Developer selection processes

Section 19 of Bihar State Infrastructure Development Enabling Act, 2006 deals with developer selection processes. The Government Agency or the Local Authority may adopt appropriate Developer selection process including any of the following process, namely :- (I) DIRECT NEGOTIATIONS: (i) The Government Agency or the Local Authority may directly negotiate with a Bidder for implementing;

The Government Agency or the Local Authority may adopt appropriate Developer selection process including any of the following process, namely :- (I) DIRECT NEGOTIATIONS:

(i) The Government Agency or the Local Authority may directly negotiate with a Bidder for implementing;

(a) Category -I projects initiated by a Bidder; or (b) the projects which involve proprietary technology, or franchise which is exclusively available with the Bidder globally; or (c) the projects where competitive bid process has earlier failed to identify a suitable Developer; or (d) the projects in prescribed social infrastructure sectors where a non-profit organization seeks to develop a project; or (e) a linkage infrastructure Project with the concerned Mega Infrastructure Project.

(ii) In case a developer is selected through direct negotiations, the Government Agency or the Local Authority may renegotiate the financial offer or recommend that all subsequent procurement for the project is made through the competitive bidding, procurement process, the cost of the project be determined after such competitive bidding procurement process and renegotiate the financial offer based on the revised cost of the project. (II) SWISS CHALLENGE APPROACH:

(i) The Swiss Challenge Approach will be followed in any project belonging to Category-Il initiated by a private sector participant who is hereinafter referred to as 'Original Project Proponent', by a suo-motu proposal.

(ii) The Original Project Proponent must submit to the Government Agency or Local Authority :- (a) details of his technical, commercial, managerial and financial capability;

(b) technical, financial and commercial details of the proposal;

(c) principles of the concession agreement.

(iii) The Government Agency or the Local Authority would first evaluate the original Project Proponent's technical, commercial, managerial and financial capability as may be prescribed and determine whether Original Project Proponents capabilities are adequate for undertaking the project.

(iv) The Government Agency or the Local Authority shall forward such suo-motu proposal to the Infrastructure Development Authority along with its evaluation within prescribed time for the approval of the Infrastructure Development Authority.

(v) The Infrastructure Development Authority would then weigh the technical, commercial and financial aspects of the Original Project Proposal and the concession agreement along with the evaluation of the projects by the Government Agency or the Local Authority and ascertain if the scale and scope of the project is in line with the requirements of the State and whether the sharing of the risks as proposed in the Concession Agreement is in conformity with the risk-sharing framework as adopted or proposed by the Government for similar projects, if any and if the project is in conformity with the long term objective of the Government.

(vi) If the Infrastructure Development Authority recommends any modification in the technical, scale, scope and risk sharing aspects of the proposal or the Concession Agreement, the Original Project Proponent will consider and incorporate the same and resubmit its proposal within the prescribed time to the Government Agency or the Local Authority.

(vii) If the Infrastructure Development Authority finds merit in such suo-motu proposal, the Infrastructure Development Authority will then require Government Agency or the Local Authority to invite competing counter proposals using the Swiss Challenge Approach giving adequate notice as may be prescribed. The original Project proponent will be given an opportunity to match any competing counter proposals that may be superior to the proposal of the Original project Proponent. In case the original Project proponent matches or improve on the competing counter proposal, the project shall be awarded to the original Project Proponent, otherwise the bidder making competing counter proposal will be selected to execute the project.

(viii) In the event of the project not being awarded to the original Project proponent and being awarded to any other Bidder, the Government Agency or the Local Authority will reimburse to the original Project proponent reasonable costs incurred for preparation of the suo-motu proposal and the Concession Agreement. The Suo-motu proposal and the Concession Agreement prepared by the Original Project Proponent shall be the property of the Government Agency or the Local Authority as the case may be.

(ix) The reasonable costs of preparation of the suo-motu proposal and the Concession Agreement shall be determined as per the norms prescribed by the Government and shall be binding upon the Original Project Proponent. (III) COMPETITIVE BIDDING.

(i) Competitive Bidding will be adopted in all Projects initiated by the Government Agency or the Local Authority. The notice inviting participation will be adequately publicised by the Government Agency or the Local Authority as may be prescribed.

(ii) The bid process will be designed to assist and ascertain, technical, financial, managerial and commercial, capabilities of the Developer.

(iii) In case of a two stage process being adopted for a Mega Infrastructure Project, the Government Agency or the Local Authority may require all Bidders to obtain from their Prospective Lenders, financial terms, expectations regarding State Support, comments on the Concession Agreement and other project documents (hereinafter called "Deviations").

(iv) Any Deviations proposed shall be enclosed in a separate envelope and shall not be part of the envelope containing the financial or the commercial offer with regard to a Project. The procedure for determining the common set of Deviations and the effect to be given to such common set of Deviations shall be as may by prescribed.

(v) All proposals shall be opened and evaluated at a common platform in a free and fair manner.

(vi) It will be open for the Government Agency or the Local Authority to adopt one or two stage process depending upon the complexity of the project.

(vii) The Government Agency or the Local Authority will periodically inform the Infrastructure Development Authority of the progress of all Projects undertaken through a two-stage bid process.

Section 19, Bihar State Infrastructure Development Enabling Act, 2006 (Act 2006 of 2024).