COOPERATION BETWEEN THE GOVERNMENT AND PRIVATE COMPANIES IN THE DEVELOPMENT AND OR MANAGEMENT OF
INFRASTRUCTURES
(Presidential Decree No. 7/1998, dated January 12, 1998)
ATTACHMENT :
I. DETEMINATION OF COOPERATION PROJECTS AND SELECTION OF PRIVATE PARTIES
1. The obligations of personnel/technical departments in charge :
(1) Personnel/technical departments in charge shall be required to execute, or stipulate pre-feasibility studies of the respective projects proposed to the National Development Planning Board (Bappenas) to be considered for inclusion into the list of infrastructural development projects.
(2) Before proposing cooperation projects, personnel/technical departments in charge shall be required to evaluate whether the said pre-feasibility studies fulfill the requirements needed, wherein the said projects are feasible technically and economically, and follow the following principles :
(a) technical explanation identifying and covering all relevant components of the projects;
(b) estimates of initial costs including all relevant components of the projects;
(c) financial analysis according to the scope of the projects and public to be served;
(d) adequate identifiation and specification of standards and designs of adequate performance;
(e) complete identification of the regions and public to be served by the projects;
(f) identification of the project locations which must be in accordance with spatial plans in force;
(h) clear identification and estimates of the costs according to all steps of projects development, including, subsidies, contracts with the government and financial concessions; (i) environmental considerations fulfilling relevant requirements as well as identification of all anticipatory steps suitable for overcoming all negative impacts of the projects;
(j) a thorough study on the social aspects of the eviction of and compensations to be paid to the public attected by the projects;
(k) the period of implementation considered sufficient and suitable to the scope and degrees of difficulty of the projects;
(l) identification of socio-economic benefits by using appropriate methodology;
(m) a study capable of giving an answer to the question, why the said projects are attractive to private parties;
(n) all agreements required as a pre-quisite to the implementation of projects, including agreements on environmental analysis, procedures for evicting the community affected by the projects, approvals from PKLN, government permits; and
(o) application of the most appropriate method to select private parties (either one-step competitive tenders, two-step competitive tenders or simplified competitive tenders), and justification of the method recommended. 2. The obligations of Bappenas shall be :
(1) examining whether all proposals of the said projects are accompanied by pre-feasibility studies. The proposals of the projects to be considered shall only be those complete with pre-feasibility studies.
(3) providing input for personnel/technical departments in charge whether the said project proposals can be included or not into the list of infrastructural development (cooperation) projects. In the case of the projects failing to be included into the list, Bappenas and personnel/technical departments in charge shall be allowed to cooperate to complete the said proposals so as to be able to be considered.
(4) Bappenas shall include the proposals fulfilling the requirements into the list of infrastructural development projects.
(5) Bappenas shall periodically renew and issue the list of projects approved and provide copies of the list of the projects approved for the parties needing them.
3. The projects worth Rp 50 billion or higher shall be offered by open tenders.
4. The projects with clear technical specifications shall be processed by one-step tender.
5. The two-step tenders shall be applied to the large-scale projects whose technical specifications still need to be developed, wherein : (1) the technical specifications available are inadequate and less
complete for a competitive tender, but clear technical criteria can be found to evaluate the technical proposals.
(2) more than one technical qualification can be found.
6. The decision to use one or two-step tenders shall be made by personnel/technical departments in charge after consulting with Bappenas, following the fulfillment of the requirements for pre-feasibility studies and before issuing invitations for pre-qualification. II. PRE-QUALIFICATION
b. names, addresses, telephone and facsimile numbers of personnel/technical departments in charge;
c. names of contact persons and venues where the documents of pre-qualification can be obtained:
d. the period and date of the closing of pre-qualification and procedures which must be undertaken by prospective bidders to file applications for pre-qualification; and
e. provisions on whether tenders are executed in accordance with the one and two-step system.
(2) Within a period of seven days after the applicatons for pre-qualification are received, personnel/technical departments in charge shall advertise invitations through media mass that can be easily obtained.
(3) After personnel/technical departments in charge have advertised the invitations to potential bidders, the personnel/technical departments shall be required to provide the documents of pre-qualification for interested parties. The documents must indicate :
a. names and locations of projects;
b. scope and cost estimates of the said projects;
c. names, addresses, telephone and facsimile numbers of personnel/technical departments in charge;
d. time period and date of the closing of pre-qualification (not less than 60 days from the date of advertisement) as well as procedures that must be followed by private parties to file applications for pre-qualification.
(4) Potential bidders shall be required to fill the documents of pre-qualification, conserning the following matters :
a. experience in the said sector;
b. performance in the similar projects, including references from previous clients of the same projects;
c. similar experience in the same geographical, topographical and climate conditions;
(5) Personnel/technical departments in charge shall be required to conclude pre-qualification of potential bidders within a period of 30 days after the closing date of pre-qualification.
(6) Personnel/technical departments in charge shall evaluate whether potential bidders will be capable of executing the projects in accordance with criteria of pre-qualification by evaluating, among others : criteria as meant in point (4) as well as arrangement of organization and management, including supporting companies (contractors, sub-colsultants etc).
(7) Personnel/technical departments in charge shall be required to notify in writing all potential bidders passing pre-qualification and at the same time inform those failing to pass pre-qualification along with relevant reasons. Personnel/technical departments in charge shall provide copies of pre-feasibility studies for all participants passing pre-qualification.
(8) The bidders disqualified shall be allowed to submitt requests to the Team for Evaluation of Procurement in connection with the decision of personnel/technical departments in charge on their disqualification. The said request must be received by the Team for Evaluation of Procurement within a period of 15 days after the bidders receive the decision on the disqualification from personnel/technical departments in charge. The Team for Evaluation of Procurement will make decisions on the said requests within a period of time stipulated later. The decision of the Team for Evaluation of Procurement on the said requests shall be final and directly bindign.
(9) Personnel/technical departments in charge shall be required to deliver the list of all pre-qualification participants to the Team for Evaluation of Procurement.
2. In the case of a two-way tender system being applied, personnel/technical departments in charge shall be required :
(2) to discuss the said technical proposals with participants of pre-qualification on the basis of technical standards and parameters of project.
(3) to invite pre-qualification participants to deliver their bids on the basis of standard agreements and technical parameter by observing the bidding requirements as regulated in the tender documents.
(a) Foreign companies shall be allowed to be involved in pre-qualification.
(b) Foreign companies passing pre-qualification shall be entitled to participate in bidding.
(c) In the case of the said foreign companies winning the tenders, the relevant companies shall be required to set up Indonesian statutory bodies to execute the development and or management of the said infrastructures, according to Government Regulation No 20/1994 in the purchase of shares in companies established in the framework of foreign investments. III. BIDDING DOCUMENTS
1. Personnel/technical departments in charge shall be required to prepare and deliver bidding documents to all participants passing pre-qualification :
(1) invitation for bidding;
(2) directives to the bid participants, covering :
a. general explanation and objectives of the projects, including a clear statement on the objectives, scope, results expected, the public to be served, designs and minimum standard of performance and environmental standards;
b. procedures for filing bids, including the date, time period and location for filing the bids, guarantees for bids, and validity periods of the respective bids as well as procedures allowed for delivering bids;
d. principles of detemination and adjustment of tariffs, charges, costs and rental fees;
e. guarantees provided by personnel/technical departments in charge;
f. the need for a relevant statutory body, if any;
g. the share of personnel/technical departments in charge and/or other agencies in financing part of projects;
h. assistance or enhancement to be provided by personnel/technical departments in charge;
i. tables indicating clearly the risks to be allocated to personnel/technical departments in charge, private parties and users.
(3) forms of bids;
(4) general and specific requirements to be applied in the contracts;
(5) copies of pre-feasibility studies;
(6) copies of the contract concept describing the forms of cooperation (like : BOT, BOO, concession and etc) and the maximum period of the construction;
(7) guarantees of pro forma bids;
(8) guarantee of pro forma implementation.
(9) attachments, including additional information which is relevant, like : economic, socio, demographic and environmental data required to improve the quality of the bids; and
(10) other documents that personnel/technical departments in charge consider useful for the bidders.
2. The bids and other documents delivered by the bidders and matters relating to the bids shall be made in the Indonesian language or English. In the case of dispute arising from the implementation, the reference shall be documents made in the Indonesian language. 3. Additional information, expalanation, rectifications and amendments
to bidding documents shall be supplied to the bid participants formally and in writing.
5. Bidding guarantees under the name of investors shall be required in the bidding. The bid guarantees will reflect the amount of losses to be borne by personnel/technical departments in charge that may arise, in the case of bidders resigning or failing to sign the contracts. Total bid guarantees shall be determined by personnel/technical departments in charge.
6. All bids shall be prepared to use the Indonesian rupiah maximally. 7. Bidding documents shall clearly indicate whether the adjusments to
the project financing are allowed, and events and/or conditions wherein the cost adjustments are permitted.
8. Bidding documents shall indicate clearly that the succesfull tenders shall be required deliver guarantees of performance in forms of bank guarantees under the name of the winners whose amount is equivalent to 5% of the estimated contract value. Bank securities can be obtained from a bank in Indonesia or international banks having branch offices in Indonesia. The securities shall be held by personnel/technical departments in charge and have a validity period until :
(1) the completion of projects physically; and (2) 12 months after the projects start operation.
9. Unless there are no other provisions, the delivery of bids shall be not later than 90 days since the date of the documents is issued.
10. The bids delivered after the time and date stipulated shall be returned without disclosure.
11. The bidders can be asked to extend the validity period of their bids without introducing modification to the letter of their bids. The bids of bidders failing to fulfill the said matter shall be returned along with the guarantees of their bids.
12. Personnel/technical departments in charge shall conduct pre-qualification conference, not less than 21 days and not more than 45 days after the bidding documents are issued.
13. The date, time and location of pre-bidding conference shall be given to the bidders in form of bidding directives. All changes in the time and location of pre-bidding conference will be informed to the bidders through letters and facsimile.
they are made as written supplements from personnel/technical departments in charge. Personnel/technical departments in charge will issue the additional explanation in writing to all bidders.
15. The bidders shall be allowed to file written question to personnel/technical departments in charge togather explanations on the bidding documents, or data or information relating to the tenders. The bidders shall be required to provide personnel/technical departments in charge with sufficient time to consider and answer the said request. Personnel/technical departments in charge will send additional notifications in writing to the respective bidders and the Team for Evaluation of Procurement through facsimile or other electronic media.
16. The bidders shall be responsible for the careful evaluation and thorough understanding of all requirements, terminologies and condition of bidding documents or other documents issued by the government or personnel/technical departments in charge. Personnel/technical departments in charge shall not be responsible for the mistakes or misunderstanding of the bidders arising from information (including bidding documents) provided by personnel/technical departments in charge.
17. The final time, date and venue of the delivery of tenders shall be included into bidding documents. The documents will be opened publicly at the time and in the venue stipulated.
18. The bidders shall not be allowed to improve, change or substitute their bids after the bidding are opened.
IV. EVALUATION OF BIDS
1. Evaluation of bids shall be executed as follows :
and to make sure the documents are well arranged. The bids containing miscalculation shall be refused.
(2) All bids shall be evaluated later to ensure that the said bidsfully comply with technical criteria and performance required :
a. Basic design shall at least fulfill technical requirements and environmental standards stipulated in the bidding documents. Field examination shall be required to result in accurate technical plans and timetables of project implementation must be kept;
b. Organizational structure proposed to the projects, arrangement of organization and maintenance must be elucidated clearly to ensure that the performance planned is in accordance with requirement standards stipulated;
c. Financing plans must be complete by calculating all financing of project construction, and their start-up operations. The difference and uncertainly in the financial planning shall become the basis for refusing a bid. It is also calculated the sufficiency of fund reserves to cover the possibilities of excessive cost, slow performance, or cashflow deficit in the start-up operation.
(3) Evaluation of financing shall only be introduced to reponsive bids and passing technical evaluation :
a. the comparison and evaluation of financial proposals must be executed by using the method of present value of financial discounting. Discount tariffs applied to this evaluation shall be tariffs of Bank Indonesia Certificate for three months effective on the day of bids are opened, or other tariffs approved by the Team for Evaluation of Procurement to evaluate the financial condition of cooperation projects between private companies and the government;
b. the financial flows used in tender documents must be in accordance with minimum technical design and standards of implementation, planning and specifications contained in tender documents;
comparison with the period stipulated in tender documents will be disqualified;
d. the currency used in evaluating the bids shall be the Indonesian rupiah;
e. all bids will be evaluated thoroughly, to ensure that all calculations are included, covering :
i. the placement of staff and their financing; ii. the costs of operation and maintenance;
iii. the adequate working capital (including among others, cash revenue, inventory of spareparts, other inventories, rental fees and downpayments);
iv. the replacement and renewal of equipment so long the development and operational period;
v. the licences, permits and payment connecting to licences of technology;
vi. the income and other taxes.
f. all bids must be evaluated accurately to ensure that the projection of demand and growth rate stipulated in analysis shall be reasonable and widely consistent with the projection of demand contained in pre-feasibility studies and/or bidding documents. In the case of the projection of demand covered as part of bidding documents, this version will also be valid for pre-feasibility studies.
g. the calculation of tariffs shall be in accordance with that stipulated in bidding documents;
h. all support gained from the public, including those contained in the financial proposals must be indicated clearly and reasonably and included in analysis;
i. the timetable of projects implementaton must be consistent with that contained in the financial analysis;
j. all debts repayment, financial arrangement, interest and debts amortization must be clearly indicated and calculated in the financial analysis;
i. the proposals of tariffs of subsidies, charges, costs and rental fees proposed in forms of Build Operate Transfer (BOT), Build Own Operate (BOO), Develop Operate Transfer (DOT), Rehabilitate Operate Transfer (ROT), Rehabilitate Operate Own (ROO), and other similar forms, resulting in the lowest deduction from the present value; ii. the timetable proposals or amortization payment in forms
of Build Transfer (BT), Build Lease and Transfer (BLT), Build Transfer and Operate (BTO), and other similar forms, resulting in the lowest deduction from the present value; or
iii. the timetable proposals of the financing to parties in charges in leasing and other similar forms resulting in the highest deduction from the present value.
2. In the case of the private party serving as the initiator of a project and the project is offered to the public, the initiator shall be entitled to obtain additional value in the bid evaluation whose amount is determined by personnel/technical departments in charge, by fulfilling the following requirements :
a. the bidder has submitted the project proposal to personnel/technical department in charge on the basis of initiative of the relevant private party;
b. the bidder has executed pre-feasibility study resulting in the project included in the list of infrastructural development projects;
c. pre-feasibility study is opened to all other participants;
d. the bidder has passed the tender pre-qualification and his/her tender fulfilled technical requirements;
e. there are found out more than one tender fulfilling technical requirements.
V. THE REFUSAL OF BIDS
1. Personnel/technical departments in charge shall be allowed to refuse bids existing, and also execute repeat bids.
2. Repeat bids shall be based on the considerations :
(2) the requirements of bids are not fulfilled, wherein only less than two bids complying with the requirements.
3. In the case of only one bid fulfilling the requirements technically and personnel/technical departments in charge proposing to make agreement with the said bidder, personnel/technical departments in charge need to obtain approval from the Team for Evaluation of Procurement to undertake a negotiation with the bidder.
4. The negotiation as meant in No. 3 above will ensure that the bid aims at yielding the best result in the interest of consumers and Indonesian state. The negotiation must be concluded before personnel/technical departments in charge deliver their recommendations to obtain the approval of the Team for Evaluation of Procurement on the basis of the negotiation with the private party.
5. In the case of the Team of Evaluation of Procurement approving a negotiation with a bidder fulfilling the said requirements, the other bids will be refused.
6. The above mentioned bidder can be a company or a group of companies or a combination of companies proposing a tender cooperatively.
7. Within a period of 120 days from the closing date of the ternder, personnel/technical departments in charge shall deliver the following matters to the Team for Evaluation of Procurement to be observed further :
(1) the report of evaluation results and recommendations of personnel/technical departments in charge to make contracts; (2) the concepts of contracts (which are not yet signed) with
bidders succeeding to pass selection
9. The Team for Evaluation of Procurement shall not be allowed to issue approval for the projects which are not fulfilling the provisions in this Presidential Decree.
VI. SIMPLIFICATION OF COMPETITIVE TENDER
1. The procedures for tendering the infrastructure projects with an estimated cost less that Rp. 50 billion can be executed in a simpler way.
2. The simpler procedures shall be stipulated by the relevant Ministers, Governors or Heads of Second-level regoins (Regents or Majors). 3. The simplified tender procedures shall refer to the following
provisions :
(1) bids shall be allowed to be carried out by only bidders passing pre-qualification
(2) pre-qualification will be executed through a transparent and consitent process.
(3) all invitations to join pre-qualification will be delivered to KADIN and INKINDO as well as GAPENSI and will be advertised in :
a. Mass media;
b. Printed media, including newspapers, commercial publications;
c. Business news.
(4) all parties delivering the pre-qualification documents before the closing date of bids will be considered, and the results will be informed
(5) at least five of the lowest bidder will be allowed to participate in tenders
(6) the opening of tender will be executed openly and all bidders will be invited to be present.
(7) every bid will be evaluated, whether it is responsive and technically fulfills the requirements. The tender committee will evaluate the financing proposals on the basis of creteria of evaluation.
VII. PROCEDURES FOR NOTIFICATION TO BIDDERS
After the Team for Evaluation of Procurement, or Ministers, or Governors, or Heads of Second-level regoins approve the results of the selection of private parties :
1. the results of selection will be published and announced to the public; 2. personnel/technical departments in charge will inform all bidders
failing to pass the selection, the results of evaluation along with explanations;
3. within a period of 14 days after the publication or 15 days after the written announcement on the unsuccessfull bidders made, the unsuccessfull parties shall be allowed to file objections to the Team for Evaluation of Procurement;
4. regarding the point (3) above, the Team for Evaluation of Procurement will make decision within a period of 30 days after the date of the said application is received. The decision of the Team for Evaluation of Procurement shall be final.
5. in the case of objection arising, personnel/technical departments in charge shall not be allowed to decide anything on the said project, including to sign contracts with winners, but must be waiting until the decision of the Team for Evaluation of Procurement is issued.
6. after the decision of the Team for Evaluation of Procurement are sent to the successfull bidders, personnel/technical departments will take steps required to finalize the contracts and then inform the winners to start their activities.
7. the rights and obligations of parties in the development of infrastructural cooperation projects shall be explained in detail in a contract, according to this Presidential Decree.
VIII. MONITORING AND EVALUATION
1. Personnel/technical departments in charge shall be responsible for administrative affairs and monitoring the implementation of the projects and report the results to Bappenas every six months.
2. Personnel/technical department in charge shall be required to carry out financial audits on the implementation of development and operation of the projects annually, and it shall be undertaken by independent auditors.
3. Within a period of six months after the completion of projects, personnel/technical departments in charge shall report the projects completion to Bappenas, containing recommendations and other matters that can be obtained during the implementation of the projects starting from the report of preparations, development through the operation of the said facilities.
4. Except stipulated in the contracts, from the signing of contracts until the completion of projects, or otherwise specified, personnel/technical departments in charge and/or private parties shall be allowed to file objections relating to the implementation of projects physically, or other matters relating to the implementation of the contracts, to the Team for Evaluation of Procurement to obtain considerations.
THE PRESIDENT OF THE REPUBLIC OF INDONESIA
sgd
