Aggressive Selection of Concessionaires

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Territorial Workshop on Public-Private Partnership in Transport Competitive Selection of Concessionaires Cesar Queiroz Roads and Infrastructure Consultant World Bank Transport and Telecommunication Institute Riga, Latvia, March 6-8, 2007

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Procurement and Public-Private Partnerships (PPP) Procurement courses of action ought to be embraced in an aggressive way PPP incorporates the full scope of concession sort game plans for the arrangement, updating, upkeep, and operation of framework undertakings PPP likewise incorporates long haul benefit contracts, administration contracts, leases, and divestiture

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Definition of Public-Private Partnership A Public-Private Partnership (PPP) constitutes a managed community exertion between people in general area (government organizations) and private endeavors to accomplish a typical goal (e.g., a motorway or railroad extend) while they seek after their own particular individual premiums.

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Definition of Public-Private Partnership A Public-Private Partnership (PPP) constitutes a supported communitarian exertion between people in general division (government offices) and private undertakings to accomplish a typical target (e.g., a motorway or railroad extend) while they seek after their own particular individual interests.

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Concessions Types of Concessions: Build, Operate, Transfer (BOT) Build, Own, Operate (BOO) Build, Own, Operate, Transfer (BOOT) In a BOOT plan the private administrator holds responsibility for office keeping in mind the end goal to ensure bank credits Concessions typically incorporate some administrative arrangements to set the costs to be charged and the nature of administration to be given The benefits are come back to the state toward the end of the concession term (aside from BOO)

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Procurement under BOO/BOT/BOOT Concessions with the World Bank Participation an) If the concessionaire is chosen through ICB The concessionaire is allowed to obtain the products, works, and administrations required for the office utilizing its own particular techniques The Loan Agreement determines the sort of consumptions brought about by the concessionaire to which World Bank financing will apply OR b) If the concessionaire is not ICB chose, the merchandise, works, or administrations required for the office and to be financed by the World Bank ought to be secured through ICB

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Evaluation Criteria for ICB Selection of Concessionaires May Include The measure of sponsorships required from people in general segment The execution details of the offices offered The cost charged to the clients Income created for the Client by the office The concession term (number of years)

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Preparation for Bidding Issue a commercial as a GPN and a SPN and welcoming bidders to prequalify - UNDB and nearby and global daily papers Adopt a procedure to minimize the expenses to bidders of setting up their proposition Prepare a rundown of prequalified competitors (in view of the result of the prequalification) Ensure that the delicate procedure is attempted quickly and effectively

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Steps Before the Tendering Process Establishing a committed venture group made up of experienced people Putting set up a proper legitimate and administrative structure for the operation of the concession Establishing a reasonable meaning of what is required from the private division Launching a specialist audit of the budgetary practicality of the venture Deciding on the most proficient method to handle the financing hole Developing a firm arrangement for the offering procedure (timetable, the quantity of stages, and the targets at every stage)

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Use of Consultants The Role of Consultants Providing governments with specialized help and counsel on acquisition and the monetary, administrative, lawful, money related and specialized issues Two Types of Consultant Contracts A consortium of firms under a solitary contract to manage every one of the issues May diminish the administration requests on the legislature May bring about more reliable exhortation … however may not give adequate guidance on complex issues Separate counselors under individual contracts Contracting is direct The administration can organize them or dole out one of them to facilitate the others

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Consultants Can Support Government Activities Such As: Road Shows Visiting potential bidders and make presentations on the proposed concession Conferences Giving potential bidders data on the prequalification and offering forms Data Rooms Establishing an information room where all information applicable to the concession are made accessible for potential bidders for a particular period Reviewing Suggestions from the Potential Bidders Allowing potential bidders to make recommendations for the offering procedure can make the determination procedure more sensible

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Incentive Schemes How can the administration give motivators to private segment firms to take an interest? Fetched sharing and valuing game plans Incentive installments ( or punishments ) connected to execution models Insurance courses of action Support the arrangement of ensures (e.g., World Bank Partial Risk Guarantee)

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Cost and Risk Sharing PPP may include different dangers including business, political, conversion scale hazards The concession contract ought to be planned in a way that dangers are allotted to the gathering who can best deal with the hazard Consult with potential bidders in territories where there is vulnerability about the private area's craving for expecting distinctive levels of hazard: Alternative outlines Different levels of hazard exchange

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International Competitive Bidding (ICB) Ensures straightforwardness Provides a market system for selecting the best proposition Stimulates enthusiasm among a wide scope of potential bidders

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Single versus Two Stage ICB Single Stage ICB The Client gets ready and issues the offer archives Bidders offer offers containing their last specialized proposition and a money related proposition The Client assesses the consolidated recommendations (specialized and monetary)

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Single versus Two Stage ICB Two Stage ICB The First Stage The customer readies a first stage offering record with utilitarian execution particulars (not point by point specialized determinations) Bidders offer unpriced specialized recommendations (i.e., no budgetary proposition is submitted as of now) The customer surveys the bidders' capabilities, assesses the specialized recommendations, and shows what bidders ought to do to make their offer in fact responsive The Second Stage The customer readies the memoranda of changes for every bidder and may get ready addenda to the offer reports, and starts the second stage Bidders offer corrected offers containing their last specialized proposition and a budgetary proposition The Client assesses the specialized and monetary recommendations

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The concession venture is not perplexing and specialized and execution necessities are unmistakably characterized ➨ Single Stage ICB The concession venture is unpredictable and both specialized and execution prerequisites are not obviously characterized ➨ Two Stage ICB Single versus Two Stage ICB

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Prequalification Process The goal Determine, among every intrigued candidate, the individuals who are met all requirements for the principle offering process Required conditions Prequalification is strict so that the administration can make a satisfactory choice Applicants are furnished with adequate data on the concession For the situation of joint endeavors, qualified little administrators are permitted to join expansive temporary workers or banks to rival customary concessionaires

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Prequalification Documents Information to Be Provided by the Client Demand gauges with the evaluated income and request flexibility Progress on different basic activities important to the venture Scope of the proposed concession A framework of offer choice and assessment criteria

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Main Requirements to Prequalify Candidates The budgetary, specialized, and administrative limit Expertise to assemble, fund and work the office Experience of offering effectively for comparative concessions and activating undertaking account Demonstrated responsibility and aggressive excitement to take an interest in the fundamental offering process Experience in the host nation

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Examples of Prequalification Criteria Source: Kerf and et al. (1998)

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Pre-capability for the St. Petersburg Western High Speed Diameter Motorway Source: http://www.whsd.ru

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Documents for Prequalification The Information to Be Provided by Applicants Experience on the plan, development, and operation of the venture Proposed business structure, if granted the concession Their comprehension of business issues Likely wellsprings of financing Proposed size of monetary responsibility and, if important, the level of the budgetary duties of consortium individuals Likely level of money related returns looked for

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Documents for Prequalification The Information to Be Provided by Applicants (Continued) The approach toward overseeing development contracts Experience in aggressive offering for tasks including outlining, fabricating and working concession The assention and association among accomplices if there should be an occurrence of a joint wander Experience in significant development and operational undertaking in the host nation Economic and money related History of prosecution or discretion

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Assessing the Financial Capabilities of Candidates in the Prequalification Process Criteria The consolidated total assets of the candidates This ought to surpass the whole of the value and the measured estimation of any assurance like endeavors by an edge that is sufficiently agreeable for the supporters to attempt their unique business responsibilities The source and use of the bidder's finances The bidder's short and long haul obligation plan The bidder's pay explanations How well the bidder shows its comprehension of the key business and money related issues Clients ought to demonstrate the base worthy value

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Designing Performance Indicators While in the Prequalifi

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