Biennial Meeting

1. '08 Biennial Meeting World Bank December 10-11, 2008 Public-Private Partnerships: WB's and HoPs' coordination groups Patricia Baquero Sr. Procurement Specialist The World Bank

2. Biennial Meeting '08 HoPs’ WG on PPPs • Created by HoPs at their Oct. ’07 meeting • Co-chaired by WB and IDB • Objectives: • address increasing interest in and demand for PPPs from borrowers; • reach consensus among MDBs on financeable PPP options; and • provide common guidance to Banks’ staff and borrowers on appropriate procurement methods • Internal consultations to be carried out at each Bank prior to first WG meeting

3. Biennial Meeting '08 WB’s PPP monitoring group • Conformed in Feb. ’08 by Procurement, Infrastructure, GPOBA & PPIAF, in preparation for further discussions at MDB level • Tasked with drafting a concept note: • identifying/defining PPP modalities; • addressing areas where WB can help and stages at which to intervene; and • assessing appropriateness and acceptability of Bank’s and procurement processes employed worldwide

4. Biennial Meeting '08 Highlights of WB’s Concept Note • No guidance on which PPP option is suitable or should be pursued • Not a single definition/modality but generic elements identified aimed to arrive at Bank’s own definition • Bank has financed through IL: • Mgmt. contracts, leases, concessions & BOTs in energy, telecom., transport & WSS sectors; • Govt. contribution in form of equity to SPVs, infrastructure assets or subsidies • Competitive procurement is a key condition for success of PPPs but traditional public tender process may be ineffective due to: • Uncertainty under which PPPs start/evolve; • PPPs involve multiple proposals and criteria other than lowest-evaluated price; and • PPPs require informal communication between public and private sectors • Various alternative procedures employed worldwide depending on PPP types - Bank acceptability depends on them not being conducive to corruption or high costs to governments

5. Biennial Meeting '08 Diversity of PPP definitions

6. Biennial Meeting '08 Diversity of PPP options

7. Biennial Meeting '08 Diversity of procurement procedures 1/4

8. Biennial Meeting '08 Diversity of procurement procedures 2/4 Contract notice PQQ / Selecting participants Competitive dialogue phase Final tender process Post-tender discussions Preferred Bidder Pr oc. Notice Contract signature -Clarification and confirmation of commitments FBC

9. Biennial Meeting '08 Invitation to 1st Stage Bidding Evaluation of Technical Proposals Clarification/Feedback Meeting with Qualified Bidders Invitation to 2nd Stage Bidding Technical/Financial Evaluation and Award Diversity of procurement procedures 3/4

10. Biennial Meeting '08 Formal proposal invited & examined Authority publishes description of proposal’s essential output elements & invites comparable proposals** Authority engages in competitive selection granting incentives* to original proponent YES YES NO Many alternative proposals received? Alternative proposals received? YES NO YES Initial proposal requested & assessed Proposal no longer considered Authority engages in competitive selection granting incentives* to original proponent NO NO Authority may be authorized to negotiate directly with original proponent Authority invites all offerors to competitive negotiations ** Variation: “Swiss challenge” – competitor offering lower-priced proposal gets award if not matched by original proponent * Extra evaluation credit or proposal preparation cost reimbursement Is project possible w/o involving proprietary rights? Is project in the public interest? Diversity of procurement procedures 4/4

11. Biennial Meeting '08 WB’s procurement policies on PPPs Guidance for Management Contracts • Sample PQ & Bidding Docs. & technical note issued in Dec. ’07 • BD includes selection approaches depending on nature of services: • Option A – Single Stage Bidding process, with 3 possible selection methods: • Lowest Evaluated Cost[governed by Proc. GLs] – Suitable for mgmt. services focused to O&M, with or w/o investment fund mgmt. • QCBS & Fixed Budget Selection[governed by Cons. GLs] – Suitable for mgmt. services leaning toward technical assistance • Option B – Two Stage Bidding process

12. Biennial Meeting '08 WB’s procurement policies on PPPs Guidance for Concessions • Para. 3.13 of the GLs covers procurement by private entrepeneur of Bank-financed G, W & S required by facility under BOO/BOT/BOOT, concessions & similar “private sector arrangements”, as follows: • An entrepeneur selected under acceptable ICB procedures* [may involve several stages to arrive to optimal evaluation criteria] is free to use own procedures • An entrepeneur not selected under acceptable ICB procedures must use WB procedures • To be acceptable, ICB procedures used to select private entrepeneur must: • Meet principles of economy, efficiency, transparency & open competition • Include, as a minimum: (i) wide advertisement & promotion; (ii) PQ; (iii) clear/non-discriminatory bidding docs.; (iv) transparent, pre-disclosed eval. criteria; (v) selection based on announced criteria to bidder with technically responsive bid & best commercial proposal; (vi) effective & fair complaints-handling mechanism • OM issued in Nov. ’05 clarifies conditions under which incumbent entrepeneur can use its own procurement procedures: • WB’s ICB procedures for procuring G, W & S may be impractical [e.g. low cost]; • Case should involve expansion of existing system; • Entrepeneur must be privately-owned or if govt.-owned, must be financially autonomous & operate on commercial basis; • Upon upfront assessment & post-reviews, WB must accept entrepeneur’s procurement procedures & capacity

13. Biennial Meeting '08 WB’s Action Plan after Concept Note • Conduct survey among Procurement, Infrastructure, IFC & MIGA to learn: • Procurement issues per type of PPP [e.g., concessions, BOTs, management contracts, leases, etc.] that clients are more concerned about • Trends with regard to PPPs where clients see the Bank could provide more support • Survey results to be analyzed to: • Prioritize and focus Bank’s resources toward future steps; • Assist the Monitoring Group in determining whether current WB’s procurement policies need to be clarified or changed and whether specific guidelines and/or model contracts for complex PPPs should be developed; and • Agree on Bank’s position to be further presented at the HoPs’ WG on PPPs

14. '08 Biennial Meeting World Bank December 10-11, 2008 Thank you for your attention. Any questions?