The bidding process is generally lengthy and costly, for the bidders and for the contracting agency. In order to manage the cost and time outlay, the contracting agency may wish to prequalify those parties most likely to provide an attractive bid, and avoid the time and cost of managing bidders who do not have the fundamental qualifications or financial substance that would enable them to undertake the project. Prequalification also encourages good bidders, who will prefer a smaller field of equally qualified competitors.
| Box 4.4: Prequalification Criteria for an Airport Concession |
| Each sector and project has its own specificities. For example prequalification criteria for an airport PPP may include: • level of owned total assets in excess of a set amount • recent experience managing the construction and operation of an airport of similar size and complexity in a similar market • recent experience raising similar amounts of debt and equity • exclusion of air carriers, or of companies owned by air carriers, or of operators of airports located close to the site (e.g. within 800 km) (which would create a natural conflict of interest) Clearly these criteria will need to be adjusted based on market context. |