New Delhi, 25 January 1965
The Government of India and the Government of the Polish People's Republic,
BEING mutually desirous to extend the co-operation in the economic and technical fields, and
HAVING in view the successful development of the economic relations between both countries on the basis of equality and mutual benefit,
HAVE agreed as follows :
The Government of the Polish People's Republic will enable the Polish Foreign Trade Enterprises to deliver under the terms and conditions
stipulated in this Agreement, Power Station equipment and services connected therewith as follows :
Power Plant comprising of two Generating Units of 125 MW each, consisting of two generating sets, two steam generators, together will
all auxiliary mechanical and electrical equipment.
While the Government of the Polish People's Republic will permit the export of machinery, equipment and services as referred to in
Article 1, the Government of India will issue the requisite import licences.
The Government of the Polish People's Republic will make available to the Government of India a credit up to the amount of 105 million
Indian rupees, in words one hundred and five million (one Indian rupee contains 0.186621 grammes of fine gold).
This credit will cover the FOB value of the deliveries of machinery and equipment not available in India and services relating to
design and technical documentation for the power plant referred to in Article 1 in accordance with the respective contracts. The
said contracts shall be concluded before June 30, 1966 in Indian rupees, between the Polish Foreign Trade Enterprises and the Indian
organisations authorised for this purpose by the Government of India.
If the value of deliveries stipulated by the contracts concluded exceeds the total amount of the credit i.e. Indian rupees 105 million,
the amount in excess shall be paid for in such a manner as may be agreed upon in each separate case between both Governments.
In case of deliveries of machinery and equipment which, according to the contracts concluded, will be on CIF or C and F basis, the
costs of freight and/or insurance will be paid by the Indian party in non-convertible Indian rupees under the Trade and Payments
Agreement in force, on presentation of the appropriate documents in accordance with the provisions of the relevant contracts.
The above mentioned credit may be drawn upon from the date when the present Agreement comes into force upto the completion of deliveries
in accordance with the terms and conditions of the respective contracts.
The date when the Bank Handlowy w Warszawie S.A., honours the documents presented as per Article 5 by the Polish Foreign Trade Enterprises
shall be considered the date on which the credit has been drawn.
The Bank Handlowy w Warszawie S.A., shall open on its books in the name of the Government of India (Ministry of Finance) Credit Accounts
in Indian rupees as follows :
(a) Account No. I relating to the first generating set, the first steam generator and auxiliary mechanical and electrical equipment
specifically pertaining to the first Generating Unit;
(b) Account No. II relating to the second generating set, the second steam generator and auxiliary mechanical and electrical equipment
specifically pertaining to the second Generating Unit;
(c) Account No. III relating to auxiliary mechanical and electrical equipment of common requirement for both Generating Units.
No charges will be levied for the maintenance of these Accounts.
On presentation of the respective invoice and Bill of Lading or other stipulated documents, the Bank Handlowy w Warszawie S.A., will
debit the values of these invoices to the above mentioned Accounts in accordance with the stipulations of Article 4.
After effecting the delivery of the last lot of machinery and equipment essential for the commissioning of the first Generating Unit,
Account No. III will be closed and 60% of its balance will be transferred to Account No. I and 40% to Account No. II. Any further
deliveries of equipment of common use for both Generating units will be debited to Account No. II.
As and when repayments are made into the Account established in accordance with Article 8, the Bank Handlowy w Warszawie S.A., shall
credit the amounts so repaid to the relevant Credit Accounts No. I and II.
The credit shall bear an interest of 211/2% per annum. The amount of interest payable shall be calculated on the amount outstanding
to the debit of the Indian party in the Credit Accounts No. I, II and III, as on June 30 and December 31 each year. The amounts of
interest so calculated will be communicated to the Government of India (Ministry of Finance) to be paid within one month after receipt
of relevant advice. The last payment of interest shall be effected simultaneously with the last instalment under each Credit Account.
The amount of the credit drawn in accordance with Articles 4 and 5 shall be repaid by the Government of India as follows:
The amount outstanding in the Credit Accounts No. I and II mentioned in Article 5, after effecting the delivery of the last lot of
machinery and equipment essential for putting each Generating Unit into operation shall be divided by the Bank Handlowy w Warszawie
S.A., into twelve equal yearly instalments. The first instalment for the repayment of this credit shall be paid on the expiry of
one year after the date of invoice and other documents concerning the delivery of the last lot of machinery and equipment essential
for putting each Generating Unit into operation as specified in the relevant contracts.
The next instalment shall fall due at the end of each successive period of twelve months.
Any drawings out of the credit that may occur after the delivery of the last lot of machinery and equipment, as referred to, shall
be entered to the debit of the respective Credit Account and shall mature for repayment in twelve equal yearly instalments the first
of which being payable on the expiry of one year from the date of the respective final invoice.
The maturity dates of the respective instalments shall be notified to the Government of India (Ministry of Finance) by the Bank Handlowy
w Warszawie S.A., in writing.
The repayments towards the principal and the payments of the interest shall be credited to the Indo-Polish Credit Repayment Account
opened by the Reserve Bank of India in the name of Bank Handlowy w Warszewie S.A. No charges will be levied for the maintenance of
The amount tendered into the above Account shall be used for the purpose of purchasing Indian goods for export to Poland. This will
be done in accordance with the Trade and Payments Agreement between the two countries as might be in force from time to time. In
the absence of such a Trade and Payments Agreement, the goods to be purchased from India for export to Poland will be mutually agreed
between the two Governments.
In case of a change in the gold parity of Indian rupee mentioned in Article 3, the amount of unutilised credit made available thereunder,
the value of unfulfilled deliveries on the contracts concluded, the balances in the respective Credit Accounts established under
Article 5 as well as the balance in the Indo-Polish Credit Repayment Account mentioned in Article 8 shall be adjusted as of the date
when the change takes place in proportion to the change in the gold parity.
The prices of goods to be purchased and sold under this Agreement would be based on world market prices and shall be agreed upon together
with the other conditions of sale between the parties concerned at the time of concluding specific contracts.
Payments for services not covered by Article 3 of this Agreement, shall not be drawn upon from the aforementioned credit but shall
be effected by the Indian party in accordance with the provisions of the Trade and Payments Agreement in force at the time.
The Government of India (Ministry of Finance) and the Bank Handlowy w Warszawie S.A., shall mutually agree upon all the necessary
financial and banking procedures for putting into effect the present Agreement.
Both Governments undertake to do their best to enable the conclusion of the contracts or other appropriate agreements referred to
in Article 3 as early as possible and for their proper implementation.
In order to facilitate a smooth execution and full implementation of the present Agreement both Governments shall consult each other.
For such consultations, if necessary, a meeting of the representatives of both Governments will be convened at the request of either
party at any time as soon as possible after request being made, alternatively in Warszawa and in New Delhi.
Besides, in case of dispute between the supplier and the Indian importer in respect of their contracts concluded the representatives
of both Governments shall consult each other to bring about a mutual agreement.
The present Agreement shall come into force on the date of its signing and shall be valid till all the obligations arising from the
implementation of this Agreement for both Governments are fulfilled.
DONE in New Delhi on the 25th day of January, 1965 in two originals in the English language, both texts being equally authentic.
For the Government of India
Y. T. SHAH.
Joint Secretary to the
Government of India and
Leader of the Indian Delegation.
For the Government of Polish People's Republic
Director of the Department in the
Ministry of Foreign Trade and
Leader of the Polish Delegation.