A guidebook on public-private partnership in infrastructure

L. DEALING WITH UNSOLICITED PPP PROJECT PROPOSALS 
Unsolicited PPP projects have been implemented in many countries, but 
some countries do not entertain such proposals because of the problems associated 
with them, especially the risks they involve for competition and transparency. In fact, 
the legal provisions of many countries do not allow consideration of such project 
proposals.
There are some merits in keeping provision for considering unsolicited project 
proposals. Often, such proposals are based on innovative project ideas. The 
difficulty with unsolicited proposals however, lies in getting the right balance between 
encouraging private companies to submit innovative project ideas without losing the 
transparency and efficiency gains of a competitive tender process. 
Considering the merits of unsolicited proposals that they may often have, 
some governments have developed procedures to transform unsolicited proposals 
for private infrastructure projects into competitively tendered projects.
There are two main approaches that have been developed to deal with 
unsolicited proposals. These are:
• In a formal bidding process, a predetermined bonus point is awarded to 
the original proponent of the project.
• The Swiss challenge system in which other parties are invited to make 
better offers than the original proponent within a specified time period. If a 
better offer is received, the original proponent has the right to 
countermatch any such better offer.
A third approach has also been suggested by some practitioners. The 
government can purchase the project concept and then award it through a 
competitive bidding process. 
The government agencies are in a better position to handle unsolicited 
proposals if a transparent procedure is already in place for the purpose. Such a 
procedure may include an initial screening to determine the merit of the project and 
its conformity with the existing legal, regulatory and policy environment of the 
country.
A thorough examination of the submitted feasibility study may then follow with 
a focus on matters that include suitability of the project and its likely effect on the 

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concerned sector and market; assessment of risks and their proposed sharing; 
responsibilities of, and liabilities on government; the financing proposal; the main 
terms of the contract; and competency of the project sponsor. Some countries (for 
example, the Republic of Korea) have institutional mechanisms for thorough 
examination of unsolicited project proposals. 
The implementing agency after thorough examination of the proposal may 
consider separate procurement processes for unsolicited proposals that do not 
involve proprietary concepts or technology and those that involve proprietary 
concepts or technology. Given the scope of the present Guidebook, no further 
discussion on unsolicited projects is considered necessary. 

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A Guidebook on Public-Private Partnership in Infrastructure