The competent authority-procurement agency-develops a PPP project plan setting out the investment priorities and project characteristics. PPP master plans lay out the general principles for selecting PPP projects. A candidate project must fall under one of the 59 infrastructure types covered by the PPP Act. At this stage, the competent authority assesses a candidate project's profitability, benefit to the public, user affordability, and efficiency gains, and assesses whether it is in line with national medium- and long-term infrastructure plans. A preliminary feasibility study, conducted by PIMAC, must be done if a candidate project costs exceed W50 billion ($50 million) or requires a government subsidy of over W30 billion ($30 million).
Once the project is designated, the competent authority puts out a request for proposal (RFP) within 1 year of a project being designated. Before the announcement is made, it is important for the authority to consult with government agencies on any issues and regulations that may affect the project once it gets going. The Public-Private Partnership Review Committee must review the RFP documents before a formal announcement is made for projects costing over W200 billion ($200 million) or requiring a government subsidy of over W30 million ($30 million).
Bidders submit project proposals to the competent authority in accordance with legislation and regulations covering this process, and they usually form a consortium of builders, maintenance operators, and financial institutions. Bidders have the right to request clarifications on any aspect of the RFP's specifications, and the competent authority must share its response with all bidders.
The competent authority forms a team of external experts to evaluate the bids using the RFP criteria. This is usually done in two stages: a prequalification evaluation of the bidder's project-implementation capacity, and a technical and financial evaluation of the proposal. The competent authority should select at least two potential concessionaires in case negotiations fail with the preferred bidder. The authority then starts negotiations with the preferred bidder, and it is usual to form a team of external legal, financial, and engineering experts for this (PIMAC can be asked to provide advisory support).
The concessionaire puts together a detailed engineering and design plan-based on the PPP contract-for the project and applies for the plan's approval within 1 year of the project being awarded. The competent authority notifies the concessionaire of its decision on the engineering and design plan within 3 months from the application's filing date. Once the plan is approved, the concessionaire is responsible for getting all the permits and approvals for construction. The competent authority monitors construction to ensure the quality of the building materials and the equipment used; an independent expert is usually hired to do this.