's commission should bo made in Indian rupees to the agents in Tndia. Such paymets, however, will form part of the licence value and will, therefore be charged to the licence.

I (viii) Firm order must be placed on FOB basis on the Overseas supplier located in tho countries mentioned in Annex ure-J nnd sent to the Department of Economic Affairs (Japan Section) within four months from the date of issue tho import licence. Freight and insurance charges will >be payable in India in Indian rupees, "Firm orders" means purchase orders placed by the Indian license* on the over- seas supplier duly signed by the latter or purchase contract duly signed by both the Indian importer and tho overseas supplier. Orders on Indian Agents of overseas suppliers andfor order confirmation of such Indian Agents are not acceptable.

The purchase order and the supplier's order confirmation

should be in English only.

II (il) The broad guidelines for procurement of goods and services under the OECF Yen Credit (Project Aid) are given in Annexme-II. However prior approval of the Fund shall be obtained, if it is proposed to adopt procurement procedures other than Formal Open International Tender- ing for goods and services to be financed out of the Pro- ceeds of the loan, submitting to the Fund an application for approval of procurement method(s) signed by duly authorised person together with its reasoning.

Prior to inviting bids for the procurement of goods and services, the copies of all notices and instructions to bidders, the bid form, the proposed contract, specifications and draw- ings and all other documents relevant to the bidding shall be submitted to the Fund for its prior aproval. The nbove ' documents|application may be forwarded, in duplicate, to tho DEA (Japan Section) for obtaining approval of OECF,

Tl(iii) The payment to the overseas supplier should be arranged - through an irrevocable letter of credit to be opened bv the Bank of India, Tokyo in their favour under the OECF Yen Credit (Project Aid) No. ID-P. 11 for 3979-80 the details of which are given in Section VI below.

II (iv) 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 Affairi (Japan Section), Ministry of Finance, should be obtained

, soon after the date of issue of the Import licence.

II fv) Eligibility of Supplier

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

Il (vi) Declaration in Contract,—The following statements

of eligibility by the supplier shall be added to each contract.

"I, ihc undersigned, hereby certify that the goods to be supplied are produced in — (eligible source coun- try).

I, th.; undersigned, further certify that to the best of my information and belief, the poition imported from the non- eligible source countries is less than thirty percent (30 per cent) in accordance with the following formula :

Imported CIF_Price__+ Import Duly X 100_

Supplier"? FOB Price

"I, the undersigned, hereby certify ihat— (Name of

lompanyl has been incorporated and registered in — (name of eligible source country), and is- controlled by nationals of the eligible source countries."

II (vii) Permissible imports from non-eligible source coun- tries—-Financing of goods which contain materials originating from a non eligible source country or countries may be mode provided that the imported portion is less than thirty percent (30 per cent) on an item by item basis in accordance with the following formula:

Imported CIF Price + Import Duty Suppliers FOB Price

Section JII.—Conditions to be incorporated In the supply

contracts.

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Section IV—-Contract Approval by OECF

IV (i) Within the stipulated period for placement of firm orders the licensee should forward 4 copiea of the contracts duly signed by both DGP&T and overseas suppliers supported by order confirmation in writing by the oveiwas suppliers or their photo copies complete in all respects, to- gether with two photo copies of the relevant valid import licence, to Japan. Section, Department of Economic Affair*, Ministry of Finance, North Block, New Delhi.

IV (ii) The abovc procedure will also apply to all contract—amendments causing essential modification* 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 Von Credit No. ID-P. 11 (Project Aid) for Telecommunication Project (III).

Section V—Payment to the overstas supplier* — Letteri

of Credit procedur.

V (i) On receipt of the intimation of the contract appro- val from the OECF, by the Ministry of Finance, Department of Economic Affairs, Japan Section, DOPAT and the CAA&A will be informed of the same. Whereafter the DGP&T should approach the Controller of Aid Accounts 4 Audit, (hereinafter referred to as CAA&A) Department of Economic Affairs, Ministry of Finance, LJCO Bank Buil- ding parliament Street, New Delhi with a request in the form attached as Annexure-ITI for issue of a letter of authorisation. The CAA&A will issue a letter of authori- sation as in th© form attached as Annexure-IV addressed to the Tokyo Branch of the Bank of India for opening an irrevocable Letter of Credit as in the form attached as Annexure-V for physical imports) or Annexure-VI (for services) in favour of the overseas supplier concerned. Copies of the Letter of Authorisation will be endorsed to the OECF, the Embassy of India, Tokyo, the importer's Bank in Tndia. and Japan Section, Department of Eco- nomic Affairs. Ministry of Finance.

Section III—-Can jit ions to be incorpoic.teJ in the Mtpply

contracts,

(a) The contract is arranged in accordance with the Loan Agreement between the Government of India and Overseas Economic Cooperation Fund of Japan (OECF) dated the 15th Oft, HI concerning the Yen Crtdit No. ID-11 (Project Aid) for Telecommuni- cations Project (Iff) and will be subject to the ap- proval of Government of India and the Oversea* Economic Cooperation Fund,

fb) Payments to the supplier sh;ill be made through an irrevocable Letter of Credit to be issued by the Bank of India, Tokyo under the Loan Agreement No ID-P. U dated 13th Oct., 81 : between the Govern- ment of India and the Overseas Fconomic Co- operation Fund of Japan I OECF),

(c) The Overseas supplieis agree to furnish such infor- mation and documents a* may be required undei the Yen Credit arrangement's by the Government of India on the one hand and the OECF on the other.

(di Certificates (triplicate) in the forms indicated in

Ittvi).

III (li) In case the supplier is located in Japan, the supply contract should contain a clause that the Japanese supplier agrees to make shipping arrangements in consulta- tion with the Embassy of India. Tokyo and that for this purpose he would keep the Embassy of India, Tokyo in- formed of the delivery schedule of the goods involved and notify the Embassy of India at least six weeks Jn advance Lof ihc '•hippina required so ihat suitable arrangements could he msde. In eM-epliorial c ses, where ths Indian importers require it, this period of notice may be reduced The Japanese supplier should al"o agree to send a cable advi * to the Importer after each shipment giving the necessary details and a ropy iheieof should be sent to the Fmbassy of India, Tokvo. 1359 G1781— 4

V(il) On receipt of the letter of authority, the Bank of India, Tokyo, will establish an irrevocable letter of credit t>§ per Annexure-V (applicable to physical imports) or VI (applicable to services) in favour of the overseas suppliers concerned and will also forward a copy of the same to the OECF, Embassy of India, Tokyo, the importer's Bank in India and the CAAAA.

The abo^e procedure of opening of letters of credit on the basis of the letters of authority from CAA&A would Ipso facto apply to all such amendments to letter of authorisa- tion|letter of credit as may become necessary due to con- tract amendment or otherwise.

V (iii) The overseas supplier shall, after efFe.ting ship- ment of the goods, present through his bankers the docu- ments specified in the letter of credit to the Bank of India Tokyo. If the documents are found to be in order, the Bank of India, Tokyo will release the amount secifled in the documents to the overseas supplier through his bankers and will thereafter obtain reimbursement of th# said amount from the OECF.

V. (iv) All charges on account of opening, mainte- nance, and on the operation of the letter of Credit will be to the account of overseas suppliers. Bank of India Tokyo will therefore recover all these charges from the suppliers Bank, charges for handling and negotiating the documents and other incidentals will also be borne by the suppliers.

For the time lag between the dates of payment of the F.O.B. cost of the material by the B.O.T., Tokyo to the suppliers and the date of reimbursement by the OECF the B.O.T. will charge interest as per the terms and conditions of the Agreement entered into by them with the Government of India (\f|o Finance) on 25-3-19R0 and get the same reimbursed by the Embassy of India. Tokyo. The expenditure on account of this interest-payment by the Embassy of India in Japan will be recovered from the P&T Department (Vide section Vf (iv) infra)

Section VI—Responsibility for rupee deposit

VI (i) The Bank of India, Tokyo will forward the nefio-

kabls thipping documents to the accredited bankers of OGPAT as indicated in the Appendix to the relevant Letter of Authority and the bankers will in turn ensure th"t the DGP&T make the rupee deposits at RBI, New Delhi or S.B.I. Tis Hazari, Delhi before releasing the shipping docu- ment*. The nipee equivalent of the Yen payments made to the overseas supplier are to be deposited into Government of India Account in the manner prescribed in Public Notice No. 74-ITC(PN)|74 dated 31-5-1974. The exchange rate to be adopted for computing the rupee equivalent of the Yen payments made to the overseas suppliers will be the compo- iite rate of exchange applicable to the date of payment which will be worked out in accordance with the method prescribed ;n Public Notices No. 109-ITC(PN)l74 dated 3-8-1974 and No. 8-ITC(PN)|76 dated 17-1-1976 or a? may be notified by Government from time to time through Public Notices of the CCI&F or through Exchange Control Circulars of the Reserve Bank of India. The Head of Account to which the above rupee deposits should be credited is "K-Deposlts and Advancs-843-CiviI Deposits—Deposit? for purchase etc. abroad-Purchase under creditslLoan Agreements Loans from the Government of Japan—5.0 billion Yen Credit No. ID-11 for Telecommunication? Project (III)." The provisions regard- ing calculation and deposit of interest charges mentioned in the above sairl Public Notice of 31-5-1974 will, however, not be applicable, as no interest charges are recoverable! in reapeci of imports made by Centra! Government departments.

VI Cii) The amount referred to above should be deposi- ted in cash to the credit of the Government either itj the Reserve Bank of India New Delhi, or State Bank of India, Tis Ho.zari, Delhi as contemplated in Public Notice* No. 184-ITCfPN1|f;R dated 30-8-1968, No 233. ITC(PN)|68 dated 24-10-1968, No. 132-TTC(PN)|71 dated 5-10-1971 No. 74-TTC (PN)[74 dated 31-5-1974 and No. 103-ITC (PN)|76 dated 12-10-1976.

VI (iii) The concerned Bank in India shall also furnish such additional deposit in the same manner stipulated above a* may be requested by the Government of India, Ministry of Finance, Department of Economic Affairs, on account of service charges wifhin seven days after such a demand is madc by Ministry of Finance ("Department of Economic Affairs). While filling in the various columnsjin the challan it should be ensured by the importers |their bankers that the information prescribed in para 2 of Public Notice No 132- ITC(PN)|7l dated 5-10-1971 is invariably indicated in the column "full particulars of remittances and authority fif any)" of the challan. The following particulars should invariably be furnished in the treasury Challnns :—

fa) Ministry of Fin"nc" letter of authority No. and

date.

(b) Amount of Yen currency in respect of which deposits are to be made together with rate of conversion adopted.

(c) Date of payment to the overiea* supplier.

Thereafter the Treasury Challans evidencing the rupee deposit should be tent by registered post to the CAA&A Indicating reference to the letter of authorisation issued by him and also enclosing copies of the irwoice and shipping documents.

Note : Importer's Banks in India "hould ensure that the rupee deposit* are invariably made within 10 days of the receipt of the advice of payments and negotiable shipping documents from the Bank of India, Tokyo and that the CAA&A Ministry of Finance (DBA), New Delhi is kept Informed of the fact immediately thereafter.

VI (iv) The concerned bsmk jn India should also endorse the amount of rupee deposits on the exchange control copy of the licence and send the requisite "S" Form to the Reserve Bank of India, Bombay.

The rupee equivalents of Yen payments on account of interest charges etc.. made by Embassy of Indln, Tokyo, to BOI, Tokyo will also be calculated in the manner laid down in p"ra VI (i) of Section VI above and deposited in favour of the Principal Account* Officer. Ministry of External Affair*, New Delhi, for which purpone, CAAiA will ba issuing auitable advices.

Section VII—Miscellaneous provisions

VII (i) Reports on the utilisation of the import licence The importer should send a monthly report, after the - letter of credit has been opened rogarding shipments and payments made tbrreagainst and about the balance left, to the Controller of Aid Accounts & Audit, Department of Pconomlc Affairs, Ministry of Finance, UCO Bank Build- ing, Parliament Street, New Delhi.

VII (ii) Notifying Suppliers of Special Conditons

The licensee should apprise the supplier of any special provisions in the import licence which may affect the suppliers in carrying out the transaction.

VII (iii) Disputes

It should be understood that the Government of India will not undertake any responsibility for disputes, if any, that may arise between the licensee and the suppliers. The conditions to be fulfilled by the supplier be-fore payment by ihe Bank of India, Tokyo must be clearly spelt out by the importer in Annexure-m under 'Terms of Payment" Pro- visions dealing with settlement of .disputes should be inclu- ded in the conditions of contract.

VII (iv) Future Instructions

The license shall promptly comply with any direction*, instructions or orders issued by the Government of India from time to time regarding any and all matters arising from or pertaining to the import licence and for meet- ing all obligations under the Yen Credit Agreement (Pro- ject Aid) No. ID-P 11 with the Overseas Economic Cooperation Fund of Japan (OECF).

VII (v) Breach or violation

Any breach or violation of the conditions set forth in th" above clauses will result in appropriate action under the Imports and Exports (Control) Act.

VII (vi) List of Anncxurcs • ——

Anoexure-I List of eligible source countries

Annextire-11 Main Guidelines for Procurement.

Annexure-III Request for issue of Letter of Authority.

Anmexure-TV Form of Letter of Authority.

Annexure-V Form of Letter of Credit (Applicable to Physi-

cal Imports).

Annexure-VI For of Letter of Credit (Applicable to Ser-

vices)

ANNEXUREI

List of Eligible Source Countries

A. Developing Countries and Territories

(al) Noa-OPEC Developing Countrle§

I. AFRICA, North of Sahara

Egypt Morocco Tunisia

II. APHICA, South of Sahara

Angola Botswana Burundi Camereon Cape Verds Islands Central African Rep. Chad Comoro Islands Congo, People's Republic of Dahomay

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      Equatorial  Guinea (1)                                             IV.   AMERICA, South
      Ethiopia                                                               Argentina
      Gambia                                                                 Bolivia
      Ghana                                                                   Brazil
      Guinea                                                                 Chile
                                                                             Colombia
      Ivory  Coast                                                           Falkland  Islands
      Kenya                                                                  French  Guiana
      Lesotho                                                                Guyana
                                                                             Paraguay
      Liberia                                                                Peru
      Malagasy  Republic                                                     Surinam
      Malawi                                                                 Uruguay
      Mali                                                             V.    ASIA, Middle E"st
      Mauritania,  Mauritius                                                 Bahrain
                                                                             Israel
      Moozambiquc                                                            Jordan
      Niger                                                                  Lebanon
      Portuguese  Guinea                                                     Oman
      Reunion                                                                Syrian Arab  Republic
                                                                             United  Arab Emirates (6)
      Rhodesia                                                               Yemen Arab  Republic
      Rwanda                                                                 Yemen, People's  D.R,  (7)
      St. Helena and  dcp. (2)                                         VI.   ASIA, South
      Sao Tomo and  Principle                                                Afghanistan
      Senegal                                                                Bangladesh
      Seychelles                                                             Bhutan
      Sierra  Leone                                                          Burma
      Somalia                                                                India
      Sudan                                                                  Maldivis
      Swaziland                                                              Nepal
      Terro. Afars and Issas (3)                                             Pakistan
      Togo                                                                   Sri Lanka
      Uganda
                                                                       Vn.  ASIA,  Far East
      Un. Rep. of  Tanzania
                                                                             Brunei
      Upper Volta
                                                                             Hong Kong
      Zaire Republic
                                                                             Khmer  Republic
      Zambia                                                                 Korea,  Republic of
i n.  AMERICA, North and Central                                             Laos
      Bahamas                                                                Macao
      Barbados                                                               Malaysia
      Belize                                                                 Philippines
      Bermuda                                                              • Singapore
      Costa Rica                                                             Taiwan
      Cuba                                                                   Thlland
      Dominican  Republic                                                    Timor
      El Salvador                                                            Viet-Nam,Rep. of
      Guadeloupe                                                             Vict-Nam  Dem. Rep,
      Guatemala
                                                                       Vni.  OCEANIA
      Haiti
                                                                             Coek Islands
      Honduras
                                                                             Fiji
      Jamaica
                                                                             Gilbert & Ellicc Is.
      Martinique
                                                                             French Polynesia (8)
      Mexico
      Netherlands  Antilles                                                  Nauru
      Nicaragua                                                              New  Calendonia
      Panama                                                                 New Hebrlces (Br. and  Fr.)
      St. Pierre & Miquclon                                                  Niue
      Trinidad  and  Tobago                                                  Pacific  Islands (US) (9)
West  Indies  (Br.)  n.i.e.                                                  Papua New Guinea
(a)   Associated  States  (4)                                                Solomon Islands (Br.)
(b)   Dependencies (5)                                                       Tonga            .   .
                                                                             Wallls and  Futuna
(lj   Formerly  the  territory  of  Spanish  Guinea,  including  the         Wcstrcn  Samoa  -
      island  of  Fernando  Po.
(2)   Including  the  following  islands  :  Ascension,  Tristan  da   (6)   Ajman,  Dubai,  Fujairnh,  Ras  al' Khaimah,  Sharjah  and
      Inaccessiblcs,  Nightingale,  Gough.                                  Umm  al  Quaiwain.
(3)   Main  islands  ,  Aruba,  Bonaire,  Curacao,  Saha,  St.  Eus-   (7)   Including  Aden  and  various  sultanates  and  emirates.
      tacit  St.  Martin  (Southern  part).                            (8)  Comprising  the  Society  Islands  (including  Tahiti),  The
(4)   Main  Islands:  Antigue,  Dominica,  Grenada,  St.  Kitts             Austral  Islands,  the  Tuamotu-Gambier  Group  and  the
      (St. Caristophc), Ncvis-Anguilla, St. Lucia and St. Vincent.          Marquesas Islands.
(5)   Main  islands:  Montserrat,  Cayman,  Turks  and  Caicos,        (9)  Trust  Territory  qf- the  Pacific  Islands  :  Cwoline  ljiand  •  -
      and  British  Virgin  Islands.                                         Marshall  Islands,  and  Marine  Islands  (except  Guam)

IX. Europe

Cyprus Gibraltar Grsoce Malta Spain Turkey Yugoslavia

(•2) Member or Association Countries of OPEC

Algeria Bolivia Libyan Arab Republic Gabon Nigeria Ecuador Venezuela Iran Iraq Kuwait Qatar Saudi Arabia Abu Dhabi Indonesia

ANNEXURE II

Main Guideline* for Procurement of Goods and Service* 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 newspaper of general circulation in India.

II. Bidding Documents and Contracts.

H-l. Bid Bonds or Guarantees.

Bid bonds or bidding guarantees are a usual requirement but they should not be get so high as to discourage ratable bidders. Bid bond* or guarantee should be retoawl to unsuccessful bidders as soon as possible after the bids have * been opened.

II-2. Conditions of Contract.

The conditions of contract should clearly define the rights and obligations of the Importer and contractor or supplier, and the 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 included.

11-3 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 diflerent 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 princip"lly on the rehniMOTenient 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 ('Turnkey Contracts") are acceptable if they offer technical and economic advantages for the borrower country.

II-4. Eligible suppliers.

Exporters or suppliers whose goods and services are to be financed out of the proceeds of the Loan (hereinafter referred to as ("the eligible supplier") ihall be nationals of the eligible source countries satisfying the following condi- tions.

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

nationals 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.

IIM. Contract Price.

(a) 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 borrower's 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 con- tract prices in the event changes occur in the prices of the major cost constituents of the contract, such as labour and important materials.

The specific formula for price aJjustments should be

clearly defined in the bidding documents.

t A ceiling on price adjustment should be included In contracts for the supply of goods, but it is not usual to

. include such a celling in 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 various

methods by which contract prices may be adjusted,

(c). Insurance.

The bidding documents should state precisely the types of

insurance to be provided by the successful bldde~.

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

III-3, The following statement of eligibility by the supplier

shall be added to each contract.

"I (We) hereby state that my (our) company is a eligible supplier, as per cent ( per cent) of the shares are 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 equip- ment or materials must comply are cited, the specifications should state that commodities meeting Japan Industrial Stan- dard or other internationally accepted standards, which ensure an equal or higher quality than the standards mentioned, will also be accepted.

1V-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 arc required or it has been determined that a degree of standardization is necessary to maintain cer- tain essential features. In the latter case the specifications should permit offers of alternative commodities (vhich 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 gurantee 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 b© sufficient to protect the borrower in case of default by the contractor. Its life should extend sufficiently beyond completion of the contract to cover a reasonable warranty period. That subject of the guarantee of bond required should be defined with the bidding documents.

In contracts for the supply of goods it is usually prefe- rable to have a percentage of the total payment held as retention money to guarantee performance, than to have a bank guarantee or bond. The percentage of the total payment to be held us retention money and the conditions for its ultimate payment 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 com- pletion or delivery will result in extra cost, loss of revenues or less 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 ill- eluded in the bidding documents should contain clauses, when apptopriate, stipulating that a failure on the part of the parties to perform their obligtions under the Contact shall not be considered a default under the Contract if such failure is the result of an event of force majeurc (to be defined in the conditions of the Contract.)

VII. Settlement of Disputes :—Provision dealinj with the settlerrei^ 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.

1XT2. Bid Opening Procedures :—The date, hour and place for the. latest received of bids and for the bid owning should be announced in the invitations to bid and all bids should be opentd publicly at the stipulated time. Bids recevied after this time should be returned unopened. The name of the bidder and the total amount of each bid and of any alter- native bids, if they have been requested or permitted, should be read aloud and recorded.

IX-3. Clarifications 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 uf the bid may be accepted. The importer may ask any bidder

168/5

for a clarification of his bid but should not ask any bidder to change the substance of the price of his bid.

1X-4. Procedures to the confidential :—Except a8 may be required by law, no information relating to the examination, clarification and evaluation of bids and recommendations con- cerning award should be communicated after the public opening of bids to any persons not officially concerned with these procedures until tine award of. a contract to the succes*- tul bidder is announced..

IX-5. Examination of Bids :•—Following the opening, it shoui'd be ascertained whether material errors in computation have been mode in the bids, whether the bids are fully res- ponsive to the bidding documents whether the required sureties have been provided, whether documents have been properly signed and whether the bids are otherwise generally in order. If a bid does not substantially conform to tho specifications, or contains inadmissible reservations, or is not otherwise substantially responsive to the bidding docu- ments, it should be- rejected. A technical analysis should then be made lo evaluate each responsive bid and to enable bids to be compared.

IX-6. Post-qualification of Bidders :—In the absence of prequalifications, the borrower should determine whether the bidder whose bid has been evaluated the lowest has the capability and financial resources effectively to carry out the contract concerned. If the bidder does not meet that test, his bid should bo rejected.

1X-7, Evaluation and Comparison of Bids :-^Bid evalu- ation must be consistant with the terms and conditions set forth in the bidding documents. In addition to the bid price, adjusted to correct arthmetical errors, other factors such as the time of completion of consluction or the efficiency and compatibility of the equipment, the availability of service and spare parts, and the reliability of construction methods pro- posed should be taken into consideration. To the extent practicable these factors should be expressed in monetary terms according to criteria specified in the bidding documents. The amount of escalation for price adjustments, if any, included in the bidfi 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 selected by the borrower for comparison of all bids and stated in (he bidding documents. The rates of exchange to be used in such valuation shou-ld 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 t value of currencies before the award is made. In such cases the exchange rates of the time of the decision to notify the

' award to 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 estimates by a substantial airount. ' Rejection of all bid may also be justified when <(a) bids are not responsive to the intent of the bidding documents, or (b), there is a lack of competition. If all bids are rejei-ted. the borrower should review the cau.se or causes justifying the rejection and either consider revision of the specifications or modification in the- project (for araouhrs of work on items called for in the origin invitation to bids), or both. In special circumstance*, after consultation with the Fund, the borrower may negotiate with one or two of the lowest bidders to try to obtain a satisfactory 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, ns a condition of award, to undertake responsibilities on comrroditics not stipulated in the specifi- cations or to modify his bid.

ANNEXURE III

REQUEST FOR ISSUE OF THE LETTER OF AUTHORITY

No, Date ;

To

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

Sub • Import of from lapan under the

Yen Credit No (Project Aid)

Sir,

In connection with the import of from

under the above mentioned Yen Credit No (Project Aid) we furnish the following particulars to enable you to issue the Letter of Authority to this : — (name of the Bank) which should be the same as given In (n) below for opening a letter of credit in favour of the overseas supplier 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.

(c) Method of procurement—whether it is bused on direct purchase or Formal Open International ten- dering 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.

(e) Origin of the good9.

(f) Percentage of the import components from non-

eligible iourcc countries, If any.

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

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

if any.

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

Authority is required.

0) Number and date of the contract with overseas

suppliers.

(k) Name and Address of the overseas supplier :

(1) Nationality

(iij Percentage of the shares held by nationals of the

eligible source countries.

(iii) Nationality of the representative and/or Presi-

dent of the supplier.

(iv) Percentage of Directors who are nationals of

eligible source countries.

(1) Payment terms and probable dates on which payments

under the contract will fall due.

l(m) Expected date of completion of deleveries.

(n) 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 a contract (s) under the same licence has been placed and notified lo the lapanese authorities, and if so, the No., date and value of each such contract 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)

No. F.

Government of India

Ministry of Finance

Department of Economic Affairs

New Delhi, the

To

The Bank of India, Tokyo Branch, Tokyo f( Japan).

Subject : Import under Yen Credit (Project Aid)—Loan Agreement No. —Issue of Letter ot Authority for opening Letter of Credit.

Dear Sirs,

In accordance with the terras and conditions of the agree- ment dated 25-3-1980 entered into with your Hank, you are hereby authorized to open irrevocable Letter of Credit for an. favouring amount not exceeding Yen — 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 Embassy 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.

For the time lag between the dates of payment by you to the supplier and the date of its reimbursement by the OECF, you will be paid interests as per terms of the above agreement by the Embassy of India, Tokyo. The other banking charges Including those on account of opening maintenance and for the operation of the Letter of Credit as also those connected with handling negotiating documents and charges of overseas suppliers bankers If any, are to be borne by the overseas suppliers and hence not payable by the importer and may therefore be recovered from the suppliers directly. As such no reimbursement of such charges 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 Letter of Authority is intended for opening of L /C favouring the overseas suppliers, Subsequent amendments to L/C or further fresh L/Os against This authorisation may not bo acted upon in the absence of a specific authority from this Ministry.

This Letter 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 payment to the overseas suppliers on receipt of documents from the Bank of India, Tokyo Branch. The rupee equivalent of am- ounts 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 17-1-1976 or such other Public Notices as may be issued from time to time. It should be ensured that these deposits are made before Ihe original set of import documents are handed over to th" Importer for Customs clearance.

These amounts should be deposited either with the RBJ, 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-ITC(FN)/68 dated 30-8-68, 233-ITC(PN)/68 dated 24-10-1968, 132-1TC(PN)/71 dated 5-10-1971, No. 74-ITC(PN)/74 dated 31-5-1974 and No. 103-lTG(PN)/76 dated 12-10-1976. The head of Account to be credited aa 'K- Depcsits and Advances—843—Civil Deposits—Deposits for purchases etc., abroad under Purchases under Credit Loan Agreements—Loans from the Government of Japan.—5.0 bilfion Yen Credit (Project Aid) No. 1D-P. II for 1979-80.

One copy of the challan in original, in cases where the ri.-pec equivalents are. credited in cash at the RBI, New Delhi, or the SBI, Tis Ffazari, Delhi as prescribed in Public Notice No. 132-ITC(PN)/71 dated 5-10-1971, should bo sent by them to the address given below along with a forwarding letter giving full details of the advice notes received from the Bank of India, Tokyo Branch.

The Controller of Aid Accounts and Audit, Ministry of Finance Department of Economic Affairs), 1st Floor, i r co Bank Building, Parliament Street, New Delhi-1.

In eases where the rupee equivalents are remitted by means of demand drafts as laid down in the Public Notice dated 24-10-1968 mentioned above, intimations thereof should be sent to the address given above. In all cases, full particulars "f the rupee equivalents deposited should he furnished to this Department.

The banking charges, interest and other charges of the Bank of India, Tokyo Branch (including charges of the overseas suppliers bankers), if any, should he settled by paying their rupee equivalents to the Principal Accounts Officer in the Ministry of External Affairs, New Delhi. For this purpose appropriate advices will be sent by this Depart- ment on receipt of relevant information from the Bank of India Tokyo/Embassy of India in Japan.

3. The Director, Loan Department-II, Overseas Economic Cooperation Fund, Takcbashi Godr> Building, 4-1, Ohtemachi 1-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.

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to order and blank endorsed and marked 'Freight and "Notify ": Other documents,

to

Evidencing shipment of (brief description of goods) to be shipped referring to Contract No. (if any) from Partial shipments are permitted. Transhipment is permitted. Bills of lading must be dated not later than Draft m ut be presented for negotiation not later than

AH drafs and documents under this credit must b© marked irrevocable credit , dated and Import '"Drawn under No. Reference No. ,(s).

(if any)".

This creidt is not transferable,

We hereby undertake that all drafts drawn under and in compliance with the terms of the credit shall be duly honoured on due presentation and delivery of documents to the drawee.

Unless otherwise expressly stated, this credit is subject to "Uniform Customs and Practice for Documentary Credit¹ (1974 Revision), International Chamber of Commerce Bro- chure No, 290".

Special Instructions to the negotiating bank :

1. After obtaining the reimburseme n for our payments from THE OVERSEAS ECONOMIC COOPERATION FUND in accordance with the provisions of the Letter of Commitment issued thereby under the .ibove-mentit: ned Loan Agreement we un tertake to remit the amount of the drafts in accordance with instructions issued by the negotiating Bank.

2. The negotiating Bank must forward the drafts and one L\ mplete set of documents to us together with the certificate stating that the remaining documents have been airmailed direct t o— — •——-.

3. All banking charges under this credit are for the account

of the importer/supplier.

Yours faithfully,

(a commercial bank)

ANNEXURF, V

Form OECF-LC I

Irrevocable Letter of Credit (Applicable for goods)

Date :

To

(Name and address of the Supplier)

This letter of Credit has been i^Hicd pursuant to T nan Agreement No.— dated — Between (Borrower) and THE OVFRSFAS FCONOMIC COOPERA- TION FUND.

Dear Sirs,

We advice you that we ha\e opened our irrcvocab'e credit

No _ ^ — in your favour for account of tor a sum or Minis not exceeding any aggregate amount of Y •——; " (Say Yen l available by your drafts a( sight for full invoice value drawn on us, to be accompanied by the following documents : Signed commercial invoice in Full set of clean on board ocean bills of Jwdinp made out

By :

(Authorised Signature)

PAYMENT TERMS

This payment terms constitutes an Integral part of our Letter of Credit No. — — _

Initial Payment

Amount Y -

being of the total

contract price.

Required documents :

Latest presentation date :

IT. Intermediate Payment (if any)

Amount : Y~— .—.

being — \ of of the total

contract price.

Required documents:

Latest presentation date :

111. Payment against Shipping Documents

Amount Y

b e i n g— —— % of the total contract price.

Note : This attached sheet is not required in case of full payment

against shipping documents.

ANNEXURE VI

Form OECP-LC II

Irrevocable Letter of Credit

(Applicable for Services)

Date :

To

(Name and addres of the Supplier)

This Letter of Credit hat been issued pursuant to Loan Agreement No. — dated — , between (Borrower) and THE OVERSEAS ECONOMIC COOPERATION FUND.

Dear Sirs,

) available by beneficiary's We advise you that we have opened our irrevocable credit No, —in your favour for account of for a sum or sums not exceeding an aggregate amount of Y~ (Say Yen drafts at sight for full Stntement value drawn on us.

To be accompanied by the required documents, in accor-

dance with the Payment Schedule attached hereto, concerning (Contract No, with regard to——— Project). Drafts must be presented for negotiation not later than

irrevocable credit No. dated

All drafts and documents must be marked "Drawn under ."

This credit is not transferable.

We hereby undertake that all drafts drawn under and in compliance with the terms of the credit shall be duly honoured on due presentation and delivery of documents to the drawee.

Unless otherwise expressly stated, this credit is subject to "Uniform Customs and Practice for Documentary Credits (1974 Revision), Tnternation Chamber of Commerce Bro- chure No. 290,"

Special Instructions to the negotiating bank :

1. After receipt of the original Statement of Performance issued by (Borrower or its designated authority) in accor- dance with the form attached hereto, paymentls) under this credit must be made in accordance with the Payment Schedule stipulated in the sheet attached hereto. In case of the initial payments, the beneficiary's Statement is required instead of the above-mentioned Statement of Performance.

2. After obtaining the reimbursement for our payment from THE OVERSEAS ECONOMIC COOPERATION FUND in accordance with the provisions of the Letter of Commitment issued thereby under the above mentioned Loan Agreement, we undertake to remit the amount of the drafts in accordance with the instructions issued by the negotiating bank.

3. A copy of the document as mentioned in item 1 above mid the drafts shall he sent to vrs immediately ;ifter the receipt thrrcfor.

4. All banking charges under this credit are for the account

of Ihc importer/supplier.

Yours faithfully.

PAYMENT SCHEDULE

This payment schedule constitutes an integral part of our

Letter of Credit No. —~ — . ,

I. initial Payment

Amount Y — -— ———-— - —

being

.% of the total contract price

Required documents : beneficiary's Statement Latest presentation date :

II. Progress Payment

Aggregate amount Y ——• ~ - — —~ •

being •% of the total contract

price to be paid as follows :

Amount due Latest presentation

date

1st Instalment y • — ——

lTnd Instalment Y ——-—-—-—. - - —

Required document : a copy of Statement of Performance issued

by (Borrower or its designated authority), a form of which is attached hereto.

Statement of Performance

Date : Rf. No.

To

(Name and address of the sunnlier)

Re: Letter of Credit No, , dated

issued by • —— for Y — • ~ in favour of —•— — —concerning— ——Project under Loan Agreement No. ~ —— — I, the undersigned, representing (Borrower), hereby issue a Statement of Performance to entitle — -— — to receive the sum of Y (Yen — — only) from THE OVERSEAS ECONOMIC COOPERATION FUND in accordance with the Payment Terms stipulated in the Con- tract No. — , dated — •— between arid — • • •

(Borrower )

By: —_

(Authorised Signature)

Special Instructions:

The details of the actual performance shall bi stated in the

sheer attached hereto.

APPENDIX II

LICENSING CONDITIONS IN RESPECT OF IMPORTS OF GOODS AND SERVICES UNDER THE YEN CREDIT OF V 9.4 BILLION FOR TELECOMMUNICATIONS PROJECT (IV) EXTENDED BY THE OVERSEAS ECONOMIC CO-OPERATION FUND (OECF) OI JAPAN

Section I : General Conditions

(a commercial bank)

By : — „ _— _ __ (Authorized signature) Hi) The Yen Credit of 9.4 billion Yen extended by the Overseas Economic Cooperation fund of Japan (OFCF) for financing the import requirements of the Telecommunication pioject of the DCiP & T is united in favour of developing countries. Accoidingly the goods and service^ to be procured

under this credit can be imported from Japan and all countries enumerated in the list at Anncxure-I which will be eligible source countries under the credit.

I(ii) Import Licencc(s) under the Credit can be issued for such, items and for such value as have been specifically cleared by the DGTD/CG Committee. The value of import, licence (s) issued under this credit should not exceed Y 10,500 million, (CIF).

168/9

of letter of authority 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.

I (x) All payments must be completed within 4 months 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 permitted 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 31-12-1985.

Section II—Special points to be kept in view white negotiating

a supply contract

The Rupee value of the import licenecc shall be determined with reference to the exchange rate notified hy the Department of Revenue (Customs) and prevailing on the date of Issue of the import licence and indicated in the body of the import licence(s) as per para 2 of the Public Notice No, 78-TTC fPN)/74 dated the 6th June, 1974, issued byi the CCI & E, which also enjoins that the Customs Authorities and the authorised dealers in foreign exchange will make debits to the VHI'UC bf the licence,(s) at the exchange rate specified on the import Hcence(s). This will also be repeated in the letter from the CCT&E forwarding the import licence to DGP&T, a copy of which should fce endorsed to the Ministry of Finance, Department of Economic Affairs (Japan Section).

I(iii) Tmport Licence(s) can be issued only in favour of

DGP&T on CIF Basis.

I(iv) Depending On the convenence of DGP&T more than one import licence may be issued under this credit, but the total value must not exceed Y 10,500 million (CJF) as specified at (i) above.

T(v) The extension of the validity of the import licence, may on application by DGP&T, be granted upto 31-12-1985. Request for further extension, if any, should be referred to the Department of Economic Affairs (Japan Section).

I (Vi) Import 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 (vii) 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 (vili) Firm order must be placed On FOB basis on the Overseas supplier located in the countries mentioned in Annexure-I and sent to the Department of Economic Affairs (Japan Section) within 4 months from the date of fcsue of the import licence. Freight and insurance charges will be payable In Indian rupees. 'Firm orders' means purchase orders^ placed by the Tndian licencee on the overseas supplier duly signed by the latter or purchase contract dulv signed by both the Indian importer and the overseas supplier. Orders on Indian Agents of overseas supplies and/or order confirma- tion of such Indian Agents are not acceptable,

I (ix) This condition of the placement of contracts within 4 months period will be treated a" not having been complied with unle?* 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 (viii) above cannot be. placed within four months for valid reasons, the licensee should submit the import licence to the concerned 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 mav Brant extension upto a further maximum period of 4 months. If, however, extension is sought bevond 8 months from the date of issue of the import licence, such proposals will invariably he 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 authorities for communication to the licensee.

II (i) The FOB value of the contract should be expressed in Yen (Fraction of Yen should be omitted) and should ex- clude Indian Agent's Commission, if any, which, should bo paid in Indian rupees.

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

IT(ii) The board guidelines for procurement of goods and services under the OECF Yen Credit (Project Aid) are given in Annexure-U. Normally the -procurement of goods and services should be made through Formal Open International Tendering. However, prior approval of thei Fund shall be obtained, if it is proposed to adopt procurement procedures other ,than Formal Open International Tendering for goods and services to be financed out of the proceeds of the loan, submitting to the Fund on application for approval of pro- curement method(a) signed by duly authorised person together with its reasoning, through the Department of Economic Affairs (Japan Section).

Prior to inviting bids for the procurement of goods and services the copies of ah" notices and instructions to bidders, the Wd form, the proposed contract, specifications and draw- ings and all other documents relevant to the bidding shall be submitted to the Fund for its prior approval, through the Department of Economic Affairs (Japan Section).

II (lii) The payment to the overseas supplier should be arranged through an irrevocable letter of credit to be opened by the Bank of India, Tokyo in their favour under the OECF Yen Credit (Project Aid) No. ID-P12 for 1980-81 the details of which are given In Section VI below.

II (iv) Only one contract should be entered into against the import licence. In exceptional cases, more than one con- tract may be permitted to be entered into, for which prior approval of the Department of Economic Affairs (Japan Sec- tion), Ministry of Finance, should be obtained soon after th" date of issue of the import licence.

71 (v) Eligibility of Supplier :

Suppliers shall be nationals of the eligible source countries or juridical persons incorporated and rejjlstefed In the eligi- ble source countries and controlled by nationals of the eligible source countrie*.

II (vi) Declaration in Contract :

The following statements of eligibility by th^ supplier shall

be added to each contract.

"I, the undersigned, hereby certify that the goods to bo supplied are produced fa . • (eligible source country).

I, the undersigned, further certify that to th" beat 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 •ad

"I, the undwriBned, hereby certify that (Name

Only on production by the licensee of a letter from the licensing authorities sanctioning such extension will be autho- rised dealers and departmental authorities permit the facilitv of company) has been incorporated and registered in- 1359GI/81— 3

*—r-_ "—• 1 (name of eligible source counliy), and is controlled by nationals of the eligible source count- ries."

II (vli) Permissible imports from non-eligible source count-

ries.

Financing of goods which cqptain materials originating from a non-el{gible source country or countries may be made, provided that fie imported portion is less than thirty per Ce"rit (30%) on an item-by-item basis in accordance with the fol- lowing formula;

Imported CIF Pricc+Tmport Duty

x 100"

Supplier's FOB Price

after referred to as CAA&A) Department of Economic Affairs, Miulstry of Finance, UCO Bank Building. Parliament. Street, New Delhi with a request in the form nttached as Anncxure- III for issue of a letter of authorisation. The CAA&A will issue a letter of authorisation as in tho form attached as Annexure-IV addressed to the Tokyo Branch of the Bank of India for opening an irrevocable Letter of Credit as in the form attached as Annexing-V (for physical in:ports) or Annc.we-VI (for services) in favour of the overseas supplier concerned. Copies of the letter of Authorisation will be en- dorsed to the OECF, the Embassy of India, Tokyo, the importers Bank in India, and Japan Seoiion, Department of Economic Affairs. Ministry of Finance,

Section III—Conditions to bv incorporated in the supply

contracts

Ilf (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 and the Overseas Economic Cooperation Fund of Japan jfOECF) dated the 15th October, 1981 concerning the Yen Credit No. ID-P12 (Project Aid) for Tele- communications Project (TV) and will be subject to the approval of Government of India and the Over- sea* Economic Cooperation Fund.

(b) Payments to the supplier shall be made through an irrevocable letter of Credit to bo issued by the Bank of India, Tokyo, under the Loan Agreement No. ID-P12 dated 15th October, 81 between the Government of India and the Overseas Economic Cooperation Fund of Japan (OECF).

(c) The overseas suppliers agree to furnish such Informa- tion and documents as may be requirc4 under the Yen Credit arrangements by the Government of India on the on© hand and the OECF on the other.

(d) Certificates (triplicate) In the forms indicated in V (ii) On receipt of the letter of authority, the Bank of India, Tokyo, will establish an irrevocable letter of credit as per Annexure-V (applicable to physical imports) or VI (appli- cable to services) in favour of the overseas suppliers con- corned and will also forward a copy of the same to tfie OECF, Embassy of India. Tokyo, the importer's bank, in India and the CAAAA.

The above procedure of opening of lotter of credit en the basis of the letter of authority from CAA&A would Ipso facto apply to all such amendments to letter of authorisationl letter of credit as may become necessary due to contract amendment or otherwise.

V (iii) The overseas, supplier shalJ, after effecting shipment of the goods, present through his bankers the documents speci- fied in the letter of credit to the Bank of India, Tokyo. If the documents are found to be in order, the Bank of India^ Tokyo will release the amount specified in the documents to the overseas supplier through his bankers and will there- after obtain reimbursement of the said amount from the OECF.

V (iv) All charges on account of opening, maintenance and on the operation of Ih,- teller of Credit will be to the account of Overseas Suppliers. Bank of India, Tokyo will, therefore, recover all these charges from the Suppliers' Bank, charges for handling and negotiating the documents and o*her inci- dentals will also be borne by the suppliers.

IKvi).

For the time lag between the dates of payment of the F.O.B, cost of the material by the B.O.T., Tokyo to the suppliers and the date of reimbursement by the OECF the n.O.I. will charge interest as per the terms and conditioned the Agree- ment entered into by them with the Government of India flVJjo Finance) on 25-3-1980 and get the same reimbursed by the Embassy of India, Tokyo. The expenditure" on recount of this interest payment by the Embassy of India, in Japan will be recovered from the P&T Department (Vide Section Vl(jv) infra).

Section VI—Responsibility for rupee deposit.

IJI (Ii) In case the supplier is located in Japan, the supply contract should contain a clause that the Japanese; supplier agrees "to make shipping arrangements in consultation with the Embassy of India, Tokyo and that for this purpose he would feep the Embassy of India, Tokyo Informed of (he delivery schedule of the goods involved and notify the Embassy of India at least six weeks in advance of the ship- ping rpquired eo. that suitable arrangements could bs made. In exceptional cases, where the Indian importers require it, this period of notice may be reducod. 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 seat to the Embassy of India, Tokyo.

Section IV—Contract Approval by OECF.

TV (i) Within the stipulated period for placement of firm orders the licensee should forward 4 copies of (he contract duly signed by both DGP&T and Overseas suppliers supported by order confirmation in writing by the Overseas supplier or tturir. phofo 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 cotracts or in its price.

IV (W) The Ministry of finance (DBA) Japan Section will arrange to send one copv of the contract document to the OECF for their approval for financing under Yen Credit Na ID-P12 (Project Aid) for Telecommunication Project (IV).

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. DGP&T and the CAA&A will be informed of the same. Whereafter 'he DGP&T should approach the Controller of Aid Account* <& Audit, (herein- VI (i) Tho Bank of India, Tokyo will forward the negoti- able shipping documents to the accredited bankers of DGP&T as indicated in the Appendix to the relevant Letter of Autho- rity and tho bankers will in uirn ensure that the DGP&T make the rupee deposits at RBI, New Delhi or S.B.I. Tis Hazari, Delhi before releasing the shipping documents. Tho rupee equivalent of the Yen payments made to the overseas supplier are to be deposited into Government of India Ac- count in the manner prescribed in Public Notice No, 74-1TC (PN)(74 dated 31-5-1974, The exchange rate to be adopted for computing the rupee equivalent of the Yen payments made to the overseas suppliers will be the composite rate of ex- change applicable to the date of payment which will be worked out in accordance with the method prescribed in Public Notices No. 109-ITOPN)|74 dt. 3-8-1974 and No. 8- ITC|(PN)|76 dated 17-1-1976 or as may be notified by Gov- ernment from time to tinier through Public Notices of the CCU&E or through Exchange Control Circulars of the Re- stive Dank of India. The Head of Account to wliich the above rupees deposits should be credited is "K-Deposits nnrf Ad- vances—'843-Civi 1 Deposits—Deposits for purchase etc, abroad—Purchase under credits|LOM Agreement:; Loans from ths Government of Japan—9.4 billion Yen Credit No. 1D-P12 for Telecommunications. Project (IV)" The provisions regard- i"T calculation and deposit for interest charges mentioned in tho above said Public Notice of 31-5-1974 will, however, not be applicable, as no interest charges arc recoverable in res- pect of imports made by Central Government departments.

VJ(ii) The amount referred to above should be deposited in cash to the credit of the Government either in the Re- serve Bank of India, New Delhi, or State Bank of India, Tis Hazari, Delhi as contemplated in Public Notices No. 184- lTCtPN)/"8, dated 30-8-1968, No. 233-lTC(PN)/68, dated 24-10-1968, No. 132-ITC

Vl(iii) The concerned Bank :n India shall also furnish such additional deposit in the same manner stipulated above as may be requested by the Government of India, Ministry of Finance, Department of Economic Affairs, on account of service charges within seven days after such a demand is made by Ministry of Finance (Department of Economic Affairs). While filing in the various columns|in the challan it should be ensured by the importers)their bankers that the in- formation prescribed in para 2 of Public Notice No. 132-TTC- (PN/)71 dated 5-10-1971 is invariably indicated in the column "full particulars of remittances and authority (if any)¹' of the challan. The following particulars should invariably be fur- nished in the treasury challans :—

(a) Ministry of Finance letter of authority No. and date.

(b) Amount of Yen currency in respect of which de- posits are to be made together with rate of conver- sion adopted.

(c) Date of payment to the overseas supplier.

Thereafter the Treasury Challans evidencing the rupee de- posit should be sent by registered post to the CAA&A indi- cating reference to the letter of authorisation issued by him and also enclosing copies of the invoice and shipping docu- ments.

Note : Importer's Banks in India, should ensure that ihe rupee deposits are invariably made within 10 days of the receipt of the advice of payments and ne- gotiable shipping documents from the Bank of India, Tokyo and that the CAA&A Ministry of Finance (DPA), New Delhi is kept informed of the fact immediately thereafter.

VI(iv) The concerned bank in India should also endorse the amount of rupee deposits on the exchange control copy of the licence and send the requisite "S" Form to the Reserve Bank of India, Bombay.

The rupee equivalents of Yen payments on account of in- terest charges etc., made by Embassy of India, Tokyo, to the BOX, Tokyo will also be calculated in the manner laid down in para VUi) of Section VI above and deposited in favour of the Principal Accounts Officer, Ministry of External Affairs, New Delhi, for which purpose, CAA&A will be issuing suitable advices.

168/11

VIKiv) Future Instructions

The licensee shall promptly comply with any directions, instructions or orders issued by the Government of India from time to time regarding any and all matters arising from, or pertaining to the import licence and for meeting au obli- gations under the Yen Credit Agreement (Project Aid) No. ID- P.12 with the Overseas Economic Cooperation Fund of Japan (OECF}.

Vtl (v) Breach of violation

Any breach or violation of the condition* set forth in the above clauses will result in appropriate action under the Imports and Exports (Control) Act.

Vlt (vi) List of Annexurcs

Annexure I—List of eligible source countries.

Annexure II—Broad Guidelines for Procurement.

Annexure III—Request for issu" of Letter of Authority.

Annexure IV—Form of Letter of Authority.

Annexure V—Form of Letter of Credit (Applicable to

Physical Imports.)

Annexure VI—Form of Letter of Credit (Applicable to

Services).

ANNEXURE f

List of Eligible Source Countries

A. Developing Countries and Territories

(a 1) Non-OPEC Developing Countries

I. AFRICA, North of Sahara

Agypt Morocco Tunisia

II. AFRICA, South of Sahara

Section VII—Miscellaneous provisions.

VII (1) Reports on the utilisation of the import licence •

The importer should send a monthly report, after the letler of credit has been opened regarding shipments and payments made there against and about the balance left, to the Con- troller of Aid Accounts & Audit, Department of Economic Affairs, Ministry of Finance, UCO Bank Buildine, Parlia- ment Street, New Delhi.

Vlli(ii) Notifying Suppl'iers of Special Conditions

The licensee should apprise the supplier of any special provisions in the import licence which may affect (he suppliers in carrying out the transaction.

VII (iii) Disputes

It should be understood that the Government of India will not undertake any responsibility for disputes, if any, that may arise between the licensee and the suppliers. The conditions to be fulfilled by the supplier before payment by the Bank of India, Tokyo must be clearly spelt out by the importer in Annexore III under "Terms of Payment". Provisions dealiDg with settlement of disputes should be included in the con- ditions of contract.

Angola Botswana Burundi Cameroon Cape Verds Islands Central African Rep. Chad Comoro Islands Congo, People's Republic of Dahomay Equatorial Guinea (1) Ethiopia Gambia Ghana Guinea Ivory Goast Kenya Lesotho Liberia

Malagasy Republic

Malawi Mali

Mauritania, Mauritius Mozambique Niger Portuguese Guinea Reunion Rhodesia Rwanda

(1) Formerly the territory of Spanish Guinea, inclu

the island of Fernando Po.

V. ASIA, Middle East

St. Helena and dep. (1)

Bahrain Israel Jordan Lebanon Oman Syrian Arab Republic United Arab Emirates (5)

Yemen Arab Republic Yemen, People's D.R. (6)

VI. ASIA, South

Sao Tomo and Principle Senegal Seychelles Sierra Leone Somalia Sudan Swaziland Terro. Afars and Issar Togo Uganda Un, Rep. of Tanzania Upper Volta Zaire Republic Zambia

III. AMERICA, North and Central

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 Tailand Timor Viet-nam, Rep. of Viet-Nam Dem. Rep.

VIII. OCEANIA

Bahamas Barbados Belize Bennula Costa Rica Cuba Dominican Republic El Salvador Guadeloupe Guatemala Haiti Hondures Jamaica Martinique Mexico Netherlands Antilles Nicaragua Panama St. Pierre. & Miquclon Trinidad and Tobago

West Indies (Br.) n. i.e.

Coek Islands Fiji Gilbert & EUice Is. French Polynesia (7)

(a) Associated States (3)

(b) Depcndccies (4)

Nauru New Calendonia New Hcbrices (Br. and Fr.) Niue

IV. AMERICA, South

Pacific Islands (US) (8) Papua New Guinea

Solomon Islands (Br.) Tonga Wallis and Futuna Western Samoa

XI. Europe

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

Cyprus Gibraltar Greece Malta Spain Turkey Yugoslavia

(1) Including the following Mands: Ascension, Tristan

da Inaccessible, Nightingale, Gough,

(5) Ajoian, Dubai, Fujairah, Ras al Kbaimab, Sharjah

(2) Main islands, Aruba, Bonaire, Curacao, Saha, St.

and Umm al Quaiwain,

Eustacit St. Martin (Southern part).

(6) Including Aden and various sultanates and emirates. (7) Comprising the Society Islands (including Tahiti)

The Austral Islands, the Tuamotij-Gambier Group and the Marquesas Isrands.

(3) Main islands : Antigue, Dominica, Grenada, St. Kitta (St. Carristophe), Nevis-Anguilla, St. Lucia and St. Vincwrt.

(4) Main islands : Monteserrit, Cayman, Turicas and

(8) Trust Territory of the Pacific Islands : Caroline Is- lands, Marshall Islands, and Marine Wands (except Guam).

Calcos, and British Virgin Islands.

166/14

(a2) Members or Association Countries of OPEC

Algeria Bolivia Libyan Arab Republic Gabon Nigeria Ecuador Venezuela Iran Iraq Kuwait Qatar Saudi Arabia Abu Dhabi Indonesia

ANNEXURE II

Main Guidelines for Procurement of Good* mi Servkti Under The Project Loan a* Formulated by Q.E.C.F.

I. Advertiiinji

For all contracts lubject to Formal Open International Tendering, invitation* to bid shall be advertised in at least one newspaper of general circulation in India.

II. Bidding Document* and Contract*

II—1. Bid Bonds or Guarantee*

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

11-2. Condition of Contract

The conditions of contract ihquld clearly define the rights and obligations of the importer and the contractor or supplier, and the power* and authority of the engineer, if one if> employed by the importer, in the administration of the con- tract and any Variations thereunder. In addition to the cus- tomary general conditions of contract, some of which are certified to in these Guidelines, special conditions appropriate to the nature and location of the project ihould be included.

II-3 Type and Size of Contract

Contracts can be let on the ba*i" of unit prices tor work performed or item* supplied or of a lump sum price, oi a combination of both for different portions of the contiact, 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 circLinstances.

Single contracts for engineering, equipment and construc- tion to be provided by the lame party OTurnkoy Contract*") 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 are to be financed out of the proceeds of the Loan (hereinafter re- ferred to as "the eligible supplier") "hall 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 countrie*.

(2) a majority of full time directors shall bo nationals of

the eligible source countries and

(3) luch juridical 'persona¹ shall be registered in the •Hi*-

bit BOUTM countrita-

lll-l. Contract Price

(a) The contract pric" "hou|d be stated in Japanese Yea provided, however, that the portion of the contrnct price which the contractor will spend in the borro- wer's country should bo stated in the borrower 1 currency.

(b) Price Adjustment Clauses

Bidding document* should contain a clear "tatement whether firm price* are required or escalation of the bid prices U acceptable.

A provision should be made for adjustment in the contiact price* in the- event change* occur in the price* of the major cost constituents of the contract, tuch as labour and important materials.

Th" specific formula for price adjustment* should be

clearly denned in the bidding documents.

A ceiling on price adjustment should bo included in contracts for the supply of goods, but it is not usual to Include such a ceiling in contracts for civil work*.

• No price adjustments should normally be provided for

goods to be delivered within one year.

The Guidelines do not attempt to identify the various

methods by which contract prices may be adjusted.

(c) Insurance

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

111-2. The contract duly signed by both partiei or purchase order by the Indian importer placed on the overseas, 'up- plier supported by order confirmation in writing by the ovenea* supplier, or their photo copies are also acceptable to tho Fund.

ni-3. The following statement of eligibilty by the lupplier

shall be added to each contract.

"I (We) hereby state that my (our) company is an eligi- ble supplier, a" per cent ( %) of the shares are held by nationals of (eli- gible sourc" country), and —per ceut ( ) of the .lirectori are nationals (eligible source country) and my (our) company has been registered in •—" (eligible eourcw eountry) .

IV-1. Standards

If national standard to which equipment or materials must comply axe cited, the specifications should state that com- modities meeting Japan Industrial Standard or other interna- tionally accepted standards^ which ensure an equal or higher quality than the standards mentioned, will also be accepted.

IV-2. Us* of Brand Namw

Specifications should b* bated 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 a degree of standardization U necessary to maintain certain essential fea- tures. In the latter case the specifications should permit offers of alternative commodities which have similar characteristics and provide performance and quality at hast equal to tbota specified

1V-3. Guarantees, Performance Bonds and Retention Money

Bidding documents for civil works should require some form of surety to guarantee that tho work will be controlled until it is completed. This surety can be provided either by a bank guarantee or by a performance bond, tho amount rtC

which will vary with the type- and' magnitude of the work, but should be sufficient to protect the bou'jwcr in case of default by the contractor. Its life 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 document!.

la contracti for the supply of goods it is usually peife- rable to have a percentage of the total payment held as re- tention money to guarantee performance than to have a bank guarantee or bond. The percentage of the total payment to be held as retenton money and the conditions for its ultimate payment should be stipulated in the bidding documents. Tf, however, a bank guarantee or bond h preferred it should be for a nominal amount.

V. Liquidated Damage

Liquidated damage clauses should be included in bidding dctimicu when delays in oompleticr or delivery will icsult in extra cost, loss of revenues or loss of other benefits to the borrower. Provision may also be made for a bonus to be j'ttid to contractors for completion of ci\il work* contracts at or ahead of times specified in the contract when such earlier-completion would be of benefit to the borrower.

VL Force Majeurc

Thj conditions of the Contract included in chc bidding docLfuCntt ihould outain clauses, * bca appropriate, Ktiou- lating iffi a failure 011 the part of tnj parties to perform their obligations under the Contract shall not b" considered a default under the Contract if such failure is the result of an ©vent of force majeure (to be defined in the conditions of the Contract.)

VII. Settlement of DUpulei

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 Imp6rter 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 snch, 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

Bid..

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

IX-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 (he stipula- ted time. Bids received after this time should be returned unopened. The name df the bidder and the total amount of each bid and of any alternative bid*, if they have been re- quested or permitted, should be read aloud and recorded,

DC-3. Clarifications or Alternation of Bids

No bidder should bo permitted to alter his bid after the bidi have been opened, only clarifications not changing the •ubstnnce of the bid may be a"te

IX-4. Procedures to be confidential

i

Except as may be required by law, no information relating to the examination, clarification and evaluation of bids and re- commendations concerning award should be communicated after the public opening of bids to flny persons not officially concerned with these procedures until the award of a con- tract to the successful bidder Is announced.

IX-5. Examination of Bid"

Following the opening, it should be ascertained whether material errors in computation have been made in the bids, whether the bids arc fully responsive tp the bidding docu- ments, whether the required sureties have been provided, whether documents have been properly signed and whether the bids are otherwise generally in order. If a bid does not substantially conform to the specifications, or contains in- admissible reservations, or is not otherwise substantially res- ponsive to the bidding documents, it should be rejected. A technical analysis should then be mad© to evaluate each res- ponsible bid and to enable bids to be compared.

1X-6. Post-qualification of Bidders

In th© absence of prequaJificfttioM, the borrower should determine whether the bidder ""Whose bid' hat been evaluated the lowest hag the capability and financial resources effecti- vely to carry out the contract concerned. If the bidder does not meet that test, his bill should be rejected.

IX-7. Evaluation and Comparison of Bids

Bid evaluation must be conautent with the terms and con- ditions set forth in the bidding documents. In addition to the bid price, adjusted to correct arithmetical errors, other factors such as tho time of completion of construction Or the efficiency and compatibility of the equipment, the avail- ability of service and spare parts, and the reliability Of con- struction method* proposed should be taken into considera- tion. To the extent practicable these factors should bo ex- pressed in monetary terms according to criteria 'specified in the bidding documents. The jpiount of escalation for price adjustment*, if any, included in the bids ihould 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 valufifl in terms of a single cunency selected by tho 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 opeiipd unless there should be a change in the value of currencies before the Award is made. In such cases the exchange rates si the time of the decision to notify the award to the fucctwful bidder Should be Hied.

1X-8. Rejection of Bidi

Bidding documents usually provide that borrowers may reject all bids. However, all bid* should not be rejected and new bids invited on the same specifications solely for the purpose of obtaining lower prices in th" new bids, except in case* where the- lowwt evtthmted bid exceeds the costs esti- mate* by a substantial amount. Rejection of all bids may also be justified wten (a) bfd" are not responsive to the intent of the bidding documents, or > there is a lack of competi- tion. If all bids are rejected, the borrower should review tie cause or causes justifying the rejection and cither consider "•vision of the specifications or modification in the project (or amounts of work on items called for in the original invi- tation to bids), or both. In special circumstances, after con- sultation with the Fund, the borrower may negotiate with one or two of the lowest bidd"rt 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 com- modities not stipulated in the specifications or to modify hi* bid.

ANNEXURE 111

Request For Issue of the Letter of Authority

ft

N o:

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. (Project Aid).

Sir,

In connection with the import of——• -from

under the above mentioned Yen Credit No.-— — (Project Aid) we furnish the following particulars to enable you to issue the Letter of Authority to the (name of the Bank) which should be the same as given in (n) below for opening a letter of credit in favour of the overseas supplier 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.

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

(tl) Brief description of the goods.

(e) Origin of the goods.

(f) Percentage of the import components from non-eilgi-

ble source countries, if any.

(M Amount of Indian agents commission (in Yen) if

any,

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

Authority is required.

⁰) Npl?ersr a nd d a te of l he c o n t r a ct with overseas sup-

(k) Name and Address of the overseas supplier ;

(i) Nationality.

I6t/15

0) Payment terms and probable dates on which pay-

ments under the contract will fall due.

im) Expected date of completion of deliveries.

(h) Documents to be presented at- the time of payment to Bank of Tndia. Tokyo (indicating No, of rets 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 a contract(s) under the same licence has been placed and no.tifled to the Japanese authorities, and if so, the No., date and value of each such con- tract and the reference of the Ministry of Financ* under which it has been notified to the O.E.C.F.

ANNEXURE IV

(Letter of Authority Form)

No. F.

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Economic Affairs)

New Delhi, the

To

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

Subject.—Import under Yen Credit (Project Aid)—Loan Agreement No. Issue of Letter of Authority for opening- Letter of Credit,

Deai Sirs,

In accordance with the terms and conditions of trie agree- ment dated 25th March, 1980 entered into with your Bank, 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 payment*, you must claim immediately reimbursements of the amounts paid by furnishing necessary documents to the OECF.

For the time lag between the dates of payment by you to the supplier and the date of its reimbursement by the OECF, you will be paid interests as per terms of the above agreement by the Embassy of India, Tokyo. The other bank- ing charges including those on account of opening mainte- nance and for the operation of the Letter of Credit as also those connected with handling negotiating documents and charges of overseas suppliers bankers, if any, are to be borne by the overseas suppliers and hence not payable by the im- porter and may therefore be recovered from the suppliers directly. As such no reimbursement of such charges is to be claimed from the OECF.

fil) PS e ^ el^ fe hC'd ^ ™*"* " ">"

(if;> Noftir¹ip°.ferthe re"""ta.iv, and/or Pfesidcnt

a v) T f f i S^ " SK wh° •" "*•"• - *• A" and when any payment is mede by you and reimburse- ment is made to you, an advice in the prescribed form should be sent to this Ministry.

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

Thij Letter of Authority will remain Valid upto .

Yours faithfully,

Accounts Officer

Copy forwarded to:

1. Importer • with reference to their letter

No. dated

.

2. Importer's Banker

. They are re- queued to arrange to deposit the rupee equivalent of the Yen payment to the overseas suppliers on receipt of docu- ment! from the Bank of India, Tokyo Branch. The rupee equivalent of amounts disbursed to the suppliers will have to b" 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-lTC(PN)/76, dated 17th January. 1976 or such other Public Notices a* may be Issued from time to time. It should be ensured that these deposits are made before the original set of import documents are handed over to the importer

These amounts thould be deposited either with the RBI, New Delhi or the S.B.I., Tis Hazari, Delhi. In this connec- tion their attention is also invited to the pnnisions of the Public Notices No. 184-ITC(PN)/68 dated 30th August, 1968, 233-JTC/76 dated 12th October, 1976. The head of Account to be credited is "K-Deposits & Advances—843—^CivlJ Deposits—Deposit for purchases etc., abroad under Purchases under Credit/ Loan Agreements—Loans from the Government of Japan— 94 billion Yen Credit (Project Aid) No. ID-P. 12 for 1980-81."

One copy of the challan in original, in cases where the rupee equivalents are credited in cash at the RBI, New Delhi, on the SBT, Tis Hazari, Delhi as prescribed in Public Notice No. I32-ITC(PN)/71, dated 5th October, 1971, should be sent hy them to the address given below along with a forwarding 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 VCO Bank Building, Parliament Street, New Delhl-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 bo cent to the address given above. In all cases, full particulars of the rupee equivalents deposited should be fur- nished to this Department.

The banking charges, interest and other charges of the Bank of India, Tokyo Branch (including charges of the over- seas suppliers bankers), if any, should be settled by paying their rupee equivalents to the Principal Accounts Officer in the Ministry of External Affairs, New Delhi. For this purpose appropriate advices will be sent by this Department on re- ceipt of relevant information from the Bank of India Tokyo/ Embassy of India in Japan.

3. The Director, Loan Department-!! Oversees Economic Cooperation Fund, Takebashi Godo Building, 4-1, Ohtemachi 1-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.

ANNfiXURH V

Form OECF-LC 1

Irrevocable Letter of Credit

(Applicable for goods)

Date :

To

(Namo and address of the Supplier)

This Letter of Credit has been issued pursuant to Loan Agreement No.. — , dated • —— — between (Borrower) Hnd THE OVERSEAS ECONOMIC COOPERATION FUND.

Dear Sirs,

We advise you that we have opened our Irrevocablo cre- dit No.-— —•• —in your favour for account of—-—— for a gum or sums not exceeding an aggregate amount oX • ——- - -—- (Say Yen— •) available by your drafts at sight for full invoice value drawn on m, 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 blpnk endorsed and marked "Frei- ght and "Notify

Other documents.

Evidencing shipment of (brief description of goods to b" shipped referring to Contract No. (If any) from to Partial shipments are permitted. Transhipment is permitted. Bill* of lading must be dated not later than—• Draft must be presented for negotiation not later than

ket "Drawn under

All drafts and documents under this credit must be mar- irrevocable credit No. , dated and Import Reference

No(s). - (if nny)."

This credit is not transferable.

. We hereby undertake that all drafts drawn under and in compliance with the terms of the credit shall bo duly honoured on due presentation and delivery of documents to the drawee.

Unless otherwise expressly stated, this credit is subject to "Uniform Customs and Practice for Documentary Credits (1974 Revision). International Chamber of Commerce Bro- chure No. 290".

Special Instructions to the negotiating bank:

1. After obtaining the reimbursement for our pay- ments from THE OVERSEAS ECONOMIC CO- OPERATION FUND in accordance with the provi- sions of the letter of Commitment issued thereby under the above-mentioned Loan Agreement, we undertake to remit the amount of the drafts in ac- cordance with instructions issued by the negotia- ting bank.

2. The negotiating bank must forwnrd the drafts and one complete set of documents to us together with the certificate stating that the remaining documents have been airmailed direct to —.

3. All banking charges under this credit are for the

account of the importer/supplier.

Yours faithfully,

168/17

Dear Sirtt,

We advise you that we have opened our irrevocable credit in your favour for account of for¹ No. a sum or sums not exceeding an aggregate amount of • (Say Yen ) available by beneficiary's drafts at sight for full statement value drawn on us.

(a commercial bank)

By :

To be accompanied by the required documents, in accordr

(Authorised Signature)

PAYMENT TERMS

This payment terms constitute an inlegr.il par of our

Letter of Credit N o .— • -- • • - — ••

I. Initial Payment

Amount *. Y —

beina % of the tolal contract price.

Kequired documents:

Latest presentation date :

II. Intermediate Payment (if any)

Amount : Y————— ——-— being —% of the total contract price.

Required documents :

Latest presentation date:

Hi. Payment against Shipping Documents

Amount : Y-———

beinB cfn of the total contract price.

Required documents:

Latest presentation date;

Note : This attached sheet is not required in case of full payment against shipping documents.

ance with the Payment Schedule attached hereto, concerning (Contract No. ™_with regard to Project). Drafts must be presented for negotiation not later than— — —.

All drafts and documents must be marked "Drawn undei

irrevocable credit N o . - — —— dated - ".

This credit is not transferable.

We hereby undertake that all drafts drawn under and in compliance with the terms of the credit shall be duly honour- ed on due presentation and delivery of documents to the drawee.

Unless otherwise expressly stated, this credit is subject to "Uniform Customs and Practice for Documentary Credits (1974 Revision), International Chamber of Commerce Bro- chure No. 290."

Sepcial Instructions to the negoiiatins bank :

1. After receipt of the original Statement of Perform- ance issued by (Borrower or its designated authority) in accordance with the form attached hereto pay- ment^) under this credit must be made hi accord- ance with the Payment Schedule stipulated in the sheet attached hereto. In case of tho initial pay- ments, the beneficiary's Statement is required in- stead of the above-mentioned Statement of Per- formance.

ANNKXURI-: VJ

FORM OECF-LC II

Irrevocable Letter ol Credit

f Applicable for Services)

To

1. After obtaining the reimbursement for our payment from THE OVERSEAS ECONOMIC COOPERA- TION FUND in accordance with the provisions of the Letter of Commitment issued thereby under the above mentioned Loan Agreement, we undertake to remit the amount of the drafts in accordance with the instructions issued by the negotiating bank.

3. A copy of the document as mentioned in item 1 above and the drafts shall be sent to us immediately after the receipt thereof.

4, All banking charges under this credit *r* fOf th*

account of the importer/supplier.

(Name and addresi of

the Supplier)

Yoon fmitMull

Date:

( t M H M t a tl bank

Thii Letter of Credit >"**

been iwued pursuant to

Loan Agreement No. ,

r^zZ a.. , j '.,J jJiUi

between (Borrower) end THE OVERSEAS ECONOMIC COOPERATION FUND.

(AuiboriMd g k n t un

133"GI/"1~6

Payment Schedule

This payment schedule constitutes an integral part "of

our Letter of Credit No.- —— .

I. Initial Payment

Amount : Y———— ——-——

being- —-—% of the total contract price

Required documents : beneficiary's' Statement

Latest presentation date :

U. Progress Payment

Aggregate amount : Y- ——

being % of the total contract price

to be paid as follows :

Amount due Latest presentation date

1st Instalment: Y >•

Und Instalment Y —•

Required document : a copy of Statement of Performance

issued by (Borrower or its designated authority),

a form of which Is attached hereto.

Statement of Performance

Date :

Ref. No.

To

(Name and address of the supplier)

Re : Letter of Credit No.- ——, dated , issued by -— i'or Y — —•— —in favour of——— concern- ing— -Project under Loan Agreement No.

I, the undersigned, representing (Borrower), hereby issue a Statement of Performance to entitle—-— to receive the sum of Y- • •— •— (Yen only) from THE OVERSEAS ECONOMIC COOPERATION FUND in accordance with the Payment Terms stipulated in the Contract No.-—. —. —, dated——•— — between —and- — — -— —

(Borrower)

By . ^

(Authorised Signature)

Special Instructions :

The details of the actual performance shall be stated in the sheet attached hereto.

PRINTED BY THE MANAOBR, OOVT. OF INDIA M t M, KING ROAD, NJW D 1 1 B I - 1 1 0 0 64

A NS r u i L I I H B* BT TEH CONTROLLK OT PJrtUCATK"N6, DELHI-110054, 1 9 62