COFINANCED UNSOLICITED PROPOSALS OF THE SANITATION SECTOR - 2019

Supreme Decree 016-2019-VIVIENDA

Karin Granda Sánchez Head of Special Projects PROINVERSION

IPC proposals shall be submitted to ProInversion’s Reception Desk, considering the Intervention Needs, Budget Capacity, and Assessment Criteria of the Sector, available at:

www.proinversion.gob.pe

COFINANCED UNSOLICITED PROPOSALS SANITATION SECTOR 2019

By means of Supreme Decree 016-2019-VIVIENDA a deadline for submission of Cofinance Unsolicited Proposal (IPC) on 6 Sanitation Infrastructure projects was established.

From August 5 to September 17, 2019

1 PLANNING AND SCHEDULING

Identify priority projects with PPP potential and generated commitments. (Flow chart)

*Includes the contract project and the comprehensive assessment report.

2 3 4 5 CONTRACT IMPLEMENTATION

Financial closing. Administration of PPP contract. Supervision of PPP contract.

Technical, economical and financial assessment of the PPP project.

Preparation of the Assessment Report Incorporated to the PPIP

PREPARATION

Design and structure the Project as a PPP. Prepare an Initial Version of the Contract (VIC). Coordination meetings of OPIP with entities giving opinions on the IVC Statement of interest.*

STRUCTURING

Project Opening t (call for proposals). Preparation of Terms and Conditions and reception of queries. Agencies’ opinions on FVC. Contract subscription

TRANSACTION

Multiannual report of

investments in PPP

Assessment Report

Initial Version of

the Contract

Contract award and signature

PROJECT STAGES ONE PPP PER COFINANCE UNSOLICITED PROPOSALS (IPC)

FLOW CHART OF THE PROCESS

05/04/2019: MVCS published S.D. 016-2019-VIVIENDA

05/17/2019: ProInversión published:

Intervention Needs

Budget Capacity

From 08/05/2019 to

09/17/2019:

Submision of IPC to

ProInversión

SUBMISION OF IPC (COMPETENT OPIP PROINVERSIÓN)

ADMISSION

RELEVANCE OPINION

PLA

NN

ING

AN

D S

CH

EDU

LIN

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60 + 30 working days

ProInversión assesses: • Technical and

Financial Capacity

• Minimum requirements

5 working days

Submision of IPC

Admission

The bidder sends rectification or clarification (10 wd deadline, extendable to additional 10 wd)

ProInversión determines: Admission,

or Rejection

Proinversión Serves notice of the decision to Bidder

ProInversión requests MVCS Relevance Opinion

on the set of admitted IPC

15 days

10 working days 10 + 10 working days

1/ The deadline calculation for the issuance of OR is resumed when the Bidders fulfill the requirements

PROINVERSIÓN MVCS BIDDERS

Request for

Relevance

Opinion

MVCS requires

additional information

or make queries

to IPC

Bidder fulfills the

requirements

(20 wd max.)

MVCS issues

favorable

Relevance Opinion

(OR) (**) (+ signed

agreements)

Is it necessary to correct or clarify

IPC?

Yes

No

(**) Should there be more than one (1) IPC for a same location, the sector shall define the proposal that will have its favorable OR.

MINIMUM REQUIREMENTS (REGULATION L.D. 13621)

1 Parragraphs 77.1 and 77.3 of article 77, and parragraph 102.3 of article 102 of the Regulation of Legislative Decree 1362.

Legal aspects

• Contract term = or > to 10 years

• Name or corporate name of the IPC petitioner, indicating information required by law, attaching the corresponding power of attorney of the legal representative.

• Sworn Statement of expenses effectively incurred in the preparation of the submitted IPC.

• Proposal of main clauses of the contract.

MINIMUM REQUIREMENTS (REGULATION L.D. 13621)

1 Paragraphs 77.1 and 77.3 of article 77, and paragraph 102.3 of article 102 of the Regulation of Legislative Decree 1362.

Technical Aspects

• Certificates or certifications issued by third parties proving the bidder’s technical capacity and experience for the development of projects of a similar scope.

• Project description (Name of Project, competent entity, background, area of influence, project objectives and project rating)

• Relevance and consistency of the project according to national, regional or local priorities, as appropriate, defined in national, sectorial plans, as well as regional and local agreed development plans.

• Diagnosis on the current provision of public infrastructure or service (existing demand and supply in terms of coverage and quality)

• Technical assessment of the project (assessment of alternatives and preliminary analysis to define the expected Service Levels)

• Project implementation plan (identification of eventual issues that may delay the project)

• Social benefits of the project

MINIMUM REQUIREMENTS (REGULATION L.D. 1362 1)

1 Paragraphs 77.1 and 77.3 of article 77, and paragraph 102.3 of article 102 of the Regulation of Legislative Decree 1362.

Financial aspects

• Total Investment Cost higher than 15,000 UIT (applicable tax unit)

• Audited financial statements of the last 2 years.

• The economic and financial model of the proposed project

• Analysis of the resource gap supporting the project rating (annual income estimation, investments and operation and maintenance costs during the project’s life, mechanism of investment recovery of proposed investments, annual co funding projection)

• Preliminary risk analysis of the project (identification, specification, mitigation mechanisms)

EVIDENCE OF BIDDER’S TECHNICAL AND FINANCIAL CAPACITY

TECHNICAL CAPACITY

General conditions for evidence

a) Simple copy of certificates or certifications issued by third parties other than the legal entity accrediting them (Appendix 8 Guidelines).

b) Evidence of own exp. or that of related companies (matrix or subsidiary)

c) In case of accreditation through a related company, a letter of commitment of related company means shall be attached (Appendix 6 Guidelines)

d) The Bidder’s (or its related company’s) share in the builder or operator

accrediting its experience shall be no less than 25%

e) In case of a Bidding consortium, the share of the member accrediting

the exp. (directly or through its related company) shall no less than 25%

FINANCIAL CAPACITY

Evidence shall be presented by means of:

a) Submission of audited Financial Statements corresponding to the last 2 fiscal years available.

b) By one or several members in case of consortium or through Financial Statements of one of its related companies.

Remarking aspects:

• The same company shall not be considered as a related company of two or more members of the consortium.

• For the assessment of financial capacity, the order of reception of IPC at PROINVERSION’s Reception desk shall be considered.

PROINVERSIÓN assesses and approves the Bidder’s technical and financial capacity by applying the “Guidelines for the submission and admission of IPCs” approved by Agreement CD PROINVERSIÓN N° 15-2-2017-DE.

ASSESSMENT OF THE BIDDER’S TECHNICAL AND FINANCIAL CAPACITY SHALL BE REVIEWED IN CASE THE BIDDER DECIDES TO CHANGE THE CONSORTIUM COMPOSITION AFTER ADMISSION.

REFERENCE MODEL TO ESTIMATE TOTAL INVESTMENT COST- CTI

To estimate the CTI see Reference Model in Excel format, published in the website, which includes the new definition set forth in the Regulations to L.D. 1362.

The Model will allow estimating:

The Beta coefficient

The Ke and Kd parameters

The WACC

And CTI estimation and its assessment in order to verify it exceeds the 15,000 Tax Units

INTERVENTION NEEDS OF THE MVCS

*As per Supreme Decree 016-2019-VIVIENDA

No. Project Investment amount

(S/) Intervention Needs

1

Sanitary sewer and wastewater treatment services in the city of Iquitos (Improvement and Upgrading)

400,000,000.00

Cover 100% of the coverage level in the wastewater treatment service. Disposed wastewater may be reused and/or dumped in a receiving body. The PTAR effluents shall meet Maximum Permissible Limits (MPL) and National Environmental Quality Standards for Water (ECA-Agua). Manage and dispose sludge coming from the wastewater treatment process, pursuant to applicable regulations. Control (Monitoring for Iquitos) the quality of industrial discharges in relation to the Maximum Admissible Values (VMA), as to guarantee that wastewater treatment infrastructure receives inflows with quality (organic load) and quantity for which it has been designed for, as well as to communicate the EPS to take the corresponding inspection measures. Guarantee that the wastewater treatment infrastructure receives waters from drainages, for which intervention in main collectors and pumping chambers is allowed, if required.

2 Wastewater treatment service in the urban area of the province of Huaura

100,000,000.00

3 Wastewater treatment service in the urban area of the Province of Barranca

95,000,000.00

4

Wastewater treatment service in the urban area of the provinces of Huancavelica and Andahuaylas

140,000,000.00

INTERVENTION NEEDS OF THE MVCS

* As per Supreme Decree 016-2019-VIVIENDA

No. Project Investment amount

(S/) Intervention Needs

5

Drinking water service through desalination of sea water in the urban area of the province of Ilo

120,000,000.00

Cover the deficit in the supply of drinking water service in the province of llo, in terms of quality and coverage. Continuity of drinking water service. Comply with the standards and technical regulations for the supply of drinking water in the province of llo.

6 Rural sanitation services in the region of Loreto

150,000,000.00

Cover the deficit in the supply of drinking water service. Proper sanitary disposal of excreta in rural areas of the Region of Loreto, in terms of quality and coverage. Continuity of drinking water service. Comply with the standards and technical regulations for the supply of drinking water, to render sewage service and/or the proper sanitary disposal of excreta in the Region of Loreto. It shall be developed in the area of the service provider of the rural community that is authorized and registered by the competent municipality.

BUDGET CAPACITY OF MVCS

Capacidad Máxima Presupuesta Anual1 (S/)2

1. Cofunding amounts by the State only consider Compensation by Investment (RPI), except for Loreto’s PTAR.

2. Amounts expressed in Peruvian Soles and including VAT

3. These Investment Annuities start in 2025 and end in 2040. 4. These Investment Annuities start in 2025 and end in 2039. 5. These Investment Annuities start in 2025 and end in 2039.

Estimated Investment Amount (S/)2

Sanitary sewage services and wastewater treatment in the city of Iquitos

Wastewater treatment service in the urban area of the province of Huaura

Wastewater treatment service in the urban area of the province of Barranca

400,000,000 100,000,000 95,000,000

Annual Maximum Budget Capacity1 (S/)2

Investment (S/) per Year Sanitary sewage services and wastewater

treatment in the city of Iquitos Wastewater treatment service in the urban area of

the province of Huaura Wastewater treatment service in the urban area of

the province of Barranca

2019 - - -

… … … … 2025 26,294,755 13,147,378 12,490,009 2026 52,589,511 13,147,378 12,490,009

… … … … 2031 52,589,511 13,147,378 12,490,009 2032 52,589,511 13,147,378 12,490,009 2033 52,589,511 13,147,378 12,490,009 2034 52,589,511 13,147,378 12,490,009 2035 52,589,511 13,147,378 12,490,009 2036 52,589,511 13,147,378 12,490,009 2037 52,589,511 13,147,378 12,490,009 2038 52,589,511 13,147,378 12,490,009 2039 52,589,511 13,147,378 12,490,009 2040 26,294,755 - -

15

years3

15

years4 15

years5

BUDGET CAPACITY OF MVCS

Estimated Investment Amount (S/)2

Wastewater treatment service in the urban area of the provinces of Huancavelica and Andahuaylas

Drinking water service through desalination of sea water in the

urban area of the province of Ilo

Rural sanitation services in the region of Loreto

140,000,000 120,000,000 150,000,000 Annual Maximum Budget Capacity1 (S/)2

Investment (S/) per Year Wastewater treatment service in

the urban area of the provinces of Huancavelica and Andahuaylas

Drinking water service through desalination of sea water in the urban

area of the province of Ilo Rural sanitation services in the region of Loreto

2019 - - - -

… … … … … 2025 18,406,329 15,776,853 12,205,905 15,000,000 2026 18,406,329 15,776,853 24,411,809 15,000,000

… … … … … 2031 18,406,329 15,776,853 24,411,809 15,000,000 2032 18,406,329 15,776,853 24,411,809 15,000,000 2033 18,406,329 15,776,853 24,411,809 15,000,000 2034 18,406,329 15,776,853 24,411,809 15,000,000 2035 18,406,329 15,776,853 12,205,905 - 2036 18,406,329 15,776,853 - - 2037 18,406,329 15,776,853 - - 2038 18,406,329 15,776,853 - - 2039 18,406,329 15,776,853 - - 2040 - - - -

6. These Investment Annuities start in 2025 and end in 2039. 7. These Investment Annuities start in 2025 and end in 2039.

8. These Investment Annuities start in 2025 and end in 2035. 9. These O&M annuities start in 2025 and end in 2034.

15 years6 15 years7

10 years8

10 years9

O&M

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