Melbourne Metro EOI Responses Bidding considerations

Sep 2013

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Procurement process – where does an EOI response fit in?

Affordability

Value For Money

Financial Close

► Experience ► Capability ► Innovative

ideas

► Detailed bid development

► Deliverability

► Final negotiations of solution and cost

► Money starts flowing and delivery commences

► Options appraisal ► Affordability ► Market Sounding

Business Case

Expressions of Interest

Request for Proposal Preferred

Bidder Financial

Close

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Who are the consultants and contractors to an SPV?

State Government

PPP Company (Usually an SPV)

Project Finance Debt

Equity

Example Sources •  Bank debt

•  Capital markets (bond debt) •  Institutional (super funds)

Example Sources

•  Contractor •  Super funds

•  PPP investment funds •  International pension funds

Facilities Maintenance Provider(s)

Design & Construction Contractor(s)

Example Providers •  Spotless

•  Honeywell •  DTZ/UGL

•  Serco •  MTR Corp

Example Providers

•  John Holland •  Leighton Group

•  Lend Lease •  McConnell Dowell

Advisers •  Financial

•  Legal • Technical (Design, QS etc)

Advisers •  Financial

•  Legal • Technical (Design, QS etc)

Service Payments

FM Payments

D&C Payments

Example: North West Rail

Link

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EOI – What the State is looking for

Articulate your value proposition ►  Bidders with a genuine understanding of and commitment to the

Project ►  Demonstrate relevant experience of dealing with key issues – tailor to the

Project ►  Practical approach (believable – demonstrable) ►  Broad experience and capability covering all project elements:

►  Finance & funding: Who will provide the debt funding and equity investment? Who will coordinate and ensure the best loan terms are achieved (financial advisor)? What commercial revenue opportunities might there be?

►  Design: Who will undertake the engineering design and architectural design? Do they have relevant past experience?

►  Construction: Does your builder(s) have the size, capability and experience to deliver all elements of the project? Eg tunnelling, rail systems, stations

►  Maintenance/Operations: Do your team members have strong experience in providing maintenance services to station, tunnels and rail projects? Do they have capability with IT systems such as passenger information displays?

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EOI – What the State is looking for

Articulate your value proposition ►  Clear demonstration of

►  Experience ►  Project understanding ►  Proven and tailored approach

►  EOI is not about identifying the winning bidder – looking for competent parties with great potential to deliver come RFP

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EOI – How to provide this information

►  Answer the criteria - address all aspects ►  Use their terminology ►  Use their structure ►  Keep short and sharp ►  Tailor responses to the Project – avoid generic statements ►  Use examples ►  Ensure consistency throughout response and clear cross-referencing

where needed ►  Recognise all aspects of the project: design; build; finance; operate ►  Avoid creating the impression of being ‘finance led’ or ‘construction

led’ – provide integrated response ►  Do not assume familiarity of the evaluators with your past

achievements or capabilities

►  Make assessment easy for the evaluator!

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Workshop activities

►  Your bid team is looking to develop innovative commercial opportunities to improve the competitiveness of your team to the State.

►  Consider possible opportunities attached to the Melbourne Metro Project and develop a shortlist of 2 major initiatives

►  For each initiative consider: ►  How will you sell the initiative to potential equity investors? Why would

the opportunity be an attractive investment for them? ►  How will you sell the initiative to the State? Why would the State choose

your team? What are the benefits of the commercial opportunity to the State; rail users; and/or the wider community?

Thank you