Cannot find table 1.
Selection of the right private partner in a scientific way for sustainable, effective and viable results is key to the success of a project, Sumit Barua explains in this two-part series that is especially useful for developers.In public-private partnership (PPP) projects, one of the most important activities in the project development cycle is the selection of private partner. In any PPP project, the basic objective is to deliver public utility service on a sustainable basis with the highest level of efficiency and cost-effectiveness for a reasonably long concession period, 20-30 years or more. Hence, the selection of right kind of private partner with the requisite technical and financial capability is of utmost importance.Unlike an EPC contractor, the PPP partner is involved for the entire project life and it is like a "marriage" between public and private entities. The selection process of PPP partner must ensure transparency, competitiveness and fairness to secure the best value for money.Bidding StagesThe bidding for PPP could be single or multi-stage. In such sectors where the sponsoring department has no prior experience in undertaking PPP, it is advisable to perform the initial market testing by issuing an Expression of Interest (EOI). The EOI would primarily indicate the basic details of the project along with technical and financial qualification expected from the prospective bidders.The next stage of bidding could be conducted either through:a) One Stage-Two Bid system orb) Two Stage-Two Bid system.In this stage, the more advance bidding documents such as Request-for-Qualification (RFQ), Request-for-Proposal (RFP), Project Information Memorandum (PIM) and Draft Concession Agreement (DCA) are released.The bidders who have been short-listed in EOI are invited to participate in RFQ/RFP stage. However, in some cases bidders other than those short-listed, who fulfill the EOI conditions are also invited to participate in RFQ/RFP stage.The sectors or projects where the sponsoring department has prior experience, the EOI stage could be skipped. The bidding schedule is indicated in the bid documents and it is advisable to conduct a pre-bid meeting to get the feedback on project and released bid documents.Setting the bidding criteriaDepending on the nature, complexity and size of the proposed project, the project sponsoring department needs to narrow down the necessary and essential qualifications required from the PPP partner for successfully achieving the project deliverables.The criteria are primarily technical qualifications based on past relevant experience and financial strength required for undertaking such projects. The bidders may also be asked about their understanding of the project and approach and methodology the bidder would apply for successful project delivery. A balance needs to be drawn in setting eligibility criteria so that on one hand, the number of participants should be adequate for real competition and on the other hand, a large participation from non-serious bidders may dampen the process.Quantitative vs QualitativeThe best bid practices involve setting quantitative criteria which are measurable and verifiable. The qualitative criteria generally leave a room for manipulation and unfairness. In some cases, the criteria can be a combination of quantitative and qualitative with maximum marks (>= 90 per cent) for the former.Data VerificationIn the bid document, the bidders are instructed to support their technical and financial qualifications by certified/audited work orders, completion certificates, balance sheet etc. It is advisable to seek declaration from bidders on correctness and authenticity of submitted documents. In exceptional cases, the facilities of selected bidder may be visited by team of experts after the bid process is complete.The author is Public Private Partnership Expert, Asian Development Bank, Dehradun.