The upfront payment was a decisive criterion in the assessment of bids, but not the only criterion. CCM's winning bid offered the RTA the highest upfront payment. The evaluation process focused more on the upfront payment than on achieving the lowest toll for motorists. It did not sufficiently scrutinise the underlying patronage projections.
This bidding model for this infrastructure project contained significant risks. But the model was not put to the Budget Committee of Cabinet.
We now examine the bidding and tender assessment processes in more detail.
The Request for Proposals (RFP) for the CCT project indicated to proponents that:
■ a maximum base toll level of $2.50 would be levied on all vehicles, but a lower toll, or different tolls for heavy and light vehicles, would be considered
■ the toll would be adjusted according to inflation (i.e. the CPI increase was the toll escalation formula)
■ the combined construction and operation period would be about 30 years (i.e. the 'concession period').
However, the RFP also indicated that:
■ proponents could offer options based on a zero Business Consideration Fee if the option minimised the combined construction and operating term
■ the RTA's preference was to have proposals with a shorter concession period in preference to higher Business Consideration Fees
■ proponents could submit proposals and options or alternatives to the approved or reference project (i.e. non-conforming proposals).
This model was expected to make the evaluation of tenders less complex, more transparent and more efficient.
The RTA selected three of the eight proponents to submit detailed proposals. Each proponent submitted a proposal that conformed to the reference project. Most also submitted several non-conforming proposals. As said above, the RFP allowed this. Non-conforming proposals included changes to the design, construction, operation and/or financing options.