Substitution Agreement: This is a provision for a separate agreement between the
implementing agency and the senior lenders for securing their interests through
assignment, transfer and substitution of the concession to a nominated company
under certain specified conditions. Generally, this is contained in a separate
schedule annexed to the main agreement.
Preparation of bidding documents A major task in this stage is the preparation of all bidding documents in line
with the public procurement rules/laws of the country.
D. PROCUREMENT The procurement process There are certain common steps involved in the procurement process in
countries that have a matured PPP programme. Although the details of each of
these common steps may vary and differ in approaches, their purpose is very much
similar. Generally, the following steps are taken:
• Assessing interest of the private sector;
• Prequalification of bidders;
• Request for proposal from prequalified bidders;
• Information exchange and feedback from the bidders;
• Finalization and issuance of final tender;
• Evaluation
and
selection
of preferred bidder; and
• Contract negotiation, award and financial close.
Interest of the private sector The interest of the private sector can be assessed by organizing a
procurement briefing/conference open to the interested private parties. The main
purpose is to get some feedback from the market on the feasibility of the proposed
PPP project. On this occasion, relevant basic information on the project is provided
to the interested parties. Both the government and the interested investors are
benefited through this pre-procurement engagement and consultation.
The implementing agency can structure, refine, and subsequently tender
documents and terms in such documents in a better way with the feedback received
at this stage. The engagement with the interested private parties is considered a
technical consultation and is not intended for any other purpose related to
procurement. Also, at this stage no commitment is expected from any side.
An additional advantage of this process is that it helps the government to
establish prequalification criteria and develop a general schedule of requirements.
