Project Structures and Development

NO	ASPECTS	DESCRIPTION
4.	Available Sectors	As defined by the PPP Law (Legislative Decree N° 1012, which was subsequently modified by Law 30167), the objective of PPPs is to create, develop, improve, operate, and maintain public infrastructure and services that the public sector must provide. Another goal of PPPs is to develop applied research and technological innovation projects. All infrastructure and public services sectors. The portfolio of projects from PROINVERSION, to be developed by PPP in 2014-2015 includes: • Sanitation • Transportation (Highways, ports, airports, railroad projects, cable cars, logistics platform .) • Telecommunications • Energy and Hydrocarbons • Health • Justice (Penitentiary affairs) • Tourism Possible projects in the Education sector are being assessed.
5.	Eligible Participants / Project Initiator	The specific requirements, in technical and financial aspects, that the companies should comply with, are established in the terms of private investment promotion processes. However, in general, any domestic or foreign legal person or a consortium formed by them may participate in these processes. Once the award is granted, an Special Purpose Vehicle (SPV) shall be established for the development of the project.
6.	Types of PPP Structures / Contract Types	Any kind of contractual modality recognized in the national legislation: • Concession • Joint Venture. • Management Contract. • Outsourcing • Others allowed by the law. The most used is the concession contract for the Design, Construction, Financing, Operation and Maintenance.
7.	Types of Projects	• By its initiator: (i) State Initiative- when it is the State that identifies the need to develop a specific project, performs initial studies and calls a bid; (ii) private initiative- when it is a private entity the one that submits to the State an innovative project it is interested in developing, and has prepared the initial studies. • By the need of state resources: (i) Self-sustained project -when it requires financial and nonfinancial guarantees from the government with a null or minimum probability of demanding the use of public resources; (ii) Co-financed project - when it requires financial and nonfinancial guarantees with a significant probability of demanding the use of public resources or when it requires resources or guarantees from the government.
8.	Project Stages and Implementation of Solicited Proposals	1. Inclusion of the project in the private investment promotion process and approval of the promotion plan -approved by the Steering Council of PROINVERSION (maximum body of PROINVERSION formed by 5 Ministers) and a Supreme Resolution is issued ratifying the mentioned approvals. This procedure applies to projects that have been declared of national relevance or that have been assigned to PROINVERSION. 2. Publication of the promotion Plan, general design of the process. 3. Call of the private investment promotion process. The process will be conducted by a Special Committee which is appointed by the Steering Council of PROINVERSION and is composed by 3 members. 4. Publication of Bid Terms- it is generally done jointly with the call. The bid terms and all the information about the process is published in the Web page of PROINVERSION. The interested investor must acquire the participation rights in order to be able to make inquiries about the bid terms and contract drafts and to participate in the Qualification Stage.. 5. Inquiries about the bid terms and proposals for modifications to the contract projects- During the process there is a stage in which the interested investor may make inquiries about the bid terms which shall be solved by the Special Committee in charge of the process. It may also submit proposals for modifications to the contract drafts as they are published. 6. Qualification Stage- The interested investor should comply with legal, technical and financial requirements in order to qualify and to pass to the stage of technical and economic proposal assessment. Once defined which the qualified companies are, no other interested party may individually apply to the process. 7. Submission of the technical proposal- The bidder submits its technical proposal according to the requirements of the bid terms, which will be assessed by the Special Committee. The proposals that are declared valid will pass to the next stage. 8. Submission of the economic proposal and award - The bidder submits its economic proposal according to the competition factor established in the terms of the process. This presentation is made in a public event with the presence of a public notary. After the assessment, which is made in the same public event, the successful bidder is declared and the award is granted. 9. Closing process- Date in which the contract is signed, with prior compliance of the requirements established in the terms and conditions of the process.
9.	Project Stages and Implementation for Unsolicited Proposals	UNSOLICITED PROPOSALS (UP): There are two kinds of UP: 1. Self-sustained: This kind of proposals may not require financial support from the Government a. Presentation: Self-sustained unsolicited proposals that contain projects of a national scope may be submitted to PROINVERSION. The UP has the character of "grace request" until the proposal submission due date which implies that the right of the proponent is exhausted once the PI is submitted, and it is not an obligation of the State to accept the proposal. b. Admission: PROINVERSION assesses the submitted UP for compliance with the minimum requirements established by regulations on UPs, in order for it to be admitted for procedure by the PROINVERSION Committee. c. Assessment: For said assessment, the project contained in the initiative is sent to the corresponding sector to issue an opinion of interest and relevance of the project to its sector; and if it is of interest, the opinion of the regulatory organism is requested (in case the initiative is financed with tariffs of public services) and to the Ministry of Economy and Finance, in case the project considers guarantees. In this stage the Government may make modifications to the project contained in the initiative, and if accepted by the proponent, will be part of the proposal. d. Declaration of Interest: With favorable opinion from the corresponding Ministry, the Ministry of Economic and Finance and the Regulator, if applicable, the Steering Council of PROINVERSION declares it interest on the UP and said declaration is published in the Official Newspaper "El Peruano", and in another newspaper of national distribution, as well as in the Web page of PROINVERSION. The declaration of interest contains the substantial aspects of the project and its purpose is to inform interested third parties about the project e. Presentation of interested third parties: Once the declaration of interest is published, interested third parties may submit, within 90 days, statements of interest in the same project or in alternative projects (i.e. a project with a different objective but using the same resources). f. Direct Award: If there are no interested third parties' submissions within the indicated term, it shall proceed to a direct awarding of the project to the proponent of the initiative. In this stage, non-essential aspects of the contract to be signed shall be negotiated. g. Bid: If interested third parties for the same project exist, an unsolicited proposals promotion process shall be carried out. During the selection process, the proponent has the right to match the offer that came up in first place, resulting in a final tiebreaker, which should take place within 15 calendar days from the opening of economic proposals. If the proponent is not granted the award, and the bid presented was declared valid, it shall have the right to reimbursement of expenses effectively made in the preparation of the UP, as well of major expenses originated by the preparation of any additional information requested during the assessment of the initiative, until the declaration of interest. h. Closing date: After the granting of the award, if the private initiative corresponds to a concession, the grantee of the award shall form a special purpose company which will sign the contract with the Peruvian Government. The final version of the PPP contract must previously get the favorable opinion of the Ministry of Economy and Finance, otherwise the PPP contract will be void. 2. Co-financed: This kind of proposals require financial support from the Government a. Presentation: Co-financed Unsolicited Proposals (CUP) are submitted to PROINVERSION within the first 45 calendar days of every year. A CUP should include the minimum requirements established in Article 25 of the Supreme Decree 127-2014-EF. A CUP has the nature of a "grace request" until the proposal submission due date, which implies that the right of the proponent is exhausted once the CUP is submitted, and it is not an obligation of the government to accept the proposal. b. Admission: PROINVERSION determines whether a CUP complies with the minimum applicable requirements and may be admitted for procedure by the PROINVERSION Special Committee. c. Prioritization and Relevance: PROINVERSION submits all the CUPs to the competent entities, and ask them to determine the priority of each CUP that they deem consistent with their priorities and strategic objectives. • For projects under the competence of the National Government, entities will be required to justify their arguments in order to consolidate an order of priority of CUPs. PROINVERSION will instruct the Ministry of Economy and Finance (MEF) to prepare a Fiscal Impact Report. After receiving the report, PROINVERSION will announce the projects that have been assigned a budget allocation, in order that the entities may issue opinions on the relevance and priority of the CUPs applicable to them. • For projects under the competence of Regional and Local Governments, PROINVERSION will instruct MEF to issue an opinion on the maximum amount that the entities may commit to invest. This opinion will be informed to the entities so they may issue their opinion on the relevance and priority of the CUPs applicable to them. d. Assessment: For assessment purposes, the proponent will prepare pre-investment studies on the public investment project, in compliance with the regulations for the National Public Investment System (SNIP). After the viability of the project has been declared, PROINVERSION will perform a Comparative Analysis. Subsequently, a Declaration of Interest draft will be issued. e. Declaration of Interest: With the favorable opinion of the competent entity, MEF and the Regulator (if the CUP is co-financed by public service fees), the Steering Council of PROINVERSION declares its interest on the CUP and such declaration is published in the Official Newspaper "El Peruano", in another newspaper of national distribution, and on the PROINVERSION website. The declaration of interest contains the substantial aspects of the project and is intended to inform interested third parties about the project. f. Presentation of interested third parties: Once the declaration of interest is published, any interested third parties may submit, within 90 days, their statements of interest in the same project or in an alternative project. For CUP purposes, alternative projects are defined as those intended for the same objective that propose different alternatives of solution or technical alternatives. g. Direct Award: If no interested third parties submit proposals within the term above, PROINVERSION will award the project directly to the entity that submitted the proposal. Non-essential aspects of the contract to be signed are negotiated in this stage. h. Bid: If there are third parties interested • In the same project: a selection process shall be carried out. If the proponent participates in the selection process and has filed the information required in the terms, the proponent will have the right to match the offer that came up in first place. If applicable, a final tiebreaker will take place at the act of opening of economic proposals and award. • In alternative projects: Any alternative projects will be rejected unless they are found to generate more benefits than the original proposal. If alternative projects are admitted, a Bid for Comprehensive Projects will be announced and conducted by applying criteria that guarantees competition between alternative projects, The proponent must submit a valid economic bid. If the proponent is not granted the award, it will have rights to the reimbursement of any expenses effectively incurred for the preparation of the CUP and those derived from the preparation of any additional information that may have been required during the assessment of the initiative, until the declaration of interest. The final version of the PPP contract must previously get the favorable opinion of the Ministry of Economy and Finance, otherwise the PPP contract will be void. i. Closing date: After the granting of the award, the PPP Contract is signed.
10.	Mechanisms to Involve the Private Sector with Project Development Stages	• Interested investors are very involved with private investment promotion processes due to the transparency of the latter and because it is a very market-friendly mechanism. Investors have enough time to make inquiries on the bid terms, which will be solved by the Special Committee that conducts the process. The final version of the contract is the result of a process of consultations with the market and regularly includes several proposals coming from the potential bidders. We should indicate that all replies to inquiries and contract versions are published; therefore, all bidders will be informed of the replies and additional information given to each of the bidders.
11.	Project Assessment and Selection Process	For purposes of inclusion into the private investment promotion process projects for infrastructure and public services provision through the PPP modality, an Assessment Report is prepared with the following minimum content: For all kinds of projects: a. Name, description and objective of the project. b. Importance and consistency with local, regional or national priorities, as appropriate. c. Classification as self-sustaining or co-financed project. For self-sustaining projects: d. Diagnosis about the current provision, identifying the characteristics of the existing demand and supply in terms of coverage and quality. e. Preliminary description of the level of service to reach. f. Investments and estimated operation and maintenance costs g. Tariffs. h. Preliminary Financial Economic Assessment as PPP. i. Preliminary risk allocation. j. Estimation of the guarantees that might be required. k. Sustain the guarantee payment capacity, if required. l. Advantages to developing the project through a PPP. m. Preliminary estimation of supervision costs For co-financed projects: n. Declaration of Feasibility, according to regulations in the Public Investment National System o. Information related to items d, e, f, g, h, i, j, k, which is not included in the approved Pre Investment Study. Said report is the selection filter and, if feasible as a PPP, it shall be incorporated to the private investment promotion process.