• Body of Knowledge:
    Appraising PPP Projects
    16 Value for Money Assessment
    The procurement of a PPP project represents Value for Money when — compared to a public sector procurement option — it delivers higher net economic benefits to society, taking into consideration the whole-life costs of the project. The purpose of a Value for Money (VfM) assessment is to indicate if...
  • Body of Knowledge:
    Appraising PPP Projects
    16.1 The Timing of the VfM Exercise
    The assessment of the Value for Money (VfM) of the project can be revisited in the Structuring Phase. Until then, the risk allocation mechanisms may still be altered with potential consequences for the VfM conclusions. However, it is good practice to produce a confident evaluation of VfM during the...
  • Body of Knowledge:
    Appraising PPP Projects
    16.2 Assessing Value for Money
    The VfM analysis compares the relative merits of PPP procurement against one or more other procurement routes, usually traditional public finance. This can be done using quantitative analysis, qualitative analysis, or both. Some frameworks focus on quantitative analysis, requiring a comparison of...
  • Body of Knowledge:
    Appraising PPP Projects
    16.3 Outputs of the Value for Money Analysis
    The Value for Money (VfM) analysis indicates how the PPP alternative compares to traditionally procured infrastructure, not only in terms of the associated fiscal costs but also in terms of the net economic benefit of the project. The assessment also incorporates qualitative aspects of this...
  • Body of Knowledge:
    Appraising PPP Projects
    17 The Procurement Strategy
    The procurement strategy determines how the private sector partner will be selected, and it focuses on developing an approach to procurement that helps obtain the best VfM. So, when actual alternatives are legally feasible, the project team should search for a strategy capable of creating the...
  • Body of Knowledge:
    Appraising PPP Projects
    18 Formal Requirements Regarding the Appraisal of PPPs and the Conditions Established by the Framework for the Green Light Decisions
    Chapter 2 (section 1.7.5) introduced some of the key points generally considered as decision drivers for governmental departments responsible for making the procurement decision. These decision drivers are often translated into national PPP frameworks. As introduced in chapter 1, having policy...
  • Body of Knowledge:
    Appraising PPP Projects
    19 Planning Ahead
    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...
  • Body of Knowledge:
    Appraising PPP Projects
    20 Appraisal Report
    The report must present the assumptions, discussions, and conclusions of the whole feasibility exercise presented in this chapter. Therefore, a typical table of contents for the appraisal report will include the following: Executive summary of the conclusions; Need and options analysis, policy...
  • Body of Knowledge:
    Appraising PPP Projects
    21 Obtaining the Final Approvals
    The appraisal exercise, reflected in the appraisal report, should recommend one of the following four decisions to be made by the governmental body charged with making the final green light decision or procurement decision. The project should be procured as a PPP; The project creates economic...
  • Body of Knowledge:
    Appraising PPP Projects
    22 Getting Ready for the Next Phase: Check List
    At the end of the Appraisal Phase, a considerable amount of the technical work required for a thorough preparation of a PPP project will have been done. In fact, this work sets the stage for the structuring of the project and, indeed, for several aspects of the procurement process and contract...
  • Body of Knowledge:
    Appraising PPP Projects
    23 Summary of Outcomes of this Phase
    As the interplay between the several feasibility assessments evolves, including the legal due diligence and the social and environmental assessments, the government will be able to ensure that the project can be done. It will understand what the main obstacles ahead are, and, whenever relevant,...
  • Body of Knowledge:
    Appraising PPP Projects - Appendix A - Procurement Procedures
    1. Introduction to tender approaches
    The procurement procedure is the process that will be followed by the government to assign the contract, and it will generally be referred to in this PPP Guide as the ‘tender process’. As in any public procurement, the usual process should be a competitive process[1], in other words, there will be...
  • Body of Knowledge:
    Appraising PPP Projects - Appendix A - Procurement Procedures
    2. Main Types of PPP Tender Processes
    Open Tender or One-stage Tender Process In this form of open tender, the RFP is published at the same time as the contract, and launching implies the invitation to propose, with the tender open for bidding to any potential bidder. The proposal requirements also include the qualification...
  • Body of Knowledge:
    Structuring and Drafting the Tender and Contract
    Introduction
    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...
  • Body of Knowledge:
    Structuring and Drafting the Tender and Contract
    1. Objectives of this Phase and Where We are in the Project Cycle
  • Body of Knowledge:
    Structuring and Drafting the Tender and Contract
    1.1 Objectives of the Phase
    Through a proper structuring and drafting process (of both of the contract and the RFP package), the government is aiming to ensure that the procurement of the PPP Project will be a success by launching an affordable and feasible project that will deliver the desired levels of service and a Value...
  • Body of Knowledge:
    Structuring and Drafting the Tender and Contract
    1.2 Where We are in the Process Cycle
    During the Appraisal Phase, all relevant aspects of the project were assessed for feasibility purposes, and in many countries public investment in the project would have been approved. Some feasibility exercises may be subject to confirmation during the Structuring Phase. This is especially true if...
  • Body of Knowledge:
    Structuring and Drafting the Tender and Contract
    2. Overview of the Structuring Phase
    FIGURE 5.3: Structuring and Drafting Process   Note: RFP= request for proposal; RFQ= request for qualification. The main work developed in this phase is the structuring of the contract and the tender process itself, followed by the detailing of the structure and technical terms in a clear and...
  • Body of Knowledge:
    Structuring and Drafting the Tender and Contract
    A realistic timescale is essential
    Regardless of the envisaged order of the tasks, it is crucial to schedule and organize the work properly in advance, so as to minimize time disruptions and smooth the process. This work, like the appraisal work, is time consuming and requires a realistic time scale to ensure the required quality (...
  • Body of Knowledge:
    Structuring and Drafting the Tender and Contract
    3. Summary Description of Main Tasks to be Carried Out in the Structuring Phase
    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...