Model RFQ for PPP Projects Revised

 Rajya Sabha

The government has revised certain provisions of “Request for Qualification” (RFQ) document required in Public-Private-Partnership (PPP) Projects. The model RFQ now provides that Threshold Technical Capability (TTC) shall be twice that of the Total Project Cost (TPC). As regards eligible projects, the RFQ provides that these should not be less than 20% of the estimated Project Cost. In case of projects with an estimated Project Cost of Rs. 1,000 crores or above, this amount may be suitably reduced but not less than 10% in any case. 

Shri R.P.N Singh, Minister of State for Road Transport & Highways, while giving this information to the Rajya Sabha today said that NHAI would, however, have the flexibility to reduce the Threshold Technical Capability by 50% of the Total Project Cost. 

 

In the Model RFQ revised and issued by the Ministry of Finance in May, 2009, the following are the main changes:

a. Provision relating to short‐listing of bidders for more than one Project in Clause 1.2.2 has been deleted.

b. The present limit of 1% of cross holding in clause 2.2.1 (c) (i) relating to Conflict of Interest has been increased to 5%, and the term “indirect shareholding” has been clarified.

c. The clause 2.2.1 (d) relating to disqualification of consultants has been amended to allow the Consultants of the Authority to work for private entities in relation to the same project during any period six months prior to the issue of the RFQ or three years after the COD of the same project.

d. While prescribing sector specific eligibility conditions in Clause 2.2.1 (e), provision has been made to enable Project Authority to specify suitable restrictions to prevent concentration of projects in the hands of a few entities.

e. The Threshold Technical Capacity in Clause 2.2.2 (A) has been enhanced to twice the Estimated Project Cost of the proposed project.

f. Each of the Consortium Members, in addition to holding 26% equity in the SPV, would now be required to also hold equity equal to at least 5% of the Total Project Cost for a period of two years after commissioning of the Project.

g. The commitment of the O&M partner specified in Clause 2.2.3 has now been reduced from 26% to 10%.

h. A new Clause 2.3.5 has been added to allow withdrawal of a Consortium member, who has Conflict of Interest, within 10 days of the date of Application Due Date.

i. In order to dis‐incentivise submission of incomplete or incorrect information, Clause 2.17.7 and 2.17.8 have been added to enable Project Authorities to exclude erroneous claims for determining the Experience Score and also impose a penalty equal to the score so rejected, and to disqualify applicant where patently false claims are made.

j. The Project Authority has been required to extend the Application Due Date by a minimum of 15 days and 7 days for submission of RFQ in case of substantive and minor amendments respectively.

k. An enabling provision has been made in Clause 3.2 for making suitable amendments to meet the requirements of social sectors and other projects.

l. Definition of PPP and Core sectors has been modified in Clause 3.2.1

The changes have been introduced in view of the experience gained in implementation of a large number of PPP Projects and feed back received from Ministries as well as representations from various Industry Associations.