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September 14, 2002
MEMORANDUM OF AGREEMENT
KNOW BY ALL MEN THIS PRESENTS:
This AGREEMENT made and entered into at Manila, Philippines by and between:
The DEPARTMENT OF AGRICULTURE, a government agency of the Government of the Republic of the Philippines (GOP), with principal address at Elliptical Road, Diliman, Quezon City, represented by its Secretary, MR. LEONARDO Q. MONTEMAYOR, hereinafter referred to as DA.
and
The CHINA NATIONAL CONSTRUCTIONAL AND AGRICULTURAL MACHINERY IMPORT AND EXPORT CORPORATION, a corporation duly-owned and operated by the People's Republic of China (PROC), with principal address at Huapu International Plaza, No. 19, Chao Yang Men Wai Avenue, Beijing, represented by its Chairman, MR. REN HONGBIN, hereinafter referred to as CAMC;
WITNESSETH
WHEREAS, the GOP through the DA, the Executing Agency, intends to carry out the Expansion/Improvement Project of General Santos Fish Port Complex (GSFPC), hereinafter referred to as "the Project".
WHEREAS, the Project intends to provide the needed infrastructure and facilities for the efficient landing, handling and marketing of fish in Gen. Santos City, South Cotabato. The Project aims to (a) centralize and facilitate unloading of fishing vessels and carriers as well as handling and distribution of fish; (b) promote maximum capacity utilization of existing canneries in the area; (c) improve quality handling of frozen fish products; (d) increase employment opportunities; and (e) accommodate additional volume of wastewater that will be generated from the expected industries to be set up inside the complex.
WHEREAS, the CAMC shall provide the GOP with supplier's credit loan facility amounting to about US$ 24.98 Million on the basis of the "Loan Agreement" signed on the 14th day of September 2002 between the GOP and CAMC for the implementation of the Project; and
WHEREAS, the DA through the Philippine Fisheries Development Authority (PFDA), as the implementing agency avails the facility under the terms and conditions as set forth in the Loan Agreement, in accordance with the Project Implementation Memorandum (PIM) attached hereto as "Annex A".
NOW, THEREFORE, for and in consideration of the foregoing premises, the parties hereto mutually agree, as follows to wit:
The DA/PFDA shall be responsible for the following:
1. Provision of the down payment equivalent to 10% (ten percent) of the Total Contract Price;
2. Provision of counterpart group through creation of a Project Management Unit responsible in overseeing and monitoring daily activities of the Project;
3. Confirm and assure that CAMC's performance and quality of work accomplished is in accordance with the contract documents;
4. Secure, through the PMU, all permits, licenses and clearances as may be required in relation to the Project; and
5. Apply exemption for the payment of import duties and local taxes, excluding Value-Added Tax (VAT), for all the goods and services that will be incurred for the Project.
The CAMC shall be responsible for the following:
1. Design, execution and completion of the Project in accordance with the Scope of Work and Implementation Schedule stipulated in Annex A;
2. Provision of equipment and machinery, materials and supplies in accordance with the set technical specification and quality standard agreed upon in the Contract to be entered into by DA/PFDA and CAMC;
3. In the event of hiring of local consultants, such should conform with the qualifications set in the Terms of Reference stipulated in Annex A, Attachment 4;
4. Conduct of detailed engineering design, plans, specifications, cost estimates and work schedule and proceed with the construction of expansion facilities; and
5. Provision of for the training of PFDA in the Operation and Maintenance (O&M) of completed facilities.
It is further agreed by both parties concerned that any and all stipulations in this Agreement is consistent with the content of the Financial Protocol (FP) and the Loan Agreement (LA). Should any of the stipulations of this Agreement be in conflict with the said documents, such stipulations shall be deemed null and void ab initio, without prejudice to the effectiveness of any other stipulations.
This MEMORANDUM OF AGREEMENT shall take effect upon signing of this document by the parties.
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have set their hands this 14th day of September, 2002 at Manila, Philippines:
ACKNOWLEDGEMENT
REPUBLIC OF THE PHILIPPINES ) ) S.S
QUEZON CITY ) x---------------------------------------------------x BEFORE ME, A Notary Public for and in_______________, this day of_________2002 at_________________, personally appeared: LEONARDO Q. MONTEMAYOR PETRONILO B. BUENDIA CESAR M.DRILON, JR. Who are known to me to be the same persons who executed the foregoing instrument and they acknowledged to me that the same is their own free and voluntary act and deed and that of the entities the respectively represent.
This Agreement, consisting of___________ pages including the page on which this acknowledgement is written, has been signed on each and every page thereof by the parties hereof and their instrumental witnesses, and sealed with my notarial seal.
IN WITNESS WHEREOF, I have hereunto set my hand, the day, year and place above written.
_________________________
Doc. No.____
Page No.____
Book No.____
Series of 2002
Annex A
PROJECT IMPLEMENTATION
MEMORANDUM
General Santos Fish Port Complex (GSFPC)
Expansion/ Improvement Project
Department of Agriculture
Philippine Fisheries Development Authority
TABLE OF CONTENTS I. Nature of the Loan II. Description of the Project A. Objectives B. Location C. Scope of Work D. Estimated Project Cost E. Implementation Schedule Implementation Plan III. IMPLEMENTATION PLAN A. Organization B. Conduct of the Detailed Engineering Studies
C. Procurement 1. Consulting Services 2. Civil, Mechanical and Electric Works 3. Machinery and Equipment D. Prices of Contract E. Construction of the Project 1. Construction Coordination 2. Liquidated Damages 3. Progress Billing/ Payment 4. Quality Control Laboratory 5. Commissioning and Trial Operation 6. Acceptance of the Project 7. Warranty/Guarantees IV. Operation and Maintenance V. Environmental Compliance Certificate VI. Measures to be Adopted A. Budgetary Appropriation B. Employees Training VII. Project Monitoring and Supervision VIII. Progress Report IX. Project Completion Report
Annex A
PROJECT IMPLEMENTATION MEMORANDUM
GENERAL SANTOS FISH PORT COMPLEX (GSFPC)
EXPANSION/IMPROVEMENT PROJECT
Borrower : Government of the Republic of the Philippines (GOP)
Lender : China National Constructional and Agricultural Machinery Import and Export Corporation (CAMC) of the People's Republic of China (PROC)
Executing Agency : Department of Agriculture/ Philippine Fisheries Development Authority (DA/PFDA)
I. NATURE OF LOAN
With a view of strengthening the economic and diplomatic ties, a Financial Protocol (Attachment 1) was signed last December 20, 2000 between the Government of the Republic of the Philippines represented by the Department of Finance (DOF) and Peoples Republic of China represented by the China National Constructional and Agricultural Machinery Import and Export Corporation (CAMC). In accordance with the Financial Protocol, CAMC shall provide the Republic of the Philippines with "suppliers credit" (Attachment 2) for the execution of the projects included in the economic and agricultural development programs of the country. The project shall be implemented by CAMC, including the provision of technical training as well as continuing support and services for the efficient operation of the completed project/s.
In the field of agriculture, among the projects identified to be financed under said protocol is the proposed Expansion/Improvement Project of the Gen. Santos Fish Port Complex (GSFPC) being managed and operated by the Philippine Fisheries Development Authority (PFDA) of the Department of Agriculture (DA), which is the executing agency of the project.
Under the Financial Protocol, 90% of the Total Contract amount shall be financed under this protocol with a maturity period of 10 years inclusive of 2-year grace period and shall bear an interest rate of 3% per annum, it shall be payable in 16 semiannual equal installment where the first amortization shall be due after the initial disbursement for the project. The remaining 10% shall correspond to the project's local counterpart funds of the DA.
II. DESCRIPTION OF THE PROJECT
A. Objectives
The proposed project aims to:
1. Provide the needed infrastructure facilities for fish landing and marketing;
2. Facilitate the centralization and concentration of operations of unloading of fishing vessels and carriers as well as handling and distribution offish;
3. Promote maximum capacity utilization of existing canneries in the area;
4. Improve quality handling of frozen fish products;
5. Increase employment opportunities; and
6. Accommodate additional volume of wastewater to be generated from the expected industries to be set up inside the complex.
B. Location
The proposed expansion/improvement project is located in the existing GSFPC in Brgy. Tambler, General Santos City in South Cotabato (Figure 1).
C. Scope of Work
The scope of work of the proposed project would include the construction/provision of the following:
1. 500 meters of deep draft wharves (Site 1 and Site 2 Wharves) which will accommodate large tonnage fishing vessels over 300 GRT;
2. 1500 MT capacity cold storage facility;
3. 500 cubic meters wastewater treatment plant;
4. 650 KVA power sub-station and 750 KVA stand-by generator set; and
5. Wharf handling machinery/equipment.
The General Layout is shown in Figure 2.
D. Estimated Project Cost
The estimated cost of the project and detailed financial plan is presented as follows.
Detailed cost breakdown is as follows.
(In '000 Pesos)
Cost(A) Engineering Services/1 (B) Machinery/Equipment (C) Supplies and Materials (D) Civil Works/2 (E) Mobilization/Demobilization/ Transportation/Trial Operation 16,730.39
(F) Contingencies Total /1 inclusive of VAT payment and estimated at after sales
/2 inclusive of cost for project insuranceThe estimated annual fund requirement of the project is summarized as follows:
(In '000 Pesos)
Exchange rate : US$1 = PhP55.00E. Implementation Schedule
The Implementation schedule of the project was drawn up on the assumption that the loan agreement'will be signed in September 2002 and the implementation will start in January 2003.
(SEE FIGURE IN ORIGINAL DOCUMENT)
III. IMPLEMENTATION PLAN
A. Organization
For the close coordination and monitoring of the implementation of the Project, the DA shall create a Project Management Unit or PMU. The PMU shall be composed of regular PFDA staff and shall be composed of three (3) groups, to wit:
1. Project Evaluation and Auditing Group;
2. Plans and Design Review and Evaluation Group; and
3. Construction Management Group.
The first two (2) groups, namely: Project Evaluation and Documentation and Plans and Design Review and Evaluation groups, shall be based at the Central Office of PFDA. The Construction Management Group shall be based at the project site, specifically in GSFPC in Gen. Santos City.
The detailed functions and Organizational Chart in the PMU are presented in Attachment 3 and Figure 3.
B. Conduct of the Detailed Engineering Studies
One of the preliminary activities to be undertaken after signing of the Contract is the conduct of the Site Survey, Subsoil Investigation and Detailed Engineering Design. In this connection, the prices of the Contract shall consist of two packages:
1. Package A - the prices for the site survey, subsoil investigation and detailed engineering design shall be fixed during the period of Contract Negotiation.
2. Package B - The prices for the Civil Works, Equipment/Machineries and Materials/ Supplies shall be indicative and be reviewed, verified and validated by the PMU after the detailed engineering design.
The Terms of Reference for the conduct of Detailed Engineering studies is presented in Attachment 4.
C. Procurement
The procurement of Consulting Services shall be the responsibility of CAMC, being the General Contractor of the Project. Procurement procedure of CAMC shall govern in the implementation of the project.
The quality of goods and services procured by CAMC should be in accordance with the set technical specification and quality standard agreed upon in the Contract to be entered into by DA/PFDAand CAMC.
1. Consulting Services
If CAMC would hire a local consulting firm, CAMC shall submit a shortlist of consultants chosen from accredited consulting firms for DA/PFDA's concurrence prior to entering into the contract agreement.
2. Civil, Mechanical and Electrical Works
Likewise, if CAMC would engage in the services of local civil, mechanical and electrical work contractors, these sub-contractors must be duly licensed by the Philippine Contractors Accreditation Board (PCAB). They must be qualified to undertake the work. CAMC shall submit the qualification document of the sub-contractors for DA/PFDA's approval prior to entering into the sub-contract agreement.
3. Machinery and Equipment
The CAMC shall be responsible for the procurement of machinery and equipment provided that it shall be within the international standard requirement specified in the Contract between CAMC and DA/PFDA.
D. Prices of Contract
Based on the plans, specifications and work schedule in the Contract, CAMC shall prepare the Cost Estimates of the project in the Contract presenting an itemized cost breakdown for every project component including the direct and indirect cost.
The Direct Cost shall include the cost of materials, supplies and other expenses such as storage, wastes and/or losses, the cost of labor and the equipment expenses while Indirect Cost shall include the Overhead, Contingencies and Miscellaneous Expenses (OCM), taxes and plus expected profit.
The itemized cost breakdown shall be reviewed, verified, updated and validated by the DA/PFDA after the detailed engineering design.
E. Construction of the Project
1. Construction Coordination
The PMU shall monitor and coordinate with CAMC all activities during the construction of the project particularly in reviewing the detailed engineering design, plans, specifications, and cost estimate. They shall see to it that the project is implemented based on the approved work schedule, contract cost and in accordance with the approved plans, specifications, and sound engineering practices. T he PMU shall also be responsible in coordinating with the LGUs and other agencies involved in the project.
2. Liquidated Damages
Penalties shall be charged to CAMC for any delays they caused beyond the Scheduled Completion Date for each component of the project, CAMC shall pay the GOP at the rate of zero point one percent (0.1%) per calendar day of the remaining cost of the unfinished work for the delay, limited to a maximum of five percent (5%) of the Total Contract Price. In the event of delays of Taking-Over due to the Contractors causes, CAMC shall pay the GOP for a penalty of certain amount, as applicable.
3. Progress Billing/Payment
The DA/PFDA through the PMU shall evaluate the progress billing submitted by CAMC and shall recommend payment for the work accomplished. An itemized cost breakdown of accomplished work item per project component and certification of accomplishment shall be prepared by CAMC to be verified by the PMU. The forms shown in Attachments 5 to 9 shall form part of the documentary requirements of the Notice of Disbursement to be forwarded by the DA to the Department of Finance (DOF).
4. Quality Control Laboratory
As practiced by the Department of Public Works and Highways (DPWH) for big projects in the country such as this, it is necessary that Material Testing Laboratory be provided at the project site by CAMC. It shall be complete with material testing equipment and apparatus for the conduct of sieve analysis, soil compaction test, concrete compression/flexural test, steel tensile tests and water pressure tests. The testing of material and equipment shall be undertaken at the laboratory under the supervision of the PMU.
5. Commissioning and Trial Operation
Trial operation of the project shall be undertaken by CAMC prior to issuance of Final Mechanical and Electrical Completion Certificate by DA/PFDA. CAMC shall prepare a schedule of all the commissioning activities and start up and trial operation to be undertaken. The maintenance cost that will be incurred during the conduct of the trial operation shall be borne by CAMC.
6. Acceptance of the Project
CAMC shall turn over the Project to DA upon completion of all the civil, mechanical and electrical works, commissioning, and trial operation of all the installed facilities. After the turn over of the Project, CAMC may apply for the issuance of Certificate of Acceptance to DA indicating the date of project completion and that all the works relative to the commissioning and trial operation have been completed using the form shown in Attachment 10.
7. Warranty/Guarantee
The warranty period shall be one (1) year or twelve (12) months after the completion of the Project. During this period, CAMC shall warrant that it will repair, replace or correct any failures, defects or deficiencies found in the over all works that may occur on account of CAMC during the warranty period. In the same way, CAMC shall also be responsible for the supply of accessories and spare parts of all the facilities and equipment of the project within the warranty period. It is the responsibility of CAMC to construct and set-up the facilities in accordance with the approved Technical Specifications.
IV. OPERATION AND MAINTENANCE (O & M) MANUAL
To guide and ensure proper and efficient operation and maintenance of the project, CAMC shall prepare and submit to DA all operation and maintenance manual of the different facilities in the Project. The Project shall not be considered complete unless said operation and maintenance manual shall have been submitted to DA.
V. ENVIRONMENTAL COMPLIANCE CERTIFICATE (ECC)
As required by the Environmental Management Bureau of the Department of Environment and Natural Resources or EMB-DENR (Attachment 11), another ECC application may not be necessary for the Project. However, the scope of the existing ECC with Reference Code 9104-004-052 issued to DA and Department of Public Works and Highways (DPWH) by DENR on December 3, 1991 (Attachment 12) shall be amended.
To be able to amend the existing ECC and secure the new ECC from the EMB-DENR, CAMC through its consultant shall prepare an updated Environmental Impact Statement (EIS). The DA through the PMU shall secure the required ECC.
VI. MEASURES TO BE ADOPTED
A. Budgetary Appropriation
DA shall take all the necessary measures to secure the 10% down payment in a timely manner.
The DA through the PMU shall secure exemption for the payment of import duties and taxes.
B. Employees Training
CAMC shall provide necessary training to the PFDA personnel who will be assigned in the operation, maintenance and repairs of the different facilities of the Project. Said training shall be undertaken at the site agreed by both CAMC and DA/PFDA. Training cost shall likewise be borne by CAMC.
VII. PROJECT MONITORING AND SUPERVISION
The DA/PFDA through the PMU shall continuously monitor the implementation of the project.
The DA, as executing agency shall also create a Project Steering Committee (PSC) to review and evaluate the project's performance and set policy decision for the success of the project implementation (composition and functions detailed in Attachment 13).
VIII. PROGRESS REPORT
CAMC shall submit monthly and quarterly progress reports of the project to the PMU until the Project is completed, in such details as DA/PFDA may reasonably request in accordance with the Loan Agreement. Quarterly report of the project shall be presented by CAMC Representative for the projected PMU's Project Manager to the PSC.
IX. PROJECT COMPLETION REPORT
Completion of the Project is defined as the completion of all the civil, mechanical and electrical works, commissioning, and trial operation of all the installed facilities. CAMC shall submit the Project Completion Report promptly, but in any event not later than forty five (45) days after completion of the Project, in such details as DA may reasonably request in accordance with the Loan Agreement.
LIST OF FIGURES
FIGURE 1 - Provincial Map of South Cotabato locating the General Santos City
FIGURE 2 - General Plan Layout of the Project
FIGURE 3 - Organizational Chart of Project Management Unit
LIST OF ATTACHMENTS
ATTACHMENT 1 - Financial Protocol
ATTACHMENT 2 - Definitions
ATTACHMENTS 3 - Functions of Project Management Unit (PMU)
ATTACHMENT 4 - Terms of Reference
ATTACHMENTS 5 - Form re: Recommendation for Payment
ATTACHMENT 6 - Form re: Certification of Completion
ATTACHMENT 7 - Form re: Partial Billing Statement
ATTACHMENTS 8 - Form re: Itemized Cost Breakdown
ATTACHMENT 9 - Form re: Detailed Cost Estimate
ATTACHMENT 10 - Form re: Certificate of Acceptance
ATTACHMENT 11 - Letter to DA-PFDA re: Submission of an Updated Environmental Impact Statement (EIS)
ATTACHMENTS 12 - Environmental Compliance Certificate issued to Agro Processing Facilities and Fish Port Complex, Brgy. Tambler, General Santos City, on December 3, 1991
(SEE FIGURE IN ORIGINAL DOCUMENT)
(SEE FIGURE IN ORIGINAL DOCUMENT)
(SEE FIGURE IN ORIGINAL DOCUMENT)