UNESCAP

ExpertGroupMeetingonInfrastructure
PublicPrivatePartnershipforsustainabledevelopment

Presenting
ProcurementUnderPublicPrivate
Partnership(PPP)

Nov2012 Tehran,Iran
 Agenda

1. LegalFrameworkForProcurement

2. Procurement

3. StandardizedContractualProvisions
 Legislation

LegalFrameworkforProcurement
 LegalFramework Procurement

LegislationOnPublicProcurement

- Public Procurement Regulatory

AuthorityOrdinance

- PublicProcurementRules,2004

- Procurement of Consultancy
ServicesRegulations,2008

(ProcurementLaws)
 LegalFramework Procurement

PublicProcurementhasbeendefinedas:

acquisition of goods, services or construction of any

worksfinancedwhollyorpartlyoutofthePublicFund,
unlessexcludedotherwisebytheFederalGovernment

No specific law specializes in procurement under

Continued

PublicPrivatePartnershipsinPakistan
Public Private Partnerships contracts are procured
under the present and prevailing Procurement Laws
bytheProcuringAgencies
Scope,Methods

Procurement
 Scope&Purpose

Scope&Applicability
AlltypesofprocurementsaregovernedundertheProcurementLaws
whetherrelatingto:
TraditionalProcurement,or
PublicPrivatePartnerships

PurposeoftheProcurementLaws
Transparency
Fairness
BringingValueformoneytotheProcuringAgency
Enhancedcompetition
ProcurementMethods(PreProcurement)
 ProcurementInitiation RequestforPreQualification

Procuring Agency may engage in this process to

shortlist/prequalifythebiddersincasesinvolving:
Services
CivilWorks
Turnkeyprojects,and
Procurementofexpensiveandtechnicallycomplexprojects

Prequalificationdocumentation
Informationrequiredforprequalification
Instructiontobidders
Evaluationcriteria
Documentaryevidenceand
Anyotherinformation
Open CompetitiveBidding
OpenCompetitiveBidding Methods
SingleStage OneEnvelopeProcedure
SingleStage TwoEnvelopeProcedure
TwoStage TwoEnvelopeBiddingProcedure
Conditionality:ofaboveProcedures
 ProvisionsforPerformance,Risk,Termination,Disputes

StandardizedContractualProvisions
Conditionality:ofaboveProcedures
 StandardizedProvisions PPPContracts

Infrastructure Project Development Facility (IPDF)

developed the Standardized Contractual Terms for
infrastructurePPPProjects

Standardization aims to achieve a generic Risk Allocation

Profile between the Private and the Public Sectors across a
rangeofinfrastructuresectors

Italsoaimstoachieve:
Substantialrisktransfer
Valueformoney
Affordability
StandardizedProvisions PPPContracts(Contd.)
SomeModelProvisions
 ProjectHandbook

ItdefinesthetenureofthePPPContract
ConcessionTerm

ProjectTermiscrossreferredtothefollowingother
termsoftheContract:
ExtensionintheProjectTerm
Eventsrequiringtheextension
ExpiryoftheProjectTermby:
Affluxoftime,or
Termination
Handbackguarantee
Handbackprovisionscovering:
Maintenancerequirements
Inspections
RemovalofdefectsandrestorationasperO&Mrequirements

Schedulescoversallaspects
 Performance

PerformanceofthePPPContractgenerallyrelates
to:
Performance prior to implementation of the Contract
butaftertheexecution.Itincludesusually:

FinancialClose
Siteinvestigations
Designing
ContractualappointmentssuchasIndependentCertifier

Performance regime under standardized provisions

commencesactivelyduring:
ConstructionPeriod
CommissioningPeriod
OperationsPeriod

Performancereportingmechanismisdevised

Penaltymechanismiscrossreferenced

Performance deductions, if applicable, are clearly

setoutforpoorservicedelivery
IndependentCertifier
RiskAllocationMatrix
ReliefEvents/CompensationEvents&ForceMajeure
 Termination

CausesofTermination Introduction
a) Projectmaybeterminatedforfollowingreasons:
Defaultbyeitherparty,ForceMajeureorCorruptActs

b) TerminationbyInstitutionsdefault

Agreementtoprovideeventstoconstituteinstitutiondefault
Majordifferencebetweendifferentterminationisthedifferentlevelofcompensation
toPP
InstitutiondefaultshouldbelimitedtothebreachesbytheInstitutionwherePPis
completelyunabletoperformitspartofthecontract
ObligationofInstitutionmainlyrelatestopaymentsandapprovals
Latepaymentnotermination
Noterminationexceptforexpressedprovisions.

c) TerminationbyPrivatePartyDefault

a. AgreementtospecifyeventsofPPdefaultclearly,objectivelyandwithreasonable
tolerance.Suchas:failuretocarryonbusiness,failuretoservicethedebtand
terminationoffinancingagreementsetc.
EffectsofTermination
DisputeResolution
Thankyou
Questions&Answers