Enhancing Infrastructure Services through PPPS in Benin: Institutional Strengthening and Capacity Building Support

Request for expression of interest for selection # 1218498

 

Background:

Benin's experience with PPPs to date has been mixed. At present, the PPP portfolio includes a combination of highly complex economic infrastructure projects and small-scale social infrastructure projects. The main economic infrastructure projects, for which the Government generally seeks funding from external partners include: (i) the railway Niamey-Cotonou, (ii) the new airport; (iii) the deep-water port; and (iv) energy production, restructuring, and distribution projects. Most of these PPPs are still at a preliminary stage, with no credible feasibility studies. Generally, these projects will be centrally managed from Cotonou. By contrast, many of the small-scale social projects in the water and the education sectors are in the more advanced stages of implementation and are under the decentralized management of the local governments (communes).
In recent years, the Government has demonstrated a concerted commitment to improving the business environment and fostering PPPs. In 2015, Benin was among the ten top reformers in the world in the Doing Business Report. Notwithstanding an improving investment climate, the arrangements for managing PPPs are inadequate. In particular:
A comprehensive legal framework for PPPs has yet to be developed or applied. A PPP law is currently under preparation, however the current version does not adequately address: (i) the institutional arrangements for PPP management (including the anchorage of the proposed centralized PPP unit), (ii) the disclosure of contractual conditions and reporting on actual contract performance, and (iii) the systems and processes for contract and fiscal management of PPPs. While the Bank has discouraged the practice of accepting unsolicited proposals and sole sourcing, the current draft law reflects a strong appetite among local actors for these types of PPP transaction by allowing unsolicited proposals and their exemption from competitive bidding below the US $100 million threshold.
The proliferation of government institutions created to support the implementation and oversight of PPPs has hampered efficiency. These include the Beninese Agency for Larger Projects (Agence béninoise des grands travaux), the Agency for the Promotion of Export Investments (Agence de promotion des investissements pour les exportations), and the Presidential Investment Council (Conseil présidentiel des investissements). There is little coordination among these entities, leading to an increase in transaction costs and heightened ineffectiveness in the achievement of expected results. Capacity for the PPP investments management varies. The existing PPP portfolio is comprised of PPP investments that differ vastly in size and type and that require different kinds of treatment. The capacity of the various institutions that are responsible for assessing financial risk and contingency liabilities, procurement, appraisal, unsolicited bids, due diligence, contract management, performance management and negotiations is weak and uneven. This is exacerbated by the absence of guidelines and training on PPP management. The public sector is ill equipped to ensure effective development reform, and Government is seeking to reinvigorate efforts to increase economic growth and address development challenges through an ambitious investment program. Strong commitment from the Government has been shown in the year. The Government organized a Round Table on development financing from June 17-19, 2014 in Paris, to mobilize the public and private financing. The Government presented to donors and investors a set of projects in infrastructure, health, and tourism, which could pave the way for sustainable growth. Development partners pledged about US$11.2 billion to support Benin's ambitious development program, which represents an average of US$2.4 billion per year over five years of additional funding for the country. To ensure the successful implementation of the Governments Investment Program, there is an urgent need to improve the manner in which the Administration manages public investments. Without this, there is a risk that the gains made in developing the program and in attracting significant external financing will be squandered. In this context, the Government of Benin has expressed interest for the World Bank group to support the development of an enabling environment for PPPs and to assist in strengthening GoBs capacity to identify and implement PPPs. This proposed activity will complete the WB new Public Investment management and Governance project that aims to improve efficiency in public investment management and enhance the performance of selected institutions of accountability in Benin.

ASSIGNMENT DESCRIPTION
The objective of this technical assistance is to help create (i) a favorable legal and institutional framework for PSP in infrastructure in Benin; and (ii) greater capacity in PPP preparation and implementation through provision of world-class training and technical assistance. The scope of work for this assignment will include:

1.Review of best Practices in Institutional, Legal and Regulatory Framework for PPPs : Review the legal, regulatory and institutional best practices to strengthen the enabling environment for PPPs in countries with similar characteristics (including in the UEMOA region). Case studies will be undertaken to illustrate institutional set ups, legal instruments and regulations that have supported successful PPP programs as well the in-practice experience with PPP frameworks and projects implemented to date including any major issues or flaws. The review and dissemination should be guided by a few goals: good governance, promotion of competition, and transparency.

1.Review of the current legal and regulatory framework: Technical assistance and advisory services to the Government to improve the PPP law by addressing existing inadequacies in the current draft including with regards to management of unsolicited proposals.

2.Streamlining and strengthening the institutional framework governing PPPs
The PPP Unit is likely to play an important role in developing PPP policy and strategy for the Government. The PPP Units mandate should provide clarity on a number of other issues pertaining to intra-GOB coordination on PPPs. The final report will make recommendations on the PPP Units mandate and roles. This component will develop the rationale and justification for creating new institutions, including a PPP Unit if advisable, the recommended organizational and management structure, budget, financing management, and practices and reporting arrangements for proposed new institutions. It will outline the specific roles and relationships between the new institutions, if any, and the existing multi-sectorial ones with a view to their coordination and harmonization.

3.Develop PPP Procedures : The task will involve working closely with the PPP Unit and other stakeholders to draft PPP Procedures Manual (a document that will set out the guiding framework for the PPP program) and to design a PPP website where information on project will be shared with citizens, users, and investors, where contracts will be pro-actively disclosed, and where performance indicators will be regularly updated. Specific guidelines will be developed on project viability, marketability, value for money, transaction structure, drafting of PPP agreements, pre-qualify bidding, request for proposals, evaluation and award, contract disclosure, project risks management, PPP performance management, and administration of agreements. The PPP Procedures should draw on international best practice and experience in developing PPP programs, but aim to address the specific situation and needs in Benin. The specific format of the draft PPP Procedures should be proposed by the consultant and should be agreed with the Government during the course of this assignment. The PPP website will be owned by the PPP Unit and will be designed following best practices on disclosure and transparency identified by the World Bank.

4.Pipeline Screening and project prioritization: Building upon the pipeline identified by the Government, this component will evaluate and refine the pipeline of infrastructure projects in Benin to identify two projects for further pre-feasibility study.

5.Pipeline development and PPP Options: Carry out a more detailed technical, legal, economic, and financial review of the two selected PPP projects, and guidance and support to the relevant line ministry on assessing the legal, technical, economic, and financial feasibility of the two projects through on-the job capacity building. The objective of the pre-feasibility studies is to check the quality of the project, and to develop and present a range of PPP options and recommend a preferred PPP option for each project, which will include, among other the options for remunerating the private sector partner and identify possible forms of public support (e.g., government subsidy, guarantees, etc.) to ensure the projects bankability.

6.Stakeholders Consultation and PPP Awareness Seminar :In addition to the stakeholders workshop/meeting to discuss and get feedback on the findings of the above components and final dissemination of the findings, this activity will support series of trainings session.

a. PPP training program: The PPP training workshop will be a learning platform for key Stakeholders to share best practices and emerging lessons regarding the design, implementation and monitoring of PPPs.

b. High level seminar: A PPP dialogue with high level officials and decision makers will be organized to help de-mystify PPPs and unlock the apparent reluctance and address the lack of political commitment to develop viable PPP projects in the country.

Qualification Criteria

1. Provide information showing that they are qualified in the field of the assignment. *
2. Provide information on the technical and managerial capabilities of the firm. *
3. Provide information on their core business and years in business. *
4. Provide information on the qualifications of key staff. *

* - Mandatory