The Gweru case also provides an illustration of the support provided by a specialist PPP consultant. Following presentations from the private operators, the GCC management team evaluated qualifications and produced an evaluation report shortlisting three tenderers. At this point some concern developed within the management team. While it had successfully reached this point of the process without support, concerns were raised about the imbalance in skills that now existed between specialist international operators (familiar with the process) and a management team embarking on this process for the first time. This concern was accentuated by an increasing shift towards a longer-term, investment-linked contract. As the tenderers had each proposed different arrangement and options (including affermage, concession and joint venture arrangements), the GCC was tasked not only with evaluating proposals, but making judgements as to which was the most appropriate contract option. It therefore decided to seek the advice of international specialists in the completion of the evaluation stage, and in June 1998 the GCC approached USAID for technical assistance.

To secure these consultancy services, the management team drew up terms of reference for them. In essence, the GCC proposed that an international multi-disciplinary consultant should assist in the evaluation, advise on the way forward for the GCC and advise on the appointment of the private operator. The consultant was to have a range of skills, including financial, managerial, legal and technical expertise. An internal task force was convened to work with, assist and learn from the consultant.

In the first instance, the consultant proposed that an addendum be issued to each tenderer, in order to clarify the GCC position, to obtain more information on the capacity of the private companies and to understand in more detail the approach proposed. This addendum asked each consortium to provide responses to issues relevant to the changing concerns of the council. These included, in particular:

•  tariff increases: a proposal describing how the proposal would deal with tariffs in the context of inflationary pressures;

•  capital improvements: a proposal indicating the willingness and ability to fund capital improvements (replacements, major rehabilitation, new plant and network), indicated a major shift in thinking, from a management contract to a concession agreement;

•  interim period/data gathering/contract negotiations: a proposal for how the operator would proceed in the period between selection and contract signature (including management assistance during the data-gathering/negotiation period); and

•  identification of a sole responsible party: naming the party responsible for all aspects of the contract, and the individuals who would staff the project.

This addendum enabled the council to clarify its own requirements and to state them as specific actions or conditions. It covered the key concerns of company viability, re-employment of council workers, and capital investment. In order that a plan of action could be clearly established once the responses were received, the council was taken through the benefits and drawbacks of the options open to it. These included one of the following:

•  proceed with the concession, with data gathering and management services provided at a fee;

•  proceed with the concession, without data gathering and management services; or

•  hire the preferred firm to manage water and sanitation services for one or two years, and to generate data and plan ahead.

In addition to these tasks, the consultant also carried out a significant amount of capacity building, through formal sessions (such as working with the middle-management task force) and informal information sharing with the management team and the council. The consultant was also tasked with the responsibility for developing the methodology for selecting the operator. Accordingly, a matrix system for evaluating proposals was defined, which identified the criteria to be considered and their relative importance. This evaluation method, which aimed to promote and ensure transparency in the decision-making process, included eight criteria including business experience, financial capacity, management skills, technology transfer, specific project personnel, reemployment of GCC staff and tariff levels.

The consultant and the internal task force reviewed the three responses and prepared a report for consideration by the town clerk. The consultant then presented the findings to the full council, recommending the appointment of the tenderer with the highest score at evaluation. As a result of this process, in September 1998, SAUR UK was notified that it had been selected. In the following month, the council and SAUR UK began negotiations to define and agree the necessary steps for implementation (see Box 10.4).