An Act to approve the Guarantee by the Commonwealth of the Discharge of the Obligations of the Administration of Papua New Guinea under a Loan Agreement made with the International Bank for Reconstruction and Development, and for purposes connected therewith.
[Assented to 9 June 1972]
BE it enacted by the Queen’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—
Short title.
1. This Act may be cited as the Papua New Guinea Loan (International Bank) Act 1972.
Commencement.
2. This Act shall come into operation on the day on which it receives the Royal Assent.
Definitions.
3. In this Act—
“the Administration” means the Administration or Government of Papua New Guinea;
“the Bank” means the International Bank for Reconstruction and, Development;
“the Guarantee Agreement” means an agreement between the Commonwealth and the Bank, in accordance with the form in the First Schedule to this Act;
“the Loan Agreement” means an agreement between the Administration and the Bank, in accordance with the form in the Second Schedule to this Act, being the Loan Agreement referred to in the Guarantee Agreement.
General Conditions.
4. A copy of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, being the General Conditions Applicable to Loan and Guarantee Agreements referred to in the Guarantee Agreement and the Loan Agreement, is set out in the Third Schedule to the Papua and New Guinea Loan (International Bank) Act 1970.
Approval of Guarantee Agreement.
5.—(1.) The execution and delivery, on behalf of the Commonwealth, of the Guarantee Agreement is approved.
(2.) Upon being executed and delivered, the Guarantee Agreement constitutes a valid and binding obligation of the Commonwealth in accordance with its terms.
Authorization of endorsement of guarantee on Bonds.
6.—(1.) The endorsement, on behalf of the Commonwealth, on the Bonds referred to in Section 2.02 of the Guarantee Agreement, of the guarantee is authorized.
(2.) Upon the guarantee being so endorsed and the Bonds being executed and delivered, the guarantee constitutes a valid and binding obligation of the Commonwealth in accordance with its terms.
Section 1 - Papua New Guinea Loan (International Bank) Act 1972 - Papua New Guinea Loan (International Bank) Act 1972 | Zoe
Appropriation.
7. Any payments by the Commonwealth under the Guarantee Agreement are payable out of the Consolidated Revenue Fund, which is appropriated accordingly.
Moneys to be paid, and documents to be, free of taxes, &c.
8. Notwithstanding anything in any law of the Commonwealth or of a State or Territory of the Commonwealth, whether passed or made before or after the commencement of this Act—
(a) all moneys payable as mentioned in Section 5.01 of the Guarantee Agreement shall be paid without deduction for, and free from, all taxes, as mentioned in that Section;
(b) the documents referred to in Section 5.02 of the Guarantee Agreement shall be free from all taxes, as mentioned in that Section;
(c) all moneys payable as mentioned in Section 5.03 of the Guarantee Agreement shall be paid free from all restrictions, regulations, controls and moratoria, as mentioned in that Section;
(d) all moneys payable as mentioned in Section 7.01 of the Loan Agreement shall be paid without deduction for, and free from, all taxes, as mentioned in that Section;
(e) the documents referred to in Section 7.02 of the Loan Agreement shall be free from all taxes, as mentioned in that Section; and
(f) all moneys payable as mentioned in Section 7.03 of the Loan Agreement shall be paid free from all restrictions, regulations, controls and moratoria, as mentioned in that Section.
Amendment of 1968 Act.
9.—(1.) After section 9 of the Papua and New Guinea Loan (International Bank) Act 1968 the following section is added:—
“10. If an agreement between the Administration of Papua New Guinea and the Bank, in accordance with the form in the Second Schedule to the Papua New Guinea Loan (International Bank) Act 1972 is executed, the references in the last two preceding sections to the Loan Agreement shall, upon the first-mentioned agreement becoming effective, be read as references to that agreement as amended by the first-mentioned agreement.”.
(2.) The Papua and New Guinea Loan (International Bank) Act 1968, as amended by this section, may be cited as the Papua and New Guinea Loan (International Bank) Act 1968–1972.
THE SCHEDULES
FIRST SCHEDULE Section 3.
GUARANTEE AGREEMENT
AGREEMENT, dated , 1972, between The Commonwealth of Australia (hereinafter called the Guarantor) and International Bank for Reconstruction and Development (hereinafter called the Bank).
Whereas by the Loan Agreement of even date herewith between the Bank and The Administration of Papua New Guinea (hereinafter called the Borrower) the Bank has agreed to make to the Borrower a loan in various currencies equivalent to ten million dollars ($10,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Guarantor agree to guarantee the obligations of the Borrower in respect of such loan as hereinafter provided; and
Whereas the Guarantor, in consideration of the Bank’s entering into the Loan Agreement with the Borrower, has agreed so to guarantee such obligations of the Borrower;
Now Therefore the parties hereto hereby agree as follows:
ARTICLE I
General Conditions; Definitions
Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank dated January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the modifications thereof set forth in Schedule 5 to the Loan Agreement (said General Conditions Applicable to Loan and Guarantee Agreements, as so modified, being hereinafter called the General Conditions).
Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in Section 1.02 of the Loan Agreement have the respective meanings therein set forth.
ARTICLE II
Guarantee; Bonds; Provision of Funds
Section 2.01. Without limitation or restriction upon any of its other obligations under the Guarantee Agreement, the Guarantor hereby unconditionally guarantees, as primary obligor and not as surety merely, the due and punctual payment of the principal of, and the interest and other charges on, the Loan and the Bonds, and the premium, if any, on the prepayment of the Loan or the redemption of the Bonds prior to their maturity, all as set forth in the Loan Agreement and in the Bonds.
Section 2.02. The Guarantor shall endorse, in accordance with the provisions of the General Conditions, its guarantee on the Bonds to be executed and delivered by the Borrower. The Treasurer of the Guarantor and such other person or persons as he shall appoint in writing are designated as authorized representatives of the Guarantor for the purposes of Section 8.10 of the General Conditions.
Section 2.03. Without limitation or restriction upon the provisions of Section 2.01 of this Agreement, the Guarantor specifically undertakes, whenever there is reasonable cause to believe that the funds available to the Borrower will be inadequate to meet the estimated expenditures required for the carrying out of the Project, to make arrangements, satisfactory to the Bank, promptly to provide the Borrower or cause the Borrower to be provided with such funds as are needed to meet such expenditures.
ARTICLE III
Other Covenants
Section 3.01. (a) It is the mutual intention of the Guarantor and the Bank that no other external debt shall enjoy any priority over the Loan or the Bonds by way of a lien on public assets.
First Schedule—continued
(b) To that end the Guarantor (i) represents that at the date of this Agreement no lien exists on any public assets as security for any external debt except as otherwise disclosed in writing by the Guarantor to the Bank, and (ii) undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Guarantor or any agency of the Guarantor as security for any external debt, such lien shall equally and ratably secure the payment of the principal of and interest and other charges on the Loan and the Bonds, and that in the creation of any such lien express provision shall be made to that effect; and, within the limits of its constitutional powers, the Guarantor will make the foregoing undertaking effective with respect to liens on assets of the States and Territories of the Guarantor and their agencies (including local governing authorities). The Guarantor shall promptly inform the Bank of the creation of any such lien.
(c) The foregoing representation and undertaking shall not apply to: (i) any lien created on any property at the time of purchase thereof solely as security for the payment of the purchase price of such property; or (ii) any lien created by the Reserve Bank of Australia or the Commonwealth Trading Bank of Australia on any of their assets in the ordinary course of their banking business to secure any indebtedness maturing not more than one year after its date.
Section 3.02. The Guarantor covenants that it will not take any action which would prevent or interfere with the performance by the Borrower of its obligations contained in the Loan Agreement.
Section 3.03. The Guarantor and the Bank agree that only such changes may be made in the Project as shall be mutually acceptable.
ARTICLE IV
Consultation and Information
Section 4.01. The Guarantor and the Bank shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end the Guarantor and the Bank shall from time to time, at the request of either party: (i) exchange views through their representatives with regard to the performance of their respective obligations under the Guarantee Agreement and other matters relating to the purposes of the Loan; and (ii) furnish to the other all such information as it shall reasonably request with regard to the general status of the Loan. On the part of the Guarantor, such information shall include information with respect to financial and economic conditions in the territories of the Guarantor, including its balance of payments, and the external debt of the Guarantor, of any of its political subdivisions and of any agency of the Guarantor or of any such political subdivision.
Section 4.02. (a) The Guarantor shall promptly inform the Bank of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Loan or the maintenance of the service thereof.
(b) The Guarantor shall afford all reasonable opportunity for accredited representatives of the Bank to visit any part of the territories of the Guarantor for purposes related to the Loan.
ARTICLE V
Taxes and Restrictions
Section 5.01. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid without deduction for, and free from, any taxes imposed under the laws of the Guarantor or laws in effect in its territories; provided, however, that the foregoing shall not apply to taxation of payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Guarantor or of its territories.
Section 5.02. The Guarantee Agreement, any instrument made pursuant to Section 3.01 of this Agreement, the Loan Agreement and the Bonds shall be free from any taxes that shall be imposed under the laws of the Guarantor or laws in effect in its territories on or in connection with the execution, issue, delivery or registration thereof.
Section 5.03. The payment of the principal of, and interest and other charges on, the Loan and the Bonds shall be free from all restrictions, regulations, controls or moratoria of any nature imposed under the laws of the Guarantor or laws in effect in its territories.
First Schedule—continued
ARTICLE VI
Representative of the Guarantor; Addresses
Section 6.01. The Treasurer of the Guarantor is designated as representative of the Guarantor for the purposes of Section 10.03 of the General Conditions.
Section 6.02. The following addresses are specified for the purposes of Section 10.01 of the General Conditions:
For the Guarantor:
The Treasurer
The Commonwealth of Australia
Canberra, A.C.T. 2600
Australia
Cable address:
Comtreasury
Canberra
For the Bank:
International Bank for
Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Intbafrad
Washington, D.C.
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 in the District of Columbia, United States of America, as of the day and year first above written.
SECOND SCHEDULE Section 3.
LOAN AGREEMENT
AGREEMENT, dated , 1972, between International Bank for Reconstruction and Development (hereinafter called the Bank) and The Administration of Papua New Guinea (hereinafter called the Borrower).
ARTICLE I
General Conditions; Definitions
Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the modifications thereof set forth in Schedule 5 to this Agreement (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank, as so modified, being hereinafter called the General Conditions).
Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings herein set forth and the following additional terms have the following meanings:
(a) “Prior Loan Agreement” means the loan agreement between the Bank and the Borrower dated June 28, 1968.
(b) “Prior Guarantee Agreement” means the guarantee agreement between the Guarantor and the Bank dated June 28, 1968.
(c) “Project” means the telecommunications development program 1973–1975 of the Borrower excluding (i) the ongoing works under the Prior Loan Agreement (ii) the construction of the headquarters administrative building and (iii) tools, vehicles and buildings not required for purposes of paragraphs (a) through (f) of Schedule 2 to this Agreement, as of the date of this Agreement and as set forth in the said Schedule.
Second Schedule—continued
ARTICLE II
The Loan
Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to ten million dollars ($10,000,000).
Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule shall be amended from time to time, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed under the Loan Agreement; provided, however, that, except as the Bank shall otherwise agree, no withdrawal shall be made on account of expenditures in the territories of any country which is not a member of the Bank (other than Switzerland) or for goods produced in, or services supplied from, such territories.
Section 2.03. Except as the Bank shall otherwise agree, the goods and services (other than services of consultants) required for the Project and to be financed out of the proceeds of the Loan, shall be procured on the basis of international competition under procedures consistent with the Guidelines for Procurement under World Bank Loans and IDA Credits, published by the Bank in August 1969, as revised in May 1971, and in accordance with, and subject to, the provisions set forth in Schedule 4 to this Agreement.
Section 2.04. The Closing Date shall be June 30, 1976 or such other date as shall be agreed between the Bank and the Borrower.
Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (¾ of 1%) per annum on the principal amount of the Loan not withdrawn from time to time.
Section 2.06. The Borrower shall pay interest at the rate of seven and one-fourth per cent (7¼%) Per annum on the principal amount of the Loan withdrawn and outstanding from time to time.
Section 2.07. Interest and other charges shall be payable semi-annually on May 15 and November 15 in each year.
Section 2.08. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement.
Section 2.09. If and when the Bank shall from time to time request, the Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in Article VIII of the General Conditions.
Section 2.10. The Treasurer of the Borrower and such other person or persons as he shall appoint in writing are designated as authorized representatives of the Borrower for the purposes of Section 8.10 of the General Conditions.
ARTICLE III
Execution of the Project
Section 3.01. The Borrower shall carry out the Project with due diligence and efficiency and in conformity with sound administrative, financial, engineering and public utility practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose.
Section 3.02. The Borrower shall employ engineering consultants acceptable to the Bank upon terms and conditions satisfactory to the Bank in order to assist the Borrower in (a) the preparation of specifications and bid documents, (b) evaluation of bids, (c) planning, and (d) maintenance and operations procedures.
Second Schedule—continued
Section 3.03. The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan against 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 by the Borrower to replace or repair such goods.
Section 3.04. Except as the Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the Project.
Section 3.05. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, specifications, construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request.
(b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Loan, and to disclose the use thereof in the Project; (ii) shall, without limitation upon the provisions of Section 6.03 of this Agreement, 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; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning the Project, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds.
Section 3.06. The Borrower shall take all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for the construction and operation of the facilities included in the Project.
ARTICLE IV
Management and Operations of the Borrower
Section 4.01. The Borrower shall cause its Posts and Telegraphs Department to take out and maintain with responsible insurers, or make other provision satisfactory to the Bank for, insurance of the Borrower’s telecommunications facilities against such risks and in such amounts as shall be consistent with sound practice.
Section 4.02. The Borrower shall: (i) cause its telecommunications facilities and equipment to be adequately operated and maintained, and cause all necessary repairs thereof to be made, all in accordance with sound engineering practices; (ii) provide, promptly as needed, the funds, facilities, services and other resources required for the foregoing; and (iii) cause its Posts and Telegraphs Department to carry out its functions under qualified and experienced management.
ARTICLE V
Financial Covenants
Section 5.01. The Borrower shall cause its Posts and Telegraphs Department to maintain records adequate to reflect in accordance with consistently maintained sound accounting practices its operations and financial condition.
Section 5.02. The Borrower shall: (i) maintain separate accounts for (A) its postal and (B) its telecommunications services; (ii) have such accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Bank; (iii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of said financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iv) furnish to the Bank such other information concerning said accounts and financial statements of the Borrower and the audit thereof as the Bank shall from time to time reasonably request.
Section 5.03. (a) It is the mutual intention of the Borrower and the Bank that no other external debt shall enjoy any priority over the Loan or the Bonds by way of a lien on the assets of the Borrower.
Second Schedule—continued
(b) To that end the Borrower (i) represents that at the date of this Agreement no lien exists on any assets of the Borrower as security for any external debt except as otherwise disclosed in writing by the Borrower to the Bank, and (ii) undertakes that, except as the Bank shall otherwise agree, if any such lien shall be created, it will ipso facto equally and ratably, and at no cost to the Bank or the holders of the Bonds, secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds and in the creation of any such lien express provision will be made to that effect. The Borrower shall promptly inform the Bank of the creation of any such lien.
(c) The foregoing representation and undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date.
(d) As used in this Section, the term “assets of the Borrower” means assets of the Borrower or of any of its political subdivisions or of any agency of the Borrower or of any such political subdivision, including assets of a central bank of the Borrower and assets held on behalf of the Borrower by the Reserve Bank of Australia or any other institution performing the functions of a central bank for the Borrower.
Section 5.04. Except as the Bank shall otherwise agree, the Borrower shall not, on behalf of the Department of Posts and Telegraphs, incur any long-term debt, unless the net revenues of the Department of Posts and Telegraphs for the fiscal year next preceding such incurrence or for a later twelve-month period ended prior to such incurrence, whichever shall have been the greater, shall be not less than 2 times the maximum debt service requirements for any succeeding fiscal year on all long-term indebtedness incurred for the Posts and Telegraphs Department (including the debt to be incurred). For the purposes of this Section:
(a) the term “long-term debt” means any debt maturing by its terms more than one year after the date on which it is originally incurred, including any debt represented by bonds;
(b) debt shall be deemed to be incurred (i) under a loan contract or agreement, on the date the loan contract or agreement providing for such debt is entered into, and (ii) under a guarantee agreement, on the date the agreement providing for such guarantee is entered into;
(c) the term “net revenues” means gross revenues from all sources adjusted to take account of postal and telecommunications tariffs in effect at the time of the calculation even though they were not in effect during the twelve consecutive months to which such revenues related, less operating and administrative expenses, including provision for taxes, if any, but before provision for depreciation and interest and other charges on debt;
(d) the term “debt service requirements” means the aggregate amount of amortization (including sinking fund contributions, if any), interest and other charges on debt; and
(e) whenever it shall be necessary to value in the currency of the Borrower debt payable in another currency, such valuation shall be made on the basis of the rate of exchange at which such other currency is obtainable by the Borrower, at the time such valuation is made, for the purposes of servicing such debt or, if such other currency is not so obtainable, at the rate of exchange that will be reasonably determined by the Bank.
Section 5.05. (a) Except as the Bank shall otherwise agree, the Borrower shall from time to time take all necessary measures, including, but not limited to, adjustments in its tariffs for telecommunications services, as shall be required to enable such services to earn an annual rate of return of not less than ten per cent (10%) in the fiscal year ending June 30, 1975 and twelve per cent (12%) thereafter.
(b) For the purposes of this Section:
(i) the annual rate of return shall be calculated in respect of each fiscal year by relating the telecommunications net operating income for that year to the average of the value of the telecommunications net fixed assets in operation at the beginning and end of that year;
Second Schedule—continued
(ii) the term “net operating income” shall mean the difference between (A) all telecommunications revenues, except dividends and interest from long-term investments, and (B) all telecommunications operating expenses, including direct costs of operation, administration, overhead, adequate maintenance expenses, straight-line depreciation based on the useful life of assets, and taxes (if any), but excluding interest and other charges on debt; and
(iii) the term “value of the telecommunications net fixed assets in operation” shall mean the gross value of fixed assets in operation less the accumulated depreciation, both as valued from time to time in accordance with sound and consistently maintained methods of valuation acceptable to the Bank.
(c) Without limiting the generality of the foregoing, the Borrower shall, until the completion of the Project, consult with the Bank prior to making any reductions in the current telecommunications tariffs.
Section 5.06. Until the completion of the Project, the Borrower shall ensure that its Posts and Telegraphs Department obtains an agreement of the Bank to a revised financing plan before committing itself to any capital expenditure not required for the Project if the aggregate of such capital expenditure made or to be made in any one fiscal year should exceed an amount equivalent to $500,000.
ARTICLE VI
Consultation; Information and Inspection
Section 6.01. The Bank and the Borrower shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end, the Bank and the Borrower shall from time to time, at the request of either party:
(a) exchange views through their representatives with regard to the performance of their respective obligations under the Loan Agreement, the administration, operations and financial condition of its Posts and Telegraphs Department and other matters relating to the purpose of the Loan; and
(b) furnish to the other all such information as it shall reasonably request with regard to the general status of the Loan.
Section 6.02. The Bank and the Borrower shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Loan, the maintenance of the service thereof or the performance by either of them of its obligations under the Loan Agreement.
Section 6.03. The Borrower shall afford all reasonable opportunity for accredited representatives of the Bank to inspect all plants, installations, sites, works, buildings, property and equipment of its Posts and Telegraphs Department and any relevant records and documents and to visit any part of the territories of the Borrower for purposes related to the Loan.
ARTICLE VII
Taxes
Section 7.01. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories; provided, however, that the foregoing shall not apply to taxation of payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Borrower or the Guarantor.
Section 7.02. The Loan Agreement, any instrument made pursuant to Section 5.03 of this Agreement and the Bonds shall be free from any taxes on or in connection with the execution, issue, delivery or registration thereof imposed under the laws of the Borrower or laws in effect in its territories and the Borrower shall pay all such taxes, if any, imposed under the laws of any other country or countries.
Section 7.03. The payment of the principal of, and interest and other charges on, the Loan and the Bonds shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories.
Second Schedule—continued
ARTICLE VIII
Remedies of the Bank; Amendment of Prior Loan Agreement
Section 8.01. If any event specified in Section 7.01 of the General Conditions or in Section 8.03 of this Agreement shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continuance thereof, the Bank, at its option, may by notice to the Borrower and the Guarantor declare the principal of the Loan and of all the Bonds then outstanding to be due and payable immediately together with the interest and other charges thereon and upon any such declaration such principal, interest and charges shall become due and payable immediately, anything to the contrary in the Loan Agreement or in the Bonds notwithstanding.
Section 8.02. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified:
(a) The Borrower or the Guarantor shall have failed to perform any covenant or agreement (other than a covenant or agreement to pay monies) under the Prior Loan Agreement, or the Prior Guarantee Agreement, or the Bonds provided for therein.
(b) The Borrower shall have, prior to June 30, 1975 and without the agreement of the Bank, required its Posts and Telegraphs Department to repay any monies advanced (including interest thereon) to such Department for capital expenditures and shown as Government Funds in the balance sheet of such Department.
(c) The Department of Posts and Telegraphs of the Borrower shall have been made a corporate body or otherwise given separate legal existence in such a form as to affect adversely and substantially the performance of the Borrower’s obligations under this Agreement.
Section 8.03. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified:
Any event specified in paragraph (a), (b) or (c) of Section 8.02 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Guarantor and the Borrower.
Section 8.04. For the purpose of the Prior Loan Agreement, paragraph (c) of Section 5.02 of Loan Regulations No. 4 of the Bank applicable thereto is hereby amended to read as follows:
“(c) A default shall have occurred in the performance of any other covenant or agreement on the part of the Borrower or the Guarantor under the Loan Agreement, the Guarantee Agreement, or the Bonds, or under the loan agreement dated [The date of this Agreement will be inserted.] between the Bank and the Borrower, the guarantee agreement of even date therewith between the Guarantor and the Bank or the bonds provided for therein”;
and the term “Loan Regulations” as used for the purposes of the Prior Loan Agreement shall mean the Loan Regulations No. 4 of the Bank applicable thereto, as modified in the Prior Loan Agreement and as further amended hereby.
Section 8.05. Section 5.08 of the Prior Loan Agreement shall be amended to read as in Section 5.05 of this Agreement provided.
ARTICLE IX
Effective Date; Termination
Section 9.01. The Loan Agreement and the Guarantee Agreement shall not become effective until evidence satisfactory to the Bank shall have been furnished to the Bank:
(a) that the execution and delivery of the Loan Agreement on behalf of the Borrower have been duly authorized or ratified by all necessary governmental action, including action of the Guarantor; and
(b) that the execution and delivery of the Guarantee Agreement on behalf of the Guarantor have been duly authorized or ratified by all necessary governmental action.
Second Schedule—continued
Section 9.02. The date [A date approximately 180 days after the date of signature of this Agreement will be inserted here.] is hereby specified for the purposes of Section 11.04 of the General Conditions.
ARTICLE X
Addresses
Section 10.01. The Treasurer of the Borrower is designated as representative of the Borrower for the purposes of Section 10.03 of the General Conditions.
Section 10.02. The following addresses are specified for the purposes of Section 10.01 of the General Conditions:
For the Bank:
International Bank for
Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Intbafrad
Washington, D.C.
For the Borrower:
Director of Posts and Telegraphs
Port Moresby
Papua New Guinea
Cable address:
Postal
Port Moresby
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 in the District of Columbia, United States of America, as of the day and year first above written.
SCHEDULE 1
Withdrawal of the Proceeds of the Loan
1. The table below sets forth the Categories of imported items to be financed out of the proceeds of the Loan and the allocation of amounts of the Loan to each Category:
Category
Amount of the Loan Allocated (Expressed in Dollar Equivalent)
I. Local Exchanges.............................<br>Equipment and Subscribers’ Plant Cables
3,500,000
II. Long Distance Facilities........................<br>Microwave<br>Radio (Outstations)
4,000,000
III. Telex and Telegraph Facilities....................
1,500,000
IV. Technical Services...........................
500,000
V. Unallocated................................
500,000
TOTAL...........................
10,000,000
Second Schedule—continued
Schedule 1—continued
2. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of:
(a) expenditures for goods produced in, or services supplied from, the territories of the Borrower;
(b) expenditures prior to the date of this Agreement; and
(c) payments for taxes imposed under the laws of the Borrower or laws in effect in its territories on goods or services, or on the importation, manufacture, procurement or supply thereof.
3. Notwithstanding the allocation of an amount of the Loan set forth in the second column of the table in paragraph 1 above:
(a) if the estimate of the expenditures under any Category shall decrease, the amount of the Loan then allocated to such Category and no longer required therefor will be reallocated by the Bank by increasing correspondingly the unallocated amount of the Loan;
(b) if the estimate of the expenditures under any Category shall increase, a corresponding amount will be allocated by the Bank, at the request of the Borrower, to such Category from the unallocated amount of the Loan, subject, however, to the requirements for contingencies, as determined by the Bank, in respect of any other expenditures; and
(c) if the Bank shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Guarantor and the Borrower, cancel such amount of the Loan as in the Bank’s reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan.
SCHEDULE 2
Description of the Project
The Project includes:
(a) installation of about 13,500 lines of local automatic exchange equipment, including the replacement of 3,300 lines of existing equipment;
(b) Provision of local exchange cable network and telephone equipment at subscriber premises to connect about 6,100 additional direct exchange lines;
(c) Installation of UHF/VHF radio systems, and outstation radio equipment to connect 11 base stations;
(d) Installation of multiplex equipment on long distance routes to provide about 650 additional circuits;
(e) Extension of long distance automatic exchanges;
(f) Installation of telex exchanges with a total capacity of about 600 lines and provision of about 500 teleprinters;
(g) Construction of technical and operational buildings for purposes set forth in the preceding paragraphs of this Schedule.
The Project is expected to be completed by June 30, 1975.
Second Schedule—continued
SCHEDULE 3
Amortization Schedule
Date Payment Due
Payment of Principal (expressed in dollars)*
November 15, 1976
170,000
May 15, 1977
175,000
November 15,1977
185,000
May 15, 1978
190,000
November 15, 1978
195,000
May 15, 1979
205,000
November 15, 1979
210,000
May 15, 1980
220,000
November 15, 1980
225,000
May 15, 1981
235,000
November 15, 1981
245,000
May 15, 1982
250,000
November 15, 1982
260,000
May 15, 1983
270,000
November 15, 1983
280,000
May 15, 1984
290,000
November 15, 1984
300,000
May 15, 1985
310,000
November 15, 1985
325,000
May 15, 1986
335,000
November 15, 1986
350,000
May 15, 1987
360,000
November 15, 1987
375,000
May 15, 1988
385,000
November 15, 1988
400,000
May 15, 1989
415,000
November 15, 1989
430,000
May 15, 1990
445,000
November 15, 1990
460,000
May 15, 1991
480,000
November 15, 1991
495,000
May 15, 1992
530,000
Premiums on Prepayment and Redemption
The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions or on the redemption of any Bond prior to its maturity pursuant to Section 8.15 of the General Conditions:
Time of Prepayment or Redemption
Premium
Not more than three years before maturity
1¼%
More than three years but not more than six years before maturity
2%
More than six years but not more than eleven years before maturity
3½%
More than eleven years but not more than sixteen years before maturity
5¼%
More than sixteen years but not more than eighteen years before maturity
6¼%
More than eighteen years before maturity
7¼%
To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal.
Second Schedule—continued
SCHEDULE 4
Procurement
1. With respect to any contract for goods and services, other than automatic exchange equipment referred to in paragraph 3 of this Schedule, estimated to cost the equivalent of $50,000 or more:
(a) Before bids are invited, the Borrower shall furnish to the Bank, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedure as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank’s concurrence before it is issued to the prospective bidders.
(b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Bank of the name of the bidder to whom it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report, by the consultants referred to in Section 3.02 of this Agreement, on the evaluation and comparison of the bids received, together with the recommendations for award of the said consultants, and the reasons for the intended award. The Bank shall, if it determines that the intended award would be inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement, promptly inform the Guarantor and the Borrower and state the reasons for such determination.
(c) The terms and conditions of the contract shall not, without the Bank’s concurrence, materially differ from those on which bids were asked.
(d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of any such contract.
2. With respect to any other contract for goods and services, the Borrower shall furnish to the Bank, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of any such contract, two conformed copies of such contract, together with the analysis of bids, recommendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract is not consistent with the procedures set forth or referred to in Section 2.03 of this Agreement, promptly inform the Borrower and State the reasons for such determination.
3. The automatic exchange equipment required to extend existing installations and estimated to cost about $800,000 may be procured by limiting bids to the three Australian manufacturers of the equipment now existing in these exchanges. Provisions set forth in sub-paragraphs (b), (c) and (d) of paragraph 1 of this Schedule shall also apply to procurements made pursuant to this paragraph.
SCHEDULE 5
Modifications of General Conditions
For the purpose of this Agreement, the provisions of the General Conditions are modified as follows:
A. Paragraph 13 of Section 2.01 is deleted and the following paragraph is substituted therefor:
“13. The term external debt means any debt payable in any medium other than the currency of the Guarantor or 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 if the Guarantor and the Borrower shall cease to have a currency common to them, a debt incurred by one of them in the currency of the other shall be deemed to be the external debt of the former.”
B. The last sentence of Section 4.01 is deleted and the following sentence is substituted therefor:
“Withdrawals from the Loan Account shall be made either in the respective currencies in which the cost of goods and services has been paid or is payable or in dollars, as the Bank may from time to time elect, except that where withdrawals may be made in respect of expenditures in the currency of the Guarantor or of the Borrower, such withdrawals shall be made in such currency or currencies as the Bank shall from time to time reasonably select.”
C. Section 5.01 is deleted.
Second Schedule—continued
Schedule 5—continued
D. Paragraph (e) of Section 6.02 is deleted and the following paragraph is substituted therefor:
“(e) The Guarantor: (i) shall have been suspended from membership in or ceased to be a member of the Bank, or (ii) shall have ceased to be a member of the International Monetary Fund or shall have become, or shall have been declared, ineligible to use the resources of said Fund.”
E. Paragraph (g) of Section 6.02 is deleted and paragraph (h) thereof is renumbered to read as paragraph (g):
F. Paragraphs (i) and (j) of Section 6.02 are deleted and the following new paragraphs (i) and (j) are added to the Section:
“(i) There shall occur any such change in the nature and constitution of the Borrower as shall make it improbable that the Borrower will be able to carry out its obligations under the Loan Agreement or the Bonds.”
“(j) Any other event specified in the Loan Agreement for the purposes of this Section shall have occurred.”
G. Paragraphs (e) and (f) of Section 7.01 are deleted.
H. Paragraph (g) of Section 7.01 is renumbered to read as paragraph (e).
I. The last sentence of paragraph (k) of Section 9.04 is deleted and the following sentence is substituted therefor:
“Notwithstanding the foregoing, this Section shall not authorize any entry of judgement or enforcement of the award against the Borrower or the Guarantor (as the case may be) except as such procedure may be available against the Borrower or the Guarantor (as the case may be) otherwise than by reason of the provisions of this Section.”
J. The first and second sentences of Section 10.03 are deleted and the following sentences are substituted therefor:
“Any action required or permitted to be taken, and any documents required or permitted to be executed, under the Loan Agreement, or the Guarantee Agreement, on behalf of the Borrower or the Guarantor may be taken or executed by the representative of the Borrower or the Guarantor designated in the Loan Agreement or the Guarantee Agreement for the purposes of this Section or any person thereunto authorized in writing by him. Any modification or amplification of the provisions of the Loan Agreement or the Guarantee Agreement, may be agreed to on behalf of the Borrower or the Guarantor by written instrument executed on behalf of the Borrower or the Guarantor by the representative so designated or any person thereunto authorized in writing by him; provided that, in the opinion of such representative, such modification or amplification is reasonable in the circumstances and will not substantially increase the obligations of the Borrower under the Loan Agreement or of the Guarantor under the Guarantee Agreement.”
K. Section 11.01 is deleted and the following Section is substituted therefor:
“Section 11.01. Conditions Precedent to Effectiveness of Loan Agreement and Guarantee Agreement. The Loan Agreement and the Guarantee Agreement shall not become effective until the conditions specified in Section 9.01 of the Loan Agreement shall have been fulfilled.”
L. The eighth paragraph of the Form of Registered Bond without Coupons payable in Dollars set forth in Schedule 1 is deleted and the following paragraph is substituted therefor:
“The principal of the Bonds, the interest accruing thereon and the premium, if any, on the redemption thereof shall be paid without deduction for and free from any taxes, imposts, levies or duties of any nature or any restrictions now or at any time hereafter imposed under the laws of the [name of Guarantor], or of [the Borrower] or laws in effect in their territories; provided, however, that the provisions of this paragraph shall not apply to taxation imposed (a) under the laws of [name of Guarantor] or laws in effect in its territories on or in connection with payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of [name of Guarantor] or of its territories or (b) under the laws of [the Borrower] or laws in effect in its territories on or in connection with payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of [the Borrower] or [the Guarantor].”