Procurement process

Relevant procedure

What procedures normally apply to a PPP procurement? What evaluation criteria are used to award a PPP transaction?

Under the Policy, two procurement processes are prescribed:

  • a competitive procurement process; and
  • an unsolicited proposal.

The Policy does not prescribe detailed rules or guidelines on the competitive procurement process. However, the Policy provides that the procurement procedures adopted must:

  • be in accordance with a system that is fair, transparent, competitive and cost-effective;
  • encourage the maximum use of local content and transfer of technology; and
  • ensure that PPP activities that are within the scope of public procurement shall be undertaken according to the Public Procurement Act.

Unsolicited proposals are considered based on the criteria stated in the Policy. The criteria for evaluation must:

  • demonstrate affordability, value for money and substantial technical, operational and financial capacity; and
  • demonstrate efficient risk allocation.

The proposed PPP Bill, however, provides for detailed rules on procurement processes that must be followed.

Consideration of deviating proposals

May the government consider proposals to deviate from the scope or technical characteristics of the work included in the procurement documentation during the procurement process, without altering such terms with respect to other proponents? How are such deviations assessed?

As indicated, the Policy does not prescribe a detailed procurement process for PPPs. In prescribing the procurement process, the best practices in public procurement are adopted, which will require the bidder to submit a conforming bid or proposal before an alternative proposal or bid is considered. Therefore, a proposal that deviates from the scope or technical requirements of the procurement documentation may be rejected.

Unsolicited proposals

May government parties consider unsolicited proposals for PPP transactions? How are these evaluated?

Yes. Unsolicited proposals may be considered by the government. Under the Policy, unsolicited bids are considered on a case-by-case basis and are limited to projects that are not in the project list of the public party, and have not already been considered by the public party. The unsolicited proposals are required to be consistent with the national development agenda and serve the public interest and the needs and priorities of the public party. All unsolicited proposals are also subject to a value for money, technical, financial and economic assessment.

Under the proposed PPP Bill, unsolicited proposals will be subject to a competitive procurement process. The intention of the Bill is to discourage unsolicited proposals.

Government stipend

Does the government party provide a stipend for unsuccessful short-listed proponents or otherwise bear a portion of their costs?

The government does not provide stipends to unsuccessful short-listed proponents or bear a portion of their costs. The general principle is that all costs related to the preparation and submission of proposals are borne by the bidders or proponents.

Financing commitments

Does the government party require that proposals include financing commitments for the PPP transaction? If it does not, are there any mechanisms during the procurement process to ensure that the applicable PPP transaction, once awarded, is financeable?

There is no legal requirement for proposals to provide for financing commitments. However, the procurement documentation may require such financing commitments in the proposal, in which case it is evaluated as part of the proposed terms by the private party. In most cases, the project agreement provides that the achievement of financial close by the private party is a condition precedent and failure to achieve financial close is subject to some liabilities imposed on the private party.

Legal opinion

May the government ask its counsel to provide a legal opinion on the enforceability of the PPP agreement? May it provide representations as to the enforceability of the PPP agreement?

Except with representations in the PPP agreements, the government does not request its legal counsel (usually the transaction adviser or the Attorney General) to provide such legal opinion to the private party. However, the private party (where it engages local counsel) would usually request an opinion on the enforceability of the PPP agreement under Ghanaian law and related regulatory advice.

Restrictions on foreign entities

Are there restrictions on participation in PPP projects by foreign entities? May foreign entities exercise control over the project company?

There are no restrictions in respect of the participation by foreign entities in PPP projects. However, the draft PPP Bill empowers the Minister of Finance to enact the necessary regulations prescribing the preference that may be given to Ghanaian businesses as part of a general local content policy of Ghana. The public party may also make provision for a margin of preference that may be applied to a domestic or local business.

A foreign entity is free to exercise control over the project company. The current draft PPP Bill provides that the public party should not hold more than 15 per cent interest in the special-purpose company unless prior approval of the Minister of Finance is obtained, or in the case of projects designated as strategic national projects.