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RELATING TO THE AUSTRALIA-WORLD BANK CO-FINANCING FACILITY

This document records the understandings between the Government of the Republic of Indonesia and the Government of Australia with respect to the general procedures for the provision of assistance under the Australian Co - financing Facility with the World Bank. Specific arrangements for pro -jects to be undertaken in Indonesia under the co-financing Facility will be formally recorded in separate documents to be known as Project Arrangements, to be signed in each instance by the two Governments.

OBJECTIVES

FORMS OF ASSISTANCE

TERMS OF ASSISTANCE

l . The objective of the Australian Co -financing Facility is to assist in the preparation for, or implementation or, World Bank endorsed projects in Indonesia by offering Australian scientific and tech-nical expertise and, where appropriate, Australian supplies. The Co- financing Facility extends the scope of assistance which Australia is able to provide under the regular bilateral aid program .

2. co-financing assistance offered by Australia may be in the form of grant aid for techni-cal expertise, training or supplies .

3. Assistance provided under the Co - financing Facility may be limited to Australian services and supplies to the maximum extent possible, taking into account the availabi -lity of local serviccc and supplies, o ·' a case by case basis .

PROJECT

SELECTION AND OFFER OF ASSISTANCE

ACCEPTANCE OF OFFER

TERMS OF REFERENCE

4. a) Identifi cation

As the Government of Indonesia, after consultation with the World Bank, identifies a Bank supported project in Indonesia suitable for Austral ian assistance , the Government of Indonesia will advise the Australian Government .

b) Consideration and Offer

If the Australian Government is able to respond positively to such a request, the Australian Embassy , Jakarta , will inform the Indonesian Government in writing of an offer in principle to provide assis-tance to the selected project , subject to further consultations as to the financial limit , form and timing of such assistance .

5 . If the Australian offer is acceptable in principle, the Indonesian Government wil l inform the Australian Embassy in writing .

6 . The Indonesian Government or the desig -nated technical authority (Executing Agent) responsible for the project, will prepare comprehensive Terms of Reference in consul-tation with the World Bank . The Terms of Reference will define project objectives, scope of assistance sought from Australia, timing of project implementation and a schedule of project supplies to be obtainerl from Australia .

FORMAL APPROVAL

SELECTION OF AUSTRALIAN CONSULTANTS OR CONTRACTORS

7. Following consideration of the Terms of Reference submitted by the Government of

Indonesia and of the estimated cost of services to be supplied, the Australian Government will make a formal commitment to provide funds to the project .

8. The Australian Government will assist the Indonesian Executing Agent in selecting an Australian firm for the provision of agreed services, by observing the following established procedures :

Public advertisement in Australia of required project technical services. Determination of a short- list of consultants on the basis of capability statements considered by an Australian technical advisory panel.

Clearance with the World Bank and the Executing Agent ofthe scope and schedule of services to be provided by Australia. Invitation of short-listed organisations to submit substantive technical proposals based on the agreed scope and schedule of services .

Referral of technical proposals to both the World Bank and the Executing Agent for comment prior to final evaluation of proposals being carried out .

Evaluation of substantive proposals by a joint Australian/Indonesian technical advisory panel which will ｴ｡ｫｾ＠ .iuto consideration :

CONSULTANCY

PERSONNEL

each organisation ' s experience and capacity in the technical sphere of the project;

each organisation ' s response to the Terms of Reference, proposed methodo-logy and work plan;

experience , qualifications and ｾｴ･ｮ｣･＠

of personnel proposed for the project ; The Australian firm recommended by the technical advisory panel will be subject to formal approval by the Indonesian Government. All contractual arrangements with the selected firm will be stated in specific Project Arrangements.

9. For the purposes of each project, the Indonesian Government will, in accordance with prevailing laws and regulations , facilitate the employment by the Australian Government of the consultancy personnel required for t he project and established between the two Governments by

(a) bearing income or other taxes on project salaries and allowances; Australian project personnel wil l not bear these taxes.

(b) granting exemption from ｾｲｴ＠ and other duties on personal and household effects; (c) granting exemption from taxes and duties

on the purchase in Indonesia of a locally assembled motor vehicle per expert on condition that i t either be sold to

a person who has the same privileges, or to the Government authorised agents. The expert's assignment should be on a long term basis of at least twelve (12) consecutive months period;

(d) granting to Australian project personne l a l l rights and entitlements accorded to the a i d personnel of any other donor country;

(e) expediting the issue of all documentation required for the entry of, and performance of work by, project personnel including work permits or certificates for eligible persons.

PROJECT 10 . The selected Australian finn will be required IMPLEMENTATION to provide the spec i f i ed services to the

Executing Agent, which will be responsible for project impl ementation and liaison and consultation, as appropriate, with the World Bank . All reports, drawings, maps , documents , etc . will become to property of the Exe -cuting Agent on completion of the respective project .

CONSULTANT COOPERATION

PROCUREMENT OF SUPPLIES

11. The selected Australian firms and the selected Indonesian firms will cooperate to achieve project objective .

12 . (a) Responsibil ity for purchasing and arranging delivery of suppl ies agreed to be provided by Austral i a will be ::>tc1ted in the specific Project Arrangements .

The schedule of agreed s upplies will

be specified in the offer of Australian

assistance .

On completion of the

pro-ject all agreed supplies shall become

the property of the Government of

Indonesia.

(b)

The Executing Agent may elect

to

utilise

the services of the Australian

consul-tant or contractor to assist in

pro-curement activities,

in which case

such procurement services as may be

required will be included in the scope

of services in the contract .

(c)

Procurement services that may be

provided by the Australian consultant

or contractor could be any or all of

the following

Preparation of tender specifications;

Public advertisement for tenders

in Australia;

Receipt and evaluation of tenders;

Follow- up orders placed by or on

behalf of the Executing Agent;

Inspection and acceptance of suwlies

on completion of orders;

Arranging packing, shipment and

in-surance

to the

port of delivery in

Indonesia; and

Certification of procurement account

for payment .

(d)

The Executing Agent will

SUPPLIES

13 .

Retain overall responsibility for

procurement, as the consultant or

contractor would be acting on behalf

of the Executing Agent;

Formally place the order with the

successful tenderer ; and

Authorise payment for supplies and

associated costs , such as shipping

and insurance.

(e)

All costs associated with procurement

services provided by Australian

con-sultants or contractors, together with

costs of shipping and insurance to the

port of delivery will be met from

Australian funds .

(f)

Responsibility for customs clearance

and transport, including associated

charges , from the port of delivery

will be the responsibility of the

Executing Agent.

(a)

The

Indonesian Government will, in

accordance with prevailing laws and

regulations , either exempt from import

duties

and

other taxes , or pay/reimburse

such duties or taxes on all supplies

purcahsed by Australia foreach project.

(b)

The Indonesian Government will facilitate

movement of project equipment and

supplies

by

providing appropriate customs

and wharfage facilities in the port of

entry and will be responsible for the

expeditious transport of such equipment

and supplies to the site .

PAYMENT PROCEDURES

DURATION

CONTRIBUTIONS

14 . Payments for services and supplies provided

under the Australian contribution will be

made as follows for :

Consultant or Contractor Services - the Australian Government will pay directly the consultants or contractors for services

rendered, or may advance funds to the

Vbrld Bank to pay consultants on its behalf. Payment procedures for each project will be stated in the specific Project Arrange-ments. Where payment is made by the World Bank, the Executing Agent will be respon-sible for providing certification to the

World Bank that the services have been

satisfactorily performed and for ensuring

that such advice is transmitted to the world Bank in the shortest reasonable time.

Supplies and Associated Costs - procedures for payment for agreed supplies and

associated shipping and insurance will be

stated in the specific Project Arrangerrents.

15. This Memorandum will take effect from the

date of its signature. The duration of

co-financed projects will be set out in specific Project Arrangements.

16. The contributions of the Indonesian and

Australian Governments will be set out in specific Project Arrangements. Disbursement of the Indonesian and Australian Governments '

contributions will be subject to the normal annual budget appropriations .

PROJECT

EVALUATION AND REVIEW

LIABILITY

SECURITY

SETTLEMENT OF

DIFFERENCES

Annual budgets, including forward alloca-tions and actual disbursement, will be prepared by both Governments .

17. The Australian Government may participate in joint evaluation and review missions with the Indonesian Government and the World Bank .

18 . The Government of Indonesia will be

respon-sible for dealing with any claims which may be brought by third parties against Australia and its experts, agents or Australian personnel and will hold hrumlless Australia and its experts, agents and Australian personnel in case of any claims or liabilities resulting from operations under this Memorandum.

This provision will not relieve any person from liability for any criminal, grossly, negligent or fraudulent act .

19. The Government of Indonesia will arrange for any protection deemed necessary to ensure the safety of Australian personnel, project location, in transit in Indonesia or on any other official representational

activity in Indonesia. The Australian

Governmentwil l take reasonable precautions to ensure that Australian personnel have due regard for local traditions and customs.

20 . Any disputes arising out of the

interpreta-tion or implementainterpreta-tion of this Memorandum will be settled amicably by consultation or negotiation between the two Governments .

AMENDMENTS 21 , Amendments to this Memorandum may be made at any time by an Exchange of Letters between the two Governments .

SIGNED at Canberra , in duplicate , this seventeenth day of December 1985.

Signed

FOR THE GOVERNMENT OF AUSTRALIA

Signed