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MINISTERSTVO ZDRAVOTNÍCTVA 
SLOVENSKEJ REPUBLIKY
Číslo: M/1858/2003

Materiál na rokovanie 		
vlády SR

Dohoda o preddavku na prípravu 
projektu modernizácie zdravotníctva ___________________________________________________________

Príloha A
Príloha B

Bratislava, 23. apríla 2003
The World Bank	1818 H Street N.W.	(202) 477-1234
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT	Washington, D.C.  20433	Cable Address:  INTBAFRAD
INTERNATIONAL DEVELOPMENT ASSOCIATION	U.S.A.	Cable Address:  INDEVAS

March 11, 2003

His Excellency 
Ivan Miklos
Deputy Prime Minister
Ministry of Finance
Ul. Stefanovicova 5
810 05 Bratislava
P. O. Box 82
Slovak Republic

	Re: 	Advance for Preparation of
		Health Sector Modernization Project
		Letter-Agreement No. P4010 SK

Your Excellency:

(1)		I am writing on behalf of the International Bank for Reconstruction and Development (the Bank) to indicate the Bank’s agreement to provide to Slovak Republic (the Recipient) an advance in an amount not exceeding seven hundred fifty thousand U.S. dollars (US$750,000) (the Advance).  The purpose of the Advance is to finance certain expenditures required for the preparation of a project that would support the Recipient’s health sector reform and modernization program including: (i) improving the efficiency of inpatient services;                  (ii) increasing the capacity of the state to regulate the financing and provision of health care services; and (iii) streamlining the health care financing system to improve equity and financial sustainability (the Project) for carrying out of which the Recipient has requested the financial assistance of the Bank.
	The Advance is provided on the terms and conditions set forth in Attachments I-IV hereto, and the Recipient represents, by confirming its agreement below, that it is authorized to contract, withdraw, and repay the Advance for the said purpose and on the said terms and conditions.

	The amounts of the Advance withdrawn shall carry interest as per paragraph 5 of the “Financial Provisions Applicable to Advances for Project Preparation” set forth in Attachment IV hereto.

	Provision of the Advance does not constitute or imply any commitment on the part of the Bank to assist in the financing of the Project.

	Please confirm your agreement with the foregoing, on behalf of the Recipient, by signing, dating, and returning to us the enclosed copy of this Letter-Agreement.  Upon receipt by the Bank of the copy of this Letter-Agreement countersigned by you, this Letter-Agreement will become effective as of the date of countersignature.

Very truly yours,

INTERNATIONAL  BANK  FOR
RECONSTRUCTION AND DEVELOPMENT

	By
Roger W. Grawe 
 Country Director for Central Europe and the Baltics
Europe and Central Asia Region 

AGREED:SLOVAK REPUBLIC

By:				_
       Authorized Representative
Name: _____________________
Title  : _____________________
Date : 				_

Attachments:	I.   Terms and Conditions of Advance
		II. Special Account
III. Procurement
		IV. Financial Provisions Applicable to Advances for Project Preparation

Attachment I 

Terms and Conditions of Advance

1.	The activities (the Activities) required for the preparation of the Project are as follows:

(a)	provision of technical assistance to carry out of a social assessment and economic analysis, and to develop an environmental management plan (EMP); 
(b)	provision of technical assistance to design the Project’s financial management system (FMS); 
(c)	provision of technical assistance to carry out of a needs assessment for the health information system; 
(d)	provision of technical assistance to carry out of a needs assessment for the communication and public relations system; 
(e)	provision of technical assistance to develop a communications strategy;
(f)	provision of training to the Project Coordinating Unit (PCU) staff of the Ministry of Health of the Recipient, which will be implementing the Project, on procurement, financial and Project management; and
(g)	provision of technical assistance to develop an operations manual (OP) for the Project. 	
2.	Expenditures to be financed with the Advance are:

		Amount of the 
		Advance Allocated	% of  
		(Expressed in	Expenditures
	Category	U.S.dollars)	to be Financed

	(1) 	Consultant’s Services	640,000	local firms 52%;
			local individuals 73%;
			foreign firms 77%;
			foreign individuals 100%

	(2) 	Training	60,000		100%

	(3) 	Technical services	50,000		100%

		TOTAL	750,000

	For the purposes of this paragraph, the term:

	(a)	“foreign expenditures” means expenditures in the currency of any country other than that of the Recipient for services supplied from the territory of any country other than that of the Recipient; 

	(b)	“local expenditures” means expenditures in the currency of the Recipient or for services supplied from the territory of the Recipient, provided, however, that if the currency of the Recipient is also that of another country from the territory of which services are supplied, expenditures in such currency for such services shall be deemed to be foreign expenditures; 
	
	(c)	“training” means expenditures incurred on account of conducting training to PCU staff on procurement, financial and Project management  such as travel, accommodations, per diem,  translation and interpretation costs, communications costs and costs of printing booklets/materials for training, and local transportation costs; and

	(d)	“technical services” means expenditures incurred on account of printing of leaflets/materials for communications campaign and media time. 

3.	The Recipient, through its Ministry of Health, shall carry out the Activities with due diligence and efficiency; promptly provide the funds, facilities, services and other resources required for that purpose; furnish to the Bank all information covering the Activities and the use of the proceeds of the Advance as the Bank shall reasonably request; and from time to time exchange views with the Bank's representatives on the progress and results of the Activities.

4.	To facilitate the carrying out of the Activities, the Recipient may open a special deposit account (the Special Account) in U.S. dollars in a bank on terms and conditions satisfactory to the Bank, including appropriate protection against set-off, seizure or attachment. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions set forth in Attachment II to this Letter-Agreement.

5.	Except as the Bank shall otherwise agree, procurement of the consultants’ services  required for the carrying out of the Activities and to be financed out of the proceeds of the Advance shall be governed by the provisions of Attachment III to this Letter-Agreement.

6.	Withdrawal, use, and repayment of the Advance shall be made in accordance with the “Financial Provisions Applicable to Advances for Project Preparation”, set forth in Attachment IV to this Letter-Agreement. 

7.	The Bank may require that withdrawals of the proceeds of the Advance be made on the basis of statements of expenditure for expenditures for: (a) services of consulting firms and individual consultants costing less than US$50,000 and US$25,000, respectively; and (b) training, all under such terms and conditions as the Bank shall specify by notice to the Recipient.  

8.	The date August 30, 2003 is hereby specified for the purposes of paragraph 6 of Attachment IV to this Letter-Agreement.  No withdrawals of the Advance shall be made after said date, and any amount of the Advance then remaining unwithdrawn shall be canceled, unless the Bank shall establish a later date for the purposes of such paragraph 6.

9.	Withdrawal applications for the Advance shall be signed on behalf of the Recipient by the Minister of Finance of the Recipient or any other person or persons as he or she shall have authorized in writing. Authenticated specimen signatures of the designated persons shall be provided with the first application.

Attachment II 

Special Account

1.	For the purposes of this Attachment:

	(a)	the term "eligible categories" means the categories set forth in paragraph 2 of Attachment I to this Letter-Agreement;

	(b)	the term "eligible expenditures" means expenditures in respect of the reasonable cost of services required for the Activities, to be financed out of the proceeds of the Advance allocated from time to time to the eligible categories in accordance with the provisions of paragraph 2 of Attachment I to this Letter-Agreement; and

	(c)	the term "Authorized Allocation" means the amount of US$_______ to be withdrawn from the Advance and deposited in the Special Account pursuant to paragraph 3 (a) hereof.

2.	Payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Attachment.

3.	After the Bank has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account shall be made as follows:

	(a)	The Recipient shall furnish to the Bank a request or requests for deposit into the Special Account of an amount or amounts which do not exceed the aggregate amount of the Authorized Allocation.  On the basis of such request or requests, the Bank shall, on behalf of the Recipient, deposit into the Special Account such amount or amounts out of the proceeds of the Advance as the Recipient shall have requested.

	(b)	(i)	For replenishment of the Special Account, the Recipient shall furnish to the Bank requests for deposits into the Special Account at such intervals as the Bank shall specify.

		(ii)	Prior to or at the time of each such request, the Recipient shall furnish to the Bank the documents and other evidence required pursuant to paragraph 4 of this Attachment for the payment or payments in respect of which replenishment is requested.  On the basis of each such request, the Bank shall, on behalf of the Recipient, deposit into the Special Account such amount out of the proceeds of the Advance as the Recipient shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the Special Account for eligible expenditures. All such deposits shall be withdrawn by the Bank from the Advance under the eligible category(ies) and in the respective equivalent amounts, as shall have been justified by said documents and other evidence.

4.	For each payment made by the Recipient out of the Special Account, the Recipient shall, at such time as the Bank shall reasonably request, furnish to the Bank such documents and other evidence showing that such payment was made exclusively for eligible expenditures.

5.	Notwithstanding the provisions of paragraph 3 of this Attachment, the Bank shall not be required to make further deposits into the Special Account:

	(a)	if, at any time, the Bank shall have determined that all further withdrawals of the Advance  should be made directly by the Recipient;

	(b)	if, at any time, the Bank shall have notified the Recipient of its intention to suspend in whole or in part the right of the Recipient to make withdrawals of the Advance  pursuant to the provisions of paragraph 8 of Attachment IV to this Letter-Agreement; or

	(c)	once the total unwithdrawn amount of the Advance allocated to the eligible category(ies) shall equal the equivalent of twice the amount of the Authorized Allocation.

Thereafter, withdrawal of the remaining unwithdrawn amount of the Advance allocated to the eligible category(ies) shall follow such procedures as the Bank shall specify by notice to the Recipient.  Such further withdrawals shall be made only after and to the extent that the Bank shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice will be utilized in making payments for eligible expenditures.

6.	(a)	If the Bank shall have determined at any time that any payment out of the Special Account: (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Attachment; or (ii) was not justified by the evidence furnished to the Bank, the Recipient shall, promptly upon notice from the Bank: (A) provide such additional evidence as the Bank may request; or (B) deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment or the portion thereof not so eligible or justified.  Unless the Bank shall otherwise agree, no further deposit by the Bank into the Special Account shall be made until the Recipient has provided such evidence or made such deposit or refund, as the case may be.

	(b)	If the Bank shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Recipient shall, promptly upon notice from the Bank, refund to the Bank such outstanding amount.

	(c)	The Recipient may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in the Special Account.

	(d)	Refunds to the Bank made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be made available to the Recipient for subsequent withdrawals, or may be canceled in accordance with the provisions of paragraph 9 of Attachment IV to this Letter-Agreement.

Attachment III

Procurement

Section I. 	Consultants’ Services
Part A:	General
	Consultants’ services shall be procured in accordance with the provisions of Sections I and IV of the “Guidelines:  Selection and Employment of Consultants by World Bank Borrowers”, published by the Bank in January 1997 and revised in September 1997, January 1999 and May 2002 (the Consultant Guidelines), paragraph 1 of Appendix 1 thereto, Appendix 2 thereto, and the following provisions of this Section.
Part B:	Quality- and Cost-based Selection
	Except as otherwise provided in Part C of this Section, consultants’ services shall be procured under contracts awarded in accordance with the provisions of Section II of the Consultant Guidelines and the provisions of paragraphs 3.13 through 3.18 thereof applicable to quality- and cost-based selection of consultants.
Part C:	Other Procedures for the Selection of Consultants
1.	Selection Based on Consultants’ Qualifications
	Services for design and conducting of a social assessment, design and conducting of economic analysis, design of FMS, conducting needs assessment for health information system, needs assessment for communication and public relations system under paragraphs 1 (a), (b), (c), and (d) of Attachment I estimated to cost less than US$100,000 equivalent per contract may be procured under contracts awarded in accordance with the provisions of paragraphs 3.1 and 3.7 of the Consultant Guidelines.
2.	Individual Consultants
	Services of individual consultants for tasks that meet the requirements set forth in paragraph 5.1 of the Consultant Guidelines shall be procured under contracts awarded in accordance with the provisions of paragraphs 5.1 through 5.3 of the Consultant Guidelines; and (b) tasks under paragraph 1 (g) of Attachment I may be selected on a sole-source basis in accordance with the provisions of paragraphs 5.3 and 5.4 of the Consultant Guidelines, subject to prior approval of the Bank.

Part D:	Review by the Bank of the Selection of Consultants
1.	Selection Planning
	A plan for the selection of consultants for the Activities, which shall include contract cost estimates, contract packaging, and applicable selection criteria and procedures, shall be furnished to the Bank for its review and approval prior to the issuance to consultants of any requests for proposals.  Selection of all consultants’ services shall be undertaken in accordance with such selection plan as shall have been approved by the Bank.
2.	Prior Review
	(a)	With respect to each contract for the employment of consulting firms estimated to cost the equivalent of US$50,000 or more, the procedures set forth in paragraphs 2, 3 and 5 of Appendix 1 to the Consultant Guidelines shall apply.
(b)	With respect to each contract for the employment of individual consultants to be selected on a sole-source basis, or estimated to cost the equivalent of US$25,000 or more, the report on the comparison of the qualifications and experience of candidates, the qualifications, experience and the terms of reference and terms of employment of the consultants shall be furnished to the Bank for its prior review and approval.  The contract shall be awarded only after said approval shall have been given.  The provisions of paragraph 3 of Appendix 1 to the Consultant Guidelines shall also apply to such contracts.
(c)	All terms of reference irrespective of the contract amounts are subject to prior review by the Bank.
(d) 	Training sites, agenda, list of participants, and estimated budget are subject to prior review by the Bank.
3.	Post Review
	With respect to each contract not governed by paragraph 2 of this Part, the procedures set forth in paragraph 4 of Appendix 1 to the Consultant Guidelines shall apply.
Section II.  	Procurement of Technical services

	(a) 	Technical services shall be procured: (a) in accordance with the provisions of Section I of the “Guidelines for Procurement under IBRD Loans and IDA Credits” published by the Bank in January 1995 and revised in January and August 1996, September 1997 and January 1999 (the Procurement Guidelines); and (b) under contracts awarded on the basis of shopping procedures in accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines.  The review procedures set forth in paragraph 4 of Appendix 1 to the Guidelines shall apply to such contracts, provided that the word “bids”, in such paragraph 4, shall be read as “quotations”.
	(b) 	Technical services estimated to cost up to US$50,000 in aggregate shall be procured with the Bank’s prior review and approval under contracts awarded to suitably qualified technical services contractors after comparison of not less than three (3) substantially responsive price quotations.

Attachment IV

Financial Provisions Applicable to Advances for Project Preparation

1.	In these Provisions, the term "World Bank" means (a) the International Bank for Reconstruction and Development (the Bank); or (b) the International Development Association (the Association).  All other terms defined in the Letter-Agreement or in Attachments I, II and III thereto have the same meanings, when used herein.

2.	Withdrawal of the Advance.	The World Bank shall disburse funds from the Advance to the Recipient to meet the expenditures specified in the Letter-Agreement.  The Recipient shall submit a written application for withdrawal in the form specified by the World Bank.  The application shall be: (a) signed by an authorized representative of the Recipient; and                  (b) accompanied by evidence of the expenditures made or, if the World Bank shall so agree, to be made.

3.	The Advance shall be disbursed in U.S. dollars; the Recipient, however, may request any other currency required to meet an expenditure to be financed by the Advance.  In this case the World Bank will purchase that currency with U.S. dollars.

4.	Withdrawals shall be made only for expenditures for services supplied from, or goods produced in, countries eligible under the Consultant Guidelines or Procurement Guidelines.  Except as the Recipient and the Bank shall otherwise agree, no withdrawals shall be made: for the purpose of any payment to persons or entities, or for any import of goods, if such payment or import, to the knowledge of the Bank, is prohibited by a decision of the United Nations Security Council taken under Chapter VII of the Charter of the United Nations. 

5.	Service charge or Interest.	As specified by the World Bank in the Letter-Agreement, the amounts of the Advance withdrawn and not repaid shall carry (a) a service charge at the rate of three-fourths of one percent (3/4 of 1%) per annum, or (b) interest at a rate calculated and charged as follows:

(i)	The Borrower shall pay interest on the principal amount of the Advance withdrawn and outstanding from time to time, in respect of each Interest Period at a variable rate equal to the sum of: (i) LIBOR; plus (ii) the Fixed Spread (the “Variable Rate”).

 (ii)	For the purposes hereof:
(A)	“Interest Period” means the initial period from and including the date of  countersignature of the Letter-Agreement by the Recipient to but excluding the first Interest Payment Date occurring thereafter, and after such initial period, each period from and including an Interest Payment Date to but excluding the next following Interest Payment Date.

(B)	“Interest Payment Date” means December 15 and June 15, occurring on or after the date of countersignature of the Letter-Agreement by the Recipient on which interest is payable.	

(C)	“Fixed Spread” means the Bank’s fixed spread in respect of U.S. dollars in effect at 12:01 a.m. Washington, D.C. time, one calendar day prior to the date of countersignature of the Letter-Agreement by the Recipient.

(D)	“LIBOR” means, in respect of any Interest Period, the London interbank offered rate for six-month deposits in U.S. dollars, expressed as a percentage per annum, that appears on the Telerate Page as of 11:00 a.m., London time, on the LIBOR Reset Date for said Interest Period. If such rate does not appear on the Telerate Page, the Bank shall request the principal London office of each of four major banks to provide a quotation of the rate at which it offers six-month deposits in U.S. dollars to leading banks in the London interbank market at approximately 11:00 a.m. London time on the LIBOR Reset Date for said Interest Period. If at least two such quotations are provided, the rate in respect of said Interest Period shall be the arithmetic mean (as determined by the Bank) of the quotations. If less than two quotations are provided as requested, the rate in respect of said Interest Period shall be the arithmetic mean (as determined by the Bank) of the rates quoted by four major banks selected by the Bank in New York, NY, at approximately 11:00 a.m. in New York, NY, on the LIBOR Reset Date for said Interest Period for loans in U.S. dollars to leading banks for a period of six months. If less than two of the banks so selected are quoting such rates, LIBOR in respect of said Interest Period shall be equal to LIBOR in effect for the Interest Period immediately preceding said Interest Period.

(E)	“LIBOR Reset Date” means, the day two London Banking Days prior to the first day of the relevant Interest Period.

(F)	“London Banking Day” means any day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in London.

(G)	“Telerate Page” means page 3750 on the Dow Jones Telerate Service, which displays LIBOR for deposits in U.S. dollars (or such other page as may replace such page on such service, or such other service as may be selected by the Bank as the information vendor, for the purpose of displaying rates or prices comparable to LIBOR).

6.	Repayment.  The amount of the Advance withdrawn, together with interest or service charge accrued thereon, as the case may be, shall be repaid by the Recipient to the World Bank as follows:

(a)	If, by or before the date agreed upon for this purpose in the Letter-Agreement, a loan shall have been granted by the Bank, or a credit shall have been granted by the Association, for the purpose of assisting in the financing of the Project, then the full amount of the Advance withdrawn and outstanding shall be repaid to the World Bank.  Such repayment shall include accrued interest or service charge, as the case may be, on the Advance to the date of repayment.  The repayment shall be made by means of a withdrawal of the proceeds of such loan or credit in accordance with the provisions of the agreement providing therefore, as soon as such agreement shall have become effective.

(b)	If, by the date referred to in paragraph (a) above, no such loan or credit shall have been granted, or if, by such date or at any time thereafter, the agreement providing for such loan or credit shall have been terminated without becoming effective, then:

(i)	if the amount of the Advance withdrawn shall not exceed US$50,000, such amount shall be repaid by the Recipient to the World Bank, together with accrued interest or service charge thereon, as the case may be, to the date of repayment, on such date as the World Bank shall specify in a notice to the Recipient, which shall in no event be earlier than 60 days following the date of dispatch of such notice; and

(ii)	if the amount of the Advance withdrawn shall exceed US$50,000, the aggregate of such amount shall be paid by the Recipient to the World Bank in ten approximately equal semiannual installments of principal, together with interest or service charge, as the case may be, accrued on such aggregate amount outstanding from time to time in the amounts and on the dates specified by the World Bank in a notice to the Recipient. In no event shall the first installment date be earlier than 60 days following the date of dispatch of such notice.

7.	All payments to the World Bank shall be made in U.S. dollars at such places and with such depositories as the World Bank shall specify.

8.	Suspension and cancellation.	The World Bank may, by notice to the Recipient, suspend at any time further withdrawals of the Advance if any of the following events of suspension shall have occurred:  (a) funds withdrawn have not been used for the purpose agreed between the Recipient and the World Bank; (b) the Activities have not been carried out in accordance with the standards or methods agreed between the Recipient and the World Bank;     (c) the right of the Recipient, or any other entity to which the Bank has granted a loan with the guarantee of the Recipient, to make withdrawals under any loan agreement with the Bank or any development credit agreement with the Association shall have been suspended; (d) if the World Bank has decided, at any time after consultation with the Recipient, to withdraw its support to the Project; or (e) if the Recipient has withdrawn its request for the World Bank's financial assistance in support of the Project.

9.	At any time after withdrawals of the Advance shall have been suspended pursuant to the provisions of paragraph 8 above, the World Bank may, by notice to the Recipient, cancel any amount of the Advance remaining unwithdrawn.

10.	Accounts and Audits	(a) The Recipient shall maintain or cause to be maintained a financial management system, including records and accounts, and prepare financial statements in a format acceptable to the World Bank, adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures related to the Activities.

	(b)	The Recipient shall: (i) have the records, accounts and financial statements referred to in subparagraph (a) above [and the records and accounts for the Special Account] for each fiscal year audited, in accordance with auditing standards acceptable to the World Bank, consistently applied, by independent auditors acceptable to the World Bank; (ii) furnish to the World Bank as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such year as so audited, and (B) an opinion on such statements, records and accounts and report of such audit, by said auditors, of such scope and in such detail as the World Bank shall have reasonably requested; and (iii) furnish to the World Bank such other information concerning said records and accounts and the audit thereof, and concerning said auditors, as the World Bank shall from time to time reasonably request.

	(c)	For all expenditures with respect to which withdrawals from the Advance were made on the basis of statements of expenditure, the Recipient shall: (i) maintain or cause to be maintained, in accordance with subparagraph (a) above, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the World Bank has received the audit report for the fiscal year in which the last withdrawal of the proceeds of the Advance was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the World Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in subparagraph (b) above and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals.