On the Ratification of the Loan Agreement (Routine Operations) (Project for the reconstruction of the CAREC Corridor 3 road [Shymkent-Tashkent road section] [access to the Western Europe-Western People's Republic of China International Transit Corridor]) between the Republic of Kazakhstan and the Asian Development Bank

Law of the Republic of Kazakhstan dated November 15, 2013 No. 139-V 3PK

     To ratify Loan Agreement (Routine Operations) (CAREC Corridor 3 Road Reconstruction Project [Shymkent–Tashkent road section] [access to the Western Europe–Western People's Republic of China International Transit Corridor]) between the Republic of Kazakhstan and the Asian Development Bank, signed in Astana on May 28, 2013.

     President of the Republic of Kazakhstan N. NAZARBAYEV

                                                LOAN NUMBER 2916-KAZ

LOAN AGREEMENT (Normal operations)

(the CAREC Corridor 3 road reconstruction project [Shymkent–Tashkent road section] [access to the Western Europe–Western People's Republic of China International Transit Corridor])

between

BY THE REPUBLIC OF KAZAKHSTAN

and

BY THE ASIAN DEVELOPMENT BANK

DATED MAY 28, 2013

                                                           KAZ 46145

  LOAN AGREEMENT (Normal operations)

     LOAN AGREEMENT dated May 28, 2013 between the REPUBLIC OF KAZAKHSTAN (the "Borrower") and the ASIAN DEVELOPMENT BANK ("ADB").       WHEREAS (A) the borrower has applied to ADB for a loan for the purposes of the project described in Annex 1 to this Loan Agreement; and (C) ADB has agreed to provide the borrower with a loan from ADB's regular capital resources on the terms and conditions set forth in this document;       TAKING INTO ACCOUNT THE ABOVE, the parties to this Agreement have agreed on the following:

  ARTICLE I

  Loan rules; definitions

     Section 1.01. All provisions of the Loan Rules for ordinary operations applicable to loans at the London Interbank Rate allocated from ADB's ordinary capital resources dated July 1, 2001 (the "Loan Rules") are hereby deemed to apply to this Loan Agreement with the same force and effect as if they were set forth in the text of this Agreement, however, subject to the following amendments:

     (a) Section 3.03 is deleted and replaced by the following:

     Reservation fee; credit

     (a) The borrower will pay the reservation fee for the unclaimed loan amount at the rate and terms stipulated in the Loan Agreement. (b) ADB will provide the borrower with a loan at the rate stipulated in this Loan Agreement, with such loan remaining fixed until the end of the loan term. ADB will apply the loan amount to the interest payable by the borrower.

     (b) Section 3.06 is deleted and replaced by the following:

     Compensation

     (a) After each notification to ADB that the fixed spread applicable to new loans will be reduced, ADB will provide a refund to each borrower with an unclaimed loan to which a higher fixed spread applies. The amount of the refund will be determined by multiplying (i) the difference between the fixed spread applicable to the unclaimed loan and the fixed spread applicable to new loans (expressed as an annual percentage value) by (ii) the principal amount of the unclaimed loan, on which the borrower will pay interest for all interest periods starting from and after effective dates of the lower fixed spread applicable to new loans.       (b) Upon each notification from ADB that its calculations of the financing cost margin in respect of any loan currency (or approved currency) in any half-year have resulted in savings for ADB, ADB will provide a refund to the borrower. The amount of the refund will be determined by multiplying (i) the financing cost margin (expressed as an annual percentage) by (ii) the principal amount of the loan on which the borrower will pay interest during the interest period beginning immediately after the half-year for which the financing cost margin was calculated. ADB will apply the refund amount to the interest payable by the borrower during the interest period beginning immediately after the half-year for which the financing margin was calculated.       (c) Section 3.07 is deleted and replaced by the following:

     Additional amount

     (a) After each notification to ADB that the fixed spread applicable to new loans will be increased, each borrower with an unclaimed loan to which a lower fixed spread applies will pay an additional amount to ADB. The amount of the additional amount will be determined by multiplying (i) the difference between the fixed spread applicable to the new loans and the fixed spread applicable to the unclaimed loan (expressed as an annual percentage value) by (ii) the principal amount of the unclaimed loan, on which the borrower will pay interest for all interest periods starting from and after the effective date of the higher fixed spread applicable to new loans.       (b) Upon each notification from ADB that its calculations of the financing margin in respect of any loan currency (or approved currency) in any half-year resulted in additional costs incurred by ADB, the borrower will pay an additional amount to ADB. The amount of the additional amount will be determined by multiplying (i) the financing cost margin (expressed as an annual percentage) by (ii) the principal amount of the loan on which the borrower will pay interest during the interest period beginning immediately after the half-year for which the financing cost margin was calculated. ADB will add the additional amount to the interest payable by the borrower during the interest period beginning immediately after the half-year for which the financing margin was calculated.

Section 1.02. In each case of use in this Loan Agreement, unless defined in this document or otherwise required by the context, some of the terms defined in the Loan Terms have the corresponding meanings set out in them. The additional terms used in this Loan Agreement have the following meanings:       (a) "CAREC" means the Central Asian Regional Economic Cooperation;       (b) "CAREC Corridor 3" means the transport corridor connecting the Russian Federation with the Middle East and South Asia through countries such as the Islamic Republic of Afghanistan, the Republic of Kazakhstan, the Kyrgyz Republic, the Republic of Tajikistan, and the Republic of Uzbekistan; (c) "Guidance on Attracting Advisory Services" means guidance on the use of consultants by the Asian Development Bank and its borrowers (2010, with periodic amendments);       (d) "Consulting services" means the services to be financed from the loan, as described in paragraph 2 (b) of Annex 1 to this Loan Agreement; (e) "EMP" means the environmental management plan for the project, including any changes made to it, combined into a PEO; (f) "Environmental protection measures" means the principles and requirements set out in chapter V, annex 1 and annex 4 (if applicable) Permanent residence;       (g) "PEO" means the preliminary environmental assessment of the project, including any changes to it, prepared and submitted by the borrower and approved by ADB; (h) "Protective measures for forced resettlement" means the principles and requirements set out in Chapter V, annex 2 and Annex 4 (if applicable) (i) "Km" means a location indicating the number of kilometers on the project road as defined below, and "km" means kilometers;       (j) "GDPR" means the land purchase and resettlement framework document for the project, including any changes made to it, prepared and submitted by the borrower and approved by ADB; (k) "GDPR" means the land purchase and resettlement plan for the project, including any changes made to it, prepared and submitted by the borrower and approved ADB; (l) "Loan Expenditure Handbook" means the ADB Loan Expenditure Handbook (2012, as periodically amended);       (m) "MTK" means the Ministry of Transport and Communications of the borrower and any of its legal successors; (n) "Region" means the territorial administrative unit of the borrower; (o) "RUP" means the project management manual for the project dated August 22, 2012, agreed between the borrower and ADB, with periodic updates in accordance with the relevant administrative procedures of the borrower and ADB; (p) "Procurement Manual" means the ADB Procurement Manual (2010, as periodically amended);       (q) "Procurement Plan" means the procurement plan for the project dated August 22, 2012 and agreed between the borrower and ADB, with periodic updates in accordance with the procurement guidelines, guidance on consulting services and other activities agreed with ADB; (r) "Project Execution Agency" for the purposes and within the framework of The definition of the Loan Terms means the MTK responsible for the execution of the project;       (s) "Project Road" means the section of road that will be reconstructed as part of the project, as described in more detail in paragraph 2 (a) of Annex 1 to this Loan Agreement; (t) "Protective Measures Monitoring Report" means each report prepared and submitted by the borrower to ADB describing progress in the implementation of and compliance with the EMP and PRSP (if applicable), including any corrective and preventive actions; (u) "PMR" means the ADB Protection Policy (2009); and (v) "Works" means construction or civil engineering works financed by loan funds, including services such as drilling or mapping, and project-related services provided as part of a single commitment or turnkey construction contract, with the exception of consulting services.

  ARTICLE II

  Loan

     Section 2.01. (a) ADB agrees to provide a loan to the borrower from ADB's ordinary capital resources in the amount of one hundred and twenty-five million US dollars ($125,000,000), and this amount may be converted periodically by currency conversion in accordance with the provisions of section 2.06 of this Loan Agreement. (b) The loan assumes a principal repayment period of 16 years and the grace period specified in paragraph (c) of this section.       (c) The term "grace period" used in paragraph (b) above means the period preceding the first payment date for repayment of the principal amount of the loan in accordance with the repayment schedule set out in annex 2 to this Loan Agreement.

     Section 2.02. The borrower will pay interest to ADB on the principal amount of the loan, withdrawn and unclaimed, periodically, at a rate for each interest period equal to: (a) LIBOR; and (b) 0.60% per annum in accordance with Section 3.02 of the Loan Terms, minus the loan 0.20% per annum in accordance with Section 3.03 of the Loan Terms.       Section 2.03. The borrower will pay a reservation fee in the amount of 0.15% per annum. This commission is charged on the full loan amount (minus the amounts withdrawn periodically), starting from the date 60 (sixty) days after the date of signing this Loan Agreement. Section 2.04. Interest and other loan payments are payable semi-annually on December 15 and June 15 of each year.       Section 2.05. The Borrower will pay the principal amount of the loan withdrawn from the loan account in accordance with the provisions of Appendix 2 to this Loan Agreement. Section 2.06. (a) The borrower may at any time request any of the following loan terms conversions in order to ensure sound debt management:       (i) a change in the loan currency of the full or part of the loan principal, withdrawn and unclaimed or not withdrawn, to an approved currency; (ii) a change in the interest rate base applicable to the full or partial loan principal, withdrawn and unclaimed, from a floating interest rate to a fixed one or vice versa; and (iii) setting limits on the floating interest rate applicable to the full or partial principal amount of the loan, withdrawn and unclaimed, by setting a maximum or minimum of the specified floating interest rate. (b) Any conversion requested in accordance with paragraph (a) of this section, approved by ADB, will be considered a "Conversion" under as defined in section 2.01(6) of the Loan Rules and will have to enter into force in accordance with the provisions of article V of the Loan Rules and the conversion guidelines.

  ARTICLE III

  Use of loan funds

     Section 3.01. The Borrower will ensure that the loan funds are used to finance project costs in accordance with the provisions of this Loan Agreement. Section 3.02. Loan funds must be allocated and withdrawn in accordance with the provisions of Annex 3 to this Loan Agreement, with periodic amendments to this annex permitted as agreed between the borrower and ADB. Section 3.03. Unless otherwise agreed by ADB, the borrower will purchase or ensure the purchase of cost items from the loan funds in accordance with the provisions of Annex 4 to this Loan Agreement. ADB has the right to refuse to finance a contract for which any such items have not been substantially procured under the procedures agreed upon by the borrower and ADB, or if the terms and conditions of the contract do not meet the requirements of ADB. Section 3.04. Unless ADB may agree otherwise, the borrower will ensure that all expenditure items financed from the loan are used solely for project execution purposes.       Section 3.05. The closing date of the loan for the purposes of Section 9.02 of the Loan Rules is considered to be June 30, 2016, or such other date as may be periodically agreed between the borrower and ADB.

  ARTICLE IV

  Special conditions

Section 4.01. (a) The Borrower will ensure that the project is executed with due responsibility and efficiency and in accordance with sound applicable technical, financial, business and development practices.       (b) During the implementation of the project and the operation of the project facilities, the borrower will fulfill or ensure the fulfillment of all obligations set out in Appendix 5 to this Loan Agreement. Section 4.02. In addition to the loan funds, the borrower will provide timely funds, facilities, services, land plots and other resources necessary for the execution of the project and the operation and maintenance of the project facilities.       Section 4.03. (a) Where applicable, during the implementation of the project, the borrower will ensure the hiring of competent and qualified consultants and contractors acceptable to ADB, to the extent, on terms and conditions that meet the requirements of the borrower and ADB.       (b) The borrower will ensure that the project is implemented in accordance with plans, design decisions, specifications, work schedules and construction methods acceptable to the borrower and ADB, where applicable. The borrower will provide or ensure the provision to ADB, immediately after their preparation, of these plans, design decisions, specifications and work schedules, as well as any significant changes to these documents made subsequently, with the degree of detail that ADB reasonably requires. Section 4.04. The borrower will ensure that all actions of its departments and organizations in relation to project execution and operation of project facilities are carried out and coordinated in accordance with sound administrative policies and procedures.       Section 4.05. (a) The Borrower will (i) maintain separate accounts and separate accounts for the project; (ii) prepare annual financial statements for the project in accordance with accounting principles acceptable to ADB; (iii) conducting an annual audit of such financial statements by independent auditors whose qualifications, work experience, and terms of reference meet ADB requirements, in accordance with international standards on Auditing or equivalent national standards acceptable to ADB; (iv) as part of each such audit, the preparation by the auditors of a report (including the auditors' report on the use of funds loan) and a letter to management (outlining deficiencies in the internal control of the project that were identified during the audit, if any); and (v) providing to ADB, no later than six months after the end of each relevant fiscal year, copies of such audited financial statements, audit report, and management letter in English, as well as other information relevant to these documents and the audit, upon ADB's periodic reasonable request. (b) ADB will disclose the annual audited financial statements for the project and the auditors' report on the financial statements within 30 days from the date of their receipt by posting them on the ADB website.       (c) The Borrower will grant ADB the right, upon request from ADB, to discuss the financial statements for the project and the borrower's financial affairs related to the project with the auditors appointed in accordance with paragraph (a) (iii) above, and will authorize and require any representative of such auditors to participate in any in this discussion at the request of the ADB. The condition is that such a discussion will be held only in the presence of an authorized representative of the borrower, unless the borrower has agreed otherwise.       Section 4.06. The borrower will grant ADB representatives the right to inspect the project and work, as well as any relevant reports and documents.       Section 4.07. The Borrower will ensure that any facilities related to the project are operated, maintained, and repaired in accordance with applicable sound technical, financial, business, and development, operation, and maintenance practices.

  ARTICLE V

  Entry into force

     Section 5.01. The date after the expiration of ninety (90) days after the date of signing of this Loan Agreement is considered to be the effective date of this Loan Agreement for the purposes of Section 10.04 of the Loan Rules.

  ARTICLE VI

  Other provisions

     Section 6.01. The borrower's Minister of Finance acts as the borrower's representative for the purposes of Section 12.02 of the Loan Rules.       Section 6.02. The following details are provided for the purposes of Section 12.01 of the Loan Terms:

     For the borrower

           Ministry of Finance             11 Pobedy Avenue             Astana, 010000 Republic of Kazakhstan

           Fax: +7 (7172) 717-785

     For ADB Asian Development Bank 6 ADB Avenue Mandaluyong City 1550 Metro Manila Philippines

           Fax number:

           (632) 636-2444             (632) 636-2428.

     IN SUPPORT OF THE ABOVE, the parties to this Agreement, represented by their authorized representatives, have ensured that this Loan Agreement is signed with appropriate signatures on the date and year indicated above and delivered to ADB headquarters.

REPUBLIC OF KAZAKHSTAN        

_________________________ Bolat Zhamishev                 Minister                       Ministry of Finance        

ASIAN DEVELOPMENT BANK      

_________________________ Matthew Westfall Authorized Representative

  APPENDIX 1

  Project Description

     1. The objective of the project is to provide an efficient transport network for the borrower on the section of the CAREC Corridor 3 road in the South Kazakhstan region.       2. The project will include the following components: (a) reconstruction of a 36.7 km section of road between 705 km and 742 km of road between Shymkent and Tashkent under the CAREC Corridor 3 in the borrower's South Kazakhstan region; and (b) support for construction supervision and external monitoring of security measures. 3 The project is expected to be completed by December 31, 2015.

  APPENDIX 2

  Loan repayment schedule (Project for the reconstruction of the CAREC Corridor 3 road [Shymkent–Tashkent road section] [access to the Zapadnaya International transit corridor Europe – Western People's Republic of China"])

     1. The following table shows the repayment dates of the loan principal and the percentage of the total loan principal payable on each repayment date of the loan principal (regular installment). If the loan funds were fully withdrawn at the time of the first repayment date for the repayment of the principal amount of the loan, the principal amount of the loan to be repaid by the borrower on each payment date of the principal amount of the loan will be determined by ADB by multiplying: (a) the total principal amount of the loan withdrawn and unclaimed at the time of the first repayment date for the repayment of the principal amount loan amounts; (b) a regular installment for each payment date to repay the principal amount of the loan, and such repayment amount will be adjusted as necessary to deduct any amounts described in paragraph 4 of this annex to which currency conversion applies.

Payment date

The next installment (expressed in %)

December 15th, 2016

3.125000

June 15th, 2017

3.125000

December 15th, 2017

3.125000

June 15th, 2018

3.125000

December 15th, 2018

3.125000

June 15th, 2019

3.125000

December 15th, 2019

3.125000

June 15th, 2020

3.125000

December 15th, 2020

3.125000

June 15, 2021

3.125000

December 15, 2021

3.125000

June 15, 2022

3.125000

December 15, 2022

3.125000

June 15, 2023

3.125000

December 15, 2023

3.125000

June 15th, 2024

3.125000

December 15, 2024

3.125000

June 15, 2025

3.125000

December 15, 2025

3.125000

June 15, 2026

3.125000

December 15, 2026

3.125000

June 15, 2027

3.125000

December 15, 2027

3.125000

June 15th, 2028

3.125000

December 15, 2028

3.125000

June 15th, 2029  

3.125000

December 15, 2029

3.125000

June 15, 2030

3.125000

December 15, 2030

3.125000

June 15th, 2031

3.125000

December 15, 2031

3.125000

June 15th, 2032

3.125000

total

100.000000  

2. If the loan funds have not been fully withdrawn at the time of the first payment date for repayment of the loan principal, the loan principal amount payable by the borrower on each payment date for repayment of the loan principal will be determined as follows:       (a) to the extent that any loan funds that should have been withdrawn at the time of the first payment date will repay the principal amount of the loan, the borrower will repay the amount withdrawn and unclaimed at that date in accordance with paragraph 1 of this annex.       (b) any withdrawal made after the first repayment date for the repayment of the principal amount of the loan is due on each repayment date for the repayment of the principal amount of the loan falling after the date of the withdrawal, in amounts determined by ADB by multiplying the amount of each withdrawal by a fraction, the numerator of which is the initial installment shown in table b in paragraph 1 of this annex, for the above-mentioned payment date for repayment of the principal amount of the loan (Initial Regular Installment), and the denominator of which is the sum of all remaining Initial Regular Contributions for the dates of payments to repay the principal amount of the loan that fall on or after this date, while these amounts of payments will be changed, if necessary, to deduct any amounts specified in paragraph 4 of this annex, to which currency conversion applies.       3. Withdrawals made within two calendar months prior to any of the payment dates for repayment of the principal amount of the loan, solely for the purpose of calculating the principal amounts payable on any day of repayment of the principal amount of the loan, should be considered withdrawn and unclaimed at the time of the second payment date for repayment of the principal amount of the loan after the withdrawal date, and these funds are subject to due on each payment date for repayment of the principal amount of the loan, starting from the second payment date for repayment of the principal amount of the debt after the withdrawal date. 4. Regardless of the provisions of paragraphs 1 and 2 of this annex, when converting currencies in full or partially withdrawn funds of the loan's principal amount into an approved currency, the amount of funds converted into the aforementioned approved currency that is due to be repaid on any of the repayment dates of the loan's principal amount during the conversion period will be determined by ADB by multiplying this amount by the currency of the denomination immediately prior to the aforementioned conversion to either: (i) a currency exchange rate reflecting the principal amounts in the specified approved currency, payable to ADB as part of a currency hedging transaction related to the aforementioned conversion; or (ii) as decided by ADB in accordance with the guidelines for conversion to the exchange rate component of the established rate. 5. If the principal amount of the loan, withdrawn and unclaimed, is periodically denominated in more than one loan currency, the provisions of this annex should be applied separately to the amounts denominated in each loan currency in order to develop a separate repayment schedule for each of these amounts.

  APPENDIX 3

  Allocation and withdrawal of loan funds

     General provisions

     1. The table added to this annex sets out the categories of expenditure items financed from the loan, as well as the allocation of loan funds for each such category (the "Table") (the reference to the concept of "Category" in this annex refers to the category of the table).

     The basis for withdrawing funds from the loan account

     2. Unless otherwise agreed by ADB, the loan funds will be disbursed based on withdrawal percentages for each of the expense items shown in the table.

     Redistribution

     3. Regardless of the allocation of the loan funds and withdrawal percentages shown in the table, (a) if the loan amount allocated to any category is insufficient to finance all agreed expenses of that category, ADB may, by notifying the borrower, (i) reallocate funds allocated to another category to that category, and in the opinion of ADB that are not necessary to finance other expenditures, to the extent necessary to fill the calculated shortfall in funds, and (ii) if this reallocation cannot fully fill the calculated shortfall, reduce the withdrawal percentage for these expenses so that further withdrawals for this category are made until all of these expenses have been covered; and (b) if the loan amount allocated to any category exceeds all agreed expenses in this category, ADB may, by notifying the borrower to redistribute such an excess amount in favor of some other category.

     Loan repayment procedures

     4. Unless otherwise agreed by the ADB, the loan funds are payable in accordance with the ADB Loan Disbursement Handbook.

Addendum to Appendix 3

table

LOAN ALLOCATION AND WITHDRAWAL (project for the reconstruction of the CAREC Corridor 3 road [Shymkent–Tashkent road section] [access to the Western Europe–Western People's Republic of China International Transit Corridor])  

category

 ADB FINANCING

Number

Name  

Total amount allocated for ADB financing ($) Category

The basis for withdrawing funds from the loan account

1

Works

111,000,000

85 % percent of the total requested cost amount  

2

Consulting services  

3,000,000

100 % of the total requested cost amount *

3

Unallocated funds  

11,000,000

Total  

125,000,000

     * Excluding taxes and fees imposed on the borrower's territory.

  APPENDIX 4

  Procurement of works and consulting services

     General provisions

     1. The procurement of works and consulting services is subject to execution and control in accordance with the procurement manual and the consultant engagement manual, respectively.       2. All terms used in this annex and not defined in this Loan Agreement are defined in the procurement manual and/or the consultant engagement manual, where applicable.

     Works

     3. Unless otherwise agreed by the ADB, works should be purchased only on the basis of international competitive bidding.       4. The procurement method, among other things, is subject to execution in accordance with the detailed arrangements and thresholds specified in the Procurement Plan. The borrower has the right to change the procurement method or threshold costs only subject to prior agreement with ADB, and the changes should be reflected in the additions to the Procurement Plan.

     Conditions for the award of the contract

     5. The borrower should not award contracts for work involving environmental impacts until: (a) the EMP has been approved by the borrower's relevant authority; and (b) the borrower has incorporated the relevant EMP provisions into the work contracts.       6. The borrower should not award any work contracts that include forced relocation until the borrower has prepared and submitted to ADB a final PRA (if required) based on a detailed project design decision and has received ADB approval for such PRA.

     Consulting services

     7. Unless otherwise agreed by ADB, and unless otherwise specified in the following paragraph, the borrower will apply selection methods based on quality and price when selecting and engaging advisory services.       8. The borrower will apply the following method in the selection and attraction of the specified advisory services in accordance with, among other things, the procedures described in the procurement plan: selection based on the lowest price to attract the services of external monitoring of security measures.

     Industrial and intellectual property rights

     9. (a) The Borrower will ensure that the purchased works (including, but not limited to, all computer hardware and software and computer systems purchased either separately or as part of other purchased goods and services) do not infringe on the industrial or intellectual property rights or claims of third parties.       (b) The borrower shall ensure that all contracts for the procurement of works contain appropriate assurances, guarantees and, if necessary, guarantees of damages from the contractor or supplier in respect of the cases specified in subparagraph (a) of this paragraph.       10. The borrower will ensure that all contracts with consultants funded by ADB contain appropriate assurances, guarantees and, if necessary, guarantees of compensation from consultants, in order to ensure that the consulting services provided do not infringe on the rights or claims of third parties to industrial or intellectual property.

     ADB review of procurement decisions

11. Contracts acquired in accordance with international competitive procedures and contracts for consulting services are subject to prior review by ADB, unless otherwise agreed between the borrower and ADB and specified in the Procurement Plan.       12. The borrower must obtain approval from the ADB before:       (a) grant any extension of the prescribed period for the completion of work under the contract; or (b) agree to any changes or waivers to the terms of the work contract, including any notices of changes, based on paragraphs (c) and (d) below; or (c) issue any notice of changes to the work contract that will increase the total amount of the original contract price (for the avoidance of doubt, such total amount should take into account any previous or simultaneous notices of changes or orders under such contract); or (d) issue any notice of changes to the work contract that will affect the price by more than 15% of the original contract price (either by increasing or decreasing), even if the cumulative effect of such notification of changes in the total amount will not increase the original contract price. For the avoidance of doubt, such a total amount should take into account any previous or simultaneous notices of changes or orders under such a contract.       13. ADB must respond to each request for approval in accordance with paragraph 12 above within 7 business days (in Manila) after receiving such request from ADB. Such a response will mean that the request has been (a) approved, (b) rejected, (c) deferred until further information or documentation is available; or (d) deferred pending consideration by the ADB Procurement Committee, in each case as determined by ADB. If ADB does not respond within 7 business days (in Manila) after ADB receives such a request, the request (except if the request is subject to review by the ADB Procurement Committee) will be considered approved by ADB. In case (c), the borrower must immediately submit the requested information or documentation to ADB, and ADB must respond to the request within 7 business days (in Manila) after receiving such requested information or documentation to the satisfaction of ADB. In case (d), ADB must notify the borrower of the Procurement Committee's decision within 7 business days (in Manila) after the Procurement Committee makes such a decision.       14. The borrower will, or is required to ensure that the MTK:       (a) submitted to ADB, within 7 days, copies of all documents on extensions, amendments or cancellations of contracts (including notices of changes) after approval by ADB in accordance with paragraph 12 above, and ADB's amendments to contracts; and (b) maintained records of all notices of changes for all work contracts that do not require prior approval by ADB in accordance with paragraph 12 above, and submitted such records to ADB for review every 6 months.

  APPENDIX 5

  Project execution; financial issues

     Implementation measures

     1. The borrower and the MTK will ensure that the project is implemented in accordance with certain measures outlined in the RUP. Any subsequent changes to the RUP will take effect only after approval of such changes by the borrower and the ADB. In the event of any inconsistency between the RUP and this Loan Agreement, the provisions of this Loan Agreement will prevail.

     Environment

     2. The borrower will instruct MTK to ensure that the preparation, design, construction, implementation and operation of the project comply with: (a) all applicable laws and regulations of the borrower related to the environment, health and safety; (b) environmental policy; and (c) all measures and requirements set out in the PEO, EMP, and any corrective or preventive actions outlined in the security measures monitoring report.

     Acquisition of land and forced relocation

     3. The Borrower will instruct the ITC to ensure that all land and right-of-way required for the project are available to the contractor in accordance with the schedule agreed upon under the relevant work contract, and that land acquisition and protective relocation measures are implemented in accordance with (a) all applicable laws and regulations of the borrower, related to land acquisition and forced relocation; and (b) protective measures of forced relocation (if required); (c) GDPR; and (d) all measures and requirements set out in the PRSP (if required), as well as any corrective or preventive measures set out in the monitoring report of the security measures. 4. Without limiting the application of protective measures for forced resettlement, DDR, or, if required, PRT, the borrower will instruct the ITC to ensure that neither physical nor economic resettlement takes place in connection with the project until the PRT is fully implemented (if required).

     Indigenous peoples

     5. The borrower will instruct the ITC to ensure that the project does not have any impact on indigenous peoples within the meaning of the PHC. If such an impact occurs, the borrower should instruct the ITC to prepare, disclose, and implement an indigenous peoples plan in accordance with all applicable laws and regulations of the borrower related to indigenous peoples and the ITC.

     Human and financial resources to implement the requirements of protective measures

     6. The borrower must instruct the ITC to provide the necessary budgetary and human resources for the full implementation of the EMP and, if required, the PRSP.

     Protective measures – relevant provisions in the tender documents and work contracts

     7. The borrower will instruct the ITC to ensure that all tender documents and work contracts contain provisions that oblige contractors:       (a) comply with the contractor-related measures set out in the PEO, EMP and, if required, the PRA, and any corrective or preventive actions set out in the protective measures monitoring report; (b) provide budgetary funds for all these environmental and social measures;       (c) provide written notification to the ITC of any unforeseen risks related to the environment, resettlement or indigenous peoples, or impacts that arise during the construction, implementation or operation of the project and that have not been addressed in the PEO, EMP and, if necessary, PRSP; (d) sufficiently document the condition of the roads, agricultural land and other infrastructure facilities before the start of transportation of materials and construction; and (e) to restore the tracks, other local infrastructure and agricultural land at least to their pre-design condition after completion of construction.

     Monitoring of protective measures and reporting

     8. The borrower will instruct the MTK to do the following:       (a) submit protective measures monitoring reports to ADB (i) semi-annually during construction and (ii) annually during operation, and disclose relevant information from such reports to affected persons immediately after submission;       (b) if any unforeseen risks related to the environment and/or social risks and impacts not provided for in the PEO, EMP and, if required, PRA, arise during the construction, implementation or operation of the project, it is necessary to immediately inform ADB of the occurrence of such risks or impacts with a detailed description of the events and proposed corrective action plan;       (c) appoint qualified and experienced external experts or qualified NGOs no later than the award date for the work (who, for the avoidance of doubt, should be included in the consulting services financed from the loan funds in accordance with paragraph 2 (b) Annex 1 to this Loan Agreement and Article No. 2 of the table added to Annex 3 to this Loan Agreement), as part of the selection process and terms of reference acceptable to ADB, verify information obtained through project monitoring, as well as facilitate any verification activities by such external experts, and (d) report any actual or potential violations of compliance with the measures and requirements set out in the EMP or PRSP immediately after such violations become known.

     List of prohibited investments

     9. The borrower will ensure that no loan funds are used to finance any activity included in the list of prohibited investment activities provided for in Appendix 5 of the PMZ.

     Labor standards

     10. The borrower will instruct the ITC to ensure that provisions are included in the work contracts so that contractors (a) comply with applicable labor laws and regulations of the borrower and apply appropriate workplace safety standards; (b) do not differentiate between men's and women's pay for equal work; (c) did not use child labor in the construction and maintenance of roads; (d) maximize the employment of the local poor and disadvantaged population for the construction purposes of the project, provided that the requirements for work and efficiency are adequately met, and (e) facilitate the employment of experienced and inexperienced working women.

     Health protection

     11. The borrower will instruct the ITC to ensure the dissemination of information about the risks of sexually transmitted diseases, including HIV/AIDS, among employees of contractors involved in the project, and among local residents living in the immediate vicinity of the project.

     Partner support

12. Without limiting the general meaning of Section 4.02 of this Loan Agreement, the borrower will ensure the availability of all co-financing funds necessary for the timely and effective execution of the project, in the form of annually allocated budgetary funds for the ITC, and ensure that such funds are provided to the ITC on time. The borrower will instruct the ITC to ensure that it includes all the changing financing needs for the project in its annual development programs.

     Construction quality

     13. The borrower will instruct the ITC to ensure that the project is executed in accordance with applicable technical specifications and plans, and that construction supervision, quality control and project management are carried out in accordance with applicable standards and international best practices.

     Preventing illegal trade  

     14. The borrower will ensure that reliable and rigorous measures are fully implemented on the project road to detect and prevent illegal trafficking in humans, wild animals, rare species, and controlled substances.

     Operation and Maintenance (O&M)

     15. Without limiting the general meaning of sections 4.02 and 4.07 of this Agreement and paragraph 12 of this Annex 5, the borrower will allocate from its budget and immediately make available to the ITC sufficient funds for adequate operation and maintenance of the project road, which may be required after the completion of the project and in each subsequent financial year, and ensures that the project road be operated and maintained in accordance with sound practice.

     Governance and anti-corruption

     16. The Borrower and the ITC will (a) follow ADB's Anti-Corruption Policy (1998, as amended) and agree that ADB reserves the right to investigate, directly or through its agents, all alleged cases of corruption, fraud, collusion or coercion related to the project; and (b) to cooperate and facilitate any such investigation to the extent necessary to provide support for the satisfactory conclusion of such investigation.       17. The borrower will instruct the ITC to ensure that anti-corruption provisions acceptable to ADB are included in all tender documents and contracts, including provisions defining ADB's right to audit and verify the records and accounts of all contractors, suppliers, consultants, and other service providers related to the project.

     I hereby certify that this translation corresponds to the text of the Loan Agreement (Normal Operations) (project for the reconstruction of the CAREC Corridor 3 road [Shymkent-Tashkent road section] [access to the Western Europe -Western People's Republic of China International Transit Corridor]) between the Republic of Kazakhstan and the Asian Development Bank in English, done on May 28, 2013 in Astana.

     Head of the State Language and Editing Department of the Document Management and Control Department, State Language Development of the Ministry of Finance of the Republic of Kazakhstan B. Akhmetzhanova

     RCPI's note!       The following is the text of the Agreement in English.

President    

Republic of Kazakhstan     

© 2012. RSE na PHB "Institute of Legislation and Legal Information of the Republic of Kazakhstan" of the Ministry of Justice of the Republic of Kazakhstan  

 Constitution Law Code Standard Decree Order Decision Resolution Lawyer Almaty Lawyer Legal service Legal advice Civil Criminal Administrative cases Disputes Defense Arbitration Law Company Kazakhstan Law Firm Court Cases