Myanmar - Public Private Partnership Centre Issues Procedures For Unsolicited Proposals.
Legal News & Analysis - Asia Pacific - Myanmar - Energy & Project Finance - Regulatory & Compliance
24 May 2021
In 2018, the Ministry of Planning, Finance and Industry (“MoPFI”) established the Project Bank via Notification 2/2018. The Project Bank consolidates projects that Implementing Government Agencies (“IGAs”) plans to develop and implement strategic action plans including through Public Private Partnership (“PPP”) mechanism, through unsolicited proposal or any other mechanisms. The idea behind this is to ensure that prioritisation and implementation of the projects are in line with the national strategic plan, and achieve better coordination and transparency for projects.
In 2020, the Public-Private Partnership Center (“PPP Center”), a specialised unit formed within the MoPFI, published its first notification, Notification No.1/2020 (“Unsolicited Proposals Notification”), for unsolicited proposals.
Unsolicited Proposal means a proposal made by a private party to undertake a PPP Project, submitted at the initiative of the private party, rather than in response to a request from the relevant government agency.
If the scale of a project under the unsolicited proposal exceeds MMK 2 billion, the relevant government agency is required to seek the advice of the PPP Center whether to include it in the Project Bank. For each unsolicited proposal that the relevant government agency decides to pursue, the relevant government agency, with support to be provided by the PPP Center upon request, shall prepare a Swiss Challenge tender process. This is a public procurement process where the agency is required to publish a bid and invite third parties to exceed it.
New procedures for unsolicited proposals
On 2 October 2020, the PPP Centre issued the Unsolicited Proposals Notification on the procedures for competitive tender process of unsolicited proposals without government invitation.
The Unsolicited Proposals Notification provides that unsolicited project proposals shall be processed according to the following four steps:
Initial screening of project proposals: In the first step, IGAs will assess the project based on the proponent’s financial capability such as income declaration and financial statements, business experience in implementing similar projects, completeness of documents and information (in accordance with Notification 2/2018) and finally alignment with the national strategic action plan and the benefits to the country.
Categorising the processes: After the initial assessment and based on the result of the screening, IGAs may (i) reject the proposal if the technical or financial capability is unsustainable to implement the project, or (ii) request to resubmit the proposal if the capability information is not sufficient to make a decision.
If the IGAs accept the proposal, they have three options:
conduct direct negotiation for implementation;
invite other bidders for the standard competitive tender process; or
invite other bidders for the Swiss Challenge tender process.
Payment of the fee for assessment of proposals: The proponent’s must make the payment of proposal assessment fee of MMK 5 million to IGAs. After remittance of the assessment fee, IGAs shall inform the proponent on the required process, whether it is the standard tender or the Swiss Challenge tender process.
Swiss Challenge tender process: The Swiss Challenge tender process allows other companies to provide better proposals to the initial project proponent. It must be implemented swiftly starting from when the “Business Case” and the tender proposals are requested. IGAs shall conduct the Swiss Challenge tender process by advertising Expression of Interest (EOI) in Newspapers, select preliminary companies/organisations who had submitted an EOI, proceed to, sign non-disclosure agreement with the interested companies and issue the requests for proposal prior to making a final selection.
Evaluation and Selection
The IGA’s evaluation and selection criteria, under sections 26 and 27 of Notification 2/2018, provides for an assessment of public need, project merits, complementary nature, uniqueness and novelty of the concept and technology. Particularly in relation to the Swiss-Challenge process, if the IGA receives a superior proposal then the original project proposer, the original proposer is given a 45 day period to match or improve its proposal compared to the competing bidder.
The Unsolicited Proposals Notification aims to facilitate and clarify the procedure of applying unsolicited project proposals from private proponents to government departments subject to principles of fair mechanisms which are competitive and transparent. Given the underdeveloped landscape in infrastructure projects across a number of categories (power, roads, ports, utilities, etc) and a continued need for development of these infrastructure projects, a clear and transparent bidding process is a welcomed step especially one that is centrally managed by the PPP Centre in conjunction with the IGAs.
The involvement of the PPP Centre (under the purview of MoPFI) is thought of as paving the way for the granting of government guarantees (“GG”) for nationally strategic projects under the Public Debt Management Law 2016. Although such law allows for GG to be granted, to date as far as public information is available, no such GG has been granted before by the Pyidaungsu Hluttaw. We will continue to monitor developments in such regard as notwithstanding recent events, much opportunities for development of these projects remain in Myanmar.
For more information, please contact:
Thuzar Tin, Zaid Ibrahim & Co (a member of ZICO Law)