Makerere University Investors Conference Tender Framework and Procurement
Makerere University Investors Conference Tender Framework and Procurement Process: How the next stages of the procurement shall progress after the Investors Workshop Commercial considerations Project Structure The project structure envisioned is a Development Lease structure This shall involve the letting of the relevant Project Site by the Makerere University or Mak Holdings to a Private Sector Party who will conclude a long term commercial lease with the Makerere University or Mak Holdings, as applicable, with a view to undertaking the development (designing, financing, procurement, construction, operation and maintenance) of the relevant Project for its own account. Principle terms and conditions set out in Development Lease Agreements including obligations of Mak Holdings, performance specifications, conditions precedent and other Private sector obligations. Mak Holdings obligations: procure and deliver in a timely manner the land /Right of Way, free from any encumbrances; subject to private sector compliance with predefined obligations, facilitate the project development; and assist the private sector in securing necessary national government consents for the Project. Private sector obligations: Private investor to take full revenue risk, compensate Mak Holdings for the right to develop and or manage MUK properties as the case may be through: 1) Signature bonus; and 2) Annual lease Rentals. Project Structure Makerere University
Assign & Transfer Income Signature Bonus (One-off) Mak Holdings Development Lease Investor Capital Receipt + Lease Payments Annual Lease Payments (Continuous) Lease Duration = N years Value as per valuation Proposed Risk Allocation Matrix Key Risks
Description Allocation I. Development Period Risks 1. Statutory clearances Environmental Clearance, Conservation of Site and Mak Holdings/ Private other approvals Proponent 2. Availability of land free from Land availability, encroachments, utility shifting Mak Holdings encumbrances 3. Financing and financial closure Ability to secure financing Private Proponent 4. Legal & regulatory Risks Change in procurement law, approval requirements Mak Holdings
5. Access Availability and access to material sites Mak Holdings 6. Design risk Meeting minimum performance requirements Private Proponent 7. Quantity and price variation Change in quantities & price fluctuations Private Proponent 8. Quality Adherence to Quality standard Private Proponent 9. Local permits / clearances Securing necessary permits
Private Proponent 10. Construction risks Cost II. Construction Period Risks overruns, Contractor Competence, Site Private Proponent Preparation, Time Over-runs & other delays 11. Completion risks Necessary design approvals, tests, certificates, other procedural issues
completion Private Proponent Proposed Risk Allocation Matrix Key Risks Description Allocation III Operational Period Risks 12. Revenue risks Revenue fluctuations and under or over estimation, Private Proponent 13. Demand risk impact on Impact of usage on operation and maintenance Private Proponent operating cost costs 14. Industrial Relations risk Labor issues especially in context contractor staff 15. Operations & Maintenance Operations & maintenance requirements Private Proponent Private Proponent risks
16. Quality of service Performance not meeting the required standards Private Proponent IV. Project Life Cycle Risks 17. Legal risks Change in Law Mak Holdings / Private / Private Proponent 18. Commercial / Financial risks Foreign Currency fluctuation, Interest rate & other Private Proponent financial factors
19. Debt repayment Inability to repay debt Private Proponent 20. Force Majeure Events Act of God or other inevitable events Mak Holdings Proponent Development Lease Key Terms Contract duration / term, renewal non-automatic on mutual consent Guarantee / security deposit, % aligned with annual lease rental Lettable areas, restrictions on sublease and delegations Transfers and rights of first refusal Licences and permits Tax and insurance, local service, property and land use tax as applicable Maintenance and repair Major repairs and works Indexation and inflation adjustment Damage or expropriation Handback regime Definition of default and penalties
Force majeure Procurement Process Procurement laws, key actors Laws The Public Procurement and Disposal of Public Assets Act, 2003, The Public Procurement and Disposal of public Assets Regulations, 2014 Key Actors Makerere University Council Mak Holdings Board of Directors Contracts Committee Evaluation Committee Next steps Done Sign-off PIM Jul 2018: Receive and Evaluate Proposa ls
5 Dec 2017: Investor Conference th Done Obtain approvals and Issue PIM Jan 2018: Issue RfQ; Bidder Prequalificatio n; Issue RfP; Dialogue with Bidders Dec 2018: Financia l Close Sep 2018: Commercial Close
Procurement Process Ref Milestone Anticipated Days 1 Complete Feasibility Study Complete 2 MUK Council Approval Complete 3 Issue PIM Complete 4 Investor Conference
Dec-17 5 Investors Q&A Dec-17 6 Issue, response and evaluation of RfQ 14 Days 7 Shortlist and issue RfPs 10 Competitive Dialogue 11 Preparation and Submission of Proposals 12 Evaluation of Proposals
13 Negotiations to Commercial Close 14 Financial Close 14 Days 5 Days 90 Days 21 Days 10 Days 30 Days Comments, Q&A, Discussions thank you
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