900 



and contract forms with such modifications or adaptations as it in its 



discretion deems desirable. 



The obligations undertaken by the United States Government and 



the United States Department of the Interior are understood to be 



subject to the following terms and conditions : 



1. (a) In the interest of allowing the work undertaken by the 

 Department of the Interior to proceed as expeditiously as possible, 

 the Saudi Arabian Government shall establish within thirty (30) 

 days after its acceptance of the terms of this note an irrevocable 

 letter of credit to cover the entire estimated cost of the project to 

 be paid by the Saudi Arabian Government, in the amount of Four- 

 teen Million Dollars ($14,000,000). The project's estimated cost 

 includes the expense of site selection and proconstruction planning, 

 design, plans and specifications, construction, installation, initial 

 operations, training of Saudi Arabian personnel, and completion of 

 documentary. The estimated cost also includes the expenses of the 

 Department of the Interior with the exception of (1) salaries of 

 employees of the Department assigned to the project, (2) cost of 

 providing an architectural and engineering study and design for 

 the desalting plant, and (3) field supervision of the construction 

 of the desalting plant. 



(b) The letter of credit shall be payable through a bank in the 

 United States and shall be in the form attached hereto as Appendix 

 II [^] or in the approved format of the issuing bank. The Depart- 

 ment of the Interior will draw upon the letter of credit by the 

 submission of demand drafts on the paying bank for obligations 

 actually incurred by the Department of the Interior. The Depart- 

 ment of the Interior will provide at three-month intervals to the 

 Saudi Arabian Government an accounting of the funds so expended,^ 

 in such format and detail as may be mutually agreed upon by the 

 Department of the Interior and the Saudi Arabian Government, 

 The Saudi Arabian Government shall be advised of the amount of 

 unexpended balances remaining upon final completion of and ac- 

 counting for the work involved. 



(c) Appeals in disputes arising out of contracts of the United 

 States Government made in furtherance of this Agreement shall 

 be heard and decided, pursuant to the "Disputes" clause contained 

 in such contracts, by the Secretary of the Interior through the 

 Department of the Interior Board of Contract Appeals. The Saudi 

 Arabian Government agrees to make such additional funds avail- 

 able as may be necessary to cover the payment of successful claims. 



2. (a) The Saudi Arabian Government shall make available in 

 a timely manner, consistent with construction phasing, all lands, 

 easements, and rights-of-way required for the entire project. In 

 addition, the Saudi Arabian Government shall timely construct 

 necessary access roads to the plant site, fuel supply lines and facili- 

 ties, fresh water lines, pumping stations and reservoirs and electric 

 transmission and distribution lines and substations, in accordance 

 with the design of the project. 



(b) The Saudi Arabian Government shall make arrangements 

 for fuel of the type for which the project is designed in adequate 



^ Not printed. 



