On the ratification of the Letter of Agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and Development on the allocation of a grant for the preparation of the project "Groundwater protection and industrial wastewater treatment in the city of Ust-Kamenogorsk"

Law of the Republic of Kazakhstan dated January 8, 2004 No. 517

     To ratify the Letter of Agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and Development on the allocation of a grant for the preparation of the project "Groundwater Protection and industrial wastewater treatment in the city of Ust-Kamenogorsk", signed in Astana on September 9, 2003.  

     President of the Republic of Kazakhstan  

The World Bank 1818 N. Street N.W. (202) 477-1234 INTERNATIONAL BANK Washington, D.C. Cable Address: INTBAFRAD FOR RECONSTRUCTION 20433 U.S.A. Cable Address: INDEVAS AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION  

                                                 August 22, 2003  

To Mr. A.S. Yessimov, Deputy Prime Minister of the Republic of Kazakhstan - Minister of Agriculture, 49 Abaya Ave., 473000 Astana  

Cas.: Japanese Government Grant for the Republic of Kazakhstan:  Ust-Kamenogorsk Environmental Restoration Project Grant N TF 051352  

     Dear Mr. Yessimov,  

     On behalf of the International Bank for Reconstruction and Development (the Bank) and as the administrator of grants provided by the Government of Japan, we hereby express our consent to the allocation of a grant (Grant) in the amount not exceeding eight hundred sixty thousand seven hundred US dollars (860 700) to the Republic of Kazakhstan (Recipient).         The Grant is provided in response to the Recipient's request for financial assistance, as well as for the purposes and in accordance with the terms and conditions of the Annex to this Letter of Agreement. The Recipient, further confirming his consent, declares that he is authorized to conclude an agreement and withdraw Grant funds for the purposes and under the conditions specified above.         Please note that according to the Bank's policy, this Letter of Agreement and any information on this issue must be published after the entry into force of this agreement and receipt of the Recipient's consent to the disclosure of information. By signing this Letter of Agreement, the Recipient hereby gives his consent to such disclosure.         I ask you to confirm your agreement with the above on behalf of the Recipient by affixing your signature and date and returning the attached copy of the Letter of Agreement to the Bank. This Letter of Agreement shall enter into force on the date on which the Bank notifies the Recipient of (i) receipt of a copy of the Letter of Agreement signed by you and (ii) acceptance of confirmations satisfactory to the Bank indicating that the Letter of Agreement has been duly authorized or ratified, executed and delivered on behalf of the Recipient and It is legally binding on the Recipient in accordance with the terms of the Letter of Agreement.  

Yours sincerely, On behalf of  

International Bank for Reconstruction and Development  

____________________________________ Christopher Lovlas, Acting Director of the Regional Office in Central Asia, Europe and Central Asia Region  

     Agreed:  

     Republic of Kazakhstan  

     Signature _____________  

     Name _________________  

     Post ___________  

     Date ________________  

Application  

        Objectives, terms and conditions of the grant  

             1. Goals and activities  

     1.1 The purpose of the Grant is to assist in the preparation of the Ust-Kamenogorsk Environmental Restoration Project (hereinafter referred to as the Project), the main objectives of which are: (1) improving the quality of water supply for the population and industrial activities in Ust-Kamenogorsk; (2) preventing pollution of the Irtysh River by toxic metal waste; (3) involving large industrial enterprises. enterprises in solving priority environmental problems of the region; (4) Strengthening the activities of environmental authorities to manage pollution issues. The activities (hereinafter referred to as the Activities) for which the Grant is provided include the following: (a) a technical and economic justification of the groundwater rehabilitation program for assessing and analyzing the current level of groundwater pollution by industrial enterprises in Ust-Kamenogorsk; the estimated cost of this event is equivalent to USD 5,38,500; (b) an impact assessment on the environment of groundwater rehabilitation and environmental restoration programs of the tailings dam; the estimated cost of this event is the equivalent of USD 110,000; (c) a social assessment to identify the degree of perception and impact of existing groundwater pollution, tailing dumps, industrial pollution in general, and other relevant factors; the estimated cost of this event is the equivalent of USD 64,000; (d) a financial and economic assessment; the estimated cost of this event is the equivalent of USD 22,800; (e) Grant audit; The estimated cost of this event is the equivalent of US$ 20,000; (f) evaluation, identification and recommendations on staffing and training for procurement; the estimated cost of this event is the equivalent of US$ 25,400; (g) other technical assistance; the estimated cost of this event is the equivalent of US$ 80,000.  

             2. The implementation as a whole  

     2.1 The Recipient, (a) carries out activities through the Committee on Water Resources of the Ministry of Agriculture of the Republic of Kazakhstan in compliance with existing requirements and achieving the intended results; (b) immediately provides funds, equipment, services and other resources required for this purpose; (c) provides all information related to Activities and the use of Grant funds, which the Bank reasonably requests; (d) periodically exchanges views with representatives of the Bank on the progress and results of Activities; (e) takes all necessary measures required to enable the Bank to visit the territory of the Republic of Kazakhstan for purposes related to the Grant; (f) ensures that all goods and services financed from the Grant are used exclusively for the purposes of the Project.         Without limiting the foregoing, the Recipient, if requested by the Bank, immediately prepares and submits to the Bank a report acceptable to the Bank in form and content on the results and impact of the Events.  

             3. Purchases  

     3.1. In the absence of other agreements with the Bank, purchases of consulting services and goods necessary for the implementation of Activities and subject to Grant financing are governed by the provisions of Appendix I to this Annex.         3.2. The Recipient shall ensure that all imported goods subject to Grant financing are insured against the risks associated with their purchase, transportation and delivery to the place of use or installation, and that the corresponding insurance indemnity is paid in freely convertible currency in order to ensure the replacement or repair of such goods. The Recipient shall ensure that the operation and maintenance of any facilities related to the implementation of Measures is always carried out using appropriate methods and that any repairs or upgrades to such facilities are carried out promptly as necessary.  

             4. Withdrawal of Grant funds  

     4.1. Grant funds are credited to the account opened by the Bank in its accounting documents in the name of the Recipient (Grant account), and may be withdrawn from this account by the Recipient in accordance with the provisions of this Section 4 to pay for the reasonable cost of goods and services necessary for the implementation of Activities and subject to financing from the Grant funds.         4.2. Expenses under the following items may be financed from the Grant funds and are used exclusively for the implementation of Activities:  

       Item Amount of allocated % of expenses to be funded from the Grant (in US dollars)  

                                    [100 %1]  

(1) Consulting 820700 services  

(2) Goods 15,000 100% of expenses in foreign currency 100% of expenses in local currency [(ex-factory value)] and 85% of expenses in local currency for other items in the framework of purchases on the domestic market  

(3) Additional 25,000 90% operating cost ___________________________________________________________________ Total 860700   ___________________________________________________________________  

For the purposes of this paragraph: (a) the term "expenses in foreign currency" means expenses in the currency of any country other than the Republic of Kazakhstan for the payment of goods or services supplied from the territory of any country other than the Republic of Kazakhstan;         (b) the term "expenses in local currency" means any expenses that are not expenses in a foreign currency, provided, however, that if the currency of the Republic of Kazakhstan is also the currency of another country from whose territory goods and services are supplied, expenses in that currency to pay for such goods or services are considered expenses in a foreign currency.;         (c) The term "additional operating costs" means additional operating costs incurred by the Recipient under the Grant, including minor office equipment (paper, stationery and other office equipment supplies), printing, faxing, translation, written and oral, communication and transportation services.  

     4.3. Notwithstanding the provisions of clause 4.2:  

     (a) funds may not be withdrawn from the Grant Account: (i) to pay expenses incurred prior to the date of signing this Letter of Agreement by the Bank; (ii) to pay any taxes levied by the Recipient or on the Recipient's territory; (iii) to finance expenses on the territory of a non-member country. a member of the Bank, or to pay for goods produced in the territory or services provided from the territory of such a country; or (iv) to make any payments to individuals or legal entities or to finance the import of goods, if such payments or imports, to the best of the Bank's knowledge, are prohibited by a decision of the UN Security Council adopted in accordance with Chapter VII of the UN Charter.;         (b) funds may not be withdrawn from the Grant Account after June 30, 2004 or a later date, which the Bank will indicate in a written notification to the Recipient (Closing Date), provided that, except in special circumstances, the Closing Date is not postponed so that it occurs later than the expected date of the Bank's approval of funds financing of the Project. However, Grant funds may be withdrawn after the Closing Date to pay for expenses incurred prior to the Closing Date if the relevant withdrawal request is received by the Bank within four months of the Closing Date, after which any remaining Grant amount will be cancelled.; and (c) if, in the opinion of the Bank, the amount of the Grant allocated under any item specified in the table in paragraph 4.2 proves insufficient to finance the costs of this item, the Bank, by sending a written notification to the Recipient, may transfer to this item such amount of the Grant funds allocated for another item that, according to the Bank, it will not be required to finance other expenses.         4.4. If the Recipient wishes to withdraw any amount of funds from the Grant Account, he must submit to the Bank a written request for withdrawal of this amount in the form specified by the Bank. Withdrawal requests are: (a) signed on behalf of the Recipient by the Minister of Finance or another person who has received written authority from him; and (b) accompanied by supporting documents reasonably requested by the Bank. Certified samples of the signature of the person authorized to sign withdrawal requests are submitted together with the first application, which bears his or her signature. Each request for withdrawal of a certain amount of the Grant and the supporting documentation must be sufficient in form and content to convince the Bank that the Recipient has the right to withdraw this amount from the Grant account and that this amount will be used for the implementation of Activities. The Bank pays the amounts withdrawn by the Recipient from the Grant account only to the Recipient himself or on his behalf.         4.5. The Bank may require that withdrawals from the Grant Account be made based on expense statements to pay for the costs of contracts for: (a) consulting firms that cost less than $100,000; (b) individual consultant services that cost less than $50,000.; (c) goods and (d) additional operating costs, all of which are carried out in accordance with the terms and conditions that the Bank defines in the notification to the Recipient.         4.6. Withdrawal of Grant funds is made in the Grant currency. The Bank, at the request of the Recipient and acting as the Recipient's representative, buys with the Grant currency withdrawn from the Grant account those currencies that are necessary to pay for expenses financed from the Grant funds. If, for the purposes of this Letter of Agreement, it is necessary to determine the value of one currency in relation to another, this value is reasonably determined by the Bank.         4.7. In order to facilitate the implementation of the Measures, the Recipient may open and maintain a special deposit account in US dollars (Special Account) with a commercial bank and on terms satisfactory to the Bank, including adequate protection of this account from offsets, seizure or annexation. Deposits to a Special Account and payments from a Special Account are made in accordance with the provisions of Appendix II to this Annex.  

             5. Accounting accounts and audit  

     5.1. (a) The Recipient maintains or ensures the maintenance of a financial management system, including accounting documents and accounting accounts, and prepares financial statements in a form acceptable to the Bank that properly reflect transactions, resources and expenses related to the implementation of Activities, in accordance with good accounting practices.         (b) The Recipient must: (i) have the accounting documents, accounting accounts and financial statements referred to in subparagraph (a) above [as well as accounting documents and accounting accounts related to the Special Account] for each financial year that has been audited by independent auditors acceptable to the Bank, in accordance with consistently applicable auditing standards acceptable to the Bank; (ii) provide to the Bank immediately after preparation, but in any case no later than six months after the end of each year: (A) certified copies of the financial statements referred to in subparagraph (a) of this section for each audited year, and (C) the opinion of the above-mentioned auditors on these reports, accounting documents and accounting accounts, as well as an audit report, the scope and degree of detail of which are reasonably determined by the Bank.; and (iii) submit to the Bank, upon its reasonable periodic requests, other information related to these accounting documents, accounting accounts and their audit, as well as the above-mentioned auditors.         (c) For all expenses for which funds have been withdrawn from the Grant account on the basis of expense statements, the Recipient must: (i) maintain or ensure that accounting documents and accounts reflecting these expenses are maintained in accordance with subparagraph (a) of this section.; (ii) keep, for at least one year after the Bank receives the audit report for the financial year in which the Grant account was last withdrawn, all accounting documents (contracts, orders, invoices, invoices, receipts, and other documents) confirming these expenses; (iii) ensure that representatives of the Bank have the opportunity to verify these accounting documents; and (iv) take measures to ensure that these accounting documents and accounting accounts undergo the annual audit referred to in subparagraph (b) of this section, and that the report on such audit contains a separate opinion from the above auditors as to whether the expense statements submitted during such a financial year, as well as the procedures and the internal control mechanisms applied during their preparation are sufficient grounds for appropriate withdrawal of funds.  

             6. Suspension and cancellation of rights  

     6.1. The Bank, by sending a corresponding notification to the Recipient, may at any time suspend the Recipient's right to further withdraw funds from the Grant account if any of the following events have occurred and are continuing: (a) The Recipient has failed to fulfill any of its obligations set forth in this document; or (b) the right of the Recipient or any other person to whom the Bank has provided a loan under the guarantee of the Republic of Kazakhstan to withdraw funds under any loan agreement with the Bank or any development loan agreement with the International Development Association has been suspended.         6.2. The Bank, by sending a corresponding written notification to the Recipient, may revoke the Recipient's right to further withdraw funds from the Grant Account: (a) at any time after the Recipient's right to withdraw funds from the Grant Account has been suspended in accordance with the provisions of paragraph 6.1 of this section; (b) if within six months after the entry into force by virtue of this Grant Agreement, the Recipient was unable to take measures satisfactory to the Bank in order to implement the Measures; or (c) if, after consulting with the Recipient, the Bank has decided to withdraw further support for the Project; or (d) if the Recipient has withdrawn its request for the Bank's assistance in financing the Project.  

Appendix I  

         Purchases  

             Section I. Consulting services    

         Part A: General provisions  

     Consultant services are procured in accordance with the provisions of Sections I and IV of the Guidelines "Selection and Hiring of Consultants by Borrowers of the World Bank", published by the Bank in January 1997 and revised in September 1997, January 1999 and May 2002 (Consultant Guidelines), as well as in accordance with paragraph 1 of Annex 1 to the Guidelines, Appendix 2 to the Manual and the following provisions of this section.  

             Part B: Selection based on quality and cost  

[1.] With the exception of other provisions of Part C of this section, consultant services are purchased under contracts awarded in accordance with the provisions of Section II of the Consultant Guidelines and the provisions of paragraphs 3.13-3.18 of the Guidelines, which apply to the selection of consultants based on quality and cost.         2. The following provisions apply to the services of consultants who are procured under contracts awarded in accordance with the provisions of the previous paragraph: the short list of consultants for the provision of social assessment services and audit functions, with an estimated cost of less than 100,000 US dollars per contract, may include only national consultants, as provided for in the regulations paragraph 2.7 and footnote 8 of the Consultant Manual.  

             Part C: Other procedures for the selection of Consultants    

         1. Selection based on a fixed budget  

     The services for the preparation of a feasibility study and environmental impact assessment may be procured under contracts awarded in accordance with the provisions of paragraphs 3.1 and 3.5 of the Consultant Guidelines.  

             2. Selection by qualification of consultants  

     Social assessment and audit services with an estimated cost of less than USD 100,000 per contract may be purchased under contracts awarded in accordance with paragraphs 3.1 and 3.7 of the Consultant Guidelines.  

             3. Individual consultants  

     The services of individual consultants in financial and economic assessments, procurement analysis and other types of technical assistance that meet the requirements set out in paragraph 5.1 of the Consultant Manual are purchased under contracts awarded in accordance with the provisions of paragraphs 5.1-5.3 of the Consultant Manual.  

             Part D: The Bank's review of the selection of consultants    

         1. Selection planning  

     Before sending any invitations to bid to consultants, a selection plan for consultants should be submitted for consideration and approval by the Bank, including the estimated cost of contracts, the layout of contract packages, and applicable selection criteria and procedures. All advisory services should be selected in accordance with this plan [(subject to periodic clarifications)], which must be approved by the Bank.  

             2. Preliminary review  

     (a) For each contract involving the hiring of consulting firms with an estimated value of 100,000 US dollars or more, the procedures set out in paragraphs 2, 3 and 5 of Appendix 1 to the Consultant Manual apply.         (b) For each contract involving the hiring of individual consultants with an estimated cost of USD 50,000 or more, a report on the results of a comparison of candidates' qualifications and experience, as well as terms of reference and conditions of hiring consultants, is submitted for preliminary review and approval by the Bank. The contract is awarded only after obtaining the Bank's consent. Such contracts are subject to the provisions of paragraph 3 of Annex 1 to the Guidance on Consultants.  

             3. Follow-up review  

     Each contract that is not governed by the provisions of paragraph 2 of this Part is subject to the procedures set out in paragraph 4 of Annex 1 to the Guidance on Consultants.  

             Section II. Purchase of goods  

     The goods are purchased: (a) in accordance with the provisions of Section I of the IBRD Loans and MAP Loans Procurement Guidelines, published by the Bank in January 1995 and reviewed in January and August 1996, September 1997 and January 1999 (Guidelines); and (b) for contracts awarded using procedures procurement in free trade in accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. Such contracts are subject to the review procedures set out in paragraph 4 of Annex 1 to the Guidelines, provided that the words "bids" in this paragraph are read as "prices".  

     Appendix II  

         Special account  

     1. For the purposes of this Addendum:  

     (a) the term "eligible items" means the items listed in the table in paragraph 4.2 of the Annex to this Letter of Agreement; (b) the term "eligible expenses" means expenses for the payment of a reasonable cost of goods and services necessary for the implementation of Activities and to be funded from the Grant; and (c) the term "Authorized Deduction" means an amount equivalent to 75,000 US dollars, which must be withdrawn from the Grant account and deposited into a Special Account in accordance with paragraph 3 (a) of this Addendum.         2. Payments from a Special Account are made solely to finance eligible expenses in accordance with the provisions of this Addendum.         3. Upon receipt by the Bank of documents satisfactory to it confirming that the Special Account is properly opened, the withdrawal of funds of the Authorized Amount and subsequent withdrawal of funds to replenish the Special Account shall be carried out as follows: (a) The Recipient shall send to the Bank an application or requests for depositing to the Special Account for amounts or amounts not exceeding the total amount The authorized amount. Based on such an application or applications, the Bank, on behalf of the Recipient, withdraws the amount or amounts requested by the Recipient from the Grant account and deposits them into a Special Account.         (b) (i) In order to replenish the Special Account, the Recipient sends requests to the Bank for depositing funds to the Special Account, the frequency of which is determined by the Bank.         (ii) Prior to or together with the filing of such an application, the Recipient shall send to the Bank the documentation and other supporting documents required in accordance with paragraph 4 of this Addendum for making the payment or payments in connection with which funds are requested to replenish the Special Account. Based on each application received, the Bank, on behalf of the Recipient, withdraws from the Grant Account and deposits into a Special Account the amount that was requested by the Recipient and which, as shown by the above-mentioned and other documents, was paid from a Special Account to pay acceptable expenses. All funds deposited in this way are withdrawn by the Bank from the Grant account within acceptable items and in appropriate equivalent amounts, confirmed by the above and other documents.         4. With respect to each payment made by the Recipient from a Special Account, the Recipient must, at the reasonable request of the Bank, submit to the Bank documents and other evidence that this payment was made solely to cover acceptable expenses.         5. Notwithstanding the provisions of paragraph 3 of this Addendum, the Bank is not obligated to deposit additional funds into a Special Account: (a) if at some stage the Bank decides that in the future the Recipient must withdraw all funds directly from the Grant Account;         (b) if the Recipient does not submit to the Bank, within the time period specified in sub-paragraph (ii) of paragraph 5.1 (b) of the Annex to this Letter of Agreement, any audit report that must be submitted to the Bank in accordance with this paragraph in connection with the audit of accounting documents and accounting accounts related to the Special (c) if at any stage the Bank notifies the Recipient of its intention to suspend, in whole or in part, the Recipient's right to withdraw the Grant from the account in accordance with the provisions of paragraph 6.1 of the Annex to this Letter of Agreement; or (d) as soon as the total amount of the withdrawn Grant funds is equal to the equivalent of twice the Authorized Deduction.         After that, the remaining unspent Grant amount is withdrawn from the Grant Account using the procedures that the Bank will determine in the appropriate notification to the Recipient. Such further withdrawals are made only after and to the extent that the Bank is satisfied that all funds remaining in the Special Account at the time of such notification will be used to pay acceptable expenses.         6. (a) If the Bank decides at any stage that any payment from the Special Account: (i) has been made to cover expenses or amounts that are not acceptable under paragraph 2 of this Addendum; or (ii) has not been confirmed by documents submitted to the Bank, the Recipient, upon receiving the appropriate notification from the Bank, must immediately: (A) submit additional supporting documents requested by the Bank; or (C) deposit to a Special Account (or, at the request of the Bank, refund to the Bank) an amount equal to the amount of such payment or that part of it that is not acceptable or has not been confirmed. In the absence of other arrangements with the Bank, the Bank will not deposit any additional funds into the Special Account until the Recipient submits such supporting documents or deposits the funds or returns them.         (b) If the Bank decides at any stage that any remaining amount in the Special Account will not be required to make further payments to finance eligible expenses, the Recipient, upon receiving the appropriate notification from the Bank, must immediately refund the remaining amount to the Bank.  

     RCPI's note: the following text is in English (see the paper version).  

President    

Republic of Kazakhstan     

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