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Making it happen: Procurement and contracting, Anna Spenceley


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Presentation made at the CBD/IUCN TAPAS Group meeting on "Tourism partnerships and concessions in protected areas: Cooperating for success" meeting in the iSimangaliso Wetland Park

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Making it happen: Procurement and contracting, Anna Spenceley

  1. 1. Making it happen: 
 Procurement and contracting 1 June 2017 Time Block 11 Image © image4you via Pixabay
  2. 2. Good procurement processes . . . WBG Guideline: Spenceley et al, 2016
  3. 3. Procurement preparation: Actions needed •  Description of concession package •  Agreement on procurement strategy •  Plan for reaching out to investors •  Produce promotional materials •  Develop bidding documents •  Agree evaluation committee and rules Get agreement at highest level for the process! Image © 3dman-eu via Pixabay
  4. 4. Procurement preparation: Transaction type Op#on Pros Cons Open tender Most transparent Market-based MulHple criteria Costly, lengthy, complex Less aLracHve to some investors Secrecy of evaluaHons Short list / limited tender RelaHvely transparent More aLracHve to experienced investors Needs more preparaHon to short- list Excludes new entrants AucHon Very transparent Quick and easy SHmulates investor interest No negoHaHon of non-financial benefits Hard to do background checks Unsolicited bid No promoHon needed Test interest through tender Flexible Ad hoc Risk of unsuitable investor Risk of not ge[ng best deal Direct negoHaHon Simple, quick, direct, flexible No promoHon needed Not compeHHve Open to criHcism Risk of not ge[ng best deal
  5. 5. Procurement preparation: Promotion Page 104 104 Section 5.3: Tourism Resort Site Development Profile - Crusse/Jamali Concept Description and layout Stilted Island CRUSSE ISLAND Community Fishing Port and Market Ponta Mangaca PLANTACAO NAMADE To Nacala INDIAN OCEAN Mozambique Channel Exclusive Chalets Boutique Mainland Hotels Max. 5-10 unit Exclusive Residential Clusters Boutique ±40 Room Hotel Day Visitor Restaurant and Beach Area 5+ Star ±100 Room Hotel ±30 Stilted Chalets To Jamali Entrance Mangrove Forest Unique attraction opportunities Private Residential Units Island-Style Development
  6. 6. Finding investors committed & sustainable: •  Pre-qualification: Expression of Interest •  References / examples •  Sustainability built into bid documents Local expenditure Job creation Conservation activities Revenue sharingSupply chain linkages Environmental education Research
  7. 7. Transaction management: ✓
  8. 8. PPP toolkit PROJECTPREPARATIONPERIOD PROCUREMENT Prepare a feasibility study comprising: • Needs analysis • Options analysis • Project due diligence • Value assessment • Economic valuation • Procurement plan • Design a fair, equitable, transparent, competitive, cost-effective procurement process • Prepare bid documents, including draft PPP agreement • Pre-qualify parties • Issue request for proposals with draft PPP agreement • Receive bids • Compare bids with feasibility study and each other • Select preferred bidder • Prepare value-for-money report • Negotiate with preferred bidder • Finalise PPP agreement management plan Module 1 Module 2 Module 4 MODULE 5 Module 6 Module 7 Module 8 Module 9 MODULE 4 Module 6 Module 7 Module 8 Module 9 PPP agreement signed Treasury Approval: III Treasury Approval: IIB Treasury Approval: IIA Treasury Approval: I PhaseIIIPhaseII PPP tender process South Africa
  9. 9. Negotiation and contracting: Image © Unsplash via Pixabay Image © Darkmoon via Pixabay
  10. 10. Concession rights Precedent condi#ons for entry into force Dura#on Nature of property interests (rights to use) Maintenance of assets Fees payable Performance guarantees M&E, Key performance indicators Insurance Limita#ons of liability Force Majeure Environmental impacts during process Right to assign concession rights to 3rd par#es Condi#ons of transfer of concession Socio-economic contribu#ons Breach and cancella#on processes Dispute seLlement provisions Circumstances for 3rd party to take over Taxa#on & fiscal maLers Negotiation and contracting: Contracts
  11. 11. Accurate identification of parties Clear payment terms Flexible covenants Legally valid Comprehensive Appreciate that there will be problems Provisions for defaults, fixing them, termination Adequate negotiation Clear understanding / deadlines / penalties Language Clear internal procedures and protocols Everyone signs! Negotiation and contracting: Good deals
  12. 12. Resources: Image © Ptera via Pixabay
  13. 13. Knowledge café: Round tables Group 1: List options to identify a short-list of investors likely to have adequate resources AND sustainability credentials? (Share your experiences) Group 2: Discuss which transaction types would you use under different circumstances? Are there some you would never use? (e.g. tender, auction etc)