Draft Document Shared for Consultation Purposes Only – Not for Redistribution Review of Experiences with Unsolicited Proposals in Infrastructure Projects March 2017 1 Draft Document Shared for Consultation Purposes Only – Not for Redistribution TABLE OF CONTENTS TABLE OF CONTENTS .................................................................................................................. 2 1 Introduction ......................................................................................................................... 15 1.1 Previous USP Initiatives .......................................................................................................................... 15 1.2 Approach and Methodology for the Experience Review ........................................................... 16 1.2.1 Selection of Countries ............................................................................................................................... 16 1.2.2 Literature Review ....................................................................................................................................... 17 1.2.3 Desk Research About USP Frameworks and Analysis of USP Projects ............................... 17 1.2.4 Expert Discussions and Interviews ..................................................................................................... 18 1.2.5 Questionnaire Surveys and Follow-up Interviews ....................................................................... 18 1.3 Limitations of the Experience Review ............................................................................................... 18 1.4 Conceptual Framework ........................................................................................................................... 19 1.5 Structure of the Experience Review ................................................................................................... 20 2 Motivations for USPs ............................................................................................................ 22 2.1 Key Findings ................................................................................................................................................. 22 2.2 Overview ........................................................................................................................................................ 22 2.3 Country Experience ................................................................................................................................... 24 2.3.1 Overcoming Lack of Public-Sector Capacity .................................................................................. 24 2.3.2 Harnessing Private-Sector Innovation and Creativity .............................................................. 27 2.3.3 Avoidance of Competition for Corruption and Nepotism ......................................................... 29 3 Stage One: Submission ......................................................................................................... 33 3.1 Key Findings ................................................................................................................................................. 33 3.2 Overview ........................................................................................................................................................ 33 3.3 Country Experience ................................................................................................................................... 34 4 Stage Two: Evaluation.......................................................................................................... 40 4.1 Key Findings ................................................................................................................................................. 40 4.2 Overview ........................................................................................................................................................ 40 4.3 Country Experience ................................................................................................................................... 41 5 Stage Three: Project Development ........................................................................................ 52 5.1 Key Findings ................................................................................................................................................. 52 5.2 Overview ........................................................................................................................................................ 52 5.3 Country Experience ................................................................................................................................... 53 6 Stage Four: Procurement ...................................................................................................... 62 6.1 Key Findings ................................................................................................................................................. 62 6.2 Overview ........................................................................................................................................................ 62 6.3 Country Experience ................................................................................................................................... 63 7 Conclusions .......................................................................................................................... 81 2 Draft Document Shared for Consultation Purposes Only – Not for Redistribution 7.1 USP Performance and Management Challenges ............................................................................ 81 7.2 Policy Interventions to Address USP Management Challenges .............................................. 82 7.2.1 Challenge 1: Difficulties in Creating equal bidding conditions ............................................. 82 7.2.2 Challenge 2: Large Number of Low-Quality USPs Draining Public-Sector Resources 83 7.3 USP Management Strategies .................................................................................................................. 84 7.3.1 Overcoming Lack of Public-Sector Capacity .................................................................................. 85 7.3.2 Harnessing Private-Sector Innovation and Creativity .............................................................. 86 7.4 Epilogue ......................................................................................................................................................... 86 8 ANNEX 1: COUNTRY SELECTION CRITERIA AND SELECTION OF COUNTRIES ....................... 87 9 ANNEX 2: OVERVIEW OF USPS SUBMITTED IN SELECT COUNTRIES..................................... 90 10 ANNEX 3: USP SPEED IN CASE STUDIES ............................................................................. 94 11 ANNEX 4: USP SUBMISSION REQUIREMENTS .................................................................... 97 12 ANNEX 5: USP EVALUATION CRITERIA ............................................................................... 99 13 ANNEX 6: USP MANAGEMENT TIMELINE ......................................................................... 101 14 ANNEX 7: USP EVALUATION PROCEDURE ....................................................................... 103 15 ANNEX 8: USP PROJECT DEVELOPMENT ......................................................................... 105 16 ANNEX 9: USP PROCUREMENT MECHANISM ................................................................... 107 17 ANNEX 10: TRANSPARENCY AND PROPRIETARY INFORMATION ..................................... 110 18 ANNEX 11: APPLICABILITY OF THE USP FRAMEWORK ..................................................... 116 3 Draft Document Shared for Consultation Purposes Only – Not for Redistribution INDEX OF TABLES Table 1: Countries Studied as Part of the Experience Review Report ......................................................................... 6 Table 2: Evaluation Procedure and Timelines of the Studied Countries ................................................................ 42 Table 3: Summary of USPs Since 2006 in the Commonwealth of Virginia ............................................................ 48 Table 4: Competitive Tension in Infrastructure USP Projects in the Philippines ................................................ 70 Table 5: Competition in Colombian USP Projects ............................................................................................................ 71 Table 6: Number of Bidders in South Korea by PPP Projects (and Sector) ........................................................... 74 Table 7: Chilean USP Concessions (1995 – 2015) ............................................................................................................ 76 Table 8: Best Practices in Creating Competition During Procurement .................................................................. 82 Table 9: Best Practices in USP Management ..................................................................................................................... 83 Table 10: Country Selection–Ensuring Diversity in Selection ..................................................................................... 88 Table 11: Overview of Infrastructure USPs Submitted in Select Countries ........................................................... 90 Table 12: Speed of Implementation in Case Studies