Transaction phase is basically tendering process to find the private sector to be the winner and form a Special Purpose Vehicle to build, operate and maintain the project after construction. This process of finding the Special Purpose Vehicle is divide in two option.
The first option is by tendering process. The second option is by direct assignment. However direct assignment can only be performed if there is only one bidder during the tendering process.
In the transaction stage, during tendering process, there are some steps in the pipeline. The steps are Pre-qualification, Request for Proposal, Bid Award, PPP Agreement Signing.
Pre-qualification: In this step, the bidders will be evaluated according to its background, history, and ability. The objective is to get a list of the qualified bidders to do the PPP Project.
Request for proposal: After the bidders are set, they are given all of the documents related to the transaction process. Then the bidders will evaluate the documents and propose a bidding proposal based on those document.
Bid award is the time when the winning bidder is announced. After the bidder was awarded, usually the non-winner bidders were given an amount of time to show objection or to clarify some issue.
In the next step, PPP agreement signing: the winner then have to sign some agreement regarding that PPP project. In general, they have to sign PPP agreement with the GCA, and also have to sign recourse agreement with IIGF.
Financial close should be obtained no longer than 12 months after signing Cooperation Agreement and could be extended from time to time if the failure to obtain funding is not contributable to a failure of Business Entity. Every extension being given for financial close is no longer than 6 months. Financial close could be done gradually in accordance with the project cycle. Financial close derived from a loan is deemed to have been implemented if:
• The loan agreement has been signed to finance the entire PPP; and
• A part of the loan can be disbursed to start the construction works