Assessment of financing strategy & procurement method: Governments carry out a pre-feasibility study once a project has been identified and the need for the project has been demonstrated. The prefeasibility study should at the minimum establish and evaluate: the basic characteristics of the project; sources and availability of project input; Location, geological and soil conditions and the access to site; Environmental impact of the project; Preliminary engineering and technology possibilities; Tentative implementation schedule; Preliminary allocation of risk between the private and public sectors; Financial appraisal of the project profitability, including sensibility analysis. The findings from the pre-feasibility are, then included in the bidding documents.
Creation of a Procurement Committee: A procurement committee is established which is assigned the responsibilities to prepare and conduct the procurement proceedings. The procurement committee consists of officials of the procuring government entity; legal official experienced in BOT procurement; technical official knowledgeable about the project and financial management official. Committee may use the services of consultants with appropriate experience. A facility user might be invited to join the committee to improve transparency and strengthen public confidence. Committee may keep record of the proceedings. Record may contain information such as prequalification proceedings, the principle terms of the tender and a summary of the evaluation of bids.
Preparation of Tender Documents: One of the key tasks of the procurement committee is preparation of tender documents. The documents specify the specific technical details and basic project performance criteria. Tender documents for BOT projects normally include information relating to: Detailed instruction to bidders on bidding proceedings and the form of tender; Prefeasibility study undertaken for the project; Text of the project agreement; Type of facility to be constructed and the proposed technology; Technical specifications based on performance criteria; Description of the site location and access to the site; Specification of the facilities to be provided by the government authority; Timetable for completion of the construction work; Maximum concession period; Statement of the financial requirements, including the minimum committed equity; Proposed tariff, toll of fee structure and revenue sharing arrangements; Nature, amount, period of validity and other principal terms and conditions of security and warranties; Evaluation criteria and criteria for comparing bids.