-
Body of Knowledge:
Structuring and Drafting the Tender and Contract
For the purpose of this chapter, the term financial structure is taken from the public perspective, that is, the financial structure of the contract as opposed to the financial structure of the project company (which is how the private partner would use the term). In this context, the financial...
-
Body of Knowledge:
Structuring and Drafting the Tender and Contract
The risk management process starts with the identification of risks. Identification of risks refers to defining a comprehensive list of risk events, usually grouped in consistent categories, and then describing them so as to understand clearly how those risks will impact the project outcome if they...
-
Body of Knowledge:
Structuring and Drafting the Tender and Contract
This chapter covers the period from the preliminary decision to invest in a PPP, once the project has been appraised, to the official launch of the tender for the project contract.
It corresponds to two main tasks and areas of knowledge.
The structuring and design of the project contract; and
The...
-
The risk of changes in law refers to the risk of changes that may affect the project outcome, impacting on the costs (capital costs by means of new investments) or current operating costs (higher maintenance costs or higher operating costs).
Law is broadly defined for this purpose as laws,...
-
Body of Knowledge:
Structuring and Drafting the Tender and Contract
As noted, the contract must have flexibility built in to enable changing circumstances to be dealt with as far as possible within the contract. In this sense, the contract should consider and permit certain potential changes (which may be subject to limits in quantity or the law may provide those...
-
Body of Knowledge:
Structuring and Drafting the Tender and Contract
Risk allocation: definition and rationale
Risk allocation is the exercise to define which party will assume each risk, identifying which risks the private partner will be (or remain) responsible for and to what extent, and identifying which risks the public partner will be responsible for and to...
-
Body of Knowledge:
Tendering and Awarding the Contract
Chapter 2.9.3 of the PPP Certification Guide explains the importance and significant benefits of transparency and proactive disclosure in PPP programs. It also provides examples of disclosure policies that are considered to be good practice. In some jurisdictions, it is compulsory to publicly...
-
Body of Knowledge:
Structuring and Drafting the Tender and Contract
This subsection introduces a list of the most relevant risks as they are commonly identified in different guides and protocols (while acknowledging that there may be material differences in the classification of risks from some country practices to others).
Appendix A provides a deeper explanation...
-
Body of Knowledge:
Tendering and Awarding the Contract
It is possible that no bidders will submit, which constitutes a clear process failure. This is best avoided by having a well-planned and well-structured tender process, consistent with the practices described in chapter 5 of this PPP Certification Guide. If it does eventuate that there are no...
-
Body of Knowledge:
Structuring and Drafting the Tender and Contract
3.1 Establishing the Project Team, Incorporating Advisors and Finalizing the Project Management Plan for this Phase
It may happen that the project team was established before appraisal, contracting advisors to handle both appraisal and the structuring and drafting of the tender package. Otherwise...
-
Body of Knowledge:
Establishing a PPP Framework
Institutional responsibilities for PPPs, that is, which entity will play what role at each step of the process will need to be defined in the framework.
Institutional arrangements differ widely from place to place. This depends on the particular needs of the PPP program and the pre-existing...
-
Construction risk is the possibility that during the Construction Phase the actual project costs or construction time exceeds those projected.
The delay in the completion or commissioning will also represent a loss of income. This is assessed and categorized as a separate or ad hoc risk category in...
-
Body of Knowledge:
Strategy Delivery and Commissioning
For the purposes of this PPP Guide, quality management is defined as a set of policies, processes, and procedures required for planning and execution (production/ development/ service) in the core business area of an organization. A Quality Management System (QMS) needs to integrate the various...
-
Body of Knowledge:
Tendering and Awarding the Contract
As with assessment of qualifications, proposals must be evaluated in accordance with the criteria set out in the RFP. In this sense, there will be an important difference in terms of process between price-only evaluation and a combination of quality and price criteria. The latter is clearly more...
-
Body of Knowledge:
Appraising PPP Projects
The project team, typically with specialized consultants, must address a fundamental question during the environmental feasibility analysis: is there any specific aspect of the project that makes environmental approvals impossible or the costs to obtain them prohibitive?[43]
To approach the...
-
Body of Knowledge:
Appraising PPP Projects
The next phases of the PPP process can be as demanding and challenging as the Appraisal Phase. They are multidisciplinary and profoundly interactive, and the natural interests surrounding large infrastructure projects tend to create a difficult decision environment. Thus, as the Appraisal Phase...
-
The land or site for building the asset may already be available, or it may be in the hands of the authority, and available for use.
However, in most of the cases it is not. In such cases, land has to be acquired. This is especially complex in linear infrastructure, such as roads and rails where...
-
Body of Knowledge:
Tendering and Awarding the Contract
This phase covers the period from the launching of the project to the point of financial close. This chapter assumes that the government has chosen to tender the project, rather than negotiating directly with a potential private sector contractor. The benefits of choosing a tender process are...
-
Body of Knowledge:
Structuring and Drafting the Tender and Contract
When the usage level of the asset is not relevant for the purpose of the public party (that is, it is not of itself a public objective), but it is still paramount that the asset be available for use by the final users, for instance health workers in a hospital, then payment should be based on the...
-
Body of Knowledge:
Structuring and Drafting the Tender and Contract
Financial or economic capacity criteria are intended to guarantee that the company or group of companies (consortium) that are candidates for the project have a healthy financial situation. The criteria provide evidence that they will be capable of meeting the financial needs of the project, which...
