PPP Process

Posted in Divisions

The PPP Policy provides the legal basis for the procedures to be undertaken during the implementation of PPP projects. The Guidelines therein provide best practice guidance on the processes and procedures to be followed by all Government entities to obtain the required approvals for the procurement of PPP projects.

The PPP procedures follow the logical sequence of the project cycle, from project selection, through structuring, procurement and award, to contract management (implementation) phase. The PPP process is as follows:

Project Initiation (Inception) Phase

The project initiation (inception) phase determines whether the selected project can (and should) be delivered as a PPP instead of using conventional public procurement. The identification of PPP projects should be undertaken as part of the national development planning process. This phase involves:

Prefeasibility Assessment

·         Carry out needs analysis

·         Undertake solutions options analysis

·         Perform high-level cost-benefit analysis

·         Provide motivation for PPP procurement

·         Develop preliminary risk matrix

·         Provide project implementation and management plan

Registration as PPP project

·         Submit prefeasibility assessment report to PPP Unit

·         If found suitable, the project is registered and proceeds to next stage

Output: PPP project is registered with the PPP Unit

Business Case Consideration (Feasibility Study) Phase

The aim of the feasibility study is to confirm that the procurement of the project using PPP will deliver value for money to government. The key steps are:

Project Team

·         Establish a Project Team,

·         Engage Transaction Advisor

Business Case Consideration

·     Carry out technical, legal, financial and environmental/social due diligence, and detailed assessment of project risks to redefine project scope;

·         Undertake detailed commercial, financial and risk analysis;

·         Define required service standards (output requirements), risk allocation and payment mechanism;

·         PPP options assessment, market sounding and PPP pre-structuring;

·         Define procurement method and plan including evaluation criteria;

·         Draft the PPP tender documents – EOI, RFP, draft PPP contract.

Output – Feasibility Study Report

Project Procurement Phase

Procurement is carried out in accordance with the Public Procurement and Asset Disposal Act. It starts with the invitation of Expression of Interest (EOI) and ends with financial close. The key processes are:

Bidding process

·         Issue invitation for EOI;

·         Shortlist suitable bidders;

·         Send out Request For Proposal to shortlisted bidders;

·         Hold bidders conference;

·         Manage bidders data room and issue necessary clarifications;

·         Evaluate tenders and select preferred bidder.

Contract Negotiations and Award

·         Negotiate PPP contract details;

·         Award and sign PPP contract.

Financial Close

·         Conclude financing and ancillary agreements;

·         Sign all PPP related agreements;

·         All funding approvals in place.

Output – Private party in place

Contract Management (Implementation) Phase

Once the contract has been signed each party performs its respective role. Contract management requires a good working relationship between the two parties, and continues throughout the project term. Key activities include:

Construction:

·         Set up contract management team;

·         Approval of designs;

·         Site transfer and permits;

·         Monitor construction – manage variations, claims and disputes;

·         Commissioning and commencement of delivery.

Operations:

·         Monitor and manage project outputs;

·         Manage claims, changes and disputes.

Hand back and transfer:

·         Monitor and manage handover maintenance;

·         Handover protocols;

·         Ex-post evaluation.

 Output – Performance Reports and Value for Money Audits

Joomla SEF URLs by Artio