Relating to a Loan to the Administration of Papua New Guinea by the Asian Development Bank.
[Assented to 18 April 1973]
BE IT ENACTED by the Queen, the Senate and the House of Representatives of Australia, as follows:—
Short title
This Act may be cited as the Papua New Guinea Loan (Asian Development Bank) Act 1973.
Commencement.
This Act shall come into operation on the day on which it receives the Royal Assent.
Definitions.
In this Act, unless the contrary intention appears—
“Administration” means the Administration or Government of Papua New Guinea;
“Bank” means the Asian Development Bank;
“letter of assurances” means the letter dated 19th January, 1973, containing proposed arrangements between the Commonwealth and the Bank, being the letter a copy of which is set out in Schedule 1;
“Loan Agreement” means the agreement made on 28th December, 1972, between the Administration and the Bank, being the Loan Agreement that is referred to in the letter of assurances and a copy of which is set out in Schedule 2.
Loan Regulations
A copy of the Special Operations Loan Regulations applicable to loans made by the Bank from its Special Funds Resources, being the Special Operations Loan Regulations referred to in the letter of assurances and the Loan Agreement, is set out in the Fourth Schedule to the Papua New Guinea Loan (Asian Development Bank) Act 1972.
Approval of loan.
The Treasurer may, on behalf of the Commonwealth, notify the Bank in writing that the Commonwealth approves the terms and conditions of the Loan referred to in the letter of assurances and thereupon the arrangements contained in the letter of assurances constitute valid and binding obligations of the Commonwealth in accordance with the terms of the letter of assurances.
Appropriation.
Any payment by the Commonwealth under the letter of assurances is payable out of the Consolidated Revenue Fund, which is appropriated accordingly.
Moneys to be paid, and documents to be, free of tax, &c.
Notwithstanding anything in any law of the Commonwealth or of a State or Territory, whether passed or made before or after the commencement of this Act—
(a) all moneys payable as mentioned in paragraph 2 of the letter of assurances shall be paid without deduction for, and free from, all taxes and free from all restrictions as mentioned in that paragraph;
Section 1 - Papua New Guinea Loan (Asian Development Bank) Act 1973 - Papua New Guinea Loan (Asian Development Bank) Act 1973 | Zoe
(b) the document referred to in paragraph 3 of the letter of assurances shall be free from all taxes, as mentioned in that paragraph;
(c) the purchase of any currency required as mentioned in paragraph 4 of the letter of assurances shall be free from all restrictions as mentioned in that paragraph;
(d) all moneys payable as mentioned in paragraph (a) of Section 4.09 of the Loan Agreement shall be paid without deduction for, and free from, any taxes and free from all restrictions as mentioned in that Section; and
(e) the document referred to in paragraph (b) of Section 4.09 of the Loan Agreement shall be free from any taxes, as mentioned in that Section.
SCHEDULE 1 Section 3
LETTER OF ASSURANCES
COMMONWEALTH OF AUSTRALIA
TREASURER
PARLIAMENT HOUSE
CANBERRA 2600
19 JAN 1973
Dear Sirs,
Loan for Road Project
Assurances by the Commonwealth of Australia
In connection with the Loan by the Asian Development Bank (the Bank) to the Administration of Papua New Guinea (Papua New Guinea) in an amount in various currencies equivalent to $US9,800,000 for the Highlands and Hiritano Highways, we propose that the following arrangements should apply between the Commonwealth of Australia (Australia) and the Bank, as from the date that Australia notifies the Bank in writing that it approves the terms and conditions of the Loan.
Until such time as Papua New Guinea assumes responsibility for its own international relations:—
(a) Australia shall be responsible to the Bank for the due performance of Papua New Guinea's obligations punctually to repay the principal of, and interest and other charges on, the Loan.
(b) Within the limits of its constitutional powers, Australia will take or cause to be taken all action necessary or appropriate on its part to empower Papua New Guinea to perform all covenants, agreements and obligations of Papua New Guinea set forth in the Loan Agreement, and will not take or permit any of its political subdivisions or agencies to take any action which might prevent or interfere with the performance by Papua New Guinea of such covenants, agreements and obligations.
(c) Australia and the Bank will from time to time, at the request of either party, and having regard to the extent of internal self-government of Papua New Guinea, exchange views through their representatives with regard to matters relating to the purposes of the Loan and maintenance of the service thereof.
The principal of, and interest and other charges on, the Loan shall be paid without deduction for, and free from, any taxes, and free from ail restrictions, imposed under the laws of Australia or laws in effect in its territories.
The Loan Agreement shall be free from any taxes imposed under the laws of Australia or laws in effect in its territories on or in connection with the execution, delivery or registration thereof.
The purchase of any currency required by Papua New Guinea for the purpose of servicing the Loan shall be free from all restrictions imposed under the laws of Australia or laws in effect in its territories.
Australia and the Bank, together with representatives of Papua New Guinea, will consult in the event of any condition arising, including any proposed or anticipated constitutional change affecting Papua New Guinea, which might interfere with the accomplishment of the purposes of the Loan or the maintenance of the service thereof. If Papua New Guinea should achieve independence while any part of the Loan is outstanding, Australia will use its best endeavours to ensure the continuing security of the Loan and the smooth devolution of responsibility with respect thereto.
The provisions of Section 6.03 of the Special Operations Loan Regulations shall be deemed to apply-
(a) to any controversy or claim relating to any obligations of Papua New Guinea in respect of the Loan for which Australia has undertaken responsibility to the Bank, as if Australia were a Guarantor, and as if this letter were a Guarantee Agreement, within the meaning of that Section, and as if this paragraph were a part of the Loan Agreement;
Schedule 1—continued
(b) to any controversy or claim relating to the assurances by Australia herein, as if it were a controversy between the Bank and a Guarantor or a claim arising under a Guarantee Agreement, and as if this letter were a Guarantee Agreement, within the meaning of that Section;
provided that nothing herein is intended to limit the application or effect of Article 60 of the Agreement establishing the Bank.
Except where the context otherwise requires, references in this letter to Papua New Guinea include the Administration for the time being of Papua New Guinea.
Communications to Australia in relation to the assurances set out in this letter shall be sent to:
The Treasurer
The Commonwealth of Australia
CANBERRA, A.C.T., 2600
AUSTRALIA
(Cable address: Comtreasury, Canberra)
Please indicate your agreement with the foregoing by signing the form of confirmation on the enclosed copy of this letter and returning it to us.
Yours truly,
THE COMMONWEALTH OF
AUSTRALIA
By Frank Crean
TREASURER OF THE COMMONWEALTH
OF AUSTRALIA
__________
SCHEDULE 2 Section 3
LOAN AGREEMENT
(Special Operations)
LOAN AGREEMENT, dated 28 December 1972 between THE ADMINISTRATION OF PAPUA NEW GUINEA (hereinafter called the Borrower) and ASIAN DEVELOPMENT BANK (hereinafter called the Bank).
WHEREAS:
(A) the Borrower has applied to the Bank for a loan for the purposes of the Project described in Schedule 1 of this Agreement (such project being hereinafter called the Project); and
(B) the Bank has agreed to make a loan to the Borrower from the Bank's Special Funds resources upon the terms and conditions hereinafter set forth;
NOW THEREFORE the parties hereto agree as follows:
ARTICLE I
Loan Regulations; Definitions
Section 1.01. The parties to this Loan Agreement accept all the provisions of the Special Operations Loan Regulations of the Bank dated 6 May 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said Special Operations Loan Regulations as so modified being hereinafter called the Loan Regulations):
(a) Section 4.01 of the Loan Regulations is deleted; and
(b) Paragraph 12 of Section 9.01 is amended to read:
“12. The term ‘external debt’ means any debt of the Borrower payable in any medium other than the currency of the Borrower, whether such debt is or may become payable absolutely or at the option of the creditor in such other medium; provided, however, that debt payable to non-residents, including the Commonwealth of Australia, in the currency of the Borrower shall be considered as part of the Borrower's external debt until the Borrower and the Commonwealth of Australia shall cease to have a currency common to them.”
Schedule 2—continued
Section 1.02. Wherever used in this Loan Agreement, unless the context otherwise requires, the several terms defined in the Loan Regulations have the respective meanings therein set forth, and the following additional terms have the following meanings:
(a) “PWD” means the Department of Public Works of the Borrower;
(b) “Project Facilities” means the facilities to be constructed under the Project;
(c) “Interest” includes the service fee referred to in Section 2.03 of the Loan Regulations.
ARTICLE II
The Loan
Section 2.01. The Bank agrees to lend to the Borrower an amount in various currencies equivalent to nine million eight hundred thousand dollars ($9,800,000).
Section 2.02. The Bank shall open a Loan Account on its books in the name of the Borrower and shall credit to such Account the amount of the Loan. The amount of the Loan may be withdrawn from the Loan Account as provided in, and subject to the rights of cancellation and suspension set forth in, this Loan Agreement.
Section 2.03. The Borrower shall pay interest at the rate of three per cent (3%) per annum on the amount of the Loan withdrawn and outstanding from time to time.
Section 2.04. The currency of payment of the service fee is hereby specified for the purposes of Section 3.04 of the Loan Regulations as the currency in which the interest which includes such fee is payable.
Section 2.05. Except as the Borrower and the Bank shall otherwise agree, the charge payable for special commitments entered into by the Bank at the request of the Borrower pursuant to Section 4.02 of the Loan Regulations shall be payable in dollars at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of any such special commitment outstanding from time to time.
Section 2.06. Interest and other charges shall be payable semi-annually on 1 March and 1 September of each year.
Section 2.07. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 2 to this Agreement.
ARTICLE III
Use of Proceeds of the Loan
Section 3.01. The Borrower shall cause the proceeds of the Loan to be applied, in accordance with the provisions of this Loan Agreement, to the financing of expenditures on the Project.
Section, 3.02. The allocation of the proceeds of the Loan among the expenditures on the Project, the goods to be financed from such proceeds and the methods and procedures for procurement of such goods shall be determined by agreement between the Borrower and the Bank, subject to modification by further agreement between them.
Section 3.03. Except as the Borrower and the Bank may otherwise agree:
(a) The Borrower shall be entitled to withdraw from the Loan Account, in respect of
goods to be financed out of the proceeds of the Loan,
(i) such amounts as shall have been paid (or, if the Bank shall so agree, as shall be required to meet payments to be made) for the reasonable cost of goods imported into the territories of the Borrower for the purposes of the Project, and
(ii) the equivalent of such percentage or percentages as shall be established by agreement between the Borrower and the Bank of such amounts as shall have been paid (or, if the Bank shall so agree, as shall be required to meet payments to be made) for the reasonable cost of civil works required for the Project, such percentage or percentages representing the estimated imported component of such works.
Schedule 2—continued
(b) Withdrawals shall be made only in respect of goods which
(i) are produced in (or in the case of services, are supplied from) such member countries of the Bank as shall have been specified by the Bank from time to time as eligible sources for procurement, and
(ii) meet such other eligibility requirements as shall have been specified by the Bank from time to time.
(c) No withdrawals from the Loan Account shall be made on account of expenditures prior to the Effective Date.
Section 3.04. Except as the Borrower and the Bank may otherwise agree, the Borrower shall cause all goods financed out of the proceeds of the Loan to be used exclusively in the carrying out of the Project.
ARTICLE IV
Particular Covenants
Section 4.01. The Borrower shall cause the Project to be carried out with due diligence and efficiency, and in conformity with sound administrative, financial, engineering and highway practices.
Section 4.02. The Borrower shall make available, promptly as needed, the land, funds, facilities, services and other resources which are required, in addition to the proceeds of the Loan for the carrying out of the Project and for the maintenance of the Project Facilities.
Section 4.03. (a) In the carrying out of the Project, the Borrower shall cause consultants and contractors acceptable to the Borrower and the Bank to be employed to an extent and upon terms and conditions acceptable to the Borrower and the Bank.
(b) The Borrower shall cause the Project to be carried out in accordance with plans, design standards, specifications, work schedules and construction methods acceptable to the Borrower and the Bank. Upon request from time to time by the Bank, the Borrower shall promptly furnish or cause to be furnished to the Bank such plans, design standards, specifications and work schedules, and any material modifications subsequently made therein in such detail as the Bank shall reasonably request.
(c) The Borrower shall continue to conduct and coordinate the activities of its departments and agencies in accordance with sound administrative policies and procedures when carrying out the Project.
Section 4.04. (a) The Borrower shall make arrangements satisfactory to the Bank for insurance of the Project Facilities against such risks and in such amount as shall be consistent with sound practice.
(b) Without limiting the generality of the foregoing, the Borrower undertakes to insure or cause to be insured the imported goods to be financed out of the proceeds of the Loan against marine, transit and other hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable to replace or repair such goods.
Section 4.05. The Borrower shall maintain or cause to be maintained records adequate to identify the goods financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of the PWD.
Section 4.06. The Borrower and the Bank shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end,
(a) The Borrower shall furnish or cause to be furnished to the Bank all such information as the Bank shall reasonably request concerning (i) the Loan, and the expenditure of the proceeds and maintenance of the service thereof; (ii) the goods financed out of the proceeds of the Loan; (iii) the Project; (iv) the administration, operations and financial condition of the PWD; (v) financial and economic conditions in the territories of the Borrower and the international balance of payments position of the Borrower; and (vi) other matters relating to the purposes of the Loan.
(b) The Borrower shall promptly inform the Bank of any condition which interferes or threatens to interfere with the accomplishment of the purposes of the Loan, or with the maintenance of the service thereof.
Schedule 2—continued
(c) The Borrower and the Bank shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof.
Section 4.07.(a) The Borrower shall enable the Bank's representatives to inspect the Project, the goods financed out of the proceeds of the Loan and any relevant records and documents.
(b) The Borrower shall afford all reasonable opportunity for representatives of the Bank to visit any part of the territories of the Borrower for purposes related to the Loan.
Section 4.08. It is the mutual intention of the Borrower and the Bank that no other external debt shall enjoy any priority over the Loan by way of a lien on governmental assets. To that end, the Borrower undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower as security for any external debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan, and that in the creation of any such lien express provision will be made to that effect; provided, however, that the foregoing provisions of this Section shall not apply to: (a) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; and (b) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date.
The term "assets of the Borrower" as used in this Section includes: (i) assets of the Borrower; (ii) assets of any political subdivisions of the Borrower; and (iii) assets of any agency of the Borrower or of any of its political subdivisions, including assets held on behalf of the Borrower by the Reserve Bank of Australia or any other institution at any time performing the functions of a central bank for the Borrower.
Section 4.09.(a) The principal of, and interest and other charges on, the Loan shall be paid without deduction for and free from any taxes, and free from all restrictions, imposed under the laws of the Borrower or laws in effect in its territories.
(b) This Loan Agreement shall be free from any taxes that shall be imposed under the laws of the Borrower or laws in effect in its territories on or in connection with the execution, issue, delivery or registration thereof, and the Borrower shall pay all such taxes, if any, imposed under the laws of the country or countries in whose currency the Loan is payable or laws in effect in the territories of such country or countries.
Section 4.10. The Borrower shall take such measures as are necessary to ensure that the Project Facilities are operated, maintained and repaired in accordance with sound engineering and highway practices, and shall make available adequate funds for such purposes.
ARTICLE V
Remedies of the Bank
Section 5.01. If (i) any event specified in paragraph (a) or paragraph (b) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of thirty (30) days or (ii) any event specified in paragraph (c) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of sixty (60) days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the continuance thereof the Bank, at its option, may declare the principal of the Loan then outstanding, together with all interest and other charges thereon, to be due and payable immediately, and upon such declaration such principal, interest and other charges shall become due and payable immediately, anything in this Loan Agreement to the contrary notwithstanding.
ARTICLE VI
Effective Date; Termination
Section 6.01. The following event is specified as an additional condition to the effectiveness of this Loan Agreement within the meaning of Section 8.01 (d) of the Loan Regulations: That the Commonwealth of Australia shall have notified the Bank in writing that it approves the terms and conditions of the Loan.
Section 6.02. The following is specified as an additional matter, within the meaning of Section 8.02(c) of the Loan Regulations, to be included in the opinion or opinions to be furnished to the Bank: That the approval of the Commonwealth of Australia referred to in Section 6.01 has been validly given.
Schedule 2—continued
ARTICLE VII
Miscellaneous
Section 7.01. A date ninety (90) days after the date of this Agreement is specified for the purposes of Section 8.04 of the Loan Regulations.
Section 7.02. The date of 30 September 1977 or such other date as may from time to time be agreed between the Borrower and the Bank is specified for the purposes of paragraph (b) of Section 5.03 of the Loan Regulations as the closing date for withdrawals from the Loan Account.
Section 7.03. The following addresses are specified for the purposes of Section 7.01 of the Loan Regulations:
For the Borrower:
The Treasurer
Box 2249
Konedobu
Papua New Guinea
Alternative address for cables and radiograms:
TREASURER
PORT MORESBY
or
TELEX NO. PNG 109
For the Bank:
Asian Development Bank
P.O. Box 789
Manila, Philippines
Alternative address for cables and radiograms:
ASIANBANK
MANILA
or
TELEX NO. 3587
7425071
7222094
Section 7.04. The Treasurer of the Borrower is designated as the representative of the Borrower for the purposes of Section 7.03 of the Loan Regulations.
IN WITNESS WHEREOF the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and to be delivered at the principal office of the Bank, as of the day and year first above written.
THE ADMINISTRATION OF PAPUA
NEW GUINEA
By JOHN W. KEANY
Authorized Representative
ASIAN DEVELOPMENT BANK
By SHIRO INOUE
President
SCHEDULE 1
Description of the Project
The Project consists of the following:
(a) The upgrading, realignment and sealing of 75 miles of the Highlands Highway between Munum and Waterais in the Morobe District of Papua New Guinea.
(b) The upgrading and new construction of 62.5 miles of the Hiritano Highway between the Veimauri River and Bereina in the Central District of Papua New Guinea.
(c) Consultancy services for detailed engineering design and construction supervision relating to (a) and (b) above.
The Project is scheduled to be completed by March 1977.
* To the extent that any portion of the Loan is repayable in a currency other than dollars (see Loan Regulations, Section 3.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal.