A private party – be it an individual or company – may identify a project that meets certain requirements and propose it to the government to be implemented under the Public Private PartnershipAct as a PPP project.
However, after the feasibility and transaction approval of the proposed project, the government will still go to a public tender process, with the proposing entity being awarded 10% bonus points during evaluation.
The Ministry of Finance and Public Enterprise revealed this in the Guidelines for Unsolicited Proposals for Public Private Partnership projects under the Public Private Partnership Act, 2017.
After a private party has identified a project that meets the requirements of the guidelines to be implemented under the Act, the private party must submit the proposed project to the relevant public entity for consideration, assessment and evaluation, in terms of the guidelines.
At the initiation of the Public-Private Partnership Act, it did not allow the private sector to propose projects to the government, as opposed to the current status where only the state can ask the private sector for collaboration.
According to the new guidelines, the requirements for proposals to be considered unsolicited proposals are that the project concept proposal must not be listed as the PPP project maintained by the Unit or registered with the Committee in terms of section 16 of the Act.
Furthermore, the proposed project should be of public interest; with the scale and scope of the project being in line with the requirements and strategic vision of the specific public entity.
Also, such a project should not entirely dependent on the government for funding and there is no direct government guarantee, subsidy or equity required in the proposal.
If the entity or individual is afraid their ideas will be stolen, they may request that the public enterprise protects its intellectual property by submitting two proposals.
In one version of the unsolicited proposal, the private entity must mark the parts that contain the intellectual property and the other version of the unsolicited proposal must be submitted without the intellectual property.
Once the unsolicited proposal is submitted, the public entity after consultation with the Public Private Partnership Unit, will determine whether the proposal complies with the requirements.
The public entity will undertake further investigation to ensure that the individual/company meets the integrity due-diligence criteria and it will communicate, in writing, its investigation outcomes.
The public entity will also perform assessment and minimum evaluation criteria on the unsolicited proposal such as the element of innovation, either in terms of design or approach in project development and management.
At the same time, the private entity proposal of risk-sharing optimality will be reviewed and if variation to risk-sharing is required.
The proposal’s financial viability and its potential for securing private financing will be assessed, while a preliminary feasibility assessment older than three years from the date of the submission of the proposal will not be allowed.
According to the guidelines, if the committee involved in assessing the unsolicited proposal approved it, such a proposal willgo for a detailed evaluation.
The private entity which submitted the unsolicited will be required to pay to the Ministry the Unsolicited Proposal Review Fee, because the public entity may not proceed to a detailed evaluation of the proposal unless the applicable fee is paid.
The guidelines also state that the payment of the review fee is non-refundable and does not create any obligation on the part of the public entity and the Unit towards the owner of the proposal.
On receipt of proof of payment for the review fee, the public entity, with the assistance of the Unit, must conduct a detailed evaluation of the USP.
Following a positive outcome from the detailed evaluation of the unsolicited proposal, the public entity must prepare and submit an evaluation report to the Committee for review and approval to proceed to the feasibility assessment of the unsolicited proposal.
A feasibility assessment in accordance will determine whether the unsolicited proposal is feasible and in line with the requirements of the Act; and whether it is expected to generate value for money through the PPP delivery.
Secondly, the feasibility will tell how the unsolicited proposal must be structured to maximise value for money.
Upon obtaining the transaction approval from the Committee for the feasibility assessment of the unsolicited proposal the responsible government entity will then go to tender for the same proposal.
“The public entity must undertake a competitive bidding in accordance with the procurement process contemplated in Part 5 of the Act,” the guidelines state.
In this regard, the public entity may appoint a transaction advisor to assist in conducting the procurement process if it does not have internal capacity.
The guidelines state that the public entity must ensure that competing bidders have timely and equal access to all the relevant documents relating to the project as the owner of the unsolicited proposal.This includes all relevant studies undertaken during the feasibility assessment, tender documents, draft PPP contracts, and proposed risk allocation developed during the procurement stage.
“The public entity must strive to maximise competition in the tender,”state the guidelines.
Furthermore, the public entity, with the approval of the Committee, must provide the owner of the unsolicited proposal with an additional 10% bonus points in addition to the bid evaluation score obtained.
The guidelines indicate the same rights and obligations as any other competing bidder as outlined in the tender document, and the unsolicited proposal procurement process must be dealt with as the publicly initiated project procurement process in accordance with the Act.
If the public entity decides not to proceed with the unsolicited proposal, with the approval of the Committee, must reimburse the OPP for the genuine expenditure on the studies prepared in the preparation of the proposal.
The private entity is, however, not entitled to any reimbursement if the unsolicited proposal is not found to be feasible or they decide not to participate in the bidding process.Email: email@example.com