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Terms of Reference- Draft 1.3

NATIONAL HIGHWAYS AUTHORITY (NHA)

REQUEST FOR PROPOSAL (RFP)

FOR HIRING THE SERVICES OF A FINANCIAL CONSULTANCY FIRM FOR

DEVELOPMENT OF FINANCIAL EVALUATION CRITERIA AND FINANCIAL
EVALUATION OF BIDS
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Terms of Reference- Draft 1.3

REQUEST FOR PROPOSAL FOR HIRING THE SERVICES OF A FINANCIAL CONSULTANCY

FIRM FOR DEVELOPMENT OF FINANCIAL EVALUATION CRITERIA AND FINANCIAL
EVALUATION OF BIDS

1. General
1.1
National Highways Authority ( the " Employer") is a statutory body corporate established under
section 3 of the National Highway Authority Act, 1991 (the "NBA Act"). In terms of section 4 of the
NHA Act, the purpose and function of the Employer is to plan, promote, organize and implement
programs for construction, development, operation, repair and maintenance of the national highways
and strategic roads specially entrusted to it by the Federal Government, Provincial Governments and
other authorities Further, the Employer in terms of section 10 (2) (vii) of the NHA Act is fully
empowered to seek and obtain advice and assistance for the preparation and execution of any plan,
program or project.

1.2 NHA intends to hire the services of a financial consultancy firm ( the "Consultant") for development of
financial evaluation criteria and financial evaluation of bids. The Consultant engaged by NHA will
assist from pre-qualification till Financial Close of all the Projects including the warranties and
undertakings required to be obtained from various project players at various stages and carrying
out the "Due diligence" on behalf of NHA as the Project Owner's Consultant. The entire range
of activities given in terms of reference/ scope of work are required to be carried out by the
Consultant.

TERMS OF REFERENCE/SCOPE OF WORK

2. Financial Evaluation Criteria

The Consultant shall develop the following financial evaluation criterion:

2.1 Financial Evaluation Criteria of bidder:

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Terms of Reference- Draft 1.3

The Consultant shall advise the Employer on the suitability of various firms who have submitted
their EOI/Proposals to undertake the project based on the criteria given in the Request for Proposal
("RFP") and Request for Expression of Interest ("REOI"). The Consultant shall in determining the
suitability of a firm for a project shall take into account, the bidders proposed source of financing
including the liquid assets, unencumbered real assets, lines of credit and other financial means, net
of current commitments available to meet the total construction cash flow demands of the subject or
contracts.

2.2 Financial Evaluation Criteria for the Protect:

The Employer shall be responsible for specifying the project requirements at the stage of
development of Evaluation Criteria for the project while the Consultant shall prepare and develop a
suitable Evaluation Criteria based on the information provided by the Employer for each project.
The Financial Evaluation criteria for the project shall include the financial evaluation of nature of
the project and its financial requirements, with particular reference to the considerations for the
resources and costs involved including critical time frame for completion of the project. The
Evaluation Criteria for the project may be further modified by the Employer as may be required
depending upon the type and/or nature of the contract.

2.3 Financial Evaluation Criteria fOirevaluatiowof bid

The Consultant at the request of the Employer shall critically evaluate bids based upon the financial
and bid evaluation criteria. The Consultant shall also prepare a bid evaluation report for each
project providing details evaluation of various bidders. The bid evaluation report should at
minimum include the following:

a) Eligibility of Bidders and goods

b) Bidders qualification
c) Arithmetic checks and corrections
d) Compliance with Commercial terms and conditions including
i) Bid validity and Bid security
ii) Time of Completion
iii) Terms of payment
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Terms of Reference- Draft 1.3

e) Compliance with Technical requirements

i) Technical deviations

3. Financial aspects of Legal documents

The Consultant shall advise the Employer on the financial aspects of the legal documents prepared
by the Employer's legal counsel and executed from time to time with various contractors. The legal
documents shall be drafted by the Employer's legal counsel.

The Consultant shall advise and assist the Employer in:

i. determining payment terms and conditions

ii.
determining the effect of any changes in project costs and deviations;
iii.
any problem areas relating to financial aspect at the time of awarding the project;
iv. setting out the contractor claims in the agreements;
v. assessment and treatment of unallocated risks;
vi. preparation of warranty claims;
vii. agreements/Contracts of Build operate Transfer (BOT) projects;
viii.
agreements/Contracts of Public Private Partnership (PPP) projects;
ix. loan arrangements with commercial banks;
x. contracts variation orders;
xi. contracts extension time;and
xi i.
any other matter referred by the Employer with regard to the legal documents

4. Due Dili ence of Build 0 a erate Transfer BO and Public Private Partnershi
PP Pro ects

The Consultants shall undertake preliminary financial due diligence for each project that
is to be
carried out under the BOT and PPP scheme. The Employer shall be responsible to provide timely
and accurate data to the Consultant for such due
diligence. The Consultant shall also prepare a financial
model for each project based on the data provided by the Employer.
Terms of Reference- Draft 1.3

5. Assistance in Fund Raising for BOT and PPP

The Consultants shall assist the Employer in identifying ban1cs/financial institutions for fund raising
and while taking into account the financial institution past experience, legal structure, orientation,
economic and social profile in fund generation shall procure the best available fee/interest rate
structure:

There shall be particular focus on:-

5.1 Development of Financial Model and Information Memorandum.

5.1.1 Financial Model: Based on the project design, technical, commercial, engineering
and financial estimates already developed/prepared by the Employer, a comprehensive
financial model of a project assigned to the Consultant shall be prepared by the Consultant.
This financial model shall cover complete financial data and capital cycle for which data
shall be provided by the Employer.

5.1.2 Information memorandum: Based on the options and financial model prepared by
the Consultant as referred to in para 5.1.1, the Consultant shall develop a comprehensive
Information Memorandum (IM") incorporating the most suitable financing process taking
into account alternate funding options, tax implications and prudential regulations of the
State Bank of Pakistan.

The 1M shall be circulated by the Employer to the targeted banks/financial institutions for
obtaining loan facility/facilities by the Employer. The IM shall include project economics,
cash flows, details of assets, liabilities, term for debt and a term sheet indicating the amount
of loan, repayment details, security offered, fees and mark-up payable and transactions steps
required for financial closure.
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Terms of Reference- Draft 1.3

5.2 Detailed Assessment and Comparative Analysis of various Loan facilities

The Consultant shall:

a. Conduct a detailed assessment and comparative analysis of sustainability of

different lending institutions and their efficiency in term of lower cost for the
end user of credit.

b. Determine whether the conditions of a loan offered by a bank /financial

institution make it comparatively more or less expensive for the borrower than
another loan from another bank/financial institution and whether changes in
pricing policies may have any effect.

c. Determine different loans variables and different interpretations of rates, a

standard method of calculating the effective rate on a loan (considering all
variables) is necessary to determine the true cost of borrowing for the Employer.

5.3 Loan documentation completion and debt draw down:

Based on the approved financial arrangement, the Consultant shall assist the Employer and its
legal counsel to draw appropriate loan document.

6 NHA (Employer) Responsibilities

6.1 Technical Consultants

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Terms of Reference- Draft 1.3

Any technical detail or technical advice including third party technical consultants as may be
required by the Consultant in the successful completion of its scope of work shall be provided by the
Employer.

6.2 Timely provision of Information and General Assistance

In relation to the Consultant's performance of the Services, the Employer shall cooperate with the
Consultant and shall furnish such information and data to the Consultant as deemed necessary by the
Consultant. The Employer shall also assist the Consultant in obtaining access to the Employer's
officer, directors, members, employees, appeasers, independent accountants, legal counsel and other
consultants and advisors upon the Consultants informing the Employer of its requirements. Any
advice rendered by the Consultant pursuant to this Agreement shall not be disclosed publicly without
any reference to the Consultant in any public communication by the Employer and/or any of their
associated consultants and advisors. Such advise may however be shared with the Consultant's prior
written consent; provided such consent shall not be withheld unreasonably.

7. Minimum Qualifications of Consultant

Consultants shall have sufficient qualified personnel and resources to accomplish all the
services described herein within the prescribed time. The Consultant shall be capable of furnishing
all necessary professional, technical, and expert services as required to complete all the elements of
Consultancy assignment described in the Scope of Work. The Consultant will be required to have
high degree of management and technical expertise and experience directly related to structuring of
BOT and PPP for Highway projects.

8. General Conditions regarding RFP

8.1 The Consultant(s) shall bear all costs associated with the preparation and
submission of its proposal

8.2 All documents submitted by the Consultant(s) will be treated as confidential, and will
not be returned to Consultants(s).
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Terms of Reference- Draft 1.3

8.3 Employer reserves the right to accept or reject any or all applications, without thereby
incurring any liability to the affected Consultants(s) or any obligation to inform the Consultants(s) of
the grounds for the action of the Employer. Employer also reserves the right not to award or
enter into any contract or agreement with any Consultants(s), and may terminate the
procurement process at any time without thereby incurring any liability to any Consultant.

8.4 Failure by any Consultant(s) to provide all of the information required in the
proposal or any additional information requested by Employer may lead to Employer's
rejection of the Consultant's proposal in its entirety.

8.5 Employer reserves the right to use and interpret the information it receives in its
absolute discretion for evaluating these proposals.

8.6 Dead-line for submission of proposals shall be up to hrs and these shall be
opened at hrs on the same day.

The Consultants(s) shall submit the proposal in sealed envelope marked very clearly
marked: 8.7

PROPSOAL FOR DEVELOPMENT OF FINANCIAL EVALUATION CRITERIA

AND FINANCIAL EVALUATION OF BIDS

8.8 Proposals may be mailed, couriered or delivered in person to:

9. Contents of Proposal

If the Consultant is qualified and would like to be considered, the Consultant is invited to submit a
proposal in this regard. The contents of the proposal shall be complete in description, concise in
volume and austere in form. The proposal shall be in the format of a written report. Once submitted,
the proposal, including the composition of the consulting team, cannot be altered without prior
written consent of the Employer. Only one (I) original is required. Any reproduction of photos,
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Terms of Reference- Draft 1.3

drawings, charts and/or diagrams included in the proposal copies should be the same as in the
original. The proposal should, at a minimum, include the following sections:

9.1 Covering Letter and Title Page

Include a covering letter containing a brief statement of the Consultant's understanding

of the work to be done and an indication of positive interest in performing this work for the
Employer. The letter and/or a title page should contain the name of the Consultant's firm, a street
address for correspondence, and a primary contact for this proposal.

9.2 Table of Contents

Include a Table of Contents listing the various sections included in the proposal.

9.3 Proposal Contents

Each Consultant must include in the proposal an Executive Summary that summarizes
important features of the proposal, and includes a brief description of the Consultant's approach to
the scope of work, a description of the project team. The Executive Summary should be no more
than one (1) one sided page.

9.4 Team Identification and Organizational Chart

Identify your firm and each key professional by name, primary representative and title, address of
offices, telephone and fax numbers and email address. Indicate the business structure of your firm
(i.e., whether your firm is a company, joint venture, partnership, or sole proprietor). Indicate
the name(s) of the owner(s) of your firm.

9.5 Services and Work Plan

The proposal should include a work plan describing the services, approach and methodology
proposed for accomplishing the scope of work. The proposed phasing of the project should
be discussed. The proposal should be sufficient in detail to allow an objective analysis of the firm's
capabilities and envisioned work plan in comparison with competing firms. Discuss the roles and
responsibilities of the proposing firm and all key professionals.
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9.6 Qualifications and Experience

The proposal must supply information concerning the qualifications and experience of the proposed
project team for this assignment. Detailed CVs of the proposed key personnel along with a copy of
the passport size photograph should be submitted.

10. Intimation to successful Consultant

The Employer after assessment of all proposals will notify the successful Consultant in writing
by registered letter or facsimile. The final detailed scope of work, terms, conditions, schedule,
and professional fee for the services will be finalized at the time of signing the contract. The
Consultant selected will be required to enter into a contract agreement with the Employer to
provide the envisaged services described in the Scope of work.

11. Right of Rejection

The Employer reserves the right to reject any or all proposals, to waive any informality in such
proposals, to request new proposals, to revise the RFP prior to, and including, to proceed to
do the work otherwise, withdraw this RFP, not award the work, or not award a portion of the
work at any time. The receipt of proposals shall NOT in any way, obligate the Employer to enter
into a consultancy agreement, lease or
any other contract of any kind with any Consultant. All
submitted copies of the proposals shall become the property of the Employer.