RGII-CA063P-CR
THE PROJECT Central American Electrical Interconnection System (SIEPAC, Sistema de Interconexión Eléctrica para los Países de América Central)
I. Objective
1.01.-The Project has two main objectives: (a) to support the progressive formation and consolidation of a Regional Electricity Market through the creation and establishment of appropriate legal, institutional, and technical mechanisms (a regional coordination and transactions center) that facilitates private sector participation, particularly in the development of generation additions; and (b) to establish the electrical interconnection infrastructure (transmission lines and substations that facilitates electricity exchanges between participants in the regional electricity market).
II. Description
2.01.-The Project consists of a comprehensive operation with two components: (a) a technical cooperation program, financed in parallel with this loan, to support the creation of regional bodies and the start-up of the Regional Electricity Market, including a Regional Coordination and Transactions Center, in which the reliable, secure, and economic operation of the regional electrical system will be coordinated; (b) this loan to finance the Project’s infrastructure works, which include approximately 1,830 km of 230 kV lines running from Panama to Guatemala, and connections to transformation substations in each country. In parallel with these two components, and with resources independent of those of the Project, the participating countries of the region will carry out reinforcement works on the national grids, including transmission lines and transformation substations, to achieve the reliability levels that firm electricity transactions between agents located in different countries will demand.
2.02.-The aforementioned Components are described below:
1. Market Formation Support (concurrent activities) 2.03.-The activities of this component are described in the Regional Non-Reimbursable Technical Cooperation Agreement No. ATN/SF-5502-RG, in the Technical Cooperation Loan Agreement No. 1002/OC-PN granted to the CEAC with the guarantee of the Republic of Panama, in the Technical Cooperation Loan Agreement No. 1002/OC-GU granted to the Instituto Nacional de Electrificación de Guatemala (INDE) with the guarantee of the Republic of Guatemala, and in the Coordination Agreements to be entered into among the Participating Countries and the Participating Electric Utilities referred to in the aforementioned Technical Cooperation Loan Agreements.
2. Transmission Works and Substations 2.04.-This component consists of the design, engineering, and construction of approximately 1,830 kilometers (km) of 230 kV lines, which will connect at the following substations in each country: Guate Norte, Panaluya, and Guate-Este in Guatemala; Ahuachapán, Nejapa, and 15 de Septiembre in El Salvador; Río Lindo, Pavana, and Tamara in Honduras; Planta Nicaragua and Ticuantepe in Nicaragua; Cañas, Parrita, Río Claro, and Palmar Norte in Costa Rica; and Veladero in Panama. In these 16 substations, the SIEPAC Project also includes thirty (30) access bays for the SIEPAC Line. The other necessary works shall be carried out by the countries involved. The approximate length of the lines per country is as follows: Panama: 140 km; Costa Rica: 462 km; Nicaragua: 293 km; Honduras: 370 km; El Salvador: 283 km; and Guatemala: 282 km.
2.05.-The line sections in El Salvador between the Ahuachapán - Nejapa - 15 de Septiembre substations consist of two 230 kV lines mounted on the same tower. Under this component, fifty percent (50%) of the cost of the aforementioned sections shall be financed, and the remaining fifty percent (50%) shall be financed by the Republic of El Salvador as a national project.
III. Project Execution
3.01.-The execution of the first Component, "Market Formation Support," is described in the Agreements mentioned in paragraph 2.03 of this Annex.
3.02.-The execution of the second Component, "Transmission Works and Substations," is carried out within the framework of the SIEPAC Project and the Regional Electricity Market. The Empresa Propietaria de la Línea (EPL), as the Executing Agency of this Component, shall carry out the development, construction, and maintenance management of the interconnection network. The EPL, in turn, shall contract in each of the Participating Countries the national company responsible for operating and maintaining transmission lines of similar characteristics to be responsible for the operation and maintenance of the transmission line.
IV. Project Cost and Financing Plan
4.01.-The estimated cost of the Project is the equivalent of US$320,250,000.00, according to the following distribution by investment categories and by financing sources:
COST AND FINANCING (in millions of US$ equiv.)
| % Of | | | | | | |
|---|
| Investment Categories | Total Cost | Financing Plan | Total Cost | | | | |
| Contribution | SQ | IDB | IDB | | | |
| EPL | | OC | FOE | | | |
| 1. | Engineering and Administration | 21.2 | 9.2 | 3.7 | 5.6 | 2.7 | 6.6% |
| 1.1 | Engineering | 14.3 | 2.3 | 3.7 | 5.6 | 2.7 | 4.5% |
| 1.2 | Administration | 6.9 | 6.9 | 0.0 | 0.0 | 0.0 | 2.2% |
| 2. | Direct Costs | 230.9 | 62.4 | 51.4 | 79.0 | 38.1 | 72.1% |
| 2.1 | Lands and easement (servidumbre) | 30.3 | 30.3 | 0.0 | 0.0 | 0.0 | 9.5% |
| 2.2 | Lines | 163.1 | 26.1 | 41.8 | 64.2 | 31.0 | 50.9% |
| 2.3 | Connection to substations | 17.5 | 2.8 | 4.5 | 6.9 | 3.3 | 5.5% |
| 2.4 | Compensation equipment | 20.0 | 3.2 | 5.1 | 7.9 | 3.8 | 6.2% |
| 3. | Concurrent Expenses | 1.5 | 0.2 | 0.4 | 0.6 | 0.3 | 0.5% |
| 3.1 | Environmental studies | 1.5 | 0.2 | 0.4 | 0.6 | 0.3 | 0.5% |
| 4. | No Specific Allocation | 38.1 | 6.2 | 9.7 | 15.0 | 7.2 | 11.9% |
| 4.1 | Contingencies | 21.3 | 3.5 | 5.4 | 8.4 | 4.0 | 6.7% |
| 4.2 | Escalation | 16.8 | 2.7 | 4.3 | 6.6 | 3.2 | 5.2% |
| 5. | Financial Costs | 28.6 | 2.3 | 4.8 | 19.8 | 1.7 | 8.9% |
| 5.1 | Interest | 24.6 | 0.0 | 4.8 | 18.6 | 1.2 | 7.7% |
| 5.2 | Commitment fee | 2.3 | 2.3 | 0.0 | 0.0 | 0.0 | 0.7% |
| 5.3 | Inspection and supervision | 1.7 | 0.0 | 0.0 | 1.2 | 0.5 | 0.5% |
| 5.3 | Expenses other financial credits | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0% |
| Total Project | 320.3 | 80.3 | 70.0 | 120.0 | 50.0 | 100.0% | |
| Percentages (%) | 100.0% | 25% | 22% | 37% | 16% | | |
V. Bidding
5.01.-When goods and services acquired or contracted for the Project, including those related to transportation and insurance, are financed wholly or partially with Foreign Exchange of the Financing, the procedures and specific bases of the bidding processes or other forms of contracting shall allow the free participation of suppliers of goods and services originating from member countries of the Bank. Consequently, conditions that prevent or restrict the offering of goods or the participation of contractors originating from such countries shall not be established in said procedures and specific bases of the bids or tenders.
5.02.-When credit sources other than the Financing resources or the local counterpart funds are used, the Borrower may agree with the financier on the procedure to be followed for the acquisition of goods and services. However, at the request of the Bank, the Borrower shall demonstrate the reasonableness of both the price agreed upon or paid for the acquisition of said goods and services, and the financial conditions of the credits. The Borrower shall also demonstrate that the quality of the goods meets the technical requirements of the Project.
VI. Consulting Services
6.01.-In the selection and contracting of consulting services financed wholly or partially with Financing resources: (a) the procedures agreed upon with the Bank shall be applied, and (b) no provisions or stipulations that restrict or prevent the participation of consultants originating from member countries of the Bank may be established.
6.02.-With respect to consulting services financed with local counterpart resources, the Bank reserves the right to review and approve, before the Borrower proceeds with the corresponding contracting, the names and backgrounds of the selected firms or individual consultants, the terms of reference, and the agreed fees. This provision does not apply to contracts made with resources from supplier credits.
VII. Maintenance
7.01.-The purpose of maintenance is to preserve the works included in the Project under the operating conditions they were in at the time of their completion, within a level compatible with the services they are to provide.
7.02.-The first annual maintenance plan shall correspond to the fiscal year following the entry into operation of the first of the Project works.
7.03.-The annual maintenance plan shall include: (a) details of the organization responsible for maintenance, the personnel in charge, and the number, type, and condition of the equipment assigned to maintenance; (b) the location, size, and condition of the premises allocated for repair and storage, as well as that of the maintenance camps; (c) information regarding the resources to be invested in maintenance during the current year and the amount to be allocated in the budget for the following year; and (d) a report on the condition of maintenance, based on the adequacy evaluation system established by the Borrower.
RGII-CA064P-CR
BIDDING PROCEDURE Central American Electrical Interconnection System (SIEPAC)
I. SCOPE OF APPLICATION
1.01.-Amount and Types of Entities. This Procedure shall be used by the Bid Inviter in all acquisitions of goods and execution of works for the Project. When the estimated value of such goods or works equals or exceeds the amounts established in the Special Stipulations of this Contract and provided that such entity belongs to the public sector, the acquisition method to be used shall be international public bidding. Included in said sector are companies or other entities in which state participation exceeds 50% of their capital. The contracting of related services, such as transportation of goods, insurance, installation and assembly of equipment, and initial operation and maintenance, is also governed by this Procedure and is subject to the same rules as acquisitions of goods. The contracting of consulting services, however, is governed by different procedures.
1.02.-Local Legislation. The Bid Inviter may apply, on a supplementary basis, formal requirements or procedural details contemplated by local legislation and not included in this Procedure, provided that their application does not conflict with the basic guarantees that the bid processes must meet, nor with the Bank's policies on this matter.
1.03.-Diverse Legal Relationships. The legal relationships between the Bank and the Borrower are governed by this Contract. Said Contract also regulates important aspects of the procurement procedures. However, since the legal relationships between the Bid Inviter and the suppliers of works, goods, and related services are governed by the bidding documents and the respective supply contracts, no supplier or entity that is not a party to this Contract may derive rights or demand payments by reason of this Contract.
1.04.-Basic Responsibilities. Responsibility for the execution and administration of the Project lies with the Borrower and, therefore, the responsibility for the award and administration of the supply contracts also corresponds to the Borrower, all without prejudice to the supervisory powers vested in the Bank.
II. GENERAL RULES
2.01.-Ethical Levels. Both during the bidding process and during the execution stage of the corresponding contracts, the Bidder and the Bid Inviter, as well as any other direct or indirect participant in the procurement processes governed by this Procedure, shall maintain the highest ethical levels and shall not engage in any type of corruption in relation to such processes.
2.02.-International Public Bidding. The international public bidding system shall be used when the acquisition of goods or the execution of works or related services is financed partially or wholly with Foreign Exchange of the Financing and the estimated value of said goods or works equals or exceeds the amounts established in the Special Stipulations of this Contract.
2.03.-Unrestricted Participation of Bidders. When Foreign Exchange of the Financing is used, the procedures and specific conditions of the bidding shall allow the free participation of offerors originating from member countries of the Bank. Consequently, conditions that prevent or restrict the offering of works, goods, and related services, including any mode of transportation, or the participation of offerors originating from those countries, may not be established.
2.04.-Public Bidding That May Be Restricted to the Local Level. The acquisition of goods or the execution of works that are financed entirely with local currency of the Financing or with local counterpart funds, or with a combination of these two types of funds, and whose amounts equal or exceed those indicated in the Special Stipulations of this Contract, shall be carried out through public bidding, which may be restricted to the national level.
2.05.-Other Procedures for Execution of Works or Acquisition of Goods. When the acquisition of goods or the execution of works is financed exclusively with resources that do not come from the Financing or from the Borrower, the Bid Inviter may use procedures agreed upon with the provider of those resources. However, the procedures must be compatible, to the satisfaction of the Bank, with the Borrower's obligation to carry out the Project with due diligence and efficiency. Likewise, the goods and works to be acquired must: (a) be of satisfactory quality and conform to the technical requirements of the Project; (b) have been delivered or completed in a timely manner; and (c) have been acquired at market prices. The Bank may request that the Bid Inviter inform it of the applicable procedure and the results obtained.
2.06.-Procedures Applicable to Offers for Amounts Below the Limits Established in the Special Stipulations.
(a) The acquisition of goods or the execution of works for amounts below those indicated in the Special Stipulations shall be governed, in principle, by the provisions of the respective local legislation. To the extent possible, the Bid Inviter shall establish procedures that allow the participation of several proponents, and shall pay due attention to the aspects of economy, efficiency, and price reasonableness. When Foreign Exchange of the Financing is used, the procedures employed must also allow the participation of offerors of goods or works from the member countries of the Bank.
(b) When this Contract indicates that the Bank's supervision of certain acquisitions shall be carried out ex-post, that is, after the signing of the corresponding procurement contracts, the Bid Inviter shall promptly notify the Bank of each contract, sending it the basic data thereof, and shall retain, so that the Bank may carry out such supervision, the background documentation of the acquisition, and in particular, the following documentation:
(i) the corresponding bidding documents; (ii) the notices and letters relating to the publicity given to the bidding; (iii) the reports that analyzed the offers and recommended the award; and (iv) the corresponding signed contracts. The Bid Inviter further undertakes to submit to the Bank any other additional information that the Bank may require.
(c) Acquisitions supervised ex-post are also subject to the Bank's policies. The Bank reserves the right to (i) not finance or cancel the resources of those contracts whose prior procurement procedure was not in accordance with such policies; (ii) to require the reimbursement, with interest and commissions, of those resources already disbursed for the cited contracts; and (iii) not to recognize, as part of the local counterpart funds, those resources that the Borrower had allocated for the cited contracts. The Bank further reserves the right to establish that for future contracts, supervision shall be carried out ex-ante.
2.07.-Eligible Participants and Goods. The goods or works to be contracted for the Project and that are financed with Financing resources must originate from the member countries of the Bank. To determine such origin, the following rules shall be followed:
1. For the case of bids for works 2.08.-Criteria for Establishing Nationality. Only firms or companies from one of the member countries of the Bank may participate in bids for works. To determine the nationality of an offering firm, the Bid Inviter must verify that:
- a)The firm is constituted and in operation, in accordance with the legal provisions of the member country where the firm has its principal domicile; b) The firm has its principal place of business in the territory of a member country; c) More than 50% of the capital of the firm is owned by one or more natural or juridical persons from one or more member countries or by citizens or "bona fide" residents of those eligible countries; d) The firm constitutes an integral part of the economy of the member country in which it is domiciled; e) There is no arrangement by virtue of which a substantial part of the net profits or other tangible benefits of the firm are credited or paid to natural persons who are not citizens or "bona fide" residents of the member countries; or to juridical persons who are not eligible in accordance with the nationality requirements of this paragraph; f) In the case of a contract for the execution of works, at least 80% of the personnel required to provide services in the country where the work is carried out shall be citizens of a member country, whether such persons are employed directly by the contractor or by subcontractors. For the purposes of this calculation, if it concerns a firm from a country other than the country of construction, citizens or permanent residents of the country where the construction is carried out shall not be taken into account; and g) The foregoing rules shall apply to each of the members of a consortium (association of two or more firms) and to firms that propose to subcontract part of the work.
The requirements referred to in this paragraph must be made known to the interested parties. They must provide the Bid Inviter with the pertinent information to determine their nationality, whether in the prequalification forms, registration forms, or bidding forms, as applicable.
2. For the case of bids for the acquisition of goods 2.09.-Criterion for Establishing the Origin of Goods. Only goods whose country of origin is a member country of the Bank may be acquired. The term "country of origin" means:
- a)The country in which the material or equipment has been extracted, grown, produced, manufactured, or processed; or b) That in which, as a result of manufacturing, processing, or assembly, another commercially recognized article results that differs substantially in its basic characteristics from any of its imported components. The nationality or country of origin of the firm that produces, assembles, distributes, or sells the goods or equipment shall not be relevant in determining their origin.
2.10.—National and Regional Preference Margins for the procurement of goods. In cases of international public bidding for the procurement of goods, the Bidder may apply the following preference margins:
2.11.—National preference margin. When suppliers from the Borrower’s country participate in biddings, the Bidder may apply, in favor of those suppliers, a national preference margin. To do so, it shall use the following criteria:
- a)A good shall be considered of local origin when the cost of the local materials, labor, and services used in its manufacture represents no less than 40 percent of its total cost.
- b)In the comparison of local and foreign bids, the price proposed or offered for articles of national origin shall be the delivery price at the Project site, after deducting: (i) import duties paid on main raw materials or manufactured components and (ii) national sales, consumption, and value-added taxes incorporated into the cost of the article or articles being offered. The local proponent shall provide proof of the amounts to be deducted, in accordance with subparagraphs (i) and (ii) above. The price proposed or offered in the foreign bid shall be the CIF price, excluding import duties, consular fees, and port charges, to which shall be added the handling costs at the port and local transportation from the port or border to the project site in question.
- c)Currency conversion to establish price comparisons shall be made based on the exchange rate applied by the Bank itself in this Contract.
- d)In the award of biddings, the Bidder may add a preference margin of 15% or the actual customs duty, whichever is less, to the CIF price of foreign bids expressed in the equivalent of its national currency.
2.12.—Regional preference margin.
- a)For the purposes of the Contract, the Bank recognizes the following subregional or regional integration agreements: (i) Central American Common Market; (ii) Caribbean Community; (iii) Andean Subregional Integration Agreement, and (iv) Latin American Integration Association. In cases where the Borrower’s country has entered into more than one integration agreement, the subregional preference margin or the regional margin may be applied, according to the country of origin of the good.
- b)When suppliers from a country other than the Borrower’s country, which is a member of an integration agreement to which the Borrower’s country is also a party, participate in a bidding, said suppliers of goods shall be entitled to a regional preference margin that shall be recognized using the following criteria:
(i) A good shall be considered of regional origin when it originates from a country that is a member of an integration agreement to which the Borrower’s country is a party and complies with the rules governing origin and other aspects related to the trade liberalization programs established by the respective agreements.
(ii) The local added value is not less than that stipulated for the national preference margin.
(iii) In the comparison of foreign bids, the Bidder may add to the price of bids for goods originating from countries that are not party to the respective integration agreement either a percentage of 15%, or the difference between the import duty applicable to those goods when they originate from countries that are not party to the integration agreement and that applicable to those goods when they come from countries that are party to the agreement, whichever is less.
2.13.—Association of local and foreign firms. The Bank encourages the participation of local suppliers and contractors in procurement processes, to foster the development of local industry. Local suppliers, industrialists, and contractors may bid independently or in consortiums with foreign firms, but it may not be established that the formation of consortiums or any other type of association between local and foreign firms is mandatory or that mandatory participation percentages are also established.
III. INTERNATIONAL PUBLIC BIDDING
PUBLICITY General Procurement Notice 3.01.—General rule and special requirements. Unless the Bank agrees otherwise, the Project shall require the publication of a General Procurement Notice "GPN". This notice shall be intended to notify interested parties with due advance notice of the possible procurements of works, goods, or services that will take place on account of the Project, as well as their approximate date, and shall include the following information:
- a)Name of the country; b) Reference to the Inter-American Development Bank loan; c) Name of the Project, loan amount, and its purpose; d) Brief description of each of the biddings or group of biddings that would be carried out on account of the Project, with a tentative indication of the quarter or half of each year in which they will take place; e) Brief description of the Bank’s publicity policy for specific biddings, indicating the type of publication that must be used and other sources of information (Embassies or others); and f) Name of the Bidder, its mailing address, telephone, and fax, where interested parties may obtain additional information.
3.02.—Method of publication. When the publication of the GPN has not been processed or carried out prior to the signing of this Contract, the Bank shall be responsible for its publication, on behalf of the Bidder, in the United Nations newspaper called "Development Business". To this end, the Bidder shall send the text of the GPN to be published for review and publication by the Bank, following the requirements indicated in paragraph 3.01, no later than 30 days from the effective date of this Contract. Once the final text is agreed upon, the Bank shall be responsible for its publication, which may be done in any of the official languages of the Bank.
3.03.—Publicity requirements for specific biddings.
- a)Content of the announcement for prequalification. The announcement for prequalification or for enrollment in the register of proponents, as applicable, the text of which must have the prior approval of the Bank, shall include, at a minimum, the following information:
(i) General description of the Project and of the work subject to bidding, its location, and its main characteristics. In the case of a bidding for goods, their description and special characteristics, if any; (ii) The prequalification method proposed to be used; (iii) Approximate dates on which invitations to bid will be made, the bidding proposals will be opened, the works subject to bidding will commence, and their construction will be completed; (iv) The fact that the project subject to bidding is partially financed by the Bank, and that the procurement of goods or contracting of works with said Financing shall be subject to the provisions of this Contract; (v) The place, time, and date on which firms may withdraw the prequalification or registration forms, agreed upon between the Bidder and the Bank, as well as their cost; and (vi) The other requirements that interested parties must fulfill in order to qualify and subsequently be invited or be able to participate in the public biddings.
- b)Content of bidding announcements and invitations to submit proposals. The bidding call announcements published in the press when prequalification has not been carried out, or the invitations to bid delivered or sent to prequalified firms, the texts of which must have the prior approval of the Bank, shall state, at a minimum, the following:
(i) The description of the Project and of the subject of the bidding and the origin of the funds allocated to finance the cost of the procurements or works; (ii) The fact that the project subject to bidding will be partially financed by the Bank, and that the procurement of goods or contracting of works with said Financing shall be subject to the provisions of this Contract; (iii) The general description of the equipment, machinery, and materials required, as well as of the work, with the volumes or quantities of work, its main parts, and the term for its execution; (iv) The office or place, day, and time at which the bidding documents, including the terms, plans, and specifications, as well as the draft contract to be entered into, may be withdrawn; (v) The office where the proposals must be delivered and the authority that is to decide their approval and award; and (vi) The place, day, and time at which the proposals will be opened in the presence of the offerors or their representatives.
(i) Local publicity. Every bidding for goods, works, or related services shall include local publicity. Such publicity consists of the fact that the announcement for prequalification or registration, and the bidding announcement when there is no restricted invitation to prequalified firms, must be published at least twice in a newspaper of wide circulation or, at the Bidder’s option, once in two newspapers of wide circulation.
(ii) International publicity. When biddings are carried out whose estimated value is equal to or exceeds the amounts established in the Special Stipulations of this Contract, in addition to the local publicity referred to in subparagraph (i) above, the Bidder shall carry out international publicity. In these cases, the announcement for prequalification or registration and the bidding announcement, when prequalification has not been carried out, must be published in the United Nations newspaper "Development Business" and, if applicable, in any additional publicity medium indicated in the Special Stipulations.
BIDDING DOCUMENTS 3.04.—Bank approval. The bidding documents shall be approved by the Bank before being delivered to interested parties. These documents must also comply with the requirements established in paragraphs 3.05 through 3.16.
3.05.—Clarity, content, and price of the documents. The bidding documents prepared by the Bidder shall be clear and coherent. They must carefully describe and in all the detail required, the goods, works, or services to be provided; the inclusion of conditions or requirements that hinder the participation of qualified contractors must be avoided; and they must clearly indicate the criteria to be used in the evaluation and comparison of bids. The detail and complexity of the documents may vary according to the nature of the bidding, but generally these documents include: the call for bids; instructions to bidders; bid form; requirements for guarantees; draft contract; technical specifications; list of goods or quantities and, when applicable, a price schedule. If a price is set for the bidding documents, it must reflect the cost of their reproduction and in no case be so high as to discourage competition.
3.06.—Free access to the Bidder. The Bidder shall be available, once the bidding documents have been withdrawn and up to a prudential time before the opening, to answer questions or formulate clarifications to proponents regarding the bidding documents. These consultations shall be answered promptly by the Bidder and the respective clarifications shall be made known to the other interested parties who have withdrawn the bidding documents and to the Bank. The names of the firms that requested clarifications shall not be disclosed.
3.07.—Quality standards. If the bidding documents mention quality standards to which the equipment or materials must conform, the specifications must indicate that goods that meet other recognized standards ensuring quality equal to or superior to the mentioned standards shall also be acceptable.
3.08.—Specifications for equipment; trademarks. The specifications must not make reference to trademarks, catalog numbers, or types of equipment from a specific manufacturer, unless it has been decided that it is necessary to do so to guarantee the inclusion of a specific essential design, or operating, construction, or manufacturing characteristics. In such case, those references must be followed by the words "or equivalent," along with the criteria to establish that equivalence. The specifications shall allow bids for alternative equipment, articles, or materials that have similar characteristics, provide equal service, and are of equal quality to that established in said specifications. In special cases and with the prior approval of the Bank, the specifications may require the supply of an article of a specific brand.
3.09.—Stipulations on currencies. The bidding documents must contain the following provisions regarding currencies:
- a)Currency of the bid. The bidding documents must establish that the supplier may express the bid price in its own currency or, at the supplier’s option, in a single currency selected by the Bidder and indicated in the bidding documents, provided it is widely used in international trade. The supplier who expects to incur expenses in more than one currency and wishes to receive payments in the same currencies as its bid must indicate and justify the portion of its bid price in each of the corresponding currencies. As an alternative, the supplier may express the total price of its bid in a single currency and indicate the percentages of the bid price that must be paid in other currencies and the exchange rates used in the calculations. The bidding documents must clearly indicate the rules and procedures for making the conversion.
- b)Currency for the evaluation and comparison of bids. The currency or currencies in which the Bidder would pay the price of the corresponding goods or works shall be converted to a single currency selected by it and identified in the bidding documents as the currency for the comparison of all proposals. The exchange rate to be used in such evaluation shall be the selling rate for the selected currency, published by an official source and applicable to similar transactions. The effective date for making the exchange rate conversion must be indicated in the bidding documents. Said date must not precede by more than 30 days the date established for the opening of the bids.
- c)Currency to be used for payments. Generally, the payment currency to contractors shall be the same currency or currencies used by the awardee in its bid. When payments must be made in both national currency and foreign currency, the bidding documents must stipulate that the amounts in each currency must be detailed and justified separately. When the price of a bid is set in a specific currency and the offeror has requested to also be paid in other currencies, indicating its needs for said currencies as percentages of its bid price, the exchange rates to be used to make said payments shall be those indicated by the bidder in its bid. The purpose of this is to ensure that the value of the portions of its bid that were expressed in foreign currencies is maintained, avoiding losses or gains. It is the Bidder’s responsibility to clearly establish in the bidding documents and in the corresponding contract that the offeror must comply with the requirements described above, as well as that it may not obtain payment in a currency different from that specified in the bidding rules, bid, and contract.
3.10.—Exchange risk. When payment to the contractor or supplier is based on the conversion of national currency or foreign currency, the exchange risk shall not be borne by the contractor or supplier.
3.11.—Bid security guarantee. Bid bonds or securities for the maintenance of the bid shall not be for such high amounts, nor their validity so prolonged, as to discourage the participation of responsible bidders. The awardee shall have its guarantee returned when the contract is formalized and its bond or performance guarantee for works is accepted. Those who placed second and third shall have theirs returned within a period not exceeding three months, counted from the award or upon formalization of the contract if it occurs before said period. For the other proponents, the guarantee shall be returned within five days following the award.
3.12.—Performance bond or guarantee. The specifications for construction works must require performance bonds or other guarantees that ensure the works will be carried to completion. Their amount shall vary according to the type and magnitude of the works, but must be indicated in the bidding documents and be sufficient to give the Bidder adequate protection. The amount of the bond must ensure that, in the event of default by the contractor in the execution of the works, they will be completed without cost increases. The validity of the bond or guarantee must exceed the term of the works contract, to cover a reasonable guarantee period. If necessary, bonds or guarantees may be required for equipment supply contracts. These guarantees may consist of the retention of a percentage of the total payment during a testing period.
3.13.—Criteria for bid evaluation. The award must be made to the most advantageous bid, which is one that includes factors that, besides price, must be taken into account in the comparison of bids. The latter is the "bid evaluated as the lowest." To select the bid evaluated as the lowest, the bidding documents must clearly establish which factors, besides price, must be taken into account in the evaluation and the value to be given to each factor. These factors must preferably be expressed in monetary terms or, at a minimum, be given a relative weighting in accordance with the criteria indicated in the bidding documents. Factors that are usually taken into account include, among others, transportation costs to the project site; the payment schedule; the delivery time for the works or goods; operating costs; the efficiency and compatibility of the equipment; the availability of maintenance service and spare parts; and the proposed construction methods. The relative weight assigned to these factors must reflect the costs and benefits that said factors will bring to the project. Factors not listed in the bidding documents may not be considered in the evaluation of proposals. The amount, if any, of the price adjustment included in the proposals shall not be taken into account.
3.14.—Rectifiable errors or omissions. The bidding documents must distinguish between rectifiable and non-rectifiable errors or omissions, both for the prequalification stage and for the bid submission stage. A Bidder shall not be automatically disqualified for not having submitted complete information, whether due to inadvertent omission or because the requirement was not clearly established in the bidding documents. Provided that they are errors or omissions of a rectifiable nature—generally because they are omissions related to the verification of data or historical information—the Bidder must allow, within a short period, the interested party to provide the missing information or correct the rectifiable error. However, there are certain types of basic errors or omissions that, due to their seriousness, are not traditionally considered rectifiable. Examples of these are not signing the bid or not submitting a specific guarantee. Finally, it is also not permitted for the correction of errors or omissions to be used by the offeror to alter the substance of its bid or to improve it.
3.15.—Rejection of bids. The bidding documents must provide that the Borrower may reject all bids, in accordance with the guidelines indicated in paragraph 3.43.
3.16.—Draft contract. The draft contract between the Bidder and the awardee must be appropriate for the type of bidding in question. The contract must be drafted with the objective of achieving an equitable distribution of the risks related to the respective operation, so that the most economical price and efficient execution of the operation can be obtained. Said contract must include general and special conditions.
- a)General conditions of the contract. The contract must include general conditions that contain, among others, general obligations of the contractor, provisions on bonds, indemnities, and insurance, penalty and bonus clauses, percentage of payment retention, termination, advances, form, and currency of payment. When applicable, the general conditions must also include the duties and responsibilities of the consultant(s), modifications, additional items, and particular situations of the place where the works are to be carried out that may affect their construction. Special requirements related to some frequent clauses of the general conditions of the contract are included:
(i) Expenses financed with Bank funds chargeable to the contract. The contract shall provide that the contractor or supplier shall not incur expenses for the purposes of the contract to be financed with Loan resources in the territory of a country that is not eligible for Project procurements.
(ii) Payments. The Bidder shall carefully analyze any advance to the supplier or contractor for mobilization expenses that may be authorized once the contract is signed. Other advances that may be authorized, such as materials to be delivered to the work site but not yet incorporated into the work, must be clearly provided for in the contract. When applicable, the progress payments to be made for work performed or goods delivered must be indicated, to avoid excessively high bids as a result of the high working capital cost of the contractor or supplier. At the request of the Bidder, the Bank may make disbursements for the procurement of construction goods and services financed against the Financing, through:
(1) Direct disbursements to the Bidder in the form of advance or reimbursement of expenses; (2) Disbursement to the suppliers of imported goods or to the contractors; and (3) An irrevocable agreement by the Bank to reimburse a commercial bank that has issued or confirmed a letter of credit to a supplier or contractor.
(iii) Price adjustment clauses. When applicable, provisions may be included regarding adjustments (upward or downward) of the contract price for cases in which changes occur resulting from inflation or deflation in the economy, affecting the main cost components of the contract, such as labor, materials, and equipment. The bases upon which said adjustments will be made must be clearly indicated in the bidding documents and in the contract.
(iv) Retention percentages. When applicable, the bidding documents and the contract may stipulate retentions of a certain percentage of the total price to guarantee the fulfillment of the contractor’s obligations, as well as the conditions for their return and final payment.
(v) Penalty and bonus clauses. The contract must include penalty clauses in case delays in the completion of the project result in additional expenses, loss of income, loss of production, or inconvenience for the Borrower. Likewise, the contract may stipulate the payment of a bonus to the contractor for the completion of the contract before the expected term or for exceeding the minimum criteria established in the contract related to performance.
(vi) Force majeure. Among the general conditions of the contract, it is advisable to include clauses stipulating that the partial or total failure by one of the parties of the obligations incumbent upon it in accordance with the contract shall not be considered as a breach of said obligations if it is due to an event of force majeure (which must be defined in the general conditions of the contract).
(vii) Dispute resolution. It is advisable to include in the contract conditions, provisions relating to the applicable law and the forum for dispute resolution.
- b)Special conditions of the contract. The special conditions of the contract include the detailed description of the works to be constructed or the goods to be supplied; the source of financing; special requirements relating to matters such as currencies, payment, bonuses for early completion, and any modification that must be made in relation to what is provided in the general conditions.
Prequalification and registration of proponents 3.17.—Scope of application. General rule. The Bidder shall use, in biddings for the execution of works, the system of prequalification or registration of proponents when dealing with large or complex civil works. The Bidder may also use prequalification or registration for the procurement of goods when it deems it appropriate.
3.18.—Two-envelope system. Unless local legislation prohibits it, the Bank and the Bidder may agree, when circumstances exist that, in the judgment of the parties, make it advisable, to the use of the two-envelope procedure. This procedure must be clearly established in the terms and conditions of the call. Through this procedure:
- a)Every proponent shall submit, at the public opening ceremony, two sealed envelopes, the contents of which shall be the following:
(i) Envelope No. 1. Information on the financial, legal, and technical capacity of the firms. Said information shall refer to topics such as: financial solvency, capacity to contract, general and specific experience, key personnel and machinery available for the project, executed contracts, contracts in progress, and existing commitments and litigation.
(ii) Envelope No. 2. The bid itself with the respective price quotation.
- b)At the public opening ceremony, which shall take place in a public ceremony on the scheduled day and time, Envelopes No. 1 shall be opened and it shall be verified whether the proponents have included the documents required by the terms. If these Envelopes do not contain the required documentation, this fact shall be recorded in the minutes of the session, as well as the information that is missing or incomplete, and Envelopes No. 2 shall be returned unopened to the respective bidders. Once these procedures are completed, the first ceremony shall be concluded, with Envelopes No. 2 remaining sealed for those offerors who had submitted all the information required in Envelopes No. 1.
- c)Based on this information, the prequalification of the offerors shall proceed, within the deadlines indicated in the terms.
- d)Once the prequalification is concluded and approved by the Bank, the second public ceremony shall be held, which shall take place on the date, time, and place that had been indicated with adequate advance notice. In it, Envelopes No. 2 of the firms that were not prequalified shall first be returned, unopened. Then, Envelopes No. 2 of the prequalified firms shall be opened and the price of each bid shall be read aloud, recording in the minutes the prices and most relevant details of the bids.
- e)The final analysis of the proposals and the award shall be carried out within the deadlines set in the bidding terms and once the Bank has given its conformity to the proceedings.
3.19.—Registration of proponents. The register of proponents is a form of prequalification accepted by the Bank. To be acceptable, it is necessary that the registers: (a) are open on a permanent basis or that the opening, whether for updating the data of registered firms or for the incorporation of new firms, is carried out frequently; (b) are open on the occasion of biddings held for projects financed with Bank loans; and (c) do not include requirements that hinder or prevent the participation of foreign firms or violate the principle of equality of applicants.
3.20.—Deadline for carrying out prequalification. The Bidder must carry out the prequalification within a period that harmonizes with the investment schedule agreed upon between the Bidder and the Bank.
3.21.-Content of the prequalification or bidder registration form. The prequalification or registration form, as the case may be, must contain, among others, the following information:
- a)Legal background regarding the constitution, legal nature, and nationality of the bidding company. A copy of the bylaws and the respective constitutive documents shall be attached. The information regarding nationality must comply with the provisions of paragraph 2.08; b) technical background of the company; c) financial situation of the company; d) available personnel and equipment; e) experience in the construction, manufacturing, and installation of goods or works similar to those that constitute the object of the bid (licitación); f) works being carried out or obligations already assumed by the company; g) certification that the company has sufficient personnel and equipment to satisfactorily carry out the works contemplated within the project, and indication of the location of said personnel and equipment; and h) description, in broad terms, of the systems the company would use in the execution of the work.
3.22.-Deadline for submitting the forms. Interested parties shall have a period of at least 45 calendar days, counted from the last publication of the notice, to submit the prequalification or registration form.
This period may be reduced to 30 days when the bid (licitación) is restricted to the national scope.
Selection of Prequalified Parties 3.23.-Qualified firms. Only firms that demonstrate, in accordance with the requirements established in the bid documents (documentos de licitación) or in the registration documents, technical, financial, legal, and administrative capacity to carry out the works may be prequalified or registered in the bidders' registry. Forms that present defects of form or obvious errors may be admitted and their correction required, following the principles indicated in paragraph 3.14.
3.24.-Technical report. The Bidder (Licitante) shall prepare a technical report on the firms that submitted applications, indicating which have been prequalified or duly qualified in the registry and which have not, and giving the reasons therefor. The report shall be sent to the Bank promptly, so that it may express its conformity or reservations in this regard.
3.25.-Notification of results. Once the Bank approves the technical report, the results shall be notified simultaneously to all participating firms.
3.26.-Subsequent disqualifications. Once a firm has been prequalified, it may not be disqualified for the corresponding bid (licitación), unless the prequalification or registration was based on incorrect information submitted by the firm or if circumstances supervening after the date of prequalification or registration have occurred that justify such a decision.
3.27.-Validity of the qualification. After one year has elapsed from the prequalification or registration without a bid (licitación) having been called, the Bidder (Licitante) shall issue a new call for prequalification or registration, to admit new bidders and so that the already prequalified or registered firms update the original information. The new call must meet the requirements established in this Procedure.
3.28.-Lack of bidders.
- a)In the event that fewer than two bidders are prequalified or registered in the first call, a second call shall be made following the same procedure as the first, unless the Bank authorizes a private bid (licitación privada) under the terms established in the following subparagraph, or to directly select the contractor.
- b)If, after the second call, two or more firms are not prequalified, the prequalification may be declared void and, with the prior approval of the Bank, a private bid (licitación privada) may be carried out, inviting at least three firms, including the prequalified one, if any.
3.29.-Prequalification for multiple bids (licitaciones).
- a)The Bidder (Licitante) may agree with the Bank to carry out a single prequalification of contractors for multiple bids (licitaciones), when it foresees that, within a short period, it will have to carry out several bids (licitaciones) for the construction of a set of works of the same nature that, due to their geographical location or other factors acceptable to the Bank, cannot be carried out through a single bid (licitación).
- b)The contractors thus prequalified may participate, if so established by the terms and conditions (bases), in one or more of the scheduled bids (licitaciones). The Bidder (Licitante) may require, in each call for bids (licitación), that the bidders update information that may have changed since the time of prequalification and, especially, a demonstration that the execution capacity of each contractor continues to meet the requirements of the terms and conditions (bases).
- c)The validity of prequalifications for a set of bids (licitaciones) shall not exceed one year.
BID (LICITACIÓN) Call for Bids (licitación) 3.30.-When prequalification has been carried out. If prequalification has been carried out, the Bidder (Licitante) shall only send or deliver invitations to submit proposals (ofertas) to the firms that were prequalified. Before sending or delivering such invitations, the Bidder (Licitante) shall send to the Bank, for its conformity, the text of the invitation and, if it has not done so previously, the bid documents (documentos de licitación). At this stage, the publication of notices shall no longer be necessary.
3.31.-When prequalification has not been carried out. If prequalification has not been carried out, the provisions of paragraph 3.03 regarding publicity shall be followed for the call for bids (licitación). Regarding the capacity of the bidders to carry out the work or provide the goods in question, the bid documents (documentos de licitación) must clearly indicate the minimum requirements that said bidders must meet. To this end, the documents shall include a questionnaire, with content similar to the form indicated in paragraph 3.21 of this Chapter, which shall be completed by the interested parties and submitted together with their respective proposals (ofertas).
Deadlines for the Submission of Proposals (ofertas) 3.32.-Normal deadline. For the submission of proposals (ofertas) in international public bids (licitaciones públicas internacionales), a period of at least 45 calendar days must be established, counted from the date of the last publication of the bid notice or from the date on which the bid documents (documentos de la licitación) were made available to potential offerors, whichever is later.
3.33.-Deadline for large or complex civil works. For large or complex civil works, bidders must have a minimum period of 90 calendar days to prepare their proposal (oferta).
3.34.-Deadline for national bids (licitaciones). When the bid (licitación) is restricted to the national scope, the Bidder (Licitante) may reduce the deadline for submitting proposals (ofertas) to 30 calendar days.
3.35.-Reserve that must be maintained regarding certain documents. The officials responsible for receiving the envelopes containing the prequalification form or the proposal (oferta) must verify that they are duly sealed. These envelopes shall be kept in a secure place until the date set for their opening. Once opened, no photocopies shall be made of the documents contained in the envelopes. Unless the law provides otherwise, after the public opening and the reading of the price of the proposals (ofertas) and before the announcement of the award (adjudicación), information regarding the examination, tabulation, clarification, and evaluation of the proposals (ofertas) or regarding the recommendations relating to the award (adjudicación) thereof may only be provided to officials of the Bidder (Licitante) who are officially involved with the corresponding bid process (proceso de licitación).
3.36.-Modification or extension of the bid documents (documentos de licitación). Any modification or extension of the terms, conditions, and specifications (bases y especificaciones) of the bid (licitación) or the submission date for proposals (ofertas) must have the prior conformity of the Bank and be communicated to all interested parties who have withdrawn the bid documents (documentos de la licitación). In the event that, in the judgment of the Bidder (Licitante) or the Bank, the modification or extension is substantial, at least 30 calendar days must elapse between the communication to the interested parties and the opening date of the proposals (ofertas).
3.37.-Inquiries must not modify the bid documents (documentos de la licitación). Inquiries sent to the Bidder (Licitante) by interested parties regarding the interpretation of the bid documents (documentos de licitación) may not be used to modify or extend the terms, conditions, and specifications (bases y especificaciones) of the bid (licitación). The inquiries and their responses shall not have a suspensive effect on the deadline for submission of proposals (ofertas).
3.38.-Single proposal (oferta). When only one proposal is submitted in a bid (licitación), the Bidder (Licitante) may not award the contract, unless the Bank has given its prior consent.
3.39.-Opening of proposals (ofertas). Proposals (ofertas) must be submitted in writing and in sealed envelopes. They must be signed by the legal representatives of the offerors and comply with the requirements established in the bid documents (documentos de licitación). They shall be opened in public on the scheduled day and time. Representatives of the offerors and the Bank may attend the opening act and may examine the proposals (ofertas). Proposals (ofertas) received after the determined date and time for submission shall be returned unopened. The name of the offerors, the price of each proposal (oferta), and the term and amount of the guarantees shall be read aloud, as well as any substantial modification that was submitted separately, within the deadline, but after the submission of the main proposal (oferta). Minutes shall be drawn up of everything that has occurred, which shall be signed by the representative of the Bidder (Licitante) and by the bidders present who wish to do so.
3.40.-Clarification of proposals (ofertas). The Bidder (Licitante) may request clarifications from the offerors regarding their proposals (ofertas). The clarifications requested and provided may neither alter the essence of the proposal (oferta) or its price, nor violate the principle of equality among offerors.
Analysis and Comparison of Proposals (propuestas) 3.41.-Object. When analyzing and comparing the proposals (propuestas), it shall be determined whether they comply with the terms and conditions stipulated in the bid documents (documentos de la licitación) and the value of each proposal (propuesta) shall be established, with the object of selecting the awardee (adjudicatario).
3.42.-Evaluation of proposals (propuestas). The evaluation of proposals (propuestas) shall take into account the provisions of paragraph 3.13.
3.43.-Rejection of proposals (ofertas). Proposals (ofertas) that do not substantially conform to the bid terms and conditions (bases de licitación) or that contain errors or omissions that cannot be remedied, according to the criteria established in paragraph 3.14, shall be rejected without going through the evaluation stage. The Bidder (Licitante), after consulting with the Bank, may also reject all proposals (ofertas) when none of them conform to the bid documents (documentos de licitación), or when it is evident that there has been a lack of competition or collusion. Proposals (ofertas) should not be rejected and a new bid (licitación) called solely on the grounds of price, when the price is only slightly higher than the estimated cost calculations. However, the Borrowers may, after consulting with the Bank, reject all proposals (ofertas) if the lowest evaluated price proposals (ofertas) are considerably higher than the official budget. In these cases, new proposals (propuestas) must be requested from at least all those who were initially invited to submit proposals (ofertas), and sufficient time must be granted for their submission. Individual proposals (propuestas) may be rejected when they are so far below the official budget that it can reasonably be anticipated that the Bidder (Licitante) will not be able to complete the works or supply the goods within the scheduled period and for the offered price.
3.44.-Proposal (ofertas) evaluation report. The Bidder (Licitante) must prepare a detailed report on the analysis and comparison of the proposals (propuestas), setting forth the precise reasons on which the selection of the proposal (propuesta) evaluated as the lowest is based. Said report shall be submitted for consideration by the Bank before awarding the contract. If the Bank determines that the proposed award (adjudicación) does not comply with the provisions of this Procedure, it shall immediately inform the Bidder (Licitante) of its determination, indicating the reasons therefor. Unless the objections raised by the Bank can be resolved, the contract shall not be eligible for financing by the Bank. The Bank may cancel the amount of the Financing that, in its opinion, corresponds to the expenses declared ineligible.
Award of the Bid (Adjudicación de la licitación) 3.45.-Bank conformity. The bid (licitación) shall be awarded to the offeror whose proposal (propuesta) has been evaluated as the lowest and conforms to the bid documents (documentos de la licitación), once the Bank has approved the draft notification of the award (adjudicación).
3.46.-Communication of the award (adjudicación) and signing of the contract. The Bidder (Licitante) shall communicate the award (adjudicación) to all bidders, at the address they have indicated, within three business days following the award (adjudicación). Once said notification has occurred, the Bidder (Licitante) may no longer award to another or declare the bid (licitación) void, except in cases of fraud or other illegal acts or when facts unknown to it at the time of prequalification come to its attention that could affect the capacity of the awardee (adjudicatario) to fulfill the contract. It shall send, within a short period, for the Bank's approval, a copy of the draft contract it proposes to sign with the awardee (adjudicatario). The signed contract may not modify the awardee's (adjudicatario) proposal (oferta) nor the terms and conditions stipulated in the bid documents (documentos de licitación). Once the Bank approves the draft contract, it shall be signed and the Bidder (Licitante) shall send a copy of the signed contract to the Bank as soon as possible. Within the same deadline established for signing the contract, the awardee (adjudicatario) shall deliver the corresponding performance guarantee (garantía de ejecución) to the Bidder (Licitante).
3.47.-Modification of the award (adjudicación). If for any reason the awardee (adjudicatario) does not sign the contract or does not provide the corresponding performance guarantee (garantía de ejecución), within the period set for this purpose, the Bidder (Licitante) may, without calling a new bid (licitación), award it to the other bidders in the order in which their proposals (ofertas) were evaluated.
Void Bid (Licitación desierta) 3.48.-Report for the Bank. In any case where, for justified reasons, the Bidder (Licitante) intends to declare the bid (licitación) void, it shall require the prior favorable opinion of the Bank, for which purpose it shall send a complete report including the reasons and elements of judgment that served as the basis for proposing such measure.
3.49.-Effects of the declaration. Once the bid (licitación) is declared void, the Bidder (Licitante) must call a second bid (licitación), following the same provisions of this Procedure. If the second bid (licitación) is declared void, the Bidder (Licitante) and the Bank shall agree on the procedure to be followed for the purchase or contracting in question.
IV. DUE PROCESS
4.01.-Appeals. The regulations applicable to bids (licitaciones) governed by this Procedure must ensure the legal protection of offerors, and allow the filing of the remedies (recursos) necessary to make such protection effective.
4.02.-Filing of complaints (protestas). The Bidder (Licitante) may not impose conditions that prevent, hinder, or increase the cost of filing complaints (protestas) by firms participating in bids (licitaciones) for the acquisition of goods or execution of works with Project resources.
4.03.-Communication of complaints (protestas). The Bidder (Licitante) undertakes to communicate to the Bank, promptly, any complaint (protesta) or claim it receives in writing from participating firms, as well as the responses it has given to such complaints (protestas) or claims.
V. NON-OBSERVANCE OF THIS PROCEDURE
5.01.-Consequences of non-observance. The Bank reserves the right to refrain from financing any acquisition of goods and services or contracting of works when, in its judgment, the provisions of this Procedure have not been observed in the corresponding bid (licitación).
RGII-CA065P-CR
PROCEDURE FOR THE SELECTION AND CONTRACTING OF CONSULTING FIRMS OR INDIVIDUAL EXPERTS Central American Electrical Interconnection System (SIEPAC) In the selection and contracting of consulting firms, specialized institutions, or individual experts, hereinafter referred to interchangeably as the "Consultants," necessary for the execution of the Project, the following shall apply:
I. Definitions
The following definitions are established:
1.01.-A consulting firm is any legally constituted association, composed primarily of professional personnel, that offers consulting, advisory services, expert opinions, and professional services of various kinds.
1.02.-A specialized institution is any non-profit organization, such as universities, foundations, autonomous or semi-autonomous bodies, or international organizations, that offers consulting services. For the purposes of this Annex, specialized institutions shall be subject to the same rules as consulting firms.
1.03.-An individual expert is any professional or technician specialized in a science, art, or trade.
1.04.-Contracting Entity means the competent entity to carry out the contracting of the Consultants. This entity may be, as the case may be, the Borrower, the Executing Agencies, the Beneficiaries, the Intermediary Financial Institutions, or another indicated in the respective contract or agreement.
1.05.-The terms Contract or Agreement are used interchangeably to designate the legal instrument of which this Annex forms a part.
1.06.-"Project" interchangeably means the Project or Program covered by the Contract.
1.07.-"Financing" refers to the resources that, under the title of "Contribution," "Credit," or any other, are allocated to Loan operations, Technical Cooperation, Small Projects, etc.
II. Ethical standards and incompatibilities
2.01.-Both during the contracting process and during the execution stage of the corresponding contracts, the direct or indirect participants in the competitions governed by this procedure shall maintain the highest ethical standards and shall not participate in any type of corruption in relation to said processes.
2.02.-Bank resources may not be used to contract Individual Experts from the Borrower's country if they: (a) belong to the permanent or temporary staff of the institution receiving the Financing or that is the beneficiary of the services of said Individual Experts; or (b) have belonged to any of the aforementioned institutions within the six months prior to one of the following dates: (i) the submission of the Financing request; or (ii) the selection of the Individual Expert. The Bank may reduce this period upon reasonable request by the Contracting Entity. Notwithstanding the periods, ties, or relationships described above, the Bank may also take into account other situations for the purpose of determining the existence of a conflict of interest and, consequently, declare the incompatibility of the Individual Expert.
2.03.-Bank resources may also not be used to contract Consulting Firms from the Borrower's country if the partners, associates, directors, and other technical or professional personnel of said Consulting Firms: (a) belong to the permanent or temporary staff of the institution receiving the Financing or that is the beneficiary of the services of said Consulting Firms; or (b) have belonged to any of the aforementioned institutions within the six months prior to one of the following dates: (i) the submission of the Financing request; or (ii) the start of the prequalification or selection process for the Consulting Firm. The Bank may reduce this period upon reasonable request by the Contracting Entity. Notwithstanding the periods, ties, or relationships described above, the Bank may also take into account other situations for the purpose of determining the existence of a conflict of interest and, consequently, declare the incompatibility of the Consulting Firm.
2.04.-A fully qualified consulting firm that is an affiliate or subsidiary of a construction contractor, equipment supplier, or a holding company shall only be considered acceptable if it agrees in writing to limit its functions to professional consulting services and accepts, in the contract it signs, that the firm and its associates may not participate in the construction of the project, in the supply of materials and equipment for it, or in carrying out financial activities related to the Project.
III. Eligibility and nationality requirements
3.01.-In applying the procedures established in this Annex, the Contracting Entity may not introduce provisions or conditions that restrict or prevent the participation of Consultants originating from member countries of the Bank or from donor countries of the FOMIN and from regional developing countries that are members of the Bank, when the consulting services are financed in whole or in part with resources from the FOMIN.
3.02.-Only Consultants who are nationals of member countries of the Bank or of donor countries of the FOMIN and of regional developing countries that are members of the Bank may be contracted, when the consulting services are financed in whole or in part with resources from the FOMIN. To determine the nationality of a consulting firm, the following criteria shall be taken into account:
(a) The country in which the consulting firm is duly constituted or legally organized.
(b) The country in which the consulting firm has established its principal place of business.
(c) The nationality of the firm or the citizenship or "bona fide" residence of the individuals who have ownership in the consulting firm, with the right to participate in a percentage of 50% or more of its profits as established through certification issued by a duly authorized official of the consulting firm.
(d) The existence of agreements by virtue of which a substantial part of the profits or tangible benefits of the firm is destined to firms or persons of a specific nationality.
(e) The determination by the Bank that the consulting firm: (i) constitutes an integral part of the economy of a country, a fact that shall be verified by the "bona fide" residence in said country of a substantial part of its executive, technical, and professional personnel; and (ii) has in the country the operational equipment or other elements necessary to carry out the services to be contracted.
3.03.-The nationality requirements demanded by the Bank shall be applicable to firms proposed to provide a part of the required services, by virtue of an association or subcontract with a qualified consulting firm.
3.04.-To establish the nationality of an expert, the provisions indicated in their passport or another official identity document shall apply. The Bank, however, may admit exceptions to this rule in those cases where the expert, not being eligible on grounds of nationality: (a) has established domicile in a member country of the Bank where they may work, in a category different from that of an international official, and have declared that they have no intentions of returning to their country of origin in the immediate future; or (b) has established their permanent domicile in an eligible country where they have resided for at least 5 years.
IV. Professional qualifications
4.01.-The analysis of the professional qualifications of a consulting firm shall take into account:
(a) The experience of the firm and its management personnel in providing consulting services in projects or programs of dimension, complexity, and technical specialty comparable to those intended to be executed; (b) the assigned number of professionally qualified personnel; (c) its experience both in the region and in other countries; (d) knowledge of the language; (e) financial capacity; (f) current workload; (g) the capacity to organize a sufficient number of personnel to carry out the work within the scheduled timeframe; (h) good ethical and professional reputation; and (i) the absence of any tie or relationship that could give rise to a conflict of interest.
V. Selection and contracting procedures
A. Selection and contracting of consulting firms 5.01.-In the selection and contracting of consulting firms:
(a) Before initiating the selection process and once the local approvals that may be required have been obtained, the Contracting Entity must present for the Bank's approval the following requirements for the contracting of firms:
(i) The procedure to be used in the selection and contracting of the firm, which includes:
(A) The functions to be performed by the personnel of the Contracting Entity or the Selection Committee designated to:
1. Review and approve documents; 2. Select a shortlist (lista corta) of firms; 3. Rank the firms from the shortlist (lista corta) in order of merit; and 4. Approve the selected firm.
The Contracting Entity shall inform the Bank of the names and positions of the persons it designates to participate in the prequalification and selection processes of said Consultants.
(B) The scoring system to be used to prequalify the firms. Said system shall include, at least, the following factors:
1. General background of the firm; 2. Similar works carried out; 3. Previous experience in the country where services are to be provided, or in similar countries; 4. Proficiency in the language; and 5. Use of local consultants.
(C) The scoring system to be used for the selection of the firms. Said system shall include, at least, the following factors:
1. Qualification and experience of the personnel to be assigned; 2. Methodology for carrying out the evaluation, when applicable; 3. Proposed execution plan; 4. Execution schedule; 5. Proficiency in the language; and 6. Management support systems to guarantee quality control during the execution of the consultancy, such as regular reports, budgetary controls, etc.
(D) Specific reference to the local laws, tax requirements, and procedures that may be pertinent for the selection and contracting of the consulting firm.
(E) If it is estimated that the cost of the services will exceed the sum of two hundred thousand United States dollars (US$200,000) or its equivalent, calculated in accordance with the provisions of the "exchange rate" clause of this Contract or Agreement, the selection and contracting must be announced in the "Development Business" of the United Nations and in the national press. These announcements must indicate the intention to contract professional consulting services and a brief description of the services required. They must in turn invite interested firms and consortiums to submit detailed information about their technical capacity, previous experience in similar work, etc., within a period of 30 days counted from the date of publication. The respective clippings specifying the date and the name of the publication in which they appeared shall be sent to the Bank; (ii) The terms of reference, specifications, describing the work to be carried out by the firm and a cost estimate thereof; and (iii) A list with no fewer than three, nor more than six firms that will be invited to submit proposals (propuestas).
(b) Once the Bank has approved the foregoing requirements, the preselected firms shall be invited to submit proposals (propuestas) in accordance with the approved procedures and terms of reference. Said firms shall be informed of the selection procedures and the adopted evaluation criteria, as well as the applicable local laws, tax requirements, and the names of the other companies invited to submit proposals (propuestas).
(c) In the invitation to submit proposals (propuestas), one of the two following procedures shall be used:
(i) The single sealed envelope procedure, which shall include only the technical proposal (propuesta), without reference to price. The Contracting Entity shall analyze the received proposals (propuestas) and rank them in order of merit. If the complexity of the case so requires, the Contracting Entity may use, with prior authorization from the Bank and at its own expense, consulting services to review the proposals (propuestas) and qualify them in order of merit.
Once the order of merit of the firms has been established, the one ranked first shall be invited to negotiate a contract. During negotiations, the terms of reference must be reviewed to ensure full agreement with the firm; the contractual and legal requirements shall also be examined, and finally the detailed costs shall be drawn up. If no agreement is reached on the terms of the contract with the firm, it shall be notified in writing that its proposal (propuesta) has been rejected and negotiations shall begin with the firm ranked second, and so on, until a satisfactory agreement is reached; and (ii) The two sealed-envelope procedure. The first envelope shall include the technical proposal (propuesta) without costs, and the second, the proposed cost for the services.
The Contracting Entity shall analyze the technical proposal and establish the order of merit. Contract negotiations shall begin with the firm that submitted the best technical proposal. The second envelope submitted by said firm shall be opened in the presence of one or more of its representatives and shall be used in the contract negotiations. All second envelopes submitted by the other firms shall remain sealed and, if an agreement is reached with the first firm, shall be returned to them unopened. If no agreement is reached on the terms of the contract with the first firm, it shall be notified of its rejection in writing and negotiations shall begin with the second firm, and so on until an agreement is reached.
(d) If no agreement is reached on detailed costs or fees, or if, in the judgment of the Contracting Entity, such costs or fees prove inadequate or excessive, this shall be sufficient cause to reject a proposal and begin negotiations with the next firm in order of merit. If a firm is rejected, it shall not be called again for new negotiations for the same contract.
(e) Before beginning negotiations, the Contracting Entity shall provide the Bank, for its no-objection, a copy of the report summarizing the evaluation of the technical proposals submitted by the short-listed firms referred to in Section 5.01(a)(iii) of this Annex.
(f) The Contracting Entity, once having obtained any local approvals that may be required, shall submit for the Bank's approval the final draft of the contract negotiated with the consulting firm before its signing. After signing, a true copy of the signed text of the contract shall be sent to the Bank as soon as possible.
(g) When this Contract indicates that the Bank's supervision of certain contracting of consulting firms or individual experts shall be carried out on an ex-post basis, that is, after the contracting of the respective consultancy, the Contracting Entity shall promptly notify the Bank of each contracting, sending it the basic data thereof, and shall keep, so that the Bank may carry out such supervision, the background records of the respective contracting and especially the following documentation:
(i) The procedure used for the contracting of the firms or experts, including, where applicable, the criteria for prequalification and selection; (ii) The name of the selected consultants; (iii) The technical reports that recommended the prequalification and the contracting in question; and (iv) The corresponding signed consulting contract. The Contracting Entity shall provide the Bank any other additional information that the Bank may require.
(h) Unless the parties agree otherwise, even if the supervision of a given contract is carried out on an ex-post basis, the Contracting Entity shall always submit the following to the Bank for its concurrence on an ex-ante basis: (i) the corresponding terms of reference; and (ii) the names of the firms making up the short list.
(i) Before initiating the first contracting of a consulting firm or an individual expert, the supervision of which is to be carried out on an ex-post basis, the Contracting Entity must have sent to the Bank for its concurrence the procedures it proposes to use for the contracting of consulting firms and individual experts, including, where applicable, the criteria for prequalification and selection.
(j) The contracting of firms or individual experts supervised by the Bank on an ex-post basis is also subject to the Bank's policies. The Bank reserves the right: (i) not to finance or to cancel the resources for those contracts whose procedures have not conformed to said policies; (ii) to require reimbursement, with interest and commissions, of those resources already disbursed for the cited contracts; and (iii) not to recognize as local counterpart funds those that may have been allocated to such contracts. The Bank further reserves the right to establish that, for future contracting, supervision shall be carried out on an ex-ante basis.
B. Selection and Contracting of Individual Experts 5.02.-In the case of selection and contracting of individual experts:
(a) Before beginning the selection process and once having obtained any local approvals that may be required, the Contracting Entity shall submit for the Bank's approval the following requirements for contracting individual experts:
(i) The selection procedure; (ii) The terms of reference, specifications, and schedule related to the services to be provided; (iii) The names of the tentatively selected experts, indicating their nationality and domicile, background, professional experience, and language skills; and (iv) The model contract to be used with the experts.
(b) Once the country's competent authority and the Bank have approved the above requirements, the Contracting Entity shall proceed to contract the experts. The contract to be signed with each of them must conform to the model contract agreed upon by the Bank and said competent authority. Once the contract is signed, the Contracting Entity shall send a copy thereof to the Bank as soon as possible.
(c) When this Contract indicates that the contracting of certain individual experts shall be supervised by the Bank on an ex-post basis, the provisions of subparagraphs (g), (h), (i), and (j) of paragraph 5.01 of this Annex shall apply to such contracting.
5.03.-Notwithstanding the provisions of paragraphs 5.01 and 5.02 above, and at the request of the Contracting Entity, the Bank may collaborate in the selection of the Consultants, as well as in the preparation of the respective contracts. It is understood, however, that the final negotiation of the contracts and their signing, on terms and conditions acceptable to the Bank, shall be the exclusive responsibility of the Contracting Entity, without the Bank assuming any liability whatsoever in this regard.
VI. Currencies of Payment to Consultants
6.01.-In the contracts signed with the Consultants, the following modalities regarding currencies of payment shall be established, on the understanding that, in relation to the exchange rate, the rule established in this regard in this Contract or Agreement shall apply:
(a) Payments to consulting firms: The contracts signed with consulting firms must reflect one of the following modalities, as the case may be:
(i) If the consulting firm is domiciled in the country where the services are to be provided, its remuneration shall be paid exclusively in the currency of that country, with the exception of expenses incurred in foreign currency for payment of international airfares or per diem abroad, which shall be reimbursed in United States dollars or the equivalent in other currencies forming part of the Financing; (ii) If the consulting firm is not domiciled in the country where the services are to be provided, the maximum possible percentage of its remuneration shall be paid in the currency of that country, and the remainder in United States dollars, or the equivalent in other currencies forming part of the Financing, on the understanding that the item corresponding to per diem must be paid in the currency of the country or countries in which the respective services are to be provided. In the event that the percentage to be paid in the currency of the country where the service is to be provided is less than 30% of the total remuneration of the consulting firm, the competent authority of the country shall submit to the Bank for its review and comments a complete and detailed justification of the proposed remuneration; and (iii) In the case of a consortium composed of firms domiciled in the country where the services are to be provided and firms not domiciled therein, the portion of the remuneration corresponding to each member of the consortium shall be paid in accordance with the rules set forth in subparagraphs (i) and (ii) above.
(b) Payments to individual experts:
(i) If the expert is domiciled in the country where he/she will provide services, his/her remuneration shall be paid exclusively in the currency of said country; (ii) If the expert is not domiciled in the country where he/she will provide services and the term of his/her contract is less than six months, his/her remuneration and per diem shall be paid in United States dollars; (iii) If the expert is not domiciled in the country where he/she will provide services and the term of his/her contract is six months or more, his/her remuneration and post adjustments shall be paid as follows: (1) 40% in the currency of said country; and (2) 60% in United States dollars. Per diem, installation allowance, resettlement allowance, and retainer fees, when applicable, shall also be paid in United States dollars; and (iv) Payment for lump sum services, including fees, airfares, and per diem, may be made in United States dollars.
VII. Recommendations of the Consultants
7.01.-It is established that the opinions and recommendations of the Consultants do not bind the Contracting Entity, other local entities, or the Bank, all of which reserve the right to formulate such observations or caveats as they deem appropriate.
VIII. Scope of the Bank's Commitment
8.01.-It is established that the Bank assumes no commitment whatsoever to finance, totally or partially, any program or project that could, directly or indirectly, result from the services provided by the Consultants.
IX. Special Conditions
9.01.-The final payment agreed upon in the contract shall be subject to acceptance of the Consultants' final report by the Contracting Entity or other competent local authority and by the Bank. Said final payment shall constitute at least 10% of the total amount of the sum agreed upon in the contract for fees.
RGII-CA066P-CR
PROCEDURES FOR PROCUREMENTS AND CONTRACTING FOR SMALLER AMOUNTS Electric Interconnection System for the Countries of Central America (SIEPAC)
I. General Provisions
1.01.-The contracting of works, the procurement of goods and related services, and the contracting of consulting services financed with Program resources shall be governed entirely by the procedures agreed upon with the Bank under the terms of this Contract. Requirements not provided for in Annexes B and C shall likewise be governed entirely by the rules provided in this Annex.
1.02.-International competitive bidding shall be used to contract goods and related services from two hundred fifty thousand dollars (US$250,000) and works from one million five hundred thousand dollars (US$1,500,000). International competitive selection shall be used for consulting services from two hundred thousand dollars (US$200,000). Procurements and contracting for amounts below those indicated, which for the purposes of this Contract are called "smaller amounts," shall be governed by the following rules:
(a) Unrestricted National Public Selection or Bidding:
- Works: equal to or greater than US$500,000 and less than US$1,500,000 - Goods and related services: equal to or greater than US$50,000 and less than US$250,000 - Consulting services: equal to or greater than US$100,000 and less than US$200,000 (b) Private National Selection or Bidding:
- Works: equal to or greater than US$20,000 and less than US$500,000 - Goods and related services: equal to or greater than US$10,000 and less than US$50,000 - Consulting services: equal to or greater than US$10,000 and less than US$100,000 (c) Direct Contracting:
- Works: less than US$20,000 - Goods and related services: less than US$10,000 - Consulting services: less than US$10,000 (d) In no case shall provisions or stipulations be established that restrict or prevent the participation of consultants, suppliers, or contractors originating from the Bank's member countries.
1.03.-To apply the foregoing, the procedures indicated below shall be used:
Definitions (a) Minor works: Minor works are understood to be those executed within the Program whose estimated value is less than US$1,500,000. If the Bank should later modify this figure, the new value shall serve to define the concept of minor works, and the procedures agreed upon herein shall be applicable to works whose cost is equal to or less than the modified figure.
(b) Minor goods and related services: Minor goods and related services are understood to be those whose estimated value is less than US$250,000. If the Bank should later modify this figure, the new value shall serve to define the concept of minor goods and related services, and the procedures agreed upon herein shall be applicable to the procurement of goods and related services whose cost is equal to or less than the modified figure.
(c) Minor consulting services: Minor consulting services are understood to be those whose estimated value is less than US$200,000. If the Bank should later modify this figure, the new value shall serve to define the concept of minor consulting services, and the procedures agreed upon herein shall be applicable to the contracting of consulting services whose cost is equal to or less than the modified figure.
II. Applicable Procedures
2.01.-For the contracting of minor works:
(a) The contracting of minor works whose estimated value is equal to or greater than US$500,000 and less than US$1,500,000 shall be carried out through the Unrestricted National Public Bidding procedure established in numeral 3.01 of this annex.
(b) The contracting of minor works whose estimated value is equal to or greater than US$20,000 and less than US$500,000 shall be carried out through the Private National Bidding procedure established in numeral 3.02 of this annex.
(c) The contracting of works whose value is less than US$20,000 shall be carried out through Direct Contracting provided for in numeral 3.05 of this annex.
2.02.-For the procurement of minor goods and related services:
(a) The procurement of goods and related services whose estimated value is equal to or greater than US$50,000 and less than US$250,000 shall be carried out through the Unrestricted National Public Bidding procedure established in numeral 3.01 of this annex.
(b) The procurement of goods and related services whose estimated value is equal to or greater than US$10,000 and less than US$50,000 shall be carried out through the Private Bidding procedure established in numeral 3.02 of this annex.
(c) The procurement of goods and related services whose estimated value is less than US$10,000 shall be carried out through Direct Contracting, provided for in numeral 3.05 of this annex.
2.03.-For the contracting of minor consulting services:
(a) The contracting of consulting services whose estimated value is equal to or greater than US$100,000 and less than US$200,000 shall be carried out through the Unrestricted National Public Quality-Based Selection procedure established in numeral 3.03 of this annex.
(b) The contracting of minor consulting services whose estimated value is equal to or greater than US$10,000 and less than US$100,000 shall be carried out through the Private Quality-Based Selection procedure established in numeral 3.04 of this annex.
(c) The contracting of minor consulting services whose estimated value is less than US$10,000 shall be carried out through Direct Contracting, provided for in numeral 3.05 of this annex.
III. Specific Procedures Applicable to Each Modality
3.01.-Unrestricted National Public Bidding. The Unrestricted National Public Bidding procedure, detailed below, shall govern for the categories of minor works and goods defined in subparagraphs 2.01 (a) and 2.02 (a), respectively.
(a) The Unrestricted National Public Bidding system shall be used, with national publicity. The unrestricted participation of firms from the Bank's member countries shall be allowed. It shall not be necessary to carry out prequalification, unless the Bank expressly requires this modality because, in its judgment, it involves a procurement or contracting of a complex nature. It is understood that the bidding entity may agree with the Bank, as a prequalification modality, on a firm registration system, which may include natural or legal persons. If firm registries are organized, they shall remain open for registration for procurements forming part of the Program.
(b) In this procedure, the uniform bidding documents agreed upon between the Executing Agency and the Bank shall be used.
(c) National publicity for the invitations to bid shall be carried out twice in one newspaper or once in two newspapers, in both cases daily newspapers of wide national circulation. The period for submission of bids shall be at least thirty (30) calendar days, counted from the last publication. This period may be longer, in the judgment of the bidding entity, depending on the size or complexity of the work to be contracted or the amount of the procurement of goods.
(d) Bids shall be submitted in a single envelope, which must contain the bid itself, as well as the legal, technical, and financial background of the participants. The envelopes containing the bids shall be opened in a public session called by the bidding entity on the date and time of the deadline for submission of bids, in the presence of the bidders who have attended the event, with all the requirements to ensure the transparency required by the uniform bidding documents. In this same session, the bidding entity shall form a technical committee with three members for the legal, technical, and economic analysis of the bids, which shall submit a report within fifteen (15) business days that must include any necessary comparison tables.
(e) The bid shall be awarded to the bid evaluated as the lowest, as defined in paragraph 3.13 of Annex B of the Loan Contract. To this end, a single technical committee shall first evaluate the bids to determine if they comply with the bidding documents and shall establish a ranking, beginning with the bid evaluated as the lowest. It shall then analyze the legal, technical, and financial documents only of the firm evaluated as the lowest, to establish whether they meet said background requirements. If they meet said background requirements, the bid shall be pre-awarded to said firm; if not, the background requirements of the next firm shall be examined, and so on.
(f) The technical report related to the proposed award, together with the corresponding supporting documents (including the draft contract proposed for signing), shall be sent together for the Bank's approval. Once these requirements are met and the formal approval of the Executing Agency and the Bank is obtained, the notification of the final award and subsequent signing of the contract with the awarded entity shall proceed. No substantial change may be made to the draft contract approved by the Bank.
(g) Other procedures or different modalities within the procedures agreed upon herein may be applied, by mutual agreement with the Bank, in the case of minor goods and related services that must be carried out on the occasion of events that, according to the Bank's policies, qualify as natural disasters.
3.02.-Private Bidding. The Private Bidding procedure detailed below shall govern for the categories of minor works and goods defined in subparagraphs 2.01 (b) and 2.02 (b), respectively:
(a) For the application of the Private Bidding procedure, an invitation shall be extended to at least five bidders, with deadlines for bid submission that ensure competition. It shall not be necessary to carry out prequalification, unless the Bank expressly requires this modality because, in its judgment, it involves a work or procurement of a complex nature. It is understood that the bidding entity may agree with the Bank, as a prequalification modality, on a firm registration system, which may include natural or legal persons. If registries are organized, they shall remain open for registration for procurements forming part of the Project.
(b) In this procedure, the uniform bidding documents agreed upon between the Executing Agency and the Bank shall be used.
(c) For the use of this procedure, the bidding entity must prepare and send to the invited firms the bidding documents and the technical specifications of the work to be contracted or the goods to be procured.
(d) Within six business days following the deadline date for bid submission, the bidding entity shall decide on the award of the contract to the bid evaluated as the lowest, as defined in paragraph 3.13 of Annex B of the Loan Contract, or shall declare the process void, in which case it may reopen it, making adjustments and modifications to the bidding documents, if applicable, within the following twenty (20) calendar days, inviting at least three additional firms beyond those that participated in the process. For the reopening, all the conditions established for this procedure must be maintained.
(e) Once the award is decided, and prior to the signing of the respective contract, the bidding entity must have the Bank's no-objection.
3.03.-National Public Quality-Based Selection. The unrestricted National Public Quality-Based Selection procedure detailed below shall govern for the categories of minor consulting studies defined in subparagraph 2.03 (a).
(a) When the unrestricted National Public Quality-Based Selection procedure is to be applied, the call for submission of technical-financial proposals shall be made by publication once in two daily newspapers or twice in one daily newspaper, in both cases newspapers of wide national circulation. The deadlines for submission of proposals shall be set so as to ensure broad participation of firms and thus guarantee competition among them.
(b) In this procedure, if possible, the uniform selection documents that the Executing Agency agrees upon with the Bank shall be used.
(c) The last publication of the call shall be made at least twenty (20) days prior to the deadline date set for submission of proposals. This period may be longer, depending on the size or complexity of the study.
(d) The proposals must be delivered in two different envelopes, which, for the purposes of these procedures, are denominated Envelopes Nos. 1 and 2. The first (Envelope No. 1) must contain the technical proposal, as well as the legal background and the documents accrediting the technical and financial solvency of the proposer. The second (Envelope No. 2) shall contain the financial proposal. This form of submission must be clearly stated in the selection documents.
(e) The contracting entity shall appoint an Evaluation Committee where all Envelopes No. 1 shall first be opened, that is, those containing the technical proposals and the juridical-financial information of the proposers. Subsequently, within the following fifteen (15) business days after the opening of Envelopes No. 1, the Evaluation Committee shall establish the order of merit of the technical proposals and shall convene the representatives of the firm ranked first for negotiation of the respective contract, all in accordance with the stipulations defined in Annex "C" to the Loan Contract.
(f) The technical report related to the proposed award, together with the corresponding supporting documents (including the draft contract proposed for signing), shall be sent together for the Bank's approval.
(g) Once the contract negotiation is concluded and the Bank's no-objection is obtained, the contracting entity may proceed to the signing of the contract.
3.04.-Private Quality-Based Selection. The Private Quality-Based Selection procedure detailed below shall govern for the consulting contracting defined in subparagraph 2.03 (b).
(a) For the application of the Private Quality-Based Selection procedure, an invitation shall be extended to at least 3 and no more than 6 proposers, with deadlines for submission of proposals that ensure competition. For this purpose, the contracting entity may agree with the Bank on the modality of prequalification or firm registration. If registries are organized, they shall remain open for registration for procurements forming part of the Project.
(b) In this procedure, if possible, uniform selection documents agreed upon between the Executing Agency and the Bank shall be used.
(c) For the use of this procedure, the contracting entity must prepare and send to the invited persons or firms, which may include natural or legal persons, the selection documents and the Terms of Reference (TOR) for the consultancy.
(d) The proposals must be delivered in two different envelopes, which, for the purposes of these procedures, are denominated Envelopes Nos. 1 and 2. The first (Envelope No. 1) must contain the technical proposal, as well as the legal background and the documents accrediting the technical and financial solvency of the proposer. The second (Envelope No. 2) shall contain the financial proposal. This form of submission must be clearly stated in the selection documents.
(e) The Executing Agency shall appoint an Evaluation Committee where all Envelopes No. 1 shall first be opened, that is, those containing the technical proposals and the juridical-financial information of the proposers. The Executing Agency shall provide the Bank, for its no-objection, a copy of the Evaluation Committee's report summarizing the evaluation of the technical proposals submitted, together with the corresponding supporting documents (including the draft contract proposed for signing). Once the Bank's no-objection to this evaluation is received, the opening of the envelopes containing the financial proposals corresponding to the technical proposals that have reached or are above the minimum acceptable technical level shall proceed. The firm that has submitted the lowest financial proposal shall be the one selected for the award of the contract, and the Executing Agency may proceed to the signing thereof. When, as a result of the technical proposal evaluation process, the Executing Agency concludes that there is a single consulting firm that has reached or is above the minimum acceptable technical level, the Executing Agency may not award the contract to said firm until the Bank has granted its no-objection, after having received, to its satisfaction, the financial proposal of said firm, as well as any other clarification or information that the Bank may have requested in relation to the firm selection process or the selected firm.
3.05.-Direct Contracting. The Direct Contracting procedure detailed below shall govern for the contracting of works, the procurement of goods, and the contracting of consulting services defined in subparagraphs 2.01 (c), 2.02 (c), and 2.03 (c), respectively.
(a) Works. This method consists of contracting a construction firm, or a supplier of goods and services, without following a competitive procedure.
(i) In the case of works, in the selection and contracting of firms under this procedure, the Executing Agency shall take into account the merits and technical capacity, financial capacity, relevant experience in similar works in the area, immediate availability, adequate and available equipment, and reasonable market prices.
(ii) The Executing Agency shall agree with the Bank on the model contract it will use to formalize the contracting.
(b) Goods and related services. This method consists of contracting a firm for the supply of goods and related services without following a competitive procedure.
(i) In the selection and contracting of firms under this procedure, the Executing Agency shall take into account the required deadlines and reasonable market prices. In the case of goods, firms of recognized prestige in the field shall be selected.
(ii) Application: The Executing Agency must agree with the Bank on a maximum cumulative amount per supplier firm, within which the Executing Agency shall be authorized to procure goods from the same firm, and a maximum cumulative amount at the Program level, under which the Bank will agree to finance goods procured by direct contracting.
(c) Contracting of individual consultants. To contract individual consultants, the Bank may authorize the Executing Agency to use direct contracting, as an exception to selection through a short list. Such direct contracting may be supervised by the Bank on an ex-post and sampling basis.
(i) When contracting an individual consultant directly, the Executing Agency shall take into account the consultant's merits and technical capacity, such as technical qualifications, professional experience, immediate availability, and knowledge of the language required to perform the specific consultancy.
(ii) The Executing Agency shall agree with the Bank on the contract model to be used to formalize direct contracting of individual consultants.
IV. Common Procedures
4.01.-The Evaluation Commission or Committee shall be composed of three (3) officials or employees of the Program's bidding entity, who must have extensive experience and capacity, and who shall be responsible for the final recommendation (dictamen final), and must have the necessary autonomy to make decisions. The Executing Agency shall appoint the members of the Commission and invite the oversight bodies so that, should they wish to participate in the evaluations as observers, they appoint a representative to the Commission, on the understanding that the quorum for deliberations and for adopting decisions is constituted by the three (3) members appointed by the Executing Agency. For each case, the Executing Agency shall specify in advance the deadline the Commission has to finalize the evaluation and issue the corresponding Recommendation (Dictamen), and must communicate said deadline in the Commission's appointment letter. This deadline shall not exceed ten (10) business days.
4.02.-Communication of award and signing of the contract. The bidding entity shall communicate the award act to all proponents, at the address they indicated in their proposal, within three (3) business days following the award.
4.03.-The procedures established below are applicable both in the case of Unrestricted National Public Bidding (Licitación Pública Nacional No Restringida), provided for in section 3.01 of this Annex, and in Private Bidding (Licitación Privada), provided for in section 3.02 of this Annex 22.
(a) In any of the Bidding or Competition processes, should no offeror appear on the date and time set for the bidding or competition, the Bidding Entity may declare it void (desierta), in which case it may issue a new invitation within twenty (20) calendar days thereafter and after making adjustments or modifications to the bidding documents (bases), if necessary.
(b) Should only one offer be submitted, the Bidding Entity may not award the contract to said firm until the Bank has granted its no-objection, after having received, to its satisfaction, the economic proposal of said firm, as well as any other clarification or information that the Bank may have requested regarding the firm selection process or the selected firm.
(c) Remediable Errors or Omissions: The procedure established in Annex B of the Loan Contract shall be followed.
Resolution DE-114/01 LOAN CONTRACT No. 003/SQ-CR between the INSTITUTO COSTARRICENSE DE ELECTRICIDAD and the INTER-AMERICAN DEVELOPMENT BANK ELECTRICAL INTERCONNECTION SYSTEM FOR THE COUNTRIES OF CENTRAL AMERICA (SIEPAC) February 26, 2002 LOAN CONTRACT SPECIAL PROVISIONS INTRODUCTION Parties, Object, Integral Elements, Executing Agency, Guarantee, and Special Definitions 1. PARTIES AND OBJECT OF THE CONTRACT CONTRACT entered into on February 26, 2002, between the Instituto Costarricense de Electricidad of the Republic of Costa Rica, hereinafter referred to as the "Borrower" or "ICE", and the Inter-American Development Bank, hereinafter referred to as the "Bank", to cooperate in the execution of a project, hereinafter referred to as the "Project", consisting of financing the one-sixth share corresponding to Costa Rica in support of the establishment of the Infrastructure of the Electrical Interconnection System for the Countries of Central America project, hereinafter referred to as the "SIEPAC PROJECT". Annex A details the most relevant aspects of the Project and the SIEPAC PROJECT.
The Project shall be executed in coordination with the parallel operations in the other Participating Countries financed with the resources indicated in Clause 1.03, without prejudice to the obligations incumbent upon each of the six countries in accordance with the respective loan contracts they sign with the Bank. The operations as a whole comprise the SIEPAC PROJECT.
2. INTEGRAL ELEMENTS OF THE CONTRACT AND REFERENCE TO THE GENERAL RULES (a) This Contract consists of these Special Provisions, the General Rules, and Annexes A, B, C, D, and E attached hereto. Should any provision of the Special Provisions, the Annexes, or the Guarantee Contract be inconsistent or in contradiction with the General Rules, the provisions of the Special Provisions, the respective Annex, or the Guarantee Contract, as the case may be, shall prevail. Should there be inconsistency or contradiction between provisions of the Special Provisions, the Annexes, or the Guarantee Contract, the principle that the specific provision prevails over the general shall apply.
(b) The General Rules set forth in detail the procedural provisions relating to the application of clauses on amortization, interest, credit commission, inspection and supervision, disbursements, as well as other provisions related to the execution of the Project. The General Rules also include definitions of a general nature.
3. EXECUTING AGENCY (a) The parties agree that: (i) the execution of the Project and the use of the Bank's financing resources shall be carried out entirely by the Borrower, who shall in turn delegate the execution of the Project to Empresa Propietaria de la Línea, S.A., hereinafter referred to interchangeably as the "Executing Agency" or "EPL", whose legal and financial capacity to act as such is attested to by the Borrower; and (ii) the execution of the SIEPAC PROJECT shall also be carried out entirely by the EPL.
(b) The Borrower undertakes to transfer the Financing resources and the additional resources, referred to in Clauses 1.02 and 1.03(a) respectively, to the EPL and to ensure that the EPL fulfills all the obligations established in this Contract incumbent upon it as the Executing Agency of the Project, in accordance with the provisions of Clause 3.02(b).
4. GUARANTEE This Contract is subject to the condition that the Republic of Costa Rica, hereinafter referred to as the "Guarantor", jointly and severally guarantees, to the Bank's full satisfaction, the obligations assumed by the Borrower and directly assumes those incumbent upon it in accordance with the Guarantee Contract.
5. SPECIAL DEFINITIONS For the purposes of this Contract, the following special definitions are adopted, in addition to those contained in Chapter II of the General Rules:
(a) "Technical Cooperation" means the support project for the formation and progressive consolidation of a Regional Electricity Market referred to in Component 1 of this Project.
(b) "Treaty" refers to the Framework Treaty for the Electricity Market of Central America signed in Guatemala City on December 30, 1996, and its Protocols.
(c) "Participating Countries" refers to the countries participating in the SIEPAC PROJECT, which are the Republics of: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama.
(d) "Participating Electric Companies" refers to the electric companies participating in the SIEPAC PROJECT, which are: the Instituto Costarricense de Electricidad (Costa Rica); the Instituto Nacional de Electrificación (Guatemala); the Comisión Ejecutiva Hidroeléctrica del Río Lempa (El Salvador); the Empresa Nacional de Energía Eléctrica (Honduras); the Empresa Nicaragüense de Electricidad (Nicaragua); and the Empresa de Transmisión Eléctrica, S. A. (Panama).
(e) "MER" means the Regional Electricity Market (Mercado Eléctrico Regional).
(f) "CRIE" means the Regional Electric Interconnection Commission (Comisión Regional de Interconexión Eléctrica) referred to in the Treaty.
(g) "EOR" means the Regional Operating Entity (Ente Operador Regional) referred to in the Treaty.
(h) "EPL" refers interchangeably to the Empresa Propietaria de la Línea referred to in the Treaty under the name "Empresa Propietaria de la Red" or "EPR", and to Empresa Propietaria de la Red, S.A. referred to in the Shareholders' Agreement of Empresa Propietaria de la Línea de Transmisión Eléctrica, S. A., signed on November 30, 2001.
Cost, Financing, and Additional Resources CLAUSE 1.01.-Project Cost. The total cost of the Project is estimated at the equivalent of fifty-three million three hundred seventy-five thousand dollars of the United States of America (US$53,375,000). Unless otherwise stated in this Contract, hereinafter the term "dollars" means the legal tender currency of the United States of America.
CLAUSE 1.02.-Financing Amount. Under the terms of this Contract, the Bank undertakes to grant to the Borrower, and the Borrower accepts, financing, hereinafter referred to as the "Financing", charged to the capital resources of the Quinto Centenario Spanish Fund, up to the equivalent sum of ten million dollars (US$10,000,000) in Euros, forming part of said resources. The amounts disbursed under this Financing shall constitute the "Loan".
CLAUSE 1.03.-Additional Resources.
(a) The amount of additional resources to this Loan, and to Loan 1368/OC-CR, consisting of financing up to a sum of thirty million dollars (US$30,000,000) charged to the resources of the Bank's Ordinary Capital, which, in accordance with Article 6.04 of the General Rules, the Borrower undertakes to contribute in a timely manner for the complete and uninterrupted execution of the Project, is estimated at the equivalent of thirteen million three hundred seventy-five thousand dollars (US$13,375,000), without this estimate implying any limitation or reduction of the Borrower's obligation in accordance with said Article. Said amount may include up to the equivalent of seven million six hundred twenty-five thousand dollars (US$7,625,000) from contributions from ENDESA Internacional, S.A., hereinafter referred to as "ENDESA", to the EPL. To calculate the equivalence in dollars, the rule set forth in subsection (b) of Article 3.06 of the General Rules shall be followed. In relation to the provisions of Article 6.04 of the General Rules: (i) "the Project" refers to one-sixth of the resources required for the complete and uninterrupted execution of the SIEPAC PROJECT; and (ii) the Borrower's obligations are absolute, unconditional, and irrevocable and may not in any way or manner be reduced, limited, terminated, or otherwise affected by the failure to comply with contractual obligations, or by commissions or omissions, or by any right, against claim, defense, waiver, surrender, or compromise of one or more of the Participating Electric Companies in their capacity as borrower or of one or more of the Participating Countries in their capacity as guarantor.
(b) In addition to the resources indicated in Clause 1.01 of these Special Provisions, the Participating Electric Companies, backed by the respective guarantees of the Republics of El Salvador, Guatemala, Honduras, Nicaragua, and Panama, shall sign with the Bank the loan contracts necessary to complete the sum equivalent to three hundred twenty million two hundred fifty thousand dollars (US$320,250,000), at which the total cost of the SIEPAC PROJECT is estimated, as follows: (i) the Republic of El Salvador shall contribute to the SIEPAC PROJECT a sum equivalent to fifty-three million three hundred seventy-five thousand dollars (US$53,375,000), consisting of: (aa) thirty million dollars (US$30,000,000) corresponding to Loan No. 1369/OC-ES and a local counterpart estimated at the equivalent of ten million thirty-one thousand two hundred fifty dollars (US$10,031,250); and (bb) up to the equivalent of ten million dollars (US$10,000,000) in Euros corresponding to Loan No. 004/SQ-ES and a local counterpart estimated at the equivalent of three million three hundred forty-three thousand seven hundred fifty dollars (US$3,343,750); (ii) the Republic of Guatemala shall contribute to the SIEPAC PROJECT a sum equivalent to fifty-three million three hundred seventy-five thousand dollars (US$53,375,000), consisting of: (aa) thirty million dollars (US$30,000,000) corresponding to Loan No. 1370/OC-GU and a local counterpart estimated at the equivalent of ten million thirty-one thousand two hundred fifty dollars (US$10,031,250); and (bb) up to the equivalent of ten million dollars (US$10,000,000) in Euros corresponding to Loan No. 005/SQ-GU and a local counterpart estimated at the equivalent of three million three hundred forty-three thousand seven hundred fifty dollars (US$3,343,750); (iii) the Republic of Honduras shall contribute to the SIEPAC PROJECT a sum equivalent to fifty-three million three hundred seventy-five thousand dollars (US$53,375,000), consisting of: (aa) the equivalent of twenty-five million dollars (US$25,000,000) corresponding to Loan No. 1095/SF-HO and a local counterpart estimated at the equivalent of eight million three hundred fifty-nine thousand three hundred seventy-five dollars (US$8,359,375); and (bb) up to the equivalent of fifteen million dollars (US$15,000,000) in Euros corresponding to Loan No. 007/SQ-HO and a local counterpart estimated at the equivalent of five million fifteen thousand six hundred twenty-five dollars (US$5,015,625); (iv) the Republic of Nicaragua shall contribute to the SIEPAC PROJECT a sum equivalent to fifty-three million three hundred seventy-five thousand dollars (US$53,375,000), consisting of: (aa) the equivalent of twenty-five million dollars (US$25,000,000) corresponding to Loan No. 1096/SF-NI and a local counterpart estimated at the equivalent of eight million three hundred fifty-nine thousand three hundred seventy-five dollars (US$8,359,375); and (bb) up to the equivalent of fifteen million dollars (US$15,000,000) in Euros corresponding to Loan No. 008/SQ-NI and a local counterpart estimated at the equivalent of five million fifteen thousand six hundred twenty-five dollars (US$5,015,625); and (v) the Republic of Panama shall contribute to the SIEPAC PROJECT a sum equivalent to fifty-three million three hundred seventy-five thousand dollars (US$53,375,000), consisting of: (aa) thirty million dollars (US$30,000,000) corresponding to Loan No. 1371/OC-PN and a local counterpart estimated at the equivalent of ten million thirty-one thousand two hundred fifty dollars (US$10,031,250); and (bb) up to the equivalent of ten million dollars (US$10,000,000) in Euros corresponding to Loan No. 006/SQ-PN and a local counterpart estimated at the equivalent of three million three hundred forty-three thousand seven hundred fifty dollars (US$3,343,750). The local counterpart amounts indicated in this paragraph (b) may include up to the equivalent of seven million six hundred twenty-five thousand dollars (US$7,625,000) per country, from contributions from ENDESA to the EPL.
Amortization, Interest, Inspection and Supervision, and Credit Commission CLAUSE 2.01.-Amortization.
(a) The Loan shall be amortized by the Borrower through semi-annual, consecutive, and, as far as possible, equal installments. The first installment shall be paid on the first date on which the interest payment must be made, after ten years and six months have elapsed from the date of this Contract, and the last, no later than February 26, 2037.
(b) Amortization and interest payments shall be made in Euros.
CLAUSE 2.02.-Interest.
(a) Interest shall accrue on the daily outstanding balances of the Loan at an annual rate for each Semester that shall be determined by the cost of the Quinto Centenario Spanish Fund resources for the Government of the Kingdom of Spain. As soon as possible after the end of each Semester, the Bank shall notify the Borrower of the interest rate for the following semester. The effective interest on the Loan, net of the interest subsidy charged to the Compensation Account of the Quinto Centenario Agreement referred to in the letter agreement signed on this date by both parties and the Guarantor, may not be lower than that in effect for operations financed by the Fund for Special Operations (FOE), that is, 2% per year, with the corresponding adjustments to said subsidy being made.
(b) Interest shall be paid semi-annually on the 26th day of the months of February and August of each year, beginning on August 26, 2002.
(c) Interest shall be paid with Financing resources and without the need for a request from the Borrower, during the disbursement period and on the dates established in the preceding paragraph.
CLAUSE 2.03.-Reference to the General Rules. In matters of interest calculation, currency obligations, exchange rate, participations, place of payments, receipts, application of payments, prepayments, waiver of part of the Financing, and maturity on holidays, the provisions for such purposes in Chapter III of the General Rules shall apply, except that for the purposes of this Contract the following is established:
(a) Article 3.02 is eliminated; (b) Article 3.03 shall read as follows: "Calculation of interest. Interest shall be calculated based on the exact number of days in the corresponding Semester."; (c) Article 4.05 is eliminated; and (d) In Article 3.13, the reference to commissions is eliminated.
Disbursements CLAUSE 3.01.-Disbursement Currencies and Use of Funds.
(a) The Financing amount shall be disbursed in Euros, forming part of the Quinto Centenario Spanish Fund resources, to pay for goods and services acquired through international competition and for the other purposes indicated in this Contract.
(b) The Financing resources may only be used for the payment of goods and services originating from the Bank's member countries.
CLAUSE 3.02.-Special Conditions Precedent to the First Disbursement of the Financing for Engineering and Administration (Category 1 of Annex A) and Concurrent Expenses (Category 3 of Annex A). The first disbursement of the Financing for consulting services for the preparation of the environmental impact assessment (estudios de impacto ambiental) and the final designs of the SIEPAC PROJECT works is conditioned upon the fulfillment, to the Bank's satisfaction, in addition to the conditions precedent stipulated in Article 4.01 of the General Rules, of the following requirements:
(a) That the contracts necessary to complete the total financing of the SIEPAC PROJECT, indicated in Clause 1.03(a) and (b), as well as the corresponding guarantee contracts, have entered into force; (b) That each of the Participating Electric Companies, the respective government, if necessary, and the Empresa Propietaria de la Línea ("EPL"), have signed the respective credit agreement, and any necessary subsidiary agreements, for the transfer to the EPL, as a loan, of the resources from the loans and the national counterpart indicated in Clauses 1.02 and 1.03, and the obligations incumbent upon it as the Executing Agency of the SIEPAC PROJECT, which shall establish, among other aspects: (i) that the resources of the loans granted from the resources of the Fund for Special Operations (FOE) shall be transferred under the same financial terms as the FOE during the disbursement period established in Clause 3.05 and, as of that date, under the financial terms of the Ordinary Capital; the loans from the Ordinary Capital shall be transferred under the same financial terms under which these loans are granted; and the loans from the Quinto Centenario Spanish Fund shall be transferred under the same financial terms provided for this Fund; and that the counter-guarantee (contra-aval) from the EPL to the Participating Electric Company shall be granted in the event that said Company or the respective government so requires; (c) That the procurement procedures for goods and services, supplementary to Annexes B, C, and D of this Contract, which shall govern the purchases and contracting carried out by the EPL, have been adopted and put into effect; and (d) That the government or borrower of each of the Participating Countries has: (i) granted the EPL the respective permit, authorization, or concession, as applicable, for the construction and operation of the regional interconnection system; and (ii) defined the mechanism, procedures, and action plan to obtain and secure legal possession, easements (servidumbres), or other necessary rights concerning the properties where the works will be built.
CLAUSE 3.03.-Special Conditions Precedent to the First Additional Disbursement. The first disbursement of the Financing resources additional to the disbursements contemplated in Clause 3.02 above is conditioned upon the fulfillment, to the Bank's satisfaction, in addition to the conditions precedent stipulated in Clause 3.02 above and Article 4.01 of the General Rules, of the following requirements:
(a) That the main milestones of the Technical Cooperation, related to the initial stage of operation of the MER, have been met, as established below:
(i) That the Regional Electric Interconnection Commission ("CRIE") and the Regional Operating Entity ("EOR") have been constituted as entities with their own legal personality and international public law capacity applicable to their Parties, with the functions provided for in the Treaty and agreed with the Bank, which must be exercised in accordance with the regional agreement or regulation of the MER referred to in subsection (xii) of this Clause, including, in the case of the CRIE, the authority to establish, regulate, and annually adjust, based on MER studies, the maximum percentages of installed capacity as a generator or demand as an electricity distributor of a MER agent representing the maximum permissible level of their direct or indirect interests in the MER for: (A) a MER agent; and (B) a MER agent that is a shareholder of the EPL; (ii) That the transitory rules necessary for the operation of the Central American electrical interconnection, for application in the MER, have been approved and put into effect by the CRIE, upon the proposal of the EOR; (iii) That the 230 kV transmission line between El Salvador and Honduras has been put into operation, thereby initiating exchanges among the six countries of the region; (iv) That the internal regulations of the CRIE defining the administrative and technical structure of this entity, in accordance with the provisions of the Treaty and the design of the MER, are in force; and that this entity is in operation, with at least: its physical establishment in one of the Participating Countries and its financial capacity to operate; (v) That the internal regulations of the EOR as the operational authority over the entire Regional Transmission Network (RTR), defining the administrative and technical structure of this entity, including the functions of the Board of Directors, in a way that ensures independence, neutrality, and transparency in its decision-making, are in force and that this entity is in operation, with at least its physical establishment in one of the Participating Countries and its financial capacity to operate; (vi) That the CRIE, upon the proposal of the EOR, has issued the operating and maintenance standards for the RTR; (vii) That based on the provisions of the general design of the MER, the Oversight Committee attached to the CRIE has been constituted; (viii) That the CRIE has approved and is applying the regulations on the functioning of the MER, which must establish all the principles of dispatch, opportunity market ("spot"), bilateral contracts, and the technical and reliability guidelines of the MER. Furthermore, said regulations must include:
(1) Specific milestones to ensure that legally authorized buyers from one country have the option of acquiring their electric energy needs from suppliers located in other countries, if this results in the solution of greatest economic efficiency; (2) The obligation to separate accounting by activity segment, and to create separate business units in all electric companies in the Central American region whose corporate structure remains as a Vertically Integrated Company ("EVI") and to eliminate cross-subsidies between activities; (3) The common accounting methodology to be adopted in MER operations and the obligation to make available to the CRIE all information it requires, including the accounting records of the regulated companies; (4) The initial maximum percentages of installed capacity as a generator, or demand as an electricity distributor, of a MER agent, based on MER studies, representing the maximum permissible level of their direct or indirect interests in the MER for: (A) a MER agent; and (B) a MER agent that is a shareholder of the EPL; and (5) The technical and commercial regulations for the development of regional generation.
(ix) That the CRIE has approved the regulation establishing the methodology and remuneration bases for the RTR and its form of application to MER agents, and the procedures for calculating connection charges and network usage, including cases where only agents in the same country are involved. Said regulation must ensure that the SIEPAC Line pays for itself and that no cross-subsidies occur between countries; (x) That the EOR Directorate has formally constituted the Regional Coordination and Transactions Center (CRCT) of the EOR with the functions and in accordance with the procedures established in the Technical Cooperation Program; (xi) That the designs and bidding documents for the CRCT have been prepared, previously approved by the Bank and in accordance with the MER operating regulations; and (xii) That the governments have approved a regional agreement or regulation formalizing their agreement on the characteristics of the MER, within which the regional bodies of the same must operate, by defining its fundamental and irreversible aspects and principles, prepared based on the provisions of the Treaty and the General Design of the MER.
(b) That the EPL's bylaws are in force, and that they specify, among other aspects, that: (i) the EPL was constituted as a corporation (sociedad anónima), of a private nature, with majority public participation, in which no shareholder directly or indirectly owns more than 15% of the total share capital of the company or of any class of voting shares; and (ii) mechanisms for the protection of minority shareholders have been adopted; and (c) That the agreement among all shareholders of the EPL has been signed and entered into force, along with the criteria for approving the construction of the SIEPAC Line by sections, the modality and financing of the final designs of the SIEPAC Line, and the commitments of the national Participating Electric Companies to build in a timely manner the reinforcements required by each of the national transmission systems.
CLAUSE 3.04.-Reimbursement of Expenses with Financing Resources. With the Bank's acceptance, Financing resources may be used to reimburse expenses incurred or finance those incurred in the Project from November 28, 2001, until the date of this Contract, provided that requirements substantially analogous to those established in this instrument have been fulfilled.
CLAUSE 3.05.-Disbursement Period. The period for disbursing the Financing resources shall be five (5) years, counted from the effective date of this Contract.
CLAUSE 3.06.-Revolving Fund. The reports related to the execution of the Project that the Borrower must provide to the Bank pursuant to Article 7.03(a)(i) of the General Rules must include the accounting-financial information on the management of the Revolving Fund resources and information on the status of the special bank accounts used for managing the Financing resources and the local contribution, in the form reasonably requested by the Bank.
Project Execution CLAUSE 4.01.-Conditions on Prices and Procurement.
(a) The procurement of goods, works, and related services shall be subject to the Bidding Procedure included as Annex B of this Contract. When the estimated value of the goods or related services is at least the equivalent of two hundred fifty thousand dollars (US$250,000) or more, and that of the works is at least the equivalent of one million five hundred thousand dollars (US$1,500,000) or more, and provided that the entity responsible for carrying out the Project's bidding processes belongs to the public sector, the procurement method to be used shall be international public bidding (licitación pública internacional), as stipulated in said Annex.
(b) For the purposes of the provisions of paragraph 1.02 of Annex B, the supplementary procedures that the Bidder may apply are those determined by the Participating Countries as a condition precedent to the first disbursement of the Financing, in accordance with the provisions of Clause 3.02(c) of these Special Provisions.
(c) For the purposes of the provisions of paragraph 2.06 of Annex B, the applicable procedures for tenders for amounts below the limits established in subsection (a) above, shall be those set forth in Annex D of this Contract.
(d) For the purposes of the provisions of Annexes B and D of this Contract, whenever said Annexes refer to national preference or to national publicity and competition, it shall be understood that they refer to regional preference or regional publicity and competition. Regional is understood to mean the region composed of the Republics of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama.
(e) For the purposes of the provisions of paragraph 3.17 of Annex B, prequalification or registration of bidders shall be used in the bidding for the execution of the transmission works referred to in paragraph (f) of this Clause.
(f) Due to the complexity of the Project and to ensure uniformity in all equipment, the construction of the transmission works shall be carried out on a turnkey basis, even if executed in sections, which shall be awarded through international public bidding, in accordance with the provisions of this Clause, unless the Participating Countries, with prior approval of the Bank, agree otherwise based on technical and economic criteria. For the Bank to consider a request from the Executing Agency for the construction of any section, the Executing Agency must provide technical and economic justification.
(g) In addition to the international publicity established in paragraph 3.03(c)(ii) of Annex B, the notice of prequalification or registration for the tendering of the turnkey contract referred to in the preceding paragraph must be published in a newspaper of wide international circulation and/or a recognized technical journal of wide international circulation.
(h) Unless the parties agree otherwise, before calling for each public bidding, or if no call for bidding is required, before the acquisition of goods or the commencement of works, the Borrower, through the Executing Agency, must submit for the Bank’s consideration: (i) the general plans, specifications, budgets, and other documents required for the acquisition or construction and, as applicable, the specific bidding documents and other documents necessary for the call for bids; (ii) in the case of works, evidence that it holds, with regard to the properties where the works of the SIEPAC PROJECT will be built, the legal possession, the easements (servidumbres), or other rights necessary to begin the works; and (iii) evidence of having contracted, in accordance with the terms of reference agreed upon with the Bank, the services of a specialized consulting firm for the supervision of the works.
CLAUSE 4.02.-Maintenance. The Borrower and the Executing Agency undertake to: (a) ensure that the works and equipment included in the SIEPAC PROJECT are adequately maintained in accordance with generally accepted technical standards; and (b) submit to the Bank, during the ten years following the completion of the first of the works of the SIEPAC PROJECT, and within the first quarter of each calendar year, a report on the condition of said works and equipment and the annual maintenance plan for that year, in accordance with the provisions of Chapter VII of Annex A. If, from the inspections carried out by the Bank, or from the reports it receives, it is determined that maintenance is being performed below the agreed levels, the Borrower and the Executing Agency must adopt the necessary measures to fully correct the deficiencies.
CLAUSE 4.03.-Recognition of expenses charged to the local counterpart. The Bank may recognize, as part of the Project’s local counterpart resources, expenses incurred on the Project up to the equivalent of one million dollars (US$1,000,000) in the acquisition, with regard to the properties where the works of the SIEPAC PROJECT will be built, of the rights of legal possession, the easements (servidumbres), topography, studies, and environmental licenses or other rights necessary to begin the works, carried out before November 28, 2001, but after May 28, 2000, provided that they have met requirements substantially similar to those established in this Contract. It is understood that the Bank may also recognize, as part of the local counterpart, expenses incurred or to be incurred on the Project from November 28, 2001, up to the date of this Contract, provided that the aforementioned requirements have been met.
CLAUSE 4.04.-Contracting of consultants, professionals, or experts.
(a) The Executing Agency shall select and directly contract the services of consultants, professionals, or experts necessary to comply with the relevant provisions of this Contract, in accordance with the procedures established in Annex C and Annex D.
(b) In contracting consulting services for the preparation of the final engineering designs envisioned in the Project, the Executing Agency may use the selection method based on "Lowest Price". For the purposes of the foregoing, the following is established:
(i) The procedure for submission of proposals, negotiation, and award of contracts established in subsections (c) and (d) of Paragraph 5.01 of Annex C of this Agreement shall be replaced by the following procedure: "In the invitation to submit proposals to the consulting firms on the shortlist, it shall be indicated that the technical proposals must be submitted in two envelopes. The first envelope shall contain the technical proposal and the second envelope shall contain the financial proposal. The envelopes of the technical proposals shall be opened first and said proposals shall be evaluated. Proposals that have not reached the minimum acceptable technical level previously agreed upon with the Bank shall be rejected, and the envelopes with the financial proposal corresponding to said technical proposals shall be returned unopened. Only proposals that reach or are above the minimum acceptable technical level, established in the scoring system for the selection of consulting firms previously agreed upon with the Bank, and of which the Contracting Entity must inform the shortlisted firms in the invitation to submit proposals, shall be accepted." (ii) Subsection (e) of Paragraph 5.01 of Annex C of this Agreement is amended as follows: "Before beginning negotiations, the Contracting Entity shall provide the Bank, for its no-objection, a copy of the report summarizing the evaluation of the technical proposals submitted by the shortlisted firms referred to in Section 5.01(a)(iii). Once the Bank's no-objection to this evaluation is received, the opening of the envelopes containing the financial proposal corresponding to the technical proposals that have reached or are above the minimum acceptable technical level shall proceed. The firm that submitted the lowest financial proposal shall be selected for the negotiation and award of the contract. When, as a result of the technical proposal evaluation process, the Contracting Entity concludes that there is only one consulting firm that has reached or is above the minimum acceptable technical level, the Contracting Entity may not negotiate or award the contract to said firm until the Bank has granted its no-objection, after having received, to its satisfaction, the financial proposal of said firm, as well as any other clarification or information that the Bank has requested regarding the selection process of firms or the selected firm." CLAUSE 4.05.-Reports. The Borrower undertakes to submit to the Bank, through the Executing Agency, and without prejudice to the provisions of Articles 4.01(d) and 7.03(a)(i), respectively, of the General Conditions of this Contract and the annual evaluation report to be prepared by the Oversight Committee, the following reports:
(a) Within a period of no less than six (6) months before calling for public bidding on the Project works, evidence of having submitted a preliminary version of the national Environmental Impact Assessments (EIA) (Estudios de Impactos Ambientales, EIA) of its country to the review of the competent environmental authorities and, in accordance with the laws of the country and the Bank’s standards, to the general public for discussion and comments; (b) Within a period of no less than six (6) months before beginning the execution of the Project works, evidence of having submitted the national Environmental Impact Assessments (EIA) (Estudios de Impactos Ambientales, EIA) of its country, including the corresponding Environmental Management Plans (PMA) (Planes de Manejo Ambiental, PMA), to the competent environmental authorities and, in accordance with the laws of the country and the Bank’s standards, to the knowledge of the general public. The borrowers, through the EPL, shall take measures to ensure that the PMA and other recommendations established in the EIA are incorporated into the bidding documents. The PMA shall contain at least the following components: (i) plans for the creation and consolidation of the environmental management capacity of the electrical entities at the national level for the monitoring of the SIEPAC Project; (ii) direct impact mitigation plans; (iii) plans for the mitigation of indirect impacts and impacts on protected or fragile areas; (iv) contingency and emergency plan; (v) relocation and resettlement plans when necessary; and (vi) environmental follow-up and monitoring plan during the construction and operation phase of the line; and (c) Within a period of two (2) years, counted from the completion of the construction of the SIEPAC Line, a report with the results of the analysis of the performance of all components of the SIEPAC PROJECT. This analysis must have been carried out in coordination with CRIE and EOR, comparing said performance with what was foreseen in the studies and designs of the SIEPAC PROJECT components. In the event that adverse conditions and significant deviations are found with respect to the initial design parameters, the Borrower must take the necessary measures so that the EPL, in coordination with the Bank, CRIE, and EOR, defines the corrective measures, as well as the work program for their implementation.
CLAUSE 4.06.-Monitoring Meetings. In addition to the supervision and administration tasks that the Bank shall periodically carry out through its country offices in the Participating Countries, mid-term reviews of the SIEPAC PROJECT shall be conducted, in accordance with the provisions set forth below:
(a) Annually, during the execution of the SIEPAC PROJECT, meetings shall be held in which the Borrower, the EPL, CRIE, EOR, and others whose participation is necessary according to the agenda agreed upon between the parties must participate with the Bank, as it corresponds to each, to evaluate the results obtained from the SIEPAC PROJECT during the preceding year, based on the initial report, the annual evaluation report to be prepared by the Oversight Committee, and the progress reports referred to in Articles 4.01(d) and 7.03(a)(i), respectively, of the General Conditions of this Contract, which must cover the SIEPAC PROJECT, and to review the programming of the SIEPAC PROJECT activities for the following year. In the event that any goals or actions have not been met, the causes shall be analyzed and the necessary corrective measures shall be recommended, the Borrower committing to ensure that the EPL, within its powers, seeks the implementation of the recommendations during the following year; and (b) In addition to the annual evaluation meetings mentioned in subsection (a) above, at the end of the second year counted from the date on which the Project becomes eligible for disbursement of the Financing resources, a mid-term evaluation of the progress of the execution of the SIEPAC PROJECT, the proposals resulting from the studies financed by the SIEPAC PROJECT, and the proposed mechanisms to ensure its sustainability shall be carried out.
Records, inspections, and reports CLAUSE 5.01.-Records, inspections, and reports. The Borrower undertakes that, by itself or through the Executing Agency, records shall be kept, inspections shall be permitted, and reports and financial statements shall be provided, in accordance with the provisions established in Chapter VII of the General Conditions.
CLAUSE 5.02.-Audits. In relation to the provisions of Article 7.03 of the General Conditions, the financial statements of the Project, the SIEPAC PROJECT, and those of the Executing Agency shall be submitted duly audited by an independent public accounting firm acceptable to the Bank, those of the Project and the SIEPAC PROJECT during the period of its execution, and those of the Executing Agency during the term of this Contract.
Miscellaneous provisions CLAUSE 6.01.-Effectiveness of the contract.
(a) The parties record that the effectiveness of this Contract commences on the date on which, in accordance with the laws of Costa Rica, it acquires full legal validity. The Borrower is obliged to notify the Bank in writing of said effective date, attaching the documentation that so accredits it.
(b) If, within a period of one year counted from the signing of this instrument, this Contract has not entered into effect, all the provisions, offers, and expectations of rights contained therein shall be deemed non-existent for all legal purposes without the need for notifications, and therefore, there shall be no liability for any of the parties.
CLAUSE 6.02.-Termination. The total payment of the Loan and of the interest and commissions shall terminate this Contract and all obligations derived from it.
CLAUSE 6.03.-Validity. The rights and obligations established in this Contract are valid and enforceable, in accordance with the terms agreed upon herein, without relation to the legislation of any specific country.
CLAUSE 6.04.-Communications. All notices, requests, communications, or notifications that the parties must address to each other by virtue of this Contract shall be made in writing and shall be considered completed from the moment the corresponding document is delivered to the addressee at the respective address noted below, unless the parties agree otherwise in writing:
For the Borrower:
Postal address:
Instituto Costarricense de Electricidad Sabana Norte, Apartado 10032-1000 San José, Costa Rica Facsimile:
(506) 220-1555 For matters related to the execution of the Project:
Postal address:
Instituto Costarricense de Electricidad Sabana Norte, Apartado 10032-1000 San José, Costa Rica Facsimile:
(506) 220-1555 For matters related to the execution of the SIEPAC PROJECT:
Postal address:
Empresa Propietaria de la Línea Presidente EPL c/o Empresa Nacional de Energía Eléctrica (ENEE) Tegucigalpa, Honduras Facsimile:
(504) 237-1898 For matters related to the service of the Loan:
Postal address:
Ministerio de Hacienda Ave. 2a, Calles 1 y 3 San José, Costa Rica Facsimile:
(506) 233-8267 For the Bank:
Postal address:
Banco Interamericano de Desarrollo 1300 New York Ave., N.W.
Washington, D.C. 20577 USA Facsimile:
(202) 623-3096
Arbitration CLAUSE 7.01.-Arbitration Clause. For the resolution of any dispute arising from this Contract that is not resolved by agreement between the parties, the latter submit unconditionally and irrevocably to the procedure and award of the Arbitral Tribunal referred to in Chapter IX of the General Conditions.
IN WITNESS WHEREOF, the Borrower and the Bank, each acting through its authorized representative, sign this Contract in three identical counterparts in San José de Costa Rica, Costa Rica, on the date indicated above.
INSTITUTO COSTARRICENSE DE ELECTRICIDAD BANCO INTERAMERICANO DE DESARROLLO Pablo Cob Bertus Meins President Representative HONOR WITNESS Miguel Ángel Rodríguez Echeverría PRESIDENT OF THE REPUBLIC RGII-CAO99P-CR SECOND PART GENERAL CONDITIONS
Application of the General Conditions