Bid Process Jammu

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National Training Programme For Rural

Electricity Distribution Franchisees

10-12 October,2011Venue: JKPDD,JAMMU


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Energy Division2

Bid-Process : NIT / RFP


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Energy Division3

Tendering Process and Commercial Arrangements

Notice Inviting Tender

Developing RFP

Elements of Contracts Agreement

Contents


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Energy Division4

Bid-Process : NIT / RFP


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Tendering Process and Commercial Arrangements

Selection of the franchisee should be done through competitive

route i.e. bidding route to ensure fairness of the transaction

The Tendering Process is initiated once the following prerequisitesare in place

Identifying the suitable franchisee model

Finalising Roles and Responsibilitiesof the Stakeholders

Scrutiny of the envisaged model among the Franchisers staff andtheir consensus-This is purely for the creation of a conducivesystem which go hand in hand with the Franchisee system



Issue of Notice Inviting Tender

Defining the Franchisee Model

Defining the Roles and Responsibilities

of the Franchisee and Stakeholders

Technical and Financial bid evaluation

Franchisee

selection

Signing of Franchisee Agreement

and Bank Guarantee

Responsibility delegation and

Asset Transfer to the Franchisee

Letter of Award

Consensus by

Franchiser

Bid Submission

Pre-Bid conference -if required



Notice Inviting Tender

Notice inviting Tender-Advertisement for calling EOIs or bids for

Franchising should cover the following information:

Objective in brief

Name of the area

Date of sale of tender document

Last date and time for sale of tender document

Last date and time of submission of bids

Cost of purchase of tender document

Address from where the tender document can be purchased

Earnest Money Deposit (EMD) amount with details regarding bank draft, etc.



Developing RFP

Designing Bid Document- Covering all the details which needs to becommunicated to the interested parties like;

Information about the Project

Any legal provision under which the project is promoted

The selection criteria for the bid

Scope of work under the project

The baseline detail of the commercial information

Information for purchase of the document and its availability

Fee submission and the form in which it needs to be provided

Formats for the bids are required to be submitted

The due dates of the submission of the bids and the opening


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Energy Division9

Baseline Information

The most critical factor that shall enable the franhcisee to

bid realistically are the Commercial & Technical information.

The Level of information to be provided in the Bid documentdepends on the following factors:

Rural or Urban franchisee ?

Franchisee Model being envisaged ?

The size of the area selected for the franchiseeimplementation ?


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Energy Division10

Commercial Information

The Commercial Information should cover the

following (should be based on more than oneyear data):

Number of consumers

Connected load

Units billedAmount billed

Arrears

Payments made by the consumers

New connections/Disconnection

Energy supplied to the areaT&D losses

Annual average expenses in the area


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Energy Division11

Technical Information

The Technical Information should cover the following:

Number of Distribution Transformer installed/ damage record & theircapacities

HT/LT line length in the area

Energy consumption pattern

Supply schedule and breakdown history

Substation and their transformation capacities

Number of LT feeders and whether Rural/Urban

In case of any already running augmentation of other schemesplanned should also be informed through theBid Document


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Energy Division12

Eligibility Criteria

Bid Submission and Earnest Money Deposit

In the sequence and according to the processdesigned

Establishing the eligibility criteria

Franchiser needs to select the candidate based on the

already established criteria

These criteria depends on the following:Franchisee Model- Rural/Urban

Size of revenue billing and assessment

Consumer mix in the area to be franchisedSize of investments required over the term of contract period

Financial capacity to cater to the investment requirements


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Energy Division13

Objectives of the Agreement

Franchisee Agreement is a record that contains the details of rolesand responsibility. The agreement needs to be answer the following

questions clearly:

Whether contract protects the franchisee and the franchiser?

Are the rights and obligations of both parties clearly stated?

What is the legal framework within which both franchisee andfranchiser have to function?

Is the contract specific about the type and size of operation that thefranchisee is expected to manage?

Is the nature duration and extent of training to be imparted by thefranchiser outlined in the contract?

Whether the various payments to be made to the franchiser by thefranchisee have been specified?

Other fixed payments.


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Energy Division14

Objectives of the Agreement

Source of essential supply for proper O&M of the system.

If interrupted supply is provided by the utility, what are the arrangementsfor compensation to the franchisee?

Various MIS reports needed to be submitted to the franchiser by thefranchisee.

Duration of the franchisee contract and terms for renewal of the contract.

Area allocated to the franchisee for the intended franchisee operation.

Reasons for termination of the contract and its terms and conditions.

If there is any default in the contract, what are the measures that can bepermitted to rectify the situation?

Arbitration clause.

Whether franchisee is prevented from engaging itself in any other businessactivity for the duration of the contract?


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Energy Division15

Structure of an AgreementThe Agreement may be structures so as to cover the following details;

Information about the project and the area

Roles and responsibilities in detail of the parties

Liabilities and duties in case of Force Majeur

Contract period and Agreement validity

Technical boundaries need be defined

The agreed Bulk supply Tariffor incentive as the case may be and the provisionsof its revision

Responsibility shares in case of accidents and other commercial activities

Targets (if any) for the Franchisee/Franchiser at the end of the contract period

Termination of the agreement

This documents needs to be signed on every page by the parties and in presenceof witness from both parties

All of the above are subjective and may be changed according to the Model envisaged


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Energy Division16

Thank You

Bid Process Jammu

Documents

Transcript of Bid Process Jammu