Common use of Institutional and Other Arrangements Clause in Contracts

Institutional and Other Arrangements. 1. The Borrower shall: (a) maintain, until completion of the Project, the unit within SEPE (the PMU), created by the Borrower’s Law No. 6797, of November 16, 2005, with staff, structure and functions satisfactory to the Bank, responsible for the management, coordination, supervision, monitoring and evaluation of the Project, including, without limitation, approval of PIPs, carrying out of feasibility studies, environmental screening, procurement oversight, disbursement and accounting procedures; (b) create and maintain, until completion of the Project, a Steering Committee (Comitê Gestor) with structure and functions satisfactory to the Bank, presided over by the Borrower’s Secretary of SEPE and composed of other Borrower government representatives and representatives of civil society, for the supervision and decision making regarding Part 1 of the Project, all in accordance with the provisions of the Operational Manual; (c) not later than 30 days after the Effective Date, establish, and thereafter maintain until completion of the Project, a procurement unit within the PMU with staff, structure and functions satisfactory to the Bank; and (d) ensure that appropriate mechanisms are in place for the provision of procurement support to the PMU for the carrying out of the Project during the period prior to the establishment of the procurement unit referred to in (c) above, including the ability to provide training to the staff of said procurement unit in anticipation of the establishment referred to in (c) above. 2. The Borrower shall carry out the Project in accordance with the provisions of: (a) the Environmental Impact Assessment; (b) the Resettlement Framework; (c) the Indigenous Peoples and Quilombolas Framework; (d) the Forestry and Natural Habitats Framework; and (e) the manual, dated June 22, 2006 (the Operational Manual), which contains the policies and procedures for the carrying out, monitoring and evaluation of the Project, including, inter alia: (i) the organizational structure of the Project; (ii) the Project procurement and financial management requirements and procedures; (iii) the indicators to be used for Project monitoring and evaluation; (iv) the criteria and procedures for the preparation and approval of PIPs and the procedures for the carrying out of the Subprojects; and (v) the model forms of the PIP Preparation Agreements, PIP Agreements and Zoning Arrangements. In case of any inconsistency between any provision of the Operational Manual and this Agreement, the provision of this Agreement will prevail. 3. The Borrower shall not carry out any Complementary Infrastructure Subproject, or permit any Income Generation Subproject to be carried out, under a PIP without the Bank’s prior approval of such PIP, until the Bank has approved fourteen (14) PIPs. 4. Prior to initiating any activity under the Project which will benefit or affect an indigenous community, the Borrower shall obtain from Fundação Nacional do Índio - FUNAI, the Guarantor’s foundation which deals with indigenous peoples in Brazil: (a) an agreement to the carrying out of any such activity; and (b) a commitment to collaborate with the Borrower and such indigenous community in the carrying out of any such activity. 5. Whenever contracts signed under Subprojects have reached the number of one hundred fifty (150) or a multiple thereof, the Borrower shall: (a) have the procurement procedures and related contract execution performance in respect of a sample of contracts under Part 1 of the Project audited by procurement auditors acceptable to the Bank, in accordance with terms of reference satisfactory to the Bank; (b) furnish to the Bank as soon as available, but in any case not later than six (6) months after the occurrence of each such event, the report of such procurement audit by said auditors; and (c) furnish to the Bank such other information concerning said procurement audit as the Bank may reasonably request.

Institutional and Other Arrangements. A. Implementation Arrangements 1. The At all times during the execution of the Project, the Borrower shall:shall maintain a unit attached to its Secretariat for Special Projects, to be responsible for the overall implementation of the Project (the “PMU”). (a) maintainThe PMU shall be empowered with functions and responsibilities satisfactory to the Bank as set forth in the Operational Manual, including inter alia the following responsibilities: (i) overall planning and monitoring of Project activities, including coordination with state and municipal entities, CAEMA and other stakeholders; (ii) carrying out of Project procurement and contracting of the required works, goods and services, in close consultation with the Procurement Committee; (iii) elaboration of the annual operational plans; (iv) carrying out of the financial management of the Project; (v) overseeing the adequate implementation of the Resettlement Action Plans, if needed, under Parts 2 and 3 of the Project, the implementation of the Environmental Management Plan and any other environmental and social mitigation measures required for the implementation of Project activities; (vi) preparation and submission to the Bank of: (A) disbursement requests and supporting documentation; and (B) Project information and Project Reports in accordance with the format established in the Operational Manual; (vii) oversight of the performance of the Implementation Support Consultant; and (viii) provision of assistance and documentation to external independent auditors. (b) The Borrower shall assign existing municipal staff, or appoint new technical, managerial and administrative staff to the PMU, all with terms of reference and qualifications acceptable to the Bank, as set forth in the Operational Manual, including, inter alia, the following: (i) coordinator; (ii) water sanitation specialist; (iii) procurement specialist; (iv) social/environmental specialist; (v) LED specialist; (vi) project planning and monitoring specialist; (vii) urban planning specialist; (viii) financial management specialist; (ix) accounting specialist; and (x) information system management specialist. (c) The Borrower shall, by no later than three months after the Effective Date: (i) employ, pursuant to the provisions of Part C. 1 of Section III of Schedule 2 to this Agreement, a consulting firm (“the Implementation Support Consultant”) to assist the PMU in the management, implementation and coordination of Project activities; and (ii) thereafter maintain until the completion of the Project, the unit within SEPE (the PMU), created by the Borrower’s Law No. 6797, of November 16, 2005, with staff, structure and functions satisfactory to the Bank, responsible for the management, coordination, supervision, monitoring and evaluation of the Project, including, without limitation, approval of PIPs, carrying out of feasibility studies, environmental screening, procurement oversight, disbursement and accounting procedures; (b) create and maintain, until completion of the Project, a Steering Committee (Comitê Gestor) with structure and functions satisfactory to the Bank, presided over by the Borrower’s Secretary of SEPE and composed of other Borrower government representatives and representatives of civil society, for the supervision and decision making regarding Part 1 of the Project, all in accordance with the provisions of the Operational Manual; (c) not later than 30 days after the Effective Date, establish, and thereafter maintain until completion of the Project, a procurement unit within the PMU with staff, structure and functions satisfactory to the Bank; and (d) ensure that appropriate mechanisms are in place for the provision of procurement support to the PMU for the carrying out of the Project during the period prior to the establishment of the procurement unit referred to in (c) above, including the ability to provide training to the staff of said procurement unit in anticipation of the establishment referred to in (c) above. 2. The Borrower shall carry out the Project in accordance with the provisions of: (a) the Environmental Impact Assessment; (b) the Resettlement Framework; (c) the Indigenous Peoples and Quilombolas Framework; (d) the Forestry and Natural Habitats Framework; and (e) the manual, dated June 22, 2006 (the Operational Manual), which contains the policies and procedures for the carrying out, monitoring and evaluation of the Project, including, inter alia: (i) the organizational structure of the Project; (ii) the Project procurement and financial management requirements and procedures; (iii) the indicators to be used for Project monitoring and evaluation; (iv) the criteria and procedures for the preparation and approval of PIPs and the procedures for the carrying out of the Subprojects; and (v) the model forms of the PIP Preparation Agreements, PIP Agreements and Zoning Arrangements. In case of any inconsistency between any provision of the Operational Manual and this Agreement, the provision of this Agreement will prevail. 3. The Borrower shall not carry out any Complementary Infrastructure Subproject, or permit any Income Generation Subproject to be carried out, under a PIP without the Bank’s prior approval of such PIP, until the Bank has approved fourteen (14) PIPs. 4. Prior to initiating any activity under the Project which will benefit or affect an indigenous community, the Borrower shall obtain from Fundação Nacional do Índio - FUNAI, the Guarantor’s foundation which deals with indigenous peoples in Brazil: (a) an agreement to the carrying out of any such activity; and (b) a commitment to collaborate with the Borrower and such indigenous community in the carrying out of any such activity. 5. Whenever contracts signed under Subprojects have reached the number of one hundred fifty (150) or a multiple thereof, the Borrower shall: (a) have the procurement procedures and related contract execution performance in respect of a sample of contracts under Part 1 of the Project audited by procurement auditors acceptable to the Bank, in accordance Implementation Support Consultant with terms of reference satisfactory to the Bank; (b) furnish to the Bank as soon as available, but set forth in any case not later than six (6) months after the occurrence of each such event, the report of such procurement audit by said auditors; and (c) furnish to the Bank such other information concerning said procurement audit as the Bank may reasonably requestOperational Manual.

Institutional and Other Arrangements. A. Institutional Arrangements 1. The Borrower shall: (a) maintainBorrower, until completion of through MoPWH, shall implement the Project, the unit within SEPE (the PMU), created by the Borrower’s Law No. 6797, of November 16, 2005, with staff, structure and functions satisfactory to the Bank, responsible for the management, coordination, supervision, monitoring and evaluation of the Project, including, without limitation, approval of PIPs, carrying out of feasibility studies, environmental screening, procurement oversight, disbursement and accounting procedures; (b) create and maintain, until completion of the Project, a Steering Committee (Comitê Gestor) with structure and functions satisfactory to the Bank, presided over by the Borrower’s Secretary of SEPE and composed of other Borrower government representatives and representatives of civil society, for the supervision and decision making regarding Part 1 of the Project, all Project in accordance with the provisions of the Operational Manual; (c) PIP and the Procurement Plan. Except as the Bank shall otherwise agree, the Borrower shall not later than 30 days after the Effective Date, establish, and thereafter maintain until completion amend or waive any provision of the ProjectPIP or the Procurement Plan, a procurement unit within if, in the PMU with staff, structure and functions satisfactory to opinion of the Bank; and (d) ensure that appropriate mechanisms are in place for the provision of procurement support to the PMU for , such amendment or waiver may materially or adversely affect the carrying out of the Project during or the period prior to the establishment achievement of the procurement unit referred to in (c) above, including the ability to provide training to the staff of said procurement unit in anticipation of the establishment referred to in (c) aboveProject objectives. 2. The Borrower shall vest in MoPWH the overall responsibility for carrying out the Project. MoPWH shall carry out Part A of the Project in accordance with and shall coordinate the provisions implementation of: (ai) Part B of the Environmental Impact Assessment; (b) the Resettlement Framework; (c) the Indigenous Peoples Project with GCD and Quilombolas Framework; (d) the Forestry and Natural Habitats FrameworkMoT; and (eii) the manual, dated June 22, 2006 (the Operational Manual), which contains the policies and procedures for the carrying out, monitoring and evaluation Part C of the ProjectProject with the Borrower’s Ministry of Municipal Affairs, includingGAM and other concerned municipalities and stakeholders. 3. Without prejudice to the provisions of paragraphs 1 and 2 above, inter aliaMoPWH shall implement: (i) the organizational structure Environmental Management Plan with assistance from the Borrower’s Ministry of the ProjectEnvironment and other stakeholders; (ii) the RAP in close coordination with the municipalities of the Amman Metropolitan Area; and (iii) the CRMP in coordination with the Borrower’s Department of Antiquities. 4. The Borrower shall, throughout the period of implementation of the Project procurement and financial management requirements in a manner satisfactory to the Bank, maintain the ADC Steering Committee established pursuant to the Council of Ministers’ Decision dated March 23, 2004, for the purpose of overseeing the implementation progress and proceduresthe provision of guidance on promoting the Project. 5. The Borrower shall, throughout the period of implementation of the Project and in a manner satisfactory to the Bank, maintain the ADC Executive Committee established pursuant to the Council of Ministers’ Decision dated March 23, 2004, for the purpose of managing and organizing the land usages within the Project’s area of influence. 6. The Borrower shall throughout the period of implementation of the Project and in a manner satisfactory to the Bank, maintain the ADC Urban Development Technical Unit under the ADC Executive Committee, such Unit shall serve a vital advance planning function, with no decision-making responsibilities. The Technical Unit shall, inter alia, be responsible for: (i) carrying out urban planning studies for development within the ADC’s zone of influence; (ii) promoting and guiding development within and along the ADC; (iii) the indicators assisting industrial and real estate developers to be used for Project monitoring locate and evaluationprepare their subprojects; and (iv) the criteria assessing and procedures for the preparation monitoring transport and approval land use impacts of PIPs and the procedures for the carrying out of the Subprojects; and (v) the model forms of the PIP Preparation Agreements, PIP Agreements and Zoning Arrangements. In case of any inconsistency between any provision of the Operational Manual and this Agreement, the provision of this Agreement will prevailplanned developments. 37. The Borrower shall not carry out any Complementary Infrastructure Subproject, or permit any Income Generation Subproject to be carried out, under a PIP without For the Bank’s prior approval purpose of such PIP, until the Bank has approved fourteen (14) PIPs. 4. Prior to initiating any activity under the ensuring effective management of Project which will benefit or affect an indigenous communityimplementation, the Borrower shall obtain throughout the period of implementation of the Project and in a manner satisfactory to the Bank, cause MoPWH to maintain the PMT, headed by a Project Manager and staffed with adequate number of engineers from Fundação Nacional do Índio - FUNAIMoPWH. The PMT shall be responsible for: (i) reporting, monitoring and evaluation activities, the Guarantor’s foundation which deals with indigenous peoples in Brazil: procurement process, financial management and audit requirements; (aii) an agreement to ensuring effective implementation of the carrying out of any such activityEMP and RAP; and (biii) a commitment working in close coordination with GCD and MoT appointed task teams, which are entrusted with contributing to collaborate with the Borrower and such indigenous community in implementation of Part B of the carrying out of any such activityProject. 58. Whenever contracts signed under Subprojects have reached the number of one hundred fifty (150) or a multiple thereofTo ensure timely implementation according to specification and within allocated budgets, the Borrower shall: (a) have , through MoPWH, retain an international construction management firm to assist the procurement procedures PMT with overall Project management, and related contract execution performance which firm shall provide both a core team of specialists and a pool of specialized expertise, on which to draw skills on an “as needed” basis, in respect of a sample of contracts under Part 1 support of the Project audited by procurement auditors acceptable to the Bank, in accordance with terms of reference satisfactory to the Bank; (b) furnish to the Bank as soon as available, but in any case not later than six (6) months after the occurrence of each such event, the report of such procurement audit by said auditors; and (c) furnish to the Bank such other information concerning said procurement audit as the Bank may reasonably requestPMT.

Institutional and Other Arrangements. 1. The Borrower Project Implementing Entity shall: (a) maintain, until completion at all times during Project implementation, maintain its departments in charge of the implementation, coordination and oversight of the Project, the unit within SEPE (the PMU)with competent staff in adequate numbers, created by the Borrower’s Law No. 6797, of November 16, 2005, with staff, structure qualifications and functions experience satisfactory to the Bank, responsible for the management, coordination, supervision, Association (including monitoring and evaluation of evaluation, procurement, accounting and environmental specialists), with responsibility for implementing the Project. 2. The Project Implementing Entity shall, including, without limitation, approval in accordance with paragraph C of PIPs, carrying out Section I of feasibility studies, environmental screening, procurement oversight, disbursement and accounting procedures; (b) create and maintain, until completion of the Project, a Steering Committee (Comitê Gestor) with structure and functions satisfactory Schedule 2 to the BankFinancing Agreement, presided over by ensure that the Borrower’s Secretary of SEPE and composed of other Borrower government representatives and representatives of civil society, for the supervision and decision making regarding Part 1 of the Project, all Project is implemented in accordance with the provisions of the Operational Manual;Environmental and Social Management Framework (ESMF) and the Resettlement Policy Framework (RPF), and in a manner and substance satisfactory to the Association. 3. The Project Implementing Entity shall: (ca) not later than 30 days after adopt a Program Implementation Manual (PIM) in form and substance satisfactory to the Effective DateAssociation, establish, containing detailed arrangements and thereafter maintain until completion procedures for: (i) institutional coordination and day-to-day execution of the Project; (ii) disbursement and financial management; (iii) procurement; (iv) environmental and social impact screening guidelines; (v) monitoring, a procurement unit within evaluation, reporting and communication; and (vi) such other administrative, financial, technical and organizational arrangements and procedures as shall be required for the PMU with staff, structure and functions satisfactory to the BankProject; and (db) ensure that appropriate mechanisms are in place for the provision of procurement support to the PMU for the carrying out of the Project during the period prior to the establishment of the procurement unit referred to in (c) above, including the ability to provide training to the staff of said procurement unit in anticipation of the establishment referred to in (c) above. 2. The Borrower shall carry out the Project in accordance with the arrangements and procedures set out in the PIM (provided, however, that in case of any conflict between the arrangements and procedures set out in the PIM and the provisions of: of this Agreement, the provisions of this Agreement shall prevail) and, except as the Association shall otherwise agree, shall not amend, abrogate or waive any provision of the PIM, if such amendment, abrogation or waiver shall, in the opinion of the Association, materially or adversely affect the implementation of the Project. 4. The Project Implementing Entity shall: (a) no later than 1 March, 2009 carry out jointly with the Environmental Impact AssessmentAssociation and the Recipient (if the latter may deem necessary), a Mid-Term Review of the progress made in carrying out the Project; and (b) no later than thirty days after the Resettlement Framework; (c) the Indigenous Peoples and Quilombolas Framework; (d) the Forestry and Natural Habitats Framework; and (e) the manual, dated June 22, 2006 (the Operational Manual), which contains the policies and procedures for the carrying out, monitoring and evaluation completion of the ProjectMid-Term Review, includingstart to implement the recommendations of the Mid-Term Review as agreed with the Association. The Mid-Term Review shall assess, inter alia: (i) the organizational structure overall progress made during the implementation of the Project; and (ii) the Project procurement and financial management requirements and procedures; (iii) results of the indicators to be used for Project monitoring and evaluation; (iv) the criteria and procedures for the preparation and approval of PIPs and the procedures for the carrying out of the Subprojects; and (v) the model forms of the PIP Preparation Agreements, PIP Agreements and Zoning Arrangements. In case of any inconsistency between any provision of the Operational Manual and this Agreement, the provision of this Agreement will prevailevaluation activities. 3. The Borrower shall not carry out any Complementary Infrastructure Subproject, or permit any Income Generation Subproject to be carried out, under a PIP without the Bank’s prior approval of such PIP, until the Bank has approved fourteen (14) PIPs. 4. Prior to initiating any activity under the Project which will benefit or affect an indigenous community, the Borrower shall obtain from Fundação Nacional do Índio - FUNAI, the Guarantor’s foundation which deals with indigenous peoples in Brazil: (a) an agreement to the carrying out of any such activity; and (b) a commitment to collaborate with the Borrower and such indigenous community in the carrying out of any such activity. 5. Whenever contracts signed under Subprojects have reached the number of one hundred fifty (150) or a multiple thereof, the Borrower shall: (a) have the procurement procedures and related contract execution performance in respect of a sample of contracts under Part 1 of the Project audited by procurement auditors acceptable to the Bank, in accordance with terms of reference satisfactory to the Bank; (b) furnish to the Bank as soon as available, but in any case not later than six (6) months after the occurrence of each such event, the report of such procurement audit by said auditors; and (c) furnish to the Bank such other information concerning said procurement audit as the Bank may reasonably request.

Institutional and Other Arrangements. 1(a) The Borrower, through SEGEPLAN, shall furnish to the Bank a Project operational manual, satisfactory in form and substance to the Bank, setting forth rules, methods, guidelines, standard documents and procedures for the carrying out of the Project, including the following: the detailed description of: (A) Project activities; and (B) institutional arrangements in respect thereof; the detailed membership required of all entities to be set up for purposes of the Project, including inter alia, the Management Board and the Investment Coordination Committee; the administrative, financial, accounting, auditing, procurement and disbursement procedures for the implementation of the Project by all Executing Entities, including the relevant standard documents in relation thereto; the selection criteria for: (i) the NGOs and other service providers, including the standard service agreements for the contracting of their services, (ii) the Beneficiaries and (iii) the Investment Subprojects under Part1.1 and 1.3 of the Project; the Environmental Management Framework disclosed to the general public on January 12, 2006, therein setting forth the guidelines and the framework for mitigating potential harmful effects of Project implementation and including an IPDF prepared for the Project; and the plan for the monitoring, evaluation and supervision of the Project, including the Performance Indicators. The Borrower, through SEGEPLAN, shall: (i) maintain the OM throughout Project implementation; (ii) take all measures necessary to ensure that the Project is carried out in conformity with the OM; and (iii) only amend the OM, from time to time, with the Bank’s prior written consent. In the event of any conflict between the provisions of the OM and any one under this Agreement, the provisions of this Agreement will prevail. 2. The Borrower shall ensure that SEGEPLAN: (a) is maintained in structure and with personnel, including procurement and financial management specialists, adequate in number and having terms of reference, functions and resources satisfactory to the Bank at all times during Project implementation; (b) remains responsible for the effective coordination of the overall Project, including the coordination of procurement, financial management, auditing, monitoring and evaluation aspects in relation thereto; and (c) submits annual work plans and budget for review and comments to the Bank and, for approval, to the Management Board. 3. The Borrower shall: (a) maintainestablish, until completion for purposes of the Project, an investment coordination committee and a management board with membership as set forth in the unit within SEPE (the PMU), created by the Borrower’s Law No. 6797, of November 16, 2005, with staff, structure OM; and functions satisfactory to the Bank, responsible for the management, coordination, supervision, monitoring and evaluation of the Project, including, without limitation, approval of PIPs, carrying out of feasibility studies, environmental screening, procurement oversight, disbursement and accounting procedures;thereafter (b) create and maintain, until completion of through SEGEPLAN, during Project implementation, the Project, a Steering Committee (Comitê Gestor) with structure said investment coordination committee and functions satisfactory to the Bank, presided over by the Borrower’s Secretary of SEPE and composed of other Borrower government representatives and representatives of civil society, for the supervision and decision making regarding Part 1 of the Project, all management board in accordance conformity with the provisions of specifications set forth in the Operational Manual; (c) not later than 30 days after the Effective Date, establish, and thereafter maintain until completion of the Project, a procurement unit within the PMU with staff, structure and functions satisfactory to the Bank; and (d) ensure that appropriate mechanisms are in place for the provision of procurement support to the PMU for the carrying out of the Project during the period prior to the establishment of the procurement unit referred to in (c) above, including the ability to provide training to the staff of said procurement unit in anticipation of the establishment referred to in (c) above. 24. The Borrower shall carry out the Project in accordance with the provisions of: (a) the Environmental Impact Assessment; (b) the Resettlement Framework; (c) the Indigenous Peoples and Quilombolas Framework; (d) the Forestry and Natural Habitats Framework; and (e) the manual, dated June 22, 2006 (the Operational Manual), which contains the policies and procedures for the carrying out, monitoring and evaluation of the Project, including, inter alia: (i) the organizational structure of the Project; (ii) the Project procurement and financial management requirements and procedures; (iii) the indicators to be used for Project monitoring and evaluation; (iv) the criteria and procedures for the preparation and approval of PIPs and the procedures for the carrying out of the Subprojects; and (v) the model forms of the PIP Preparation Agreements, PIP Agreements and Zoning Arrangements. In case of any inconsistency between any provision of the Operational Manual and this Agreement, the provision of this Agreement will prevail. 3. The Borrower shall not carry out any Complementary Infrastructure Subproject, or permit any Income Generation Subproject to be carried out, under a PIP without the Bank’s prior approval of such PIP, until the Bank has approved fourteen (14) PIPs. 4. Prior to initiating any activity under the Project which will benefit or affect an indigenous community, the Borrower shall obtain from Fundação Nacional do Índio - FUNAI, the Guarantor’s foundation which deals with indigenous peoples in Brazil: (a) an agreement to the carrying out of any such activity; and (b) a commitment to collaborate with the Borrower and such indigenous community in the carrying out of any such activity. 5. Whenever contracts signed under Subprojects have reached the number of one hundred fifty (150) or a multiple thereof, the Borrower shall: (a) have the procurement procedures and related contract execution performance in respect of a sample of contracts under Part 1 of the Project audited by procurement auditors acceptable to the Bank, in accordance with terms of reference satisfactory to the Bank; (b) furnish to the Bank as soon as available, but in any case not later than six (6) months after the occurrence of each such event, the report of such procurement audit by said auditors; and (c) furnish to the Bank such other information concerning said procurement audit as the Bank may reasonably request.ensure that:

Institutional and Other Arrangements. 1. The Borrower shall: (a) maintain, until completion of the Project, the unit within SEPE (the PMU), created by the Borrower’s Law No. 6797, of November 16, 2005, with staff, structure and functions satisfactory to the Bank, responsible for the management, coordination, supervision, monitoring and evaluation of the Project, including, without limitation, approval of PIPs, carrying out of feasibility studies, environmental screening, procurement oversight, disbursement and accounting procedures; (b) create and maintain, until completion of the Project, a Steering Committee (Comitê Gestor) with structure and functions satisfactory to the Bank, presided over by the Borrower’s Secretary of SEPE and composed of other Borrower government representatives and representatives of civil society, for the supervision and decision making regarding Part 1 of the Project, all in accordance with the provisions of the Operational Manual; (c) not later than 30 days after the Effective Date, establish, and thereafter maintain until completion of the Project, a procurement unit within the PMU with staff, structure and functions satisfactory to the Bank; and (d) ensure that appropriate mechanisms are in place for the provision of procurement support to the PMU for the carrying out of the Project during the period prior to the establishment of the procurement unit referred to in (c) above, including the ability to provide training to the staff of said procurement unit in anticipation of the establishment referred to in (c) above. 2. The Borrower shall carry out the Project in accordance with an operational manual satisfactory to the provisions of: (a) the Environmental Impact Assessment; (b) the Resettlement Framework; (c) the Indigenous Peoples and Quilombolas Framework; (d) the Forestry and Natural Habitats Framework; and (e) the manual, dated June 22, 2006 Bank (the Operational Manual), which contains such manual to include, inter alia: (i) the policies and procedures for the carrying out, monitoring and evaluation of the ProjectProject (including the procurement, includingfinancial, inter alia: (i) the organizational structure of the Project; social and environmental requirements thereof); (ii) the Project procurement and financial management requirements and procedures; criteria for the eligibility of Municipalities to participate in the Project, according to the type of Subprojects; (iii) the indicators to be used criteria for Project monitoring the eligibility of each type of Subprojects, including without limitation: (A) the activities/investments eligible for financing under each type of Subproject; and evaluation; (B) the procedures required for a participatory process during the preparation of Subprojects; (iv) the criteria requirements and procedures for the preparation approval, implementation, monitoring and approval evaluation of PIPs Subprojects, including: (A) standards, satisfactory to the Bank, for environmentally sound construction practices; (B) appropriate screening procedures for Subprojects; and (C) technical, social and economic criteria for the evaluation of such Subprojects (including the requirement that the rehabilitation and/or extension of existing systems be assessed); (v) model forms for the Grant Agreements and Technical Assistance Agreements; (vi) the IPDP, the Sectoral Environmental Assessment, and the procedures for to safeguard cultural property; and (vii) the Performance Indicators. (b) The Operational Manual may be amended by the Borrower from time to time with the prior approval of the Bank. In the case of any conflict between the terms of the Operational Manual and those of this Agreement, the terms of this Agreement shall prevail. 2. The Borrower shall maintain, during the execution of the Project, a project management unit (the PMU) with structure and functions satisfactory to the Bank, with qualified staff in adequate numbers as required to carry out its responsibilities. 3. Without limitation to the provisions of paragraph (a) of Section I.B.1 of this Schedule, the Borrower, through MIDUVI, shall: (a) implement the IPDP in accordance with its terms; (b) implement the actions required under the Sectoral Environmental Assessment in accordance with its terms, including without limitation the activities set forth in Part 1 (c) of the Project; (c) ensure that no physical or involuntary resettlement (as interpreted in accordance with the Bank’s Operational Policy 4.12) shall take place as a consequence of the carrying out of the SubprojectsProject; and and (vd) the model forms ensure that no significant loss or degradation of the PIP Preparation Agreements, PIP Agreements and Zoning Arrangements. In case terrestrial or aquatic natural habitats shall take place as a consequence of any inconsistency between any provision of the Operational Manual and this Agreement, the provision of this Agreement will prevail. 3. The Borrower shall not carry out any Complementary Infrastructure Subproject, or permit any Income Generation Subproject to be carried out, under a PIP without the Bank’s prior approval of such PIP, until the Bank has approved fourteen (14) PIPs. 4. Prior to initiating any activity under the Project which will benefit or affect an indigenous community, the Borrower shall obtain from Fundação Nacional do Índio - FUNAI, the Guarantor’s foundation which deals with indigenous peoples in Brazil: (a) an agreement to the carrying out of any such activity; and (b) a commitment to collaborate with the Borrower and such indigenous community in the carrying out of any such activityProject. 5. Whenever contracts signed under Subprojects have reached the number of one hundred fifty (150) or a multiple thereof, the Borrower shall: (a) have the procurement procedures and related contract execution performance in respect of a sample of contracts under Part 1 of the Project audited by procurement auditors acceptable to the Bank, in accordance with terms of reference satisfactory to the Bank; (b) furnish to the Bank as soon as available, but in any case not later than six (6) months after the occurrence of each such event, the report of such procurement audit by said auditors; and (c) furnish to the Bank such other information concerning said procurement audit as the Bank may reasonably request.

Institutional and Other Arrangements. 1. The Bank and the Borrower shall:hereby agree that the obligations set forth in Sections 5.04, 5.05, 5.06 and 5.07 of the General Conditions (relating to insurance, land acquisition, use of goods, works and services, and plans, documents and records, respectively) in respect of the Project shall be carried out by ACIF. (a) maintain, until completion Without limitation upon the provisions of the ProjectSection 3.01 of this Agreement, the unit within SEPE (Borrower shall cause ACIF to carry out the PMU), created by the Borrower’s Law No. 6797, of November 16, 2005, with staff, structure and functions satisfactory to the Bank, responsible for the management, coordination, supervision, monitoring and evaluation of the Project, including, without limitation, approval of PIPs, carrying out of feasibility studies, environmental screening, procurement oversight, disbursement and accounting procedures; (b) create and maintain, until completion of the Project, a Steering Committee (Comitê Gestor) with structure and functions satisfactory to the Bank, presided over by the Borrower’s Secretary of SEPE and composed of other Borrower government representatives and representatives of civil society, for the supervision and decision making regarding Part 1 of the Project, all Project in accordance with with: (i) the provisions of the Operational Manual;, said manual to include, inter alia: (A) the list of CREMA Contracts and road sections under Part 3 of the Project; (B) the institutional and administrative structure of the PU and its functions and responsibilities; (C) the Project’s chart of accounts, internal controls, and budgeting, accounting and financial reporting systems; (D) the format of the annual financial statements and unaudited interim financial reports referred to in Section II. B.1 (b) and B.2 of this Schedule, respectively; (E) the terms of reference for carrying out the Project audits under Section II.B.3 of this Schedule; (F) the Project’s flow of funds structure; (G) the Project administrative and procurement procedures; (H) the Project’s standard bidding documents for CREMA Contracts and road paving works under Part 3 of the Project (which shall include a provision whereby the contractor must comply with the pertinent provisions of the Environmental and Social Management Plan); (I) the Project indicators; (J) the fiscal indicators referred to in Part B of Section V of this Schedule; and (K) the information described in Section I.B.2 (c) below; and (ii) the provisions of the Environmental and Social Management Plan. (b) In case of any conflict among the terms of the Operational Manual, the Environmental and Social Management Plan and those of this Agreement, the terms of this Agreement shall prevail. (c) Without limitation upon the provisions of Section I.B.2 (a) above, the Borrower shall cause ACIF to, not later than 30 days three months after the Effective Date, establishupdate the Operational Manual, and thereafter maintain until completion of the Project, in a procurement unit within the PMU with staff, structure and functions satisfactory manner acceptable to the Bank; and (d) ensure that appropriate mechanisms are , and therefore, include in place for said updated version the provision of procurement support to the PMU for the carrying out of the Project during the period prior to the establishment of the procurement unit referred to in (c) above, including the ability to provide training to the staff of said procurement unit in anticipation of the establishment referred to in (c) above. 2. The Borrower shall carry out the Project in accordance with the provisions of: (a) the Environmental Impact Assessment; (b) the Resettlement Framework; (c) the Indigenous Peoples and Quilombolas Framework; (d) the Forestry and Natural Habitats Framework; and (e) the manual, dated June 22, 2006 (the Operational Manual), which contains the policies and procedures for the carrying out, monitoring and evaluation of the Project, including, inter aliafollowing information: (i) the organizational structure terms of reference for the professional and administrative staff of the ProjectPU; (ii) the Project procurement and financial management requirements and procedures; (iii) the indicators to be used for Project monitoring and evaluation; (iv) the criteria and procedures for the preparation and approval of PIPs and the procedures for the carrying out of the Subprojects; and (v) the model forms of the PIP Preparation Agreements, PIP Agreements and Zoning Arrangements. In case of any inconsistency between any provision of the Operational Manual and this Agreement, the provision of this Agreement will prevail. 3. The Borrower shall not carry out any Complementary Infrastructure Subproject, or permit any Income Generation Subproject to be carried out, under a PIP without the Bank’s prior approval of such PIP, until the Bank has approved fourteen (14) PIPs. 4. Prior to initiating any activity under the Project which will benefit or affect an indigenous community, the Borrower shall obtain from Fundação Nacional do Índio - FUNAI, the Guarantor’s foundation which deals with indigenous peoples in Brazil: (a) an agreement to the carrying out of any such activity; and (b) a commitment to collaborate with the Borrower and such indigenous community in the carrying out of any such activity. 5. Whenever contracts signed under Subprojects have reached the number of one hundred fifty (150) or a multiple thereof, the Borrower shall: (a) have the procurement procedures and related contract execution performance in respect of a sample of contracts under Part 1 of the Project audited by procurement auditors acceptable to the Bank, in accordance with terms of reference satisfactory for preparing the semi-annual Project Reports, as referred to the Bank; (b) furnish to the Bank as soon as available, but in any case not later than six (6) months after the occurrence of each such event, the report of such procurement audit by said auditors; and (c) furnish to the Bank such other information concerning said procurement audit as the Bank may reasonably request.in