Anabela RodriquesVernon Booth

Tourism Concessions and Rural Development Meeting

19th March, 2012Maputo

Sociedade para a Gestão e Desenvolvimento da Reserva do Niassa

SGDRN framework to award tenders

– SGDRN has a contract with Government to manage and develop the Niassa National Reserve.

�This mandate includes the award long term contracts to tourism development investors.

�Any company entering into a contractual agreement must have 25% ownership by Mozambican citizen(s) or by a Mozambican entity (itself with majority Mozambican citizen ownership).

– The Government of Mozambique requires that companies must be legally registered in Mozambique�Companies must be in possession of all necessary permits

and licenses required to operate in the tourism industry in Mozambique.

Steps in the tender process

� Advertise Expression of Interest�Vet Expression of Interest

� Invite bidders

� Set up Evaluation Committee

� Appoint independent auditor and evaluators (3)

� Receive and register the tenders

� Evaluate bids

� Recommendations to the Board

� Award tender

� Negotiate and sign contract

Documentation

� Expression of Interest

� Advertise tender

� Tender guidelines and Prospectus

� Evaluation criteria

� Scoring system

� Letter of Engagement

� Contract

Expression of Interest

– Objective: To attract genuine investors and

establish profile of potential bidders

�Name

�Corporate Structure

�Date of Foundation

�Base Location

�Ownership / Shareholders

�Directors / Principal Officers

– Assess Past / Current Operations and Relevant Experience

– Determine Preferred Concession(s):

Advertise tender

– Placed in local Mozambique newspaper(s) (e.g. Noticias)– Use foreign media if feasible

– Advertise in the electronic media (e.g. Indaba Newsletter with a worldwide circulation to over 50,000 subscribers in the tourism industry)

– Email to potential investors (over 350 emails in the NNR database).

Tender Guidelines and Prospectus

� Tender guidelines provide a background summary▪ Broad description of the management and development

activities that can be undertaken

▪ Duration, rights and conditions of the contract

▪ Tender submission date and Tender fees.

� The Prospectus provides more detailed information about each specific management unit offered on tender.▪ Quota

▪ Infrastructure

▪ Communities

▪ Map with physical features

Structure of Tender Document Guidelines

Guidelines developed for the Niassa Reserve cover the following major sections:

a. CORPORATE STRUCTURE:b. GOVERNANCE, MANAGEMENT & EMPLOYEE STRUCTURES:

c. COMMERCIAL OPERATIONS:d. MARKETING:

e. CONSERVATION DEVELOPMENT & SECURITY:

f. SOCIAL DEVELOPMENT:g. MANAGEMENT RELATED INFRASTRUCTURE DEVELOPMENT:

h. OTHER GENERAL MANAGEMENT ISSUES:

i. FINANCIALS:j. FEE PROPOSAL:

Tender Evaluation Committee

Position Responsibility

Chairperson (Casting vote) Chairs the Evaluation Committee meeting.

Evaluator (Voting member) Responsible for technical wildlife and

tourism aspects of tenderEvaluator (Voting member) Responsible for assessment of financial

packageEvaluator (Voting member) Responsible for compliance with Niassa

Management Plan and professional

structure of tender proposal.MITUR Representative (Voting

member)

Responsible for Government

compatibility

Arbitrator/Audit firm representative (Non-voting

member)

Non-voting member. Responsible for monitoring the tender evaluation

process.

Tender Evaluation Committee Responsibilities

� Agree on evaluation criteria

� Open tender documents in presence of full committee

� Confirm that bidders have met all requirements in terms of guidelines

� Record all details of tender submissions

� Verify minutes of all meetings

� Debate results of independent scores

� Reach consensus on tender award

Scoring system

Categories Score %FEE STRUCTURE 100 33%MOZAMBIQUE SHAREHOLDING 25 8%

PEOPLE 20 7%CORPORATE 15 5%

TOURISM PRODUCT 24 8%INFRASTRUCTURE 15 5%

MARKETING 15 5%

FINANCE 20 7%

CONSERVATION DEVELOPMENT 25 8%

COMMUNITY DEVELOPMENT 30 10%OTHER 10 3%

Scoring system: Fee Structure

� Points awarded as follows:

▪ Summarise the Fixed Fee, Variable Fee and Capital Investment for each bid under each area.

▪ Rank bids according to the highest Fixed Fee, Variable fee and Capex Investment

▪ Award points according to the following ranking

Scoring system: Fee Structure

Rank Fixed Fee Variable Fee Capex Total

1 40 30 20 90

2 30 20 10 60

3 20 10 5 35

4 10 5 0 15

5 5 0 0 5

Others 0 0 0 0

Company offering the highest Fixed + Variable

Fee + Capex investment will be awarded 90

points.

Scoring system: Fee Structure

� Assess income earning potential and award points

based on:

▪ Highly realistic – 10 points

▪ Probable – 8 points

▪ Unrealistic – 2 points

� Potential maximum points = 100 (or 33% of total)

Scoring system (Example - Financial offer)

TOTAL OVER 5 YEARS Financial Score

Company Income Capital Fixed Fee Variable Fee Capex Fixed Variable Total

A 2,533,521 983,885 276,502 114,347 10 20 10 40

B 2,046,140 637,755 221,000 97,500 5 10 5 20

C 1,890,250 231,500 317,550 137,500 - 30 20 50

D 4,500,000 435,000 559,000 - - 40 -40

E 2,494,501 1,068,781 87,747 313,140 20 5 30 55

Scoring System

• Company registration:

�25 points to wholly owned and registered Mozambique companies

�10 points to registered Mozambique partner/foreign companies

�0 points for unregistered foreign companies.

• Community development

�10 points to any bid that contributes directly to community development and benefits�Community trust

Scoring system (Assessment questions)

The remaining criteria assessed against a series of specific questions and awarded points.

PEOPLE Score each out of 5: 0 = poor 5 = excellent

Relevance of Experience How relevant is the experience of the key people

behind the bid: a) to the bid and b) to Niassacontext?

4

Credibility of Experience How credible is the experience of the key people behind the bid?

3

Proposed Governance

Structures

To what extent do the proposed governance

structures give comfort that: (a) the experience of key people behind the bid will be actively and

sustainably leveraged into the proposed Niassa

operations and b) the proposed operations will be professionally managed?

3

Proposed Employee Structure

To what extent do the proposed employee structures give comfort that the proposed Niassa

operations will be professionally managed?

3

Total score 13

Evaluating the scores

• Each tender document is evaluate independently and the scores aggregated

• The scores are compared• Wide differences are discussed and consensus reached

• Chairperson can call bidders to make an oral presentation to the Evaluation Committee in the event that total scores are close

Scoring system (Summarised):

Combined Score out of 647 67%436

46%296

58%374

2 FEE STRUCTURE 100 48 26 63

3 MOZAMBIQUE SHAREHOLDING 25 25 0 0 10

1 2 3 1 2 3 1 2 3

4 PEOPLE 20 17 17 14 48 13 8 14 35 13 13 11 37

5 CORPORATE 15 12 11 10 33 9 6 11 26 10 9 12 31

6 PRODUCT 24 19 19 18 56 13 12 16 41 16 14 18 48

7 INFRASTRUCTURE 15 11 11 11 33 10 5 10 25 7 10 11 28

8 MARKETING 15 9 11 11 31 11 7 12 30 9 8 10 27

9 FINANCE 20 16 13 12 41 11 8 12 31 9 13 10 32

10 CONSERVATION DEVELOPMENT 25 17 20 1956

10 5 1328

14 13 1340

11 COMMUNITY DEVELOPMENT 30 17 16 14 47 13 12 14 39 15 9 17 41

12 OTHER 10 5 7 6 18 5 4 6 15 4 5 8 17

174 123 125 115 436 95 67 108 296 97 94 110 374

Individual

Scores

A

25

Individual score out of

B

26

Individual

Scores

C

48 63

10

Individual Scores

Section

Awarding the tender

• Submit recommendations to the Board

• Letter of Engagement:• Binds both parties to negotiate the final contract within a

specified period based on the tender offer

• Allows time to prepare the business plan

• Contract:▪ Negotiate and agree on the terms and conditions

▪ Signature by the Board Chairperson and ratification by the Minister

Lessons learnt� Critical to retain transparency in the evaluation process

▪ Independent auditor and evaluators▪ Security of tender documents

▪ Record of approved minutes

� Tender Guideline structure▪ Categories and questions focused

▪ All tender documents standardised

� Evaluation Committee▪ Capacity to understand the process

▪ Independence of Evaluators

� Hunting more attractive than photographic▪ Don’t have to award large areas for photographic concessions

� Maintain control over submission▪ Don't accept tender documents that don’t follow the guidelines

What to avoid� Opening the tender in absence of bidders

▪ Process is not affected, but it raises suspicions

▪ Not practical when bids received from outside of Mozambique

� Avoid bidders combining more than one block▪ Affects evaluation

� Staggered tender process – a double edged sword▪ Can be advantageous to secure all blocks, but high work load▪ Can take advantage of favourable economic market

� Launch of tender▪ Avoid height of tourism season

▪ Schedule to take advantage of tourism season

� Process could be quicker▪ Managing the political process

THANK

YOU