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November 25, 1988

WHEREAS, the Government of the Philippines and the BELGO-LUXEMBURG ECONOMIC UNION having concluded the General Agreement on economic, industrial, scientific, technical and development cooperation dated the 15th day of January 1987;

WHEREAS, the Government of the Philippines is desirous of carrying out the water supply of several locations in Cebu Province;

WHEREAS, the Government of Belgium is willing to fund these projects;

NOW, THEREFORE, for and in consideration of the mutual covenants herein contained, it is hereby agreed as follows:

ARTICLE I
(OBJECTIVES)

The project is intended to supply adequate potable water to inhabitants of the municipalities of BORBON, CARMEN, CARCAR, DALAGUETE and PINAMUNGAHAN of the Province of Cebu of the Republic of the Philippines.

ARTICLE II
(RESPONSIBLE AGENCIES)

The Government of the Kingdom of Belgium designates the Belgium Administration for Development Cooperation (BADC) as its agency responsible for the execution of the Project, this Authority being represented in the Philippines by the Belgian Embassy in Manila.

The Government of the Philippines designates local Waterworks and Utilities Administration (hereinafter called LWUA) as its implementing agency of the project.

ARTICLE III
(OBLIGATIONS OF THE GOVERNMENT OF BELGIUM)

The Government of Belgium shall make the following contributions to the project:

a. provide a grant in the amount of BF FORTY MILLION (BF40,000,000.00) for the purpose of carrying out the project;

b. prepare and send out the calls for tender concerning the materials for the transmission lines of the water supply systems based upon the technical specifications to be provided by the Philippine side;

c. prepare and support the corresponding orders;

d. support the transport of supplies and Insurances up to Provincial Engineering Office compound, Provincial Capitol, Cebu City;

e. obtain its own consultant acceptable for both sides to provide technical assistance during the implementation of the project in order to implement the acceptance and quality control of the piping materials supported by the Government of Belgium, and to monitor the studies and works on site done by the Philippine Implementing agency;

f. obtain its own consultant to provide several activities concerning social animation corresponding to the terms of reference drafted by the Philippine implementing agency.

ARTICLE IV
(OBLIGATIONS OF THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES)

The Government of the Philippines agrees as follows:

a. to exempt from all import and export duties, taxes and other official charge to the equipments, supplies, and etc. provided by the Government of Belgium or its consultants in connection with the project;

b. to provide, through LWUA the Implementing agency, all available and necessary information data, reports, maps, and documents relevant to the project to the consultants;

c. to give, through LWUA the consultants every reasonable assistance to enable them to perform their assignment;

d. to conduct, through LWUA a detailed engineering studies concerning the routing and sizing of the transmission lines and distribution network, the definition and the sizing of the equipment, detailed Implementation program (the Technical Specifications and detailed drawings of the transmission lines, distribution network and appropriate civil works. This study will contain, among others, the bill of quantities and technical specifications of the materials of all agreed water projects to allow the Government of Belgium to fulfill her obligations;

e. to provide the terms of reference concerning the activities of social animation like management training, operation and maintenance training and base-community accounting training;

f. to bear the cost: concerning the following items:

- the acquisition of the "right-of-way", the damages and repair works, if any. to the neighbors,

- all civil works, laying works, construction works, and etc. for the construction and/or rehabilitation of the spring boxes, transmission lines, distribution networks, the start-up, etc.,

- all materials necessary for the project, that are not supported by the Government of Belgium, and their transportation up to the site,

- storage costs in the Philippines and transport cost of piping materials from the Provincial Engineering Office compound, Cebu City to the respective project sites.

ARTICLE VI
(ENTRY INTO FORCE AND DURATION)

This AGREEMENT shall enter into force upon the signing of this document and shall thereafter remain In force and effect until the final acceptance of the works. Any amendment of/or addition to this AGREEMENT can be made by an Exchange of Notes.

Done in Manila, Philippines, 25 November 1988, the day and year here-in-before mentioned in the English Language.