Common use of Employment of Consultants Clause in Contracts

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower shall employ such consultants under contracts using the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with the Association. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications . I. Organization and Management of the General Conditions For purposes RFLR 1. The RFLR shall prepare not later than October 1 of this Agreementeach year an organization and staffing plan for the following year, which shall be acceptable to the Bank. 2. The RFLR shall have core management including a president, a financial officer, an operations director and a procurement coordinator. 3. The management of the RFLR, under the direction of its President and with the input of its Council of Trustees, shall be responsible for ensuring overall coordination, management and monitoring of the Project, including the carrying out of any procurement and disbursement functions for the Project. 4. In coordinating the Project, the provisions of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association mayRFLR shall work closely with other relevant agencies, by notice to the Borrower, terminate the right entities and branches of the Borrower to make withdrawals ensure effective implementation. II. Annual Work Program and Mid-term Review 1. The RFLR shall present the Bank by October 1 of each year with respect a proposed work program under the Project for the following year, involving details on implementation and financing (including the increasing counterpart contribution to such amountoperating costs), and shall carry out the program as agreed with the Bank (the Annual Work Program). 2. Upon The RFLR shall cooperate with the giving of such notice, such amount Borrower in carrying out the obligations referred to in Section 3.04 of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Loan Agreement, the Association shall, in respect of any portion of the Credit:.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA PLN in carrying out the ProjectParts X, the BorrowerX, the ProvincesX, AJK and FATA X.0(x), X.0, X.0, xxx X.0, XXX shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the AssociationBank. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower PLN shall employ such consultants under contracts using the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower PLN shall use other standard forms agreed with the AssociationBank. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications PLN shall, by December 31, 1994, designate a manager in PLN, satisfactory to the Bank, for the purpose of coordinating the various activities under Parts X, X, X, X.0(x), X.0, X.0 and D.7 of the General Conditions For purposes of this Agreement, Project. 2. PLN shall operate the provisions Besai hydroelectric and Banjarmasin thermal power plants constructed under Parts A.1 and B.1 of the General Conditions are modified as follows: Project in accordance with the Bank’s Environmental Guidelines (1September 1988) The last sentence of Section 3.02 is deletedand in compliance with the Borrower’s national environmental standards. 3. PLN shall: (2a) The words "the Association maymake adequate arrangements, by notice satisfactory to the BorrowerBank, terminate for the right inspection and safety of Besai Dam constructed under Part A.1 of the Borrower Project including the appointment of independent engineering experts, satisfactory to make withdrawals the Bank, to carry out periodic inspection of Besai Dam with respect a view to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified determining its safety in sub-paragraph 3 accordance with appropriate engineering practices; (b) undertake, promptly after each such inspection, all necessary measures including repairs, if any, of Schedule 5 Besai Dam recommended by the said engineering experts; and (c) furnish, or cause to be furnished, regularly to the Development Credit AgreementBank a report regarding the said inspection and measures including repairs. 4. PLN shall jointly with the Borrower: (a) take the necessary measures required to reorganize PLN into a limited liability company (Persero): (b) by December 31, 1994, furnish to the Association shallBank a progress report concerning the reorganization of PLN together with a draft time bound corporate reorganization and restructuring action plan for PLN to operate according to best utility practices; (c) discuss the said progress report and draft action plan with the Bank; and (d) immediately thereafter, finalize the said action plan taking into account the comments, if any, thereon by the Bank. 5. PLN shall carry out the Environmental Action Plans in respect of any portion of a manner satisfactory to the Credit:Bank. 6. PLN shall carry out the Resettlement Action Plans in a manner satisfactory to the Bank.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Bank, the carrying out of the General Conditions For Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, on or about March 1, 1999, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Bank, by June 1, 1999, or such later date as the Bank shall request, the report referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank views on the matter. 2. In carrying out Parts A and C of the Project, the Borrower shall: (a) not later than March 31, 1997, complete the demarcation of the KSNP boundary; and (b) not later than September 30, 1997, complete the gazettement of KSNP. 3. In carrying out Parts A and C of the Project, the Borrower shall, not later than March 31, 1997, review measures to improve biodiversity management in logging concession areas adjacent to KSNP, including the possibility of excluding logging activities in certain areas, and, thereafter, cause the prompt implementation of any measures that are found to be feasible. 4. In carrying out Parts A and C of the Project, the Borrower shall take all steps necessary to ensure thatexisting logging permits for logging concessions in areas adjacent to KSNP are not renewed or extended without the inclusion of a biodiversity management zone for the areas adjacent to KSNP, such biodiversity management zone to remain in effect until biodiversity surveys have been carried out for purposes of identifying significant biodiversity sites to be protected. Thereafter, the identified biodiversity sites would remain as biodiversity management zones. 5. In carrying out Part A of the Project the Borrower shall: (a) take all measures necessary to ensure (i) that current mining exploration permits in KSNP are not renewed or extended after their expiration, and (ii) that, promptly upon the determination by the Borrower’s Ministry of Mining that an area subject to a mining concession lacks significant economic potential, the applicable mining concession is terminated in accordance with applicable legislation; (b) prior to the granting of exploration permits and exploitation or production licenses in KSNP, furnish to the Bank for comments, the full XXXXX evaluation by the Borrower’s Sectoral XXXXX Commission, including the specifications of exploration, mining and extraction methods, and any other mitigation measures required to minimize any adverse impact on KSNP from the proposed activity; (c) take all measures necessary to ensure that the exploration permit and the exploitation or production license, is granted solely on terms consistent with the findings and recommendations of the Borrower’s Sectoral XXXXX Commission and the Bank’s comments on the XXXXX evaluation; and (d) thereafter, ensure that all recommended mitigation measures are promptly and fully carried out. 6. In carrying out Part B of the Project the Borrower shall: (a) not later than September 30, 1998, prepare and carry out a land zoning plan for the Project area, including recommendations for the long-term management plan of KSNP, acceptable to the Bank; and (b) not later than June 1, 1999, review the land zoning plan for the Project area, and, promptly thereafter, carry out the recommendations of such review, taking into account the comments of the Bank. 7. In carrying out Part B.1 (b) of the Project, the Borrower shall make Grants in accordance with the procedures and on the conditions set forth in Schedule 6 to this Agreement. 8. The Borrower shall: (a) take all measures necessary to ensure that no roads shall be constructed or upgraded within KSNP until (i) the completion of the KSNP management plan and the land zoning plan for the Project area referred to in paragraph 6 of this Schedule, and (ii) an XXXXX shall have been carried out; and (b) ensure that any construction or upgrading shall be carried out in a manner consistent with the recommendations of the XXXXX, including recommendations for the carrying out of mitigating measures, and the requirements of the management plan and land zoning plan referred to in paragraph 6 of this Schedule. 9. The Borrower shall: (a) until April 1, 1999, not cause or permit involuntary resettlement of persons residing within KSNP; (b) thereafter, confine any involuntary resettlement to that required for purposes of protection of KSNP’s biodiversity; and (c) where involuntary resettlement is to be carried out, (i) furnish to the Bank for approval the Resettlement and Rehabilitation Action Plan, prepared on the basis of Schedule 7 to this Agreement, and (ii) thereafter, carry out the resettlement and rehabilitation of Affected Persons in accordance with the Resettlement and Rehabilitation Action Plan approved by the Bank. 10. In carrying out Part B.5 of the Project, the Borrower shall: (a) not later than September 30, 1998, furnish to the Bank for comments, the results of the baseline study and the impact assessment; (b) based on the results of the study and of the assessment, and taking into account the KSNP management plan, the land zoning plan for the Project area, and the comments of the Bank on the baseline study and impact assessment, prepare, not later than June 1, 1999, an action plan designed to ensure that the Orang Rimba do not suffer adverse effects as a result of the implementation of the above plans; and (c) promptly thereafter, carry out such action plan in a manner satisfactory to the Bank. 11. The Borrower shall provide the vehicles and the fertilizers required under the Project in accordance with a schedule and timetable agreed with the Bank. Procedures and Conditions of Grants Except as the Bank shall otherwise agree, the following procedures and conditions shall apply for purposes of paragraph 7 of Schedule 5 to this Agreement. 1. The district head (Bupati) shall be responsible for the final selection of sub-projects in his district, and shall take into account the recommendations of the relevant sub-district head (Xxxxx) and therelevant Village Community Resilience Institute (Lembaga Ketahanan Masyarakat Desa). 2. Each Grant shall be made only to a Grantee which shall have established to the satisfaction of the Borrower that: (a) the sub-project for which the Grant is proposed to be made: (i) is technically feasible, environmentally viable (including conservation of biodiversity), and economically justified; and, in the case of public infrastructure, economically justified; (ii) is estimated to cost $40,000 equivalent or less; and (iii) targets the most disadvantaged common interest groups; (b) necessary funding to fully finance the sub-project has been obtained, including the Grant and any voluntary contributions to be made by the villagers; (c) an implementation plan for the completion of such sub-project has been prepared; and (d) the Grant, when added to any prior Grant obtained, does not exceed the maximum of $75,000 equivalent. 3. Grants shall be made on terms whereby the Borrower shall obtain, by written contract with each of the Grantees or by other appropriate legal means, rights adequate to protect the interests of the Bank and the Borrower, including the right, as applicable, to: (a) require the Grantee to carry out and operate the sub-project with due diligence and efficiency and in accordance with sound technical, financial and managerial standards and to maintain adequate records; (b) require that: (i) the goods and services to be financed out of the proceeds of the Loan shall be procured in accordance with the provisions of Schedule 4 to this Agreement, and (ii) such goods and services shall be used exclusively in the General Conditions are modified as follows:carrying out of the sub- project; (1c) The last sentence inspect, by itself or jointly with representatives of Section 3.02 is deleted.the Bank if the Bank shall so request, such goods and the sites, works, plants and construction included in the sub-project, the operation thereof, and any relevant records and documents; (2d) The words "obtain all such information as the Association may, by notice Bank or the Borrower shall reasonably request relating to the Borrower, foregoing and to the benefits to be derived from the sub-project; and (e) suspend or terminate the right of the Borrower Grantee to make withdrawals with respect to such amount. Upon the giving of such notice, such amount use of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion proceeds of the Credit:Loan upon failure by such Grantee to perform its obligations under its contract with the Borrower. Terms of Reference for the Resettlement and Rehabilitation Action Plan

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: Bank; (ai) the terms of reference for such contracts, ; (bii) single-source selection of consulting firms, ; (ciii) assignments of a critical nature, as reasonably determined by the Association, the (div) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or ; or (ev) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications of Implementation Program Part A: Implementation Arrangements 1. Provincial Program Implementation Memorandum (PPIM) Except as the General Conditions For purposes of this AgreementBank shall otherwise agree, the provisions of PPIM shall, inter alia, include the General Conditions are modified as followsfollowing undertakings: (1a) The last sentence of Section 3.02 is deletedBorrower shall designate East Java as the principal Implementing Agency. (2b) The words "the Association may, by notice (i) East Java shall declare its commitment to the Borrower, terminate the right objectives of the Borrower Project as set forth in Schedule 2 to make withdrawals with respect this Agreement and to such amount. Upon the giving of such notice, such amount this end shall carry out its respective parts of the Credit Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering, environmental and resettlement practices, and shall provide, or cause to be cancelled" set forth at provided, promptly as needed, the end of Section 6.03 are deleted funds, facilities, services and the following is substituted therefor: "or (e) other resources required by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion Participating Local Governments and Participating PDAMs for their respective parts of the Credit:Project.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications Overall responsibility for the carrying out of the General Conditions Project shall be assigned by the Borrower to its MSAR. For this purpose, the Borrower shall ensure that MSAR shall: (a) continue to maintain, for the purposes of the Project: (i) an office with resources and staff whose qualifications and terms of reference are acceptable to the Bank, to be responsible for the coordination and supervision of the carrying out of the Project including the procurement of goods and services thereunder; and (ii) the National Committee on Administrative Reform (NCAR) established by the Borrower to advise MSAR on administrative reform activities including those in Parts B (2) (i) and (ii) of the Project. The Committee, chaired by the Prime Minister, shall include in its membership, and upon recommendation to the Prime Minister by MSAR as its deputy-chairman, representatives from the Council of Ministers, the civil service, academia, and the private sector; and (b) make arrangements, satisfactory to the Bank, for close coordination in the carrying out of the Project among the Office of the MSAR, the Borrower’s Ministry of Finance, CDR, the core administrative agencies, and other ministries proposed to benefit under the Project. 2. The Borrower shall: (a) enter, not later than December 15, 1995, into arrangements with CDR, satisfactory to the Bank, pursuant to which CDR shall be responsible, on behalf of the Borrower, for the procurement of goods and services provided under the Project, including establishing, for these purposes, a joint committee between CDR and the office of MSAR, with responsibilities agreed upon with the Bank; and (b) employ or cause to be employed, on the basis of a time- based schedule agreed with the Bank, consultants to assist in the carrying out of the Project pursuant to Section II of Schedule 4. 3. The Borrower shall, through MSAR, ensure that the workshops under Part B (2) (ii) of the Project shall be organized, and the participants therein shall be selected, in accordance with the following guidelines: (i) the objectives of the workshops to be the review and dissemination of international experience in administrative reform and the discussion of reform options in areas under consideration by the Borrower; (ii) the themes for the workshops to cover major aspects of administrative and civil service reform, including public/private partnership in the provision of public services, civil service regulations, public accountability systems, the mandate and structures of line ministries, and information technology; (iii) the timing of the workshops to take into account the timetable of the process of reform; and (iv) the participants in the workshops to include representatives of the groups concerned with administrative reform, including senior civil servants, members of Parliament, academics, representatives of the private sector, trade unions and non-governmental organizations, and the consultants assisting in the implementation of Part B (i) of the Project. 4. The Borrower shall: (a) cause each ministry or agency proposed to benefit from the Project to submit to the Office of MSAR: (i) a report setting forth an annual work plan covering the intended activities to be carried out under the Project; and (ii) a semi-annual report on the progress of such activities; and (b) submit and furnish to the Bank, for its review, an annual work plan report, and a semi-annual progress report, covering the whole Project and reflecting (a) above. 5. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate, on a continuous basis, in accordance with indicators satisfactory to the Bank, the carrying out of the Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, not later than March 31, 1997, a report integrating the results of the monitoring and evaluation activities performed pursuant to subparagraph (1) of this paragraph, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project during the period following such date; and (c) review with the Bank, on April 30, 1997, or such later date as may be agreed between the Borrower and the Bank, the said report, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank’s views on the matter. SCHEDULE 6 Special Account 1. For the purposes of this Agreement, the provisions of the General Conditions are modified as followsSchedule: (a) the term "eligible Categories" means Categories (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:),

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultantsþ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines þGuidelines for the Use of Consultants by The World Bank Borrowers and by the The World Bank as Executing Agency" Agencyþ published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-time- based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ consultantsþ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as followsThe Borrower shall: (1a) The last sentence develop, adopt and maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Bank, the carrying out of Section 3.02 is deletedthe Project and the achievement of the Projectþs objectives; (b) (i) by June 30, 1997, undertake a mid-term review of the implementation of the Project in consultation with and in a manner satisfactory to the Bank; (ii) prepare and, by September 30, 1997, furnish to the Bank, a report regarding the results of the mid-term review, including the progress achieved in the implementation of the Project during the period preceding the date of said report and measures recommended to ensure the efficient carrying out of the Project and the achievement of the Projectþs objectives during the period following such date; (iii) at the request of the Bank, review with the Bank the said report; and (iv) thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the Projectþs objectives, based on the conclusions and recommendations of the said report and the Bankþs views on the matter; and (c) by December 31, 1995, design a comprehensive national strategy, satisfactory to the Bank, for the divestiture of social assets of state-owned or state-controlled enterprises, and develop, as a part of such strategy, a set of principles covering access to essential social services. 2. The Borrower shall ensure that: (2a) The words "by June 30, 1996, policies related to eligibility of unemployed for benefits beyond the Association may, by notice existing six-month period have been adopted in a manner satisfactory to the BorrowerBank; alternative support and training options have been defined for school graduates and other new or returning entrants into the labor market; and the procedures for applying for unemployment benefits have been streamlined in a manner satisfactory to the Bank and responsibility for approval of unemployment benefits has been delegated from the existing commissions to the staff of the Employment Service; (b) by June 30, terminate 1996, the right Employment Service has developed guidelines to modify its overall staffing distribution in a manner satisfactory to the Bank; the current payment structure for participants in the temporary employment schemes (TES) has been changed in accordance with the revised structure of the unemployment benefits and payments for TES are above the minimum level of unemployment benefits; training advisory groups (TAGs) are set up in each Participating Region, and the Employment Service has developed a comprehensive strategy to contract training services to private and public institutions capable of delivering job-oriented training courses; (c) during each calendar year of Project implementation, each department, agency and administrative unit of the Borrower involved in Project implementation has prepared quarterly progress reports which shall then be made available to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of Bank through the Credit shall be cancelled" set forth at PCU no more than 30 days after the end of Section 6.03 are deleted and the following is substituted therefor: "or each quarter; and (ed) by February 15 of each calendar year of Project implementation, each department, agency and administrative unit of the date specified Borrower involved in sub-paragraph 3 Project implementation has prepared annual implementation progress reports which shall then be made available to the Bank through the PCU. 3. The Borrower shall establish and, until the completion of the Project, maintain a project coordination council (PCC) and a project coordination unit (PCU) and shall ensure that the PCC and PCU function at all times in a manner and with staffing, funds, facilities and other resources satisfactory to the Bank. 4. The Borrower agrees that: (a) the operations of the PCU shall be overseen by the PCC, which shall be chaired by a member of the senior management of the MOF; (b) the PCC shall be composed of Schedule 5 to representatives of: (i) the Development Credit AgreementMOF, MOL, the Association shallBorrowerþs Ministry of Economy, in respect Ministry of any portion Social Protection, Ministry of Health, Ministry of Education, State Committee on Management of State Property, State Committee on Privatization, and Ministry of Justice; (ii) the Credit:Participating Regions; and

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant GuidelinesGuide- lines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-single- source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts con- tracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as followsThe Borrower shall: (1a) The last sentence monitor and evaluate on an ongoing basis, in accordance with adequate procedures and indicators satisfactory to the Bank, the carrying out of Section 3.02 is deleted.the Project and the achievement of the objectives thereof; (2b) The words "prepare, under terms of reference to be agreed between the Association mayBorrower and the Bank, and furnish to the Bank, on or about June 30, 1999: (i) a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date, including an evaluation of the activities of the Observatory and a review of its status; and (ii) a multisectoral summary report prepared by the Secretariat on progress achieved by the Program; and (c) review with the Bank, by notice December 31, 1999, or such later date as the Bank shall request, the reports referred to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, as shall have been agreed between the Borrower and the Bank. 2. Without limitation upon the provisions of paragraph 1 above, the Borrower shall, starting in 1997 and by September 30 of each year, submit to the Development Credit AgreementBank: (a) an annual implementation report including: (i) a review of progress achieved in the implementation of the Project based on the Project and Program Indicators; (ii) projected sector and Project expenditures for the year; and (iii) activities programmed under the Project in the Selected Provinces; and (b) a qualitative assessment of progress achieved in the execution of the Program prepared by the Secretariat on the basis of the sectoral reports. 3. The Borrower shall furnish to the Bank for its review and com- ments by March 31, 1997, an action plan comprising measures to improve procurement, payment and disbursement procedures of the Borrower, and start implementation, not later than October 31, 1997, of those measures that shall have been agreed with the Bank. 4. The Borrower shall, not later than December 31, 1996: (i) appoint a BAJ coordinator within the Ministry of Interior; and (ii) take all necessary measures for the appointment of a BAJ focal point in each one of the Selected Provinces. 5. The Borrower shall cause the Secretariat to: (i) launch, together with the Ministries of the Borrower responsible for Interior, Employment and Social Affairs, Health and Education, not later than December 31, 1997, an integrated program management and geographic information system, with appropriate staffing therefor; and (ii) initiate two beneficiary assessments, the Association first one to be concluded before the preparation of the report for mid-term review referred to under paragraph 1 (b) (ii) above, and the second one to be concluded by completion of the Project. 6. The Borrower shall, starting with its Fiscal Year 1996/1997, earmark the expenditures for the activities financed under the Project in respect of any portion the respective budgets of the CreditMinistry of Interior and Population. 7. The Borrower shall take all necessary measures to reduce, by December 31, 2000, the share of Promotion Nationale’s activities devoted to urban community works to 20% of its budget. 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1) through

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA Borrower in carrying out the Project, the BorrowerBorrower shall, or shall cause its department or agency responsible for the Provincesexecution of a Sub-project to, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the AssociationBank. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Consultants’ Guidelines). For complex, time-based assignments, the Borrower shall employ such consultants under contracts using the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with the AssociationBank. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Consultants’ Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than firms and $50,000 equivalent eacheach for individuals. However, said exceptions this exception to prior Association Bank review shall not apply to (a) the terms of reference for such contractscontracts with firms or to the employment of individuals, (b) single-to single source selection of consulting firms, (c) to assignments of a critical nature, nature as reasonably determined by the Association, (d) Bank and to amendments to of contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or aboveabove for individuals and $100,000 or above for consulting firms. 1. Modifications The Center shall be responsible for the overall coordination of all Project activities. It shall cause all activities under the General Conditions For purposes Project (hereinafter referred to as the Sub-projects) to be carried out in accordance with the provisions of this Agreement. For this purpose, the provisions Borrower shall establish and monitor arrangements, satisfactory to the Bank, for ensuring effective coordination among the departments and agencies of the General Conditions are modified as followsBorrower involved in the implementation of the Project. 2. The purpose and scope of each Sub-project, the method of implementation thereof and the specific allocation thereto of proceeds of the Loan shall be determined by agreement between the Borrower and the Bank. Criteria for Sub-project Eligibility 3. A Sub-project shall be one of the following: (1a) The last sentence under Part A of Section 3.02 the Project, preparatory activities, including consultants’ services, goods and rehabilitation works needed to carry out such activities, for projects for which financing by the Bank, under loans made or to be made by the Bank other than the Loan, has been or is deletedexpected to be requested; (b) under Part B of the Project: (i) a program to strengthen the capacity and capability of institutions in the Russian Federation for project planning and implementation and economic development, including, inter alia, training and overseas study tours and the acquisition of equipment; and (ii) a program for overall development of the administration and management of technical and financial assistance; and (c) under Part C of the Project: (i) the refurbishment of Center premises which house the business opportunities bureau; (ii) development of a data base on enterprises with a potential interest in bidding in externally financed projects; (iii) business outreach, including information and marketing programs; or (iv) training programs on procurement procedures for interested local firms. (2) The words "4. A Sub-project shall have no equally suitable financing available from other external financing agencies. Sub-project proposals 5. Except as the Association mayBank may otherwise agree, by notice the Borrower shall submit, for each Sub-project, the following to the BorrowerBank for its approval: (a) a description of the studies and work to be carried out in connection with the proposed Sub-project, terminate including a time schedule for, the right purposes and objectives of, and the benefits expected from, such Sub-project; (b) the proposed selection procedures, qualifications, terms of reference and duration of service for any consultants to be engaged for the purposes of the proposed Sub-project; (c) a description of the role of the department or agency or personnel of the Borrower to make withdrawals with respect to such amount. Upon be responsible for the giving of such notice, such amount execution of the Credit shall proposed Sub-project and counterpart staff, if any, to be cancelled" set forth at supplied by the end Borrower; (d) a general description of Section 6.03 are deleted the arrangements to be made by the executing agencies for the provision of office space, secretariat facilities, transportation and other operational facilities required for the following is substituted therefor: "or Sub-project to proceed efficiently; (e) estimated foreign and local costs of the proposed Sub- project broken down by major items and showing amounts to be financed by the date specified in sub-paragraph 3 Borrower and out of the proceeds of the Loan, respectively, and an estimated disbursement schedule; and (f) measures to be taken to comply with paragraphs 6 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:and (c) below.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "“Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" ” published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications Except as the Association shall otherwise agree, in carrying out the Project, the Borrower shall apply the procedures set out in the Project Implementation Plan, and the Borrower shall not amend, abrogate or waive such Plan or any provision thereof, which, in the opinion of the General Conditions Association, will materially or adversely affect the implementation of the Project. 2. The Commissioner for Agriculture and Livestock Development of MOA shall be responsible for the overall implementation of the Project. 3. The Borrower shall establish and maintain a Project Steering Committee under the chairmanship of the Principal Secretary, MOA, comprising the Principal Secretaries of MOF, the Planning Commission, PMO, Community Development, and Women and Children, Ministry of Justice and Constitutional Affairs, heads of departments of MOA, and a representative each of farmers, and other extension providers, to address policy issues, approve the annual work plan and budget, review program progress and audit observations, approve changes to the Project Implementation Plan, and provide directions for overall management of the Project. 4. The Borrower shall, in each District, establish and maintain a DESC with composition and functions acceptable to the Association. Each DESC shall be chaired by the District Commissioner and shall, inter alia, review the implementation of the Project in the District, liaise with NGOs and other extension providers, assist in raising resources locally for supporting extension activities and provide support in farmer mobilization and resolving farmers’ problems. 5. The Borrower shall establish and maintain a Training Coordination Committee with composition acceptable to the Association to finalize the annual training plan for the Project, review training curricula and progress, facilitate networking between training institutions and give directions for the overall management training support under the Project. 6. The Borrower shall: (a) not later than December 31, 1996, strengthen and maintain its M & E system acceptable to the Association; (b) incorporate the findings and recommendations of the M&E system in the annual progress reports. 7. The Borrower shall, by May 31 in each year, furnish to the Association, for its review and comments, the annual work program for the carrying out of the Project and supporting budgets. Such documents shall include, inter alia, a review of progress, implementation issues, with proposed solutions, timetables and updated performance indicators. Pilot Subprojects Under Part D of the Project 8. Without limitation upon the provisions of paragraph 1 above, Pilot Subprojects shall be eligible for financing out of the proceeds of the Credit, only if they satisfy the criteria specified below, and in more detail in the Project Implementation Plan, which shall include, inter alia, the following: (a) the Pilot Subprojects shall cover an activity within any of the following areas: improvement in extension management, technology transfer, farmer/extension/ research linkages, participation of other providers, promotion of Savings and Credit Societies and farmers organizations; (b) the pilot Subprojects shall be initiated by MOA, NGOs, the private sector, cooperatives or farmer groups; and (c) the cost of the Subproject shall not exceed $100,000 equivalent, provided however, that Pilot Subprojects covering at least three districts may cost up to $200,000 equivalent. (a) The DESC, in the district or districts concerned, shall review each proposal for a Pilot Subproject and make recommendations to the PSC after such proposal has been reviewed by the Commissioner for Agriculture and Livestock within MOA. Each Pilot Subproject shall be approved by the PSC. (b) The first five Pilot Subprojects, as well as all Pilot Subprojects whose total cost is $20,000 or more, shall be sent to the Association for its approval. 10. The Pilot Subprojects shall be financed as grants under a Grant Agreement to be entered into between the Borrower and the Recipient of the grant under conditions satisfactory to the Association, including conditions whereby the Borrower shall obtain rights adequate to protect the interests of the Borrower and the Association, including to the extent appropriate, the right to: (a) require the Pilot Subprojects pilot activity be carried out with due diligence and efficiency and in accordance with sound technical, financial and managerial standards and to maintain adequate records; (b) require that the goods and works for the Pilot Subprojects to be financed out of the proceeds of the Credit be procured at a reasonable cost, account being taken of the time of delivery, efficiency, their quality and the competence of the parties rendering them; (c) obtain all such information as the Borrower and the Association shall reasonably request relating to the Pilot Subprojects; and (d) require the Recipients of grants to submit to MOA the final results of the Pilot Subprojects financed under the Project. 1. For the purposes of this Agreement, the provisions of the General Conditions are modified as followsSchedule: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "“Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" ” published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each, or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as followsEach Project State shall cause each participating WDC: (1a) The last sentence to select NGOs, to be contracted under the Project, in accordance with the criteria and procedures agreed with the Association; (b) to establish by January 31, 1999, with the help of Section 3.02 is deletedindependent financial management consultants, accounting, auditing and internal control practices acceptable to the Association; (c) starting in 1999, to provide to DWCD and the Association for review and comments by January 31 each year, a copy of the WDC’s annual action and procurement plans for the following year, prior to approval by the WDC Board and the State’s nodal Department and, thereafter, to take into account the Association’s recommendations and views in finalizing the plans; and (d) to employ: (i) by March 31, 1999, a Monitoring Officer, a Marketing Coordinator, and a Communications Officer at the state level and a Business Development Officer and supporting staff at the district level; and (ii) six months before the commencement of Project activities in any new district in the Project States, a District Manager, a Business Development Officer and support staff. 2. Each Project State shall cause its respective WDC, before the WDC provides assistance for social programs or to leverage funds for community asset creation, to: (2a) The words "consult with the community to prioritize activities; (b) reach an agreement with the community to support the health and child care programs after funding for the Project has been utilized; and (c) obtain a commitment from the relevant community and/or SHG for the operation and maintenance of the community asset to be created. 3. Where the Project is implemented in any state tribal area (as designated by such state in accordance with applicable laws), such Project State shall: (a) develop Project implementation arrangements in the tribal area in consultation with potential members of SHG and in accordance with criteria and procedures satisfactory to the Association; and (b) cause the Project to be implemented in the tribal area in accordance with such implementation arrangements. 4. Each Project State shall cause all participating WDCs: (a) to maintain policies and procedures adequate to enable each WDC to monitor and evaluate on an ongoing basis, in accordance with indicators acceptable to the Association, the implementation of the Project and the achievement of the objectives thereof; (b) to prepare, under terms of reference satisfactory to the Association, and furnish to the Association, every three months beginning on or about December 31, 1998, and every twelve months beginning on or about December 31, 1999, a report, which integrates the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient implementation of the Project and the achievement of the objectives thereof during the period following such date; and (c) to review with the Association, by March 31, 2001, or such later date as the Association mayshall request, by notice the reports referred to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the Development Credit Agreement, the Association shall, in respect of any portion efficient completion of the Credit:Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said reports and the Association’s views on the matter.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (ai) the terms of reference for such contracts, ; (bii) single-source selection of consulting firms, ; (ciii) assignments of a critical nature, as reasonably determined by the Association, ; (div) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or ; or (ev) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2a) The words "Borrower shall implement the Association may, by notice to Project through the Borrower, terminate Implementing Agencies. NPAC shall have overall responsibility for the right implementation of the Borrower Project, while PAPMU shall act as secretariat to make withdrawals with respect NPAC and shall be responsible for day to such amount. Upon the giving of such notice, such amount day management of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 Project. (b) The Borrower shall ensure that throughout the implementation of Schedule 5 the Project, PAPMU shall be staffed by competent staff in adequate numbers, including a full-time director whose qualifications and experience shall be acceptable to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:Association.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (ai) the terms of reference for such contracts, (bii) single-source selection of consulting firms, (ciii) assignments of a critical nature, as reasonably determined by the AssociationBank, (div) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (ev) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications . A. Part A of the General Conditions For purposes of this AgreementProject: Environment, the provisions of the General Conditions are modified as followsLand Acquisition and Resettlement 1. XAR shall: (1a) The last sentence of Section 3.02 is deleted. (2) The words "carry out the Association may, by notice EAP and the RAP in a manner satisfactory to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 Bank; (b) furnish any proposed revision of Schedule 5 the EAP and the RAP to the Development Credit AgreementBank for its prior approval; (c) during the construction phase of the Urumqi-Kuitun Highway and for each of the first three (3) years following completion of construction, prepare, under terms of reference acceptable to the Association shallBank, and furnish to the Bank an annual environmental monitoring report; and (d) prepare, under terms of reference acceptable to the Bank, and furnish to the Bank: (i) by March 31 and September 30 of each year starting September 30, 1996, an internal monitoring report prepared by the appropriate agencies of XAR; and (ii) by June 30 and December 31 of each year starting December 31, 1996, an external monitoring report prepared by an independent agency acceptable to the Bank, regarding the implementation and impact of the resettlement activities during the previous six months. B. Part B of the Project: Highway Maintenance 1. XAR shall furnish to the Bank for its review and comments, by March 30 of each year from 1997 until 2003, in a format acceptable to the Bank, an annual highway maintenance report in respect of any portion the entire regional highway network which shall: (a) indicate the length and condition of each class of road; (b) establish targets for the following year, including an estimate of the Creditrequired physical works and costs thereof; and (c) measure the results and actual expenditures of the past year against the targets and the budgeted funds therefor. 2. XAR shall: (a) by January 31 of each year commencing in 1997, prepare and furnish to the Bank for its concurrence the MRP yearly program for such year on the basis of technical and economic criteria acceptable to the Bank, such yearly program to include inter alia an estimate of the costs therefor and the expected IRI on the road segments covered by such program; and (b) thereafter, implement such program in a manner satisfactory to the Bank. 3. XAR shall, by January 31 of each year from 1997 until 2000, furnish to the Bank for its review and comments, an annual report on highway maintenance and rehabilitation under the MRP which shall: (a) indicate the highway maintenance and rehabilitation activities undertaken during the previous year; and (b) indicate the actual IRI for the previous year, the expected IRI during the current year, and the costs associated with achieving such IRI, on the paved highways included in the MRP. C. Part C of the Project: Institutional Strengthening and Training 1. XAR shall (a) carry out the training under Part C of the Project in accordance with a training program acceptable to the Bank; and (b) to that end, by October 31 of each year commencing in 1997, furnish to the Bank for its approval a rolling two-year training implementation schedule. 2. XAR shall, by April 30, 2000, furnish to the Bank for its review and comments, an analysis and recommendations of the structure of toll-rates on the Urumqi-Kuitun Highway taking into consideration the results of studies on toll-rate structures conducted under other Bank-financed highway projects in China and the experience with toll-rates in other parts of China. D. Part D of the Project: Highway Safety Program 1. XAR shall establish, not later than December 31, 1996, and thereafter maintain: (a) a Leading Group, which shall include representatives from XCD and the regional agency responsible for traffic safety, for traffic safety coordination and policy-making, with functions and responsibilities acceptable to the Bank; and (b) a Highway Safety Secretariat, with functions and responsibilities acceptable to the Bank, to serve as secretariat for said Leading Group and to develop safety audit procedures. 2. XAR shall, pursuant to terms of reference acceptable to the Bank: (a) by October 31, 2000, complete a black spot identification and improvement program in a manner satisfactory to the Bank; (b) by October 31, 2000, complete a program to improve road signs and markings in a manner satisfactory to the Bank; and (c) by December 31, 2001, have an expert acceptable to the Bank prepare an evaluation of its highway safety program according to indicators acceptable to the Bank. E. Part E of the Project: Promotion of Regional Transport XAR shall: (a) by December 31, 1996 establish a review panel with membership acceptable to the Bank to guide the regional transport study under Part E of the Project and provide comments on the results and recommendations of said study; (b) by September 30, 1998 complete said study in accordance with terms of reference acceptable to the Bank and xxxxxxx said study together with the comments of said review panel to the Bank for review; and (c) take appropriate steps to implement the recommendations of said study, taking into consideration the comments thereon of said review panel and the Bank.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications . A. Project Management In order to facilitate the proper implementation of the General Conditions For purposes Project, CADTIC, through its International Finance Department, shall maintain with the central project management office referred to in paragraph 1 of Schedule 4 to the Loan Agreement, arrangements satisfactory to the Bank, for the provision by said office of the assistance described in said paragraph 1. B. Monitoring and Evaluation 1. Without limitation upon the provisions of Section 2.03 of this Agreement, CADTIC shall supervise, monitor, evaluate and report on the provisions implementation of the General Conditions are modified as follows: (1) The last sentence Investment Projects in accordance with guidelines acceptable to the Bank. Such guidelines shall include the preparation, under terms of Section 3.02 is deleted. (2) The words "reference acceptable to the Association mayBank, by notice and furnishing to the Borrower, terminate for consolidation in the right of reports to be furnished by the Borrower to make withdrawals the Bank pursuant to paragraph 2 of Schedule 4 to the Loan Agreement, of progress reports on such implementation during the period under review, at least one month prior to the date on which the Borrower is required to furnish its consolidated report for such period to the Bank. 2. CADTIC shall prepare, in accordance with respect terms of reference acceptable to such amountthe Bank, and furnish to the Bank annual reports not later than July 1 in each fiscal year summarizing the financial statements and audit reports for the preceding fiscal year furnished to it by the Investment Enterprises pursuant to Part D.6(f) of Schedule 1 to this Agreement. C. Institutional Strengthening 1. Upon the giving CADTIC shall undertake a program to strengthen its organization, management and operations through (a) institutional reorganization, (b) development of such noticestrategies to ensure capital adequacy and liquidity, such amount (c) modernization of the Credit shall be cancelled" set forth at the end accounting and management information systems, (d) adoption of Section 6.03 are deleted policies and the following is substituted therefor: "or procedures to improve risk management, and (e) expansion of its financial services. In order to assist CADTIC in developing and carrying out such program, CADTIC shall employ, not later than July 1, 1997, consultants whose terms of reference, qualifications and experience shall be satisfactory to the Bank. CADTIC shall furnish to the Bank, promptly upon their preparation, the recommendations of said consultants, and implement such recommendations of said consultants as shall have been agreed between the Bank and CADTIC. 2. CADTIC shall: (a) undertake a review of its lending operations for the purpose of improving supervision and control by the date specified in sub-paragraph 3 consolidating its credit operations into one department; (b) on the basis of Schedule 5 such review, prepare and furnish to the Development Credit AgreementBank, by January 1, 1997 a time-bound plan for such consolidation; and (c) thereafter, implement such plan taking into account the Association shall, in respect of any portion of the Credit:Bank’s comments thereon.

Employment of Consultants. 1. In order to assist Consultants’ services required for the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Project shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines Guide- lines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultantsconsul- tants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (ai) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (bii) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (ai) the terms of reference for such contracts, ; (bii) single-single- source selection of consulting firms, ; (ciii) assignments of a critical nature, as reasonably determined by the Association, Bank; (div) amendments to contracts con- tracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (ev) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications Section A: Implementation and Oversight Arrangements 1. Direction Gnrale de l’Industrie (DGI) (a) Overall responsibility for the Project shall reside with the MI. Within the MI, coordination, management and monitoring of the General Conditions Project shall be entrusted to the DGI, which shall, to this end, be maintained by the Borrower with staff and under budgetary and reporting requirements adequate to enable it to carry out its responsibilities under the Project. To ensure consistency in the implementation of Project activities, the DGI shall establish specialized working groups including representatives of the STCs. (b) For the purposes of Section 3.02 (a) of this Agreement, the provisions MI shall, on the basis of a proposal of the General Conditions are modified as follows:DGI, be vested responsibility for drawing up the Financing Agreements. 2. Project Coordination Unit (PCU) (1a) For the purposes of ensuring the proper execution of the Project, the Borrower, through the MI, shall maintain during the period of Project implementation a Project Coordination Unit headed by a Director reporting directly to the Directeur Gnral of Industry. The last sentence of Section 3.02 is deletedBorrower shall take all adequate measures to maintain the PCU with staffing satisfactory to the Bank. (2b) The words "PCU shall be assigned specific responsibility for: (i) monitoring the Association mayfinancing of the Project, by notice including approving free-limit Financings in accordance with the provisions of paragraph 2 (c) of Section B of Schedule 6 to this Agreement, consolidating Project accounts, tracing and monitoring Project expenditures, disbursements and commitments; (ii) providing guidance and advising on procurement matters, and ensuring that procurement of goods and works is carried out in accordance with the requirements set forth in Section 3.03 and Schedule 4 to this Agreement; (iii) collecting, gathering and xxxxxxx- dating information from the STCs and, on the basis thereof, preparing and submitting to the BorrowerBank for its review (A) not later than March 31, terminate June 30, September 30 and December 31 in each Fiscal Year, quarterly statements on procurement under the right Project; (B) not later than March 31 and September 30 in each Fiscal Year, semiannual progress reports, including an assessment of the Borrower need to make withdrawals with respect update or modify the Performance Indicators; and (C) the mid-term review report referred to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect Section B of any portion this Schedule; (iv) timely and prompt planning of the Credit:Project activities and supervision of each STC responsible therefor;

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "“Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" ” published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ ' services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications For the purposes of the General Conditions For purposes Section 2.01(b) of this Agreement, the provisions Implementation Program shall consist of the General Conditions are modified as followsfollowing: (1) The last sentence A. Project Management In order to ensure the proper carrying out of Section 3.02 is deletedPart B of the Project, NCPGC shall continue to maintain a project management unit, with terms of reference, staffing and other resources satisfactory to the Bank, to be responsible for the overall coordination and supervision of project implementation, the supervision of procurement of goods and services thereunder, the overall assessment of quality and impact of Part B of the Project, and the preparation and furnishing to the Bank of reports and other information thereon. B. Project Implementation 1. Part B of the Project: In connection with the implementation of Part B of the Project, NCPGC shall: (2a) The words "complete the Association mayconstruction of 500 kilovolt (kV) transmission lines and associated sub- and switching stations to transmit power from the 600 megawatt (MW) units to be built under Part A(1) of the Project, by notice three months prior to the Borrower, terminate the right commissioning of the Borrower to make withdrawals with respect to such amount. Upon the giving first of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:said 600 MW units; and

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each, or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (a) the terms of reference for such contracts, (b) single-single- source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications For the purposes of carrying out the Project, the Borrower shall: (a) apply the policies, procedures and arrangements specified in the Project Operational Manual and shall not amend said Manual, or any provision thereof, in a manner which, in the opinion of the General Conditions For purposes Association, would materially and adversely affect the implementation of the Project; (b) maintain policies and procedures adequate to enable MOPH to monitor and evaluate, on an ongoing basis, and in accordance with indicators acceptable to the Association, the carrying out of the Project and the achievement of the objectives thereof; (c) convene, as soon as ECDs have been established in accordance with the Borrower’s Arret No. 0069/MSP/SG of June 3, 1996: (i) quarterly meetings at the Health District level, with representatives of the population in such Health District, chaired by ECDs, to review the Health District’s implementation performance of the PDSD, identify any shortcomings in achieving the objectives set out in said PDSD and agree on actions to remedy said shortcomings during the following quarter; and (ii) semiannual meetings chaired by directors in DDS to review Project implementation within the respective departments, drawing on the results of the quarterly meetings referred to in sub-paragraph (i) of this paragraph; (d) furnish to the Association, for its review and comments, six months after each annual review referred to in Section 3.03 (a) of this Agreement, progress reports on the provisions implementation of the General Conditions are modified Project, including: (i) the reports and/or recommendations, as follows: the case may be, of the meetings referred to in subparagraph (1c) The last sentence (ii) of Section 3.02 is deleted. this paragraph, and assessment reports, in form and substance acceptable to the Association, on the implementation of Part C (2) The words "the Association may, by notice to the Borrower, terminate the right (b) of the Borrower to make withdrawals Project; and (e) with respect to such amount. Upon goods and works to be procured under inter- national or national competitive bidding procedures, as the giving of such noticecase may be: (i) within sixty (60) days from bid opening for contracts under Section I, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted Part B paragraph (2) (a) and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 3 to this Agreement, and thirty (30) days for contracts under Section I, Part C paragraph (1) and Section II of Schedule 3 to this Agreement, transmit to the Development Credit Association documentation as set forth in paragraph (2) (c) of Appendix 1 to the Guidelines referred to in Schedule 3 to this Agreement; and (ii) within thirty (30) days from the receipt of the internal approval, or the Association’s non-objection to the proposed contract, as the case may be, have said contract signed. 2. The Borrower shall appoint, in accordance with the provisions of Section II of Schedule 3 to this Agreement, and maintain, until the completion of the Project, a health and management specialist, with qualifications and experience acceptable to the Association, to advise MOPH on sector reform and Program implementation. 3. The Borrower shall ensure that in the Project Area: (a) the DDS staff designated to act as departmental Project coordinators shall, at all times until completion of the Project, have qualifications and experience acceptable to the Association; (b) the staff of each of the three DDSs referred to under Part C (1) (b) of the Project, include, at all times, a financial specialist with qualifications and experience acceptable to the Association; and (c) establish, within twelve months after the Effective Date, the ECDs according to Arret No. 0069/MSP/SG of June 3, 1996. 4. The Borrower shall: (a) no later than three months after the Effective Date, prepare drafts, acceptable to the Association, for consideration by Parliament of: (i) a pharmaceutical law and, (ii) a law on the dmonopolisation de l’ONPPC, both acceptable to the Association; (b) no later than December 31, 1997, reorganize ONPPC’s unit responsible for procurement of essential generic drugs, in accordance with terms of reference acceptable to the Association; (c) no later than six months prior to the Mid-Term-Review, referred to in Section 3.03 of this Agreement, submit to the Asso- ciation for its review and comment draft regulations on: (i) quality control and laboratory work; (ii) production; and (iii) acquisition, distribution and retailing; acceptable to the Association, to govern the operations of ONPPC’s respective units; and at the latest by June 30, 2000, adopt said regulations. 5. The Borrower shall establish, no later than March 31, 1998, a pricing mechanism for essential generic drugs, acceptable to the Association. 6. The Borrower shall carry out, no later than six months prior to the Mid-Term-Review referred to under Section 3.03 of this Agreement: (a) an evaluation of community participation under Part C (2) (a) of the Project, in such detail as the Association shallshall reasonably request, including, inter alia, a draft legal framework for community participa- tion in the health sector, in respect accordance with terms of any portion reference accept- able to the Association; and (b) the two surveys referred to in Part A (2) (f) of the CreditProject, both in such scope and detail as the Association shall reasonably request. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank Association in August 1981 (the Consultant Guidelines). For complex, time-time- based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each, or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. 3. However, said The exceptions to prior Association review shall not apply to to: (a) the terms of reference for such contracts, (b) single-single- source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, , (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications Implementation Program Except as the Association shall otherwise agree, in carrying out Part A.1 of the General Conditions For purposes of this AgreementProject, MPU shall apply the procedures and guidelines set out in the Implementation Manual including, but not limited to, the provisions of the General Conditions are modified as followsfollowing: (Part A: The following types of Micro-Projects will be eligible for financing under the Credit: 1) The last sentence . Health Micro-Projects Expansion, repair and, where appropriate, construction of Section 3.02 is deletedprimary health care facilities . 2. Education and Vocational Training Micro-Projects (2a) The words "the Association may, by notice to the Borrower, terminate the right Rehabilitation and expansion of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted primary schools and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 vocational training centers; and (b) training in vocational skills including, but not limited to, on-farm storage, well-digging, sanitation, functional literacy, primary health and nutritional training, basic veterinarian skills, animal husbandry, marketing, horticulture, environmental issues and training of Schedule 5 to the Development Credit Agreement, the Association shall, trainers in respect of any portion all of the Credit:above. 3. Water and Sanitation Micro-Projects (a) Rehabilitation and expansion of community based water supply and sanitation systems and; (b) rehabilitation and expansion of water and sanitation facilities in primary and secondary schools, health facilities and vocational training facilities. 4. Economic Micro-Projects (a) Reconstruction and rehabilitation of earth surface roads in rural areas to improve access to markets and facilitate social service delivery; (b) construction, upgrading and rehabilitation of, bridges, market place facilities and community owned and operated grain banks, irrigation systems and cattle crushes for small scale farmers; and (c) acquisition of equipment and materials for use in small scale entrepreneurial activities.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, complex time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications Project Coordination SCHEDULE 4 Implementation Program 1. For the purposes of coordinating the implementation of the Project, the Borrower shall maintain the PCU until the completion of the Project with competent staff in adequate numbers, including a Project Coordinator, a Project Accountant and appropriate support staff. Project Implementation 1. The Borrower shall carry out Part A of the Project through SEC and MOF in conjunction with the ministries responsible for the sectors of operation of the relevant SOEs. 2. The Borrower shall carry out Parts B.1, B.2, B.4 and B.5 of the Project through DIC, in conjunction with the ministries responsible for the sectors of operation of the relevant SOEs. 3. The Borrower shall carry out Part B.3 of the Project through its Ministry of Employment and Social Welfare (or through such other agency or agencies as may be agreed upon between the Borrower and the Association), in conjunction with DIC. 4. The Borrower shall carry out Part C of the Project through XXX. 0. For the purposes of Parts A.1 (c) and B.1 of the Project, the Borrower shall ensure that the following information, in a form and with content acceptable to the Borrower and the Association, is made available publicly: (a) the annual report and audited annual accounts of DIC and SEC; (b) the audited annual accounts of all SOEs, together with the names of all SOEs not publishing such accounts within six months of their financial year end; (c) a report on the aggregate performance of the SOE sector; and (d) a report on the performance of the Borrower’s portfolio of equity investments, loans and guarantees. 1. For the purposes of Part B.3 (a) of the Project, the Borrower shall: (a) furnish to the Association for its review and comments the recommendations of the studies or reviews commissioned to determine its policy for dealing with redundant workers; and (b) implement such recommendations as shall have been agreed between the Borrower and the Association on the basis of such studies and reviews. Project Monitoring 1. Without limitation upon its obligations under Section 9.06 of the General Conditions For purposes of this AgreementConditions, the provisions Borrower shall maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association, the carrying out of the General Conditions are modified as follows: (1) The last sentence Project and the achievement of Section 3.02 is deletedthe objectives thereof and shall carry out such monitoring and evaluation in a manner satisfactory to the Association. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:Without limitation upon its obligations under Sections 9.01 and

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank Association in August 1981 (the "Consultant Guidelines"). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the BankAssociation, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the BankAssociation, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than one hundred thousand dollars ($100,000 100,000) equivalent each each, or (b) contracts for the employment of individuals individual consultants estimated to cost less than fifty thousand dollars ($50,000 50,000) equivalent each. However, said exceptions this exception to prior Association review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, ; (d) amendments to contracts for the employment of consulting firms raising the contract value to one hundred thousand dollars ($100,000 100,000) equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to fifty thousand dollars ($50,000 50,000) equivalent or above. 1. Modifications The Borrower shall maintain, or cause to be maintained, until completion of the General Conditions For purposes Project, the PIU with terms of reference and resources as shall be satisfactory to the Association, and shall ensure that the PIU is at all times headed by a project director and staffed with qualified staff in adequate numbers disposing of all necessary resources. 2. The Borrower shall, not later than June 30, 1996, take all measures necessary to approve the reconstituted and duly audited balance sheet of EDC as at December 31, 1995. 3. The Borrower shall, through EDC, not later than February 28, 1996, prepare an action plan, satisfactory to the Association, for: (i) the collection of any of EDCþs accounts receivable outstanding as at December 31, 1995; and (ii) the reduction of EDCþs accounts receivable to the equivalent of (A) three (3) monthsþ of sales revenues as of December 31, 1998 and (B) two and one-half (2 1/2) months' of sales revenues as of December 31, 1999. 4. The Borrower shall, through EDC, implement procedures satisfactory to the Association for the timely monitoring of progress achieved in carrying out the Project, including the submission to the Association of quarterly progress reports in such detail and of such scope as the Association shall reasonably request. 5. Promptly after the Borrower shall have established EDC as an autonomous juridical entity possessing the attributes provided therefor in Section 5.01 (a) of this Agreement, the provisions Borrower shall take all action necessary on its part to ensure that a duly qualified advisor is recruited to assist EDC’s board of directors, according to terms of reference and conditions of employment which shall have been previously approved by the Association. 6. The Borrower shall take all action necessary on its part to ensure that: (i) not later than March 31, 1996, EDC shall have prepared a time-bound action plan, acceptable to the Association, for terminating all then existing arrangements between EDC and electricity wholesalers and entering into alternative contractual arrangements as may be required; and (ii) EDC carries out said action plan prior to beginning the implementation of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. low voltage transmission line construction activities under Part A (2) of the Project. Part A: Terms and Conditions of Subsidiary Loan Agreement The words "Subsidiary Loan Agreement shall include the Association may, by notice following principal terms and conditions: 1. EDC shall repay to the Borrower, terminate Borrower the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such aggregate amount of the proceeds of the Credit withdrawn from the Credit Account, from time to time, for carrying out Parts A and B.1 of the Project less an amount equivalent to six million dollars ($6,000,000) which shall constitute the Borrower’s capital equity contribution to EDC (the "Subsidiary Loan") over a period not to exceed seventeen (17) years, including a grace period not to exceed five (5) years from the date of the establishment of EDC as an autonomous juridical entity possessing the attributes provided therefor in Section 5.01 (a) of this Agreement. 2. The Subsidiary Loan shall be cancelled" denominated in United States dollars and repaid by EDC to the Borrower in Xxxxx, at least semi-annually at the official rate of exchange as determined by NBC on the respective dates on which the proceeds of the Subsidiary Loan are repaid by EDC. 3. EDC shall pay interest on the principal amount of the Subsidiary Loan, withdrawn and outstanding from time to time, at a rate per annum equal to the Libor rate plus one-half of one percent (1/2%). 4. EDC shall pay to the Borrower the commitment charges payable under Section 2.06 of this Agreement, allocable to the part of the proceeds of the Credit relent but not withdrawn by EDC. 5. The provisions set forth at in paragraphs 1 through 8 of Part B of this Schedule. Part B: Financial and Performance Requirements The Borrower shall take all action necessary to ensure that: (i) from the end date of Section 6.03 are deleted and this Agreement, the following is substituted therefor: "provisions shall be complied with by EDC; and (ii) these provisions shall also be included in the Subsidiary Loan Agreement: 1. That EDC shall carry on its operations and conduct its affairs in accordance with sound administrative, economic, engineering, financial, managerial, public utility and environmental practices, under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. 2. That EDC shall, at all times, operate and maintain its plants, machinery, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound administrative, economic, engineering, financial, managerial, public utility and environmental practices. 3. That EDC shall take out and maintain with responsible insurers, or (e) by make other provision satisfactory to the date specified Association for, insurance against such risks and in sub-paragraph 3 such amounts as shall be consistent with appropriate practice. 4. That, after its establishment as a autonomous juridical entity possessing the attributes provided therefor in Section 5.01 (b) of Schedule 5 this Agreement, EDC shall maintain its existence and right to carry on its operations, and to acquire, maintain, renew and otherwise exercise any and all rights (including, but without limitation, land rights), powers, privileges and franchises which are necessary or useful in the conduct of its operations and its carrying out of its obligations pursuant to the Development Credit provisions of the Performance Plan and the Subsidiary Loan Agreement. 5. That, except in the ordinary course of its business, EDC shall not, without the Association’s prior consent, sell, lease, transfer or otherwise dispose of any of its property or assets which are required for the efficient conduct of its operations or the carrying out of the Project. 6. That EDC shall reduce its outstanding accounts receivable to three (3) months of sales revenues by December 31, 1998, and to two-and-a-half (2 1/2) months of sales revenues by December 31, 1999, all in accordance with a methodology acceptable to the Association. 7. That: (a) Except as the Association shallshall otherwise agree, for each Fiscal Year after the Fiscal Year ending on December 31, 1995, revenues in respect of any portion EDC shall be generated from internal sources at least sufficient to cover all of its expenses; (b) Except as the Association shall otherwise agree, for each Fiscal Year after the Fiscal Year ending on December 31, 1998, an annual return shall be earned in respect of EDC of not less than six percent (6%) of the Creditaverage current net value of EDCþs fixed assets in operation in Fiscal Year 1999 and thereafter; (c) Before November 1 in each of its Fiscal Years, EDC shall, on the basis of forecasts prepared by EDC and satisfactory to the Association, review whether the requirements set forth in paragraphs (a) and (b) would be met in respect of such year and the next following Fiscal Year and shall furnish to the Association a copy of such review upon its completion; and (d) If any such review shows that the requirements set forth in paragraphs (a) and (b) would not be met for the Fiscal Years covered by such review, the Borrower and EDC shall promptly take all necessary measures (including, without limitation, adjustments of the structure or levels of EDC's tariffs) in order to meet such requirements. (a) For the purposes of sub-paragraph 7 (a) above:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 200,000 equivalent each each; or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 200,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications No later than January 1, 1997, the Borrower shall establish and thereafter maintain, with adequate staff and resources, a project unit within MMTC (MMTC Project Unit) for the purposes of monitoring the implementation of Part A of the General Conditions For purposes Project. 2. The Borrower shall ensure that Croatian Roads Administration, Croatian Railway Company and the Port of this AgreementPloe Authority shall carry out procurement of goods and works under Parts A (1), A (2) and A (3) of the Project, respectively, and shall submit to the Bank, through the MMTC Project Unit, on a quarterly basis, progress reports on their respective parts of the Project. 3. The Borrower shall maintain the project unit established within MOI (MOI Project Unit) for the purpose of carrying out Part B of the Project which shall be staffed and shall operate in a manner satisfactory to the Bank. 4. The Borrower shall maintain, with adequate staff and resources, the provisions of the General Conditions are modified as followsQuality Assurance Unit within MOI which shall be responsible for: (1i) The last sentence setting the standards for Mine-clearing works; (ii) reviewing the standard operating procedures and safety regulations of Section 3.02 is deletedMine clearing agencies; and (iii) conducting quality assurance tests to ensure compliance of Mine clearing agencies with accepted international standards for humanitarian mine clearance. 5. The Borrower shall ensure that all Mine clearance activities are carried out and all Mines cleared under the Project are promptly destroyed in accordance with appropriate safety standards and guidelines. 6. The Borrower shall maintain a Project Unit within the Ministry of Finance to conduct overall supervision of the Project implementation. 7. The Borrower shall: (2a) The words "maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association mayBank, the carrying out of the Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, on or about January 31, 1998, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Bank, by notice February 28, 1998, or such later date as the Bank shall request, the report referred to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the Development Credit Agreement, the Association shall, in respect of any portion efficient completion of the CreditProject and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank’s views on the matter. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (ai) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (bii) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (ai) the terms of reference for such contracts, ; (bii) single-source selection of consulting firms, ; (ciii) assignments of a critical nature, as reasonably determined by the Association, ; (div) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (ev) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications . (a) The Borrower shall maintain the National Council for Vocational Training for the purpose of providing a policy framework for vocational training centers with membership and terms of reference satisfactory to the Association, including majority representation from employers contributing to the SDF. (b) The Borrower shall maintain Local Councils for Vocational Training for the purpose of providing organizational, administrative staffing and instructional oversight to respective vocational training centers with membership and terms of reference satisfactory to the Association, including majority representation from employers contributing to the SDF. (c) The Borrower shall maintain Local Training Program Advisory Committees for each program specialization area with membership and terms of reference satisfactory to the Association. (d) For the purpose of ensuring the proper supervision of the General Conditions For purposes execution of this AgreementParts A (2) and B of the Project, the provisions Borrower shall maintain the Project Implementation Unit within GAVTT with organization, staffing and terms of reference satisfactory to the Association. (a) SDF contributions to vocational training centers shall be in accordance with guidelines, criteria and procedures agreed between the Borrower and the Association, including the requirement that vocational training centers comply with policies formulated by the National Council for Vocational Training. (b) The Borrower shall present to the Association for approval not later than one (1) month prior to the scheduled start of implementation proposals for support to training centers for the physically handicapped estimated to cost the equivalent of $50,000 or more. (a) For the purpose of ensuring the proper supervision of the General Conditions are modified execution of Part C of the Project, the Borrower shall establish a Technical Committee with representation from concerned Ministries, as followswell as non-governmental organizations. (b) The Borrower shall cause the Technical Committee to select adult education and training centers for support under the Project in accordance with guidelines, criteria and procedures agreed between the Borrower and the Association, including the requirement that proposals for support specify: (1i) The last sentence of Section 3.02 is deletedhow recurrent costs for facilities and equipment maintenance would be financed; (ii) how contributions from communities would be obtained; (iii) how income would be generated from training activities; and (iv) how contributions and earnings would be utilized. (2c) The words "Borrower shall present to the Association may, by notice for approval not later than one (1) month prior to the Borrowerscheduled start of implementation proposals for support to adult education and training centers estimated to cost the equivalent of $20,000 or more. (a) The Borrower shall cause the MOE to select an individual with qualifications and experience satisfactory to the Association to fill the position of Coordinator for Adult Education and Training and shall appoint the individual selected to that position not later than June 1, terminate 1996. (b) The Borrower shall appoint a non-governmental organization with experience satisfactory to the right Association to manage the technical assistance for Part C of the Project. 5. For the purpose of ensuring the proper execution of Part D of the Project, the Borrower shall submit for the Association review and approval pilot vocational training centers selected in accordance with criteria satisfactory to make withdrawals with respect the Association. 6. In order to such amount. Upon xxxxxx the giving successful implementation of such noticethe Project, such amount the Borrower shall ensure that any consultants required for the Project and not financed out of the proceeds of the Credit shall have qualifications and experience, and be cancelled" set forth at employed under terms of reference, satisfactory to the end Association. 7. In order to strengthen the financial base of vocational training centers and adult education and training centers, income generated by student fees and other income generating activities would be retained by respective centers pursuant to policy guidelines satisfactory to the Association. 8. Before November 1 in each of its fiscal years, the Borrower shall, on the basis of forecasts prepared by the Borrower and satisfactory to the Association, review whether the budgets in respect of the current fiscal year and the next following fiscal year include allocations sufficient to meet the requirements for: (i) salaries and maintenance of buildings and equipment for vocational training centers and adult education and training centers; and (ii) implementation of the Project, and shall furnish to the Association a copy of such review upon its completion. In light of the findings of said review, the Borrower shall promptly take all actions required to ensure the achievement of the objectives of the Project, taking into consideration the recommendations of the Association. 9. Without limitation upon the provisions of Section 6.03 are deleted 9.06 of the General Conditions: (a) by December 31, 1996 the Borrower, through GAVTT, shall prepare and furnish to the Association a report containing baseline data with respect to indicators agreed between the Association and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 Borrower. (b) by March 31 of Schedule 5 each year, the Borrower shall prepare and furnish to the Development Credit AgreementAssociation a report of the SDF contributions made to vocational training centers for the preceding year in such detail as the Association shall reasonably request. (c) by May 31, 1999, the Borrower shall prepare and furnish to the Association for its review and comments, a report on the progress achieved in carrying out the Project, in such detail as the Association shall reasonably request; and (i) the Borrower and the Association shall, not later than June 30, 1999, hold a mid-term exchange of views on the progress achieved in respect of any portion the carrying out of the CreditProject, including an assessment of the existing demand for vocational training centers to be established under Part D of the Project; and (ii) thereafter, the Borrower shall prepare a joint work program with the Association and take all measures necessary to ensure the efficient completion of the Project and the achievement of the objectives thereof, taking into consideration the results and conclusions of the report referred to in paragraph (c) hereof and the Association’s views on the matter. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short listsshortlists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms under contracts estimated to cost less than $100,000 equivalent each each, or (b) contracts for the employment employ- ment of individuals under contracts estimated to cost less than $50,000 equivalent each. However, said exceptions to prior review by the Association review shall not apply to to: (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments assign- ments of a critical nature, as reasonably determined by the Association, , (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications Overall Coordination 1. The Borrower shall implement the Project in accordance with the procedures set out in the Implementation Manual, and, except as the Association shall otherwise agree, the Borrower shall not amend, abrogate or waive any provision thereof which, in the opinion of the General Conditions Association, may materially and adversely affect the implementation of the Project. 2. MRH shall be responsible for the overall coordination of the Project including, inter alia, overseeing the sector policy reform and coordinat- ing the sector-wide expenditure subprograms among GHA, DUR and DFR, coordinating financial assistance to the Program and ensuring the restructuring as well as smooth functioning of the Road Fund. 3. AMISU shall assist MRH in the financial and budgetary management of the road sector expenditures under the Program and shall be responsible, in particular, for establishing and streamlining all accounting, monitoring and reporting procedures in MRH, GHA, DUR and DFR, as well as managing a cofinancier-specific information system. 4. For purposes the purpose of carrying out its responsibilities under this Project, MRH shall continue to maintain, until completion of the Project, the position of Program Coordinator within its organization. The Borrower shall appoint an accounting consultant, in accordance with the provisions of Section II of Schedule 3 to this Agreement, whose functions shall include, inter alia: (i) reviewing the accounting system of GHA and MRH; and (ii) establishing procedures and practices for the Special Accounts as well as the project accounts, statement of expendi- tures and Road Fund-related accounts. 5. MRH shall: (a) furnish to the Association timely estimates of its projected annual Project expenditures; and (b) develop and apply budgeting and accounting systems, accept- able to the Association, in each one of its agencies to monitor the performance of each contract. 6. The Borrower shall: (a) by June 30, 1996, appoint the accounting consultant referred to in paragraph 4 of Schedule 4 to this Agreement under terms of reference satisfactory to the Association, and (b) by November 30, 1996, appoint independent auditors referred to in Section 4.01 (b) of this Agreement, in accordance with the provisions of the General Conditions are modified as followsSection II of Schedule 3 to this Agreement. Quarterly Reports 7. The Borrower shall, commencing on September 30, 1996: (1a) The last sentence prepare and furnish to the Association, for its review and comments, quarterly reports on the progress of Section 3.02 is deleted.Project implementation, including: (2i) The words "procurement and disbursements, (ii) progress on civil works, supply of goods, technical studies and institutional accomplishments, (iii) trunk road sector related issues, (iv) contributions made by the Association mayBorrower from its budget, by notice to and (v) the Borrower, terminate the right status of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 Road Fund; and (b) carry out the Project for the quarters in question, taking into account the comments of Schedule 5 the Association. Annual Review 8. The Borrower shall: (a) not later than October 31 in each year, furnish to the Development Credit AgreementAssociation for review and comments a draft annual work program and training program and supporting budget for its road sector, including the road works to be carried out under Part A of the Project, for the succeeding calendar year; (b) not later than November 30 in each year: (i) review with the Association shallthe documents referred to in paragraph (a) above, in respect of any portion of the Credit:(ii) identify implementation issues and propose appropriate solutions, and

Employment of Consultants. 1. In order Consultants’ services shall be procured under contracts awarded to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the AssociationTrustee. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association Trustee on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers Recipients and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower Recipient shall employ such consultants under contracts using the standard form of contract for consultants’ services issued by the BankInternational Bank for Reconstruction and Development, with such modifications as shall have been agreed by the AssociationTrustee. Where no relevant standard contract documents have been issued by the BankInternational Bank for Reconstruction and Development, the Borrower Recipient shall use other standard forms agreed with satisfactory to the AssociationTrustee. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Trustee review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than that $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Trustee review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationTrustee, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications MOE, through its Department Polityki Ekologicznej (Department of Ecological Policy), will be responsible for the overall coordination and implementation of the General Conditions For purposes Project. XXX will also be responsible for monitoring and reviewing project activities and products. 2. XXX will administer the project activities and will coordinate the activities of this Agreement, its central and regional offices to properly accomplish these activities. XXX shall designate a Project Director who shall be assigned qualified staff in sufficient numbers to carry out its project activities. BOS will: (a) supervise the provisions imple- mentation of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified pilot projects in sub-paragraph 3 Krakow; (b) of Schedule 5 to promote the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:Project concept nationwide;

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications The Borrower shall carry out Parts A and C of the General Conditions For purposes of this AgreementProject through KGM. 2. The Borrower shall maintain, through KGM, the provisions policy of ensuring an adequate balance between road improvement, rehabilitation and maintenance and ensuring that state roadworks included in the HIMP are economically viable and environmentally sound according to criteria satisfactory to the Bank. 3. The Borrower shall ensure, through KGM, that state roadworks proposed to be carried out under Part A (1) of the General Conditions Project and financed out of the proceeds of the Loan are modified technically and environmentally sound, and that such state roadworks have an estimated rate of return of at least 12%. 4. The Borrower shall obtain, through KGM, the prior approval of the Bank with respect to any roadworks to be carried out under Part A of the Project and to be financed out of the proceeds of the Loan, such approval to be based, inter alia, on an environmental analysis prepared in accordance with criteria satisfactory to the Bank, together with an evaluation of such roadworks by the Borrower’s Ministry of Environment. 5. The Borrower shall ensure, through KGM, that any roadworks to be carried out under Part A (2) of the Project with annual average daily traffic: (a) above 250 vehicles, have an economic rate of return of at least 12%; (b) between 150 and 250 vehicles, have an economic rate of return of at least 10%; and (c) below 150 vehicles, have an economic rate of return of at least 8%, all to be calculated in accordance with a methodology acceptable to the Bank. 6. The Borrower shall carry out, through the Road Traffic Safety Task Force, the Road Traffic Safety Action Plan under Part B of the Project on the basis of a timetable and targets included in said Action Plan, as followsagreed with the Bank. 7. The Borrower shall carry out, through KGM and the Road Traffic Safety Task Force, by May 31 and November 30 of each year, together with the Bank, a review of the following: (1a) The last sentence the progress achieved in the execution of Section 3.02 the HIMP, as said HIMP is deleted.revised annually; the physical and financial condition of said HIMP for the previous year based on aggregated project data; and the proposed activities under said HIMP for the forthcoming year, including budgetary allocations; (2b) The words "the Association mayprogress achieved in carrying out Part B of the Project during the preceding six-month period, by notice said progress to be reviewed on the Borrower, terminate basis of the right timetable and targets included in the Road Traffic Safety Action Plan; (c) the progress made towards achieving the objectives of Part C of the Project during the preceding six-month period; and (d) the experience of the Borrower to make withdrawals with respect to such amount. Upon in the giving execution of such notice, such amount contracts financed out of the Credit shall be cancelled" set forth at proceeds of the end Loan. 8. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Bank, the carrying out of Section 6.03 are deleted the Project and the following is substituted therefor: "achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, on or about November 30, 1998, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (ea) by of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date specified of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Bank, by December 31, 1998, or such later date as the Bank shall request, the report referred to in sub-paragraph 3 (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of said report and the Bank’siews on the matter. 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1), (2), and (3) set forth in the table in paragraph 1 of Schedule 5 1 to this Agreement; (b) the Development Credit Agreement, the Association shall, term "eligible expenditures" means expenditures in respect of any portion the reasonable cost of goods and services required for the Project and to be financed out of the Credit:proceeds of the Loan allocated from time to time to the eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications of DWASA shall appoint by March 31, 1997, Deputy Managing Directors for its Finance and Administration, Technical, and Planning and Development Departments. 2. DWASA shall promptly carry out a staff rationalization program, satisfactory to the General Conditions For purposes of this AgreementAssociation, the provisions of the General Conditions are modified as followsto assess staff strengths and weaknesses, and reassign staff to areas with shortages. 3. DWASA shall: (1a) The last sentence of Section 3.02 is deleted. (2) The words "promptly carry out the Association may, by notice to the Borrower, terminate the right strategy study under Part D.5 of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 Project; (b) by August 31, 1997 furnish the Association with the findings and recommendations of Schedule 5 such study; and (c) by February 28, 1998, commence the implementation of such recommendations as the Borrower and the Association shall agree upon. 4. DWASA shall: (a) by March 31, 1997, establish and thereafter operate an environmental cell within DWASA to monitor water quality and advise on environmental issues; and (b) by January 31, 1998, commence implementation of the results of the water resources management study carried out under Part D.1 of the Project. 5. DWASA shall: (a) by March 1, 1997 carry out an assessment and evaluation of all its stores and inventories; and (b) by December 30, 1997 sell or otherwise dispose of all mis-matched, obsolete and slow-moving stocks. 6. DWASA shall: (a) maintain or cause to be maintained policies and procedures adequate to ensure the monitoring and evaluation, in accordance with guidelines and on the basis of performance indicators agreed with the Association, of the carrying out of the Project and the achievement of the objectives thereof; (b) prepare or cause to be prepared, under terms of reference satisfactory to the Development Credit AgreementAssociation, and furnish to the Association, by December 31, 1998, a report integrating the results of the monitoring and evaluation activities performed pursuant to subparagraph (a) of this paragraph, on the progress achieved in the carrying out of the Project during the period preceding the date of said report, and setting out the measures recommended to ensure the efficient carrying out of the Project during the period following such date; and (c) review with the Association, by March 31, 1999, or such other date as may be agreed between the Borrower and the Association, the Association shallsaid report and, in respect of any portion thereafter, take or cause to be taken all measures required to ensure the efficient completion of the Credit:Project and the achievement of the objectives thereof, based on the recommendations of the said report and the Association’s views on the matter.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "“Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" ” published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 50,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 5,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value thereof by an amount which is equal to $50,000 equivalent or above. Modifications greater than 15% of the General Conditions For purposes original contract value, and (e) the terms of this Agreementreference for all technical assistance in respect of the Project, including training. Project Steering Committee (PSC) 1. The Borrower shall maintain the existing interministerial Project Steering Committee (PSC) throughout the period of Project implementation. The PSC shall be responsible for overseeing Project implementation, shall be chaired by the Secretary of Commerce, and shall include representatives from the Ministry of Finance, the provisions Ministry of Commerce, the Ministry of Works and Transport and the Department of Customs. The Borrower shall ensure that the PSC implements the Project in accordance with the project implementation plan agreed with the Association. Project Implementation Unit (PIU) 2. The Borrower shall maintain the Project Implementation Unit (PIU) established within the Ministry of Commerce throughout the period of Project implementation, with adequate numbers of professional staff with experience and qualifications satisfactory to the Association. Terminal Management Companies (TMCs) 3. Contracts with terminal management companies for operation of the General Conditions are modified inland freight terminals to be constructed or improved under the Project shall be awarded in a competitive tender process satisfactory to the Association, in accordance with a schedule, procedures and documentation acceptable to the Association. Nepal Trade and Transport Facilitation Committee (NTTFC) 4. The Borrower shall provide, or cause to be provided, to the Nepal Trade and Transport Facilitation Committee (NTTFC), promptly as follows: (1) needed, the funds, facilities, services and other resources required for the timely and effective accomplishment of NTTFC’s responsibilities. The last sentence of Section 3.02 is deleted. (2) The words "Borrower shall further ensure that the time-bound trade facilitation action plan agreed with the Association may, by notice is implemented in a manner satisfactory to the BorrowerAssociation. Land Acquisition and Resettlement 5. The Borrower shall carry out, terminate or cause to be carried out, the right acquisition of land for the Project and the resettlement of the people affected by the Project in accordance with the Resettlement Policy Framework and Acquisition, Compensation and Rehabilitation Plan dated November 28, 1996. Environmental Aspects 6. The Borrower to make withdrawals with respect to such amount. Upon shall ensure that all civil works contracts financed out of the giving of such notice, such amount proceeds of the Credit shall include environmental mitigation measures satisfactory to the Association, such measures to include, inter alia: (a) full restoration and landscaping of all xxxxxx areas, quarries and spoil tips opened specifically for the Project; (b) preparation of storage areas, particularly those for diesel fuel and bitumen; (c) establishment of appropriate sanitary arrangements in offices, yards and on site; and (d) avoidance of contamination of water courses and groundwater. Mid-Term Review 7. The Borrower shall, in consultation with the Association and in accordance with terms of reference and methodology satisfactory to the Association, undertake and complete by December 31, 1998 a mid-term review of the Project, and shall, promptly thereafter, carry out the agreed recommendations of such review in a manner satisfactory to the Association. Coordination of Project Activities with Construction of the Rail Spur 8. The Borrower shall take all necessary steps to ensure timely and effective coordination of Project activities with the activities in respect of construction of the rail spur from Raxaul, India, to Sirsiya (Birgunj), Nepal, to be cancelled" set forth at financed and carried out by the end Government of Section 6.03 are deleted India pursuant to the Joint Statements. Monitoring and Evaluation 9. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association, the carrying out of the Project and the following is substituted therefor: "achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Association, and furnish to the Association, on or about October 31, 1998, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (ea) by of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date specified of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Association, by December 31, 1998, or such later date as the Association shall request, the report referred to in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the Development Credit Agreement, the Association shall, in respect of any portion efficient completion of the CreditProject and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Association’s views on the matter. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant GuidelinesGuide- lines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-single- source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications Implementation Program 1. In order to ensure overall coordination of Project activities and the provision of policy guidance in respect thereof, the Borrower shall maintain, with staff, other resources and terms of reference satis- factory to the Bank, the Project Coordination Unit in the Borrower’s Ministry of Power and Electrification, headed by a suitably qualified Project Coordinator. 2. The Borrower shall not take any action that would interfere with the exclusive jurisdiction of NERC to regulate wholesale and retail electricity tariffs, except as otherwise agreed with the Bank. 3. The Borrower shall cause NERC to regulate wholesale electricity tariffs in accordance with a methodology that will ensure that: (a) a cap placed on the bids of the General Conditions For purposes Generation Companies, which bids form the basis for the calculation of the system marginal price, is set at not less than US$40 per MHW and eliminated entirely by not later than April 1, 1997; (b) by not later than April 1, 1997, the capacity availability payment is introduced during capacity shortage period in accordance with the Energomarket Rules; (c) by not later than May 31, 1997, the payments to be made by NDC to each Generation Company shall include supplementary payments, to be made over a period of 3 years, which shall: (i) reimburse Donbassenergo, Dniproenergo and Tsentrenergo for the net payables transferred to them at the time of their establishment in the amounts equivalent to $50.8 million, $48.0 million and $28.5 million, respectively; and (ii) losses imposed on each Generation Company from the time of its establishment, until April 1, 1997, due to the temporary limit on bids and the lack of capacity availability payment, in amounts that shall not exceed the difference between payables and receivables of each Generation Company as of April 1, 1997, and to be agreed between NDC and each Generation Company by April 30, 1997, and approved by the Bank; and (d) NDC shall be permitted to regulate its tariffs at such levels as to enable it to recover (i) all losses resulting from the failure of its customers to pay for electricity purchases and (ii) the cost of subsidies to privileged consumers, unless such costs are transferred to the Borrower’s budget. 4. The Borrower shall cause NERC to: (a) regulate retail electricity tariffs in accordance with methodology set out in NERC Regulation No. 62, dated August 29, 1996, and, if needed, introduce amendments to the methodology set out in the said Regulation after obtaining the Bank’s agreement thereto; (i) issue licenses to non-tariff suppliers in accordance with procedures agreed with the Bank; and (ii) not revoke or alter the licenses issued except in accordance with procedures set out in each license; (c) adjust or regulate retail electricity prices for households so as to achieve (i) by December 31, 1996, an average residential electricity tariff which exceeds the average industrial electricity tariff by at least 10%; and (ii) by December 31, 1997, an average residential electricity tariff that exceeds the average industrial electricity tariff by at least 20%. 5. The Borrower shall take all necessary action to implement the activities set forth in the SEP. 6. The Borrower shall limit discounts applicable to residential consumers to consumption norm specified in the Cabinet of Ministers Resolution No. 879, dated August 1, 1996. 7. By not later than January 1, 1997, the Borrower shall eliminate the cascading effect currently applicable to the obligatory contribu- tions payable into the roads fund, innovation fund and labor protection fund by the participants of the Energomarket. 8. Without limitation upon the provisions of Section 3.01 (a) of this Agreement, the provisions Borrower shall take all steps necessary or appropriate to: (i) enable the Generation Companies to comply with Section 4.04 of their respective Project Agreements; (ii) enable NDC and the Generation Companies to comply with Section 4.02(a) of their respective Project Agreements; (iii) enable NDC and the Oblenergos to comply with their respective obligations under the Collection Agreements and the EMA; and (iv) enable the operation of, and not interfere with, the price- setting mechanism set out in the EMA. 9. The Borrower shall ensure that, for the purposes of Part C of the General Conditions are modified as followsProject, by April 1, 1997, NDC and (i) each Generation Company; (ii) each Oblenergo; and (iii) NTC, shall have entered into Installation and Maintenance Agreements satisfactory to the Bank. 10. With the assistance of the Generation Companies and NDC, the Borrower shall: (1a) The last sentence maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indi- cators satisfactory to the Bank, the carrying out of Section 3.02 is deleted.the Project and the achievement of the objectives thereof; (2b) The words "prepare, under terms of reference satisfactory to the Association mayBank, and furnish to the Bank, on or about December 31, 1997, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preced- ing the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achieve- ment of the objectives thereof during the period following such date; and (c) review with the Bank, by notice March 15, 1998, or such later date as the Bank shall request, the report referred to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the Development Credit Agreement, the Association shall, in respect of any portion efficient completion of the CreditProject and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank’s views on the matter. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 l981 (the Consultant GuidelinesGuide- lines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the BankAssociation, with such modifications modification thereto as shall have been agreed by the Association. Where no relevant standard contract documents docu- ments have been issued by the BankAssociation, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines guidelines requiring prior Association Associa- tion review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each, or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications The Borrower shall: (a) prepare and furnish to the Association by September 15, 1996, for its approval, proposals for the staffing and benefit package for PSIDC; and (b) thereafter implement such proposals as the Association shall have approved. 2. The Borrower shall employ consultants who will assist PSIDC in carrying out the Project in accordance with a timetable satisfactory to the Association. 3. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association, the carrying out of the General Conditions Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Association, and furnish to the Association, by March 31, 1999 a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) above, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Association, by June 30, 1999, or such later date as the Association shall request, the report referred to in paragraph (b) above, and thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommenda- tions of the said report and the Association’s review on the matter. Special Account 1. For the purposes of this Agreement, the provisions of the General Conditions are modified as followsSchedule: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications The Project will be carried out by the Borrower’s MOAT, Municipality of Ashghabat, Municipality of Xxxx, Municipality of Chardjou, APAPO and the Participating Transport Companies, all with the Borrower’s assistance and, as part of such assistance, the Borrower will make available to the Municipality of Ashghabat, Municipality of Xxxx, Municipality of Chardjou, APAPO and the Participating Transport Companies, the goods and services financed by the Loan, on terms and conditions set forth in this Agreement. 2. Each of the General Conditions For purposes Administration Agreements shall include, inter alia, provisions for: (a) the undertakings of this each Municipality in respect of Project and Program implementation and maintenance of Project accounts; (b) the procurement arrangements under the Project; (c) in relation to the Ashghabat Administration Agreement: (i) budgets, records and accounts and performance obligations of APAPO and the role of the Municipality of Ashghabat in supervising the performance of the Ashghabat Transport Companies; and (ii) the obligation of APAPO to enter into an Ashghabat Performance Contract with each of the Ashghabat Transport Companies and the Ashghabat Service Contract with the Municipality of Ashghabat in accordance with the provisions of paragraphs 3 and 4 below, respectively; (d) in relation to the Xxxx Administration Agreement: (i) budgets, records and accounts and performance obligations of APAPO and the role of the Municipality of Xxxx in supervising the performance of the Xxxx Transport Company; and (ii) the obligation of APAPO to enter into the Xxxx Performance Contract with the Xxxx Transport Company and the Xxxx Service Contract with the Municipality of Xxxx in accordance with the provisions of paragraphs 3 and 4 below, respectively; (e) in relation to the Chardjou Administration Agreement: (i) budgets, records and accounts and performance obligations of APAPO and the role of the Municipality of Chardjou in supervising the performance of the Chardjou Transport Company; and (ii) the obligation of APAPO to enter into the Chardjou Performance Contract with the Chardjou Transport Company and the Chardjou Service Contract with the Municipality of Chardjou in accordance with the provisions of paragraphs 3 and 4 below, respectively; (f) annual review of the progress in the implementation of the Administration Agreement, the provisions first such review to be held no later than August 31, 1998; and (g) modifications to the Administration Agreement, with the Bank’s prior approval, when such modifications are deemed necessary on the basis of the General Conditions annual review. 3. Each Performance Contract to be concluded between APAPO and each of the Participating Transport Companies shall include, inter alia, provisions for: (a) the undertakings of each Participating Transport Company in respect of Project and OIP implementation; (b) the service levels to be provided by such Company; (c) the methodology for tariff determination; (d) criteria for measuring operational and financial performance of each Participating Transport Company; (e) the obligations of said Companies in relation to the maintenance of facilities and the equipment; (f) the information to be provided by said Companies for the purpose of measuring progress in Project implementation and the achievement of Project objectives; (g) an annual review of the progress in the implementation of the Performance Contract, the first such review to be held no later than August 31, 1998; and (h) modifications to the Performance Contract, with the Bank’s prior approval, when such modifications are modified as followsdeemed necessary on the basis of the annual review. 4. Each Service Contract to be concluded between each Municipality and APAPO shall include, inter alia, provisions regarding agreed criteria and standards with respect to: (a) identification of service areas; (b) estimation of the cost of services; (c) evaluation of performance of each Participating Transport Company; (d) annual review of the progress in the implementation of the Service Contract, the first such review to be held no later than August 31, 1998; and (e) modifications to the Service Contract, with the Bank’s prior approval, when such modifications are deemed necessary on the basis of the annual review. 5. The Borrower shall maintain: (a) the PMG, until completion of the Project, under terms of reference satisfactory to the Bank, and assign to it responsibility for overall Project implementation; (b) the OSG, until completion of the Project, under terms of reference satisfactory to the Bank, and assign to it responsibility to guide and monitor the performance of the Participating Transport Companies. 6. The Borrower shall: (a) implement the Action Plan included in the Program in accordance with the time schedule set forth therein; and (b) exchange views with the Bank regularly on the implementation of such Plan with a view to agreeing on any adjustments required to such Plan in order to achieve the objectives of the Program and the Project. 7. The Borrower shall develop by June 30, 1997, a fare system whereby the Participating Transport Companies are compensated directly by the municipality or agency exempting passengers from transportation fares. 8. During Project implementation, before undertaking any investments in the urban passenger transport sector, the Borrower shall ensure: (a) the carrying out by the Municipality of Ashghabat, under terms of reference satisfactory to the Bank, of studies on urban passenger transport investments, and the completion and furnishing to the Bank of the findings and recommendations of said studies before commencement of said investments; and (b) exchange views thereafter with the Bank on said recommendations with a view to determining an appropriate order of priority for transport investments. 9. During Project implementation the Borrower shall: (a) make adequate yearly budget allocations from the central state budget for the required subsidy to APAPO; and (b) quarterly payments of said subsidy to XXXXX. 00. The Borrower shall take all measures, including adjustment of public transport fares, necessary to ensure that by December 31, 1999, each of the Participating Transport Companies shall generate revenues sufficient to cover at least its operation and maintenance costs, excluding depreciation. 11. The Borrower shall: (1a) The last sentence maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators acceptable to the Bank, the carrying out of Section 3.02 is deleted.the Project and the achievement of the objectives thereof; (2b) The words "prepare, under terms of reference satisfactory to the Association mayBank, and furnish to the Bank, on or about September 30, 1998, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Bank, by notice December 31, 1998, or such later date as the Bank shall request, the report referred to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the Development Credit Agreement, the Association shall, in respect of any portion efficient completion of the CreditProject and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank’s views on the matter. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Consul- tant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the BankAssociation, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the BankAssociation, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short listsshortlists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each, or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts con- tracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts con- tracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications XXXX shall implement the Project in accordance with the procedures set out in the Project Implementation Manual, and, except as the Association shall otherwise agree, XXXX shall not assign, amend, abrogate or waive such Manual or any provision thereof in a manner which, in the opinion of the Association, may materially and adversely affect the implementation of the Project. 2. Without limitation upon the provisions of Section 9.06 of the General Conditions For purposes of this AgreementConditions, the provisions of the General Conditions are modified as followsXXXX shall: (1a) The last sentence of Section 3.02 is deleted. (2) The words "not later than December 1 in each year, submit to the Association mayfor its review and comments, by notice to draft annual work programs for NRCs and RRCs (including a training program) and supporting financing plans for the Borrower, terminate Project for the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 succeeding calendar year; and (b) of Schedule 5 not later than March 1 in each year, furnish to the Development Credit AgreementAssociation the work programs and financing plans referred to in paragraph (a) hereof, as such programs and financing plans shall have been revised to the satisfaction of the Association in the course of the review referred to in paragraph (a) hereof and, except as the Association shall otherwise agree, carry out the Project in the year in question on the basis of the said work programs and financing plans, as so revised. Agricultural Research 3. In carrying out Part B of the Project, XXXX shall: (a) not later than 12 months after the Effective Date, prepare and adopt an implementation plan for transferring responsibility for financing research activities to the private sector; (b) not later than the Midterm Review, submit to the Association a progress report, satisfactory to the Association, on measures to transfer financing responsibilities for research on industrial/cash crops to the private sector, with particular emphasis on sugar and pyrethrum; and (c) not later than July 1, 1998, submit to the Association a plan, satisfactory to the Association, for the rationalization of its network of research centers and begin implementing such plan not later than August 1, 1998. 4. In carrying out Part B.5 of the Project, XXXX shall implement measures necessary to ensure that soil and tissue analysis services for farmers are provided on a full cost-recovery basis, in respect of any portion accor- dance with criteria acceptable to the Association. Seeds Program 5. In carrying out Part C of the Credit:Project, XXXX shall develop a plan for implementing a pilot seed program involving the formal and informal seed production and distribution sectors.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA ZPEPC in carrying out the Project, the Borrower, the Provinces, AJK and FATA ZPEPC shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the AssociationBank. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower ZPEPC shall employ such consultants under contracts using the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower ZPEPC shall use other standard forms agreed with the AssociationBank. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications ZPEPC shall, implement the Action Plan within the time schedule provided therein in a manner satisfactory to the Bank. 2. ZPEPC shall, by January 1, 1996, implement the action plan, agreed with the Bank, for unifying ZPEPC tariffs. 3. ZPEPC shall: (a) without limitation upon its obligations under Section II of the General Conditions For purposes of Schedule 1 to this Agreement, the provisions engage (i) financial management consultants to review its accounting system by December 31, 1995, and (ii) risk management consultants to review its insurance covers by September 30, 1995, both under terms of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice reference satisfactory to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 Bank; (b) furnish the results of Schedule 5 such reviews and recommendations pursuant thereto to the Development Credit AgreementBank; and (c) implement the said recommendations taking into account the comments thereon, if any, by the Association shallBank. 4. ZPEPC shall carry out the Environmental Mitigation Measures and Monitoring Plan in a manner satisfactory to the Bank. 5. ZPEPC shall carry out the Resettlement Action Plans in a manner satisfactory to the Bank. 6. ZPEPC shall carry out the training program, agreed with the Bank, in respect of any portion of a manner satisfactory to the Credit:Bank.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "“Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" ” published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications The Borrower shall maintain until completion of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as followsProject: (1a) The last sentence the PSC with overall responsibility for all aspects of Section 3.02 is deletedProject implementation consisting of key members from the Ministries of Agriculture and Environment, and associate members from at least the Ministries of Justice and Finance, the Farmers’ Union and the Producers’ Union, the Estonian Food Board, a representative of the municipalities concerned, and two Joint Project Directors from the Ministry of Agriculture and Environment respectively; and (b) the PIU in the Ministry of Agriculture to carry out the following activities: (i) coordination of and support to the implementing agencies; (ii) administration, accounting and financial management; (iii) procurement coordination and supervision; (iv) loan withdrawals; (v) monitoring and evaluation; and (vi) reporting. 2. The Borrower shall: (2a) The words "except as otherwise agreed with the Association mayBank, by notice March 31, 1996 initiate studies acceptable to the BorrowerBank to formulate and develop a plan for a national policy for the transfer of state-owned rural and farming lands to private owners and publish and present to the Bank by March 31, terminate 1997 the right findings of said studies and the proposed plan, including a timetable for said plan’s implementation, and, thereafter, implement the same taking into consideration the Bank’s views on the matter; (b) by May 31, 1996: (i) establish the PASDF to provide grants to farmers to finance private agricultural advisory services; and (ii) appoint a manager of the Borrower PASDF, with qualifications, experience and terms of reference satisfactory to make withdrawals the Bank; (c) by June 30, 1996, transfer the cadastre registration activities of Est-Survey to the National Land Board; (d) by June 30, 1996, establish a contract administration unit with respect a manager and four staff in the National Land Board to such amount. Upon manage and supervise the giving of such notice, such amount Technical Services under Parts A(2) and A(3) of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or Project; and (e) prepare progress reports every quarter on the procurement of goods and services under the Project and xxxxxxx said reports to the Bank. 3. Before commencement of the drainage rehabilitation works under Part B (1) of the Project on any specific drainage site the Borrower shall: (a) register in the cadastre all land at that specific drainage site to benefit from drainage rehabilitation; and (b) make available all such state-owned agricultural land for purchase or lease in accordance with procedures acceptable to the Bank. 4. The Borrower shall select the drainage sites under Part B (1) of the Project in accordance with criteria satisfactory to the Bank. 5. The Borrower shall take all necessary measures to ensure that the members of the LWA benefiting from the drainage rehabilitation shall contribute 20% of the costs of the drainage rehabilitation works either in cash or by providing labor. 6. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Bank, the carrying out of the Project and the achievement of the objectives thereof; (b) except as otherwise agreed with the Bank, prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, by April 1, 1998, a report covering the period through December 31, 1997, integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date specified of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Bank, by June 30, 1998, or such later date as the Bank shall request, the report referred to in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the Development Credit Agreement, the Association shall, in respect of any portion efficient completion of the CreditProject and the achievement of the objectives thereof, based on the conclusions and recommendations of said report and the Bank’s views on the matter. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank on Borrowers and by the World Bank as Executing Agency" published by the Bank Association in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the BankAssociation, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the BankAssociation, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each, or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. A. Overall Project Implementation 1. Modifications The Borrower shall cause VTSF to implement Part A of the General Conditions For Project, and shall implement Parts B and C of the Project, through CCC/FPI-OEF of MESSRS, all in accordance with the Project Implementation Plan. 2. Except as the Association shall otherwise agree, for the purposes of this AgreementPart A.1 of the Project, the Borrower shall: (i) cause VTSF to apply the criteria, policies, procedures and guidelines set out in the VTSF Operational Manual, and in the Project Implementation Plan; and (ii) not permit to be amended or abrogated, the VTSF Operational Manual, the Project Implementation Plan, or any provision thereof, in a manner which, in the opinion of the Association, may materially and adversely affect the implementation of Part A.1 of the Project. 3. The Borrower shall ensure that the positions of head of CCC/FPI-OEF, and the Manager of VTSF shall, at all times during the execution of the Project, be filled by persons having qualifications and experience satisfactory to the Association. 4. Without limitation upon the provisions of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 5.01 (b) of Schedule 5 this Agreement: (a) the staff of CCC/FPI-OEF shall at all times include a procurement specialist, and financial specialist acceptable to the Development Credit AgreementAssociation; and (b) the staff of VTSF shall at all times include a procurement specialist, a financial specialist, three vocational training specialists, and a communication specialist, all with qualifications and experience satisfactory to the Association Association. 5. The Borrower shall, in respect of any portion : (a) by the beginning of the Credit:1995/1996 academic year: (i) not enroll new students in its Brevet de Technicien-level training programs in customs, finance and workers’ rights, and (ii) reduce the enrollment in its training streams in geometry and industrial chemistry to fifty percent of its current level;

Employment of Consultants. 1. In order to assist Consultants’ services for Part D of the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Project shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 75,000 equivalent each each; or (b) contracts for the employment employ- ment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 75,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications FHD shall, under the general supervision and guidance of MOT, be responsible for the overall coordination of Project activities and providing information relating thereto to the Bank. 2. The Borrower shall maintain and strengthen the Project Implementation Unit (Dorinvest), established under the Highway Rehabilitation and Maintenance Project (Loan No. 3706 RU), in the FHD for the purpose of implementing Parts A and D.1 of the General Conditions For Project. 3. The Borrower shall carry out an Action Plan, comprising the following measures, agreed with the Bank, in a manner satisfactory to the Bank: (a) clearing the backlog of bridge rehabilitation and maintenance on federal roads; (b) implementing a program to improve the bridge management system in FHD; (c) improving the administrative, technical, and financial relationship of FHD and the regions of the Russian Federation; (d) strengthening the capabilities of FHD to assess environmental impacts of bridge works; and (e) improvement of bridge management in the Participating Regions. 4. The Borrower shall carry out Parts A and D.1 of the Project in accordance with a Project Implementation Schedule agreed with the Bank. (a) The Borrower shall, in consultation with the Bank and in accordance with selection criteria and schedule acceptable to the Bank, select the region or regions for participation in the Project from the following five subjects of the Russian Federation (administrative subdivisions of the Borrower): Tver Region, Vologda Region, Leningrad Region, Kirov Region, and Novgorod Region including any successor or successors thereto. (b) The Borrower shall select bridges and interchanges to be included in Part A of the Project in accordance with the methodology and criteria agreed with the Bank. 6. Without limiting the generality of its obligation under Section II of Schedule 4 hereof, the Borrower shall, by November 30, 1996, engage consultants, under terms of reference satisfactory to the Bank, for engineering design of bridge works selected under Part A of the Project and included in the Borrower’s 1997-99 bridge works schedule. 7. The Borrower shall, by December 31, 1996, discuss with the Bank the recommendations of the road financing study carried out under the Highway Rehabilitation and Maintenance Project (Loan No. 3706 RU), and, thereafter, take measures for improving the road financing system for federal and regional roads. 8. The Borrower shall, within one month after the end of each calendar quarter, furnish to the Bank a quarterly progress report of the implementation of Parts A and D.1 of the Project for the previous quarter in form and detail satisfactory to the Bank. 9. The Borrower shall, by December 31, 1998, carry out a mid-term review, in consultation with the Bank, for evaluating the overall progress in the implementation of Parts A and D.1 of the Project and adopting such measures as may be necessary to resolve any issues in respect thereof. 10. The Borrower shall: (a) cause FHD to open a Project bank account for the purposes of Parts A and D.1 of the Project with an initial deposit in local currency of the Borrower equivalent to at least five hundred thousand dollars ($500,000); and (b) within twelve months of the effectiveness of this Agreement increase and, until completion of the Project, maintain the said account with a minimum balance, through quarterly replenishments, equivalent to one million dollars ($1,000,000) or such other amount as may be agreed by the Bank from time to time. 11. The Borrower shall under the Participating Regions Subsidiary Loan Agreements cause each of the Participating Regions, inter alia, to: (a) declare its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, the provisions and, to this end, to carry out Parts B and D.2 of the General Conditions are modified Project with due diligence and efficiency and in conformity with appropriate administrative, financial, and engineering practices, and to provide, promptly as followsneeded, the funds, facilities, services and other resources required for Parts B and D.2 of the Project; (b) within one month of the date of effectiveness of the relevant Participating Regions Subsidiary Loan Agreement, establish and maintain a Project Implementation Unit in its respective road administration, with adequate staff, funding and facilities for the purpose of implementing Parts B and D.2 of the Project. Without limiting the generality of the foregoing, each of the Participating Regions shall assign to its respective Regional PIU on a full-time basis at least the following: (i) a Project manager, (ii) a bridge engineer, and (iii) a bilingual secretary; (c) carry out Parts B and D.2 of the Project in accordance with a Project Implementation Schedule agreed with the Borrower and the Bank; (d) select bridges to be included in Part B of the Project in accordance with the methodology and criteria agreed with the Borrower and the Bank; (e) without limiting the generality of its respective obligation under Section II of Schedule 1 hereof, engage consultants, under terms of reference satisfactory to the Borrower and the Bank: (i) within two months of the date of effectiveness of the relevant Participating Regions Subsidiary Loan Agreement, for strengthening the capacity of its respective Regional PIU; and (ii) within four months of the date of effectiveness of the relevant Participating Regions Subsidiary Loan Agreement, for engineering design of bridge works selected under Part B of the Project and included in its respective bridge works schedule; (f) within one month after the end of each calendar quarter, furnish to the Borrower and the Bank a quarterly progress report of the implementation of Parts B and D.2 of the Project for the previous quarter in form and detail satisfactory to the Borrower and the Bank; (g) after one year of the date of effectiveness of the relevant Participating Regions Subsidiary Loan Agreement, carry out a review, in consultation with the Borrower and the Bank, for evaluating the overall progress in the implementation of Parts B and D.2 of the Project and adopting such measures as may be necessary to resolve any issues in respect thereof; (h) within one month of the date of effectiveness of the relevant Participating Regions Subsidiary Loan Agreement, open a Project bank account for the purposes of Parts B and D.2 of the Project with an initial deposit in local currency of the Borrower equivalent to at least three hundred thousand dollars ($300,000) and, until completion of the Project, maintain the said account with a minimum balance, through quarterly replenishments, equivalent to the said amount or such other amount as may be agreed by the Borrower and the Bank from time to time; (i) duly perform all its obligations under its Participating Regions Subsidiary Loan Agreement and except as the Borrower and the Bank may otherwise agree, not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving its Participating Regions Subsidiary Loan Agreement or any provision thereof; (j) exchange views with the Borrower and the Bank with regard to the progress of Parts B and D.2 of the Project, the performance of its obligations under the relevant Participating Regions Subsidiary Loan Agreement, and other matters relating to the purposes of the Loan; and (k) promptly inform the Borrower and the Bank of any condition which interferes or threatens to interfere with the progress of Parts B and D.2 of the Project, the accomplishment of the purposes of the Loan, or the performance by it of its obligations under its Participating Regions Subsidiary Loan Agreement. 12. The Borrower shall under the Moscow City Subsidiary Loan Agreement cause Moscow City, inter alia, to: (1a) The last sentence declare its commitment to the objectives of Section 3.02 is deleted.the Project as set forth in Schedule 2 to this Agreement, and, to this end, to carry out Parts C and D.3 of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, and engineering practices, and to provide, promptly as needed, the funds, facilities, services and other resources required for Parts C and D.3 of the Project; (2b) The words "the Association may, by notice to the Borrower, terminate the right within one month of the Borrower to make withdrawals with respect to such amount. Upon the giving date of such notice, such amount effectiveness of the Credit Moscow City Subsidiary Loan Agreement, establish and maintain a Project Implementation Unit in its Engineering Department, with adequate staff, funding and facilities for the purpose of implementing Parts C and D.3 of the Project. Without limiting the generality of the foregoing, Moscow City shall be cancelled" set forth assign to its PIU on a full-time basis at least the end following: (i) a Project manager; (ii) a bridge engineer; and (iii) a bilingual secretary; (c) carry out Parts C and D.3 of Section 6.03 are deleted the Project in accordance with a Project Implementation Schedule agreed with the Borrower and the following is substituted therefor: "or Bank; (d) select bridges to be included in Part C of the Project in accordance with the methodology and criteria agreed with the Borrower and the Bank; (e) by without limiting the generality of its obligations under Section II of Schedule 1 hereof, engage consultants, under terms of reference satisfactory to the Borrower and the Bank: (i) within two months of the date specified in sub-paragraph 3 (b) of Schedule 5 to effectiveness of the Development Credit Moscow City Subsidiary Loan Agreement, for strengthening the Association shall, in respect of any portion capacity of the Credit:Moscow City PIU; and

Employment of Consultants. 1. In order Consultants’ services shall be procured under contracts awarded to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the AssociationBank. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Consultants Guidelines). For complex, time-based assignments, the Borrower shall employ such consultants shall be employed under contracts using the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with the AssociationBank. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Consultants Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications In order to ensure overall coordination of Project activities and the provision of policy guidance in respect thereof, the Borrower shall maintain, with staff and other resources and terms of reference satisfactory to the Bank, a Project Coordination Unit headed by a suitably qualified Project Coordinator appointed by the Borrower’s Ministry of Power and Electrification. 2. The Borrower shall ensure that NDC shall be permitted to set its tariffs at such levels as to enable it to recover all losses resulting from the failure of its customers to pay for electricity purchases, in accordance with guidelines agreed with the Bank. 3. With the assistance of DHE, pursuant to paragraph 3 of the General Conditions Schedule to the DHE Project Agreement, and of NDC, pursuant to paragraph 3 of the Schedule to the NDC Project Agreement, the Borrower shall: (a) maintain or cause to be maintained policies and procedures adequate to ensure the monitoring and evaluation, in accordance with guidelines and on the basis of performance indicators agreed with the Bank, of the carrying out of the Project and the achievement of the objectives thereof; (b) prepare or cause to be prepared, under terms of reference satisfactory to the Bank, and furnish to the Bank, on or about June 30, 1997, a report integrating the results of the monitoring and evaluation activities performed pursuant to subparagraph (a) of this paragraph, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project during the period following such date; and (c) review with the Bank, by September 30, 1997, or such other date as may be agreed between the Borrower and the Bank, the said report and, thereafter, take or cause to be taken all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the recommendations of the said report and the Bank’s views on the matter. 1. For the purposes of this Agreement, the provisions of the General Conditions are modified as followsSchedule: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-single- source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications . (a) Within one month after the effectiveness of this Agreement, for the purpose of ensuring proper coordination in the carrying out of the General Conditions For purposes Project and sustainability of rural infrastructure investments, the Borrower shall establish and thereafter maintain a Steering Committee consisting of representatives from the Governor of Ibb, the Governor of Taiz, NWSA, NWRA, XXXXX, and up to six (6) elected representatives from the Habir area. (b) The Borrower shall cause NWSA to maintain the Project Management Unit in Taiz, with staffing, terms of reference and qualifications satisfactory to the Association. (c) The Borrower shall cause NWRA to maintain the Project Management Unit, with staffing, terms of reference and qualifications satisfactory to the Association. (d) Within one month after effectiveness of this Agreement, the provisions Borrower shall cause XXXXX to appoint a Project Manager with terms of reference and qualifications satisfactory to the General Conditions are modified as followsAssociation. 2. The Borrower shall: (1a) The last sentence of Section 3.02 is deletedby January 31, 1997, prepare a proposal for management of’ public water and wastewater utilities in Taiz by private sector firms; and (b) by March 31, 1997, issue public bidding documents requesting proposals from private sector firms to manage public water and waste- water utilities in Taiz. (2) The words "3. By December 31, 1997, the Borrower shall furnish to the Association mayfor its review and comments, a proposed program for operation and main- tenance of rural infrastructure by notice local cooperatives. Thereafter, taking the Association’s comments thereon into account, the Borrower shall carry out said program to ensure the operation and maintenance of rural infrastructure by local cooperatives. 4. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the BorrowerAssociation, terminate the right carrying out of the Borrower to make withdrawals with respect to such amount. Upon Project and the giving of such notice, such amount achievement of the Credit shall be cancelled" set forth at objectives thereof; (b) prepare, under terms of reference satisfactory to the end Association, and furnish to the Association, on or about March 31, 1997, a report integrating the results of Section 6.03 are deleted the monitoring and the following is substituted therefor: "or (e) by the date specified in evaluation activities performed pursuant to sub-paragraph 3 (a) above, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Association, by April 30, 1997, or such later date as the Association shall request, the report referred to in sub- paragraph (b) of Schedule 5 above, and, thereafter, take all measures required to ensure the Development Credit Agreement, the Association shall, in respect of any portion efficient completion of the CreditProject and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Association’s views on the matter. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA CDR in carrying out the Project, the Borrower, the Provinces, AJK and FATA CDR shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the AssociationBank. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower CDR shall employ such consultants under contracts using the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower CDR shall use other standard forms agreed with the AssociationBank. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications Project Management (a) CDR shall at all times have the overall responsibility for managing and implementing the Project, including responsibility for the procurement and disbursement processes under the Project, the maintenance of Project accounts, the award and supervision of contracts, and the employment of consultants. (b) Without limiting the generality of the General Conditions For purposes foregoing, CDR shall, pursuant to the provisions of Section II of Schedule 1 to this Agreement, continue to employ an environmental expert, to assist CDR in the provisions day-to-day monitoring of the General Conditions are modified as follows: (1) The last sentence carrying out of Section 3.02 is deletedenvironmental assessments under the Project. (2c) CDR shall vest in PCU the authority to monitor activities carried out under Parts A, B and D of the Project. (d) The words "the Association mayTechnical Coordination Committee (TCC), established by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon coordinate the giving of such notice, such amount implementation of the Credit ERRP, shall be cancelled" set forth at responsible for coordinating the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion implementation of the Credit:Project. Membership of the TCC shall be expanded to include representatives of the Participating Municipalities.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as follows. A. Monitoring and Reporting EPH shall: (1a) The last sentence maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Bank, the carrying out of Section 3.02 is deleted.the Project and the achievement of the objectives thereof; (2b) The words "the Association mayprepare, by notice under terms of reference satisfactory to the BorrowerBank, terminate and furnish to the right Bank, on or about April 30 and October 30 of each year, a report integrating the results of the Borrower monitoring and evaluation activities performed pursuant to make withdrawals with respect to such amount. Upon paragraph (a) of this Section, on the giving of such notice, such amount progress achieved in the carrying out of the Credit shall be cancelled" set forth at Project during the end period preceding the date of Section 6.03 are deleted said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following is substituted therefor: "or such date; and (ec) by review with the date specified Bank, at such time as the Bank shall request, the report referred to in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of said report and the Bank’s views on the matter. B. Parts A and B of the Project: Environment, Land Acquisition and Resettlement 1. EPH shall carry out Parts A and B of the Project in conformity with environmental standards and guidelines, including the environmental regulations and guidelines issued by the National Environmental Protection Agency of the Borrower and the Henan Provincial Environmental Protection Bureau, satisfactory to the Development Credit AgreementBank. To that end, EPH shall implement the Environmental Management Program in a manner satisfactory to the Bank. (a) EPH shall ensure that: (i) all proposed land acquisitions, under Parts A and B of the Project are reviewed by the relevant provincial, prefectural or county land administration bureau in accordance with existing national regulations of the Borrower; and (ii) all persons who are involuntarily resettled, or whose rights to land and other assets are compulsorily acquired, under the Project receive adequate compensation in accordance with LARP-I. (b) To that end, EPH shall: (i) notify the Bank of any proposed involuntary resettlement of people or any acquisition of land and other assets which will result from Parts A and B of the Project; (ii) prior to undertaking any such resettlement or acquisition, submit to the Bank for its approval a detailed land acquisition and relocation plan relative to such resettlement or acquisition; and (iii) implement the approved detailed land acquisition and relocation plan. C. Part C of the Project: Energy Conservation 1. Under Part C of the Project, EPH shall ensure that each Energy Conservation Investment shall be made in accordance with procedures and on terms and conditions agreed to by the Bank, which shall include those set forth in paragraph 2 of this Part C. (a) EPH shall make Energy Conservation Investments in Energy Conservation Sub-projects selected by agreement between the Bank and EPH; (b) The financing of Energy Conservation Sub-projects carried out by Energy Conservation Entities which are consumers of energy produced by EPH shall be at commercial rates which shall be not less than the published state commercial bank lending rate for comparable maturities, plus a margin of 3%. (c) EPH shall ensure that all Energy Conservation Sub-projects will include adequate provisions for the measurement and verification of energy savings satisfactory to the Bank; (d) EPH shall enter into contractual arrangements with each Energy Conservation Entity whereby the latter undertakes, inter alia, to: (i) carry out its respective Energy Conservation Sub-project with due diligence and efficiency in accordance with sound managerial, engineering and industry practices acceptable to the Bank, and provide promptly as needed the funds and other resources required for the purposes, and maintain adequate records and accounts; (ii) utilize the proceeds of the Energy Conservation Investment exclusively in the carrying out of its respective Energy Conservation Sub-project; (iii) take out and maintain such insurance, against such risk and in such amounts, as shall be consistent with sound business practice; (iv) enable EPH and the Bank to inspect the goods, facilities and sites included in its respective Energy Conservation Sub-project, the Association operation thereof and any relevant records and documents; (v) at all times maintain and operate the equipment and facilities included in its respective Energy Conservation Sub-project, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and industry practices; and (vi) furnish to EPH and the Bank all such information as EPH or the Bank may reasonably request relating to the foregoing. 3. EPH shall, : (a) exercise its rights in respect of any portion relation to each Energy Conservation Sub-project in such manner as to protect the interests of the CreditBorrower, the Bank and EPH, comply with its obligations under this Agreement and achieve the purposes of the Project; and (b) not assign, amend, abrogate or waive any of its agreements providing for Energy Conservation Investment, or any provision therefor, without the prior approval of the Bank. D. Part D of the Project: Reform Implementation Plan 1. EPH shall: (a) carry out the Reform Implementation Plan in accordance with the provisions thereof; and (b) commence, not later than October 31, 1996, the carrying out of a time-bound action plan, satisfactory to the Bank, for establishing an appropriate mechanism for the periodic adjustment of EPH’s electricity rates, so as to enable EPH to: (i) meet its obligations under Sections 4.02 and 4.03 of this Agreement; and (ii) not later than January 1, 1999, apply for each customer category, a uniform electricity tariff rate to all its consumers belonging thereto. 2. EPH shall: (a) by February 1, 1997, engage financial management consultants in accordance with the provisions of Section II of Schedule 1 to this Agreement and under terms of reference agreed to by the Bank, to assist in the development and implementation of: (i) improved accounting and financial management information systems; and (ii) accounting practices consistent with international accounting standards; (b) by June 1, 1998, furnish to the Bank for review and comment a proposed time-bound action program for the implementation of the recommendations of said consultants; and (c) promptly after receipt of said comments, carry out said program with due diligence and efficiency, taking into account the Bank’s comments thereon. 3. EPH shall carry out management development and training in accordance with a program acceptable to the Bank.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. A. Project management and monitoring 1. Modifications The Recipient shall implement the Project through MMI and shall ensure that MMI shall establish and maintain throughout the implementation of the General Conditions For purposes Project a Project Management Office (the PMO) staffed by competent staff in adequate numbers to be responsible for overall coordination and supervision of this AgreementProject execution, the provisions supervision of the General Conditions are modified procurement of goods and services thereunder, the overall assessment of the quality and impact of the Project and the preparation and furnishing to the Bank of reports and other information thereon. 2. The Recipient shall, through MMI, maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators acceptable to the Bank, the carrying out of the Project as followswell as the achievement of the objectives thereof. 3. The Recipient shall, through MMI, submit semi-annual progress reports, including the disbursement status of each Boiler Subproject, not later than February 15 and August 15 of each year on the progress achieved in the carrying out of the Project during the immediately preceding semester. Said reports shall integrate the results of the monitoring and evaluation activities performed pursuant to paragraph 1 above and set out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof in the then current semester. After furnishing each such report, the Recipient shall review said report with the Bank and promptly take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of said report and taking into account the Bank’s views on the matter. 4. The Recipient shall, through MMI: (1a) The last sentence submit to the Bank annually not later than February 15 a report on the financial condition and operation status of Section 3.02 is deletedeach Participating Enterprise, in accordance with parameters agreed with the Bank; and b) prepare and furnish to the Bank no later than February 28, 1997 a plan for the implementation of the pilot dissemination program in each of participating municipalities. (2) B. Sub-grants The words "the Association may, by notice to the Borrower, terminate the right Recipient shall ensure that MMI carries out Part A of the Borrower Project in accordance with the following procedures: 1. Sub-grants shall be made by the Recipient to make withdrawals with respect to such amountParticipating Enterprises selected by MMI for the financing of Boiler Subprojects. Upon the giving of such notice, such amount The proceeds of the Credit Sub-grants shall be cancelled" set forth at used to procure goods (including design and manufacturing technology) and services required for the end carrying out of Section 6.03 are deleted and the following is substituted therefor: "or (e) by Boiler Subprojects. At least 25% of the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect proceeds of any portion Sub-grant shall be allocated to Phase 2 of the Credit:Boiler Subproject concerned, as described in Part D.2 below.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants' services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ ' services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 30,000 equivalent each each; or (b) contracts for the employment of individuals estimated to cost less than $50,000 10,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 30,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 10,000 equivalent or above. 1. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as followsThe Borrower shall cause XXXXX to ensure that: (1a) The last sentence of Section 3.02 is deletedMicroprojects and Sponsored Programs are identified, appraised, approved, implemented and evaluated in accordance with the procedures set forth or referred to in the Operational Manual and the applicable Framework Agreement; and (b) TASIF’s operations shall be carried out in accordance with the procedures set forth or referred to in the Operational Manual. (2) . The words "Borrower shall cause XXXXX to carry out, on an annual basis, an independent technical and procurement review of implementation of Microprojects, with specific focus on community related procurement and disbursement, under terms of reference satisfactory to the Association. 3. Prior to approval of Microprojects estimated to cost more than $50,000 equivalent, the Borrower shall cause XXXXX to furnish to the Association maythe draft Framework Agreement in respect of any such Microprojects for the Association’s review and approval. 4. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis in accordance with indicators satisfactory to the Association the carrying out of the Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Association, and furnish to the Association, on or about July 1st of each year, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Association, by notice June 30, 1998, or such later date as the Association shall request, the report referred to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the Development Credit Agreement, the Association shall, in respect of any portion efficient completion of the Credit:Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Association’s views on the matter.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications During execution of the General Conditions For purposes Project, the Borrower shall: (i) maintain the PPIU with adequate authority to carry out its responsibilities under the Project; and (ii) employ, at all times, a director as head of this Agreementthe PPIU with adequate qualifications and experience assisted by competent staff in adequate numbers. 2. The PPIU shall, in consultation with MOHMI and each Participating Oblast, establish the list of medical equipment and other goods to be provided under Part A of the Project, specify the training to be provided in relation to such equipment, and promptly inform the Bank prior to the initiation of procurement actions in accordance with the provisions of the General Conditions are modified as follows: (1) The last sentence Schedule 4 of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, this Agreement in respect of any portion such goods or initiation of any such training. 3. The PPIU shall initiate procurement actions in accordance with the provisions of Schedule 4 of this Agreement in respect of health facilities in any Participating Oblast, only if the Borrower has received a letter of commitment (the Participating Oblast Commitment) from the respective Participating Oblast which shall be acceptable to the Bank and include the undertakings of the Creditrespective Participating Oblast to take all necessary measures to: (a) assure that the medical equipment and supplies provided under the Project shall be installed at the intended facilities and be used exclusively for the purposes of the Project; (b) ensure participation of the beneficiary health facilities in ordering equipment; (c) provide additional clinical training for staff using the equip- ment provided under the Project, where needed; (d) provide adequate resources for supplies needed to fully utilize the equipment provided under the Project after the initial stock has been consumed; (e) contribute at least 10 percent of the Project costs applicable to the activities carried out in the respective Participating Oblast in counterpart funds and finance all applicable customs duties and taxes; (f) appoint an oblast-level project coordinator to liaise with the PPIU; and (g) submit periodic reports as requested by the PPIU on the status of project implementation and utilization of equipment. 4. The Borrower shall take all necessary measures to assure that the institutes authorized for the certification of medical equipment shall review the requests from suppliers for certification of medical equipment and supplies financed out of the proceeds of the Loan on a priority basis and in conformity with a time frame agreed upon by the Borrower and the Bank. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications Terms and Conditions of, and Procedures for Sub-loans and TA Financing The following eligibility criteria for Sub-loans, terms and conditions of Sub-loans, procedures for Sub-loans and procedures for and terms and conditions of Technical Assistance Loans shall be incorporated in the General Conditions For purposes Fund Management Agreement according to Section 3.01 (b) of this Agreement, the provisions of the General Conditions are modified as follows. I. Eligibility Criteria for Sub-loans: (1a) The last sentence detailed business plan acceptable to the Association; (b) the projected debt servicing capacity in foreign exchange of Section 3.02 is deletedthe Beneficiary (defined as the ratio of expected annual interest and principal payments to cash-flow generated from operations of the Beneficiary), shall be no less than 1.2 over the life of the Investment Project; (c) the debt to equity ratio shall be no more than 1.5:1.0, with the ratios calculated on the basis of the Beneficiary’s total debts, inclusive of those to be incurred under the Investment Project; (d) in the case of Sub-loans for specific development projects, a financial and an economic rate of return of at least 15%; and (e) in the case of Sub-loans for incremental working capital, a restructured balance sheet depicting improved financial structure indicators (e.g., debt/equity, liquidity ratio) and operating and financial performance indicators (e.g., stock and assets turnover, profitability, cash-flow) would be the additional criteria applicable to assessment and justification for lending for free-standing working capital. All the above ratios and criteria to be calculated on the basis of guidelines satisfactory to the Association to be set forth in the operating procedures of the Fund Management Agreement. (2f) The words "the Association mayby-laws, by notice to the Borrower, terminate the right management structure and procedures of the Borrower Beneficiary is consistent with private enterprise governance principles. II. Terms and Conditions of, and Procedures for Sub-loans: 1. The principal amount of each Sub-loan made or proposed to make withdrawals with respect to such amount. Upon be made out of the giving of such notice, such amount proceeds of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or be: (ea) by the date specified denominated in sub-paragraph 3 Dollars; and (b) in a maximum principal amount of Schedule 5 $1 million equivalent, provided that the principal amount shall be: (i) no more than 80 percent of the total investment cost of the Investment Project, including incremental working capital for expansion and modernization projects; (ii) no more than 70 percent of the total investment cost of the Investment Project, including incremental working capital in the case of newly established Beneficiaries; and (iii) up to $200,000 equivalent in the case of Sub-loans for free-standing, incremental working capital. 2. The maturity of each Sub-loan shall be no less than one year and no more than eight years, including a grace period of no less than six months and no more than one year. 3. The interest rate of Sub-loans shall be a market determined rate, set in accordance with a methodology acceptable to the Development Association. 4. No expenditures for goods or services required for an Investment Project shall be eligible for financing out of the proceeds of the Credit Agreement, unless the Sub-loan for such Investment Project shall have been approved by the Association shall, and such expenditures shall have been made not earlier than ninety (90) days prior to the date on which the Association shall have received the application and information required under paragraph 2 (a) of this Schedule in respect of any portion such Sub-loan. 5. When presenting a Sub-loan to the Association for approval, the Borrower shall cause the Fund Manager to furnish to the Association an application, in form satisfactory to the Association, together with (i) a description of the Beneficiary and an appraisal of the Investment Project, including a description of the expenditures proposed to be financed out of the proceeds of the Credit:; (ii) the proposed terms and conditions of the Sub-loan, including the schedule of amortization of the Sub-loan to be used for the Investment Project; (iii) an evaluation of the environmental impact; and

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultantsþ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ ' services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions this exception to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as followsThe Borrower shall: (1a) The last sentence not later than October 31, 1996, furnish to the Bank the guidelines for the pricing of Section 3.02 is deletedpersonal health services provided by health centers and hospitals, and protecting the poor from the impact of price adjustments; and (b) not later than October 31, 1996, implement the system for the annual collection of consolidated budgetary information for health related public expenditures to monitor the achievement of the targets referred to in paragraph (a) above, and for assessing the impact of proposed central and provincial budgetary allocations on the funding of basic health services. (2) The words "the Association may, by notice to the Borrower, terminate the right . In carrying out Part B.4 of the Project, the Borrower to make withdrawals shall carry out the Program Development activities in accordance with respect to such amountthe Program Development Expenditures Operating Guidelines, agreed with the Bank. 3. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted In carrying out Parts A.2 and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 B.4 (b) of Schedule 5 the Project, the Borrower shall carry out the activities under the Special Assistance Fund in accordance with the Special Assistance Fund Operating Guidelines, agreed with the Bank. 4. The Borrower shall, not later than December 31, 1995, furnish to the Development Credit AgreementBank the classification, on the Association shallbasis of poverty issues, of health centers and health districts in respect of any portion the Participating Provinces, as referred to in the Policy Statement. 5. The Borrower shall cause the local governments of the CreditParticipating Provinces to take all actions required for the implementation of the Provincial Statement in each district selected to participate in the Project, including: (a) the requirement that the share of the district health budget for basic health services and the poor be increased annually; (b) the requirement that health service fees be adjusted upwards and that such revenues be used for purposes of the health sector; and (c) the requirement that part of the earnings of the health centers be used by such facilities for health center performance incentives.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent equiva- lent or above. 1. Modifications In carrying out Part A.2 of the General Conditions For purposes Project, the Borrower shall provide Grants to Grantees in accordance with the procedures and on the condi- tions set forth or referred to in Schedule 6 to this Agreement. 2. In carrying out Part A.3 (a) of the Project, the Borrower shall ensure that the second and third born calves of beneficiaries of cattle distribution programs are redistributed among other interested farmers or put up for sale to cover part of the operating costs of the livestock support services. 3. In carrying out Part A.5 of the Project, the Borrower shall: (a) not later than March 31, 1997, prepare a manual, acceptable to the Bank, for the road construction program, and, promptly thereafter, apply such manual in the village road construction program; (b) ensure that funds provided for the village infrastructure program shall not exceed $250,000 equivalent for each Project Kecamatan; and (c) ensure that priority is given to villages where needs are demonstrated to be highest, the villagers are committed to actively contribute to the implementation of the road works, and the local government has agreed to maintain the completed works. 4. In carrying out Part A.6 of the Project, the Borrower shall approve Local Community Initiatives for financing under the Project, in accordance with the criteria set out or referred to in Schedule 7 to this Agreement. 5. In carrying out Part B.1 of the Project, the Borrower shall prepare and furnish to the Bank for comments, a detailed management and operational plan for each rural extension center and each animal health clinic to be rehabilitated, prior to the commencement of the relevant works, such plan to include the following: (a) adequate staffing levels; (b) budgetary provisions covering appropriate annual operational and maintenance funding requirements, for the effective operation of the rehabilitated facility; (c) delineation of area of coverage in terms of area and number of farmers to be reached by the facility; (d) for each rural extension center, identification of: (i) leading sector covered by relevant DINAS, and (ii) proposed budgetary arrangements to ensure that all participating sectors contribute to the functioning of the center; and (e) for each animal health center and one-room animal health service, a program to ensure cost recovery and budgeted maintenance of the facility. 6. The Borrower shall, not later than March 31, 1997, prepare a baseline survey to establish the existing socio-economic conditions in Sulawesi Tengah and Sulawesi Tenggara. 7. The Borrower shall: (a) provide the fertilizer required for the carrying out of the Project in accordance with a schedule and timetable agreed with the Bank; and (b) provide the vehicles required for the carrying out of the Project in accordance with a schedule and timetable agreed with the Bank. 8. The Borrower shall, not later than August 31, 1996, appoint a Project manager and adequate support staff for the Project Management Units in the Sulawesi Tengah and Sulawesi Tenggara BAPPEDA I and in the BAPPEDA II in each Kabupaten in Sulawesi Tengah and Sulawesi Tenggara. 9. The Borrower shall maintain, until the completion of the Project, a Project Implementation Unit in each participating DINAS, with competent staff in adequate numbers. 10. The Borrower shall prepare and furnish to the Bank for comments: (a) not later than October 31 in each year, commencing October 31, 1996, and until the completion of the Project, a coordinated work program and cost estimates for the Project for the following Fiscal Year; and (b) not later than December 31 in each year, commencing December 31, 1996, and until the completion of the Project, a coordinated budget proposal for the agreed provincial work programs under the Project. 11. The Borrower shall, not later than August 31, 1996, employ, in accordance with the provisions of Section II of Schedule 4 to this Agreement, the provisions of the General Conditions are modified as followsfollowing consultants: (1a) The last sentence a civil works specialist to assist in the carrying out of Section 3.02 is deletedPart A.5 of the Project; (b) two financial management and accountant specialists to assist in Project accounting and financial management in Sulawesi Tengah and Sulawesi Tenggara BAPPEDA I, respectively; and (c) a training specialist to assist in the organization of training in Sulawesi Tengah and Sulawesi Tenggara. 12. The Borrower shall: (2a) The words "maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association mayBank, the carrying out of the Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, on or about March 31, 1999, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Bank, by notice May 31, 1999, or such later date as the Bank shall request, the report referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank views on the matter. Procedures and Conditions for Grants under Part A.2 of the Project 1. Each Grant shall be made by the Borrower only: (a) to a Grantee which shall have established, to the satisfaction of the Borrower, acting through the relevant Kabupaten Coordinating Committee, on the basis of criteria and procedures, acceptable to the Bank, that said Grantee has the organization, management, staffing and other resources required for the establishment and efficient management of revolving credit accounts; and (b) to finance (i) the acquisition of agricultural and other related inputs required for the adoption by villagers and groups of villagers of agricultural programs and technologies developed under Part A.1 of the Project, and (ii) the processing and marketing of agricultural products, under proposals meeting criteria acceptable to the Bank. 2. Each Grant shall be made available by the Borrower to the Grantee on an advance basis to cover the estimated cost of the activities under the proposals to be financed under the Grant, provided, however, that the Grantee shall promptly refund to the Borrower any amounts not required for the actual carrying out of such activities. 3. Each Grantee shall receive (i) a maximum of Rp 10,000,000 per year, of which up to 40% may be used for processing and marketing of agricultural products, and (ii) a maximum of Rp 25,000,000 under the Project. 4. Grants shall be made on terms whereby the Borrower shall obtain, through a single written agreement with each of the Grantees, rights adequate to protect the interests of the Borrower and the Bank, including the right, as applicable, to: (a) require the Grantee to on-lend the Grant to farmers and groups of farmers for a maximum period of 12 months and at an interest rate of at least 15% calculated on the amount withdrawn and outstanding; (b) require the Grantee to open and maintain a revolving credit account in an institution providing deposit services; (c) require the Grantee to ensure that villagers and group of villagers shall carry out the activities with due diligence and efficiency and in accordance with sound agricultural, financial and technical standards and to maintain adequate records; (d) require that the goods and services required for the activities and to be financed out of the proceeds of the Loan shall be procured in accordance with the provisions of Schedule 4 to this Agreement, and that such goods shall be used primarily in the carrying out of the activities; (e) inspect, by itself or jointly with representatives of the Bank if the Bank shall so request, such goods and any relevant records and documents; (f) obtain all such information as the Borrower and the Bank shall reasonably request relating to the foregoing and to the benefits to be derived from the activities and the revolving credit accounts; and (g) suspend or terminate the right of the Grantee to the use of the proceeds of the Grant upon failure by such Grantee to perform itsobligations under its agreement with the Borrower providing for the Grant. SCHEDULE 7 Criteria for Selection of Local Community Initiatives The Project will support implementation of Local Community Initiatives which are considered to make withdrawals with respect be of a high priority by the relevant community. Such Initiative shall be rural based (but shall exclude water supply and sanitation), and shall result in direct benefits to such amountcommunity. Upon Except as the giving Bank shall otherwise agree, the Borrower shall approve Local Community Initiatives for financing under the Project in accordance with the following provisions: 1. The Kabupaten Coordinating Committee of such noticeeach participating Kabupaten shall be responsible for the approval of the initiatives to be financed. 2. Criteria to be used in the selection of a proposal: (a) the Initiative shall be other than the activities carried out under Part A.1, such A.3, A.4 and A.5 of the Project; (b) the proposal shall be technically feasible, economically justifiable and be a productive activity; (c) maximum amount of the Credit shall be cancelled" set forth at the end financing per Initiative: Rp 10,000,000; (d) maximum amount of Section 6.03 are deleted and the following is substituted thereforfinancing per household: "or Rp 250,000; (e) minimum number of households per Initiative: 10 (except for sparsely populated areas where the minimum shall be 3 households); and (f) contributions by households to include locally available materials, unskilled labor, and, where required, land. 3. Preference shall be given to proposals: (a) that benefit the date specified in sub-paragraph 3 poorest segment of the community; (b) that involve women’s and youth groups; (c) that are assisted by local community organizations; (d) that have the lowest risk of failure; or (e) where the socio-economic impact is greatest. 4. Procurement procedures shall be as set forth in Schedule 5 4 to this Agreement. SCHEDULE 8 Special Account 1. For the Development Credit Agreement, purposes of this Schedule: (a) the Association shall, in respect of any portion of the Credit:term "eligible Categories" means Categories (1) through

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "“Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" ” published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ ' services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications The Borrower shall carry out Parts A and C of the General Conditions For purposes Project through MWR and Part B of the Project through MOH in accordance with the requirements and details set forth or referred to in the PIM. 2. By December 31, 1997, the Borrower shall adopt the PIM, satisfactory to the Bank. 3. The Borrower shall, with resources and under terms of reference satisfactory to the Bank: (a) maintain, until completion of the Project, the PIU and assign to it responsibility for overall Project management and coordination; (b) maintain, until completion of the Project, the PCC and assign to it responsibility to oversee Project implementation and provide policy guidance for the implementation of the Project; and (c) maintain, until completion of the Project, the CCs and a Regional CC and assign to them responsibility to assist the PIU with Project management. 4. The Borrower shall implement the institutional strengthening measures under Part C of the Project under a time schedule which shall ensure: (a) the employment by December 31, 1997, pursuant to Section II of Schedule 4 to this Agreement, of consultants with qualifications, experience and terms of reference satisfactory to the provisions Bank, required to prepare the national sector reform study referred to in Part C (1) of the General Conditions Project; (b) the preparation and discussion with the Bank of the findings and recommendations of said study by December 31, 1998; (c) the preparation on the basis thereof of the action plan, satisfactory to the Bank; (d) the preparation and discussion with the Bank by June 30, 1998, of the draft legal instrument for the establishment of the DWWA, which shall provide, inter alia, for: (i) appropriate organizational and budgetary structures and an autonomous legal form for DWWA; and (ii) the capacity of DWWA to charge tariffs for water supply services at such rates as shall enable it to recover by the time the facilities under the Project are modified completed its operation and maintenance costs; and (e) the establishment and operation of the DWWA no later than December 31, 1998, or such other date as followsthe Borrower and the Bank may agree upon in light of progress in Project implementation. 5. The Borrower shall take all measures necessary to ensure that, upon its establishment and operation, the DWWA shall begin to charge tariffs for water supply services as provided in paragraph 4(d)(ii) above in each Participating Etrap when the water supply systems under the Project for the particular Etrap shall become operational. 6. The Borrower shall prepare, in accordance with guidelines satisfactory to the Bank, and furnish to the Bank for review and comment: (a) by December 31, 1997, and subsequently by October 31 of each calendar year, draft annual work programs and budgets for the Project; (b) quarterly reports on Project execution; and (c) by February 15, 1998, and subsequently by February 15 of each calendar year, annual reports on the implementation of the Project. 7. The Borrower shall: (1a) The last sentence maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators acceptable to the Bank the carrying out of Section 3.02 is deleted.the Project and the achievement of the objectives thereof; (2b) The words "prepare, under terms of reference satisfactory to the Association mayBank, and furnish to the Bank, on or about March 31, 2000, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Bank, by notice July 31, 2000, or such later date as the Bank shall request, the report referred to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the Development Credit Agreement, the Association shall, in respect of any portion efficient completion of the CreditProject and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank’s views on the matter. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, (b) single-single- source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts con- tracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications Implementation Program Coordination and Management (a) MNE shall have the overall responsibility for coordination and management of the General Conditions Project. MNE shall work in close cooperation and interaction, inter alia, with UCAD and USL, the students’ services of Dakar and Saint-Louis, DAGE and the higher education and fellowship directorates of MEN. The PIT, shall have the responsibility for the routine functioning of the Project and shall ensure its overall coordination on behalf of MNE. (b) Except as the Association shall otherwise agree, the Borrower shall, in the carrying out of the Project, apply the rules, procedures and guidelines, specified in the Implementation Manual, and shall not assign, amend, abrogate or waive the Implementation Manual or any provision thereof which, in the opinion of the Association, will materially or adversely affect the implementation of the Project. (a) For purposes the purpose of planning, problem solving and evaluation regarding the Project, the Borrower shall maintain, until the com- pletion of the Project, the Project Steering Committee. The Project Steering Committee shall be chaired by the Minister of Education of the Borrower and shall include, inter alia, the representatives of the Ministers of Economy, Finance and Planning, Public Health and Social Action, Modernization, Labor and Employment, Scientific Research and Technology, Education and National Languages, Vocational Training and Technical Education, the two Rectors of UCAD and USL and the directors of the students’ services at Dakar and Saint-Louis. (b) The Project Steering Committee shall meet at least four times annually. 3. The Borrower shall furnish to the Association: (i) not later than May 31 and November 30 of each year, progress reports on the implementa- tion of the Project; (ii) not later than November 30 of each year, annual projected work programs and budgets; and (iii) not later than November 30 of each year, all background documentation for an annual review of the Project to be organized and carried out during the fourth quarter of each year. Annual Review (a) The Borrower shall, not later than December 31 of each year, carry out in accordance with indicators, satisfactory to the Association, an annual Project implementation review aimed at: (i) documenting progress toward objectives; (ii) identifying and resolving obstacles to Project implementation; and (iii) adjusting, in agreement with the Association, targets and corresponding programs to reflect progress achieved in the implementation of the Project in the prior years and ensuring responsiveness to changes to effectively achieve the objectives of the Project. (b) The Borrower shall, not later than four (4) weeks prior to the review referred to in (a) above, furnish to the Association, a report, in such detail as the Association shall reasonably request, including an evaluation of the progress achieved in Project implemen- tation. (c) Promptly after completing such reviews, the Borrower shall carry out recommendations arising out of said reviews, with due diligence and efficiency and in accordance with appropriate practices, taking into account the Association’s comments thereon. Midterm Review (a) The Borrower shall, not later than October 31, 1999, carry out, through the Project Steering Committee, jointly with the Associa- tion, and in accordance with indicators acceptable to the Association, a mid-term review of the progress made in the carrying out of the Project. (b) The midterm review shall cover, inter alia, the implemen- tation of measures designed to strengthen the financial reporting, monitoring, accounting and auditing carried out under the Project, and shall discuss and finalize a plan prepared by the Borrower for the transfer of the functions of PIT into the organization of MNE. (c) Not later than one month prior to such midterm review, the Borrower shall furnish to the Association, for its review and comments, a report in such detail as the Association shall reasonably request, including an evaluation of the progress achieved in complying with Project implementation pursuant to the terms of this Agreement, and recommendations resulting from the provisions of studies conducted under the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deletedProject. (2d) The words "Promptly after completing such midterm review, the Borrower shall carry out, or cause the Project Steering Committee to carry out, the recommendations emanating from the said midterm review. 6. Unless the Borrower and the Association mayotherwise agree, the Borrower shall, by notice not later than November 30, 1999, take all necessary administrative and governmental action to ensure that the Borrower, terminate the right functions of the Borrower to make withdrawals with respect to such amount. Upon PIT are effectively integrated into the giving organization of such noticeMNE, such amount following the finalization of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified plan referred to in sub-paragraph 3 para- graph 5 (b) of Schedule 5 to this Schedule. Part A.1 of the Development Credit AgreementProject 7. For the purpose of carrying out the oversight responsibility under Part A.1 of the Project, the Borrower shall employ a private sector enterprise specializing in construction contract management, in accordance with the provisions of Section II of Schedule 3 to this Agreement. Research Fund (Part B.3 of the Project) (a) Without limitation upon the provision of paragraph 1 (b) of this Schedule, and except as the Association shall otherwise agree, the Borrower shall, in respect the carrying out of any portion Part B.3 of the CreditProject, apply the rules, procedures and eligibility criteria, specified in the Research Fund Operational Manual and shall not assign, amend, abrogate or waive the Research Fund Operational Manual or any provision thereof which, in the opinion of the Association, will materially or adversely affect the implementation of Part B.3 of the Project. (b) For the purpose of evaluating and approving a Grant, MNE shall establish a Research Committee, with terms of reference acceptable to the Association. The Research Committee shall make the Grant available to the Beneficiary in accordance with the guidelines and criteria set forth in the Research Fund Operational Manual and shall, inter alia, ensure that: (i) a detailed research proposal has been submitted by the Beneficiary; (ii) the research proposal is inexpensive; and (iii) MNE shall have the right to obtain from the Beneficiary all such information as MNE or the Association shall reasonably request pertaining to the utilization of the Grant. Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1) through

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 50,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 25,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 50,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 25,000 equivalent or above, it being understood, however, that the aggregate amount of contracts for employment of individuals shall not exceed $200,000. 1. Modifications The Borrower shall cause the Highway Concern and the Railway Department to carry on their operations and conduct their affairs in accordance with sound financial, administrative and engineering practices under supervision of qualified and experienced management, including a project manager, a project preparation officer, a contract manager and a financial officer and assisted by competent staff in adequate numbers. 2. The Borrower shall maintain the Project Account and make quarterly deposits therein to reconstitute a balance of no less than the equivalent of $200,000. 3. The Borrower shall take all measures required to implement the environmental mitigation plan, agreed upon with the Association. 4. Without any limitation or restriction upon the obligations of the Borrower under Section 9.06 of the General Conditions For purposes of this AgreementConditions, the provisions of Borrower shall furnish to the General Conditions are modified as followsAssociation quarterly progress reports on the activities carried out under the Project, including progress on Project targets and performance indicators agreed upon with the Association. 5. The Borrower shall: (1a) The last sentence maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association, the carrying out of Section 3.02 is deleted.the Project and the achievement of the objectives thereof; (2b) The words "prepare, under terms of reference satisfactory to the Association, and furnish to the Association, on or about June 30, 1997, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Association, by July 15, 1997, or such later date as the Association mayshall request, by notice the report referred to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the Development Credit Agreement, the Association shall, in respect of any portion efficient completion of the CreditProject and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Association’s views on the matter. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the BankAssociation, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the BankAssociation, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each, or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. A. AGEOPPE: 1. Modifications The AGEOPPE Board consists of, inter alia, the mayor of Bissau, a representative of the General Conditions Chamber of Commerce, a representative of the Transporters Association, the recognized civic leader and the administrator. 2. XXXXXXX shall employ and maintain until completion of the Project, an administrator, a technical director, an administrative and financial director in accordance with the provisions of Section II of Schedule 3 to this Agreement. 3. AGEOPPE shall select the Subprojects to be financed under the Credit in accordance with the eligibility criteria set forth in the Manual of Procedures. 4. Proposals for the financing of Subprojects shall be submitted to review by AGEOPPE by the ministries of the Borrower, the municipalities, or community organizations. 5. AGEOPPE will first verify the compliance of Subprojects proposals with the eligibility criteria set out in the Manual of Procedures, including the promotion of intensive labor techniques, the creation of jobs, the neutral impact on the environment, the promotion of women participation and the furtherance of Project objectives. (a) AGEOPPE will then identify the portfolio of selected Subproject proposals for the coming fiscal year and shall furnish to the Borrower and the Association for approval a list of selected Subprojects proposals not later than June 30 of each fiscal year. (b) AGEOPPE will furnish the Borrower and the Association a list of the Subproject proposals which have not been selected, for their review together with the reasons for the non selection of such proposals. (a) AGEOPPE shall enter into Subproject agreements, on terms and conditions satisfactory to the Association, for the execution of the Subprojects, with authorized representatives of the entities whose subproject proposal has been approved all in accordance with the Manual of Procedures. (b) The Subproject agreements shall provide, inter alia, for a detailed description of the Subprojects, the procurement method, a schedule of payments, technical standards, and accounting procedures. 1. For the purposes of this Agreement, the provisions of the General Conditions are modified as followsSchedule: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent equi- valent or above. Modifications . (a) For the purpose of ensuring the proper coordination of the Project and implementation of the Program, the Borrower shall continue to maintain the Inter-Ministerial Steering Committee, chaired by the Minister of Public Works and Housing and with representation from the Ministries of Planning; Finance; Industry and Trade; Municipalities, Rural Affairs and the Environment; Agriculture; Administrative Development; the Central Bank; and HUDC. (b) The functions of said Steering Committee shall include, inter alia, the execution of the institutional and regulatory reforms described in the Program, and responsibility for investigation and recommendation of solutions to issues arising in the course of carrying out the Project. (a) For the purpose of ensuring the proper supervision of the execution of Part A of the Project, the Central Bank of Jordan shall establish and maintain a Project Implementation Unit with the responsibility for preparation of the reports referred to in Section 9.07 of the General Conditions For purposes Conditions, and in Paragraph 8 of this AgreementSchedule. (b) For the purpose of ensuring the proper supervision of the execution of Part B of the Project, the Borrower shall establish and maintain a Project Implementation Unit within HUDC with the respon- sibility for preparation of the reports referred to in Section 9.07 of the General Conditions, and in Paragraph 8 of this Schedule. 3. The Borrower shall, by December 31, 1996, extend to the private sector, rights and privileges in land and housing development similar to those of HUDC. 4. The Borrower shall cause HUDC to: (a) establish by September 30, 1996 and thereafter maintain the organizational unit dedicated to facilitate private sector development of land and housing for lower income households; (b) purchase or acquire no more than an aggregate of 50 hectares of additional land for development purposes except as approved by the Minister of the MPWH; (c) by July 31, 1998, enhance its cost allocation systems, satisfactory to the Bank, for each line of business, including production activities, mortgage portfolio operations, land bank, rental real estate holdings, policy formulation and monitoring of land and housing markets, and private sector development; and establish budgeting and financial management systems to ensure full coverage of all assets and liabilities; and (d) by July 31, 1998, complete, under terms of reference agreed with the Bank, a comprehensive study of land use and urban planning management regulations. 5. The Borrower shall cause HUDC to attain the following targets for the development of land for low income housing by Privately Owned Entities, including, if required to meet such targets, the reallocation of development rights on HUDC sites through auction or other method satisfactory to the Bank: (i) in 1996, the greater of 220 housing plots or 20 percent of total land plots for which contracts have been signed during such year; (ii) in 1997, the greater of 400 housing plots or 33 percent of total land plots for which contracts have been signed during such year; (iii) in 1998, the greater of 850 housing plots or 55 percent of total land plots for which contracts have been signed during such year; (iv) in 1999, the greater of 1100 housing plots or 68 percent of total land plots for which contracts have been signed during such year; and (v) in 2000, the greater of 1250 housing plots or 75 percent of total land plots for which contracts have been signed during such year. If, for any year, the target for the minimum number of plots to be developed by Privately Owned Entities has not been attained, the target for the following year will be increased by the amount of such shortfall. 6. The Borrower shall present to its Parliament, by December 31, 1998, proposed legislation, which the Bank agrees is sufficient, to require zoning for land use to be more responsive to market needs and to improve the formulation of housing policy and the implementa- tion thereof. (a) The Borrower shall ensure that: (i) the SMF’s bonds are exempted from limits imposed by the Company Law upon the issuance of corporate debt; (ii) income derived from SMF bonds is exempted from taxation; (iii) the SMF’s bonds are eligible to serve as liquidity reserve holdings of banks and would be risk-weighted at 20% for the purpose of calculating capital adequacy ratios of a given bank which holds the SMF’s bonds; and (iv) the SMF’s loans to financial insti- tutions are treated as interbank lending for regulatory purposes. (b) The Borrower shall ensure, by December 31, 1996, that streamlined procedures, satisfactory to the Bank, for the registration and transfer of liens shall apply to the SMF. 8. Without limitation or restriction upon the provisions of Sections 9.01 and 9.07 (a) of the General Conditions are modified Conditions, the Borrower shall furnish the following reports, of such scope and in such detail as followsthe Bank may reasonably request: (1a) The last sentence within one month after the end of Section 3.02 is deleted. (2) The words "each reporting period, quarterly reports on the Association may, by notice to progress achieved in the Borrower, terminate the right execution of the Borrower to make withdrawals Project, in accordance with indicators agreed upon with the Central Bank of Jordan and the Bank, with respect to such amount. Upon the giving of such notice, such amount Part A of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted Project, and in accordance with indicators agreed upon with HUDC and the following is substituted therefor: "Bank, with respect to Part B of the Project; (b) on or about June 1, 1998, a report integrating the results of the monitoring and evaluation activities performed pursuant to sub- paragraph (ea) by above, on the progress achieved in the carrying out of the Project during the period preceding the date specified of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Bank, by July 1, 1998, or such later date as the Bank shall request, the report referred to in sub-paragraph 3 (b) of Schedule 5 above, and, thereafter, take all measures required to ensure the Development Credit Agreement, the Association shall, in respect of any portion efficient completion of the CreditProject and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank’s views on the matter. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK Borrower and FATA ESE in carrying out the Project, Project the Borrower, the Provinces, AJK Borrower and FATA ESE shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower and ESE shall employ such consultants under contracts using the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower and ESE shall use other standard forms agreed with the Association. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals estimated to cost less than $50,000 than$50,000 equivalent each. However, said exceptions this exception to prior Association review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-single source selection of consulting firms, firms ; (c) assignments of a critical nature, as reasonably determined by the Association, ; (d) amendments to contracts for the employment of consulting firms raising the amounts of the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications Under the supervision of the General Conditions National Seed Industry Council (NSIC), the National Seed Industry Agency (NSIA) will be responsible for the coordination of the implementation of the Project. NSIA shall establish, and maintain until the completion of the Project, a Project Coordination and Monitoring Unit (PCMU), headed by a Project Coordinator, and with staff whose qualifications shall at all times be satisfactory to the Association, including a Project accountant/disbursement officer, a management information and reporting officer, two operations officers, a secondary seed multiplication scheme specialist, a procurement officer, a training specialist, and a business specialist. 2. The Borrower, through NSIA, shall conduct, jointly with ESE, a quarterly review of the implementation of the Project, and thereafter promptly take all measures necessary on its part to remedy any shortcoming identified during said review. 3. The Borrower, through NSIC and NSIA, shall: (a) adopt and apply criteria acceptable to the Association for the selection of private sector operators to be assisted under Part A.8 of the Project; and (b) establish and maintain a Project Implementation Committee (PIC) which shall have an advisory role to PCMU, and shall comprise, inter alia, representatives of private sector seed producers and traders. 4. Promptly after the Effective Date, the Borrower, through NSIA, shall organize, jointly with Association and ESE, a workshop for the launching of the Project implementation which shall cover, inter alia, disbursement and procurement procedures for the Project. 5. The Borrower, through NSIA, shall furnish to the Association quarterly reports, in such detail and of such scope as the Association may reasonably request, on the implementation of all components of the Project. 6. Not later than two months before the end of each Project Year, the Borrower, through NSIA, shall: (a) organize a workshop with the participation of regional agricultural research and extension offices, ESE, private sector seed producers and traders, and farmers, to review progress achieved in the implementation of the Project during the concerned Project Year; (b) based on the recommendations of said workshop, prepare and furnish to the Association, before the start of the following Project Year, a work plan, acceptable to the Association, for implementation of the Project during the following Project Year, including, inter alia, a procurement plan, a staff deployment plan, details of consultants’ services and technical assistance requirements, detailed training programs, and quarterly expenditure projections; and (c) thereafter, implement said work plan, taking into account the Association’s comments thereon. 7. The Borrower shall ensure that the Project implementation is carried out in accordance with the Project Implementation Plan, subject to such modifications as may be agreed upon between the Borrower and the Association from time to time. 1. For the purposes of this Agreement, the provisions of the General Conditions are modified as followsSchedule: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:

Employment of Consultants. 1. In order Subject to assist the Borrowereligibility restrictions set forth in Section III of this Schedule, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Cconsultants' services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ ' services issued by the Bank, with such modifications as shall have been agreed by the Administrator Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAdministrator Association shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Administrator Association review or approval of budgets, short listsshortlists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each, or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Administrator Association review shall not apply to to: (ai) the terms of reference for such contracts, (bii) single-source selection of consulting firms, (ciii) assignments of a critical nature, as reasonably determined by the Administrator Association, (div) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (ev) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:val

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant GuidelinesGuide- lines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with accept- able to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Associa- tion review or approval of budgets, short listsshortlists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting con- sulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, ; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications Project Coordination SCHEDULE 4 Implementation Program (a) The Ministry of Finance shall coordinate all Project implementation activities. (b) The Borrower shall, until completion of the General Conditions For purposes Project, maintain the Steering Committee. The Steering Committee shall continue to be responsible for: (i) establishing and monitoring a timetable for the implementation of the Project, (ii) reviewing and approving the procurement of goods, works and services, (iii) coordinating and approving the various Project components so as to ensure coherence and compatibility in design, management and implementation; and (iv) making recommendations to the Ministry of Finance on policy issues. The Steering Committee shall be supported by a Project Implementation Team which shall be composed of a Manager, a Finance Manager and Information Technology Manager, all selected in accordance with the provisions of Section 11 of Schedule 3 to this Agreement, the provisions and designated counterpart staff of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deletedBorrower. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "“Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" ” published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ ' services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2a) The words "the Association may, by notice to the Borrower, terminate the right Part A of the Borrower to make withdrawals Project shall be carried out by WRD with respect to such amount. Upon the giving of such notice, such amount participation of the Credit shall be cancelled" set forth at Principal Water Officer and Basin Water Officers for the end of Section 6.03 are deleted Pangani and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 Rufiji River Basins; (b) Part B of Schedule 5 to the Development Credit AgreementProject shall be carried out by the Irrigation Department within MOA, with support from the Association agricultural research and extension services within MOA. (a) The Borrower shall, in respect order to ensure coordinated action between MOA and MOW on Project activities, establish and maintain an Interministerial Steering Committee chaired by the Principal Secretary of any portion MOW, with the Principal Secretary of MOA as the alternate chair, and including the following members: (i) the Principal Secretaries of the Credit:Ministries of Finance, Tourism and Natural Resources, Justice and Constitutional Affairs, Community Development, Women and Children, the Planning Commission, and the Vice President’s office; (ii) Regional Development Directors for Iringa and Tanga, in their capacity as Chairmen of the Rufiji and Pangani Basin Technical Committees respectively, and the Regional Development Director for the Coast Region; (iii) the Commissioner for Water Affairs of MOW, and the Commissioner for Agriculture and Livestock Development of MOA; and (iv) the Principal Water Officer in MOW. (b) The Interministerial Steering Committee shall meet at least once a year to review and approve the annual workplan, review progress to date, resolve any disputes and approve any major initiatives to be undertaken under the Project. (a) The Borrower shall establish and maintain a Technical Steering Committee under the chairmanship of the Commissioner for Water Affairs of MOW, with the Commissioner of Agriculture and Livestock Development, MOA, as alternate chair and including the following members: (i) the Principal Water Officer, MOW; (ii) the Commissioner of Planning and Marketing, MOA, and the Director of Planning, MOW; and

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (ai) the terms of reference for such contracts, ; (bii) single-source selection of consulting firms, ; (ciii) assignments of a critical nature, as reasonably determined by the Association, ; (div) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or ; or (ev) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as followsImplementation Program A. Monitoring 1. BJSC shall: (1a) The last sentence maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association, the carrying out of Section 3.02 is deleted.the BJSC Parts of the Project and the achievement of the objectives thereof; (2b) The words "prepare, under terms of reference satisfactory to the Association, and furnish to the Association, within one month following June 30 and December 31 of each calendar year, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the BJSC Parts of the Project during the preceding six months and setting out the measures recommended to ensure the efficient carrying out of the BJSC Parts of the Project and the achievement of the objectives thereof during the six months following such date; (c) review with the Association, within two weeks following the submission of the report referred to in paragraph (b) of this Section, or at such later date as the Association mayshall request, by notice said report, and, thereafter, take all measures required to ensure the efficient completion of the BJSC Parts of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Association views on the matter; and (d) prepare, under terms of reference satisfactory to the Association, and furnish to the Borrower, terminate a mid-term report, not later than April 1, 1998, for consolidation in the right of report to be furnished to the Borrower Association pursuant to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end provisions of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) 3.04 of Schedule 5 to the Development Credit Agreement, integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the BJSC Parts of the Project from the inception of the Project, and setting out the measures recommended to ensure the efficient carrying out of the BJSC Parts of the Project and the achievement of the objectives thereof. B. Implementation of the BJSC Parts of the Project 1. BJSC shall carry out the BJSC Parts of the Project in accordance with an action plan and timetable acceptable to the Association. 2. BJSC shall carry out the Environmental Management Program in a manner satisfactory to the Association shall, in respect and shall furnish any revision of any portion of said Program to the Credit:Association for prior approval.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant GuidelinesGuide- lines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or or (e) amendments to contracts for the employment of individual consultants con- sultants raising the contract value to $50,000 equivalent or above. Modifications Implementation Program 1. The Borrower shall appoint, in accordance with the provisions of Section II of Schedule 4 to this Agreement, by April 30, 1997 and thereafter employ consultants to provide assistance to DEA in the coordination of the General Conditions For purposes Project and in the review of its implementation in accordance with supervision plans acceptable to the Bank. 2. The Borrower shall, by December 15, 1998 and every December 15 thereafter: (a) carry out annual reviews of the allocation of funds under the Project among the Participating States; and (b) make adjustments of the funds for each succeeding year of the Project taking into account disbursement performance and the documented needs of each Participating State, as determined by the Borrower. 3. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Bank, the carrying out of the Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, on or about December 31, 1998, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period pre- ceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Bank, by June 30, 1999, or such later date as the Bank shall request, the report referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommenda- tions of the said report and the Bank views on the matter. Participation Agreement (Procedures, Terms and Conditions, and Implementation Arrangements) 1. The Borrower shall make the proceeds of the Loan available to the Participating States in accordance with the Borrower’s standard arrangements for developmental assistance to the States of India. 2. Prior to entering into a Participation Agreement with the Borrower, a Participating State shall have delivered to the Borrower a letter: (i) indicating that it will take decisions, satisfactory to the Borrower, on policy-based reforms in key institutional and financing aspects of its road sector; and (ii) advising the Borrower of such State’s acceptance of a project identification and preparation framework (PIPF), acceptable to the Borrower and the Bank, as the model framework for any Technical Assistance supported project preparations, such PIPF outlining the agreed strategic areas, the approach to project identification and essential techno-economic, environmental, social, institutional and procurement preparations. Upon entering into a Participation Agreement, the provisions of said letter and PIPF shall be included therein and become an integral part thereof. 3. Each Participation Agreement shall include provisions whereby: (a) Each Participating State shall undertake to establish, maintain and operate an Empowered/Steering Committee for the direction and monitoring of all aspects of reform implementation and project preparation activities carried out under the Project. (b) Each Participating State shall declare its commitment to the objectives of the Project as set forth in Schedule 2 to the Loan Agreement, and, to this end, shall carry out its part of the Project with due diligence and efficiency and shall provide, promptly as needed, the funds, facilities, services and other resources required for its part of the Project. (c) Each Participating State shall undertake that, unless the Borrower and the Bank shall otherwise agree, procurement of the goods, works and consultants’ services required for the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to the Loan Agreement. (d) Each Participating State shall undertake to carry out the obligations set forth in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of the General Conditions are modified as follows: (1) The last sentence in respect of Section 3.02 is deletedsuch State’s Partici- pation Agreement. (2e) The words "Each Participating State shall undertake to, at the Association mayrequest of the Borrower, exchange views with the Borrower and the Bank, with regard to the progress of its part of the Project, the performance of its obligations under the respective Participation Agreement, and other matters related to the purposes of the loan. (f) Each Participating State shall undertake to promptly inform the Borrower and the Bank of any condition which interferes or threatens to interfere with the progress of its part of the Project, the accomplishment of the purposes of the Loan, or the performance by such Participating State of its obligations under the Participation Agreement. (g) Each Participating State shall undertake to: (i) maintain records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of its part of the Project of the departments or agencies of such State responsible for carrying out the Project or any part thereof; and (ii) have its records and accounts referred to in paragraph (a) above for each fiscal year audited in accordance with appropriate auditing principles consistently applied, by notice independent auditors acceptable to the Borrower; and furnish to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such noticeas soon as available, such amount of the Credit shall be cancelled" set forth at but in any case not later than six months after the end of Section 6.03 are deleted each such fiscal year, the report of such audit by said auditors of such scope and in such detail as the Borrower shall reasonably request, including such other information concerning said records, accounts and the following is substituted therefor: "or (e) by audit thereof as the date specified in sub-paragraph 3 (b) Borrower shall from time to time reasonably request. 1. For the purposes of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Creditthis Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of and individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants individuals raising the contract value to $50,000 equivalent or above. 1. Modifications The Borrower shall review with the Association by September 30, 1997, road classification revisions made by LGED as a consequence of the increase in Growth Center Markets from 1,400 markets to 2,100 markets and, thereafter, take into account the Association’s recommendations and views in finalizing the revisions. 2. The Borrower shall complete or cause to be completed by December 31, 1997, a study on Union Parishad’s financial resource mobilization and, in consultation with the Association, prepare or cause to be prepared a plan of action based on the agreed recommendations under said study and implement or cause to be implemented such plan of action by December 31, 1998. 3. The Borrower shall, for purposes of Part B of the Project, provide to the Association for its approval by June 30 each year during Project implementation, an annual Project Area maintenance program for the following Fiscal Year. 4. The Borrower shall: (a) for purposes of routine and periodic maintenance of all maintainable Rural Roads, culverts and bridges in the Borrower’s territory, provide an annual budget allocation of at least $21 million equivalent for FY 1997/1998 and, thereafter, increase the budget allocation annually by $2.5 million equivalent through FY 2001/2002; and (b) in the event that external funding for the Borrower’s Road Maintenance Program (RMP) is discontinued or reduced below the FY 1996/1997 funding level for whatever reason, provide additional annual budget allocation or obtain funds from other sources for RMP or any similar program, in an amount at least equivalent to the FY 1996/1997 external funding. 5. The Borrower shall cause LGED to appoint by March 31, 1997, a qualified maintenance engineer in every District and Thana within the Borrower’s territory. 6. The Borrower shall: (a) for purposes of Part G of the Project: (i) rent construction equipment to contractors; (ii) ensure that charges for renting such equipment are sufficient to cover the maintenance and replacement costs of such equipment; and (iii) make available to LGED annually, through budget allocations into a separate identifiable item in LGED’s budget, for maintenance and replacement costs of such equipment, funds equivalent to the estimated rent collections for the following FY; and (b) furnish to the Association annually accounts relating to said rental charges, collections and allocations under the foregoing provision of subparagraph (a) above. 7. The Borrower shall, for purposes of Part H of the Project: (a) cause LGED to fill by March 31, 1997, seven high level staff positions in LGED (second Additional Chief Engineer, Superintending Engineer, Assistant Engineer (two positions), Transport Economist, Monitoring & Evaluation Specialist and Sociologist) and, beginning in FY 2000/2001, provide funds for these positions from its budget; (b) implement the recommendations made in the study dated March 1995, carried out under the Borrower’s Management Capability Strengthening Project (MANCAPS), on: (i) improved financial management and internal auditing; and (ii) reduction in control span through delegation of the responsibilities of the Chief Engineer, LGED, by creating about six regional offices by March 31, 1997, each office to be headed by a Superintending Engineer; and (c) establish, under the coordination of the Ministry of Local Government, Rural Development and Cooperatives of the Borrower, a Working Committee, consisting of representatives from the private and public sectors, by March 31, 1997, to promote private sector participation in the infrastructure sector, and ensure that the Working Committee shall meet at least semiannually and the Association shall be furnished the results of such meetings. 8. Without limitation to Section 9.08 of the General Conditions Conditions, the Borrower shall acquire the land, required for the carrying out of the Project, in accordance with a land acquisition action plan dated November 1995 agreed with the Association. 9. The Borrower shall carry out all necessary measures to mitigate the possible negative environmental impact of road, market and ghat improvements under the Project in accordance with a sectoral environmental action plan dated October 1995 agreed with the Association. 10. The Borrower shall, beginning July 1, 1997, conduct or cause to be conducted every six months, technical audits by consultants acceptable to the Association, to assess, on a sample basis, the amount and quality of civil works carried out under the Project in the preceding six-month or longer period and submit such technical audit report to the Association within three months after each audit. 11. The Borrower shall establish and thereafter maintain the PIO until the completion of the Project. 12. The Borrower shall: (a) not increase its share of revenues beyond 25% of lease revenues earned from the Markets; and (b) not decrease the 50% allocation to Union Parishads of revenues earned from land transfer tax. 1. For the purposes of this Agreement, the provisions of the General Conditions are modified as followsSchedule: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent equiva- lent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-single- source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts con- tracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications PAD shall during the period of Project implementation: (a) continue to fill the following key posts with staff having qualifications satisfactory to the Association: (i) Controller General (Accounts); (ii) Deputy Auditor General (Government Audit); (iii) General Manager (Management Information Systems); (iv) Director General (Human Resource Management); and (v) Director General (Training); (b) designate and maintain a Project Director, satisfactory to the Association, with overall responsibility for the Project implementation; (c) employ within the Project directorate, a Project Coordinator and a Deputy Project Coordinator, with qualifications satisfactory to the Association, and other staff necessary for the carrying out of the General Conditions directorate’s functions; and (d) subject to satisfactory performance, retain the incumbents appointed to posts referred to in subparagraphs (a) and (b) above for a minimum period of three years. 2. For purposes of this Agreementcarrying out studies and technical assistance under Part B of the Project, the provisions Borrower shall ensure that its Ministry of Finance and Planning Commission establish, not later than December 31, 1996, project management arrangements satisfactory to the Association. 3. The Borrower shall, not later than January 31 in each year, beginning in 1997, review and update the Implementation Plan in consultation with the Association and, thereafter, carry out the updated plan to the satisfaction of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deletedAssociation. (2) The words "4. PAD shall establish by December 31, 1996 and, thereafter, retain during the Association mayimplementation of the Project, by notice an international panel of experts for purposes of the Project with membership and responsibilities satisfactory to the Borrower, terminate Association. 1. For the right purposes of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Creditthis Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. A. Responsibilities for Project Implementation 1. Modifications The Recipient shall assign the general responsibility for Project Implementation to MNREP and shall, for this purpose, make the proceeds of the General Conditions For purposes GEF Trust Fund Grant available to MNREP as and when needed for financing eligible activities under the Project. 2. The Recipient shall ensure the maintenance of the existence of the Ozone Office throughout the period of project implementation and the assignment to it of the staff, facilities and other resources required for its performance of the following functions under the Project: (a) preparation of a plan, including a time schedule, for Project implementation; (b) preparation of the Sub-project Agreements to be concluded between MNREP and the Beneficiaries in accordance with the provisions set forth in Part B of this Schedule; (c) coordination of environmental approvals required for Sub-project implementation; (d) management, with the assistance of a financial expert to be employed by MNREP prior to the start of Sub-projects implementation, of all financial matters under the Project, including: (i) maintenance of the records and accounts of the Project; (ii) approval of expenditures under the Sub-projects and preparation of applications for disbursement of the GEF Trust Fund Grant proceeds in connection therewith; (iii) supervision of the procurement procedures to be followed by the Beneficiaries; (iv) monitoring expenditures by Beneficiaries on account of the Sub-projects; and (v) arranging for audit of the Project account in accordance with the provisions of Section 4.01 of this Agreement; (e) management, with the provisions assistance of a procurement expert to be employed by MNREP prior to the start of Sub-project implementation, of all contractual matters under the Project, including: (i) assistance to Beneficiaries to ensure that their procurement of goods or services to be financed from the proceeds of the General Conditions GEF Trust Fund Grant are modified as followsmade in accordance with the procedures set forth in Schedule 3 to the Agreement; and (ii) assistance to Beneficiaries in bid package preparation, bid evaluation and contract award and administration; (f) preparation and furnishing to the Bank of monthly reports on the status of project implementation; and (g) regulatory functions concerning the licensing and import/export control of ODS. 3. The Recipient shall: (a) ensure the inclusion in the monthly status reports referred to in paragraph (1) The last sentence (f) of Section 3.02 is deletedthis Part A of this Schedule, of adequate information concerning the financial position of Beneficiaries; and (b) suspend disbursement of the GEF Trust Fund Grant proceeds on account of any Sub-project, should it be determined by the Bank on the basis of such information that the Beneficiary under such Sub-project has lost its financial viability. (2) The words "B. Sub-project Agreements 1. Each Sub-project under Part A of the Association may, by notice Project shall be implemented under a Sub-project Agreement acceptable to the BorrowerBank, terminate to be concluded between MNREP and the Beneficiary concerned upon completion by MNREP of an environmental review of the Sub-project. Among the principal terms and conditions of each Sub-project Agreement shall be included, inter alia: (a) a description of the activities included in the Sub-project; (b) an estimate of the cost of carrying out the Sub-project and identification of the portion thereof: (i) to be financed from the GEF Trust Fund Grant proceeds; and (ii) to be financed from other resources of the Beneficiary; (c) a provision whereby the Recipient shall retain the right to suspend disbursement of the Borrower proceeds of the GEF Trust Fund Grant on account of the Sub-project should it be determined, as indicated in paragraph 3(b) of Part A of this Schedule, that the relevant Beneficiary has lost its financial viability; (d) the obligations of the Beneficiary: (i) to make withdrawals follow the procurement procedures set forth in Schedule 3 to this Agreement with respect to such amount. Upon the giving procurement of such notice, such amount goods or services to be financed from the proceeds of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:GEF Trust Fund Grant;

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, or (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of and individual consultants raising the contract value to $50,000 equivalent or above. Modifications The provisions of this Schedule shall apply for the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 3.01 (b) of Schedule 5 this Agreement. A. Overall Project Implementation 1. Overall responsibility for carrying out the Project shall be assigned by the Borrower to the Development Credit AgreementPrivatization Agency, and for this purpose and for the purpose of facilitating the efficient implementation of the Project and of the other activities and programs of the PA, the Association shallBorrower shall ensure that a Project Coordination Unit consisting of a project coordinator, procurement assistant and secretary is maintained in respect of any portion the Privatization Agency under the direction of the CreditDirector of the Transformation and Restructuring Department. The PCU shall be responsible for coordinating all Project-related tasks. 2. In order to:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank Administrator in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the BankAdministrator, with such modifications thereto as shall have been agreed by the AssociationAdministrator. Where no relevant standard contract documents have been issued by the BankAdministrator, the Borrower shall use other standard forms agreed with acceptable to the AssociationAdministrator shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Administrator review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Administrator review shall not apply to to: (a) the terms of reference for such contracts, : (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Administrator; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications . A. Overall Project Implementation The Borrower shall cause the PA to vest the responsibility for the implementation of Part A of the General Conditions For purposes Project in the SMF, and Parts B.1, B.2 and C of this Agreementthe Project in MOH. To that end, the provisions Borrower shall cause the PA to maintain PU, within MOH, with qualified staff in adequate numbers whose functions and responsibilities shall be acceptable to the Administrator. B. Part A of the General Conditions are modified as followsProject The Borrower, through the PA, shall cause the SMF: (1a) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to prepare and furnish to the BorrowerAdministrator, terminate the right for its review and comments, not later than September 30 of each year until completion of the Borrower Project, commencing September 30, 1997, a report, satisfactory to make withdrawals with respect to such amount. Upon the giving of such noticeAdministrator, such amount setting out the Business Strategy for a period commencing on the date of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted report and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:ending twelve

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "“Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" ” published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ ' services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each, or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with the indicators acceptable to the carrying out of the General Conditions For purposes Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, on or about May 31, 2000, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Bank, by June 30, 2000, or such later date as the Bank shall request, the report referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank’s views on the matter. 2. The Borrower shall cause NTF to be maintained with staffing, functions and responsibilities satisfactory to the Bank. 3. Without limitation upon any of its obligations under Section 3.01 of this Agreement, the provisions Borrower shall: (i) maintain the Project Account referred to in Section 6. 01 (c) of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association maythis Agreement, by notice and shall replenish said account promptly before each quarter with sufficient funds to the Borrower, terminate the right of enable the Borrower to make withdrawals meet its obligations under Section 3.01 of this Agreement; (ii) use said account for financing the Borrower’s contribution to Project expenditures; and (iii) ensure that sufficient annual allocations will be made with respect the Borrower’s budget for the Borrower’s counterpart contribution to such amount. Upon the giving of such notice, such amount costs of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:Project.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants' services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ ' services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short listsshortlists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each, or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications Project Implementation Manual 1. Except as the Bank shall otherwise agree, KWS shall apply the procedures and guidelines set out in the Project Implementation Manual, and KWS shall not assign, amend, abrogate or waive the Manual or any provision thereof which, in the opinion of the General Bank, will materially or adversely affect the implementation of the Project. Project Coordination and Management (a) In order to facilitate the carrying out of the Project, KWS shall establish and maintain a Project Steering Committee chaired by the Director of KWS and including representatives of the Xxxx and Athi River Development Authority, of the departments of KWS and the local government assisting in carrying out any part of the Project and representatives of selected conservation organizations. (b) The Project Steering Committee shall be responsible for approving staffing appointments and contracts, reviewing semiannual Project progress reports, reviewing and approving annual work plans and budgets and participating in periodic monitoring and evaluation of the Project. 3. In order to assist KWS in implementing the Project, KWS shall, not later than April 1, 1997, appoint: (a) a Project Coordinator who will be responsible for coordinating the carrying out of the several parts of the Project by different departments of KWS; (b) a Project Secretary and a Project Accountant to assist the Project Coordinator; (c) a Field Activities Coordinator who will report to the Project Coordinator to ensure the coordination of logistics, including the use of vehicles and other facilities, and the scheduling of Project activities at the TRPNR; (d) the Community Development Specialist; (e) the Senior Research Scientist; and (f) the Data Analyst. Microprojects under Part B of the Project Eligibility Criteria for Microprojects 4. Without limitation upon the provisions of paragraph 1 above, Microprojects shall be eligible for financing out of the proceeds of the Grant only if they are determined by KWS, on the basis of an appraisal conducted in accordance with the guidelines set forth in the Project Implementation Manual, to satisfy the eligibility criteria specified below and in more detail in the Project Implementation Manual, which shall include, inter alia, the following: (a) the Microproject shall be consistent with the Community Action Plan developed by the village in which the activity is proposed, through the mechanism of a Participatory Rural Appraisal exercise carried out with the assistance of KWS and endorsed by the District Development Committee; (b) the Microproject shall promote and support the conservation goals of the Project, either directly or through a linkage identified in the Community Action Plan; (c) the Microproject shall be initiated, proposed and implemented by a community group which meets the criteria of organization, governance, accountability and transparency set out in the KWS Guidelines for the Wildlife Development Fund; (d) the Microproject shall involve local representatives of government agencies as appropriate for implementation of different aspects, such as construction or rehabilitation of social infrastructure facilities; (e) the Microproject shall not cause adverse impacts to the reserve ecosystem or to the general environment or the health or welfare of the community (as determined by a prior environmental screening or environmental impact assessment carried out in conformity with KWS’ regulations); (f) the Microproject shall be economically, financially and technically viable, in accordance with standards defined in the Project Implementation Manual; (g) the Beneficiary community must provide at least 25% of the estimated Microproject costs, in the form of cash, materials, labor or other services, with at least 5% of the total being in cash. Terms and Conditions For purposes of this AgreementGrants made for Microprojects 5. Microprojects proposed by community groups will be submitted to the Community Wildlife Officer for evaluation by KWS, in accordance with the procedures set out in KWS’ Guidelines for the Wildlife Development Fund. Upon approval of a Microproject proposal, KWS shall enter into a Microproject Agreement with the community group through their designated representatives. The terms and conditions of the Microproject Agreement shall include provisions pursuant to which: (a) each community group proposing a project shall establish a Microproject Committee which shall be responsible for Microproject implementation; (b) the community group undertakes to fulfill its responsibilities with respect to promoting and supporting conservation goals, as set out in the Community Action Plan; (c) a work plan and schedule will be developed and agreed for the Microproject, against which Project funds will be disbursed in stages; (d) the Microproject Committee shall be responsible for implementing the Microproject in accordance with the provisions of the General Conditions are modified as follows:Microproject Agreement and the Project Implementation Manual, with due diligence and efficiency in accordance with sound technical, financial, environmental, biodiversity conservation and managerial standards, and maintaining adequate records; (1e) The last sentence the Microproject Committee shall have the obligation to report to KWS on the use of Section 3.02 is deleted.the Grant and the progress made in the implementation of the Microproject; (2f) The words "financing of Microprojects shall be on a grant basis; (g) the Association maygoods, by notice civil works and services to be financed out of the Borrowerproceeds of the Grant for Microprojects shall be procured in accordance with the provisions of Schedule 1 to this Agreement; (h) KWS shall have the right to obtain all such information as KWS or the Bank shall reasonably request regarding Microproject implementation, administration, operations and the financial condition of the Microproject Committee and the benefits to be derived from the Microproject; and (i) KWS shall have the right to suspend or terminate the right of the Borrower Microproject Committee to make withdrawals with respect to such amount. Upon use the giving of such notice, such amount proceeds of the Credit shall be cancelled" set forth at Grant for a Microproject upon failure by any such Microproject Committee, or the end Community Group which it represents, to perform any of Section 6.03 are deleted and its respective obligations under the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Microproject Agreement, the Association shall, in respect of any portion of the Credit:.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. A. Project Implementation, Management and Coordination 1. Modifications The Borrower shall vest MTPSFP with the overall responsibility for the implementation of the General Conditions For purposes Project. MTPSFP shall implement: (a) Part A.1 of the Project through MEAT; (b) Part A.2 of the Project through MAP; (c) Part A.3 of the Project through MICLE; and (d) Parts B and C of the Project through PCU. 2. In order to ensure proper management and coordination of the Project, the Borrower shall (a) maintain PCU, within MTPSFP, with professional staffing in adequate number, whose qualifications and experience shall be acceptable to the Bank; and (b) cause MTPSFP, MEAT, MAP and MICLE to maintain the arrangements provided for under the framework agreement referred to under Section 5.01 of this Agreement. 3. PCU shall be responsible, inter alia, for coordinating and monitoring the provisions implementation of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deletedProject. (2) 4. The words "the Association mayBorrower shall, by notice not later than September 30, 1996, put in place, and thereafter maintain, arrangements acceptable to the BorrowerBank to assist PCU in supervising the implementation of Parts A.1, terminate the right A.2 and A.3 of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:Project.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as followsMetro Water shall: (1a) no later than December 31, 1995, award a consultant contract for the preparation of final designs and tender documents for the installation of distribution system under the Project; (b) no later than December 31, 1996, furnish to the Bank final designs and tender documents satisfactory to the Bank for the initial phase of the work to be carried out for the distribution system under the Project; and (c) carry out the planned Water Distribution and Conservation Strategy dated February 1995 agreed with the Bank in a timely manner. 2. The last sentence TWAD shall: (i) undertake the resettlement and rehabilitation of Section 3.02 is deleteddisplaced persons and displaced families in accordance with the principles, procedures and practices acceptable to the Bank; (ii) take all necessary steps to carry out the Rehabilitation Action Plan agreed with the Bank; and (iii) without prejudice to the generality of the foregoing, shall ensure that (A) displaced persons are provided prompt and adequate compensation for lost assets, including dwelling and related structures; and (B) displaced persons who are required to relocate are provided adequate assistance, logistical and financial, to move to their new areas of residence and are provided necessary financial assistance, on a grant basis, during the period of relocation and for a reasonable period thereafter. (2b) The words For the purposes of paragraph 2 (a) (i) above, "family" means the Association may, by notice to the Borrower, terminate the right head of the Borrower to make withdrawals with respect to such amounthousehold, his or her spouse and minor children. Upon Parents and major children, even though dependent on the giving of such notice, such amount head of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association household shall, in respect for the purposes of any portion of the Credit:determining benefits and assistance for resettlement and rehabilitation, be treated as separate families.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than one hundred thousand dollars ($100,000 100,000) equivalent each each, or (b) contracts for the employment of individuals individual consultants estimated to cost less than fifty thousand dollars ($50,000 50,000) equivalent each. However, said exceptions this exception to prior Association review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-single source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, ; (d) amendments to contracts for the employment of consulting firms raising the contract value to one hundred thousand dollars ($100,000 100,000) equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to fifty thousand dollars ($50,000 50,000) equivalent or above. A. Project Management 1. Modifications The Borrower shall establish and thereafter maintain at all times during the implementation of the General Conditions For purposes Project the Project Steering Committee, chaired by a representative of this AgreementMOH and with representatives of MOF, MPI, NCPFP and SBV, assigned with such functions and responsibilities, satisfactory to the provisions Association, as shall be required for the overall oversight of Project implementation. 2. The Borrower shall establish and thereafter maintain at all times during the implementation of the General Conditions are modified Project a Project Management Unit in MOH, headed by a Manager with qualifications and experience satisfactory to the Association, and assigned with such functions, responsibilities and funds, satisfactory to the Association, and with competent staff in adequate numbers, as follows: (1) The last sentence shall be required for coordinating the implementation of Section 3.02 is deletedthe Project. (2) 3. The words "Borrower shall ensure that each Project Province shall establish and thereafter maintain during the Association mayimplementation of the Project, a Provincial Project Implementation Unit, headed by notice a Manager with qualifications and experience satisfactory to the BorrowerAssociation, terminate and assigned with such functions, responsibilities, funds and competent staff in adequate numbers, satisfactory to the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such noticeAssociation, such amount of the Credit as shall be cancelled" set forth at required for assisting the end of Section 6.03 are deleted and Provincial Health Services Directors to implement the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:Project within their respective Provinces.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as followsThe Borrower shall: (1a) The last sentence maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Bank, the carrying out of Section 3.02 is deleted.the Project and the achievement of the objectives thereof; (2b) The words "prepare, under terms of reference satisfactory to the Association mayBank, and furnish to the Bank, on or about September 30, 1998, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Bank, by notice October 31, 1998, or such later date as the Bank shall request, the report referred to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank’s views on the matter. 2. In carrying out Part A.2 (b) of the Project, the Borrower shall: (a) not later than June 30, 1997, furnish the recommendations of the study to the Development Credit AgreementBank for comments; and (b) thereafter, prepare an action plan taking into account the recommendations of the study and the comments of the Bank thereon. 3. In carrying out Part B.1 (c) of the Project, the Association shall, in respect Borrower shall ensure that the second and third born calves of any portion beneficiaries of cattle and buffalo distribution programs are redistributed among other interested farmers or put up for sale to cover part of the Creditoperating costs of the livestock support services. 4. In carrying out Part B.2 of the Project, the Borrower shall: (a) ensure that funding for road improvement works shall not exceed $250,000 equivalent for each Project Kecamatan; and (b) ensure that priority is given to villages where needs are demonstrated to be highest, the villagers are committed to actively contribute to the implementation of the road works, and the local government has agreed to maintain the completed works. 5. The Borrower shall maintain until completion of the Project, a Project management unit in each of the participating Kabupatens, with competent staff in adequate numbers. 6. In carrying out Part B.3 of the Project, the Borrower shall select Local Community Initiatives in accordance with the criteria set out or referred to in Schedule 6 to this Agreement. 7. In carrying out Part C.1 of the Project, the Borrower shall rehabilitate or construct a facility only after receiving from the relevant Kabupaten an integrated management plan for such facility, acceptable to the Bank, which shall include: (i) staffing levels; (ii) an estimate and source of annual funding requirements to support a successful operation;

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications The Borrower shall submit to the Association all information, statements and reports promptly after receiving them from PKSF pursuant to the provisions of the Subsidiary Loan Agreement. 2. The Borrower shall cause Bangladesh Bank to: (a) carry out the studies under Part B.2 of the Project under terms of reference satisfactory to the Association; (b) by December 31, 1997 submit to the Association for review the completed studies together with a time-bound plan of action for implementing the recommendations of such study; and (c) taking into account the Association’s comments thereon, implement such plan of action in a manner satisfactory to the Association. 3. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association, the carrying out of the Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Association, and furnish to the Association, by August 31, 1998, a report integrating the results of the monitoring and evaluation activities performed pursuant to subparagraph (a) above, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; (c) review with the Association, by October 31, 1998, or such later date as the Association shall request, the report referred to in subparagraph (b) above, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Association’s views on the matter; and (d) cause PKSF, at the request of the Association, to exchange views with the Association with regard to the performance of its obligations under the Subsidiary Loan Agreement and other matters relating to the purposes of the Credit. Part A: Subsidiary Loan Agreement 1. Except as the Association shall otherwise agree, the Subsidiary Loan Agreement shall, inter alia, provide that: (a) The Borrower shall onlend a portion of the proceeds of the Credit as a Subsidiary Loan to PKSF for purposes of carrying out Part A of the Project. Such Subsidiary Loan shall be denominated in Takas. Interest shall be payable on the principal amount of the Subsidiary Loan withdrawn and outstanding from time to time at a simple interest rate of 1% per annum. The amortization period shall be 20 years with a grace period of 5 years for each disbursement from the proceeds of the Credit onlent to PKSF as a Subsidiary Loan. Prepayment shall be permitted at any time without penalty. The foreign exchange risk shall be borne by the Borrower. (b) The Borrower shall provide a portion of the proceeds of the credit to PKSF as a grant for purposes of carrying out Part B.1 of the Project. Toward that end PKSF shall undertake a program of institutional development aimed at enhancing financial sustainability, strengthening accountability, improving staff skills and establishing an impact evaluation program. (c) PKSF declares its commitment to the objectives of the Project and to maintaining its financial viability, and shall conduct its operations and affairs in accordance with sound financial standards and practices, with qualified and experienced management and in accordance with its Memorandum and Articles of Association and its Statement of Policy. (d) PKSF shall establish and maintain satisfactory procedures and operational polices for supervision and monitoring of Sub-loans and Micro-credits in order to ensure the achievement of the objectives of the Project, and shall maintain a loan recovery rate of 98% on a quarterly basis. Where, however, such recovery rate is not achieved in exceptional situations of natural calamities or emergencies, PKSF shall take such measures, satisfactory to the Association and the Borrower, to promptly restore such recovery rate. (e) PKSF shall ensure that the proceeds of the Subsidiary Loan shall be utilized to make Sub-loans to POs under Sub-loan Agreements for financing Micro-credits in accordance with the procedures and on the terms and conditions set forth or referred to in Part B of this Schedule. (f) PKSF shall exercise its rights under the Subsidiary Loan Agreement and each Sub-loan Agreement in such manner as to: (i) protect the interests of the Borrower and PKSF; (ii) comply with its obligations under the Subsidiary Loan Agreement and such Sub-loan Agreement; and (iii) achieve the purposes of Part A of the Project. (g) PKSF shall duly perform all its obligations under the Subsidiary Loan Agreement and each Sub-loan Agreement. Except as the Borrower shall otherwise agree, PKSF shall not take or concur in any action which would have the effect of assigning, amending, abrogating or waiving the Subsidiary Loan Agreement or any Sub-loan Agreement or any provision of any such Agreement. (h) PKSF shall, at the request of the Borrower, exchange views with the Association with regard to the performance of its obligations under the Subsidiary Loan Agreement and other matters relating to the purposes of the Credit. (i) PKSF shall promptly inform the Borrower of any condition which interferes or threatens to interfere with the accomplishment of the purposes of the Credit or the performance by the PKSF of its obligations under the Subsidiary Loan Agreement. The Borrower and PKSF shall consult and take such measures as may be necessary in order to overcome such condition. (j) PKSF shall maintain procedures and records adequate to monitor and record the progress of Parts A and B.1 of the Project and to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of PKSF. PKSF shall have such records for each Fiscal Year audited, in accordance with appropriate auditing principles consistently applied by independent auditors acceptable to the Borrower. PKSF shall furnish to the Borrower, as soon as available, but in any case not later than six months after the end of each such Fiscal Year, a certified copy of the report of such audit by said auditors, of such scope and in such detail, including such other information on such records and audit thereof as the Borrower shall from time to time reasonably request. Such report shall include the auditor’s opinions on, inter alia, quality of PKSF’s general accounting practices, adequacy of MIS and internal audit/control systems, adequacy of loan classification and provisioning policies, accuracy of loan recovery rates and overdues, and accuracy of the periodic reports submitted pursuant to paragraph (m) of this Part. (k) PKSF shall provide to the Borrower all information, statements and reports in respect of the Subsidiary Loan, Sub-loans and Micro-credits as the Borrower shall reasonably request. (l) PKSF shall provide to the Borrower: (i) quarterly and annual reports on the progress of carrying out Parts A and B.1 of the Project and include in these reports, inter alia, information on agreed project performance indicators; and (ii) prior to the start of each Fiscal Year, its approved business plan outlining detailed financial, operational, and institutional plans for the following Fiscal Year and broad goals in these areas for the remaining Fiscal Years until the completion of the Project. (m) PKSF shall provide to the Borrower periodic reports indicating the aggregate amount of financing provided to POs during such period based on the reports provided by POs pursuant to paragraph 2 (k) of Part B of this Schedule, the sources of such financing and the amount to be financed as Sub-loans from the proceeds of the Subsidiary Loan. (n) The Borrower shall provide to PKSF a loan equivalent to $10,000,000 from its own resources over a period of two years in two equal installments at the beginning of each Fiscal Year commencing with Fiscal Year 1996-97. Such loan shall be denominated in Takas. Interest shall be payable on the principal amount of the loan withdrawn and outstanding from time to time at a simple interest rate of 1%. The amortization period shall be 20 years with a grace period of 5 years for each loan installment. Prepayment shall be permitted at any time without penalty. The foreign exchange risk shall be borne by the Borrower. (o) The Borrower shall suspend or terminate the right of PKSF to the use of the proceeds of the Subsidiary Loan upon: (i) failure by PKSF to perform any of its obligations under the Subsidiary Loan Agreement, or upon notice by the Association to the Borrower that it intends to exercise any of its remedies under Sections 6.02 and 7.01 of the General Conditions For purposes or Article V of this Agreement; or (ii) upon notice by PKSF that it intends to terminate the Subsidiary Loan Agreement, or upon the provisions actual termination of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Subsidiary Loan Agreement, the Association shall, in respect of any portion of the Credit:whichever occurs first.

Employment of Consultants. 1. In order to assist the Borrower, Borrower and the Provinces, AJK and FATA SFKC in carrying out the Project, the Borrower, the Provinces, AJK and FATA Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower shall employ such consultants under contracts using the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with the Association. 2. Notwithstanding the provisions of paragraph Paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than the equivalent of one hundred thousand dollars ($100,000 equivalent each 100,000) per contract, or (b) contracts for the employment of individuals estimated to cost less than the equivalent of fifty thousand dollars ($50,000 equivalent each50,000) per contract. However, said exceptions this exception to prior Association review shall not apply to to: (ai) the terms of reference for such contracts, ; (bii) single-source selection of consulting firms, ; (ciii) assignments of a critical nature, as reasonably determined by the Association, ; (div) amendments to contracts for the employment of consulting firms raising the contract value to the equivalent of one hundred thousand dollars ($100,000 equivalent 100,000) or above, ; or (ev) amendments to contracts for the employment of individual consultants raising the contract value to the equivalent of fifty thousand dollars ($50,000 equivalent 50,000) or above. 1. Modifications of For the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as followsSchedule: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications Implementation Program A. Parts A and B of the General Conditions For Project 1. In accordance with the eligibility criteria set forth in the RDF Policy Manual and the institutional development plans referred to in paragraph 2 (b) of this Schedule, the Borrower shall, through SBV, select financial institutions established and operating in the Socialist Republic of Viet Nam to carry out lending operations under Part A of the Project, and, thereafter, furnish to the Association, for its review and approval, a list of the financial institutions so selected. 2. The Borrower shall, through SBV, prepare and furnish to the Association for its approval: (a) an institutional development plan with a detailed time- table and staff training programs for purposes of assisting the Bank for the Poor to meet the performance criteria set forth in the FRP Policy Manual; and (b) institutional development plans with detailed time-tables and staff training programs for those financial institutions who are unable to meet the eligibility criteria set forth in the RDF Policy Manual for purposes of their accreditation as Participating Financial Institutions under the Project. 3. The Borrower, through SBV, shall: (a) on June 30 and December 31 of each year, commencing on December 31, 1996, review and assess: (i) compliance by each of the Participating Financial Institutions with regard to their eligibility criteria as set forth in the RDF Policy Manual and compliance with their institutional development plans, as the case may be; and (ii) the Bank for the Poor with regard to its performance criteria set forth in the FRP Policy Manual and compliance with its institutional development plan; and (b) by September 30 and March 31 of each year, commencing on March 31, 1997, prepare and furnish to the Association, for its review and comments, a report on the most recent findings and assessment made pursuant to paragraph (a) of this AgreementSection. 4. If at the time of the reviews mentioned in paragraph 3 of thisSchedule the Borrower determines that a Participating Financial Institution is not in compliance with one or more of the eligibility criteria set forth in the RDF Policy Manual or with its institutional development plan, as the case may be, the Borrower, through SBV, shall instruct the Participating Financial Institution to take the required remedial actions, including a time-table therefor, specified in consultation with the Association. If within the time-frame so specified the Participating Financial Institution is unable to comply with the eligibility criteria or its institutional development plan, as the case may be, the Borrower shall, in consultation with the Association and pursuant to the provisions of the General Conditions are modified relevant Subsidiary Loan Agreement, cancel the uncommitted amounts of the relevant Subsidiary Loan. 5. If at the time of the reviews mentioned in paragraph 3 of this Schedule the Borrower determines that the Bank for the Poor is not in compliance with one or more of the performance criteria set forth in the FRP Policy Manual or with its institutional development plan, as follows:the case may be, the Borrower shall instruct the Bank for the Poor to take the required remedial actions, including a time-table therefor, specified in consultation with the Association. If within the time- frame so specified the Bank for the Poor is unable to comply with the eligibility criteria or with its institutional development plan, as the case may be, the Borrower shall, in consultation with the Association and pursuant to the provisions of the relevant Financing Agreement, cancel the uncommitted amounts of the FRP Loan. (1) The last sentence 6. Unless the Association shall otherwise agree, the Borrower shall cause the Participating Financial Institutions and the Bank for the Poor to make Sub-loans to finance Sub-projects pursuant to the provisions of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) II of Schedule 5 to the Development Credit this Agreement, the Association . 7. The Borrower shall, with the proceeds accrued from the repayment of the principal of the Subsidiary Loans and the FRP Loan, establish and thereafter maintain a rural development fund and a fund for the rural poor for purposes of financing on a wholesale basis through the Participating Financial Institutions or the Bank for the Poor, as the case may be, rural investments by RDF Beneficiaries and FRP Beneficiaries, respectively, on the terms and conditions set forth in the RDF Policy Manual and FRP Policy Manual, as the case may be, and Schedule 5 to this Agreement (except for those relating to the Association’s prior approval of Sub-loans). For these purposes the Borrower shall assign the management and operations of the RDF and FRP by June 30, 1999, or such other date as may be agreed to by the Association, to an entity or entities satisfactory to the Association. 8. The Borrower shall, and shall cause SBV and the entity or entities referred to in paragraph 7 above, as the case may be, to: (a) manage and operate the RDF and FRP on a commercial basis, with qualified staff in adequate numbers and assigned with such powers and functions as shall be required to achieve their purposes; (b) maintain procedures and records adequate to (i) monitor and record the progress of each Sub-project financed out of the proceeds of the RDF and FRP (including its cost and the benefits to be derived from it); and (ii) reflect in accordance with consistently maintained sound accounting practices the operations and financial conditions of the RDF and FRP, including the operations, resources and expenditures of the Participating Financial Institution and the Bank for the Poor in respect of any portion the financing provided through the RDF and FRP, as the case may be; (c) have the records, accounts and financial statements (balance sheets, statements of income and expenses and related statements) of the Credit:RDF and FRP for each fiscal year audited in accordance with sound auditing principles consistently applied by independent auditors acceptable to the Association; and (d) furnish to the Association, as soon as available, but in any case not later than six (6) months after the end of each such year, (i) certified copies of its financial statements for such year as so audited; (ii) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reason- ably requested; and (iii) furnish to the Association such other information concerning records, accounts and financial statements, as well as the audit thereof as the Association shall from time to time reasonably request.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 75,000 equivalent each each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 25,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 75,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above25,000. 1. Modifications The Recipient shall establish by July 1, 1996 and thereafter maintain the ARA Environment Unit with staffing and terms of reference satisfactory to the Bank. 2. The Recipient shall promulgate, by December 31, 1996, regulations for operation of the General Conditions managed resource marine park to be established under Part E of the Project. 3. The Recipient shall adopt, by September 1, 1996, environmental standards and regulations for coastal zone management, environmental auditing, prevention of industrial pollution, and environmental impact assessments. 4. The Recipient shall cause ARA to: (a) by December 31, 1996, design measures for recovery of recurrent costs for operation and maintenance; (b) furnish the proposed measures to the Bank for its review and comments; (c) finalize the recommendations of the plan taking the Bank’s comments into account; (d) within six (6) months of completion implement the recommendations of the plan; and (e) update regularly cost recovery charges based on the methodology proposed in the plan. 5. The Recipient shall base the equipment to monitor sea water quality at the Marine Science Station. 1. For the purposes of this Agreement, the provisions of the General Conditions are modified as followsSchedule: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultantsþ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ ' services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions this exception to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications SCHEDULE 5 Implementation Program 1. In carrying out Parts A and B of the General Conditions For purposes of this AgreementProject, the provisions Borrower shall, not later than October 1, 1995, appoint competent staff to each of the General Conditions are modified Assessment Institutes as follows: a director, a section head, a sub-division head, four sub-section heads, at least three extension specialists, a farming systems specialist, a socio-economist, an agronomist, a livestock or fishery scientist, a communication specialist, and administrative staff in adequate numbers. 2. In carrying out Parts A and B of the Project, the Borrower shall, not later than October 1, 1995, establish, and thereafter maintain, a regional advisory committee and a regional technical working group at each of the following Priority Assessment Institutes: Assessment Institute Banda Aceh, Assessment Institute Padang Marpoyan, Assessment Institute Pontianak, and Assessment Institute Ungaran, including the following members: (1a) The last sentence of Section 3.02 is deleted. Regional Advisory Committee: (2i) The words "the Association may, by notice to the Borrower, terminate the right head of the Borrower to make withdrawals with respect to such amount. Upon provincial planning office (BAPPEDA) as first chair and the giving of such notice, such amount provincial representative of the Credit shall be cancelled" set forth at the end Ministry of Section 6.03 are deleted Agriculture (KANWIL) as second chair; and (ii) representatives from DINAS, local universities, research institutes, farmers groups, and the following is substituted therefor: "or private sector (e) by through the date specified in sub-paragraph 3 (b) regional Xxxxxxxx of Schedule 5 to the Development Credit AgreementCommerce), the Association shall, in respect of any portion of the Credit:as members.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the BankAssociation, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the BankAssociation, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each, or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, ; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications Except as the Borrower and the Association shall otherwise agree, the Borrower shall lend the proceeds of the General Conditions For purposes Credit to the Federation on the same terms and conditions as set forth in Sections 2.04, 2.05, 2.06 and 2.07 of this Agreement, and the provisions Subsidiary Credit Agreement shall contain the following Project implementation arrangements: 1. The Federation shall establish and thereafter maintain the PIU under terms of reference and with staffing and other resources acceptable to the Association. The PIU shall be headed by a director, reporting to the executive office of the General Conditions are modified as followsMOH, and shall have overall responsibility for Project management and coordination. 2. The Federation shall: (1a) The last sentence maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association, the carrying out of Section 3.02 is deleted.the Project and the achievement of the objectives thereof; (2b) The words "prepare, under terms of reference satisfactory to the Association, and furnish to the Association, on or about June 30, 1997, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Association, by August 31, 1997 or such later date as the Association mayshall request, by notice the report referred to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of said report and the Association’s views on the matter. 3. For the purposes of ensuring that the procurement of goods, works and services is carried out in accordance with the procedures stipulated for that purpose, the Federation shall establish a Procurement Review Committee which shall, inter alia, be responsible for the approval of final recommendations of contract awards. The membership of the Procurement Review Committee shall include a representative from the MOH, a representative from the PIU and two representatives selected from the clinical centers or cantonal hospitals supported under the Project. The Federation shall ensure that the Procurement Review Committee shall be assisted by procurement advisors satisfactory to the Development Credit AgreementAssociation. 4. The Federation shall select the clinical centers, cantonal hospitals, community-based physical and psycho-social rehabilitation centers and prostheses and orthoses production and maintenance units to be rehabilitated and upgraded under Parts A, B and C of the Project according to the criteria satisfactory to the Association. 5. The Federation shall, for the purposes of Section 9.06 of the General Conditions, and without limitation thereto: (a) prepare, on the basis of guidelines acceptable to the Association, and furnish to the Association shallnot later than six (6) months after the Closing Date or such later date as may be agreed for this purpose between the Federation and the Association, in respect of any portion a plan for the future operation of the CreditProject, and to ensure the continued achievement of the Project’s objectives; and (b) afford the Association a reasonable opportunity to exchange views with the Federation on said plan. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications The Recipient shall select and submit Subprojects, for approval by the Trustee, in accordance with the Operating Policy Guidelines. 2. For the purpose of carrying out Subprojects, the Recipient shall make available a portion of the General Grant to Subproject Beneficiaries under Subgrant agreements to be entered into between the Recipient, represented by NDFC and each of the Subproject Beneficiaries upon terms and conditions, satisfactory to the Trustee, including the following: Terms and Conditions For of Subgrants: Subgrants shall be provided on terms whereby the Recipient shall obtain, through the Subgrant Agreements, rights adequate to protect the interests of the Trustee and the Recipient, including but without limitation, the right to: (a) require the Subproject Beneficiary to carry out and operate the Subproject with due diligence and efficiency and in accordance with sound technical, financial, managerial, environmental and ecological standards; (b) require that: (i) the goods and services to be financed out of the proceeds of the OTF Grant shall be procured in accordance with the provisions of Schedule 3 to this Agreement; and (ii) such goods and services shall be used exclusively for the purposes and in furtherance of the objectives of the Project; (c) require the Subproject Beneficiary to comply with obligations similar to the financial covenants set forth in Section 4.01 of this Agreement; (d) inspect, by itself or jointly with representatives of the Trustee, if the Trustee shall so request, the provisions of goods and plants included in the General Conditions are modified as followsSubproject, the operation thereof and any relevant records and documents; (e) require that: (1i) The last sentence of Section 3.02 is deleted.Subproject Beneficiary shall take out and maintain with responsible insurers such insurance against such risks and in such amounts, as shall be consistent with sound business practices; and (2ii) The words "Without any limitation upon the Association mayforegoing, by notice such insurance shall cover the hazards incident to the Borroweracquisition, transportation and delivery of goods financed out of the proceeds of the OTF Grant to the place of use or installation, any indemnity thereunder to be made payable in a currency freely useable by the Subproject Beneficiary to replace or repair such goods; (f) obtain all such information as the Trustee shall reasonably request relating to the foregoing and to the administration, operations and financial condition of the Subproject Beneficiary and to the benefits derived from the Subproject; (g) obtain upon demand the refund of any part of the proceeds of the OTF Grant (together with payment of interest thereon at the commercial rate from the date of payment until repayment thereof) which, in the opinion of the Recipient or the Trustee, has been misused by the Subproject Beneficiary; and (h) suspend or terminate the right of the Borrower Subproject Beneficiary to make withdrawals with respect to such amount. Upon the giving of such notice, such amount use of the Credit shall be cancelled" set forth at proceeds of the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) OTF Grant upon failure by the date specified in sub-paragraph 3 (b) of Schedule 5 Subproject Beneficiary to perform its obligations under the Development Credit Subgrant Agreement, the Association shall, in respect of any portion of the Credit:.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank on Borrowers and by the World Bank as Executing Agency" published by the Bank Association in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the BankAssociation, with such modifications modi- fications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the BankAssociation, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 50,000 equivalent each each, or (b) contracts for the employment of individuals estimated to cost less than $50,000 25,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 50,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 25,000 equivalent or above. Modifications Implementation Program A. Overall Project Implementation 1. The Borrower shall cause ESRDF to implement Parts A and B of the General Conditions For Project in close collaboration with the Borrower’s central and regional administrations. 2. Except as the Association shall otherwise agree, for the purposes of this AgreementParts A and B of the Project, the provisions Borrower shall: (i) cause ESRDF to apply the criteria, policies, procedures and guidelines set out in the Operational Manual; and (ii) not amend, or abrogate, or permit to be amended or abrogated, the Operational Manual, or any provision thereof, in a manner which, in the opinion of the Association, may materially and adversely affect the implementation of Parts A and B of the Project. 3. The Borrower shall ensure that the positions of General Conditions are modified as followsManager, Deputy General Manager and Regional Managers of ESRDF shall, at all times during the execution of the Project, be kept filled by persons having qualifications and experience satisfactory to the Association. 4. The Welfare Monitoring Unit (WMU) of the Borrower’s Ministry of Economic Development and Cooperation shall be responsible for the implementation of Part C.1 of the Project, and the Borrower’s Central Statistical Authority shall be responsible for the implementation of Part C.2 thereof, all under the overall supervision of the Welfare Review Committee. 5. The Borrower shall: (1a) The last sentence maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association, the carrying out of Section 3.02 is deleted.the Project and the achievement of the objectives thereof; (2b) The words "not later than April 30 of each year, commencing on April 30, 1997 undertake, in conjunction with the Association mayand ESRDF, by notice a joint annual review on all matters relating to the Borrower, terminate the right progress of the Project and, in particular the progress achieved by the Borrower and ESRDF during the current fiscal year, having regard to make withdrawals with respect the monitoring indicators referred to in subparagraph (a) of this paragraph; (c) not later than one month prior to each annual review, shall furnish to the Association, for its comments, a report in such amount. Upon detail as the giving Association shall reasonably request, on the progress of such noticethe Project; (d) following each annual review, act promptly and diligently in order to take, or assist ESRDF in taking, any corrective action deemed necessary to remedy any shortcoming identified in the implementation of the Project, or to implement, or assist ESRDF in implementing, such amount measures as may have been agreed upon between the parties in furtherance of the Credit shall be cancelled" set forth at objectives of the end of Section 6.03 are deleted and the following is substituted therefor: "or Project; and (e) by promptly after the date specified Effective Date, take all measures necessary on its part to organize, in sub-paragraph 3 conjunction with the Association and ESRDF, a workshop for the launching of the Project implementation which shall cover, inter alia, disbursement and procurement procedures and detailed timetables for the implementation of the Project. 6. The Borrower shall: (ba) not later than eighteen months after the Effective Date, cause ESRDF to carry out, under terms of Schedule 5 reference satisfactory to the Development Credit AgreementAssociation, an assessment of procurement under the Association shallProject, in respect of any portion with a view to evaluate the effectiveness of the Credit:various procurement activities under the Project, identify problems, and make recommendations accordingly; and

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2) 1. The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, not later than three months prior to the end of each year, starting from 1996, undertake, in respect of any portion conjunction with PSF, CRG and LRC, an annual review to discuss the work program and budget for the forthcoming year. The review shall use, as working documents, reports that shall have been prepared by the Borrower, PSF, CRG and LRC on a semiannual basis and furnished to the Association. (a) The Borrower and the Association shall, not later than March 31, 1997 and September 30, 1998, respectively, undertake, in conjunction with PSF, CRG and LRC, joint reviews of the CreditProject, during which they shall exchange views generally on all matters relating to the progress of the Project and the performance by the Borrower and PSF of their respective obligations under this Agreement and, in particular: (i) the progress achieved by the Borrower and PSF, respectively, during the period reviewed, having regard to the performance indicators agreed upon between the Borrower and the Association; (ii) the status of financial and procurement performance under the Project; (iii) the proposed budget and work program for the remaining period; (iv) the adequacy of arrangements for the selection, financing and implementation of different activities under the Project; (v) the ability of PSF to raise revenues to finance part of its operating costs; and

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant GuidelinesGuide- lines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, con- tracts; (b) single-source selection of consulting firms, ; (c) assignments assign- ments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. A. Implementation Procedures 1. Modifications For the implementation of Part A of the General Conditions For purposes Project, GP shall maintain its current operational procedures, including the requirements for receipt of this Agreementrequests for financial assistance from farmers to implement Sub-projects, appraisal of proposed Sub-projects, the provisions conduct of feasibility and design studies in the case of agricultural roads, entering into cost-sharing arrangements with farmers through payment of cash or donation of land by farmers, the hiring and payment of contractors by GP to implement proposed Sub-projects as well as allowing farmers to initiate some works themselves. 2. Changes to the procedures referred to in Paragraph 1 above which would affect the implementation of the General Conditions Project, shall be made only with the prior agreement of the Bank. 3. Under Part A (1) of the Project and in each case the GP resources assigned for a particular locality are modified as followsinsufficient to satisfy all the assistance requests from that locality, GP shall work with local committees in identifying the poor and targeting assistance to them. B. Criteria for Sub-projects under Part A (1) of the Project following criteria: 1. Land terracing shall not be included in Sub-projects in areas where the slope is 40% or more and rockiness exceeds 60% of soil cover. 2. Beneficiaries shall undertake to complete remaining investments in Sub-projects not later than two years after completion of works. 3. Sub-projects shall not include: (a) land intended for urbanization or industrial development; and (b) national forests, protected bio- diversity areas, and areas within 500 meters thereof. 4. Sub-projects shall have an internal rate of return of at least 12 percent, the internal rate of return being the discount rate used to discount future benefits and costs which makes the present value of benefits equal to the present value of costs. C. Cost-Sharing Arrangements GP undertakes to implement the cost-sharing arrangements referred to in Section 3.04 of the Loan Agreement with beneficiaries of Part A (1) The last sentence of Section 3.02 is deletedthe Project. D. Criteria for Sub-projects under Part A (2) The words "of the Association may, by notice Project GP shall implement Part A (2) of the Project pursuant to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amountfollowing criteria: 1. Upon the giving of such notice, such amount of the Credit Sub-projects comprising agricultural roads shall be cancelled" set forth at approved only where the end land required for road construction has been provided voluntarily and without compensation by beneficiaries of Section 6.03 are deleted Sub-projects. 2. Road studies shall include an environmental assessment and road design shall take into account, inter alia, the following is substituted therefor: "or mitigation measures recommended therein. 3. Sub-projects shall have an internal rate of return, as defined in paragraph B (e) by the date specified in sub-paragraph 3 (b4) of Schedule 5 to the Development Credit Agreementthis schedule, the Association shall, in respect of any portion of the Credit:at least 12 percent.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each, or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications MEFPP shall be responsible under the Project for activities related to privatization and liquidation of public enterprises. The Borrower shall establish the CP and its permanent secretariat, which shall be responsible for Project activities related to privatization, regulatory framework reform and communication. DAC shall be responsible for the liquidation activities. A Coordinator, appointed by and acting under the supervision of MEFPP, shall have overall responsibility for Project administration and bookkeeping. Said Coordinator shall at all times until the completion of the General Conditions For purposes Project have qualifications and experience acceptable to the Association. 2. The Borrower shall ensure that all its departments or agencies responsible for carrying out the Project or any part thereof shall comply with the procedures included in the Project Implementation Plan, and shall not amend or waive such Project Implementation Plan so as to affect materially and adversely the carrying out of the Project. 3. Prior to the starting of major assignments, as defined in the Project Implementation Plan, by consultants employed in accordance with the provisions of Section II of Schedule 3 to this Agreement, the provisions Borrower shall designate local counterparts to work with said consultants, under terms of reference and with qualifications acceptable to the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deletedAssociation. (2a) The words "Borrower shall carry out, jointly with the Association mayAssociation, by notice to the Borrowernot earlier than October 30, terminate the right 1996 and not later than December 31, 1996, a mid-term review of the Borrower progress made in carrying out the Project (referred to make withdrawals with respect to such amountin this paragraph as the Mid-Term Review). Upon The Mid-Term Review shall cover, among other things: (i) progress in meeting the giving of such notice, such amount Project’s objectives; (ii) overall Project performance against Project performance indicators; and (iii) the performance of the Credit shall be cancelled" set forth at consultants under the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 Project. (b) of Schedule 5 The Borrower shall, at least three weeks prior to the Development Credit AgreementMid-Term Review, furnish to the Association a report describing the status of the items listed in paragraph (a) above and of Project implementation generally. (c) The Borrower shall, in respect of any portion not later than four weeks after the Mid-Term Review, prepare an action program, acceptable to the Association, for the further implementation of the CreditProject having regard to the findings of the Mid-Term Review and, thereafter, implement such action program. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent equi- valent or above. 1. Modifications Except as the Bank shall otherwise agree, the principal terms and conditions set forth or referred to in this Schedule shall apply for the purposes of Paragraph (a) of Section 2.02 of this Project Agreement. 2. Loans to PFIs to be financed out of the General Conditions For purposes of this Agreement, the provisions proceeds of the General Conditions are modified Loan: (a) shall be denominated, and their interest, principal and other charges be payable, in Jordanian Dinars; (b) shall be collateralized by Mortgage Loans with a remaining term of at least 140 percent of the term of the loan being extended by the SMF to such PFI; and (c) shall be market determined, and in the aggregate shall be made in a manner that minimizes interest rate risk. 3. The SMF’s loans to PFIs will, at the option of SMF, be for five, seven, or ten year terms, and, upon amendment of Article 141 of the Companies Act, to permit the SMF to issue debt securities for shorter periods, for three year terms, or such shorter terms as followsthe Bank and the SMF shall agree to. The principal amount of each loan to a PFI shall be repaid in full upon maturity of such loan, without repayment of any principal before maturity. 4. A Participation Agreement may be entered into with a financial institution that is a Privately Owned Entity, duly established and operating under the laws of the Borrower, provided that the SMF shall have determined that such financial institution: (1a) The last sentence is in compliance with the legal and regulatory requirements applicable to its operations, including all applicable banking or financial company laws, capital adequacy requirements, and monetary regulations; (b) has had its financial statements, for its fiscal year preceding the year within which its respective Participation Agreement is to be entered into, audited by independent auditors with the report thereof being unqualified; (c) has a sound financial structure and satisfactory financial performance, and the organization, management, staff and other resources required for the efficient carrying out of Section 3.02 is deletedits operations; and (d) has adequate technical and administrative capacity and satisfactory operating policies and procedures for appraisal and monitoring of a Mortgage Loan portfolio and for carrying out of its activities to be undertaken under the Project. 5. A Participation Agreement may be entered into with a newly established financial institution which has demonstrated, on the basis of an institutional development plan satisfactory to the SMF and the Bank, that it has the organization, management, staff and other resources required to comply with the requirements set forth in subparagraphs (c) and (d) of Paragraph 4 above. 6. Each Participation Agreement shall contain provisions pursuant to which each PFI shall: (a) continue to be duly established and operating under the laws of the Borrower; (b) carry out its operations in accordance with the relevant provisions of all applicable banking or financial company laws of the Borrower, capital adequacy requirements and monetary regulations; (c) conduct its operations and affairs in accordance with sound financial principles and practices and in accordance with its constitutional instruments and statement of policy, if applicable; (d) maintain a financial and operating policy acceptable to the SMF and the Bank and an adequate number of suitably qualified staff to enable it effectively to appraise the financial and economic feasibility of Mortgage Loans and to make such Loans to Beneficiaries in accordance with said financial and operating policy and on the basis of the criteria, procedures and principal terms and conditions set forth in Schedule 3 to this Agreement; (e) supervise and monitor the Mortgage Loans in accordance with procedures satisfactory to the SMF, the Borrower, and the Bank. (2f) The words "exchange views with, and furnish all such information and documentation as may be reasonably requested by the Association maySMF, by notice with regard to the Borrowerperformance of its obligations under its respective Participation Agreement, terminate and in connection with the right Mortgage Loans; (g) promptly inform SMF of any condition which interferes or threatens to interfere with the progress of its activities under its respective Participation Agreement; and (h) not assign, amend, abrogate or waive any of its agreements providing for Mortgage Loans, or any provision thereof, without prior approval of the Borrower SMF. 7. At the time of draw-down of the SMF’s loans, each PFI shall provide to make withdrawals the SMF, in accordance with respect procedures satisfactory to such amount. Upon the giving Bank, an irrevocable beneficial right and claim to Mortgage Loans equivalent to 120% of such notice, such the principal amount of the Credit loan to such PFI. Mortgage Loans will be required to have less than three months arrears at the time of pledging to the SMF. As any of the Mortgage Loans pledged as collateral by a PFI are redeemed, fall into arrears of more than three months, or have normal or early payments of principal made, such PFI shall be cancelled" set forth pledge to the SMF additional Mortgage Loans or other assets approved by the SMF, in order to obtain at the end of Section 6.03 are deleted each calendar quarter an aggregate principal value of collateral of 120% of the value of the SMF’s loans to such PFI. 8. Participation Agreements shall obligate the PFI to: (i) maintain records and the following is substituted therefor: "or accounts adequate to reflect, in accordance with sound accounting practices, its operations and financial condition, including records and separate accounts regarding its activities under Part A (e) by the date specified in sub-paragraph 3 (b1) of Schedule 5 the Project; (ii) have such records and accounts, together with its financial statements (balance sheets, statements of income and expenses and related statements), for each fiscal year audited, in accordance with generally accepted auditing standards and procedures consistently applied, by independent and qualified auditors acceptable to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:SMF;

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants individuals raising the contract value to $50,000 equivalent or above. 1. Modifications The Borrower shall, not later than March 1, 1997, establish and, thereafter maintain until the completion of the General Conditions For purposes Project: (a) a Central Program Advisory Committee and a Provincial Project Advisory Committee in each of the Project Provinces, with members and terms of reference acceptable to the Bank; and (b) a Central Program Coordination Unit and a Provincial Project Implementation Unit in each of the Project Provinces, with terms of reference acceptable to the Bank and with competent staff in adequate numbers. 2. In carrying out Part A.1 of the Project, the Borrower shall select locations for the construction of schools, teacher housing and student dormitories in accordance with criteria agreed with the Bank. 3. In carrying out Part A.3 of the Project, the Borrower shall provide scholarships in accordance with selection criteria agreed with the Bank. 4. In carrying out Part B.4 of the Project, the Borrower shall employ contract teachers in accordance with criteria acceptable to the Bank. 5. In carrying out Part C.1 of the Project, the Borrower shall select candidates for the management training in accordance with selection criteria agreed with the Bank. 6. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with the indicators set forth in Schedule 6 to this Agreement, the provisions carrying out of the General Conditions are modified Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, by June 30 of each year, commencing June 30, 1998, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the preceding year and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the following year; (c) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, on or about June 30, 1999, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (d) review with the Bank, by October 31, 1999, or such later date as followsthe Bank shall request, the report referred to in paragraph (c) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank’s views on the matter. 7. The Borrower shall: (1a) The last sentence cause technical audits of Section 3.02 is deleted.Project implementation to be carried out, in a manner acceptable to the Bank, in each Fiscal Year during implementation of the Project; and (2b) The words "the Association may, by notice furnish to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at Bank for comments as soon as available but not later than six months after the end of Section 6.03 are deleted each such year, a copy of such audit. 8. The Borrower shall: (a) not later than October 31 in each year, commencing October 31, 1997, and until the completion of the Project, furnish to the Bank for comments the proposed budget for the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 Fiscal Year; and (b) thereafter, revise the proposed budget for the following Fiscal Year taking into account the Bank’s comments. Project performance by Project Province shall be assessed through the following indicators: 1. Increase in enrollment as a percentage of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion total capacity of the Creditschools constructed under the Project. Enrollments to reach a minimum of 25% the first year, 50% the second year, and 75% the third year. 2. Increase in student examination scores for core subjects by at least 10% for each subject by the end of the Project. 3. Implementation of at least 80% of the annual work program as measured by the physical targets and budgets spent each Fiscal Year for Project activities and routine activities. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants individuals raising the contract value to $50,000 equivalent or above. 1. Modifications The Borrower shall, not later than November 1, 1996, establish and, thereafter maintain until the completion of the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as followsProject: (1a) The last sentence a Central Program Advisory Committee and, in each of Section 3.02 is deletedthe Project Provinces, a Provincial Project Advisory Committee, with members and terms of reference acceptable to the Bank; and (b) a Central Program Coordination Unit and, in each of the Project Provinces, a Provincial Project Implementation Unit, with terms of reference acceptable to the Bank and with competent staff in adequate numbers. 2. In carrying out Part A.1 (2a), A.3 (a), and A.4 (a) The words "the Association may, by notice to the Borrower, terminate the right of the Project, the Borrower to make withdrawals shall select locations for the construction of schools and teacher dormitories in accordance with respect to such amountcriteria agreed with the Bank. 3. Upon the giving of such noticeIn carrying out Part A.1 (b), such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted A.3 (b) and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 A.4 (b) of Schedule 5 the Project, the Borrower shall employ contract teachers in accordance with criteria acceptable to the Development Credit AgreementBank. 4. In carrying out Part A.1 (d), A.2, A.3 (d) and A.4 (d) of the Project, the Association Borrower shall provide scholarships in accordance with selection criteria agreed with the Bank. 5. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in respect of any portion accordance with indicators satisfactory to the Bank, the carrying out of the CreditProject and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, by July 31 of each calendar year, commencing July 31, 1997, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the preceding year and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the year following such date; (c) review with the Bank, by October 31 in each year, commencing October 31, 1997, or at such later date as the Bank shall request, the report referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank’s views on the matter; (d) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, on or about July 31, 1999, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (e) review with the Bank, by October 31, 1999, or such later date as the Bank shall request, the report referred to in paragraph (d) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank’s views on the matter. 6. The Borrower shall: (a) cause technical audits of Project implementation to be carried out, in a manner acceptable to the Bank, in each Fiscal Year during implementation of the Project; and (b) furnish to the Bank for comments as soon as available but not later than six months after the end of each such year, a copy of such audit. 7. The Borrower shall: (a) not later than October 1 in each year, commencing October 1, 1997, and until the completion of the Project, furnish to the Bank for comments a report on the implementation of the budget for the Project for the past and current Fiscal Year, together with the proposed budget for the following Fiscal Year; and (b) thereafter, revise the proposed budget for the following Fiscal Year taking into account the Bank’s comments. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant GuidelinesGuide- lines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of individual consultants or consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably reason- ably determined by the Association, Bank; or (d) amendments to contracts for the employment of individual consultants or consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications The provisions of this Schedule shall apply for the General Conditions For purposes of this Agreement, the provisions of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 3.01 (b) of Schedule 5 this Agreement. 1. Overall responsibility for the carrying out of the Project shall be assigned by the Borrower to the Development Credit AgreementMOE. 2. The Borrower shall carry out Parts B and C of the Project in accordance with the specific actions agreed with the Bank in the Action Plan and, to this end, shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Bank, the Association carrying out of the specific actions set forth in the Action Plan; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, on or about May 30, a yearly report inte- grating the results of the monitoring and evaluation activities per- formed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the specific actions set forth in the Action Plan during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the specific actions set forth in the Action Plan and the achievement of the objectives thereof during the period following such date; and (c) review with the Bank, by June 30, or such later date as the Bank shall request, the report referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the specific actions set forth in the Action Plan and the achievement of the objectives thereof, on the basis of the conclusions and recommendations of the said report and the Bank’s views on the matter. 3. The Borrower shall maintain the PCU and the Higher Education Councils with a sufficient number of qualified staff, adequate facilities, and authority satisfactory to the Bank. 4. With respect to the selection of Sub-Projects, and the award of Grants to the Beneficiaries, the Borrower shall: (a) follow procedures and criteria agreed with the Bank; (b) send to the Bank, not later than May 30 of each year, a list of all the proposals for Sub-Projects submitted to the Higher Education Councils during the preceding year, with the indication of the Grant awards recommended by the Higher Education Councils; and (c) review with the Bank, on or about June 30 of each year (and, in respect of any portion event, before the submission of the CreditHigher Education Councils’ recommendations to the MOE for final approval of the Grant awards), the Higher Education Councils’ recommendations, and the application of the procedures and criteria agreed with the Bank, with respect to up to one hundred (100) proposals for Sub-Projects selected by the Bank out of the list received from the Borrower, and thereafter take all the necessary measures as shall be consistent with the results of such review. 5. The Borrower shall: (a) review with the Bank, on or about April 30 of each year (and, in any event, before the selection of Sub-Projects), the indicative allocation percentages of Grants among the different fields of higher education, to be established on the basis of procedures and criteria agreed with the Bank, and thereafter take all the necessary measures as shall be consistent with the results of such review; and (b) review with the Bank, on or about June 30 of each year (and, in any event, before the Grant awards), any proposed allocation per- centage of Grants to a field of higher education that differs by more than twenty percent (20%) from the indicative allocation percentage for that field of higher education, and thereafter take all the necessary measures as shall be consistent with the results of such review. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications The provisions of this Schedule shall apply for the purposes of Section 3.01 (c) of this Agreement. A. Overall Coordination and Management of the General Conditions Project 1. GOZKOMPROGNOZSTAT, through the PIU, shall be responsible for coordinating and monitoring the overall implementation of the Project. 2. Within GOZKOMPROGNOZSTAT, the PIU shall be responsible for day-to-day work related to monitoring Project implementation, and assisting CIUs with budgeting, procurement, disbursement, auditing, reporting, monitoring and evaluation. The PIU shall also be responsible for appraisal and administration of Sub- loans through the Agency Bank. 3. The CIUs within the Public Project Entities shall be responsible for coordinating and managing the implementation of the relevant activities described under the corresponding Parts of the Project. B. Part A of the Project 1. Part A.1 of the Project shall be implemented through the Seed Certification and Seed Law Agency and Seed Certification and Seed Law Units. 2. Part A.2 of the Project shall be implemented by PrivateEnterprises and coordinated through the PIU. PIU shall, inter alia: (i) appraise business plans for each of the proposed Private Sub-projects; (ii) coordinate with the Agency Bank with respect to accounting, reporting, and repayments of Sub-loans; and (iii) organize training and technical assistance to Private Enterprises. C. Part B of the Project SIFAT, through its CIU, shall be responsible for the implementation of Part B of the Project. D. Part C of the Project UZNIIZR, through its CIU, shall be responsible for the implementation of Part C of the Project. E. Part D of the Project UZAGROINFORM, through its CIU, shall be responsible for the implementation of Part D of the Project. Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1) through (6) set forth in the table in paragraph 1 of Schedule 1 to this Agreement, ; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan allocated from time to time to the eligible Categories in accordance with the provisions of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice Schedule 1 to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit this Agreement, the Association shall, in respect of any portion of the Credit:; and

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers Recipients and by the The World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the BankTrustee, with such modifications as shall have been agreed by the AssociationTrustee. Where no relevant standard contract documents have been issued by the BankTrustee, the Borrower shall use other standard forms agreed with acceptable to the AssociationTrustee shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Trustee review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Trustee review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationTrustee, or (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, above or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications The Federation shall establish and thereafter maintain for purposes of Parts A, B and C.1 of the Project a PCU under terms of reference and with staffing and other resources acceptable to the Trustee. The PCU shall be headed by a coordinator and shall have overall responsibility for the management and coordination of Parts A, B and C.1 of the Project. 2. The Federation shall, for purposes of Section 8.06 of the General Conditions Conditions, and without limitation thereto: (a) prepare, on the basis of guidelines acceptable to the Trustee, and furnish to the Trustee not later than six (6) months after the Closing Date or such later date as may be agreed for this purpose between the Federation and the Trustee, a plan for the future operation of the Project, and (b) afford the Trustee a reasonable opportunity to exchange views with the Federation on said plan. 1. For the purposes of this Agreement, the provisions of the General Conditions are modified as followsSchedule: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:

Employment of Consultants. 1. In order to assist the Borrower, Province in the Provinces, AJK and FATA in carrying out of the Project, the BorrowerProvince shall employ, under time schedules satisfactory to the ProvincesAssociation, AJK consultants and FATA shall employ consultants construction managers whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants and construction managers shall be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower Province shall employ such consultants under contracts using the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower Province shall use other standard forms agreed with the Association. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications The Province shall: (a) except as the Association may otherwise agree, follow the established procedures, satisfactory to the Association, to ensure that, irrespective of the General Conditions For purposes source of funding, decisions on location, planning, design and number of schools and classrooms to be constructed and rehabilitated in the primary education sector of the Province shall be based on needs, demonstrated demand and justification as evidenced by the annual school census, the most recent population census, human resource surveys and school maps of the Province; (b) carry out school and classroom construction and rehabilitation activities under Part A of the Project during the first year of Project implementation in those sites which have been selected by the Province in accordance with procedures referred to in paragraph 1 (a) hereof satisfactory to the Association; and (c) not later than February 15 of each Fiscal Year during the implementation of the Project beginning with February 15, 1996, provide to the Association a list of school and classroom construction and rehabilitation sites for the following Fiscal Year, satisfactory to the Association, selected by the Province in accordance with procedures referred to in paragraph 1 (a) hereof, for carrying out rehabilitation and construction of schools and classrooms under Part A of the Project. (a) Without limitation upon the provisions of Section 2.01 of this Agreement, the provisions of Province shall provide, or cause to be provided, promptly as needed, the General Conditions are modified as followsfunds, facilities, educational materials, staff, services and other resources required for the annual work plans referred to in paragraph 2 (b) hereof. (b) To that end, the Province shall: (1i) The last sentence during the first year of Section 3.02 is deleted. (2) The words "Project implementation, carry out activities and policy reforms in the Association may, by notice to primary education sector within the Borrower, terminate framework of an annual work plan setting forth also the right requirements for funding such activities out of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount proceeds of the Credit shall and other domestic and external sources acceptable to the Association; (ii) by March 30 of each Fiscal Year during the implementation of the Project, beginning with March 30, 1996 provide to the Association a draft annual work plan for the following Fiscal Year setting forth the Province’s activities to be cancelled" set forth at the end of Section 6.03 are deleted carried out and the following is substituted therefor: "or policy reforms to be implemented in the primary education sector together with the requirements for funding such activities out of the proceeds of the Credit and other domestic and external sources; (eiii) by together with the date specified Association and not later than May 1 in each Fiscal Year beginning with May 1, 1996, review the Province’s activities carried out and the policy reforms implemented under the annual work plan in such Fiscal Year and the draft annual work plan provided pursuant to sub-paragraph 3 (bii) of Schedule 5 above, and taking into account the recommendations resulting from such review, the Province shall finalize a work plan, acceptable to the Development Credit AgreementAssociation, describing the Association shallProvince’s activities to be carried out and the policy reforms to be implemented in the primary education sector in the next following Fiscal Year, in respect of any portion together with the requirements for funding such activities out of the Creditproceeds of the Credit and other domestic and external sources; and (iv) ensure that:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank Association in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the BankAssociation, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the BankAssociation, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, and (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications Implementation of the General Conditions Project 1. The Project shall be carried out by the Borrower through the Steering Committee and the PMU in accordance with the Manual of Procedures, as such manual may be updated from time to time by agreement between the Borrower and the Association. (a) For purposes the purpose of this Agreementensuring the proper coordination and execution of the Project, the provisions Borrower shall maintain the Steering Committee, with membership and terms of reference satisfactory to the General Conditions are modified as followsAssociation. (b) The functions of said Steering Committee shall include, inter alia: (1i) The last sentence responsibility for investigation and recommendation of Section 3.02 is deletedsolutions to issues arising in the course of carrying out the Project; (ii) entering into and termination of contracts for high- level staff of the PMU in accordance with the Staff Service Rules; (iii) review and approval of the annual budget for the operation of the PMU and of Investment Programs; (iv) approval of contracts costing more than the equivalent of US$200,000; (v) appointment of auditors and review of auditor’s reports; and (vi) review of annual staff performance reviews to be carried out in accordance with the Staff Service Rules by January 31 of each year. (2a) For the purpose of ensuring the proper supervision of the execution of the Project, the Borrower shall maintain the PMU with organization, staffing and terms of reference satisfactory to the Association. (b) The words "Borrower shall ensure that the PMU will: (i) prepare quarterly Investment Programs consisting of Subprojects that have been appraised in accordance with the Manual of Procedures; (ii) prepare summary environmental assessments identifying any potential adverse environmental effects to be produced by proposed Subprojects; (iii) furnish to the Association mayproposed Investment Programs for its approval; (iv) afford the Association a reasonable opportunity to review such proposed Investment Programs; (v) exchange views with the Borrower and the PMU on said proposals; and (vi) thereafter, carry out said Investment Programs, as approved by notice the Association, including measures to screen and mitigate any adverse environmental effects. 4. With regard to Part A (5) of the Project, the Borrower shall, from time to time: (a) propose to the Association, for its review and approval, the financing out of the proceeds of the Credit of other activities that have a high labor content and positive impacts on the Borrower’s economy, social development, education, health and environment; and (b) upon the Association’s approval of the respective proposals, the Borrower, terminate through the right PMU, shall arrange for the identification and appraisal of the Borrower corresponding Subprojects, to make withdrawals with respect to such amount. Upon be submitted for the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified Association’s approval as provided in sub-paragraph Paragraph 3 (b) of Schedule 5 this Schedule. (a) The Borrower shall enter into agreements satisfactory to the Development Credit AgreementAssociation with governmental organizations (including any local government agency of the Borrower), non-governmental organizations, community organizations, or private firms that are selected for the Association shallpurposes of carrying out Subprojects, providing, inter alia, for: (i) the institutional and operational arrangements to be undertaken for the preparation of the Subprojects; (ii) their obligation to carry out the Subprojects with due diligence and efficiency and in accordance with appropriate managerial, administrative, engineering, environmental and financial practices; and (iii) the establishment and maintenance of separate records and accounts adequate to reflect in accordance with sound accounting practices the operation, resources and expenditures in respect of any portion each Subproject. (b) Except as the Association shall otherwise agree, the Borrower shall not amend or fail to enforce the provisions of the Creditagreements referred to in paragraph (a) of this Paragraph. 6. The Borrower shall ensure that the PMU: (a) maintains policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association, the carrying out of the Project and the achievement of the objectives thereof; and (b) without limitation or restriction upon the provisions of Sections 9.01 and 9.06 (a) of the General Conditions, furnishes the following reports, of such scope and in such detail as the Association may reasonably request: (i) quarterly reports on the progress achieved in the execution of the Project, including quarterly audit reports, within one month after the end of each reporting period; (ii) not later than January 31 of each year of Project implementation, a report integrating the results of the quarterly progress reports, including a review of performance indicators and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the subsequent period; (c) review with the Association, not later than February 28 of each year until completion of the Project, or such later date as the Association shall request, the report referred to in subparagraph (b) (ii) hereof, and, thereafter, take all measures required to ensure the efficient implementation of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of said report and the Association’s views on the matter. (d) not later than January 31, 2000, the Borrower and the Association shall hold a mid-term exchange of views on the progress achieved in the carrying out of the Project, and thereafter, the Borrower shall take all measures necessary to ensure the efficient completion of the Project and the achievement of the objectives thereof, taking into consideration the results and conclusions of the report referred to in subparagraph (b) (ii) hereof and the Association’s views on the matter. Special Account 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationBank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-single- source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants individuals raising the contract value to $50,000 equivalent equi- valent or above. 1. Modifications The Borrower shall maintain the Secretariat of DPT, including the CPCU, until completion of the General Project, in accordance with terms of reference, staffing and resources, acceptable to the Bank. 2. The Borrower shall make Grants in accordance with the procedures and on the conditions set forth or referred to in Schedule 6 to this Agreement. 3. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Bank, the carrying out of the Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, by June 30 of each year, commencing June 30, 1997, and until completion of the Project, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the preceding year and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the year following such date; (c) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, on or about June 30, 1999, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (d) review with the Bank, on or about September 30, 1999, or such later date as the Bank shall request, the report referred to in para- graph (c) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank’s views on the matter. 4. The Borrower shall: (a) cause technical audits of Project implementation to be carried out, in a manner acceptable to the Bank, in each Fiscal Year during implementation of the Project; and (b) furnish to the Bank for comments as soon as available but not later than three months after the end of each such year, a copy of such audit. 5. In carrying out Parts B, C, and D of the Project, the Borrower shall carry out the training in accordance with training programs acceptable to the Bank. 6. In carrying out the comparative analysis referred to in Part B.2 of the Project, the Borrower shall: (a) not later than October 30, 1997, furnish to the Bank for comments the recommendations of the analysis; and (b) promptly thereafter, prepare and carry out an action plan taking into account the comments of the Bank on the recommendations. Procedures and Conditions For purposes for Grants under Part A of the Project 1. Each Grant shall be made by the Borrower only: (a) to a Target University which shall have established to the satisfaction of the Borrower, on the basis of criteria and procedures acceptable to the Bank, that said Target University has the organization, management, staffing and other resources required for the efficient carrying out of the Sub-project; and has prepared an acceptable plan for the carrying out of the Sub-project, and (b) for a Sub-project: (i) which is determined by the Borrower, on the basis of guidelines acceptable to the Bank, to be technically feasible and cost effective, and to have been designed in accordance with appropriate educational standards, and (ii) which has been reviewed and approved by the Bank. 2. Grants shall be made on terms whereby the Borrower shall obtain, through a single written agreement with each Target University, rights adequate to protect the interests of the Bank and the Borrower, including the right, as applicable, to: (a) require the Target University to establish, prior to the signature of the Grant agreement and, thereafter, maintain until completion of Part A of the Project, a LPIU, with competent staff in adequate numbers; (b) require the Target University to carry out and operate the Sub-project with due diligence and efficiency and in accordance with sound educational, technical, financial and managerial standards and to maintain adequate records; (c) require the Target University to maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Bank, the carrying out of the Sub-project and the achievement of the objectives thereof; (d) require that: (i) the goods, works and services to be financed out of the proceeds of the Grant shall be procured in accordance with the provisions of Schedule 4 to this Agreement, the provisions of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:and

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions this exception to prior Association review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, ; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications of the General Conditions For purposes of this AgreementMOPH shall have overall responsibility for project implementation. All project activities shall be managed and implemented by existing units or directorates within MOPH, the provisions of the General Conditions are modified as follows: (1i) activities related to human resource development and management shall be managed by the Directorate for Health Services, in cooperation with the General Directorate for Health for training activities; (ii) the introduction of management autonomy for public hospitals shall be managed and supervised by the General Inspectorate for Health in cooperation with the General Directorate for Health for training activities; (iii) all activities linked to improving health financing mechanisms shall be managed by the unit in charge of "Planning and Coordination of Studies, Programs and Budgets"; (iv) activities related to quality assessment and management shall be carried out by the General Inspectorate for Health, under the responsibility of a Quality Committee set up for this purpose; (v) monitoring of the maintenance strategy in the Project Hospitals shall be carried out by the Directorate for Health Logistics; (vi) all project activities related to the strengthening of service delivery shall be managed by the General Directorate for Health, in cooperation with the Directorate for Health Logistics; (vii) maternal and child health and family planning activities shall be managed by the Bureau for Coordination of Family Planning Program; and (viii) information, education and communication activities shall be managed by the Health Education Unit of MOPH. 2. The last sentence Borrower shall ensure that MOPH maintains at all times the key staff (being the Project Coordinator, an architect, an economist/management specialist, a procurement specialist and an accountant) in its Project Coordination Team which shall be completely integrated into MOPH. All key staff shall be engaged in accordance with the provisions of Section 3.02 is deletedPart II of Schedule 3 of this Agreement. The PCT shall report to the Adviser in charge of the unit for Planning and Coordination of Studies, Programs and Budgets. The team would be responsible for day-to-day coordination of project activities, administrative and financial management, as well as monitoring and evaluation. In particular, the Project Coordination Team shall: (i) ensure that annual work programs and budgets are prepared by each directorate in charge of its respective component, and review their implementation progress reports; (ii) procure goods and works and recruit consultants; (iii) maintain and consolidate all accounts including the Project Account and Special Accounts; (iv) prepare the necessary withdrawal applications and supporting documents; (v) make arrangements for the annual audits; (vi) prepare, as required, semi-annual and annual progress reports; (vii) put in place a monitoring system for the project’s performance indicators; and (viii) organize annual and mid-term reviews of project implementation. The Project Coordination Team shall be headed by a Project Coordinator assisted by an economist/management specialist, an architect, an accountant, a procurement specialist, the necessary support staff and consultants to be engaged for specific tasks. 3. MOPH shall ensure that each Project Hospital rehabilitated under the Project shall, no later than six months after rehabilitation: (i) introduce the management accounting system and training programs developed under Part A.2 (c) and (d) of the Project; and (ii) assign personnel to it, in accordance with the recommendations of the Hospital Study. (2a) In April and October of each year, commencing April, 1996, a six-monthly progress report shall be prepared by the Project Coordination Team. The words "six-monthly progress reportshall be submitted to the Association may, by notice to the Borrower, terminate the right within six weeks of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in subsix-paragraph 3 month period to which it relates. (b) of Schedule 5 to the Development Credit AgreementNot later than October 31 in each year, commencing October 31, 1996, the Borrower and the Association shallshall conduct a joint review of Project implementation, including an evaluation of progress achieved in respect of any portion the implementation of the CreditProject and the Program, and in particular shall review: (i) progress reports, annual work programs and budgets for the next year;

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or each; or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: Association; (ai) the terms of reference for such contracts, ; (bii) single-source selection of consulting firms, ; (ciii) assignments of a critical nature, as reasonably determined by the Association, the (div) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or ; or (ev) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Modifications For the purposes of the General Conditions For purposes Section 2.01(b) of this Agreement, the provisions Implementation Program shall consist of the General Conditions are modified as followsprovisions set forth or referred to below. A. Project Management 1. Yunnan shall continue to maintain a provincial project office, with functions satisfactory to the Association, staffed by qualified staff in adequate numbers, to be responsible for the overall coordination and supervision of Project execution, the supervision of the procurement of goods and services thereunder, the overall assessment of quality and impact of the Project and the preparation and furnishing to the Association of reports and other information thereon. 2. Yunnan shall ensure that each of the Project Municipalities shall continue to maintain its municipal project office with functions satisfactory to the Association, staffed by qualified staff in adequate numbers, to be responsible for: the coordination and supervision of the execution of its Respective Part of the Project; the supervision of the procurement of goods and services under its Respective Part of the Project; and the preparation and furnishing to said provincial project office of reports and other information thereon. B. Resettlement and Environmental Action Plans 1. Yunnan shall take, and shall cause the Project Municipalities, each Utility Company and Participating Enterprise to take, all measures necessary to ensure that the Project shall be carried out in accordance with the Resettlement Action Plans and the Environmental Action Plans. 2. Yunnan shall ensure that any proposed revision of the Resettlement Action Plans or the Environmental Action Plans shall be furnished to the Association for prior approval. 3. Yunnan shall cause Kunming to take all steps necessary to ensure that the Kunming Iron and Steel Plant, the Yunfeng Paper Mill and the Kunming Pesticide Plant shall implement their environmental management improvement action plans, dated April 30, 1996, in a manner satisfactory to the Association. C. Financial Arrangements Yunnan shall allocate to each Project Municipality an amount out of the proceeds of the Credit under arrangements satisfactory to the Association, which shall include, without limitation, the following principal terms: (1a) The last sentence of Section 3.02 is deleted.the principal amount so made available to each Project Municipality: (2i) The words "shall be the Association mayequivalent in terms of Special Drawing Rights (on the date, by notice or respective dates, of withdrawal from the Credit Account) of the value of the currency or currencies so withdrawn on account of said Project Municipality’s Respective Part of the Project and for its Utility Company’s, and in the case of Kunming, for the Kunming Fertilizer Factory’s Respective Part of the Project; and (ii) shall be repaid in foreign currency in amounts equivalent (as of the date, or respective dates, of repayment) to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 Special Drawing Rights so made available; (b) Each Project Municipality shall repay such principal amount over a period of Schedule 5 twenty (20) years, inclusive of a grace period of five (5) years; (c) Yunnan shall charge a service charge on such principal amount, withdrawn and outstanding from time to the Development Credit Agreementtime at a rate of three-fourths of one percent (3/4 of 1%) per annum; and (d) Yunnan shall charge a commitment charge on such principal amount, the Association shall, in respect not withdrawn from time to time at a rate equal to one-half of any portion one percent (1/2 of the Credit:1%) per annum.

Employment of Consultants. 1. In order Consultants’ services shall be procured under contracts awarded to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants consultants: (A) whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants Bank; and (B) who shall be selected in accordance with principles and procedures satisfactory to the Association Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower shall employ such consultants under contracts using the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with the AssociationBank. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationBank, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants individuals raising the contract value to $50,000 equivalent or abovemore. 1. Modifications The Borrower shall maintain the Secretariat of the URC and the Project implementation unit, within DGHE, in accordance with terms of reference, staffing and other resources, acceptable to the Bank. 2. The Borrower shall ensure that URC’s activities shall be carried out in accordance with policies and operating guidelines acceptable to the Bank. 3. In carrying out Part A.3 of the Project, the Borrower shall: (a) not later than June 1, 1995, prepare and furnish to the Bank for comments, the terms of reference and proposed organizational arrangements for the carrying out of technical audits under Part B of the Project; (b) cause technical audits to be carried out annually, in a manner acceptable to the Bank, during the implementation of the Project, commencing not later than April 1, 1996; and (c) annually, commencing not later than October 1, 1996, furnish to the Bank for comments a copy of such audit. 4. The Borrower shall make Grants in accordance with the procedures and on the conditions set forth or referred to in Schedule 6 to this Agreement. 5. Without limitation upon Section 9.07 of the General Conditions, the Borrower shall: (a) not later than March 31, 1998, carry out a review of the implementation of the Project in accordance with terms of reference acceptable to the Bank, and furnish the recommendations of such review to the Bank for comments; and (b) promptly thereafter carry out the recommendations of the review taking into account the comments of the Bank. Procedures and Conditions For purposes for Grants under Part B of the Project 1. Each Grant shall be made by the Borrower only: (a) to a Grantee who or which shall have established, to the satisfaction of the Borrower, acting through URC, on the basis of criteria and procedures, acceptable to the Bank, that said Grantee: (i) (A) in the case of an individual Grantee, has the qualifications and experience necessary for the efficient carrying out of the Sub-project, and (B) in all other cases, has the organization, management, staffing and other resources required for the efficient carrying out of the Sub-project; and (ii) has prepared an acceptable plan, including terms of reference, for the carrying out of the Sub-project; and (b) for a Sub-project which is determined by the Borrower, acting through URC, on the basis of guidelines acceptable to the Bank: (i) to be technically feasible and cost-effective, and (ii) to have been designed in accordance with appropriate educational standards. 2. Grants, as described in Schedule 2 to this Agreement, shall be made on terms whereby the Borrower shall obtain, through a single written agreement with each of the Grantees, rights adequate to protect the interests of the Borrower and the Bank, including the right, as applicable, to: (a) require the Grantee to carry out the Sub-project with due diligence and efficiency and in accordance with sound financial, educational and managerial standards and to maintain adequate records; (b) require that (i) the goods and services required for the Sub- project and to be financed out of the proceeds of the Loan shall be procured in accordance with the provisions of Schedule 4 to this Agreement, (ii) such services shall be used exclusively in the General Conditions are modified as follows:carrying out of the Sub-project, and (iii) such goods shall be used primarily in the carrying out of the Sub- project; (1c) The last sentence inspect, by itself or jointly with representatives of Section 3.02 is deleted.the Bank if the Bank shall so request, such goods and any relevant records and documents; (2d) The words "require that the Association may, by notice Grantee shall take out and maintain with responsible insurers insurance to cover the hazards incident to the Borroweracquisition, transportation and delivery of goods required for the Sub- project and to be financed out of the proceeds of the Loan to the place of use or installation, any indemnity thereunder to be made payable in a currency freely usable by the Grantee to replace or repair such goods; (e) obtain all such information as the Borrower and the Bank shall reasonably request relating to the foregoing and to the benefits to be derived from the Sub-project; and (f) suspend or terminate the right of the Borrower Grantee to make withdrawals with respect to such amount. Upon the giving of such notice, such amount use of the Credit proceeds of the Loan upon failure by such grantee to perform its obligations under its agreement with the Borrower providing for the Grant. 3. Grants for the Sub-projects listed below shall be cancelled" set forth at made by the end Borrower only if the Bank shall have notified the Borrower of Section 6.03 are deleted the Bank’s approval of said Sub-project. (a) Sub-projects under Part B.1, B.3(b), B.3(c), and B.4(a) of the Project, approved by the Borrower as a result of the first program advertisement under the Project; (b) the five highest ranked and the following is substituted therefor: "five lowest ranked Sub-projects under Part B.2 (a) of the Project, approved by the Borrower as a result of the first program advertisement under the Project; (c) Sub-projects which include proposed procurement of goods estimated to cost the equivalent of $500,000 or more; (d) Sub-projects under Part B.1, B.3(b), B.3(c) and B.4(a), estimated to cost more than the equivalent of $2,000,000 each; and (e) by Sub-projects under Part B.2(a), B.2(b) and B.4(b) estimated to cost more than the date specified in subequivalent of $250,000 each. 4. When presenting a Sub-paragraph 3 (b) of Schedule 5 project to the Development Credit AgreementBank for review, the Association shallBorrower shall furnish to the Bank a draft grant agreement, in respect of any portion form satisfactory to the Bank, together with a description of the CreditSub-project, including a description of the expenditures proposed to be financed out of the proceeds of the Loan and such other information as the Bank shall reasonably request. 5. The Borrower shall ensure that all university staff assigned to work on any Sub-project shall be paid, for such work, remuneration at levels at least equal to the levels applicable to the employment of local consultants as set forth in the applicable decree on the procedures for the employment and remuneration of consultants of the Borrower’s National Development Planning Agency (Badan Perencanaan Pembangunan Nasional). 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications The Borrower shall, in accordance with a plan of action agreed upon between the General Conditions For purposes Borrower and the Association, confer greater autonomy upon ARIs in the areas of this Agreementpersonnel, budget and management. (a) The Borrower shall, not later than December 31, 1996, complete master plans for each ARI, which shall include, inter alia, an application of a method of ex-ante analysis of research programs and a program of staff training, in accordance with criteria agreed with the Association. (b) The Borrower shall prepare and furnish to the Association, by December 31, 1996, for comments by the Association, a time-bound plan of actions to eliminate duplication of research activities in ARIs, and thereafter shall carry out such plan after taking into account the Association’s comments thereon. 3. The Borrower shall carry out under terms of reference, satisfactory to the Association, a study of private financing alternatives of agricultural research and shall furnish to the Association not later than December 31, 1996, the provisions findings and recommendations of the General Conditions are modified as followssuch study. 4. The Borrower shall: (1a) The last sentence of Section 3.02 is deleted. (2) The words "the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit ensure that BARC shall be cancelled" set forth at responsible for the end evaluation of Section 6.03 are deleted research proposals, including proposals made under the Contract Research Scheme, in accordance with the rules and the following is substituted therefor: "or (e) by the date specified procedures referred to in sub-paragraph 3 (b) of Schedule 5 this paragraph; (b) apply rules and procedures acceptable to the Development Credit AgreementAssociation for evaluation and funding approval of research proposals, including those made under the Contract Research Scheme, for all research sub-projects to be implemented after July 1, 1996; (c) make public announcements of the availability of research funds under the Contract Research Scheme; and (d) use a standard contract acceptable to the Association for the Contract Research Scheme. 5. The Borrower shall by December 31, 1996, complete a plan of actions acceptable to the Association for implementation of farming systems research. 6. The Borrower shall ensure that: (a) BARC shall update the existing inventory of laboratory equipment in ARIs indicating the operational state of each item in the inventory; (b) each ARI shall prepare a plan satisfactory to the Association for repair, maintenance and operation of its existing and projected laboratory equipment; and (c) no ARI shall be eligible to receive laboratory equipment under the Project until its inventory and maintenance plan has been updated. 7. The Borrower shall, not later than March 31 and September 30 of each year, beginning in FY 97, prepare and furnish to the Association for review semiannual progress reports of BARC’s and ARIs’ Project activities during the period preceding the date of such report, such reports to have a format and coverage satisfactory to the Association, including inter alia an assessment of performance indicators for Project implementation. 8. The Borrower shall, not later than March 31 of each year, beginning in FY 97: (a) undertake an annual review of the progress of the Project in the previous year, and discuss the findings of such review with the Association; (b) ensure that BARC and ARIs present their first draft semiannual progress reports, referred to in paragraph 7 above, as part of said annual review; and (c) review with the Association the work program and funding required for BARC and the ARIs in the following year based on their performance in the previous year. 9. The Borrower shall, under terms of reference acceptable to the Association and no later than July 1, 1996, cause BARC to employ consultants in accordance with the provisions set forth in Section II of Schedule 3 to this Agreement in the areas of: (i) research management; (ii) financial management; and (iii) supervision of civil works. 10. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association, the Association shall, in respect of any portion carrying out of the CreditProject and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Association, and furnish to the Association, by September 30, 1998, a mid-term review integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) above, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Association, by December 31, 1998, or such later date as the Association shall request, the report referred to in paragraph (b) above, and thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Association’s review on the matter. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA Recipient in carrying out Parts A (1-4), B, C and D of the Project, the Borrower, the Provinces, AJK and FATA Recipient shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the AssociationTrustee. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association Trustee on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers Recipients and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower Recipient shall employ such consultants under contracts using the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower Recipient shall use other standard forms agreed with the AssociationBank. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Trustee review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Trustee review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the AssociationTrustee, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications MFNR shall be responsible for the overall implementation of the General Conditions For purposes Project. MFNR shall be assisted by a steering committee (The Steering Committee) to be chaired by the Principal Secretary of this AgreementMFNR, the provisions which shall comprise of (a) members from relevant institutions of the General Conditions are modified Riparian States with expertise in natural resources management, environmental and international law, (b) experts with international expertise, as follows:needed, in the technical disciplines of the Project and (c) representatives of selected non-governmental organizations and academic institutions with a particular stake in the Lake environment. (1) 2. The last sentence Steering Committee shall meet at least three times a year to review progress in the implementation of Section 3.02 is deletedthe Project and shall provide strategic guidance to the overall management of the Project. It shall, inter alia, review and approve annual work plans, periodic progress reports, results of completed studies, recommendations made by consultants, assist in the organization of the midterm review, and review and approve the biodiversity map and management plan for the Lake. (2a) A Project Manager reporting to the Principal Secretary of MFNR, assisted by a financial controller and support staff, shall be responsible for the day-to-day management of the Project consistent with the Project Implementation Plan, and under the overall supervision of the Steering Committee. (b) The words "Recipient shall take all measures necessary to deploy duly qualified staff in the Association mayrequired numbers for the implementation of the Project in accordance with the Implementation Plan. (c) The Project Manager shall prepare an annual work plan and budget allocations for all Project components, by notice maintain a data base on all Project-related activities, and prepare and furnish to the Borrower, terminate the right Steering Committee consolidated quarterly progress reports on all components of the Borrower Project, including an analysis of any delays in implementation and proposed corrective measures. (d) The Project Manager shall furnish through the Principal Secretary of MFNR to make withdrawals with respect to such amount. Upon the giving Trustee (i) copies of such notice, such amount of the Credit shall be cancelled" set forth at quarterly progress reports within thirty days after the end of Section 6.03 are deleted the reporting period, and (ii) with effect from the second year of Project implementation, draft annual work plans within ninety days prior to the beginning of the year covered in the plan. Part A of the Project 4. The Recipient shall submit for the purposes of Parts A.1, 2 and 3, by no later than eighteen months after the Effective Date, an interim report on biodiversity conservation priorities for the Lake; a draft species identification manual; and an interim report on water quality/pollution in the Lake. The Recipient shall submit such reports and identification manual to the Trustee and the following is substituted therefor: "or Riparian States. After receiving the Trustee and Xxxxxxxx States’ comments and review, the Project Manager shall prepare, by no later than 30 months after the Effective Date a final draft report on biodiversity conservation priorities for the Lake, and a final draft report on water quality/pollution in the Lake. Based on copies of such reports and the species identification manual, the Project Manager shall coordinate the preparation of the biodiversity map and management plan for the Lake. The Recipient shall take all measures necessary, and shall carry out the civil works and renovation required for the rehabilitation of the Cape Maclear research station for the purposes of Part A.4. 5. The Recipient shall obtain appropriate assurances from the other Riparian States that (ea) the Rehabilitation of Kyela Centre Fisheries Research Station in Tanzania and Metangula Fisheries Research Station in Mozambique under Part A.5 shall be implemented by the date specified in sub-paragraph 3 UNDP, and (b) of Schedule 5 UNDP shall prepare and furnish to the Development Credit AgreementProject Manager periodic progress reports on the implementation of Part A.5 of the Project. Part B of the Project 6. In order to enhance the Riparian States’ capacity to manage the Lake, the Association Recipient shall: (a) pursue appropriate measures to ensure that suitable counterpart staff to be trained in fish ecology, taxonomy and limnology are designated by the relevant agencies in the Riparian States; and (b) prepare and furnish to the Trustee annual training programs satisfactory to the Trustee. 7. The Recipient shall carry out Conservation Awareness Programs in respect of any portion the conservation of the Credit:biodiversity of the Lake which shall take into account the critical hot-spots of biological resources.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "“Guidelines for the Use of Consultants by World Bank Borrowers and by the The World Bank as Executing Agency" ” published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, ; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications For the purposes of overall coordination of Project execution, the Borrower shall maintain at all times during the execution of the General Conditions Project the PCU which shall be headed by a full-time director, whose qualifications and experience shall be satisfactory to the Association, and who shall be assisted by suitably qualified staff in adequate numbers. 2. The Borrower shall maintain at all times during the execution of the Project the CEU which shall be headed by an individual whose qualifications and experience shall be satisfactory to the Association and who shall be assisted by suitably qualified staff in sufficient numbers, and assure adequate authority of the CEU to: (i) monitor the performance of the Participating Banks under the Participating Bank Subsidiary Loan Agreements; (ii) monitor the continued compliance of the Participating Banks with the eligibility criteria set forth in Section I of Schedule 6 to this Agreement; (iii) monitor the records and accounts in respect of Part A of the Project to be maintained in accordance with the provisions of Section 4.01 (a) of this Agreement; and (iv) prepare an environmental impact assessment manual and monitor the compliance of Beneficiary Enterprises with environmental criteria specified in the respective Sub-Loan Agreements. 3. For purposes the purpose of carrying out Part B of the Project, the Borrower shall: (a) maintain CUDC which shall be headed by an individual whose experience and qualifications shall be satisfactory to the Association and assisted by suitably qualified staff in sufficient numbers; (b) through CUDC prepare and adopt the CUDC Operations Manual satisfactory to the Association, specifying: (i) the procedures to be followed by CUDC in respect of Part B of the Project; (ii) registration procedures applicable to CUs; (iii) the terms and conditions of the Grants to be provided under Part B.1 of the Project; (iv) the terms and conditions of the loans to be provided by the Borrower to CUs for the purpose of onlending to the members of the respective CU under Part B.2 of the Project, including the principal terms of the Administration Agreement; (v) the terms and conditions of the loans to be made by the CUs to their members; and (vi) the principal provisions of an operations manual to be adopted by the CUs prior to their registration with CUDC; and (vii) the procedures to be followed in respect of the insurance fund for members of CUs; (c) cause CUDC to carry out its operations in accordance with the CUDC Operations Manual; (d) not amend the CUDC Operations Manual, unless such amendment was previously approved by the Association; (e) cause CUDC to enter into participation agreements with the CUs for the purpose of making available the proceeds of the Credit allocated from time to time to Category (5) of the table set forth in Section 1 of Schedule 1 to this Agreement under Part B.1 of the Project and specifying the terms of the Grants to the CUs which shall be consistent with the CUDC Operations Manual and which shall include that the amount of $2,000, representing the initial equity contribution to be deposited with the Administrative Bank to serve as insurance fund, shall be used for loans to members of the CU under the same terms and conditions as the loans under Part B.2 of the Project, once the total share equity of the respective CU has reached $25,000 equivalent; and (f) enter under the signature of MOF which retains independent veto power and CUDC into subsidiary loan agreements (CU Subsidiary Loan Agreements) with registered CUs which also have entered into an arrangement with the Administrative Bank for the purpose of account keeping in respect of Part B.2 of the Project, for the purpose of making available the proceeds allocated from time to time to Category (6) of the table set forth in Section 1 of Schedule 1 to this Agreement on such terms and conditions as shall be consistent with the CUDC Operations Manual. 4. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators set forth in Schedule 7 to this Agreement, the provisions carrying out of the General Conditions are modified as follows:Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Association, and furnish to the Association, on or about April 1, 1999 and April 1, 2002, reports integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) The last sentence of Section 3.02 is deleted.this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (2c) The words "review with the Association, by June 1, 1999 and June 1, 2002, respectively, or such later date as the Association mayshall request, by notice the report referred to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 this Section, and, thereafter, take all measures required to ensure the Development Credit Agreement, the Association shall, in respect of any portion efficient completion of the CreditProject and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Association’s views on the matter. 1. For the purposes of this Schedule:

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 50,000 equivalent each each; or (b) contracts for the employment of individuals individual consultants estimated to cost less than $50,000 20,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 50,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 20,000 equivalent or above. 1. Modifications FID shall operate under the overall control of a Board of Directors consisting of one representative of the General Conditions For purposes Prime Minister’s Office, who shall be the Chairman of this Agreementthe Board of Directors, three other representatives appointed by NGOs, the provisions donor community and civic organizations, respectively, as well as two other representatives elected by members of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deletedFID. (2a) The words "Board of Directors shall appoint an Executive Director, who shall, subject to the Association mayoverall control of the Board of Directors, be responsible for the day-to-day management of activities under the Project. (b) Regional Directors shall be responsible for the promotion, appraisal and supervision of sub-projects in their respective provinces. (a) Applications for grants to finance sub-projects shall be prepared by potential beneficiaries, and submitted to the respective Regional Directors, who shall refer them to a Regional Advisory Committee, for its recommendations. (b) Subject to the recommendations of the Regional Advisory Committee, and to approval guidelines prescribed in the Procedures’ Manual, applications for grants shall be approved by the Board of Directors or, in appropriate cases, by notice the Executive Director or the Regional Directors, as the case may be. 4. Subject to the Borrower, terminate the right approval of the Borrower to make withdrawals with respect to such amount. Upon and the giving of such noticeAssociation, such amount FID shall, not later than June 30, 1996, revise the Procedures’ Manual, taking into account the findings of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion studies under Part B of the Credit:Project, and other relevant studies which have been completed or are underway.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than one hundred thousand dollars ($100,000 100,000) equivalent each each, or (b) contracts for the employment of individuals individual consultants estimated to cost less than fifty thousand dollars ($50,000 50,000) equivalent each. However, said exceptions this exception to prior Association review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-single source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, ; (d) amendments to contracts for the employment of consulting firms raising the contract value to one hundred thousand dollars ($100,000 100,000) equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to fifty thousand dollars ($50,000 50,000) equivalent or above. A. Project Management 1. Modifications The Borrower shall establish and thereafter maintain at all times during the implementation of the General Conditions Project: (a) a Project Steering Committee, chaired by a representative of NCPFP and with representatives of MOF, MOH, MPI and SBV, assigned with such functions and responsibilities, satisfactory to the Association, as shall be required for the overall coordination and oversight of Project implementation; (b) a Project Executive Committee in NCPFP, chaired by the Chairman of NCPFP and composed of each of the directors of NCPFP’s line departments and the Project Director referred to in sub- paragraph (c) of this paragraph, assigned with such functions and responsibilities, satisfactory to the Association, as shall be required for the provision of guidance on policy and technical issues that may arise in relation to the implementation of the Project; and (c) a Project Management Unit in NCPFP, headed by a Project Director with qualifications and experience satisfactory to the Association, with such functions, responsibilities, funds and competent staff in adequate numbers, satisfactory to the Association, as shall be required for the day-to-day implementation of the Project, including the preparation of Project reports, the maintenance of Project accounts, the implementation of goods procurement activities, and guidance to the Provincial Project Management Units referred to in sub-paragraph (b) of this paragraph. 2. The Borrower shall ensure that each Project Province shall establish and thereafter maintain at all times during the implementation of the Project a Provincial Project Management Unit, headed by a Provincial Project Manager with qualifications and experience satisfactory to the Association, with such functions, responsibilities, funds and competent staff in adequate numbers, satisfactory to the Association, as shall be required to monitor the implementation of the Project at the provincial level. 3. The Borrower shall take all steps necessary to ensure that each of the Project Provinces shall carry out its respective activities under the Project and, to that end, shall make available to each of the Project Provinces the proceeds of the Credit and other funds allocated for such purposes. 4. The Borrower shall carry out the Project in accordance with a strategy, satisfactory to the Association, which shall: (a) be designed on the basis of studies and surveys undertaken by qualified and experienced experts under terms of reference and timing satisfactory to the Association; and (b) include provisions for the informed participation of, and consultation with, a variety of representative communities benefiting under the Project, in particular communities with Ethnic Minorities, to ensure that the design and implementation thereafter of the Project adequately addresses the needs and cultural preferences of such communities. For purposes of this AgreementPart A, the term "Ethnic Minorities" means social groups disadvantaged in the development process and with social and cultural identities distinct from those which constitute the predominant ethnic group in Viet Nam. 5. The Borrower shall take all such actions as shall be necessary to achieve by June 30, 1997, Project performance indicators acceptable to the Association. For such purpose, the Borrower shall: (a) undertake baseline surveys and studies, satisfactory to the Association; and (b) establish and maintain operational procedures, satisfactory to the Association, to adequately monitor and evaluate progress in the carrying out of the Project, including the implementation of the strategy referred to in paragraph 4 above and its impact on the various communities in the Project Provinces, in particular those with Ethnic Minorities, as well as the overall impact of the Project on family planning and family health in Viet Nam. 6. The Borrower shall: (a) not later than June 30 and December 31 of each year, commencing on December 31, 1996, furnish to the Association semi-annual reports on the implementation of the Project, satisfactory to the Association including the results of the monitoring and evaluation activities carried out by the Borrower pursuant to paragraph A.5 of this Schedule; and (b) by December 31, 1999, undertake a mid-term review with the Association to assess the overall implementation of the Project and any proposed measures resulting from the monitoring and evaluation activities carried out by the Borrower pursuant to the provisions of paragraph A.5 of this Schedule that shall be required to further achieve the General Conditions are modified as followsobjectives of the Project. For such purposes the Borrower shall, in addition to the annual work program and budget referred to in paragraph A.7 of this Schedule, prepare and furnish to the Association by August 31, 1999, a comprehensive mid-term report of the activities undertaken under the Project. 7. The Borrower shall: (1a) The last sentence of Section 3.02 is deletedby August 31, in each year, commencing on August 31, 1996 furnish to the Association for its review and comments a proposed annual work program and budget for Project activities in the following calendar year; and (b) thereafter, taking into account the Association’s comments, implement such annual work program during the following calendar year in a manner satisfactory to the Association. 8. By September 30, 1996, the Borrower shall furnish to the Association, for its review and comments, its proposed policy and implementation guidelines with respect to: (2a) cost recovery for essential drugs and medical supplies to be provided under Part B.1 of the Project; and (b) essential drugs and medical supplies to be provided under Part B.1 of the Project, free of charge, to beneficiaries in mountainous and remote communes, and thereafter, taking into account the Association’s comments, implement such policy and guidelines. B. Training under Parts A.1, A.2 and B.1 of the Project The words "Borrower shall (a) carry out the training under Parts A.1, A.2 and B.1 of the Project in accordance with a training program for each said Part of the Project acceptable to the Association; and (b) to that end, by no later than June 30, 1996, furnish to the Association mayfor its review and comment a proposed time-bound action plan for each such training program. C. Assessment under Part A. 4 of the Project The Borrower shall: (a) by June 30, by notice 1999, carry out a pilot scheme of contraceptive charges in accordance with terms of reference satisfactory to the BorrowerAssociation; (b) by August 31, terminate 1999, prepare a proposed action plan based on said pilot scheme; and (c) afford the right Association a reasonable opportunity to exchange views with the Borrower on the results of such pilot scheme and proposed action plan at the time of the Borrower review referred to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 subparagraph A.6 (b) of this Schedule 5 4; and (d) thereafter promptly carry out said action plan, taking into account the Association’s comments thereon. D. Studies and Pilot Testings under Part A.4 of the Project 1. For purposes of carrying out Part A.4 of the Project, the Borrower shall, by August 31, 1996, establish within NCPFP a service delivery model initiatives committee with qualified and experienced members and terms of reference satisfactory to the Development Credit AgreementAssociation, which shall be responsible, inter alia, for soliciting or developing proposals for studies and pilot testings under said Part of the Project, reviewing and approving the funding of said proposals, and thereafter supervising their implementation. 2. With respect to each study or pilot testing to be carried out under Part A.4 of the Project, the Association Borrower shall, through said service delivery model initiatives committee: (a) prepare and furnish to the Association for its approval the proposal for such study or pilot testing, as the case may be, of such scope and in respect of any portion such detail as the Association shall reasonably request; and (b) ensure that such study or pilot testing, as the case may be, shall be carried out in accordance with the proposal, as so approved. E. Commune Centers, District Health Centers and Provincial Maternal and Child Health and Family Planning Centers under Part B.1 of the Credit:Project 1. The Borrower shall select commune health centers to be upgraded under Part B.1 (b) of the Project in accordance with criteria acceptable to the Association. 2. The Borrower shall maintain the facilities of each commune health center, district health center and provincial maternal and child health and family planning center, upgraded under Part B.1 (b) of the Project in accordance with arrangements acceptable to the Association. 3. The Borrower shall take all such actions as are necessary to ensure that: (a) each commune health center, district healthcenter and provincial maternal and child health and family planning center in the Project Provinces shall be adequately staffed; and (b) said district health centers be provided with adequate funding to meet the payroll obligations of the related commune health centers.

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA PLN in carrying out Part A of the Project, the Borrower, the Provinces, AJK and FATA PLN shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the AssociationBank. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower PLN shall employ such consultants under contracts using the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the AssociationBank. Where no relevant standard contract documents have been issued by the Bank, the Borrower PLN shall use other standard forms agreed with the AssociationBank. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association Bank review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 1. Modifications PLN shall: (a) by October 31 of each year commencing in 1995, until completion of the General Conditions For purposes of this AgreementProject, furnish to the provisions Bank for its review and comments PLN’s draft annual rural electrification development and investment plans; and (b) thereafter finalize the said plans taking into account the comments, if any, thereon by the Bank. 2. PLN shall select villages to be electrified each year under Part A.1 of the General Conditions are modified as follows: (1) The last sentence of Section 3.02 is deletedProject in accordance with criteria and procedures agreed with the Bank. 3. PLN shall: (2a) The words "undertake environmental screening, and resettlement and rehabilitation planning for Subprojects to be financed under the Association may, by notice Loan in accordance with criteria and procedures satisfactory to the BorrowerBank; (b) submit, terminate for the right Bank’s approval, a proposal for each Subproject, under Part A.3 of the Project, to be financed out of the proceeds of the Loan including an environmental mitigation and/or resettlement and rehabilitation measures therefor; (c) ensure that during the execution of each Subproject the environmental mitigation and resettlement and rehabilitation measures therefor are carried out in a manner satisfactory to the Bank; and (d) by April 30 every year commencing in 1996, furnish such information about the environmental mitigation and resettlement and rehabilitation measures taken during the preceding fiscal year of the Borrower in such detail as the Bank may reasonably request. 4. PLN shall maintain the Project Management Unit within its rural electrification division with functions, powers, staff, and funds necessary to make withdrawals with respect coordinate and supervise and to such amount. Upon ensure the giving of such notice, such amount implementation of the Credit Project. 5. PLN shall, by June 30 (or such other date as may be agreed by the Bank) every year commencing in 1995, revise, and publish the small power purchase tariff schedule including the form of the standard power purchase contract in accordance with the methodology agreed to by the Bank. 6. PLN shall, by June 30 (or such other date as may be agreed by the Bank) every year commencing in 1995, revise and publish the bulk supply tariff schedule in accordance with the methodology agreed to by the Bank. 7. PLN shall be cancelled" set forth at jointly with the end Borrower: (a) furnish to the Bank (i) such periodic reports concerning the reorganization of Section 6.03 are deleted PLN as reasonably requested by the Bank; and (ii) a draft time bound corporate reorganization and restructuring action plan, based on terms of reference agreed with the following is substituted therefor: "or Bank, for PLN to operate according to best utility practices (eincluding an action plan for restructuring specific to rural electrification); (b) discuss the said report(s) and draft action plan with the Bank; (c) finalize the said action plan taking into account the comments, if any, thereon by the Bank; and (d) by June 30, 1995, take appropriate steps to implement the date specified said action plan taking into consideration the comments, if any, thereon by the Bank. 8. PLN shall: (a) by October 31, 1995, establish principles and procedures for technical audit of Subprojects in consultation with the Bank; (b) commencing in 1996, until completion of the Project, carry out an annual technical audit of the completed parts of the Project, through independent technical auditors acceptable to the Bank in accordance with the principles and procedures indicated in sub-paragraph 3 (ba) of Schedule 5 to hereof, focussing on the Development Credit Agreement, the Association shall, in respect of any portion quality and standards of the Credit:goods, works, and services financed out of the proceeds of the Loan including the

Employment of Consultants. 1. In order to assist the Borrower, the Provinces, AJK and FATA in carrying out the Project, the Borrower, the Provinces, AJK and FATA shall employ consultants whose qualifications, experience and terms and conditions of employment Consultants’ services shall be satisfactory to the Association. Such consultants shall be selected procured under contracts awarded in accordance with principles and procedures satisfactory to the Association on the basis provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower such contracts shall employ such consultants under contracts using be based on the standard form of contract for consultants’ services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with acceptable to the AssociationAssociation shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, contracts shall not apply to to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each each; or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to to: (a) the terms of reference for such contracts, ; (b) single-source selection of consulting firms, ; (c) assignments of a critical nature, as reasonably determined by the Association, ; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, ; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. Section I: General 1. Modifications For the purposes of carrying out the Project, the Borrower shall apply the policies, procedures and arrangements specified in the Project Implementation Manual and, except as otherwise agreed with the Association, shall not amend the Project Implementation Manual in a manner which, in the opinion of the General Conditions For purposes Association, would materially affect the implementation of this Agreementthe Project. (a) The Borrower shall, through MSP, beginning October 1, 1996, and thereafter not later than October 1 of each year, carry out jointly with the Association: (i) a review of MSP budget plans in respect of the forthcoming calendar year and a review of MSP budget execution in respect of the current calendar year, including the provision of counterpart funds for the Project and of investment and recurrent funds required for the health district development plans under Part A.1 of the Project; and (ii) a review of Project work plans for institutional strengthening and service delivery to be prepared by MSP in respect of the forthcoming calendar year. (b) Not later than December 31, 1996, the provisions Borrower shall: (i) establish a calendar and process on an annual basis for internal review of Project activities undertaken during the previous year and to be undertaken during the forthcoming year, including in particular PMA, FP, and STD prevention and control activities; and (ii) establish a work program defining the overall technical support required for the FP program under Part B of the General Conditions are modified as followsProject, and xxxxxxx said program to the Association for its review and approval. Promptly thereafter, the Borrower shall carry out said program with due diligence and efficiency. (c) Not later than December 31, 1998, the Borrower shall carry out, jointly with the Association, a comprehensive review to assess the progress achieved in the execution of the Project. Said review shall cover, inter alia: (1i) The last sentence the extent to which the institutional objectives of Section 3.02 is deleted.the Project are being achieved; (2ii) The words "an assessment of the Association may, impact achieved by notice to the Borrower, terminate Project so far and the right sustainability of its achievements; (iii) compliance with the audit and other obligations of the Borrower included in this Agreement; (iv) timely availability of counterpart funding and disbursement performance under the Project; (v) the performance of technical advisory services under the Project; (vi) procurement under the Project; (vii) performance as against key indicators, referred to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled" set forth at the end of Section 6.03 are deleted and the following is substituted therefor: "or (e) by the date specified in sub-paragraph 3 (b) of Schedule 5 to the Development Credit Agreement, the Association shall, in respect of any portion of the Credit:paragraph