CENTRAL EUROPEAN INITIATIVE - CEI JACKHOLT.pdf · Eastern Europe & Caucasus 11% Central Europe &...

24/09/2012

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Jan Jackholt, Director

Procurement Function

EBRD

Outreach Seminar

Public Procurement in EBRD Projects

CENTRAL EUROPEAN INITIATIVE - CEI

Trieste, 25-26 september 2012

Project Procurement – Policies & Rules

FIRST SESSION

Welcoming Remarks

SECOND SESSION :

Part 1 EBRD – Introduction & Objectives

Part 2 Business Opportunities - EBRD projects

THIRD SESSION:

Part 3 Procurement and EBRD

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EBRD Introduction & Objectives

PART I:

What are the EBRD’s objectives?

To promote transition to market economies by investing mainly in the

private sector

To mobilise significant foreign direct investment

To support privatisation, restructuring and better municipal services to improve people’s lives

To encourage environmentally sound

and sustainable development

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What is the EBRD?

International financial institution, promotes transition to market economies in 30 countries from central Europe to central Asia

Owned by 63 countries and two inter-governmental institutions

In 2011, the Bank expanded its operations into Egypt, Morocco, Tunisia, & Jordan (Southern & Eastern Mediterranean – SEMED )

Capital base of €30 billion* Cumulative commitments of €71 billion

Unaudited as at 31 December 2011 At the Annual Meeting in Zagreb in May 2010, the Board of Governors approved the

Bank’s capital increase from €20bn to €30bn authorised capital.

EBRD in 2011 – Private vs Public

Invested over €71 bn in 3,389

projects since 1991

Private sector > 77% of EBRD

finance

Debt 85%, Equity 15% of EBRD

finance

€9 bn invested in 2010 in 386

projects

€9.1 bn invested in 2011 in 380

projects

AAA/Aaa rated multilateral

development bank

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Debt ABV Equity ABV Net Cumulative Business Volume

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Foundations of EBRD operations

Apply sound banking principles to every project

Support but not replace private investors

Advance the transition to a full market economy

Catalyst for change

Every Euro of EBRD investment mobilises a total of 3 Euros for the

project

EBRD investments have attracted an additional €114.6

billion from domestic and foreign investors

The EBRD uses funding donated by member governments and institutions to assist project preparation and catalyse foreign investment

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Shareholding of the EBRD

USA 10%

Japan 9%

EBRD Region excluding EU

members 8%

Others 11%

EU [25] countries

62%

A network of 36 offices in 30 countries

More than half our bankers are based in the region

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2012 ABV by region

Eastern Europe

& Caucasus

11%

Central Europe

& Baltics

8%

Turkey

13%

Central Asia

9%

South-eastern

Europe

19%

Russia

40%

Cumulative commitments €75.2 bn

EBRD finances diverse range of enterprises

Cumulative commitments €75.2 bn Unaudited as at 30 June 2012

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How does the EBRD finance?

Loans of varying maturities at floating or fixed rates

Equity investments, including equity funds

Guarantees to help borrowers gain access to financing

Sound banking principles applied to projects

Each project requires:

Careful assessment of risk/rewards for all parties

Commercial viability

Good prospect of

returns

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Advancing transition to market economies

EBRD projects should promote:

Expansion of competitive markets, including private ownership

Stronger institutional and legal framework

Sound corporate governance

Structural reforms

Respect for people and environment

Response to global financial crisis

Increase in planned investment: €6 to €9 bn

Recapitalisation of sound banks

Expanded Trade Facilitation Programme

Financing energy and infrastructure projects

Corporate Support Facility: €250 m

Greater collaboration with other IFIs

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Environmental mandate

Every project is screened for

environmental impact

Around 17% of total

commitments are designed to

make environmental

improvements

EBRD takes account of the environment in all its operations

Business Opportunities in EBRD

Financed Projects in the Region

PART II

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EBRD in the region

Albania

BiH

Bulgaria

Croatia

RFY Macedonia

Montenegro

Romania

Serbia

Albania

Projects 2001-11

No. of projects

(April 2012)

56

Net business volume €683.7 million

Total project value € 2.4 billion

Cumulative disbursements €530.4 million

Portfolio in private sector 58%

Corporate 21%

Energy 36%

Financial institutions 7%

Infrastructure 36%

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Bosnia and Herzegovina

Projects 2001-11

No. of projects

(April 2012)

100

Net business volume € 1.4 billion


Gross disbursements €871.2 million


Corporate 9%

Energy 10%


Infrastructure 60%

Bulgaria

Projects 2001-11

No. of projects

(April 2012)

205



Gross disbursements € 2.2 billion


Corporate 37%

Energy 25%


Infrastructure 9%

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Croatia

Projects 2001-11

No. of projects

(April 2012)

138





Corporate 26%

Energy 20%


Infrastructure 30%

FRY Macedonia

Projects 2001-11

No. of projects

(April 2012)

77

Net business volume € 964.8 million


Gross disbursements € 492.7 million


Corporate 12%

Energy 30%


Infrastructure 49%

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Montenegro

Projects 2001-11

No. of projects

(April 2012)

31

Net business volume € 295.2 million

Total project value € 547.8 million

Gross disbursements € 149.0 million


Corporate 27%

Energy 13%


Infrastructure 35%

Serbia

Projects 2001-11

No. of projects

(April 2012)

188





Corporate 18%

Energy 17%


Infrastructure 39%

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2011 Procurement Statistics

Key findings in procurement for 2011

• 219 contracts worth €1,645 million were signed, with EBRD’s financing

totalling €1,055 million (NSD administered contract excluded)

• Number of signed contracts doubled in comparison with 2010

• 81% of all contracts (87% value) applied Bank’s open tendering

procedure

• 805 tenders from 49 countries received on the Bank’s financed contracts

• 53 contracts worth €109 million were signed under the six Nuclear

Safety and Decommissioning Funds managed by NSD

• Additional €826 million of various contract amendments has been

approved by the relevant Fund Assemblies

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*


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*


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Value Tenderers from the six most successful tendering countries (India, Italy, Kazakhstan, Romania, Russia and Ukraine) won a total of €1 billion worth of contracts

Number

Tenderers from six most successful tendering countries (Albania, Bosnia and Herzegovina, Italy, Kazakhstan, Romania, Russia) won a total of 121 contracts

Share

70 per cent of all tenders were submitted by tenderers from countries of operations. They won 162 contracts worth €968 million

Five year dynamics

Public Sector

• Contracts 669

• Total value €7.12 billion

• EBRD financed €4.54 billion

The highest total amount of contract value:

• Russia €1.62 billion

• Ukraine €1.18 billion

• Romania €0.63 billion

• Kazakhstan €0.61 billion

• Bosnia and Herzegovina €0.56 billion

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PROCUREMENT and EBRD : General

Considerations

PART III:

.

Examples of goods and works procured

under Bank funded public projects (1)

Municipal Infrastructure

– Waste water treatment plants, pipes, meters, pumping

stations, sewage plants, process plants, incinerators

Transportation

– Rail track maintenance equipment, locomotives, signal

systems, trams, buses, air traffic control and navigation

equipment, motorway construction, management information

systems

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.

Examples of goods and works procured

under Bank funded public projects (2)

Power and Energy Efficiency

– Power transmission lines and substations, distribution control

systems, power stations and sub-components, meters, energy

efficiency equipment, refurbishment of plants, management

information systems

Nuclear Safety

.

Technical Co-operation Funds

Bank Loans

Bank Administrative Budget

Consultancy services funded through:

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.

Compare with other IFI’s

1 IBRD/IDA, AfDB, AsDB, IADB main objective

Reduce poverty

2 Beneficiaries/clients

Predominantly Sovereign Loan

3 Funding also provided for…

“Non bankable” projects like education, health, structural reforms etc.

.

EBRD’s Procurement Policies and Rules

Detailed rules for public sector

– Open tendering is the norm

Policies and objectives for private sector

– Follow normal acceptable commercial practices

Consultant services

– Competitive selection

Guidance to Tenderers (including remedies)

Includes a clause for exception to the PP&R

Separate policy for selection of concessionaires (4.4 Private

sector)

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.

Procurement of Goods and Works

Open tendering

– all interested firms may submit tenders

– pre-qualification

– two-stage tendering for complex requirements

– 95% by value of all EBRD financed contracts

All other methods are exceptions to be justified to the Board of Directors

– Direct Contracting, Selective Tender, ‘Shopping’, Local procedures

.

EBRD Public procurement principles

The Bank shares the same principles as other IFIs but/and….

– Aligned to principles of WTO Government Procurement Agreement

– Eligibility to participate is open to firms from all countries including non-shareholder countries (except countries subject to UN Chapter VII sanctions)

– Only restriction is capability to fulfil the contract

– No domestic preference allowed

– Internationally recognised contracts can be used

– The Bank’s PP&R are not aligned to the EU Directives but both are aligned to the GPA

– Specific rules for sub-sovereign clients introduced 2009

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.

Sub sovereign public sector projects

Example, Municipals and state owned enterprises can

not disregard national law. In Sovereign projects the

provision of the Loan Agreement supersedes Local

Law.

PP&R now reflects experience from sub-sovereign

projects

2009 issue includes adjustment to Incoterms, tender

prices, Currency and Language provisions

.

EBRD Procurement rules are important…

For the client and the project

– economy and accountability

For the Bank’s shareholders

– Articles of Agreement: open to all countries

For the Business Community

– fairness and transparency

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.

The Client’s role during implementation

The client is responsible for all aspects of the

procurement of contracts. It invites, receives and

evaluates tenders and awards contracts which in all

cases are concluded between the client and the

supplier or contractor

.

The Bank’s role during implementation

Public Sector Operations

– The Bank reviews and monitors the client’s tender process and contract administration to ensure that procurement is carried out in accordance with agreed procedures. The Bank reviews complaints

Private Sector Operations

– The Bank undertakes due diligence and monitors contract administration to ensure that fair market prices are obtained

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Where to find the opportunities?

• Where to find information on opportunities:

– check www.ebrd.com

– check national press

– Know your market i.e. client

• What to look for on ebrd.com:

– Project Pipeline

– General Procurement Notices (GPN)

– Invitation for Prequalification or for Tender

Strategy for winning contracts

• Be focussed and selective

• Explore sub-contracting or joint venture (JV) opportunities

• Respond to the GPN and build your knowledge

• Read “Annex 1 - Guidance to Tenderers” of the

Procurement Policies and Rules

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Strategy for winning contracts

• Don’t be too clever when preparing your tender

(comply with the requirements) !!!

• Does your company meet the qualification criteria?

Form JV

• Make sure to provide answers to all questions and

submit all required documentation

• Review documents early and submit questions or

issues in writing, if necessary copy the Bank

Tenderer’s recourse

• Do not attempt to influence tender evaluation

process. The evaluation process is confidential

• If unsuccessful, ask the client for a debriefing

• Complaints should be sent to the client with a copy

to the Director of the Banking Department Team

and the Director of Procurement using the Bank’s

procurement complaint website

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.

EBRD “review and remedies procedures” (1)

Client is responsible for the procurement process.

Tenderers may raise issues regarding the tender documents, or the process, prior to tender opening with the client and copy the Bank.

The Bank reviews all steps in the process and provides its “no objection”

Evaluation process is confidential

If unsuccessful ask the client for a debriefing

Complaints should be sent to the client with a copy to the Director of the Banking Department Team and Director of the Procurement Department

.

EBRD “review and remedies procedures” (2)

All procurement complaints are investigated by the

Bank’s Procurement Department

All complaint are then reviewed by the Bank’s

Procurement Complaints Committee.

The Bank may decide not to finance a contract

The Bank has no modalities for issuing compensation

awards.

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.

Prohibited Practices

All allegations of Prohibited Practices are investigated

by the Bank’s Chief Compliance Officer

The Chief Compliance Officer will for substantiated

cases bring the findings to the Bank’s Enforcement

Committee .

The Bank may decide to apply any of the Enforcement

Actions available. One of these is debarment.

IFI’s have now agreed upon cross-debarment.

.

Advancing the transition

EBRD projects should promote:

Expansion of competitive markets, including private

ownership

Stronger institutional and legal framework

Sound corporate governance

Structural reforms

Respect for people and environment

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.

The EBRD Public Procurement Legal Transition

Programme

“Joint Venture” between

the EBRD Procurement

Department and the

Bank’s Legal Transition

Team

.

The Legal Transition Team and Procurement

Department cooperation focuses on … building

institutional capacity of clients

in procurement process

standard training toolbox to

assist clients

standard assessment

measures to evaluate risks in

national legal frameworks and

practice

dialogue with governments to

improve frameworks and the

implementation of the

projects

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.

Legal transition – Procurement (1)

In 2010 EBRD conducted its first PP assessment in its

countries of operations which included a review of

remedies systems

http://www.ebrd.com/pages/research/publications/new

sletters/lit102.shtml

.

2010 EBRD Public Procurement Legal Framework

Assessment – Initial Findings

‘law on the books’

quality of PP legislation

tentative results

EU member states that aim for full compliance with EU public procurement directives have achieved at least a satisfactory level of compliance with international standards, only Hungary scored high compliance

South-eastern European countries, along with Turkey, Georgia, and Mongolia introduced new laws and visibly struggle with implementation issues and institution building

In other countries where legislative reform may have been started procurement laws do not yet comply with international standards

http://www.ebrd.com/pages/research/publications/newsletters/lit102.shtml

http://www.ebrd.com/pages/research/publications/newsletters/lit102.shtml

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.

2010 EBRD Public Procurement Legal Framework

Assessment – Initial Findings

‘law in practice’

quality of PP local practice

tentative results

Average 15% Implementation gap – a gap between the score on the PP legislation quality and the PP local practice quality

Implementation gap has been found largest in Western Balkan countries

Lacking data in Azerbaijan, Turkmenistan and Uzbekistan

. 60

The EBRD PP Assessment:

quality of PP legislation in selected countries

Hungary

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67

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Turkey

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67

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Kazakhstan

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Legend:

1 = Accountability

2 = Integrity

3 = Transparency

4 = Competition

5 = Efficiency of the contract

6 = Economy of the process

7 = Proportionality

8 = Uniformity

9 = Stability

10 = Flexibility

11 = Enforceability

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.


In 2011 EBRD and UNCITRAL are launching a joint

programme involving workshops, GAP analysis and

reform of public procurement legal framework in

seven countries. Benchmark is UNCITRAL model law.

.


Our aim is to sign

Memorandum of

Understanding with all

our countries of

operations to promote

policy dialogue and

exchange of

experience

Federal Antimonopoly Services,

Russian Federation. Signing 2010

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.

Transition impact of good procurement

Increased competitive pressure is likely to improve the efficiency with which resources are used, demand is satisfied, and innovation is stimulated.

Through interactions of the project entity with suppliers and clients .

A project may result in increased private ownership through privatisation, or new private provision of goods and services.

A project may help to create or reform governmental or private institutions, policies and practices whose function is to enhance entrepreneurship, and the efficiency of resource allocation.

Skill transfers are often complementary to other transition-related project impacts such as institution-building

.

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10’

Questions

and answers

Grazie!

25 September 2012

Veljko Sikirica

Senior Procurement Specialist

EBRD Procurement Department

CENTRAL EUROPEAN INITIATIVE - CEI JACKHOLT.pdf · Eastern Europe & Caucasus 11% Central Europe &...

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