Myanmar: Support for Public-Private Partnership Framework Development

Sovereign Project | 47267-001

Summary

The TA will provide the Government tools to better direct and balance PPP project outcomes in the short term, and then set the stage for more holistic and sustainable national management of PPPs. For the MOEP, the TA will help the Government establish fair and balanced terms for private sector investment into power generation projects, establish principles for international competitive tendering, assist the Government in prioritizing PPP investment projects, and strengthen the design and management of future PPP procurements. The TA will provide recommendations on how to scale up the learning from MOEP's PPP experience to the national level, informing how to apply this framework to a broader cross-section of ministries. At the same time, it will provide the Government with draft tools, policies and organizational structures to better plan and manage PPP procurements.

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Project Name Support for Public-Private Partnership Framework Development
Project Number 47267-001
Country Myanmar
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8624-MYA: Support for Public-Private Partnership Framework Development
Department for International Development US$ 2.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Partnerships
Private sector development
Sector / Subsector Public sector management - Public administration
Gender Equity and Mainstreaming No gender elements
Description

The TA will provide the Government tools to better direct and balance PPP project outcomes in the short term, and then set the stage for more holistic and sustainable national management of PPPs. For the MOEP, the TA will help the Government establish fair and balanced terms for private sector investment into power generation projects, establish principles for international competitive tendering, assist the Government in prioritizing PPP investment projects, and strengthen the design and management of future PPP procurements. The TA will provide recommendations on how to scale up the learning from MOEP's PPP experience to the national level, informing how to apply this framework to a broader cross-section of ministries. At the same time, it will provide the Government with draft tools, policies and organizational structures to better plan and manage PPP procurements. As appropriate, the TA will help determine, in close consultation with Government, the nature of a prospective national PPP management structure and how to develop deeper PPP management capabilities within specific sectors. In summary, the TA will:

(1) deliver to the Government sound tendering processes and decision frameworks based on the principles of PPPs;

(2) promote consistent, objective and transparent application of PPP project development criteria to an international standard; and

(3) create recommendations for development of institutional management capacity for PPP, first within the MOEP and then at national level.

Project Rationale and Linkage to Country/Regional Strategy The attraction of under-developed infrastructure combined with large-scale investment opportunities, has encouraged foreign investors to flock to Myanmar. Nowhere has this strategy been more deeply applied than in the electric power sector. With only about 26% of the population connected to the grid and with existing grid systems in need of major overhaul or replacement, the investment needs of the sector are staggering. To address this challenge, the Ministry of Electric Power (MOEP) is engaged with ADB and other donors to undertake overhauls and upgrades to existing state generation, transmission and distribution system as well as to advance planning and sector reforms through loan projects and technical assistance (TA). At the same time, MOEP has indicated that it has signed more than 60 memoranda of understanding (MOUs) with private sector investors to prepare, finance, build and operate electric power generation projects. While such proposals may appear attractive in the sense they address core development areas, the Government has little basis to gauge whether or not these proposals or the proponents behind them are of good quality, offer good terms and conditions and/or will deliver sustainable commercial, financial and economic value. However, given the magnitude development hurdles to overcome, the Government has felt compelled to consider these proposals. To date, the approach to project selection and negotiations has been relatively ad hoc, making difficult for the Government to determine if it is achieving value for money. There is an acute need for the Government to transition from a responsive approach to one that (a) asserts control over the development process, (b) becomes more proactive in affecting and directing investment outcomes, while (c) capitalizing on the wave of investor interest in the country. This requires development of appropriate policies and processes, prioritized sector development projects, improved tendering processes and documentation, and backed by an enhanced institutional planning and management structure. In this process, the Government will be able to benefit from the large corpus of precedent PPP experience garnered by other countries worldwide. It is in this context that the Government has requested ADB support for development of a PPP framework.
Impact A strategy and plan to mobilize and manage public-private partnerships in infrastructure is established.
Project Outcome
Description of Outcome Institutional capacity to direct and manage public-private partnerships at the ministerial level is improved.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

1. Institutional structure for managing PPP projects and financing proposed.

2. Private sector investment management capacity in MOEP improved.

3. Knowledge of and development in relation to PPPs shared.

Status of Implementation Progress (Outputs, Activities, and Issues) Expressions of Interest (EOIs) from consulting firms were solicited in Dec 2013, as part of an approved advanced procurement action. In January 2014, 28 EOIs were received from prospective consultants. The TA was approved by the ADB Board on a no-objection basis on 27 February 2014. Funding for the TA was finalized through an MOU between ADB and DFID May 2014. The Government confirmed the TA Letter in July 2014, in accordance with the ADB's framework agreement with the Government. ADB undertook evaluations of EOIs for consultants, leading to a shortlist of 6 firms. The shortlist was confirmed by the Government on 18 July 2014. ADB sent Requests for Proposal (RFP) to the shortlisted firms on 22 July 2014. Five (5) firms responded with RFP submissions on 26 August 2014. The ADB consultant selection committee evaluated the responses and established a preferred bidder based on the top technical score, combined with subsequent score from the separate financial proposal, weighted on an 80% technical, 20% price basis. The preferred bidder was invited to negotiate the consultant services contract. Currently, TA inception is slated for the week of 13 October 2014. The TA will run through 31 December 2015.
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design The TA design was evolved through extensive consultations with relevant Government ministries. Inputs and insights were gathered from a wide array of stakeholders including chambers of commerce, prospective private sector investors and lenders, as well as other bilateral and multilateral development agencies.
During Project Implementation The TA will support dissemination of information on regional and global approaches to PPP policies, practices and projects and information on recommended approaches for Myanmar. Workshops will be conducted to help relevant Government entities understand and internalize the principles of PPP, seek feedback to refine such principles in the Myanmar context, and provide training on how to apply the principles to projects and improve the capacity of Government to manage PPPs. The TA will bring the Government together with experienced regional and international PPP entities to help learn from their experience in developing, implementing and managing PPPs both within the electric power sector and other sectors. Inputs will be sought from domestic stakeholders from both private sector and civil society to provide perspective on the scope and nature of PPPs in the Myanmar context. A national PPP investors' forum will be held to highlight project opportunities and provide a forum for information and perspective exchange amongst stakeholders.
Business Opportunities
Consulting Services

The TA will finance the services of 43.5 person-months of international consultants and 31.6 person-months of national consultants. Individual consultants will be recruited on a quality and cost-based selection (QCBS) criterion. Consultants will be recruited in accordance with ADB's Guidelines on the Use of Consultants. consultants will work together as a team to deliver the following outputs:

a. International Competitive Bidding (ICB) Framework including framework requests for qualification and proposal, evaluation criteria and operating rules

b. Project selection report documenting the process of narrowing the Government's long-list of projects to a prioritized subset; consultants will undertake workshops that review how projects were screened and prepared

c. Preliminary project profiles prefeasibility level analysis of top priority projects suitable for competitive bidding

d. Workshops, seminars, and communications Capacity-building workshops on ICB procurement, management of PPP processes, fiscal management of PPP contracts, international study exchange, an international PPP forum in Myanmar, and development of a national PPP web portal

e. TA implementation reports consultant reports on TA inception, interim progress, and final findings and recommendations.

Procurement Goods and services to be financed from the TA will be in accordance with ADB's Guidelines for Procurement. Items will be procured through international shopping, with minor items (i.e., those estimated to cost less than $100,000) having the option of being purchased locally through national shopping, where appropriate.
Responsible ADB Officer Jim Liston
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Energy Division, SERD
Executing Agencies
Ministry of Nat'l Planning & Economic DevelopmentOffice of the Ministers
Yangon
Union of Myanmar
Timetable
Concept Clearance 21 Nov 2013
Fact Finding 27 Nov 2013 to 28 Nov 2013
MRM -
Approval 27 Feb 2014
Last Review Mission -
Last PDS Update 30 Sep 2014

TA 8624-MYA

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Feb 2014 14 Jul 2014 14 Jul 2014 31 Dec 2015 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 2,000,000.00 20,000.00 0.00 0.00 0.00 2,020,000.00 27 Feb 2014 165,000.00
Title Document Type Document Date
Support for Public-Private Partnership Framework Development Technical Assistance Reports Feb 2014

Safeguard Documents

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