Terms of Reference for Invitation for Submission of Proposals for the Appointment Ofa

TERMS OF REFERENCE FOR INVITATION FOR SUBMISSION OF PROPOSALS FOR THE APPOINTMENT OFA PANEL OFPROFESSIONALTRANSACTIONAL ADVISORS TO THE BUFFALO CITY METROPOLITAN DEVELOPMENT AGENCY (BCMDA)

PURPOSE

The purpose of this document is to call for proposalsfrom transactional advisors to be appointed into a panel of five (5)firms/companies/consortiato render transactional advisory services for property development and management on anad-hoc basis for a period of three (3) years.

The appointed panel will be requested to provide quotations on an ad-hoc basis, a process which will be open, fair, competitive and transparent in accordance with BCMDA supply chain management processes.

BCMDA undertakes to consider all the appointed panelists in the request for quotation (RFQ) processes.

BACKGROUND

The Buffalo City Metropolitan Development Agency (BCMDA) is a municipal entity wholly owned by the Buffalo City Metropolitan Municipality (BCMM) and established in terms of S76 of the Municipal Systems Act, 32 of 2000. BCMDA was established as a profit company on 20 April 2016, in terms of the Companies Act, 1973 as amended. This allows the Agency to transact, generate funds and have a borrowing capacity to carry its mandate to increase economic growth through tourism infrastructure, economic and social development as well as property management and commercialisation.

The BCMDA is established as a juristic person operating as a municipal entity, which has been established in terms of the Municipal Systems Act. As an entity of BCMM, the BCMDA thus extends the BCMM’s capability with respect to the identification, planning and implementation of development projects for the benefit of the entire municipal area. Pursuant to this mandate BCMM regularly donates strategic parcels of land for development by BCMDA and/or third parties.

Experience in public sector transactions will be an advantage, as well as the ability to structure transactions with multiple institutions and protect the agency from undue risk-exposure.

OBJECTIVES

BCMDA intends developing its property portfolio and thereby seeks to appoint an advisory panel of property developers with various skills who will be able to assist in the following on an ad-hoc basis:

Development of a property development strategy;
Development of a property management strategy;
Provideadvice on how land development and investment transactionsshould be structured;
Assist on identification of potential property development partners;
Conduct evaluation and risk analysisof development proposals;
Facilitate and negotiate agreementson behalf of BCMDA;
Drafting of legal contracts with developers;
Enhance the performance of BCMDA’s property portfolio

BCMDA will be invoiced upon successfully completion of land development deals.

CATEGORIES OF SPECIALISATION

The Bidders must have proven track record of transactional advisory services and arranging funding for mega projects within the South African legislative environment.

A vast skills set that will be able to carry BCMDA’s objectives is highly recommended.

PROPOSALS

Bidders must submitdetailed proposals with supporting documents setting out their relevant experience andqualifications.

Bidders should comply with the following criteria:

1.If a bidder is a shareholder in a private equity fund, confirmatory letters from the related private equity fund confirming the transaction advisor’s shareholder status, mandate of the fund, and approval to participate in this bid process should be provided.

2.Provide current or proposed organisational structure for the performance of the work, in line with Broad-Based Black Economic Empowerment (BBBEE) Principles.

3.Provide details of infrastructure finance advisory experience gained in advising public sector institutions in line with PFMA and MFMA requirements with respect to property projects including commercial, retail and residential.

5.Proven track record with respect to property development (strategy and management), financial modelling, transaction structuring, and negotiation of significant transactions within the last ten (10) years.

6.Proven experience with respect to formations of public private partnership (PPP) and quasi-PPP transaction structures, including understanding of the legal and commercial considerations thereof.

7.Preferred structure and composition of the Transaction Advisory team:

a.Degree in finance or Chartered accountant with at least 10 years project finance experience/asset manager/PPP advisory experience/PFMA and MFMA advisory

b.Degree in Law or Admitted Attorney with at least 10 years’ experience in corporate law, project finance, infrastructure finance and or PFMA and MFMA, and PPP related matters.

c.Technical Advisor with a post-graduate degree in the construction sector with a minimum experience of ten years in construction and property development project management.

8.Preference will be given to bidders with the highest B-BBEE level contributor.

DEMONSTRATIONS/PRESENTATIONS

During Assessment process prospective service providers may be invited to demonstrate the capabilities of their proposed services, as set out in their proposals. All costs relating to this process, to be held at the BCMDA Offices, shall be at the prospective service provider’s costs.

EVALUATION OF PROPOSALS

STAGE 1:Compliance evaluation

STAGE 2:Functionality evaluation

STAGE 1:Compliance evaluation

On Compliance bidders must submit the following documents with their proposals, as per the notice:

A.A summary report as proof of registration on National Treasury’s Central Supplier Database (CSD)

B.A valid original tax clearance certificate issued by South African Revenue Services or valid tax compliance verification pin is to be submitted with the completed tender;

C.Completed MBD 4, MBD 8 and MBD 9 forms;

D.Confirmation that the bidders municipal account is not in arrears for a period exceeding 3 months. Such confirmation must be as follows:

a.a statement of municipal account in the name of the bidder (the bidding company); OR

b.a tenderers debt clearance certificate from their respective municipality that is stamped and signed by that municipality; OR

c.a lease agreement:

i.If the bidder is liable for payment of municipal services, a statement of account confirming whether or not the bidder is in arrears in this regard must be provided in addition to the lease agreement;

ii.If the bidder is not liable for payment of municipal services a written confirmation from the lessor stating that the bidder is not in arrears with regards to their payment obligations in terms of the lease agreement.

E.At least 3 signed letters of recommendation from previous clients that are organs of the state; (NB: a mere appointment letter DOES NOT serve as a letter of recommendation);

F.Bidders are required to submit an original and valid B-BBEE Status Level Verification Certificates or certified copies thereof together with their bids, to substantiate their B-BBEE rating claims, failing which will result in a status level score of zero be assigned to the tenderer.

NO BIDS WILL BE CONSIDERED FROM PERSONS IN THE SERVICE OF THE STATE AS DEFINED IN THE LOCAL GOVERNMENT MUNICIPAL FINANCE MANAGEMENT ACT 56 OF 2003: MUNICIPAL SUPPLY CHAIN MANAGEMENT REGULATIONS.

Failure to meet the above stated minimum requirements will result in a proposal being considered non-responsive and therefore not considered for the evaluation in the next stage and ultimately non-responsive.

Bidders meeting the above compliance requirements will be eligible for evaluation on functionality.

Stage 2: Functionality evaluation

CRITERIA / MAX. POINTS / EVIDENCE TO CLAIM POINTS
Structure and composition of the Transaction Advisory team:
Degree in finance or Chartered accountant with at least 10 years project finance experience/asset manager/PPP advisory experience/PFMA and MFMA advisory:
15 years and above = 15 points;
10 to 14 years = 10;
Less than 10 years = 0 points.
Degree in Law or Admitted Attorney with at least 10 years’ experience in corporate law, project finance, infrastructure finance and or PFMA and MFMA, and PPP related matters:
15 years and above = 15 points;
10 to 14 years = 10 points;
Less than 10 years = 0 points
Technical Advisor with a degree in the construction sector with a minimum experience of 10 years in construction and property development project management:
15 years and above = 15 points;
10 to 14 years = 10 points;
Less than 10 years = 0 points.
Other team members with relevant experience = 5 points. / 50 / Detailed CV’s of the Transactional Advisory Team supported by certified copies of relevant certificates.
The CV’s and certificates must be able to support the qualifications and experience claimed.
Experience of bidder
Technical advisory experience in the public-sector institutions with respect to property projects including commercial, retail and residential property:
5 years and above = 15 points;
1 to 4 years = 5 points;
Less than 1 year = 0 points.
Experience in advising public sector institutions with respect to funding strategies that are compliant with PFMA and MFMA requirements:
5 years and above = 15 points;
1 to 4 years = 5 points;
Less than 1 year = 0 points.
Experience with respect to formulating property legal transactions within the public sector environmentwithin the last 10 years:
5 years and above = 10 points;
1 to 4 years = 5 points;
Less than 1 year = 0 points.
Proven experience with respect to public private partnership (PPP) and quasi-PPP transaction structures, including understanding of the legal and commercial considerations thereon:
5 years and above = 10 points;
1 to 4 years = 5 points;
Less than 1 year = 0 points. / 50 / Signed letters of reference/ recommendation from relevant institutions. Letters submitted must demonstrate the years of experience claimed.
Maximum possible score (MS) / 100

Proposals scoring a minimum of 70% on functionality will be considered for appointment as part of the panel.

SERVICE LEVEL AGREEMENT

The five successful proposals will be expected to enter into a service level agreement with the BCMDA.

INSURANCE FOR LIABILITY AND INDEMNITY:

The service provider shall arrange and keep in force professional indemnity insurance cover in respect of the services provided under this Agreement.

Signature:______Date:______