LAHORE WASTE MANAGEMENT COMPANY1

Sequence

A. Contract Details1. Procurement procedure2. Design3. Financial Model4. Bid Opening

B. Performance MonitoringC. Institutional ArrangementsD. TimelineE. Risks of project

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A- Contract Details(Procurement, Design and Financial modeling)

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A(1)- Procurement Procedure

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Prequalification of firms • RFP( International) advertised on 22nd July 2013 Submission Date was 22 August , 2013.

• Pre-qualification Criteria• Business experience and certification (25 marks)• Personnel capabilities (20 marks)• Equipment & machinery (30 marks)• Financial capability (25 marks)• Total Qualifying Marks = 60%Criteria encourage local contractors for bidding, the

marks were allocated proportionate to capabilities

Firms Pre –Qualified

Name of Firms/ Cities/

Marks ObtainedFSD GJW MUL RWP SKT BHWL Result

M/s. Albayrak 100 100 100 100 100 100 Qualified

M/s. Ozpak 100 100 100 100 100 100 Qualified

M/s. Cevre 98 98 98 98 100 100 Qualified

M/s. GHS N/A 51.5 N/A N/A 62 62 Qualified in SKT, BHWL)

M/s. Waste Buster

30 30 30 30 39 39 Disqualified

1.For small cities ( Sialkot, Bahawalpur)2.For large cities ( Faisalabad, Gujranwala, Rawalpindi, Multan)

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Components of the Bid Documents

• Instruction to Bidders

• General Conditions of the contract

• Technical Specifications

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• Bid Security

The amount of Bid Security for Large city (Multan, Faisalabad, Rawalpindi & Gujranwala)Local Rs 100 MillionInternational USD 1 MillionThe amount of Bid Security for Small city (Bahawalpur & Sialkot)Local Rs 50 MillionInternational USD 0.5 Million

• Performance security

5% of Contract Price in form of Bank Guarantee for 7 Years. 8

Cont’d...

• Mobilization advance

• 10% of the contract value in two equal

installments

• Mobilization advance is secured against Bank

Guarantee

• Recovery of mobilization advance in 24

installments within 36 months

Cont’d...

Approval of Bid documents

• Bid Documents & cost estimates were approved

by the Govt of the Punjab in the meeting held on

30th Sep 2013 under the Chairmanship of Chief

Secretary of the Punjab

• The BODs of six cities also approved the bid

Documents

• The bid documents were issued to prequalified

bidders

Details of issuance of bid documents

City /Bidders

Albayrak Ozpak Cevre GHS

Faisalabad Purchased Not Purchased

Purchased Not Purchased

Gujranwala Purchased Purchased Not Purchased Not Purchased

Rawalpindi Purchased Purchased Not Purchased Not Purchased

Multan Purchased Not Purchased

Purchased Not Purchased

Sialkot Purchased Purchased Not Purchased Purchased

Bahawalpur Purchased Not Purchased

Purchased Not Purchased

Submission of Financial Bids•Bids were opened on October 08, 2013• Bid opening ceremony was attended by all districts and bidders .City /Bidders Albayrak Ozpak Cevre GHSFaisalabad Submitted Not Submitted Submitted Not Submitted

Gujranwala Submitted Submitted Not Submitted Not Submitted

Rawalpindi Submitted Not Submitted Not Submitted Not Submitted

Multan Submitted Not Submitted Submitted Not Submitted

Sialkot Submitted Not Submitted Not Submitted Not Submitted

Bahawalpur Submitted Not Submitted Not Submitted Not Submitted

Results of Financial Bids

• Bids were examined and found responsive.

City/Firm Albayrak (USD)

Ozpak(USD)

Cevre(USD)

Lowest Bidder

Faisalabad 148,478,114 - 233,894,154 Albayrak

Gujranwala 92,223,031 123,550,637 - Albayrak

Rawalpindi 99,839,201 - - Albayrak

Multan 99,071,273 - 165,115,020 Albayrak

Sialkot 39,239,558 - - Albayrak

Bahawalpur 38,710,658 - - Albayrak

Detailed attached

A(2)- Project Design

Waste Generation Statistics

CITY No. of UCsPOPULATION

in 2013(Million)

WASTE GENERATION (TONS / DAY)

Faisalabad 113 2.90 1622

Gujranwala 64 1.58 887

Rawalpindi 62 1.46 818

Multan 61 1.23 947

Sialkot 16 0.52 265

Bahawalpur 18 0.51 285

Murree 01 0.08 32

TOTAL 335 8.47 4921 16

Scope of New SWM contract

• Manual sweeping in streets

• Vacuum sweeping on major roads

• Mechanized Washing

• Door-to Door Waste Collection

• Container based Waste Collection

• Transportation of MSW to the Disposal Site

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Sr. No.

Activity Standard

1Container for waste storage

0.8 m3 volumetric container, and 5 m3 container to be used in conjunction with 7, 13 and 25 cubic meter compactors

2 Door-to-door waste collection

2 Mini dumpers for each UC

3 Mechanical Sweeping

One mechanical sweeper for 40 km road length each day.

4 Waste Transportation

At least 3 trips per vehicle to dumpsite and 4 trips per vehicle to transfer station

5 Sweeping Standard

1 sanitary worker for 800 persons

Design Parameters

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Sr. No.

Activity Standard

6. Wheelie Bins 1 Wheelie per worker four plastic liner bags to be fixed in wheelie bins daily.

7. Collection bags For 6 month @ 3 bags/week

9. Support Vehicles Tractor Loader, Dumper, Front End Loader, Water Bouzer and Washing Machines as container washing vehicle etc.

Cont’d…

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Location of proposed landfill site (Faisalabad)

Location of proposed landfill site (Gujranwala)

Location of proposed landfill site (Rawalpindi)

Location of proposed landfill site (Multan)

Location of proposed landfill site (Sialkot)

Location of proposed landfill site (Bahawalpur)

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Phases Implementation

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Sr. No

City Phases (Months)

Total A B C D

1 Faisalabad 3 5 7 9 9

2 Gujranwala 3 5 7 9 9

3 Rawalpindi 3 5 7 9 9

4 Multan 3 5 7 9 9

5 Sialkot 3 - - - 3

6 Bahawalpur 3 - - - 3

Vehicles & Machinery Requirements

• The contractor shall supply the vehicles and

equipment required for the contract as per

given Phases and timelines

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Vehicle and Machinery (Faisalabad) Sr. # Vehicles No of Vehicles

1 7m3 Compactor 482 13m3 Compactor 203 Water Bouzer 8 4 Sweeper 6m3 8 5 Hauler dumper (40 ton) 13 6 Container washer 1 7 Washing vehicle 8m3 3 9 Dumper (10 Ton) 14

10 Loader (per hour) 911 Front End Loader 2 13 Arm Roll Truck 5m3 9 14 Compactor 25m3 915 Mini Dumper 24916 Car 1000CC 5

Total 398

Vehicle and Machinery (Gujranwala)Sr. # Vehicle No of Vehicles

1 7m3 Compactors 292 13m3 Compactors 183 Water Bouzer 24 Mechanical Sweeper 6m3 65 Hauler dumper (40 ton) 86 Container washer 17 Washing vehicle 8m3 (per day) 28 T/Loader (per hour) 039 Front End Loader 02

10 Arm Roll Truck 5m3 0411 Compactor 25m3 0512 Mini Dumper 14113 car 1000CC 05

Total 224

Vehicle and Machinery (Rawalpindi) Sr. # Vehicle No Of Vehicles

1 7m3 Compactors 212 13m3 Compactors 163 Water Bouzer 54 Sweeper 6m3 65 Hauler Dumper (40 Ton) 106 Container Washer 17 Washing Vehicle 8m3 38 Dumper (10 Ton) 109 T/Loader (Per Hour) 6

10 Front End Loader 211 Arm Roll Truck 5m3 412 Compactor 25m3 413 Mini Dumper 13214 Car 1000cc 5

Total 226

Vehicle and Machinery (Multan)Sr. Vehicles No of Vehicles1 7m3 Compactors 352 13m3 Compactors 113 Water Bouzer 24 Mechanical Sweeper 6m3 85 Hauler dumper (40 ton) 86 Container washer 17 Washing vehicle 8m3 28 T/Loader (per hour) 79 Chain Bulldozer 1

10 Arm Roll Truck 5m3 513 Compactor 25m3 814 Mini Dumper 14615 Car 1000CC 05

Total 239

Vehicle and Machinery (Sialkot) Sr. # Vehicle No Of Vehicles

1 7m3 Compactors 82 13m3 Compactors 63 Water Bouzer 24 Sweeper 6m3 46 Container Washer 17 Washing Vehicle 8m3 (Per Day) 18 Dumper (10 Ton) 59 T/Loader (Per Hour) 3

12 Arm Roll Truck 5m3 113 Compactor 25m3 114 Mini Dumper 3515 Car 1000cc 5

Total 73

Vehicle and Machinery (Bahawalpur) Sr. # Vehicle No of Vehicles

1 7m3 Compactor 82 13m3 Compactor 63 Water Bouzer 14 Sweeper 6m3 2 5 Container Washer 1 6 Washing Vehicle 8m3 17 Dumper (10 Ton) 03 8 Loader (Per Hour) 99 Front End Loader 2

10 Arm Roll Truck 5m3 211 Compactor 25m3 212 Mini Dumper (1 Cubic Meter) 4013 Car 1000cc 3

Total 8233

Man power requirement

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Sr. No

CityExisting

Manpower

Additional Manpower as per contract

Total

1 Faisalabad 2,975 2,131 5,106

2 Gujranwala 1326 1516 28423 Rawalpindi 1405 1436 28414 Multan 2018 998 30165 Sialkot 750 148 8986 Bahawalpur 605 354 959

Total 9,079 6,583 15,662

Details

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A(3)- Financial Modeling

• Main Features

Financial Modeling

Project Life 7 Years

Financial Modeling Type ROE Model

Depreciation Straight-Line

Mobilization Advance Adjustment

Within 3 years with 1 year grace period

% Equity: 100%

Return On Equity (ROE) 20%

$ Parity (US$:PKR) 30:70

Summary of Unit Rates

Activity Unit

Unit Rates (US$)

LHR BWP. FSD GUJ MTN RWP + Murree SKT

Solid Waste Collection Per Ton 17.37 20.80 20.60 18.96 22.74 26.90 18.23

Mechanical Sweeping Ha 48.46 38.13 33.13 35.58 35.37 34.80 38.61

Mechanical Washing Team Day 293.86 225.70 204.75 215.70 230.07 272.02 267.63

Manual Sweeping Team Day 32.72 26.82 21.94 32.10 17.26 29.46 13.50

Total Cost & Mobilization Advance

ActivityAmount (US$ in Million)

TotalLahore BWP FSD GUJ MTN RWP +

Murree SKT

Total Cost of Project 339 21.2 109.8 62.5 69.6 77.4 17.2 357.7

Mobilization Advance (10% of the project cost)

32 2.1 10.9 6.2 6.9 7.7 1.7 35.7

Long Term Cost 2013-to-2021

CityAvailable budget Counterpart cost Contract Cost Total Cost Additional Funds Req.

A B C D=B+C E=D-A

Multan 4,285 4,315 7,108 11,423 7,138

Faisalabad 6,145 3,742 11,247 14,989 8,844

Gujranwala 2,750 2,775 6,382 9,157 6,407

Sialkot 2,045 2,010 1,773 3,783 1,738

Rawalpindi/ Murree

3,167 2,599 7,908 10,507 7,340

Bahawalpur 3,291 2,256 2,169 4,425 1,134

Total 21,683 17,698 36,587 54,284 32,601

Amount in PKR in million

Immediate Cost 2013-14 (Mar-June)

City

Available Budget

(March to June)Counterpart cost

Contract Cost (with

mobilization advance)

Total CostAdditional

Funds

A B C D=B+C E=D-A

Multan 204 212 842 1,054 849

Faisalabad 292 189 1,374 1,563 1,271

Gujranwala 131 138 741 879 749

Sialkot 98 100 237 338 240

Rawalpindi/ Murree

151 131 974 1,105 954

Bahawalpur 157 112 300 413 255

Total 1,033 882 4,469 5,351 4,318

Amount in PKR in million

Factors Affecting Cost

• Haulage from proposed Sanitary Landfill Site / Dumpsite

• Haulage from proposed Waste Transfer Station

• Haulage from Garage to the operational site• Proximity of the workshops, parking areas

and water hydrants from city• Expenditures on residual functions

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B- Performance Monitoring

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• Key Performance Indicators (KPIs) KPIs have been defined and made part of the bidding

document for measuring performance of the contractors. KPIs have been linked with resolution time and penalties

KPIs• Penalties

The amount of penalty to be imposed during one month shall not, in any case, exceed 10 % of the monthly progress payment.

(Details of Penalties)

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Activity / Indicators Baseline Target2014 2015 2016

Household level coverage of SWM services through door-to-door (DTD) collection

NIL 30% 40% 50%

Collection efficiency (Waste transported per month i.e. amount reaching to final disposal site)

55% 80% 85% 90%

Service Delivery Indicators

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Activity / Indicators BaselineTarget

2014 2015 2016Mechanical Sweeping Coverage

NIL 40 kmIncrease according to

infrastructure improvement

Mechanical Washing coverage

NIL

Development of schedule for weekly washing activity at predefined roads and locations of public interest. 3 teams

Cont’d…

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C- Institutional Arrangements

Key Milestones • Formation of companies and Board of Directors

Status – Completed

• Services and Assets Management Agreement (SAAMA)

Status – Submitted to Law Department

• Identification of landfill site and improvement of existing dumpsites –

Status – Identified

• Hiring of key Staff

Status – In progress

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Residual Functions of WMC

• Construction of access road at waste disposal site;

• Establishment of weighbridge;

• Procurement of hardware for monitoring tools such

as Vehicle Trip Counting System, Vehicle Tracking

and Monitoring System, Android Based Monitoring,

Complaint Management System, RFID System etc.

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Cont’d…

• Development of software for monitoring of

contractors;

• Provision of land for development of Waste Transfer

Stations;

• Establishment of Water Hydrants

• Hiring of machinery for managing waste disposal site

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Residual Functions Local Govt

• Monitoring of performance of the WMC against

agreed KPIs in SAAMA;

• Enactment and Enforcement of relevant laws;

• De-silting of roadside waste water open drains; and

• Levying of charges and fees

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D- Timelines

Sr. No

Activity Time Line Activity Days

Remarks

1 Preparation of Prequalification Documents & Submission to the Companies for Approval of BODs

Jul 20, 2013 02

2 Publication of Pre-qualification Advertisement in Local & International Newspapers and PPRA Web

Jul 22, 2013 02

3 Approval of prequalified documents by the Respective BODs July 26, 2013 05

4 Issuance of Prequalification Documents to Potential Applicants/Bidders

Jul 27, 2013 02

5 Submission of Technical Proposals by Potential Bidders and Opening of Technical Proposals

Aug 22, 2013 25

6 Technical Evaluation by LWMC(Consultant) Aug 30, 2013 08

7 Submission to the Respective Companies for BODs Approval Sep 03, 2013 03

8 Preparation of Bid Documents & Submission to Companies for BODs Approval

Sep 06, 2013 03

9 Invitation to Bid to Prequalified Bidders Sep 10,2013 04

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Cont’d...Sr. No Activity Time Line Activity

Days Remarks

10 Issuance of Bid Documents to Prequalified Bidders Sep 12, 2013 02 To be issued as per approvals

received from respective BODs

11 Pre-Bid Meeting Sep 15, 2013 03 Sep 27, 2013

12 Submission of Financial Proposals & Opening Sep 21, 2013 06 Oct 04, 2013

13 Financial Evaluation by LWMC Sep 24, 2013 03 Oct 07, 2013

14 Appraisal by Finance Department Sep26, 2013 01 Oct 10, 2013

15 Final Negotiation by the Committee Sep28, 2013 05 Oct 14, 2013

14 Approval of Financial Bid by Respective BODs Oct 03, 2013 05

Oct 16, 2013(Subject to moon sighting of

Eid ul Azha)

15 Award and Signing of Contract 7th Oct, 2013 -Oct 18, 2013

(Subject to moon sighting of Eid ul Azha) 53

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E- Risks of Project

• Participation of inadequate number of contractors in

the bidding

• Capacity of contractors to execute more than one

contracts in the cities

• Weak capacity of waste management companies

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• Disruption in continuous financial support and Political

ownership

• Change management issue (workers unrest, litigation

etc.)

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Cont’d...

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