request for technical proposal

Statutory Auditor/Additional Auditor/Concurrent Auditor for BOT (Toll) projects under NHDP Phase III .

NATIONAL HIGHWAYS AUTHORITY OF INDIA (Ministry of Shipping, Road Transport & Highways)

Government of India

REQUEST FOR TECHNICAL PROPOSAL

FOR EMPANELMENT OF FIRMS OF CHARTERED

ACCOUNTANTS AS STATUTORY AUDITOR/ADDITIONAL AUDITORS FOR BOT

PROJECTS UNDER NHDP PHASE-III

June, 2007

G –5 & G – 6, Sector 10, Dwarka New Delhi – 110 075


Disclaimer The information contained in this Request for Technical Proposal or subsequently provided to the Bidder (s) whether verbally or in documentary form by or on behalf of National Highways Authority of India or the Ministry of Shipping, Road Transport and Highways (Government Representatives) or any of their employees or advisors, is provided to Bidder(s) on the terms and conditions set out in this Request for Technical Proposal and any other terms and conditions subject to which such information is provided. This Request for Technical Proposal is not an agreement and is not an offer or invitation by the Government representatives to any other party. The purpose of this Request for Technical Proposal is to provide interested parties with information to assist the formulation of their proposal. This Request for Technical Proposal does not purport to contain all the information each Bidder may require. This Request for Technical Proposal may not be appropriate for all persons, and it is not possible for the Government representatives, their employees or advisors to consider the investment objectives, financial situation and particular needs of each party who reads or uses this Request for Technical Proposal. Certain Bidders may have a better knowledge of the proposed projects than others. Each Bidder should conduct its own investigation and analysis and should check the accuracy, liability and completeness of the information in this Request for Technical Proposal and obtain independent advice from appropriate sources. The Government representatives, their employees and advisors make no representation or warranty an shall incur no liability under any law statute, rules or regulations as to the accuracy, reliability or completeness of the Request for Technical Proposal. The Government representatives may in their absolute discretion, but without being under any obligation to do so, updates, amends or supplement the information in this Request for Technical Proposal.


TABLE OF CONTENTS

NO. CONTENTS PAGE NO.

1 INTRODUCTION 1-2 2 BIDDING PROCEDURE 3-7 3 CRITERIA FOR EVALUATION 8-10

APPENDICES 1 COVERING LETTER 11 2 DETAILS OF BIDDER 12 3 ELIGIBLE PROJECT DETAILS-FIRM EXPERIENCE 13 4 WORK PLAN & METHODOLOGY 14-16 5 QUALIFICATION & COMPETENCE OF THE PARTNER /KEY

STAFF 17

5 TERMS OF REFERENCE 18-19


1 Request for Technical Proposal

1. INTRODUCTION

1.1 Background

The Ministry of Shipping, Road Transport & Highways (MOSRTH), Government of India has undertaken the upgradation of 10,000 Km length of National Highways under National Highway Development Programme (NHDP) Phase –III. The National Highways Authority of India (NHAI) has been entrusted with the task of implementing NHDP Phase-III. National Highways Authority of India (NHAI) proposes to widen various sections of National Highways on Build, Operate and Transfer basis under NHDP Phase-III from present two lanes into four/six lane divided carriageway with service lanes along certain sections, strengthening of existing two lane, construction of flyover, bridges, etc. These works are to be executed on BOT(Toll)/BOT (Annuity) basis. NHAI has entered/ likely to enter into Concession Agreements for various projects with the Concessionaires besides some projects are in pipeline to be awarded shortly. As per the terms and conditions of the Concession Agreement, Statutory Auditor has to be appointed during the subsistence of the agreement out of the mutually agreed list of Chartered Accountants. NHAI may also appoint another firm of the Chartered Accountants from the mutually agreed list as Additional Auditor at its cost to audit and verify all those matters which the Statutory Auditor of the Concessionaire are required to do, undertake or certify pursuance to the Concession Agreement. Apart from these, a Concurrent Auditor has to be appointed from the aforesaid list by the NHAI at its cost for the projects where grant is to be provided by NHAI for undertaking concurrent audit of the Concessionaire during the construction period. The assignment for the Statutory Auditor as per Concession Agreement inter-alia includes following:- • Audit and certification of the accounts of the Concessionaire; • Providing project specific information as mentioned in the Concession

Agreement; • Providing any other related information as may be reasonably required by

NHAI or the lenders to the project.

The detailed Terms of Reference for the Assignment is enclosed as Appendix 6.



1.2 Brief Description of Bidding Process 1.2.1 NHAI intends to follow a single step bidding process leading to the empanelment

of the Statutory Auditor/Additional Auditor/Concurrent Auditor for the Assignment. This would include evaluation of the “Technical Proposal”.

1.2.2 For the purpose of the Evaluation of the Technical Proposal, NHAI would open it

and compute the Total Technical Score. Any Technical Proposal not as per the requirements of Clause 2.12.2, will be rejected.

1.2.3 The list of the Bidders selected from the above process (empanelled Bidders)

would then be forwarded to the Concessionaire to select a mutually agreed list of about 10 (ten) (“list of mutually agreed Bidders”).

1.2.4 The Concessionaire shall then appoint a Statutory Auditor out of such list of

mutually agreed Bidders. Apart from this, NHAI may also appoint Additional Auditor/Concurrent Auditor from the list of empanelled Bidders for various projects based on their financial proposal which would be invited afterwards.



2. BIDDING PROCEDURE

A. General 2.1 Scope of Technical Proposal 2.1.1 NHAI wishes to receive Technical Proposals from experienced and capable

Bidders for the Assignment from the Bidders already short-listed based on their Express of Interest (EOI) submitted.

2.2 Eligible Bidders 2.2.1 The parties short listed by NHAI during the Expression of Interest (EOI) stage are

eligible to bid for the Assignment. 2.3 Bid Preparation Cost

The Bidder shall be responsible for all of the costs associated with the preparation of its Technical Proposals and its participation in the bidding process. NHAI will not be responsible or in any way liable for such costs, regardless of the conduct or outcome of the bidding process.

2.4 Bidders’ responsibility 2.4.1 It would be deemed that by submitting the Technical Proposals , Bidder has:

a. made a complete and careful examination of the Request for Technical Proposal and

b. received all relevant information requested from NHAI. 2.4.2 NHAI shall not be liable for any mistake or error on the part of the Bidder in

respect of the above. 2.5 NHAI’s Right to Accept or Reject Bid 2.5.1 Notwithstanding anything contained in this Request for Technical Proposal, NHAI

reserves the right to accept or reject any Technical Proposal and to annul the bidding process and reject all proposals, at any time without any liability or any obligation for such acceptance, rejection or annulment, without assigning any reasons.

2.5.2 NHAI reserves the right to invite revised Technical Proposals from Bidders with

or without amendment of the Request for Technical Proposal at any stage, without liability or any obligation for such invitation and without assigning any reasons.



2.5.3 NHAI reserves the right to reject any proposal if:

(a) at any time, a material misrepresentation is made or uncovered, or (b) the Bidder does not respond promptly and thoroughly to requests for

supplemental information required for the evaluation of Technical Proposal.

This would lead to the disqualification of the Bidder. B. Documents 2.6 Contents of Request for Technical Proposals

The Document comprises the contents as mentioned in this document and would additionally include addenda if any, issued in accordance with Clause 2.7 and Clause 2.11.1.

2.7 Amendment of Request for Technical Proposals 2.7.1 At any time prior to the deadline for submission of proposal, NHAI may, for any

reason, whether at its own initiative or in response to clarifications requested by a Bidder, modify the Request for Technical Proposals by the issuance of Addenda.

2.7.2 Any Addendum thus issued will be sent in writing to all the Bidders who have

purchased the Request for Technical Proposal and will be binding upon them. Bidders shall promptly acknowledge receipt thereof to NHAI.

C. Preparation and Submission of Technical Proposals 2.8 Language

The Technical Proposal and all related correspondence and documents should be written in the English language. Supporting documents and printed literature furnished by Bidder with the Bid may be in any other language provided that they are accompanied by appropriate translations of the pertinent passages in the English language. Supporting documents, which are not translated into English, may not be considered. For the purpose of interpretation and evaluation of the Bid, the English language translation shall prevail.

2.9 Currency

The currency for the purpose of the Technical Proposal shall be the Indian Rupee (INR).



2.10 Validity of Bid 2.10.1 Technical Proposal shall remain valid for a period not less than nine (9) months

from the Due Date (Validity Period). NHAI reserves the right to reject any proposal, which does not meet this requirement.

2.10.2 The empanelled Bidders shall extend the Bid Validity period as desired by NHAI. 2.11 Issue of Addenda

2.11.1 NHAI may issue an Addenda in writing to all those who have purchased the Request for Technical Proposals on the issues pertaining to the Terms of Reference and Request for Technical Proposal at any time before the Due Date.

2.11.2 In order to afford the Bidders a reasonable time in which to take an Addendum

into account, or for any other reason, NHAI may, at its own discretion, extend the Due Date.

2.11.3 Bidders may note that NHAI will not entertain any deviations to the Request for

Technical Proposal at the time of submission or thereafter. The Technical Proposal to be submitted by the Bidders will be unconditional and unqualified and the Bidders would be deemed to have accepted the terms and conditions of the Request for Technical Proposal with all its contents. Any conditional proposal shall be regarded as non-responsive and would be liable for rejection.

2.12 Format and Signing of Bid 2.12.1 Bidders would provide all the information as per this Request for Technical

Proposal and in the specified formats. NHAI reserves the right to reject any proposal that is not in the specified formats.

2.12.2 The proposal should include: a) Covering Letter as per the format in Appendix 1 b) Details of Bidder as per the format given in Appendix 2 c) Experience of Firm as per the format given in Appendix 3 d) Work Plan and Methodology as per Appendix 4 e) Qualification and Competent of the Partner/Key Staff as per Appendix 5. 2.12.3 The Bidder shall prepare only one ‘original’ proposal as described in Clause

2.12.2. 2.12.4 If the proposal consists of more than one volume, Bidder must clearly number the

volumes and provide an indexed table of contents.



2.12.5 The proposal shall be typed or printed and the Bidder shall initial each page. All the alterations, omissions, additions, or any other amendments made to the proposal shall be initialed by the person(s) signing the Bid.

2.13 Sealing and Marking of Technical Proposal 2.13.1 The Bidder shall seal the proposal in an envelope, duly marking the envelope as

“Technical Proposal”. 2.13.2 The envelope shall contain only original proposal. 2.13.3 The envelope shall indicate the name and address of the Bidder. 2.13.4 The envelopes shall clearly bear the following identification: “Technical Proposal for empanelment of firms of chartered accountants as

Statutory Auditor/Additional Auditor/Concurrent Auditor for BOT(Toll) /BOT (Annuity) projects under NHDP Phase III.

2.13.5 The envelope shall be addressed to:

ATTN. OF : Mr. S.K. Nirmal General Manager (BOT) IIA ADDRESS : National Highways Authority of India

G-5 & G-6, Sector-10 Dwarka New Delhi – 110 075 Tel. No. 25074100, Extn: 1408

2.13.6 If the envelope is not sealed and marked as instructed above, the proposal may

be deemed to be non-responsive and would be liable for rejection. NHAI shall not be responsible for the misplacement or premature opening of such proposals.

2.14 Technical Proposal Due Date 2.14.1 Proposal should be submitted before 1100 hours IST on 24th July 2007 (Due

Date), at the address provided in Clause 2.13.5 in the manner and form as detailed in this Request for Technical Proposal. Proposals submitted by facsimile transmission, telex or e-mail will not be acceptable.

2.14.2 NHAI, at its sole discretion, may extend the Due Date by issuing an Addendum in

accordance with Clause 2.7.



2.15 Late Proposals 2.15.1 Any proposal received by NHAI after 1100 hours IST on the Due Date will not be

accepted. 2.16 Modification and Withdrawal of Technical Proposals 2.16.1 The Bidder may modify or withdraw its proposal after submission, provided that

written notice of the modification or withdrawal is received by NHAI before the Due Date and time. No proposal shall be modified or withdrawn by the Bidder after the Due Date and time.

2.16.2 The Bidder’s modification or withdrawal notice shall be prepared, sealed, marked

and delivered in accordance with the provisions of Clause 2.13 with envelopes additionally marked “MODIFICATION” or “WITHDRAWAL”.

2.17 Tests of Responsiveness 2.17.1 Prior to evaluation of the Technical Proposal, NHAI will determine whether each

proposal is responsive to the requirements of the Request for Technical Proposal. A proposal shall be considered responsive if:

a. it is received by the Due Date. b. it is signed, sealed, and marked as stipulated in Clause 2.13.

c. it contains the information and documents as requested in this Request for Technical Proposals.

d. it contains information in formats specified in the Request for Technical Proposal. e. it mentions the validity period as set out in Clause 2.10.

f. it provides the information in reasonable detail. (“Reasonable Detail” means that, but for minor deviation, the information can be reviewed and evaluated by NHAI without communication with the Bidder). NHAI reserves the right to determine whether the information has been provided in reasonable detail.

g. there are no inconsistencies between the Technical Proposal and the supporting documents.

2.17.2 NHAI reserves the right to reject any proposal which in its opinion is non-

responsive and no request for modification shall be entertained by NHAI in respect of such proposal.

2.18 Confidentiality 2.18.1 Information relating to the examination, clarification, evaluation

and recommendation of the Bidders shall not be disclosed to any person not officially concerned with the process. NHAI will treat all information submitted as part of the proposal in confidence and will ensure that all



who have access to such material treat it in confidence. NHAI will not divulge any such information unless it is ordered to do so by any Government Authority that has the power under law to require its disclosure.

2.19 Clarification

2.19.1 To assist in the process of evaluation of Technical Proposal, NHAI may, at its sole discretion, ask any Bidder for clarification on its proposal. The request for clarification and the response shall be in writing or by facsimile. No change in the substance of the proposal would be permitted by way of such clarifications.

2.20 Notifications 2.20.1 NHAI will notify each empanelled Bidder by facsimile and by a

letter that it has been empanelled.



3. CRITERIA FOR EVALUATION 3.1 Technical Proposal Evaluation 3.1.1 The Technical Proposal Evaluation will be based on the following

parameters:

Parameter Technical Score Experience of the Firm 50 Work plan & Methodology 10 Qualification and competence of the partner/Key Staff

40

Total Technical Score 100

The maximum achievable Total Technical Score for every Bidder would be 100.

3.1.2 The evaluation of Firm Experience of the Bidder would be carried out

only in respect of Eligible Assignments. Assignments may be classified into the following types:

a. Audit of the Road Projects developed under BOT/PPP scheme.

This refers to statutory audit/additional audit/concurrent audit for a Company1 operating a Road Project of size at least 100 crore. The audit should have been undertaken at least one year over the previous five year period. Every Bidder has to provide details in respect of assignments undertaken by him as per the format set out in Appendix 3. b. Audit of Infrastructure Project The audit of the following types of infrastructure projects of size at lease 100 crore shall be considered.

• Roads, Highways & Expressways • Ports & Port services • Bridges/Tunnels • Airfields/Airports • Railways • Pipelines

The audit should have been undertaken for at least one year over the previous five year period. Every Bidder has to provide details in respect

1 Registered under the company’s Act, 1956



of assignments undertaken by him as per the format set out in Appendix 3. This will not include the projects executed under (a) above.

c. Non-Infrastructure Audit

This refers to audit for a Company engaged in an activity other than as mentioned in b) above. In this case, the following criteria need to be satisfied:

• The audit should have been undertaken for at least one year over the previous five year period.

• The turnover of the audited Company should have been in excess of Rs.60 crore.

Every Bidder has to provide details in respect of assignments undertaken by him as per the format set out in Appendix 3.

3.1.3 Experience of the Firm

The Firm experience would be measured in respect of statutory audit/additional audit/concurrent audit assignments done by the Firm. This parameter shall carry a maximum score of 50, which shall be made up of the following:

Experience Parameter Score Audit of the Road Projects developed under BOT/PPP scheme

20

Audit of Infrastructure Project 16 Non-Infrastructure Audit 14 Total Experience Score 50

3.1.4 Work Plan and Methodology 3.1.4.1 The Bidder would be required to furnish the following as part of their

proposal for the Project (please refer Appendix 4):

a. Understanding of Terms of Reference:

Under this item, the Bidder should provide a brief description (not exceeding 4 pages) of their understanding of the Terms of Reference.

b. Proposed Audit System and Methodology:

The Bidders should provide a write up on the proposed audit system and methodology for undertaking the Assignment (not exceeding 4 pages).



3.1.4.2 The Approach & Methodology criteria would carry a score of 10, which

would be broken up as follows:

Category Score Understanding of Terms of Reference 5 Proposed audit system and methodology 5 Total 10

3.1.5 Qualification and competence of the partner/Key Staff This parameter shall carry a maximum score of 40, which shall be made

up of the following

Category Score Number and Qualification/Experience of Partners

25

Number and Qualification/Experience of Permanent Staff employed by the Firm

15

Total 40 3.1.6 Total Technical Score

The Total Technical Score of any Bidder would be an arithmetic sum of the scores obtained by the Bidder in respect of the parameters stated above viz. Experience of the Firm, Work Plan & Methodology and Qualification and competence of the partner/Key Staff. For empanelment minimum 60 marks would have to be scored by the firm.



APPENDIX 1

COVERING LETTER

(On the Letter Head of the Bidder) Date: To Mr. S.K. Nirmal General Manager (BOT)IIA National Highways Authority of India G-5 & G-6, Sector – 10 Dwarka New Delhi – 110 075 Re: For Empanelment of firms of Chartered Accountants as Statutory

Auditor/Additional Auditor/Concurrent Auditor for BOT (Toll)/BOT (Annuity) projects for NHDP Phase III projects

Sir, Being duly authorized to represent and act on behalf of ………………………….. (hereinafter referred to as “the Bidder”), and having reviewed and fully understood all of the requirements of the Request for Technical Proposal and information provided, the undersigned hereby apply for the Assignment referred above. We are enclosing our Technical Proposal in original with the details as per the requirements of the Request for Technical Proposal, for your evaluation. …………………………………………….. Signature (Authorized Signatory)



APPENDIX 2

DETAILS OF BIDDER 1. (a) Name of the Firm (b) Country of registration (c ) Address of the corporate headquarters and its branch office(s), if any, in India (d) Date of registration and/or commencement of business 2. Brief description of the Audit Firm including details of its other activities2. 3. Details of individual (s) who will serve as the point of contact/communication for

NHAI within the Firm: (a) Name : (b) Designation : (c) Address : (d) Telephone Number : (e) E-Mail Address : (f) Fax Number : 4. Name, Designation, Address and Phone Numbers of Authorized Signatory of the

Bidder: (a) Name : (b) Designation : (c ) Address : (d) Phone Number : (e) Fax Number :

2 Consulting, advisory, investment banking etc.



APPENDIX 3

ELIGIBLE ASSIGNMENT DETAILS –EXPERIENCE OF FIRM A. Road Project developed under BOT/PPP basis:

S. No.

Name of the

Project

Name of Company

Year of Audit (Refer Instruction

2 below)

Description of Services

Size of the Project in(in Rs. Crore)

B. Infrastructure Project:

S. No.

Name of the

Project

Name of Company


2 below)


Size of the Project in(in Rs. Crore)

C. Non - Infrastructure Audit:

S. No.

Name of the Company


2 below)


Turnover of Audited Firm

(Refer Instruction 3

below)

Instructions: 1. Bidders are expected to provide information in respect of Eligible Assignments in

this section. The assignments cited must comply with the eligibility criteria specified in Clause 3.1.2.

2. Refer Clause 3.1.2. 3. The turnover/income of the Company (in the year of audit) needs to be mentioned.



It may be noted that in the absence of any one of the above, the information would be considered inadequate and could lead to exclusion of the relevant assignment in computation of the score for Experience of Firm.



APPENDIX 4

WORK PLAN AND METHODOLOGY



APPENDIX 4A

UNDERSTANDING OF TOR

Indicate in detail the bidder’s understanding of the Terms of Reference.



APPENDIX 4B

PROPOSED AUDIT SYSTEM AND METHODOLOGY

Indicate in detail the proposed audit system and methodology for carrying out the Assignment



APPENDIX 5

QUALIFICATION AND COMPETENCE OF THE PARTNER/KEY STAFF

A. Details of Partners.

Sl. No.

Name of Partner

Qualification Total Experience including brief details

B. Details of Permanent Key Staff

Sl. No.

Name of Key Staff

Qualification Total Experience including brief details



APPENDIX 6

TERMS OF REFERENCE PROJECT BACKGROUND NHAI intends to widen various sections of National Highways in the State of Andhra Pradesh under North-South Corridor from present two lanes into four/six lane divided carriageway with service lanes along certain sections, strengthening of existing two lane, construction of flyover, bridges, etc. The work is to be executed on BOT (Toll)/BOT (Annuity) basis.

NHAI has signed various Concession Agreements with the Concessionaires besides some projects are in pipeline to be awarded shortly. As per the terms and conditions of the Concession Agreement, the Concessionaires have to appoint during the subsistence of the agreement a firm of Chartered Accountants as Statutory Auditor out of the mutually agreed list of Chartered Accountants. NHAI may also appoint another firm of the Chartered Accountants from the mutually agreed list as Additional Auditor at its cost to audit and verify all those matters which the Statutory Auditor of the Concessionaire are required to do, undertake or certify pursuance to the Concession Agreement. Apart from these, a Concurrent Auditor has to be appointed from the aforesaid list by the NHAI at its cost for the projects where grant is to be provided by NHAI for undertaking concurrent audit of the Concessionaire during the construction period. SCOPE OF SERVICES • Audit and certification of the accounts of the Concessionaire; • Providing project specific information as mentioned in the Concession Agreement3 • Providing any other related information as may be reasonably required by NHAI or

the lenders to the project. INTERACTION WITH NHAI The Statutory Auditor/Additional Auditor/ Concurrent Auditor shall interact with NHAI on a periodic basis and provide such information as NHAI may require at various points of time, regarding the Project. REPORTING REQUIREMENT • Quarterly report about the performance of the Concessionaire to NHAI.

3 Relevant extract of the Concession Agreement is enclosed with the Request for Technical Proposal. A copy of the Concession Agreement/ proposed concession agreement is available at the office of the General Manager (S-2) for Bidder’s reference.



• Report about any discrepancy observed in the operation/reporting of the Concessionaire.

PERFORMANCE CLAUSE PERIOD OF SERVICES The services of the Statutory Auditor/Additional Auditor/Concurrent Auditor are required through the Concession Period for the project. However, the initial period of appointment shall be for a period of 1 year and could be extended on mutual agreement.