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REGISTERED No. D. (D.N.)-72

The Gazette of India

EXTRAORDINARY

PART I—Section 1

PUBLISHED BY AUTHORITY

No. 168] NEW DELHI, SATURDAY, SEPTEMBER 18, 1982/BHADRA 27, 1904 Separate paging is given to this Part in order that it may be filed as a s e p a r a te compilation

743 GI/82—1

(1)

743 GI/82—2

MJN1STRY OF COMMERCE

IMPORT TRADE CONTROL

PUBLIC NOTICE NO. 45—ITC (PN)|82

New Delhi, the 18lh September, 1382

SUB : Licensing conditions for import of goods and service! under OECF loan agreement No. TD-P, 18 of Yen 1.8 billion (Bombay sub-urban Railways Nfodeinisa- tion Project),

File No. IPC|23 (33 ) ;82.—The ternii & condition govern- ing the issuance of import licence in respect of good* * lervlces under OECF loan Agreement No. I.D.-P.18

of Yen 1.8 Billion (or the implementation of the Bombay Sub- urban Railways Modernisation Project, as given in Appendix to this Public Notice, are notified for information.

MANI NARAYANSWAMI, Chief Controller Imparts & Kxpotrs

APPENDIX TO MINISTRY OF COMMERCF PUBLIC NOTICE NO. 45-ITC (PN)|82, dated, the 18th September, 1982

LICENSING CONDITIONS IN RESPECT OF IMPORTS OF GOODS AND SERVICES UNDER THE YEN CREDIT OF Yl-N 1.8 BILLION FOR THE IMPLEMENTATION OF THK BOMBAY SUBURBAN RAILWAYS MODERNIZA- TION PROJECT EXTENDED BY THE OVERSEAS ECO- NOMIC CO-OPERATION FUND (OF.CF) OF IAPAN

Section I-—General condition-,

I (i) The Yen Credit of 1.8 billion extended by the Over- seas Economic Cooperation; Fund of Japan (OECF) for financ- ing the import requirements of the Bombay Suburban Rail- ways Modernization Project is untied in favour of developing countries. Accordingly the goods and service* to be procured under this credit can be imported from Japan and all countries enumerated in the Hit at Annexure-I which will be eligible •ourcc countries under the credit.

I. (ii) Import Licence (s) under the Credit can be issued oniy for such items and for such value as have beei specifically cleared by the. DGTT>|OG Committee. The value of import licenced;) issued under this credit should not exceed 2,ft(X) million (CIF).

The rupee value of the import licence shall be determined with reference to the exchange rote notified by the Department of Revenue (Customs) and prevailing on, the date of issue of the import licence and indicated in the, body of the import licenced) as per para 2 of the Public Notice No. 78-1TC (PN)/74 dated the 6th June, 1974, issued by the CCI&E, which also enjoins that the Customs Authorities and the authorised dealers in foreign exchange will make debits to the value of the licence(s) at the exchange rate specified on the impcrt licence(s). The licence will bear the superset iption "Japanese Yen Credit No. ID-P, 18". first and second suffix licence code will be " S | JC This will also be repeated in the letter from the CCI&E forwarding the impoit licence to the Indian Railway!, a copy of which should be endorsed to the Ministry of Finance, Department of Economic Affairs (Japan Section). \

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

the Indian Railway* on CTF basil.

I (iv) Depending on the convenience of the Indian Railways more than one import licence may be issued under this cre- dit, but the total value must not exceed 2,000 million (CIF) a* specified at (i) above.

I (v) The extension of th© vaildity of the import licence, may on application by the Indian Railways, be granted upto 31-12-86. Request for further extension, if any, should be re- ferred to the Department of Economic Affairs (Japan Sec- tion).

I (vi) Importi to be financed under the Credit are restrict- ed to the list of goods and services attached to the import licence, duly attested by the licencing authorities.

I (vij) No remittance of foreign exchange will be permitted against the import licence. Any payment towardt Indian agent'" commission should be made in Indian rupees to the agents in India. Such payment*, 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 Oversea* Supplier located in the countries mentioned in An- nexure-I and sent to the Department of Economic Affaire (Japan Section) within 4 monthn from the date of issue of the import licence. Freight and insurance charges will be pay- able in India in Indian rupees. "Firm orders'' means purchase orden placed by the Indian Llcencee on the oversea! supplier dulv simed bv the latter oi purchase contract duly signed by botU the Indian importer and the overarm nuppli"r, Orders on Indian Agents of overseas suppliers and]or order confirmation, of such Indian Agents are not acceptable.

I (Lx) This condition of the placement of contracts within 4 months period will be treated as not having been complied with unless complete contract documents reach the Ministry of Finance, Department 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 reasostf, the liccncec should submit the import licence to the concerned licensing authorities KJying reasons why ordering could not be completed within four months. Such requests for extension in the oidcring period will be considered on merit by the licensing authorities who may grant extension upto a further maximum period of 4 month.s. If, however, extension is sought beyond 8 months from the date of issue of the import licence •uch proposals will invariably be referred by the licensing authorities to the Department of Economic Affairs (Japan Section), Ministry of Finance, North Block, New Delhi who will consider such extension on the merits of each case and communicate their decision to the licensing authorities for communication to the licensee. Only on production by the licencee of a letter from the licensing authorities sanctioning such extension will the authorised dealers and departmental authorities permit the facility 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 •hould provide for payment on cash basis i.e. on presentation of snipping 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 :

" Month* 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 *hat this date should not be beyond 31-12-86,

Section II—Special points lo be kept in view while negotia-

ting a supply contract.

JI(i) The FOB value of the contract should be expressed in Yen (Fraction of Yen should be omitted) and should excluded India Agent's commission, if any, which should be paid in Indian rupees.

In no circumstances the contiact 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 Engliih only.

II(ii) The broad guideline*, for procurement of goods and services under the OECF Yen Credit (Project Aid) are given in Annexure-IL However, normally the procurement of goods and services should be made through Formal Open Interna- tional Tendering and the following points should be borne in mind ; —

(a) Invitations to bid shall have to be advertised m 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 w high as to dis- courage suitable biddeis,

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

ll(iii) In ctrsfts where Formal Open International Tendering i" not considered appropriate the Fund will accept the fol- lowing alternative procedures :—

(

(b) Wheie the numbei of Qualified su^pheis is limi-

ted.

(c) Where the amount involved in the procurement is so small th.il foreign flrnjs clearly would not he interested or that the advantages of formal open internalion.il tendering would be outweighed by the administrative burden involved.

(d) Where, in addition to the cases (aj, (b) and (.c) above, the Fund deems it in appiopriate to follow (he formal open international tendei ing procedures or the Fund deems such procedure inapplicable, eg,, in case of emergency procurement.

In the above mentioned cases the following procurement procedure may be applied in such a manner at to comply with the formal open international tendering procedures to the fullest possible extent as appropriate :

(i) Formal Selective International Tendering,

(ii) Informal International Competitive Procurement.

The Indian Railways shall uibmit to the Fund I OECF) im- mediately after conclusion of the Loan Agreement foi it* review copies of all notices aod instructions to bidders, the bid form, the propo&ed contract, specifications and diawings, reports of the analysis of bids, proposal for awards, and all other documents relevant to the bidding. These documents may be forwarded to the Under Secretary (TA), Department of Economic Affairs, in duplicate, for onward suhmje&ion to the OECF.

Il(iv) The payment to the overseas supplici should be arranged through an irrevocable letter of credit to be opened by tho Bank of India, Tokvo in their lavour under the OECF Yen Credit (Project Aid) No. ID-P.18 for 1979-RO the details of which are given in Section Vf helovv.

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

II (vi) Eligibility of Supplier.

The Suppliers shall be nationals of the eligible source coun- ties, or Juridical persons incorporated and iegislcred in the eligible source countries and controlled by nationals of the eligible source countries.

ll(vii) Declaration in Contract.

The following statements of eligibility b> the supplier shall

be added to each contract.

"I, the undersigned, hereby cecity that (he (juuds to he sup- plied are produced in- •—• (eligible .source country I.

I, the undersigned, further certify that to the best of my information and belief, the portion imported from the non- eligible source countries is less than thirty pei cent i3Oc'r) in accordance with .Jhe following formula :

Imported CIF Price + Import JJuty

Supplier's" FOB Price " ' X 100"

and

"I, the undersigned, hereby certify that.—• (Name of Company) has been incorproated and registered in——— — ( • n a me of eligible source country), and is controlled by nationals of the eligible NOW ce countries "

Tl(viii) Pcimiisible import from non'-eligible source count-

ries

f-inanLiiit; oi fioods which contain materials onginaling iiom a non-chgibie source country or countries mav be mude, pro- vided that the imported portion is less than thirty per cent (30',"') on an item-by-item basis in accordance with the fol- lowing formulae :

IMPORTED OIF Price + Import Duty ~^~~ Supplier's" FOB Pric" " X 100

Section III—Conditions to be incorporated in the supply

contracts.

Ill(i) The .following provisions should be specifically cm-

bodied in the supply contract:

(a) The contract is arranged in accoidance With the Loan Agreement between the Government of India and the Overseas Economic Cooperation Fund of Japan (OEC.H dated the 14th May, 1982 concerning the Yen Credit No ID-P. 18 (.Project Aid) for Bombay Suburban Railways Modernization Project nnd will be subjected to the approval of Government of India and the Overseas Economic Cooperation Fund.

(b) Payments to the supplier shaU be made through an iuevoeable letter of Credit to be issued by the Bank of India, Tokyo, under the t.oan Agicement No. ID-P, 18 dated 14th May, 1982 between the Government of India and the Overseas Economic Cooperation Fund of Japan (OECF).

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

(d) Certificates (triplicate) in the forms indicated in

IT(vii).

IHCii) In case the supplier ii located in Japan, the supply of contract should contain a clause that the Japanese supplier agrees to nrake shipping arrangements in consultation with the Embassy of India, Tokyo and that for this pmpose he would kcop the Fmbassj of India, Tokyo, informed of the delivery schedule of the goods involved and notify the Em- bassy of India at kail four weeks in advance of the shipping required so thai suitable arrangements could be made. In exceptional cises, where the Indian importers require it, this period of notice my be reduced. The Japanese supplier should also agicc to send a, cable advice to the imported after ench shipment giving the necessary details and a copy thereof should lie ^ent to the Embassy of India, Tokyo,

Section IV—Contract Appioval bv OECF.

IV(i) Within the stipulated period for placement of firm crdeis (he licericcc should foiward 4 copies of the contract duly signed bj both Indian Railways und Overseas suppliers supported by order confirmation in writing by the overseas supplier or their photo copies complete in -all icspects, toge- ther with two photo copies of the relevant valid import licence, to Jayian Section, Department of Economic Affairs, Ministry of Finance, North Block, New Delhi.

IVfii) The above procedure will also apply to all contract amendments causing essential modifications to the contents of contracts or in its price.

IVfiiiJ The Ministry of Finance (DFA) Japan Section will arrance to send one copy of the contract documents to the OECF for their approval for financing under Yen Credit No. /D-P. 18 (Project Aid) for Bombay Suburban Railways Mo- dernization Project.

Section V—.Payment to the overseas suppliers—Letter of

Credit Proceduie,

V(i) On receipt of the intimation of the contract approval from the OFCF, by the Ministry of Finance. Department of Fconomic Affairs. Japan Section, Indian Railways and the CAA & A will be informed of the same. Whereafter the Indian Railways should approach the Contioiler of Aid Accounts & Audit, (hereinafter reicired to as CAA & A) Department of Economic Affairs, Ministry of Finance UCO Bank Building,

P'uiii.incnt Street, New Delhi with a request 'n th* form .tU^- <_hed as Armexurc-lll for issue of a letter of authorisation. The CAA & A will issue .1 lcttei oi authorisation as in the form attached as Annexuie—IV addressed to the Tokyo Branch of Ihe Bank of India for opening an irrevocable Letter of Credit us in the form attached as Anracxuie—V (for phy- sical imports) or Annexuic -VI (for seivices) in favour of the overseas supplier concerned. , Copies of the Tetter of Autnorisation will be endorsed to the OECF, the Fmbassy of India, Tokyo, the importer's Bank in India, and Japan Section, Department of Economic Affaiis, Ministry of Fi- nance,

V(ii) On receipt of the letter of authority, the Rank of India, Tokyo, will establish an irrevocable letter of credit as per Annex Lire—V (applicable to physical imports) or VI (applicable to services) in favour of the overseas supplier concerned and will also forward a copy of the same to the OECF, Fmbassy of India, Tokyo, the importer's bank in India and the CAA & A.

The above procedure of opening of letters of credit on the b.isis of the letleis of authority fiom C \A & A would ipso facto apply to all such amendments to letter of autho- risation/letter of credit as may become necessaiy due to contract amendment or othciwise.

V(iii) The overseas supplier shall, after effecting shipment of aoods. present through his bankers the documents specified in the letter of credit to the Bank of Tndia, Tokyo. If the document" 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 onening, maintenance and on the operation of the I-ettcr of Cicdit will be either to the account of overseas suppliers or the importer. B.O.I., Tokyo, will therefore, recover all these charges from the suppliers' Hank or the importer, charges for handling and negotiating the documents and other incidentals will also be borne by the suppliers/importer.

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 sup- pliers and the date of reimbursement by the OECF the B.O.I., Tokyo will charge interest as per the terms and conditions of the Agreement entered into by them with the Government of India (IVf/O Finance) on 25th March, 1980 and set the same icimhursed by the Embassy of India, Tokyo. The ex- penditure on account of this interest payment by the Eb- bassy of India in lapan will be recovered from (he Indian Railways vide Section Vf (i\) infia.

Section VI—-Responsibility for rupee deposit.

VT(i) The Bank of India, Tokyo will forward the nego- tiable shipping documents to the accredited bankers of importer as indicated in the Appendix to Ihe relevant Let- ter of Authority and the banters will in turn ensure that the rupee deposits arc invariably made at RBI, New Delhi or S.B.T. Tis Hazaii, Delhi before releasing the shipping documents. The rupee equivalent of the Yen payments made to the overseas supplier are to be deposited into Govern- ment of India Account in the manner prescribed in Pub- lic Notice No. 74-ITC (PN)/74 dated 31-5-1974.

The importer will take delivery of the imported goods onlv after producing the original shipping documents ob- tained from the Banker after depositing Ihe rupee equivalent of the foreign currency payment made to the supplier, Per- mission of the ContioIIer of Aid \ccounls and Audit, UCO Bank Building. Parliament Street, New Delhi should be obtained for any departure from this procedure. The exchange rate to be udorted for computing the rupee equivalent of the Yen payments made to the overseas suppliers will be the composite rate of exchanjte applicable to the date of payment which will be uoikcd out ,ia ucoordancc- with the method prescribed in public Nntit-es No lin^ITf" fPN ) II \ rl-tr-d V,| /Vi-irt 1074 nml No B-ITC (PN )/76 dated 17th Januaiy, 1976 01 *\ mav be notified by Government from time to time through Public Notices of the CCI &, E or through Exchange Control Circulars of the Re-scrvc Bank, of India. The Head of Account to which the above mpeo deposits should be credited is "X-Deposits and Advances—, M4-3—Civil Deposits-—Deposits for purchase ct;. abroad— Pin chase under cicdits/Loan Agreements" 'Loans from the Government of Japan—1.8 Billion Yen Credit No. ID-P. 18 for Bombay Suburban Railways Modernization Project. The provisions legarding calculation and deposit of interest charges mentioned in the above said Public Notice of 31-5-1974. will however, not be appicable as no interest chaigej arc recoverable in respect of imports made by Central Govern- ment departments.

VI(ii; The amount referred to above should be deposited in cash to the credit of the Government either in the Reserve Bank of India, New Delhi, or State Bank of India, Tis Hazari, Delhi as comtemplated in Public Notices No. 184- ITC (PN)/68 dated 30th August, 1968, No. 233-TTC (PN)/6S dated 24th October, 1968, No. 132-ITC (PN)/71 dated 5th October, 1971 No. 74-ITC (PN ) /74 dated 31st May, 1974 and No. 103-rTCfPN)/7fi dated 12th October, 1976.

Vfiiii) The concerned Bank in Tndia 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 dayi after such a demand is made by Ministry of Finance (Department of Economic Affaiis). While filling in the various columns- in the challan it should be ensured by the importeis/thcir bankers that the information prescribed in para 2 of Public Notice No. 132JTC(FN)/71 dated 5th October, 1971 is invariably indicated in the column ''full particulars of remittances- and authority (if any)" of the challan. The following particulars should invariably be furnished in the treasury Chilians ; —

(a) Ministry of Finance 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 overseas supplier.

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

Note : Importers Bank in India should ensure that the iiipco deposits arc invariably made within 10 dayLS 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 (DEA), New Delhi is kept informed of the fact immediately thereafter.

VI(iv) The concerned bank in India should also endorse the amount of nipee deposits on the exchange condol copy of the licence and send the requisite "S" Form to the Re- serve Bank of India, Bombay,

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

Section VIII—lvfiscellaneous provisions.

Vlll(i) Reports on the utilisation of the import licence.

The importci should send a monthly report, after the letter of ciedit has been opened regaining shipments and puyments made thcrcagainst and abovrt the balance left, to the Controller of Aid Accounts & Audit, Department of Eco- nomic Affairs, Ministry of Finance UCO Bnnk Building, Parliament Street, New Delhi.

VUT(ii) Notifying Suppliers of Special Conditions.

The hcencee should apprise the supplier of any special provisions in the import licence which may alfoci the sup- pliers in carrying out the transaction.

VIII(in) Disputes.

It should be understood that the Government of India will not undertake any responiibility for dispute* if any. that may arise between the- licences 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 importer in Annexure—III under "Terms of Payment". Pro- visions dealing with settlement of disputes should be included in the conditions of contract.

VllJ(iv) Putin e Instructions.

The licencce shall promptly comply with uny directions, instructions or orders issued by the Government of Tndia from time to time regarding any and all matters arising from or pertaining to the import licence and for meeting jll obligations under the Yen Credit Agreement (Project Aid) No. H>-P. 18 with the Overseas Economic Cooperation Fund ot Japan (OECF).

VlII(v) Breach or violation.

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.

VNI(vi) List of Annexures.

Annexure—1 List of eligible source countries.

Anaexurc—II Broad Guidelines for Procurement.

Anncxure—HI Request for issue of letter of Autho-

rity.

Annexure—IV Form of Letter of Authority.

Annexure—V Form of Letter of Credit (Applicable to

Physical Imports).

Annexurc—VI Form of Letter of Credit (Applicable

to Services).

ANNEXURE 1

LIST OF ELIGIBLE SOURCE COUNTRIES

A Developing Countries and Territories

(al) Non-OPEC Developing Countries

T. AFRICA, North of Sahara

Egypt Morocco Tunisia

11. AFRICA, South of Saturn

Angola Botswana Burundi Camereon Cape Verde Islands Central African Ken. Chad Comoro Island* Congo, People's Republic of Dahomay Equatorial Guinea (1) Ethiopia Gambia. Ghansi Guinea Tvory Coast Kenya Lesotho Liberia Malagasy Republic Malawi Mali Mauritania, Mauritius Moozamriique Niger

Portuguese- Guinea Reunion Rhodesia Rwanda Si. Helena and Dep (2) Sao Tomo and Principe Senegal Seychelles Sierra Leonr Somalia Sudan Swaziland Tcrro. Afars and Issas Togo Uganda Un. Rep. of Tanzania Upper Volia Zaire Republic Zambia

III. AMERICA. North and Central

Bahamas Barbados Belize Bermuda Costa Rica Cuba Dominican Republic El Salvador Guadeloupe Guatemala Haiti Honduras Jamaica Martinique Mexico Netherlands An Tilles Nicaragua Panama St. Pierre Jf Miquelon Trinidad and Tobago

(1) Formerly the territory of Spirtilsh Guinea, includins

the island of Fernando Po.

f2) Includinsj the following islands : Ascension. 'I.umn-

da Inacces-sibles, Nightingale, Gougft.

(3) Main islands, Aruba, Bonaire, Guracno, Saha

Fusficit, St. Martin (Southern part).

America, Norlh & Central West Indie* (Br.) n.i.e.

(a) Associated States (1)

(b) Dependencies (2)

IV. AMERICA, South

Argentina Bolivia Brazil Chile Colombia Falkland Island* French Guiana Guyana Paraguay Peru Surinam UrugUby

V. ASIA, Middle Eait

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

. VI. ASIA. Soyth Afghanistan Bangladesh Bhutan Burma India Maldivis Nepal Pakistan Sri Lanka

VU. ASIA, F.ir East

Brunei Hong Kong Khmer Republic Korea, Republic ot Loas Macao Muluyt>:i Philippines Singapore

Thailand

Thmland "limor Viet-Nam, Rep- of Vict-Nam Dem, Rep.

VIII. OCEANIA Coek. Island* Fiji Gilbert & FlUce Is. ("ronch Polynesia (5) Nauru New Calendonia New Hebricc (Br. and Fr.) Niuo Pacific Fslands (US) (6) Papua New Guinea Solomon Islands (Br,) Tonga Wallis and Futuna Western Samoa

IX. Europe Cyprus Gibraltar Greece Malta Spain Turkey Yugoslavia

(1) Main islands : Atigue, Domin.'ca, Grenada, St. KiLts (Si. Caristophe), Nevis-Anguilla, St. Luciu and St. Vincent

(2> Main islands; Montserrat, Cayman, Turks and Caicos,

and British Virgin Islands.

(3) Ajman, Dubai, FujaJxak Raa al Khaimah, Sharjah and

Umm al Quaiwain.

(4) Including Aden and various sultanates and emirate?.

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

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

(u2) Member of Association Countries of OPEC :

Algrcia Bolivia Libyan Arab Republic Gabon Nigciiu Ecuador Vcnrzuela Iran Iraq Kuwait Qatar Saudi Arabia Abu Dhabi Indonesia 743 GI/82— 3

ANNRXURE-ll

Main guideline* for procurement of goods and sci vices under the Pro]cci Loans as formulated by OECF :

I. Advertising

For all contracts subject to Formal Open International Tendering, invitations to bid shall be advertised in at least one newspaper of geneial circulation in Indirf

II. Bidding Documents and Contrach

II-1. Bid Bonds or Guarantees

Bid bonds or bidding guarnnrees .ire u UMWI requirement but they should not be Set su high as tr> discotiiage suitable bidders, Bid bonds or guarantees should be released io un- successful hidden as soon as possible after the bids have been opened-

11-2. Conditions of Contiact

The conditions of contract should clearly define the rights .ind 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: administiation 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 of Coritract

Contracts can bo let on the basis of unit pi ices for work, performed or items supplied or of a lump sum price, or a combination of both for different portions of the contract, according to thci nature of the goods or services to be pro- vided and the bidding documents should cle;illy state the type of contract selected.

Contracts based principally on the reimbursement of actual costs are not acceptable by the Fund except in excep- tional 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 advan- tages for the borrower country.

JM. Eligible Suppliers

Exporters or suppliers whose goods and services arc to be financed out of the proceeds of the Loan (hereinafter referred to as "the eligible supplier") shall 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,

MM. Contract Price

(a) The contract price should be stated in Japanese Yen piovided, however, thm the portion of the conraei price which the contractor will spend in the bonower's country should be stated in the borrower's currency.

(b) Price Adjustment Clauses.—Bidding documents- should contain a. clear statement whether firm rtrices are required or escalation of the bid prices is acceptable

A provision sihould be made for adjustment H the. con- tract prices in the event changes occur in th" prices of th" majcr cost constituents of the contract, such as labour? and important materials.

The speiflc formula for price adjustments should be clearly

defined in the bidding; documents.

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

No price adjustments should normally be provided for

goods to bo delivered within one year.

The Guidelines do nof attempt to idrntltfy tlic various

methods by which contract prices may be adjusted.

(o) Insurance.—The bidding documents should state pic- cisely the types of insurance to be provided try the suc- cessful bidder.

111-2. The contract dulv signed by both pprties or pur- chase order by the Indian importer placed on the overseas supplier supported by ordei of confirmation in writing by the overseas supplier, or their photo copies are also acceptable to the Fund.

TII-3. The following statement of eligibility bv the supplier

shall be added to each contract :

"I (We) hereby state that my (our) con.pany Is r.n eligible supplier, as———• per cent (%) of the fhares are held by nationals of- • (eligible source country), and—• per cent ( ) of the directors are nationals (eligible souice country) and my (our) company has been registered in — —— — (eligible source country)".

IV-1. Standards.—If national standard to which equip- ment oi materials must comply are cited, the specifications should state that commodities meeting Japan Industrial Standard or other internationally accepted standards, which ensure an equal or higher quality than the standards men- tioned, will also bo accepted.

IV-2. Use of Brand Names.—Specifications should bo based on performance capability and should only prescribed 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 neces- sary to maintain certain essential features. In the latter case the specifications should permit offers of alternative commodities which have similar characteristics and provide performance und quality at least equal to those specified.

IV-3. Guarantees, Performance Bonds and Retention Money.—Bidding documents for civil works should require some form of surety to guarantee that the work will be continued until it is completed. This surety can be provided cither by a bank guarantee or by a performance bond, the amount of which ,will vaty with the tyDC and mnjtniti'de of the work, but should be sufficient to protect the borrower in case of default by the contractor, Its Jife should extend sufficiently beyond completion of the contract to cover a reasonable warranty period. The amount of the Ruarantee or bond required should be defined in tile bidding docu- ments. ,

In contract for tho supply of goods ii is usually preferable to have a percentage of the total payment held as retention money to guaranteo performance ihan to have H 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 slipulated 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 bo included in bidding documents whon delays in completion or delivery will result in extrn cost, loss of re- venues or less of other benefits to the borrower. Provision may also bo made for a bonus to be paid to contractors for completion of civil works contracts at or ahead of t^nes specified in tho contract when such earlier completion would bo of benefit to the borrower.

VI. Force Majeure.—The conditions of the Contract in- cluded in the; bidding documents should contain clauses, when appropriate, stipulating that a failuro on the cart of the parties to perform their obligations under the Contract shall not be considered a default under the Contract if such failure is the lesult of an event of force nujcui'e (to he defined in the conditions of the Contract).

VTT. Settlement of Disputes—Provision dealing with the settlement of disputes should be included in the conditions of thei Contract. It is desiiahle that tho provisions .should be based on "Rules of Conciliation and Arbitration" which have been prepared by the International Chamber of Com- meice or on such other arrangements as may be malually' acceptable to the Indian Importer and the oversea* supplied.

VIII. Language Interpretation.—Bidding documents should be prepared in English. Tf other language should be until in the bidding documents, English should be added to such documents and it is icquired to specify which is go\emiy

IX. Bid Opening Evaluation and Award of Contiau :

IX-1. Time Interval between Invitation and Submission of Bids.—-The time allowed for pieparation of bids will depend to a large extent upon the magnitude and complexity of the contract. Geneially not less than 30 days should be allowed for international bidding. The time allower, how- ever, should be governed by the circumstance* relating to each contract.

IX-2. Bid Opening Procedures.—The date, hour and place Cor the latest it-ccipt of bids and for the bid opening .should be announced in the invitations to bid and all bids should be opened publicly at the stipulated time. Bids received after this time should be returned unopened. The name of the bidder and the total amount of each bid and of my alternative bids, if they have been requested or permuted, should be read aloud and recorded.

TX-3. Clarifications or Alternation of Bids—No bidder should be permitted to alter his bid .ifter the bids have been opended, ODly clarifications not changing the substance of the bid may be accepted. The importer mav ask anyt bidder for a clarification of his bid but "hould not ask any bidder to change the sirbstance or (he price of his bid.

1X-4. Piocedures to be Confidential.'—Except as m.iy be required by law, no information relating to tho examination, clarification and evaluation of bids and recommendations concerning award should be communicated alter the public opening of bids to any persons not officially concerned with these procedures until the award of a contract lo the suctrs" ful bidder is announced.

DC-5. Examination of Bids.—Following tht> opening, it should be ascertained whether material errors in compulsion have been made in the bids, whether the bids are Tullv responsive to tho 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 I ho specifications, or contains inadmissible reservations, or is not otherwise substantially responsive to *he bidding docu- ments, it should be rejected. A technical analysis should then be madci to evaluate each responsive bid and to enable bids to be compared.

1X-6. Post-qualification of Biddcis.—In the absence of prequaUnaationa, the borrower should determine whether the bidder whose bid has been evaluated the lowest hiis the capability and financial resouices effectively to carry nut the contract concerned. If the bidder does not meet that test, his bid should be rejected.

IX-7. Evaluation and Comparison of Bids.—Bid evalua- tion must bo consistent with the terms and conditions set forth in the bidding documents. In addition to tho bid pi ice adjusted to correct arithmetical errors, other factors such as the time of completion of construction or the efficiency and compatibility of tho equipment, tho availability of ser- vice and spare parts, and the reliability of construction methods proposed 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. Th© amount of escalation for price adjustments. If any, included m the bids should not he taken into consi deration.

The currency or currencies in which the price offered M eaJi bid would be paid by the borrower, if that bid weie accepted should be valued in terms of a single currency selected by tho borrower far comrairison of &I1 bids and stated in the bidding documents. Tho rate* of exchange to be used in such valuation should be the selling rates publi- shed by an official source, and applicable to similar transac- tions on the day bids are opened unles, there should bo A change in (he value of currencies before the award if matte.

In such cases the exchange rates at 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 ihe same specificaticnB solely for the purpose of obtaining lower prices in the new bids, except in cases whore the lowest evaluated bid exceeds the cost* estimates by a substantial amount. Rejection of all bid-, may also be justified when (a) bid* ure not responsive to the intent of the bidding documents, or (b), theie is a lack of competition. If alii bids are rejected, the bonower should review the cause or causes justifying the rejection and either consider revision of the specification^ 01 modification in the project (or timotfnts of work on items called for in the original invitation to bids), or both. Tn special circinmtances, riter consultation with the Fund, the bonower 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 lowe-tt evaluated b\d and who meets the appropriate standards of capability and financial resources. Such bidder should not be> lcquired, as a condition of award, to under- take responsibilities on commodities not stipulated in the specifications or to modify his bid.

ANNEX URE IJI

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

eligible source countries.

(iii) Nationality of the representative and/or President

of the supplier.

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

gible source countries.

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

ments under the contract will fall due.

(m) Expected date- of completion of deliveries.

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

Co) Shipment instructions (indicate if trans-ship-

ment/part-shipment permitted or not permitted).

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

(q) Whether a contract(s) under the same licence has- been placed notified to the Japanese 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)

MINISTRY OF FINANCE

Request for Issue of the Letter of Authority

TJo, 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-UOOOl.

Sub .—Import of

(Department of Economic Affairs)

New Delhi, thr.

To

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

Subject :—-Import under Yen Credit (Project Aid).—^Loan Agreement No. ID-P. 18-Issue of Letter of Authority tor opening Letter of Credit.

from Japan under the

Yen Gedit No. ID-P. 18 (Project Aid) for 1979-80.

Sir,

In connection with the import of ....from under the above mentioned Yen Credit No, ID-P. 18 (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 lame as given in (n) below for opening a letter of credit in favour of the overseas supplier con- cerned.

(a) Name and Address ot the Indian importer.

date upto which it is valid.

(c) Method of procurement—-whether it is based en direct puichase or Formal Open International lender ring in which case it should be indicated whether the contract has been awarded on the basis of techni- cally suitable offer with reasons, if any.

(d) Brief description of the goods.

(e) Origin of the goods.

(f) Percentage of the import components from non-

eligible source countries, if any. (g) Gross FOB value of contract fin yen).

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

if any.

(i) Net FOB vaJue (in Yen) for which the Letter of

Authority is required.

(j) Number and date of the contract with overseat

suppliers.

(k) Name and Address of the Overseas Supplier;

(i) Nationality.

Dear Sirs,

In accordance with the terms end 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 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 tho 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 pay- ments, you must claim immediately rcimburstments 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 interest 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 opeiation of the Letter of Credit as also those connected with handling negotiating docu- ments and charges of overseas suppliers bankers if any, are to be borne bv 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/Cs against this authorisation may not be acted upon in the absence of a specific authority from this Ministry.

Thu, Letter of Authority will icmaln valid uplo •.

Yours faithfully,

(Accounts Officer)

Copy fprwarded to :—

1. Importer — -with reference to their letter

No. —— — — — -dated— ——-,

2. Importers' Banker- ————. They are icquested to arrange to deposit the rupee equivalent of the Yen pay- ment to the overseas suppliers on receipt of documents from the Bank of India, Tokyo Branch. The rupee equivalent ot amounts disbursed to the supplier;, will have to be calcu- lated 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 inch other Public Notices as may be issued from time to time. It should be ensured that these deposits are made before the original set of import documents aie handed over to the importer for Customs clearance,

These amounts should be deposited either with the RBI, New Delhi or the S.B.I., Tis Hozari, Delhi. In this connec- tion their attention is also invited to the provisions of thu Public Notices No. 184-ITC(PN)/68 dated 30th August, 1968, 233-ITCfPN)/68 dated 24th October 1968, 132-lTC (PN)/71 dated 5th October, 1971, N o. 74-ITCfPN)/74 dated 31st May, 1974 and No. 103-ITCfPN)/76 dated 12th October, 1976. The head of Account to be credited is "K-Deposits & Advances-843-Civil Deposits—Deposit for purchases etc. abroad under Purchases under Credit/Loan Agreements— Loans from the Government of Japan 1.8 billion Yen Cre- dit (Project Aid) No. ID-P. 18 for 1979-80.

One copy of the challan in original, in cases where the rupee equivalents are credited in cash at the RBT, New Delhi, or tho S.B.I.. Tis Ha7jari, Delhi as prescribed in Pub- lic Notice No. 132-ITC(PN)/71 dated 5th October, 1971, should be 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.

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

In cases where the rupee equivalents are remitted by means of demad 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 of the rupee equivalents deposited should be furnished 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 thin pur- pose appropriate advices will be sent by this Department on receipt of relevant information from the Bank of India, Tokyo/Embassy of India in Japan.

3. The Director, Loan DepartmenMI, Overseas Economic Cooperation Fund. Takebashi Godo Building, 4-1, Ohte- machi 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.

ANNEXURE-V

Form OECF-LCt

Irrevocable Letter of Credit

(Applicable for goods)

ro

(Ntime and address of the Supplici)

Date :

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

Dear Sirs,

We advise you that we have opened our irrevocable credit M o . — — — — — in your favour for account of-——

' for a sum or sums not exceeding nn, aggregate- nomutit of Y - (Say yen ) available by your drafts at sight foi full invoice value drawn on us, to be accompanied by tho follow- ing documents :

Signed commercial invoice in

Full set of clear on board ocean bills of lading made out to order and blank endorsed and marked "Freight" and "Notify" Other documents

evidencing shipment of (brief description of goods to be shipped referring to Contract No. — —(if any) from .. -to — •—— Partial shipments are •—-———-——permitted. Transhipment is —— permitted.

Bills of lading must be dated not later than —Draft must be presented for negotiation not later than All drafts and documents under this cedit must be marked "Drawn uruler • irrevocable credit No. dated and Import Reference No(s) (if any)" This credit is not transferable.

We hereby undertake that all drafts drawn under and m compliance with the terms of the credit shall by 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 COOPERA- TION FUND in accordance with the provisions of the Letter of Commitment issued thereby under the above-mentioned Loan Agreement, we under- take to remit the amount of the drafts in accor- dance with instructions issued by the negotiating bank.

2. The negotiating bank must forward the drafts and one complete set of documents to us together with ihe certificate stating that the remaining docu-

ments have been airmailed direct to

3. All banking charges under this credit are for the

account of the imports/supplies.

Yours faithfully.

(a commercial bark)

By :

(Authorised Signature————-

PAYMENT TERMS

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 data :

II. Intermediate Payment (if any)

Amount :

being % of the +otal contract price.

Required documents : Latest presentation date :

DI. Payment against Shipping Document* Amount :- —•

feeing % of the total contract price.

Note : Thii attached sheet is not required in case of full

payment against (hipping documents,

ANNEXURE-VI

Form OECF-LC H

Irrevocable Letter of Credit

(Applicable for Services)

To

(Name and address of the Supplier)

Date :

This Letter of Credit has been issued pursuant to Loan Agreement No. ~— dated between (Borrower) and THE OVERSEAS F-CONOMIC COOPERATION ON FUND

Dear Sirs,

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

To be accompained by the required docments, in accor- dance with the Payment Schedule attached hereto, concer- ning (Contract Mo, with regard to Project). Drafts must be presented for negotiation not later than

All 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 sind 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 Instruction! to the negotiating bank:

1. After receipt of the original Statement of Perfor- mance issued by (Borrower or its designated autho- rity) in accordance with the form attached hereto, payment (s) 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 Per- formance.

2, 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 abovementioned 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 draftH shall be sent to us immediately after the receipt thereof.

4, AU banking charges under this credit are for the

account of the imports/supplies.

Yours Falthully,

(ft 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 presentation date :

t[. Progress Payment

Agreement amount: Y

being % of the total contract price to bo paid as follows :

Amount due Latest presentation

date

1st Instalment : 2nd Instalment :

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 for Y

in favour of concerning Project

under Loan Agreement No

I, the undersigned, representing (Borrower), hereby issue a Statement of Performance to en Jtle to receive the sum of Y (Yen on 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 Instruciion',:

The details of the actual pjrfotminco shall be staled la the

sheet attached hereto.

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