Request for expression of interest for selection # 1251046

Selection Information

Assignment TitleStructuring Business Model for Private Operation and Maintenance of First Line of the Quito Metro Project

Publication Date 29-Sep-2017

Expression of Interest Deadline 07-Oct-2017 at 11:59:59 PM (Eastern Time – Washington D.C.)

Language of Notice English

Selection NoticeAssignment Country

EC - Ecuador

Funding SourcesThe World Bank Group intends to finance the assignment/services under:

BB - BANK BUDGETTF072421 - Global Infrastructure Facility - Technical Partner Trust Fund

Individual/FirmThe consultant will be a firm.

Assignment DescriptionSELECTION FOR CONSULTANTS BY THE WORLD BANK GROUPREQUEST FOR EXPRESSIONS OF INTEREST

Electronic Submissions through World Bank Group eConsultant2https://wbgeconsult2.worldbank.org/wbgec/index.html

ASSIGNMENT OVERVIEWAssignment Title: Structuring Business Model for Private Operation and Maintenance of First Line of the Quito Metro Project

Assignment Countries: Ecuador

ASSIGNMENT DESCRIPTION

Background: The Quito Metro Line 1 Project (PLMQ) has a total investment cost of US$2 billion and com-prises the construction of a 22.7-kilometer (km) north-south underground line. The Quito Metro Public Municipal Company (EPMMQ) has contracted a study to evaluate busi-ness model alternatives for the delivery of the operation and maintenance of the PLMQ. The study was carried out by a well-known international transport engineering firm. This study has established the technical parameters (i.e., opex and capex requirements, operational program-ming) and scoped out the operation and maintenance services that would be the subject of the business model and provided recommendations regarding the model that should be adopted by the EPMMQ for the management of the PLMQ. Following this study, several key questions still remain unresolved and need to be addressed.The above-mentioned study needs to be complemented, going further into the legal, institutional and financial structuring of the recommended business model, defining a preliminary transaction structure, producing a roadmap leading to the award of a contract to a capable private sector party and clearly defining the tasks required for project structuring. The main objective of the EPMMQ is to find a viable business model that enables private operation in a way that ensures the required level of service and minimizes operating subsidies.Although there is a PPP law in Ecuador, there is wide recognition that this legal framework needs to be strengthened and complemented. The National Government is currently engaged in efforts to revamp this legal framework. In addition, facilitating private participation in the opera-tion and maintenance of infrastructure will need to consider existing laws and regulations in other areas, including labor, commercial, taxation and asset ownership. Finally, Ecuador lacks an extensive record of private participation in infrastructure and has limited access to long-term finance at competitive terms, factors that need to be thoroughly evaluated in the definition of a financing structure that enables the mobilization of private capital, particularly foreign. The EPMMQ is now seeking to define the institutional, legal, financial and funding parameters that together will determine the business model for private sector delivery of the operation and maintenance of the first line of the Quito metro project, and potentially the delivery of additional required investments.

Objective: The World Bank intends to hire consulting services to: define the business model for private sector participation in the operation and maintenance of the PLMQ project that meets the policy objectives of the EPMMQ; outline the preliminary legal, funding, financing and institu-tional terms (preliminary structuring); produce the required analysis for consideration and ap-proval of said business model by the relevant local authorities; and define the roadmap and scope of structuring.

Preliminary Description of Tasks: 1.Take Stock of where the process to incorporate private sector participation in the operation of the PLMQ stands given the work of the previous consultant: Evaluación de alternativas y diseño del modelo de explotación de la Primera Línea del Metro de Quito. Define further the preferred business model identified in the above-mentioned study and, considering the objectives of the Municipality of Quito, provide recommendations for its improvement and for its final conceptual-ization, including the definition of outstanding issues/questions, such us: tariff setting and collec-tion, inclusion of capital investments in scope, operating subsidy needs and risk allocation. The Consultant is expected to confirm the recommendation and provide analytical inputs that sup-port a decision by the Municipality of Quito on the preferred business model option.

2.Financial modeling of the preferred option, including the modeling of: investment obligations (if applicable), financing structure, KPIs, operator remuneration mechanism and other key contrac-tual conditions. The financial model should assist in the conceptualization and preliminary struc-

turing of the project and allow for the preparation of sensitivity and all the required analyses (see next #5).

3.Detailed conceptualization of preferred business model option evaluated in the task above, in-cluding the following definitions:a. Scope of services;b. Applicable legal and regulatory framework;c. Definition of parties to the contract and roles, responsibilities of stakeholders and institutional capacity requirements; d. Funding requirements (reliance on tariff revenue and/or subsidies);e. Financing requirements; f. Market sounding of international private metro operators and service providers;

4.Carry out preliminary structuring in institutional, legal and financial terms of the preferred busi-ness model including indicative but comprehensive definitions on the following:a. Operator remuneration mechanism;b. Performance monitoring system, Key Performance Indicators (KPIs) and implications for the operator remuneration mechanism;c. Specific preliminary terms and conditions of contract;d. Definition of contract typology (i.e., service contract, concession, PPP);e. Potential financing sources (if applicable);f. Potentially required structural and third-party provided de-risking mechanisms;

5.Preparation of preliminary analyses required for evaluation and approval of private participa-tion options as required under current applicable legal and regulatory framework. Some of these analyses include:a. Qualitative and quantitative evaluation of benefits for the contracting authority;b.Risk allocation and mitigation analyses;c.Value for money analysis / public sector comparator;d.Fiscal impact and contingent liabilities analysis;

6.Support the EPMMQ in the approval process, providing expert advice and technical input in required approval instances.

7.Definition of required roadmap/ implementation plan leading to award of the contract in time to ensure rail service operations as per current project implementation plans.

8.Definition of a work plan and recommendations for scoping of final legal, technical and finan-cial structuring work.

CONSULTANT PROFILE

The consultant will most likely be a consortium of firms with a record of accomplishment in the financial and legal structuring of public-private partnerships (PPPs) in the transport sector. The Consultant should have a demonstrated track record in the conceptualization and legal and fi-nancial structuring of PPP projects in the urban transport sector, preferably rail, in Latin America or other Emerging and Developing Economies (EMDEs). The Consultant will need to incorpo-rate solid local legal experience and financial advisory expertise with a demonstrated track record of transactions. Consultants that do not meet this profile will not be considered.

EXPERTISE REQUIRED FOR THE ASSIGNMENT:

Minimum expertise desired: (i) Lead PPP/project finance specialist; (ii) Lead international legal specialist with certified experience in the legal structuring of PPPs in similar jurisdictions; (iii) Lo-cal Legal specialist with significant experience in commercial and administrative law Ecuador and experience in transaction structuring; (iii) specialized financial modeler; (iv) Rail PPP spe-cialist; (v) transport economist or engineer with experience in the urban rail sector.

Given the diverse expertise required, the assignment will most probably require the association of two or more firms.FUNDING SOURCE:

- Bank Budget;- Global Infrastructure Facility - Technical Partner Trust Fund.

ELIGIBILITY:

To foster competition, the Bank permits consultants from all countries to offer consulting ser-vices for Bank-financed projects or funded with its own budget. Any conditions for participation shall be limited to those that are essential to ensure the firms capability to fulfill the contract in question.

SUBMISSION REQUIREMENTS:

The World Bank now invites eligible consultant firms to indicate their interest in providing the services. Interested consultants must provide information indicating that they are qualified to perform the services (brochures, description of similar assignments, experience in similar condi-tions, general organization of the firm, availability of appropriate skills among staff, technological infrastructure / tools available, etc. for firms). Please note that the total size of all attachments should be less than 5MB. Consultants may associate to enhance their qualifications.

Interested consultants are hereby invited to submit expressions of interest. Expressions of Inter-est should be submitted, in English, electronically through World Bank Group eConsultant2 (https://wbgeconsult2.worldbank.org/wbgec/index.html)

NOTES:

Following this invitation for Expression of Interest, a shortlist of qualified firms will be formally in-vited to submit proposals. Shortlisting and selection will be subject to the availability of funding.

Qualification Criteria1. Provide information showng that they are qualified in the field of the assign-ment. *2. Provide information on the technical and managerial capabilities of the firm. *3. Provide information on their core business and years in business. *4. Provide information on the qualifications of key staff. *5. Provide detailed account (transaction list / deal sheet) of their experience and references in the legal and financial structuring of PPP projects for the develop-ment and operation and maintenance of urban transport. *

6. Provide detailed account of their experience and references in Ecuador or sim-ilar developing countries. *

* - Mandatory