Consultancy to prepare a detailed Technical, Financial, and Environmental and Social Due Diligence – Banja Luka Water Project

Item Description:

The European Bank for Reconstruction and Development (EBRD) was founded in 1991 to create a new post-Cold War era in central and eastern Europe, furthering progress towards ‘market-oriented economies and the promotion of private and entrepreneurial initiative’. The EBRD is owned by 67 countries from five continents, as well as the European Union and the European Investment Bank.

The utility company “Vodovod Banja Luka” (the “Company”) supported by the City of Banja Luka (the “City”) in Bosnia and Herzegovina, approached the European Bank for Reconstruction and Development (the “EBRD”, or the “Bank”) with a request to finance the priority investments (Priority Investment Programme, or “PIP”) aimed at improving water supply and wastewater services (the “Project”). The Project will support the City in improving its provision of water and wastewater services, particularly to the currently underserved population.

The wastewater system of the City is underdeveloped: the wastewater collection network currently covers approximately 60 per cent of inhabitants of the City with many individual households connected to septic tanks, where many of these tanks are sub-standard. The City has no centralised wastewater treatment plant and the wastewater collected is discharged into the rivers Vrbanja and Vrbas untreated. Septic waste collection is poorly managed with little arriving at designated sanitary landfill sites. Whilst the lack of formal wastewater treatment of sewage is not unusual for the country it causes environmental and social harm and needs to be addressed. The scale and impact of this harm is unknown and may be exacerbated with increased water and wastewater connections – this will be confirmed during technical, environmental and social due diligence. The collectors that are currently in use date back to 1912, and they are in urgent need of rehabilitation. The wastewater system has not followed the expansion of the water supply network and totals 397 km.

The loan proceeds will finance expansion and rehabilitation of existing drinking water supply and wastewater networks. The exact scope of the proposed PIP will be shared with the Consultants in order to perform the due diligence. Total capex needs are estimated at EUR 10 million to be provided in two equal tranches of EUR 5 million each. The loan will be on-lent through a legislated cascade of sub-loans from BiH via Republika Srpska (“RS”) to the City.

Assignment Description:

The EBRD wishes to commission a suitably qualified consultant (the “Consultant”) to prepare a detailed Technical, Financial, and Environmental and Social Due Diligence study as well as the resilience of the Project to climate change.

The overall objective of the assignment is to prepare and carry out Technical, Financial, and Environmental and Social Due Diligence, which the Bank can use to appraise the Project and take a decision on the prospective financing.

This Project will be based on an effective least cost short-term investment programme, designed on the basis of a long-term development plan. The short-term investment plan will be justified on the basis of thorough technical, financial and economic analysis. Furthermore, the Consultant will develop an efficient Project Implementation Plan, including procurement schedule, and carry out an energy saving and environmental assessment (including resource utilisation and the impact on GHG emissions) of the short-term investment programme.

Specific objectives of the assignment shall, inter alia:

• Confirm the need for investment;
• Identify a cost-efficient and sustainable Priority Investment Programme to be financed by the Loan and advise on the most appropriate project implementation arrangements including tender packaging, contracting, supervision and a need for external procurement support;
• Analyse the ability of the Company to service its debt including this Loan within the generally accepted limits for the affordability of tariffs limits;
• To the extent possible:

– Assess the potential impacts of climate change on the project in order to build in resilience to climate change related risks;

– Assess the resource efficiency opportunities (including energy and water efficiency and waste minimisation potential and the impact on GHG emissions) on the project;

• Establish the key technical, institutional and social risks that could impede project success and identification of measures to reduce, remove or mitigate these risks;
• Analyse possible options and recommend, on the least cost basis, the best solution for collection and treatment of households and industrial wastewater as well as for the rainfall water;
• Review baseline assessment work data from the Technical DD assignment and carry out some additional baseline data collection to assess the current situation;
• Verify the project category as B under the 2014 EBRD Environmental and Social Policy (“ESP”)[1]. If the Consultant considers the project category should be revised as A, they shall immediately notify the EBRD.
• Carry out an Environmental and Social Assessment (Environmental and Social Due Diligence – ESDD) of the Project, against the 2014 ESP and associated Performance Requirements (“PRs”), to identify its environmental and social risks, impacts and benefits and to structure the Project to comply with the Bank’s Environmental and Social Policy (“ESP”) and Procurement Policies and Rules (“PRs”).
• Calculate the Bank’s standard measuring indicators and GET impact indicators

Full Terms of Reference (TOR) of the Assignment can be found here: http://www.ebrd.com/documents/procurement/tor-76572.pdf

Consultant Selection Procedure: Single stage open competitive selection. Interested firms or groups of firms are invited to submit a Technical and Financial Proposal.

Assignment Start Date and Duration: The Assignment is expected to start in Q1 2019 and has an estimated overall duration of 14 weeks.

Cost Estimate for the Assignment: EUR 150,000 (exclusive of VAT).

Funding Source: It is anticipated that the contract will be financed by the EBRD Shareholder Special Fund.

Eligibility: There are no eligibility restrictions based on the consultant’s country of origin.

Consultant Profile: Corporate services are required. The Consultant will be a firm or a group of firms preferably with previous project experience related to drinking water supply and wastewater networks.

The Consultant should ensure that the appropriately qualified experts are available, as required, for each of the different tasks. It is expected that an appropriately qualified team leader/water engineer, accompanied by both key and supporting experts, will lead the Assignment.

The Consultant should integrate local professional skills/cooperate with local consulting companies, in order to provide national experience. The Consultant shall engage local language speaking staff on their team or arrange for translation/interpreting when necessary. All experts must be independent and free from conflicts of interest in the responsibilities accorded to them.

The Consultant’s expert team is expected to include the following key experts (the ‘Key Experts’):

Key Expert 1: Project Manager/Team Leader

• University degree or equivalent qualification
• Minimum 15 years’ professional experience in the field of water supply and wastewater management, with comprehensive experience of similar assignments in the region, as well as in institutional and commercial management of water/wastewater Companies.
• Demonstrated management and administration experience, including experience with procedures of international financing agencies (preferably EBRD procedures).
• Permanent presence in the Country during the project period of intensive work on preparation of the FS

Key Experts 2: Financial Expert

• University degree in finance or economics
• Minimum 8 years’ of relevant professional experience and extensive experience in financial modelling.
• Knowledge of the public financing and modelling.
• Experience in due diligence of utility companies and municipalities in the Western Balkans will be considered as an advantage.

Key Expert 3: Technical specialist – Wastewater engineer

• 8 years of relevant professional experience gained in countries with climatic conditions similar to the Project.
• Previous experience in technical feasibility study preparation and technical design of drinking water and sewage networks, wastewater processes and sewage sludge projects.
• Familiarity with local conditions in the region would be an advantage.

Key Expert 4: Environmental and Social experts

• Minimum of 5 years or relevant professional experience in ESIAs and E/S due diligence, health and safety, stakeholder engagement, public consultation and disclosure in the local context, gender and inclusion expertise, and/or resettlement expertise, in water/wastewater sector
• Experience of similar assignments and with recent track record in the region.

Key Expert 5: Legal/Institutional expert

• University degree in law or equivalent
• 8 years of relevant professional experience in the areas of natural monopolies regulation and knowledge of national tariff legislation

Other non-key experts include junior experts, climate change expert with preferably 5 years of previous professional experience in evaluation in climate change impact in the Western Balkan region, Health and Safety experts with focus on municipal water and wastewater services, and local experts with good communication skills and evidenced technical knowledge of water supply and wastewater. The Consultant should integrate local professional skills/cooperate with local consulting companies, in order to provide national experience. The Consultant shall engage local language speaking staff on their team or arrange for translation/interpreting when necessary. All experts must be independent and free from conflicts of interest in the responsibilities accorded to them

Submission Requirements: The consultants are now invited to submit a completed Technical and Financial Proposal as per the standard templates and instructions available at this link: http://www.ebrd.com/documents/procurement/single-stage-package.docx. Interested Consultants should make themselves familiar with these Standard Templates, Standard Instructions and Conditions of Contract in preparation of their proposals.

• The Technical Proposal shall be submitted in English electronically via eSelection not later than the Closing Date, as one single PDF file. The technical proposal should not exceed 20 pages excluding the Declaration Form and CVs (Form 1- TP 1 and Form 1 – TP 6).
• The Financial Proposal (Form 2 – FP 1 and FP2) shall be submitted in English separately by email only to the Bank Contact Person. Consultants are reminded of the requirement to ensure the confidentiality of the Financial Proposals.

A Technical Proposal that contains elements of a financial proposal shall be declared non-responsive.

A Financial proposal submitted together with the technical proposals via e Selection shall be declared non-responsive.

Bank Contact Person:

Sanda Jugo
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
e-mail: JugoS@ebrd.com

For the avoidance of doubt, technical proposals should be sent through eSelection and NOT to this email address. Financial proposals should be sent to this email address and NOT through eSelection.

Deadline to Submit Clarification Questions: Via e-mail to the Bank Contact Person by 28/01/2019

Selection Method and Evaluation Criteria:

• Technical Proposal Evaluation Criteria
• Firm’s experience in developing feasibility studies for IFIs and knowledge of IFI procedures and rules on public procurement and disbursement policies (10%)
• Firm’s experience in water/wastewater sector, specifically in institutional and legal framework aspects, environmental and social requirements; local financial management standards, professional standards of technical knowledge internationally as well as in the region (20%)
• Quality of the methodology proposed for the Assignment (30 %)
• CVs of the Key Experts (40 %).

The minimum technical score (St) required to pass is 70.

• Opening of Financial Proposals

After the technical evaluation is completed, only the submissions which score 70 or above of the total marks available for the technical criteria will be eligible to have their financial proposals opened.

• Combined Technical and Financial Evaluation

The lowest evaluated Financial Proposal (Fm) is given the maximum financial score (Sf) of 100. The formula for determining the financial scores (Sf) of all other Proposals is calculated as follows:

Sf = 100 x Fm/ F, in which “Sf” is the financial score, “Fm” is the lowest evaluated Financial Proposal, and “F” the price of the Proposal under consideration.

Proposals are then ranked according to their combined technical (St) and financial (Sf) scores using the weights (T = 80; F = 20) T + F = 100 as follows: S = St x T% + Sf x F%.

Important Notes:

• The proposal validity period is 120 days from the deadline date for the receipt of submissions. During this period, the Consultant shall maintain its original Proposal without any change, including the availability of the Experts, the proposed rates and the total price.
• The selection will be made from the Proposals received in response to this notification only, on the basis of the submission requirements and selection criteria set out in this Procurement Notice. The highest-ranked Consultant will be selected and invited to negotiate the contract, subject to availability of funding.
• Any updates of and clarifications on this procurement notice shall be announced as updates on this notice, without any other notification. In the event of changes consultants will need to download the updated versions. Consultants are required to periodically check the notice for updates. Failure to take the updates into account while preparing the Proposal may result in disqualification or penalties to the scores in the evaluation.

[1] http://www.ebrd.com/news/publications/policies/environmental-and-social-policy-esp.html