Even in the most sophisticated markets, creating investor appetite can be a challenge. Even before the financial crisis, some 30% of PPP projects in the UK only received 2 bids.24 The procurement process should put the contracting agency into a strong negotiating position if there is only one bidder, limiting the opportunity of that bidder to hold the contracting agency hostage. The contracting agency needs to be prepared to start the bidding process over if it is not happy with the bidder's proposal. Where a single bid scenario is encountered, benchmarking of the bid may be a useful mechanism to help the Government understand if it is getting good value, and to help reassure other stakeholders that the lack of competition is not a fatal flaw in the process.
| Box 4.5: Sample Bid Evaluation Criteria for an Airport PPP |
| For an airport PPP, bid evaluation criteria may include: • A technical solution compliant with the airport masterplan and with specifications provided. • A legal solution compliant with bid documents. • A financial proposal indicating the extent of Government funding, investment, or guarantee needed or the share of project revenues. • A financing plan showing how and from whom the bidder intends to mobilize debt, equity and other financial instruments to fund the project and how much due diligence has been completed. Source: Ricover, Cuttaree and Delmon, Airport Development through Public Private Partnerships: Guide for decision makers (World Bank, 2013). |
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24 National Audit Office (UK), "Improving the PFI Tendering Process", (March 2007).