Pre-feasibility study is the initial phase of the project. The goal is to identify the projects and the possibility to do so under the PPP scheme. Pre-Feasibility Study also facilitates early feasibility assessment and how projects can be structured. The study included an assessment of social and environmental aspects of the different options and the steps necessary repair and protection appropriate, analyzes the pros, cons and costs of each option and the selection of the most recommended. It should be remembered that these studies should be conducted separately from procurement options that will ultimately be used.
Feasibility Study contains all the information about the pre-feasibility study and a more detailed and accurate and precise evaluation of:
- Provisions on the use of assets and profitability
- A description of the risks associated
- The number of investment and financing will be made In short, the feasibility study should describe the business with sufficient detail so as to enable evaluation by both the public and private sectors (yield, risk, and the level of investment).
In addition to feasibility studies that have been mentioned previously, PPP requires the elaboration of additional documents that embody all aspects of the concessions in the future:
General Provisions (KU), which includes contractual agreement between the government and private parties, and the Technical Specifications (ST) that describes the technical requirements that must be satisfied winning bidder. Both are contract documents and assist in the implementation phase. Under the civil law of this specification is equipped with the applicable law; under the common law is an important part of the specifications of the contract, and must be made with great detail. General Provisions shall contain, inter alia, the requirements applicable to tenders, rates and fines and fees for service quality, economic and financial benefits and tax contributions that can be applied by the Authorizer or other authorities, fines and possible causes for the confiscation or termination of contract , and finally, the winner of the tender criteria.
Technical Specifications shall contain information about the technical and functional specifications, description of services, quality standards and other technical issues related to the concessions in the future.
Procurement project first requires proper marketing projects. It’s important to remember that the complete procurement process takes time and may help external advisors (such as expert CDIA). Conducting the process in haste can lead to counterproductive. Procurement projects should consider the framework of national law – usually involving publicity, transparency, and anti-discrimination principles.
The main steps of procurement projects are:
- Pre-qualification of bidders
- Request for proposal
- Evaluation of bids
- Determining the winner
- Prequalification of bidders
The purpose of this stage is to give an opportunity to the company only competent (from the standpoint of technical, managerial and financial) to participate in the bidding process. Bidders who meet the qualification criteria chosen as bidders who pass the pre-qualification and allowed to present the offer in the bidding stage.
- Request for Proposals (RFPs)
Bidders who pass the pre-qualification stage can proceed to the real deals from the process. To ensure that the tender process and the election goes well, the local government must pay special attention to them and give good information to prospective bidders. Local investors require less documentation because they know the direct context of investment location. The main documents that should be made by local authorities to set up the process is a request for proposal (RFP). This document is often only given to bidders who qualify the pre-qualification. Request for proposal include general provisions, technical specifications, Feasibility Study and all other documents prepared for the bidding process.
- Evaluation of Bids
Bid evaluation process must be transparent and neutral based on the general principles of good governance. Evaluation of bids is a time-consuming task. The criteria used for evaluation of bids is usually associated with underlying business proposal. For example, in a KPS bus transportation, the parameters used for evaluation of bids may be associated with user fees proposed by bidders, as well as the type of bus to be held and technical characteristics (noise, pollution, comfort).
- Follow-up project
Public authorities responsible for the quality of service and infrastructure maintenance. Therefore, the government is required to always carry an active contract management and efficient. Efficient management requires monitoring well designed and implemented based on PPP projects. Monitoring is achieved, inter alia, by linking payments and incentives for the performance of services to ensure success.
- End of project
The contract signed between the sponsor and the Local Government should include detailed provisions on the end or termination of the contract. Special attention should be given to:
- The scenario in which the contract can be terminated and its potential implications. For example, the contract can be terminated if the KPS Special Purpose Company to charge to the user at the upper level of costs agreed with the local government administrative agencies, forcing the government to come in and perhaps, assume the debt obligation.
- Payments (if any) to be done by the government to the PPP Company
- asset condition when handed over to the Local Government Depending on the circumstances, it should be noted that early termination will not alter the balance of the initial contract, as this might be considered as unlawful change. Keep in mind that the primary responsibility for the service provider remains in power all the time.