Selection of Transaction Advisor for Developing Old Age Homesthrough Public Private

-Selection of Transaction Advisor for developing Old Age Homesthrough Public Private

Participation on Design, Build, Operate and Transfer (DBOT) basis

THE PROJECT,,,

The Project Site/Sites(s) shall be leased to the developer for the purpose of development ofthe Old Age Homes on Public Private Partnership (PPP) basis. The Concessionaire shall develop the Project and thereafter, operate andmaintain it throughout the Concession Period.

The lease agreement for the Project Siteshall be co-terminus with the Concession Agreement and shall be in accordance with theConcession Agreement and its Schedules.

The developer shall, inter alia form a Special Purpose Vehicle (the “SPV”)for the implementation ofthe Project.

The SPV would enter into the Agreement with the Authority and subsequently carry out all the responsibilities as agreed with the Authority.

5 hectares of a plot in Sector 40-41, Rohini.

FAR:- 200 at par with studio apartment.

Note: The land would be given to developer on lease basis

Note: Private Player would be allowed to undertake commercial activities permissible as per Master Plan of Delhi - 2021

Developer’s Scope of Work

The Concessionaire shall Design, Build, Finance, Operate and Maintain an Old Age Homeon the Project Site earmarked for the purpose over the Concession Period, after which the Facility shall be transferred back to the Authority.
The Site shall be provided to the Concessionaire on lease, as per the provisions of theLease Deed and the Agreement. The Site, along with all the Project Assets shall betransferred to the Authority at the end of the Concession Period.
The construction of the facilities will be governed as per the prevailing Development ControlRegulations norms of the area.

ROLE OF TRANSACTION ADVISOR

The Transaction Advisor shall:

Provide commercial, financial and legal services in support of PPP project preparation and transactions which shall include but not limited to:

carry out pre-feasibility studies;
conduct project feasibility studies, assess PPP options,
carry out Value for Money (VfM) analysis
conduct financial analysis and modeling, and project structuring;
prepare bidding documents and draft contracts;
carry out the bidding process until signing of the contract with the prospective private sector proponent or concessionaire and
provide advisory services until the financial close of the project or as & when required

Detail Scope of Work for Transaction Advisor:

Transaction Advisor (TA) is expected to prepare the “Feasibility Report”, detailed Scope of work, Estimated Project cost, Technical specifications and parameters, Facilities required e.g., infrastructure, manpower, estimated revenue stream, PPP structure, execution structure plan/ model, qualification and bidding criteria etc., required for bidding of the project. There is no separate technical and/or financial consultant appointed for the project nor any feasibility study is available. All the required work for bidding the project and up to selection of private entrepreneur will be the responsibility of the TA. The detailed activities are:

STAGE I:

Detailed Feasibility Reports
Market demand assessment for the Project
Identification, assessment and provisioning of adequate required physical infrastructure facilities (Roads, Sewage, Water Supply, Electric supply, Communication Network, Parking, Shed for labor and other amenities) including design requirements as per applicable laws/regulatory framework/policy guidelines
Critical analysis and assessment of institutional/in-house capacity for various activities.
Project design, design criteria, broad technical specifications and standards, execution plan with technical, financial and administrative structure
Technical Review/Parameters: The Transaction Advisor will finalize the technical requirements, specifications and equipment etc. for each of the proposed facilities/services for the Project leading to: a) finalized technical specifications and parameters for the core provisions, b) timelines for implementation c) finalized base costs for each of the Project facility and overall d) finalize the Model design which may be used for similar type of work elsewhere e) inputs for operation & maintenance cost over the life of the facility.
Development of Financial Model: Review the technical model for the Project and facilities and finalize the total cost for each facility/service and overall project cost including timelines for implementation and funds flow requirements. Based on the costs, the Transaction Advisor will develop a financial model including all assumptions for capital expenditure (CAPEX), operation and maintenance (O&M) costs with justification (and alternative revenue generation) projections for the Project/facility. Sensitivities and outputs (projected project financial statements - balance sheet, cash flow, income statement, key ratio analysis, Financial Internal Rate of Return (FIRR), Debt Service Coverage Ratio (DSCR), other ratios) should be developed. The financing plan must include identified sources of finance available for either direct part funding of capital expenditures or any other type of support/schemes. The Transaction Advisor will also factor in the Viability Gap Funding (if any) and a pay-out plan for the VGF.
Value for Money (VFM) Analysis: The Transaction Advisor will conduct appropriate economic cost-benefit analysis to develop a VFM analysis and Project Rationale.
PPP Options Development: Based on the Project costs and financial models, develop PPP structures for each of the facilities, including assessing funding sources from the government, private sector, etc. A recommended PPP project structure should be capable of achieving sustainable operational and financial viability. Clear details of the proposed PPP structure/s should be identified such as concession / management contract / lease etc. along with a risk assessment matrix and likely impacts on the Authority such as required funds or other payments. Institutional requirements for the PPP structures such as the need for a Special Purpose Vehicle, joint ventures, etc. should be identified.
Legal and institutional analysis: The Transaction Advisor will develop policy and institutional analysis, impacting the selected PPP modality for the Project facilities, and assist with bid process, project documentation, and evaluation procedures. For the analysis:
conduct a policy and institutional assessment to ascertain the validity and viability of the proposed PPP structure for the Project and Authority capacities to manage the Project once operational and recommend required changes and capacity improvement measures as appropriate;
recommend institutional measures to improve the governance of the Project entity during implementation;
develop “bankability” measures for the proposed PPP project structure, such as fee payment mechanisms, preconditions for a private operator to fulfill in meeting service obligations, default and risk clauses, and step-in rights of government; and
assist in bid process management through documentation preparation, including request for qualification, request for proposal, contractual agreements between Authority and winning bidder, as well as in developing bidder instructions, bid qualification parameters and bid evaluation criteria, bidding process schedules, and stakeholder consultations.
Bid Process Design and RfQ Development: Bid Process design and the choice between a single stage process v/s a two stage process will be evaluated and a suitable design adopted. Post finalization of the same, the Transaction Advisor shall develop Request for Qualification (RfQ) and present to the concerned authorities for approval.
Environment and Social Safeguards: The Consultant as part of this assignment is required to specify broad parameters that need to be adhered to by the Concessionaire during implementation period in the Bid Documents (DCA).

RfQ development Private sector analysis: The Transaction Advisor will develop likely qualification criteria for potential private parties and draft a Request for Qualification document. This document should be discussed with Authority and GoMP and post approvals launched into the market.
Assistance for IIPDF/PPPAC/SLEC approvals: If so desired/required, the Transaction Advisor will assist the Authority in all meetings with DDA/ government agencies to finalize the documents for submission/approvals.

Deliverables for Stage I:

The Transaction Advisor will have to do the following for each Project:-

a)Prepare an ‘Inception Report’, laying out the broad parameters, timelines and approach

b)Finalize a consolidated "Project Report " including technical reviews, financial model, PPP options, draft RfQ for each of the proposed facilities;

c)Lead discussions with the DDA for formal approvals of above report and for RfQ launch;

d)Lead Stakeholder consultations;

e)Assist in launch of RfQ in the market and short listing of qualified parties; and

f)Assist in all matters relating to meetings for approvals etc

STAGE II:

Review and Finalize the Financial Model: The Transaction Advisor will assist in finalizing the financial model developed in Stage-I, in the light of the results of the market assessment, revised designs/technical review and private sector inputs.
Finalization of Project Structure: The Transaction Advisor, in the light of the revised financial model and the qualitative and quantitative input received from the market surveys, present a final Project structure which will be capable of achieving sustainable operational and financial viability, thereby balancing Value for Money for the Authority and viability for the private sector. Various commercial and legal options, (together with the project’s legal specialist as required), for Project structuring will be examined to recommend a suitable PPP modality and suitable implementation structure such as concession / management contract / etc., whether as an Special Purpose Vehicle, joint venture, etc.; the analysis should include feedback as to the potential acceptability of the PPP structure from developers and lenders.
Financing Plan: The Transaction Advisor will identify and assess all possible financing options for the assignment in relation to the final Project structure. Recommendations may be provided on debt equity ratios, loan tenures and rates, etc. to improve Project viability and attractiveness. The financing plan must include identified sources of finance available for either direct part funding of capital expenditures or for any other type of support.
Risk Analysis: Risk Matrix on the PPP structure along with suitable mitigation strategies and risk-sharing arrangements.

Develop PPP Output Parameters: Develop suggested term-sheet for mobilizing PPP project including all salient features of PPP structure. Term-sheet should also include suggested service-level parameters for achievement under the PPP project.
Bid Process Design and Bid Documents: Post finalization of the Project Structure, the Trsaction Advisor shall develop the contract documents (Request for Proposal (RfP), Concession Agreement etc.), bid process and appropriate governance for the Project. The RfPand the Concession Agreement that are thus required shall be developed and presented to the concerned authorities for approval.
Bid Process Timelines: Finalization of timelines for Bid Process in association with the Authority.
Conducting the Bid Process: The Transaction Advisor will assist with the Bid process management, including finalization of PPP structure and financial model, preparation of bid documents and criteria, a Request for Proposal (RfP) launch, formulation of responses to bidder queries, bid evaluation and recommendations per criteria in the RfP document, recommending a private developer, contract negotiations and bid closure which are required to be undertaken, for bringing the Project to a Technical Close.
All other activities as agreed with Authority

Deliverables for Stage II The Transaction Advisor will have to do the following for each Project:-

a)Develop a report containing financial model results, final bidding design and final Project structure for the Project;

b)Finalize Bid Documents including RfP and Draft Concession/Lease Agreements;

c)Finalize draft project facility memorandum (PIM) for each facility; and

d)Launch RfP (Request for Proposal) document.

e)Assist the Authority with Bid Process Management and award of the Project, including signing of Concession/Lease Agreement

PAYMENT & FEE STRUCTURE FOR THE TRANSACTION ADVISOR

The project fee shall be payable on a Lump Sum basis:

Lump Sum Fee:

The Lump Sum Fee shall be quoted by the Transaction Advisory and shall be paid on milestone basis to the Transaction Advisor. The following table details out the payment structure for the Fixed Fee Payment Terms:

S. No. / Deliverables / Percentage of payment / Deliverables
Initial Concept Report / 10% / T+1 Month
Feasibility Report / 15% / T+3 Months
Issue of RFQ / 10% / T+4 Months
Evaluation of RFQ Applications / 10% / T+5 Months
Issue of RFP document / 10% / T+6 Months
Evaluation Report / 10% / T+8 Months
Issue of LoI / 10% / T+9 Months
Signing of Concession Agreement / 25% / T+10 Months

ELGIBILITY CRITERIA & EVALUATION PROCESS

ELIGIBILITY CRITERIA

Firms satisfying the following minimum eligibility criteria would be allowed to participate in the bidding process:

Shall be an organization, institution or consulting firm with minimum 5 years of experience in providing consultancy/transaction advisory services
Should have an average turnover of at least INR 25Crore in the last three years (FY 2011-12, 2012-13, 2013-14)

EVALUATION & SELECTION PROCESS

The evaluation of Technical Proposal will be made on the basis of qualification and experience of the Transaction Advisory firm as well as the project team proposed by the Transaction Advisor for this assignment.

The Transaction Advisor, who does not possess the required qualifications and experience, will not be considered for opening of Financial Proposal. Authority reserves the right to judge, appraise, and reject any or all proposals. The adopted marking scheme is as follows:

S. No. / Criteria / Marks
1. / Past Experience of the firm

Experience in providing advisory services for at least 2 (two) old age home project / social / low income / affordable housing project out of which at least 1 (one) project must be successfully closed by the firm.

The Completion certificate must be provided as documentary proof for the closed assignment and signed contract/ engagement document signed by the client must be provided as documentary proof for ongoing assignment / 20

Experience of PPP Transaction Advisory in any project, of which at least 1 (one) project must be financially closed by the developer

One financially closedproject will make the bidder eligible for 4 marks. Additional such Advisory will get the bidder 4 more marks. In order to get the full 30 marks the Bidder must have done 5 such Advisory services.
The Completion certificate must be provided as documentary proof for the closed assignment and signed contract/ engagement document signed by the client must be provided as documentary proof for ongoing assignment / 20
2 / Financial Strength of the firm
Bidder will get 7 marks for average turnover of Rs. 25 crores in the past three years. 1 mark will be given for additional Rs. 5 crores turnover. In order to score the full 10 marks the bidder must have average turnover of Rs. 40 Crores. / 10
3 / Qualification and Experience of Team Proposed for the assignment / 35

Team Leader

One CA or MBA with minimum 10 years work experience in Project development on PPP basis including familiarity with project agreements, tendering arrangements, project structuring, risk management and successful project implementation of at least 1old age home advisory project / social / low income / affordable housing projects / 20

Finance Expert

One CA/MBA with minimum 5 years work experience in Financial Structuring of projects, Model preparation, Risk analysis of at least 2 projects on PPP / 5

Contract/Legal Expert

One Law Graduate with minimum 8 years work experience in Preparation of Contracts documents, Contract negotiation and successful project closure of at least 2 PPP projects / 5

Bid Process Management Expert

One Post Graduate with minimum 8 years work experience in bid process management for at least 5 projects on PPP / 5
4. / Methodology & Work Plan proposed
5 marks will be allotted for the understanding of the Department, 5 marks for the understanding of the sector, 5 marks for the methodology and work plan. / 15
Total technical score / 100

In order to qualify technically, the bidder must score 80 marks. Top 3 technical bidders will be considered for opening of the financial bid.

EVALUATION OF FINANCIAL PROPOSAL

The financial quote will be in form of success fee quoted for the assignment.

The ratio of Technical and Financial score will be 80:20. The bidder who gets the maximum marks will be selected as the Transaction Advisor.

The quoted fee shall include all applicable taxes, expenses, whatsoever, such as legal fees and all out of pocket expenses etc. to be incurred by the Transaction Advisor to complete the assignment.

The Technical and Financial Bids shall be submitted separately in sealed envelopes and submitted to the Office of Pr. Commissioner (LD), 1st Floor, D-Block, Vikas Sadan, INA, New Delhi upto 3.00 PM on ______. The Technical Bids will be opened in the Conference Hall of Pr. Commissioner (LD), D-Block, 1st Floor, Vikas Sadan, INA, New Delhi at 3.30 PM on the same day.