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REGISTERED No. D. (D.N)—72

The Gazette of India

EXTRAORDINARY

PART I—Section 1

PUBLISHED BY AUTHORITY

No. 46] NEW DELHI, FRIDAY, MARCH 12, 1982/PHALGUNA 21, 1903

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

compilation

(221)

1432GI/81—1

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229 1432 01/82—2

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MINISTRY OF COMMERCE

IMPORT TRADE CONTROL

PUBLIC NOTICE NO. 13-ITC(PN>/82

New Delhi, the 12th March, 1982

Subject : Licensing Conditions for import of goods end services under the OECF Loan Agreement No. 1D-P. 15 of Yen 1.7 Billion (Lower Borpani Hydroelectric Project of the Assam State Electricity Board).

Issued from file No. IPC/2323(27)/82.—The terms and condi- tions governing the issuance of import licence in reupect of poods and services under the OECF T.oan Agreement No. TD- P. 15 of Yen 1.7 Billion for the implementation of the Lower Boipani Hydroelectric Project of the Assam State Electricity Board, as given in Appendix to this Public Notice are notified for information.

MANX NARAYANSWAMI, Chief Controller of Imports and Exports

APPENDIX

LICENSING CONDITIONS IN RESPECT OF IMPORTS OF GOODS AND SERVICES UNDER THE YPN CREDIT OF YEN 1.7 BILLION FOR THE IMPLEMENTATION OF THE LOWER BORPANI HYDROELECTRIC PRO- JECT OF THE ASSAM STATE ELECTRICITY BOARD (ASEB) EXTENDED BY THE OVERSEAS ECONOMIC CO-OPERATION FUND (OECF) OF JAPAN.

Section I—General Conditions :

I(i) The Yen Credit of Y. 1.7 'billion extended by the Over- seas Economic Coope 'ation Fund of Japan (OECF) for financ- ing the import requirements of the Lower Borpani Hydro- electric Project of ASEB is unfied, in favour of developing countries. Acco;dinglv the goods and services to be pro- cured under this credit can be imported from Japan and all countries enumerated in the list at Annexure-T which will be eligible source countries under the credit.

I(ii) Import Liccnce(s) under the Credit can be Issued only for such items and for such value as have been specifically cleared by the DGTD/CG Committee. The value of import Hcence(s) issued under this credit should not exceed Y 1,900 million, (CIF).

The rupee value of the import licence shall be determined with reference to the exchange rate notified by the Depart- ment of Revenue (Customs) and prevailing on th0 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 7R- ITC(PN)/74 dated the 6lh 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 licenrefs) at the exchange rale specified on the Import licences). The licence will bear the sunerscrip- tion Japanese Yen Ciedit No. AD.P. 15", The first and

2tt

second suffix to the licence code will be "S/JC". This will also be repeated in the letter from the CCI&E forwarding the import licence to A.S.E.B., a copy of which uhould be endorsed to the Ministry of Finan:e, Department of Economic Affairs (Japan Section).

Kiii) Import licence(s) can be issued only in favour of

ASEB on CIF basis.

9

I(iv) Depending on the convenience of ASEB more than one impo.'t licence may be issued under this credit, but the total value trrust not exceed Y 1,900 million (CIF) as speci- fied at (i) above.

I(v) The extension of the validity of the import licence, may on application by ASEB, hz granted upto 31-3-85. Requeut for further extension, if any, should be referred to the Department of Economic Affairs (Japan Section).

I(vi) Imporls to be financed under the Ciedit

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 flgents in India. Such payments, however, will form pait 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 the countries mentioned in Annexure-l and sent to the Department of Economic Affairs (.Japan Section) within 4 months fiom trie, date of issue of the import licence. Freight and insurance, charges will be payable in India in Indian rupees, "Firm orders" means purchase orders placed by the Indian Licencee on the over- seas supplier duly signed by the letter or purchase contract duly signed by both the Indian importer and the Overseas supplier. Orders on Indian Agents of overseas suppliers anJ./OT order confirmation of such Indian Agents aie not acceptable.

Kix) This condition of the placement of contracts within 4 months' period will be treated as not having been complied wilh unlesu complete contract documents reach the Miinstry of Finance, Department of Economic Affairs (Japan Section) within four moDths 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 llconcee should submit the .'import licence t

I(x) All payments must be completed within 4 months from the expiry of thc import licence, Individual payments must be arranged upon shipment of goods. The contract should provide for payment on ca"h bask i.e. on presentation of shin- ping documents. No. credit facility of any kind will be permit- ted to be availed of by the Indian importer from the Overseas Kupillcr, The contract should provide for the period of delivery of goods as follows :

" , , . ., Months after the leccipt of Letter of credit but to be completed latest by the end of

Tn fixing trie terminal date for "hlpment it should be noted

that this date should not be beyond 31-3-1985.

Section IT.—Special points to be kept in view while neco-

tiatina .1 supply contract.

Ilfi) The FOB value of the contract should be expressed in Yen (Fraction of Yen should be omitted) and should exclude Indian Agent's commission, if any, which should h- paid in Indian rupees.

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

IT('i) The broad guidelines for procurement of goods and services under the OECF Yen Credit (Project Aid) aic given In Annexure-II. However, normally the procurement of goods and services should he made through Formal Open International Tendering and twc following points should be boinc in mind :—

II(vi) Eligibility of Supplier

Suppliers shall be nationals of th© eligible source countries or juridical persons incoipoiated anj registered in the eligible source countries and controlled by nationals of the eligible source countries.

U(vii) Declaration in Contract

The following statements* of eligibility by the supplier

shall be added to each contract.

"I the undersigned, hereby ceitify that the goods to be supplied arc produced in—— ——— (eligible source country).

I, the undersigned, further certify that to the best of my information and belief, the portion imported from the non- eligible iou:ce countries is Jess than thirty per cent (30%) in accordance with the following formula :

• ;-u. .

(a) Invitation to bid shall have to be advertised in at least one newspaper of general circulation in India. (b) Bid bonds or bidding guarantees are a usual require- ment but they should not be set so high as to discourage suitable bidders.

(c) Bid bonds or guarantees should be released to unsuccessful bidders as soon as possible after the bids have been opened.

TI(Hi) In oaso where Formal Open International Tendering Is not considered appropriate the Fund will accept the following alternative procedures :—

(a) Wheie the importer has convidng reasons or main- taining a reasonable standardisation of his equip- ment.

(b) Where the number of qualified suppliers is limited.

(c) Where the amount involved in the procurement is so small that foreign firms clearly would not be interested or that Ihc advantages of formal open international tendering would be outweighed by the administrative burden involved.

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

Tn the above mentioned cases the following procurement procedure may be applied in such a mannei as to comply with tbe formal open international tendering procedures to the. fullest po^s'ble extent an appropriate :

(i) Formal Selective International Tendering

fli) Informal International Competitive Procurement

Ijii) Direct Purchases from a single suppler.

A<, provided in Schedule 5 para. 1(21 of the loan agreement No. ID-P. 15 dated 15-10-1981, A.S.E.B., should submit, in triplicate, copies of all notices and instructions to bidders, the bid form, the propo'^j contract, specifications and drawings, reports of the analysis of bids, proposals for awards, and all olher documents relevant to the bidding, to the Ministry of Finance, Department of Economic Affairs (Japan Section), North Block. New Dc'hi who will submit them to, OECF for its review. It should be noted that purchase contracts will be notified by the Miinnlry of Finance, (De- partment of Economic Affairs) (Japan Section) to the O.E.C.F. only after the above requirement has been complied with.

Illiv) 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-P. 15 for 1981-82 the details of which arc given in Sect'On VI below.

TI(v) Only one contract should be entered into against the import licence. In exceptional cases, more than one cnntiact may he peimitfcd to he entered into for which prior approval of the Department of H'-onomie Affairs (Jtipan S:ction), Ministry of Finance, should be obtained soon after the dale of is^ue of the import licence.

Imported CTF Price + Import Duty

— . X 100"

Supplier's FOB Price

and

*'l, the undersigned, hereby certify that — r—- (Name of company) has been inco;porated and registered in———• (Name of eligible source country), and is controlled by nationals of the eligible source countries."

Il(viii) Permissible imports from non-eligible source count-

ries.

Financing of goods which contain materials originating torn a non-eligible source country or countries may be made, provided that the imported portion is less than thirty per cent (30%) on an item-by-itcm baais in accordance with the following formulae ;

Imported CIF Piicc + Impo.t Duty

— ~ — — X 100

Supplier's FOB Price

Section III—Conditions to be incorporated in the supply

contracts

III(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 Tndia and (he Overseas Economic Cooperation Fund of Japan (OECF) dated the 15th October, 1981 con- cerning the Yen Credit No. ID-P. 15 (Project Aid) foi Lower Borpani Hydroelectric Project of ASEB and •will be subject to the approval of Government of India and the Overseas Economic Cooperation Fund.

(b) Payments to the supplier shall be made through an irrevocable Letter of Credit to be issued by the Bank of India, Tokyo, under the Loan Agreement No. ID-P. 15 dated 15th October 1981 between the Government of India aud the Oveiseas Economic Cooperation Fund of Japan (OECF).

fc) The overseas suppliers agree to furnish such infor- mation and documents as may be required imder the Yen Credit arrangements by the Government of tndia on the one hand and the OECF on the other.

(d) Certificate (tripuicate in the forms indicated in

II (vii).

llllii) In cafJ8 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 he¹ would keep the Embassy of India, Tokyo, informed of the delivery schedule of the goods involved and notify the Em- bauiy of India at least four weeks in advance of the shipping tcqulred so that suitable arrangements could be made. In exceptional cases, where the Indian importers require it, this period of notice may 'ic reduced. The Japnne'-e supplier should also agree to send a cable advice to the importer after each shipment giving the necessary details and a copy thereof should be sent to the Embassy of India, Tokyo.

Section IV—Contact Approval by ORCF

JTV(j). Within the stipulated period of placement of firm orders the licensee should iorward 4 copies of the contract duly signed by both A.S.E.B. and Overseas suppliers suppor- Med by order confirmation In writing by the overseas supplier or their photo copies complete in ;ill respects, together with two photo copies of the relevant valid import licence, to Japan Section, Department of Economic Affairs, Miinstry of Finance, Nofth Block, New Delhi.

IV(ii) The above procedure will also¹ apply to all contract amendments causing essential modifications to the contents of contracts or in its price.

IV(iii) The Ministry of Finance (DEA) Japan Section will um'rge to send one copy oi' the contract documents to lie OECF for their approval for financing undci' Yen Credit No. TD-P. 15 (Project Aid) for Lower Borpani Hydroelectric Project of ASFM.

Section V—Payment to the overseas s'upplicrs—Letter of

Credit Froceduie

V(il On receipt of the intimation of the contract approval from the OECF, by the Ministry of Finance, Department of Economic Affairs, Japan Section, A.S.F.B, and the CAA and A will be informed of the same, Whereafter the ASEB should approach the Controller of Aid Accounts and Audit, (hercinaflei' referred to ps CAA&A) Department of Economic Affairs, Ministry of Finance, UCO Bank Building, Parlia- ment Street, New Delhi with a request in Ihe form attached as Annexure-III for issue of a letter of authorisation. The CAA&A will issue a letter of authorisation as in the form attached as Anncxuifc-VF addressed to the Tokyo Branch of the Bank of Tndii for opening an irrevocable Letter of Credit as in (he form attached as Annexure-V (for physical imports! or Annexure-VI (for services) in favour of the overseas supp- lier concerned Copies of the letter of Authorisation will be endorsed to lhe OECF, the Embassy of India, Tokyo, the importer's Bank in India, and Japan Section, Department of Economic Affairs, M'inist|-y of Finance.

V(ii) On receipt of the letter of authority, (he Bank of India, Tokyo, will establish an irrevocable letter" of credit as per Annexurc-V (applicable to physical imports) or VI (Applicable to services) in favour of the oveifteas suppliers concerned and will also forward a copy of the game to the OECF, Embassy of India, Tokyo, the importer's Bank in India and CAA&A.

The above procedure of 6pening 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 authorisation letter of credit as rnoy become necessary due to contract amendment or otherwise.

V (iii) The overseas supplier shall, after effecting ship* ment of goods, present through his bankers the documents 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 specified in the documents to the overseas supplier through his bankers and will thereafter obtain reimbursement of the said amount from the OECF,

V (iv) Banking charges payable to the Bank of India, Tokvo for opening the letter of credit or negotiations there- under and charges if any of overseas suppliers' bankers art to be borne by the overseas suppliers and hence not payable by the importers, Interest charges payable to thc Bank of India, Tokvo for the period counting from thc date of pay- ment of the cost of imports by them to the overseas sup- pliers to the dale of reimbursement by the OECF, shall be settled by thc concerned importers bank in India by remit- tance to the Bank of India, Tokvo through normal banking channels without affecting the Government of India's ac- count.

Section VT—Responsibility for rupee deposit:—•

VI (i) The Bank of India, Tokyo will forward the nego- tiable shipping documents to the accredited bankers of im- porter as indicated in the Appendix to the relevant Tetter of Authority nnd thc bankers will in turn ensure thai the rupee deposits are invariably made at RBI, New Delhi or S.B.T. Tis Hazari, Delhi before releasing thc shinpin^ documnts. Interest charges on the rupee-equivalents of the Yen pay- ments calculated (a) 9 per cent per annum for thc first 30

235

days and (a) 15 per cent per annum for the period in excess thereof reckoned from date of payment V>y the Bank of India, Tokyo to the Overseas Supplier to the date of actual rupee deposit, have also to be deposited along with Ihe principal payment, in terms of Public Notice No. 46-1TC- (PN)]76 dated 16-6-76. It should be noted that interest is chargeable for both the days i.e. thc day on which payment is made to the Overseas supplier and also the day on which rupee deposit is made in Government Account vide Public Notice No. 74-lTC(PN) |74 dated 31-5-1974 aa modified tinder Public Notice No. 1O3-1TC(PN)|74 dated 12-10-1976.

The exchange rate to be adopted or computing thc rupee equivalent of the Yen payments made to the overseas sup- pliers will be the composite rate of exchange applicable to thc date of payment which will be worked out in accor- dance with the method prescribed in Public Notices No. 109-ITC(PN)|74 dated 3-8-74 and No, 8-ITC(PN)|76 dated 17-1-1976 or as may be notified by Government from time to time through Public Notices of the CCI & E or through Exchange Control Circulars of the Reserve Bank of India. Thc Head of Account to which the above rupee depo- sits should be credited is "K-Deposits and advances-843- Civii Deposits—Deposits for purchase etc. abroad—Purchase under credits[Loan Agreements", Loan from the Govern- ment of Japan 1.7 Billion Yen Credit No. ID-P. 15 for Lower Borpani Hydroelectric Project.

VI (ii) The amount referred to above should be deposit- ed in cash to thc credit of the Government either in the Reserve Bank of India, New Delhi, or State Bank; of India, Tis Hazari, Delhi as contemplated in Public Notices No. 184-TTC(PN)[68 dated 30-8-1968, No 233-ITC(PN)|68 dated 2440-1968. No. 132-ITC(PN)|71 dated 5-10-1971, No. 74-ITC(PN)174 dated 31-5-1974 and No. 103-lTC(PN)| 76 dated the 12th October, 1976.

VT (iii) The concerned Bank in India shall also furnish such additional deposit in the same manner stipulated above us may be requested by the Government of India, Ministry of Finance, Department of Economic AfTain, on account of service charges within seven days after such a demand is made by Ministry of Finance (Department of Economic Affairs). While filling in the various columns in the challan it should be ensured by the imporfc?rs|their bankers that the information prescribed in para 2 of Public Notice No 132- ITC(PN)I7I dated 5-10-1971 is invariably indicated in thc column "full particulars of remittances •and authority (if any)" of the challan. Th? following particulars should in- variably be furnished In the treasury Challans :—

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

date.

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

(c) Date of payment to the overseas supplier.

Thereafter t h. Treasury Challans evidencing the rupee deposit should be rent by registered post to the CAA&A in- dicating reference to the letter of authorisation issued by him and also enclosing copies of the invoice and shipping docu- ments.

Note : Importer's Bank in Tndia should ensure that thc rupee deiposits are invariably made within 10 days of the receipt of the advice of payments and negotiable shipping documents from fhe Bank of Tndia, Tokyo and that the CAA&A Ministry of Finance CDEA), New Delhi is kept informed of the fact immediately thereafter.

VT (iv) The concerned bank in Tndia should also endorse the amount of rupee deposits on the exchange control copy ol' the licence and send the requisite "S" Form to the Re- serve Bank of India, Bombay.

Section VTTI—Miscellaneous provisions

VIII(i) Reports on thc utilisation of the import licence.

The importer should send a monthly report, after the letter of credit has been opened regarding shipments- and pay- ments made there anuinst and about the balance left, to fhe Controller of Aid Accounts & Audit. Department of'Econo- mic Affairs, Ministry of Finance, UCO Bank Buildirrrr Pir- liament Street, New Delhi.

'

VTII (ii) Notifying Suppliers of Special Conditions

Tho licensee should apprise the (supplier of anv special provisions in the import licence which may affect the sup- pliers 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 liccncec and the suppliers. The con- ditions to be fulfilled by the supplier before payment by the Bank of India, Tokyo must be clearly spelt out by the im- porter in Anrrcxure—TIT under "Terms of Payment". Provl- sion-s dealing with settlement of disputes should be included in the conditions of contract

VII

The Hcencce 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 all obligations under the Yen Credit Agreement (Project Aid) No. II>P. 15 with the Overseas Economic Cooperation Fund of Japan (OECF).

vm (v) Breach or violation

Malawi Mali Mauritania, Mauritius Moozambique Niger Portuguese Guinea Reunion Rhodesia Rwanda St. Helena and Dcp. (2) Sao Tomo and Principe Senegal •Seychelles Sierra Leono Somalia Sudan Swaziland Terro. Afars and Issas Togo Uganda Un. Rep. of Tanzania Upper Volta Zaire Republic Zambia

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

Vm

III. AMERICA, North and Cont

Annexure—I List of eligible source cotontrlei.

Annexure—II Broad Guidelines for Procurement.

Annexure—III Request for issue of Letter of Autho-

rity.

Annexure—IV Form of Lttter of Authority.

Annexure—V Form of Letter of Credit (Applicable

to Physical Imports)

Annexare—VI Form of Lcttor of Credit (Applicable

to services,

A.NNEXURE— 1

LIST OF ELIGIBLE SOURCE COUNTRIES

A. Development Countries and Territories

(al) Non-OPEC Developing Countries

I. AFRICA, North of Sahara

Bahamas Barbados Belize Bermuda Costa Rica Quba Dominican Republic El Salvador Guadeloupe Guaternala Haiti Honduras Jamaica Martinique Mexico Netherlands Anilles Nicaragua Panama St. Pierre & Miquelon Trinidad and Tobago

Egypt Morocco Tunisia

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

II. AFRICA, South of Sahara

island of Fernando Po.

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

Inacessib'les, Nightingale, Gough.

(3) Main islands, Aruba, Bonaire, Curacao, Saha, St. Eustadt

St. Martin (Southern part),

AMERICA, North & Central

(Continued)

West Indies (Br.) n.i.e. (a) Associated States (1) (b) Dependencies (2)

IV. AMERICA, South

Argentina Bolivia Brazil Chile Colombia Falkland Islands

Angola Botswana Burundi Camereon Capo Verde Islands Central African Rept. Chad Comoro Islands Congo, People's Republic of Dahomay Equatorial Guinea (1) Ethiopia Gambia Ghana Guinea Ivory Coast Kenya Lesotho Leberia Malagasy Republic

237

Turkey Yugoslavia

French Guiana Guyana ' Paraguay

(1) Main Islands: Antigue, Dominica, Grenada, St. Kitts (St. Cariatophe), Nevis-Anguilla, St. Lucia and St. Vincent.

Peru' Surinam Uruguay

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

and British Virgin Islands.

V. ASIA, Middle East

(3) Ajman, Dubai, Fujairah, Ras al Khaimah, Sbarjah and

Immal Quaiwain.

(4) Including Aden and various sultanates and emirates.

(5) Comprising the Society Islands (including Tahiti), the Austral Islands, the Tuamotu-Gambier Group and the Marquesas Islands.

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

(6) Trust Territory of the Pacific Islands: Caroline Islands, Marshall Islands, and Marine Islands (except Guam).

VI. ASIA, South

(a2) Member of Association Countries of OPEC Afghanistan Bangladesh Bhutan Burma India Maldivis Nepal Pakistan Sri Lanka

VII. ASIA, Far East

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

ANNEXURE—II

Main Guideline* for Procurement at Goods and Services

under the Project Loan a* formulated by O£,C.F.

I. Advertising

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

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

II. Bidding Documents and Contracts

II. 1. Bid Bonds or Guarantees

VIII. OCEANIA

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

II. 2. Conditions of Contract

Coek Islands Fiji Gilbert & EUicc Is. French Polynesia (5) Nauru Now Calendonia New Hebrices (Br. and Fr.) Niue Pacific Islands (US) (6) Papua New Guinea Solomon Islands (Br.) Tonga Wallis and Futuna Western Samoa

The conditions of contract should clearly define the rights and obligations of the importer and the contractor or sup- plier, 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.

II. 3. Type and Size Contract

Contracts can be let on the basis of unit prices for work performed or items supplied or of a lmnp sum price, or a combination of both for different portions of the contract, according to the nature of the goods or services to be provi- ded ud the bidding documents should clearly state tht typ* of contract selected.

IX. EUROPE Cyprus Gibraltar Greece Malta Spain

1432 GI/81—3

Contracts based principally on the reimbursement of ac- tual cost are not acceptable to 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 oiler 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- te.re^ to as "[he eligible supplier') sh.Jl be nationals uf the eligible source countries satisfying the following conditions.

(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.

in-1. Contract Price

(a) The contract price should be stated in Japanese Yen provided however, that the portion of the con- tract price which the contractor will upend in tbo borrowers country should be stated in the borrow- er'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 pri- cw of the major cost constituents of the contract, such as labour and important materials.

The specific formula for price adjustments should be

clearly denned in the bidding documents.

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

No price adjustments should normally bo provided lor

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 bid- der.

111-2. The contract duly signed by both partiej or pur- chase order by the Indian Importer placed on the overseas supplier supported by orcer conlirmalion in writing by the overseas supplier, or then- photo copies are also acceptable to the Fund.

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

plier shall be added to each contract.

" I (We) hereby state that my (our) company is an • eligible supplier, as per cent (pen ntage) o[ the shi-as .-ire held by nationals of (eligible source country), and per cent ( % ) of the directors ar0 nationals (eligible source country) and my (our) company has been registered to (eligible source country)".

IV-1. Standards

If nationals standard to which equipment or material* must- comply are cited, the specifications should state that commodities meeting Japan Industrial Standard or other In- ternationally accepted standards, which ensure an equal of higher quality than the standards mentioned, will also be accepted.

IV-2. Use of Brand names

Specifications should be based on performance capability and should only prescribe brand names, catalogue numbers, or products of specific manufacturer if specific spare parts are required or it has been determined that a degree of' standardization is necessary to maintain certain essential fea- tures. In the latter case the specifications should permit offers of alternative commodities which have similar charac- teristics and provid© 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 ot suicty to guarantee that the worK will be continued until it is completed. This surlv can be provided cither by a bank guarantee or by a performance bond, the amount of which will very with the type and magnitude of the wo '. o i should be suilh icni to rioted the bonower in case of default by the contractor. Its life should oxtend sufficiently beyond completion of thecontract to cover a reasonable wuia. ty peuud. lhe amount of the guarantee or bond required should be defined in the bidding documents.

In contracts for the supply of goods it Is usually prefer- able 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 retention money and the conditions for its ulti- mate payment should . be stipulated In the bidding docu- ments. Tf, however, a b^nk guarantee or bond is preferred it should b© for a nominal amount.

V. Liquidated Damage

Liquidated damage clauses should be Included In bidding documents when delays in completion 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 ear- lier completion would be of benefit to the borrower.

VI. Force Majeure

The conditions of the Contract included in the bidding documents should contain clauses, when appropriate, stipulat- ing that a failure on the part of the parties to perform their obligations under the Contract shall not be considered a de- fault, under the Contract if such failure is the result of an event of force majeure (to be denied in the conditions of the Contract).

VII. Settlement of Disputes

Provision dealing with the settlement of disputes should be included In the conditions of the Contract. It is desirablo that the provisions should be based on "Rules of Concilia- tion and Arbitration" which have been prepared by the International Chamber of Commerce or on such other ar- rangements as may be mutually acceptable to the Indian Importer and the overseas supplier.

VIJL 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 intrnational bidding. The time allowed, however, should be 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 Invitation* to bid and all bids should be opened publiclv at the aHpi* lated time. Bids received after this time should be returned

LinopciuiJ. The name 01 the bidder and the. total amount of each, bid and of any alternative bids, if they have been re- quested or permitted,, should be read aloud and recorded.

,IX-3. Clarifkuliufi¹; oi- Alternation of Bids

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

IX-4. Procedures to be confidential

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

JX-5. LAiimin.ilion of Bids

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

TX-6. Post-qualification of Bidders.

Tn the absence of prequalifications, the borrower should -determine whether the bidder whose bid has been evaluated the lowest has the capability and financial resources effec- tively to cany out the contract concerned. If the bidder does not meet that test, his bid should be rejected.

TX-7. Evaluation arid Comparison of Bids

Bid evaluation must be consistent with the terms and con-

239

negotrate 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, as u. condition of award, to undertake responsibilities on com- modities not stipulated in the specifications or to lriodify his bid.

ANNHXURE—III

REQUEST FOR ISSUE OF THE LETTER OF AUTHORITY

No.

Date :

To

The Controller of Aid Accounts & A!udit, Ministry of Finance, Department of Economic Affairs, (J.C.O. Bank Building, 1st Floor, Parliament Street, New Delhi-110001.

Sub :—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 partjeu-. Jars 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 cre^ dit in favour of the overseas supplier concerned.

(a) Name and address of the Indian Importer.

date upto which it is valid.

;

(B) Documents to be presented at the time of payment to Bank of India. Tokyo (indicating No. of s"ts 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) Wfee|hcr a contract(s) under the same licence has bpen placed and notified to the Japanese authori- ties, apd Jf jo, the No., date and valuc of each such contract and the reference of the Ministry of Finance under which it has been notified to the O.E.C.F.

ANNEJftJRE-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, ID-P. 15 issue of Letter of Authority for opening letter of credit.

Dear Sirs,

,

...as per attached de- In accordance with the tprms pnd conditions of the agree- ment dated 25-3-1980 entered into with your bank, you are hereby authorized to open irrevocable Letter of Credit for an amount npt eseeeding Yen favouring M/s tail*.

A copy each of the Letter of credit opened by yolir Bank may be endorsed to the importer's Bank to the OECF, En"baasy of India, Tokyo and to us.

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

Interest charges payable to you, for the time lag between the dates of payment by you to the supplier and the date Qt if" reimbursement to you by the OECF, shall bo settled by you with the concerned import*" Bank in India through, normal banking channels without affecting the Govt. of India's Account. The other Banking charge* Including those on account of opening, maintenance and ft>r the operation of the Letter of credit as also those cannected with handling negotiating documents and charges of overseas suppliers Bac- kers If ""J\ aw to he borne by th© Overseas Suppliers and hence not payable by the importer rrad may therefore, be recovered from the Suppliers directly. As such no reiraoursc- m"nt pf such charges J" to be claimed from Uw 0 # C F.

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

This tetter of Authority is intended for opening of L/C favouring the overseas suppliers. Subsequent amendments to L/C of further fresh L/C against this authorisation may nof t>° acted upon ii) the absence, of a specific authority From this Ministry.

This Letter of Authority will remain valid upto

Yours faithfully,

(Accounts Officer) Copy forwarded to :—

letter No dated

1. Importer , with reference to -thmr ' ..

2. Importers' Banker They are requested to arrange to deposit th" rupee equivalent of the Yen payment to the overseas suppliers on receipt of docu- ments from the B.ank of India, Tokyo Branch. The rupee equivalent of amounts disbursed to the suppliers will have to be calculated by applying the composite rate of conver- sion as prevailing on the date of payment to overseas sup- pliers in accordance with the Public Notice No. 8-ITC/76 dated 17-1-1976 or such oth"r Public Notices as may be issued from time to time. Interest (S) 9 per cerit per annum for the first thirty day8 and at the rate of 15 per cent per annum for the period ip excess thereof reckoned for the period between thp date, of payment to the supp(ior/date of reimbursement to Bankx of India and the date on Which, the rupeo equivalents arc deposited jn to the Government of India Account in terms of Public Notice No, 46-LTC(PN) 76 dated 16.6.76. The interest is payable for both the days i.e. the day on which paymennt is made to the Overseas suppliers and also tha date on which rupee deposit is made into Government Account. (Any change in this rate will be intimated if and when made). It should be ensured that these deposits are made before the original tet of import documents are handed over to the importer for Customs clearance.

TJjese amounts should be deposited either with the R?I, New Delh} or the S.B.I., Tis Hajari. Delhi- In this connection their attention is £ls.o invited to the provisions of the Public Notices No, 184-rTC/(PN)/68 dated 30-8-68, 233-ITC(PN)/ 68 dated 24.10.1968, 132-ITC (PN)/7J dated 5,10.1971. No. 74-ITC (PN)/74 dated 31.5.1974 and No. 103-1TC (PN)/76 dated 12-10-1976. The head of account to be credited is "K-deposita & advaaccs-843-Civil Deposits-Depptit for Pur- chases etc abroad under Purchases under CreditlLoaa agree- ment*, Loans from the Governnment of Japan 1.7 billion Yen Credit (Project Aid) No. ID-P. 15 for 1981-82.

One copy of the challan In original, in cases where the rupee equivalents are credited in cash at the RBI, New Delhi or the S.B.I., Tis Hazarj, Delhi as prescribed in Public No- tice No. 132-1TC(PN)/71 dated 5.10.1971, should bet sent by them to the address given below alongwith a forwarding letter giving full detail? of the advice notes received from the Bonk of India, Tokyo Branch.

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

In cases where thp rupee equivalents are remitted by means of demand drafts as laid down in the Public Notice dated 24-10-1968 mentioned above, intimations there of should be sent to the address given above. In all pases full particulars of the rupee equivalents deposited should be furni- shed to this Department.

Interest charges payable to the Bank of India. Tokyo, far the time lag between the dates of payment to the supplier and the date of its reimbursement to the Bank of IfldJa, Tokyo by the OECF shajl be settled directly by you with the Bank of India, Tokyo through normal banking channels without affecting Government of India's account.

3. The Director, Loan DepartmentTlL Overseas Economic cooperation fund, Takebashi Godo Building, 4-1 Ohtemacbi J-Chome, Chivodalku, Tokyo 100, Japan.

4. Embassy of India, Tokyo.

5. The Under Secretary, Japan Sectipn, Ministry of Fin-

ance, Department pf Economic Affaire, Now Delhi.

^ *r T" Accounts Officer

241

PAYMENT TERMS

ANNEXURE—V

Form OECF—LCI

Irrevocable Letter of Credit (Applicable for goods)

Date:

To This Letter of Credit has been issued pursuant to Loan Agree- ment No

(Name and address of the dated Supplier) between (Borrower) and THE

OVERSEAS ECONOMIC COOPERATION FUND.

Dear Sirs,

No of ing an aggregate amount of Y

We advise you that we have opened our irrevocable credit in your favour for account for a sum or sums not exceed- (Say Yen ) available by your drafts at 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 lading made but to order and blank endorsed and marked "Freight and Notify Other documents."

evidencing shipment of (brief description pf goods to be shipped (if any) from referring to Contract No

to

Partial shipments are permtted. Transhipment is

permitted.

Bills of lading must be dated hot later than Drafts must be presented for negotiation not later than

All drafts and documents udder this credit must irrevocable be mark"d "Drawn under credit No t dated , and (if any) Import Reference No. (s)

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), International Chamber of Commerce Brochure No. 290". Special Instructions to the negotiating bank:

1 After obtaining the reimbursement for our payments from

THE OVERSEAS ECONOMIC COOPERATION FUND in accordance with the provisions of the Letter of Commit- ment Issued thereby under the above mentioned Loan Agreement we undertake to remit the amount of the drafts In accordance with instructions issued by the negotia- ting bank.

2 The negotiating bank must forward the drafts and one com- ' plete set of documents to us together with the certificate

stating that the remaining documents have been airmailed

direct to

3 AU banking charges under this credit are for the account of

the importer/supplier.

Yours faithfully, This payment terms constitutes an integral part of our Letter

of Credit No

I. Initial Payment

Amount : Y

being % of the total

contract price.

Required documents:

Latest presentation date:

II. Intermediate Payment (if any)

Amount : Y

being % of the total

contract price.

Required documents:

Latest presentation date:

III. Payment against Shipping documents

Amount : Y . •.

b"ing % of the total

contract price.

Note; This attached sheet is not required in case of full pay ment against shipping documents.

ANNEXURE—VI

Form OECF—LC TI

Irrevocable Letter of Credit

(Applicable for Services)

To Date:

This Letter of Credit has been issued pursuant to Loan Agreement No

(Name and address of the dated

supplier) between (Borrower) and THE OVERSEAS ECONOMIC COOPERATION FUND.

Dear Sirs,

No of

We advise you that we have opened our irrevocable Credit in your favour for account for a sum or sums not exceeding

an aggregate amount of Y

(Say Yen available by beneficiary's drafts at sight for full

Statement 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

AH drafts and documents must be marked "Drawn under

irrevocable credit No. 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 honoured on due presentation and delivery of documents to the drawee.

(a commercial bank)

fy: r

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

Special Instructions to tbe negotiating Bank:

1. After receipt of the original Statement of Performance issued by (Borrower or its designated authority) in accordance with the form attached hereto, payment(s) under this credit must bo 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 Comiuit- ment issued thereby under the above mentioned Loan Agree- ment, we undertake) to remit the amount of the drafts in accordance with tho instructions issued by the negotiating bank.

3. A copy Qf the documents as mentioned in item f above and the drafts shall be sent to us immediately after the receipt thereof.

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

of the importer/supplier.

Yours faithfully,

(a commercial bank)

By:

(Authorized Signature)

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 preseqtation date:

II. Progress Payment

Amount due Latest ' pre- sentation -/late

1st Instalment: Y

2nd Instalment: Y

Required document: a copy of Statement of Performance issued 'by (Borrowor 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 for y of

in favour concerning Project under Loan Agree-

ment 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

(Borrowor)

By:

(Authorized Signature)

Special Instructions:

Aggregate amount:Y

being % of the total contract price

to be paid as follows:

The details of tho actual performance shall be stated in the

sheet attached hereto.

PRINTED BY THE MANAGER GOVT. OF INDIA FRESi, RlN{J ROAD, NEW DBLHI-11Q064

AND FUFLISHID BY THE CONTROLLER OF PUBLICATIONS, DELm-11005 (•, 1 9 62