CURRENT GUIDELINES AND TECHNICAL AND COMMERCIAL
PARAMETERS BY THE ISRAEL WATER COMMISSION FOR
EXECUTING THE FIRST LARGE-SCALE
SEA-WATER DESALINATION PROJECT IN ISRAEL
Daniel Hoffman (Director)
ADAN Technical & Economic Services Ltd. P.O. Box 18294, Tel-Aviv 61181, ISRAEL
Abstract
ADAN Technical & Economic Services Ltd. of Tel Aviv (“ADAN”) has recently concluded, on behalf of the Israel Water Commission, the drafting of a proposed set of Tender Documents for implementing the first large-scale seawater desalination project to be undertaken in Israel. The size and location of the Project, 50-55 million cubic meters per year, at Ashkelon, were selected on the basis of earlier studies prepared for the Water Commission on the optimal way to integrate large-scale desalination plants within Israel’s existing water supply system. Its main technical, economic and commercial parameters, as well as the key requirements and bidding procedures of the Tender Documents were established under the guidance of the Water Commission. These proposed parameters, requirements and procedures are presented in the paper.
1. Introduction
On March 7, 1999 the Israeli Government issued a resolution instructing the Ministers of National Infrastructures, Finance and Interior to prepare the ground-work, including the drafting of tender documents, for implementing the first large-scale seawater desalination project to be undertaken in Israel on a Build, Own, Operate and Transfer (BOOT) basis with private investors.
On June 22, 1999 the Israel Water Commission (“the Water Commission”) assigned the drafting of a proposed set of tender documents to ADAN Technical and Economic Services Ltd. of Tel-Aviv, Israel (“ADAN”).
The objectives of this paper are to present to the public and to potential bidders the Project’s main technical, economic and commercial parameters, and the key tendering requirements and procedures, as set out within the current version of the Water Commission’s Tender Documents draft.
The presentation is divided into four sections: Project Definition
Project Execution Contractual Terms Water Sale/Purchase Contractual Terms Tendering Procedures and Requirements
2. Project Definition 2.1 Overview
The objective of the Tender is to bring about the supply, installation and long-term operation in South Israel of a seawater desalination facility (“the Facility”) capable of producing, reliably and at lowest possible life-cycle costs, 50 to 55 million m3 per year of high quality water. The Facility’s design will have to allow for future expansion to double this initial capacity.
The Tender will be governed by the official Israeli Government "Compulsory Tendering Rules and Regulations - 1993" (“the Regulations”), and the Water Commission will reserve the right, pursuant to Clause 3(4) therein, to order any or all parts of the bid Project, and, once the order is placed, to carry out, at any time up to three (3) years from date of such order, expansions of the Facility’s capacity to up to twice its initial value, under the same or improved terms, through “Follow-through Contracts” with Winning Bidder.
2.2 Scope of Supply and Services
Pursuant to the Government’s resolution, it is the Water Commission’s intention that the Facility be supplied, financed, owned and operated long-term by a single private developer (the Seller) within and according to the terms and conditions of a Build, Own, Operate and Transfer (BOOT) Agreement.
The Bids, however, will be analyzed, evaluated and compared not only on the basis of their total BOOT terms and costs, as one “package”, but also on the basis of their terms and costs for each of the three main elements of the BOOT arrangement:
manufacture, transport, insurance, erection, commissioning and Approval Testing – as provided by the bid initial (year zero) Residual Value of the Facility.
(ii) The Management, Operation and Maintenance of the Facility – as provided by the non-capital recovery cost items within the breakdowns of bid Water Sale Prices; and
(iii) The Project’s Financing Plan – including the financing terms offered for the turnkey supply of the Facility only.
Should the terms and costs for the turnkey supply of a suitable and properly designed Facility be most competitive and deemed attractive, but the terms and costs of its management, operation and maintenance be non-competitive and/or deemed unattractive, the Water Commission may decide, pursuant to the above noted Clause 3(4) of the Regulations, to contract for the Facility’s turnkey supply only at its bid or negotiated Initial Residual Value.
Should the terms and costs for the turnkey supply of a suitable and properly designed Facility and for its management, operation and maintenance be most competitive and deemed attractive, but the terms and costs of the Project’s financing be deemed unattractive, the Water Commission may decide to contract for the Plant's turnkey supply and its management, operation and maintenance only, and to forego the offered financing.
2.3 Designated site, battery limits and terminals
The preferred site for the Facility (“the Designated Site”) is within the Eilat-Ashkelon Oil Pipe Corporation’s (“Katza”) Ashkelon compound.
Bidders will requested to minimize the Facility’s area requirements (“the Battery Limits”) within the Designated Site and, in any case, limit them to less than 40,000 m2.
The Water Commission has reached an agreement with Katza that it will lease the required areas within its compound on identical terms to all bidders. The leasing fees will be based on the value of the land at the site, as assessed by a Government Assessor. It is the Water Commission’s intention to publish them in advance within the Tender Documents.
Alternative sites may be offered, but only within an Alternative Bid submitted in addition to a Base Bid based on the Designated Site. Such an Alternative Bid will have to take note of the following:
(i) The Alternative Site will have to be in South Israel – between the Dan Region (Tel Aviv and Environs) on the north and the Gaza border line in the south.
(iii) The Bid will have to include details relating to Site ownership and an authorized grant of right of use of the Site to the Water Commission, in case of a Facility turnkey purchase or a Project Buyout, for at least ninety-nine (99) years, against a leasing fee or, alternatively, a buyout price, both to be specified.
(iv) The Bid will have to include a preliminary environmental impact study and confirmations from the relevant Authorities that the required seawater pumping from the sea and brine disposal to the sea are acceptable and will be approved.
(v) The Bid will have to demonstrate that accessibility to the Site and the arrangement of rights of way for the required seawater supply, brine discharge, product delivery and power transmission lines will not be problems.
(vi) The alternative product delivery point at the regional water distribution system must be identified and the estimated costs of its interconnection to site indicated in the Bid. (vii) The benefits to the Project and/or the Water Commission from use of the Site must be
detailed and quantified economically within the Bid.
Bidders will have the choice of installing their own seawater supply system or to purchase heated seawater from the Israel Electric Company (IEC) at the boundary of the adjacent power station to the Site.
Bidders will, likewise, have the choice of discharging their brine (and cooling water, if applicable) directly back to the sea or to an IEC brine discharge terminal at the boundary of the adjacent power station.
The IEC will be entitled to recuperate its investments in the equipment and works and its operating costs (pumping, etc.) in supplying and/or disposing these streams, at costs plus an agreed margin. These costs will be identical to all Bidders and will be borne by the Seller. They will be published in advance in the Tender Documents.
The desalinated product water delivery terminal will be within the Designated Site. The Facility will have to include a covered operational product water storage reservoir, of at least 7,000 m3 capacity, and a product transfer pumping station capable of delivering at any time up to forty percent above nominal Facility capacity at the required Terminal Point pressure.
2.4 Accepted Processes, Technologies and Facility Designs
The Tender will be open to any desalination process, technology and design which can demonstrate (through Bidders’ Reference Plants Lists) a successful operating record of at least two (2) years with similarly designed plants and unit production capacities on the following scales:
b) if a sea water distillation plant is offered - not less than 10,000 m3/day. The offered capacities of any single desalination unit and all major Facility sub-systems will be limited by the sizes and operating experience of their largest components, items of equipment and/or sub-systems. Bidders will have to demonstrate that these have been operated successfully anywhere, for at least two (2) years, on the same scale, with the same materials of constructions and under process conditions similar to those anticipated in the bid Facility.
Each desalination unit and each auxiliary sub-system will have to be designed so that its minimum annual availability shall be 92% or 8,060 hours/year. The Facility’s design data (choice of SIE equipment and materials of construction, factors of safety, component redundancies, etc.) and the maintenance facilities descriptions submitted within the Bids will have to demonstrate the ability to achieve such a level of reliability.
Subject to these size, previous experience and minimum annual availability limitations and the need to adhere to all the relevant Israeli and international engineering and quality control standards and codes and to some general engineering requirements specified in the Tender Documents, Bidders will be allowed maximum leeway and flexibility in designing the Facility, its desalination units, sub-systems and auxiliaries.
The Bidders, however, will be solely responsible for the correctness and adequacy of their designs and will ultimately bear all risks relating to the performance and reliability of the Facility.
The required Facility design lifetime will be 30 years, excluding items of equipment and components whose normal design and/or expected life-times, with good engineering practice, are shorter and are expected to be replaced periodically due to wear and tear.
To assure that the Facility and its economics do not become obsolete within the Term of the BOOT Agreement, the Agreement will include a requirement (with built in incentives to both Parties) that the Seller continuously modernize and upgrade the Facility.
2.5 Schedules
Four months will be allowed from Tender Publication Date to Bids Submission Deadline.
It is envisaged that the Bids evaluation and adjudication process will allow the signing of an Agreement within six (6) months from Bids Submission Deadline.
Facility’s desalination units should benefit both the Water Commission, in that urgent water supply needs will be met sooner, and the Seller, in that some of his investments can start generating revenues sooner. The schedule is based on delivery times offered elsewhere recently for facilities with similar capacities:
(i) 50,000-55,000 m3/day – twelve (12) months from the date of signing the Agreement (ii) 100,000-110,000 m3/day – fifteen (15) months from the same Date
(iii) 150,000-165,000 m3/day – eighteen (18) months from the same Date.
Other schedules will be considered if they lead to lower required investments and, consequently, lower Bid Water Sale Prices and Facility Residual Values.
Bids will be required for three optional water sale/purchase periods:
(i) Twenty (20) years from the date the complete Facility will have commenced Commercial Operation, with options to extend the Term of Agreement by five (5) additional years and, thereafter, another five (5) years.
(ii) Twenty-five (25) years from the date the complete Facility will have commenced Commercial Operation, with an option to extend the Term of Agreement by five (5) years.
(iii) Thirty (30) years from date complete Facility will have commenced Commercial Operation, without any option to extend the Term of Agreement.
2.6 Required Facility Performance Product Water Capacity
Bidders will be required to guarantee the nominal (design) daily production capabilities of the Project’s initial two Phases and of the Facility as a whole (50,000, 100,000 and 150,000 m3/day, respectively) and will be allowed to bid and compete for guaranteed safe continuous and safe short-term capacities. All guaranteed capacities (and their corresponding guaranteed specific energy requirements) will have to be demonstrated during Approval Testing of each Phase.
Notes:
1. Nominal (or design) capacity is the most efficient and/or optimal operating point from point of view of energy consumption, membrane or heat transfer surfaces fouling rates, etc.
Product Water Quality
The quality of the product water, after post-treatment, will have to meet, under guarantee, all the latest Israeli Health Ministry and World Health Organization (WHO) drinking water quality standards and requirements, and not exceed the following limits: Salinity : TDS - 300 ppm max
Cl - 150 ppm max
Na - 100 ppm max. Boron - 0.2 ppm max pH : 7.0-8.0
Langlier Index : -0.5 to +0.5 Residual Free Chlorine : 0.3-0.6 ppm Turbidity : 0.1 NTU max
Bidders will be encouraged to offer higher quality product water, and will be credited accordingly in their scoring.
Bidders will be requested, however, to indicate also within their Bids what will be the economic consequences to their Bids (investments, Residual Values and Water Sale Prices) if the required upper limits for TDS, Chloride, Sodium and Boron are loosened and increased to 400 ppm, 200 ppm, 130 ppm and 0.5 ppm, respectively.
3. Project Execution Contractual Terms
The main points of the BOOT Agreement included within the Tender Documents, relating to the turnkey supply of the Facility, its long-term O&M, its Buyout and eventual Transfer are:
The Seller will assume all technical, financial, commercial and regulatory responsibilities and risks for the Project. These include matters relating to Project financing, the design, manufacture, construction, testing, management, operation and maintenance of the complete Facility, Facility protection and insurance, sources of supply and costs of energy, spare parts, chemicals, consumables, labor, arrangement of all necessary permits, payment of all taxes levies and fees, etc. Bidders will have to investigate all these matters beforehand, and, once contracted, the Seller will be required to arrange them, at his own cost and responsibility.
The Water Commission will grant the Seller a Water Production License permitting the Seller, as an Approved Water Producer, for the Term of the Agreement only, to produce and supply water from the Facility only to the Water Commission or its Agent.
1995” and will utilize as much and to the extent possible local labor, manufacture, goods, equipment and services.
The Water Commission will administer and supervise the Project’s execution and the performance of the Agreement. The Seller will be required to cooperate with the Water Commission’s representatives., allow them access to its and/or its sub-contractors’ works and to the Site, and provide them diligently and in orderly and timely fashion all required information and data.
The Seller will be required to submit periodic progress and other reports.
The Facility’s design and all the Project Agreements will be reviewed and approved by the Water Commission. A full set of as-built drawings and copies of all the Project Agreements will have to be deposited with the Water Commission.
The Seller will be liable for delays in start of Commercial Operation and for shortfalls in meeting the guaranteed performance figures. A Permitted Period will be granted to correct shortfalls in performance.
After the Permitted Period, shortfalls in performance within limits will result in reductions in the Residual Values of the Facility and Project. Excessive shortfalls will require replacement of equipment and, if uncorrected, may lead to cancellation of the Agreement.
Delays within limits in start of Commercial Operation will result in payment by Seller of liquidated damages. Excessive delays may lead to cancellation of the Agreement.
Commercial Operation of each part of the Facility will commence only after receipt of a Certificate of Approval attesting to the successful completion of its Approval Tests.
The Seller will be entitled to no remuneration for his investments and services in the execution of the Project and the performance of the Agreement other than through the sale of water during Commercial Operation, under the terms delineated in the Agreement, and/or through the sale of the Project within a Water Commission Buyout.
The Water Commission will be solely responsible for water sale and distribution from the Designated Product Delivery Point onward.
The Seller will be required to manage, operate and maintain the Facility during its Commercial Operation on the basis of the trained technical, managerial and administrative staffs and O&M programs specified in his Bid and approved by the Water Commission. All scheduled maintenance stoppages of desalination units and/or key Facility sub-systems will be coordinated in advance with the Water Commission or its Agent.
in water production costs generated by these investments. After the end of the payback period for the added investments, the savings will be shared equally by both Parties.
The Water Commission may request at any time the Termination or Early Expiry of the Water Purchase Agreement. In such case, the complete Project will be purchased and taken over by the Water Commission (“Buyout”).
The pre-agreed prices to be paid by the Water Commission should it exercise its option to limit the scope of the Project to the turnkey supply of the Facility after the signing of the Agreement or should it exercise its Buyout option at any time during the Initial Term of the Agreement after commencement of Commercial Operation of the complete Facility will be the Residual Values of the Project. The Residual Value of the Project at any time will include the Residual Value of the Facility at that time plus the Project’s Termination Fee. The Project Termination Fee will include any claim for loss of future profits, financing breakage fees, if any, and any and all other possible costs related to terminating Project.
Should the Water Commission decide to terminate the Project during any time after the date of signing of the Agreement but before commencement of Commercial Operation of the complete Facility, while the Facility is yet incomplete, the pre-agreed price for the Project will be the value of the Facility equipment supplied and constructed to date, as established by an independent assessor agreed upon by both Parties, plus the Project’s Initial Termination Fee.
Before Project ownership and physical possession of the Facility is transferred to the Water Commission as a result of such Buyouts or at the Natural Expiry of the Agreement, the Facility will be inspected and its performance tested to demonstrate its good physical shape and its ability to continue to perform throughout its (remaining) design lifetime.
The Project’s ownership and possession of the Facility will revert (“Transfer”) to the Water Commission at the Natural Expiry of the Term of the Agreement at no cost (zero Project Residual Value).
4. Water Sale/Purchase Commercial Terms
Units Phase I Phase II Phase III Monthly
Yearly
m3/month m3/year
1,530,000 NA
3,060,000 NA
4,590,000 55,000,000
The Seller will guarantee and obligate itself to actually produce, supply and sell to the Water Commission any quantity of Acceptable Product Water ordered (“Instructed”) at any time by the Water Commission, in advance and in writing, up to the Contracted Minimum Available Capacities.
The Water Commission will obligate itself to take or pay for the monthly and annual “Contracted Minimum Purchase Capacities” of Acceptable Product Water supplied or offered to be supplied by contractor, providing such capacities, in fact, had actually been available. These are:
Phase I Phase II Phase III Monthly
Yearly
m3/month m3/year
1,390,000 NA
2,780,000 NA
4,170,000 50,000,000
The Water Commission will obligate itself to take and pay for all monthly and annual quantities of Acceptable Product Water exceeding the “Contracted Minimum Purchase Capacities” (“Excess Capacities”) if these are ordered (Instructed) by it and actually supplied by Seller.
The quantities and qualities of water actually supplied by Seller will be continuously monitored and recorded.
Billings and payments for water will be on a monthly basis. Payment sums will be calculated on the following basis: 1. During the Initial Term of the Agreement
(i) For Contracted Minimum Purchase Capacities actually delivered by Seller – according to the full Water Sale Price as bid and/or negotiated.
(ii) For Contracted Minimum Purchase Capacities which were actually available, but were not actually delivered by Seller due to the Water Commission’s Instructions and/or inability to accept - according to the fixed costs only of the Water Sale Price as bid and/or negotiated, including proportionate margins.
(iv) For Excess Capacities ordered (Instructed) by the Water Commission and actually delivered by Seller after all Contract Minimum Purchase Capacities not supplied by Seller during the previous six (6) months due to the Water Commission’s Instructions and/or inability to accept have been made up - according to the variable costs of the Water Sale Price as bid and/or negotiated, including proportionate margins, plus a bonus. (Note: The bonus is meant to cover extra operating costs, if any, due to off-design operation of the Facility and to provide incentive and compensation to Seller for the additional, marginal investments required to provide such excess capacity capability. Its value will be bid by each Bidder, but wouldn’t be allowed to exceed twenty-five percent (25%) of the variable costs of the Water Sale Price as bid and/or negotiated.)
(v) For any of the Contracted Minimum Purchase Capacities and/or Excess Capacities ordered (Instructed) by the Water Commission not actually delivered by Seller due to any reason other than the reasons noted in Point (ii) above, including reasons of Force Majeure – no (zero) payment,
2. During Extensions (if any) of the Initial Term of the Agreement
As during the Initial Term of the Agreement, except that: a) wherever applicable, the Water Sale Price will not include the (already fully recovered) Capital Recovery Component, and b) payments for Excess Capacities Instructed and actually delivered which are beyond the sum total of all Contract Minimum Purchase Capacities not supplied by Seller during the past six (6) months due to the Water Commission’s Instructions and/or inability to accept will include only fifty percent (50%) of the bonus.
All sums due during the Initial Term of the Agreement or any extension of Term will be reduced by deductions, if and when applicable, due to liquidated damages for shortfalls in guaranteed product water capacities and/or quality
The Water Sale Prices will be adjusted periodically, if justified, according to the linkages formulae as bid and/or as negotiated and agreed upon before signing the Agreement - annually for cost escalations/reductions (or twice annually if justified by significant intermediate cost changes), and monthly, on the date the Billing Statements are prepared and issued, for changes in currency exchange rates.
Other adjustments to Water Sale Prices may be made as a result of savings in water production costs due to Facility modernization and/or as a result of extra costs (or savings) due to new Government regulations, taxes or legal requirements (such as stricter environmental protection measures, relaxation of or stricter product water quality requirements, etc.).
the monthly and/or yearly Contracted Minimum Available Capacities. Payment of these damages will in addition to the loss of the revenues which will be incurred by Seller for such shortfalls in capacities.
Should the product water quality fall below the guaranteed quality, the Water Commission will have the option to refuse to purchase and receive such water until this condition is corrected.
Where the Water Commission has made such an election, it will be relieved of making payments for those Contracted Minimal Purchase Capacities not delivered due to this shortfall and Seller will be liable for payment of liquidated damages due to any resultant shortfalls in guaranteed capacities.
Where the Water Commission has elected to receive such inferior quality water, it will continue to make capacity payments, but only for the Instructed and actually delivered capacities, and not necessarily for the full Contracted Minimum Purchase Capacities, and Seller will be liable for liquidated damages for shortfalls in delivered product water quality and, if applicable, for any shortfalls in guaranteed capacities.
Failure of Seller to correct any shortfalls in capacity and/or quality within specified periods may lead initially to suspension of payments by the Water Commission and, eventually, to the more extreme sanction of Terminating the Agreement.
5. Tendering Requirements and Procedures
The key tendering requirements and procedures, as set out within the current version of the Water Commission’s Tender Documents draft, are:
5.1 Bidders’ Eligibility and Qualifications
Companies, consortia, joint ventures or partnerships which are or include competent and reputable general service contractors and/or companies that design and manufacture, construct, operate and maintain water treatment and desalination equipment and plants and at least one partner incorporated and duly registered in Israel will be able participate in the bidding, providing they possess, alone and/or collectively, minimal, thresh-hold qualifications.
Companies and personnel will be allowed to participate in only one Bidding Team. Bidders’ minimal, thresh-hold qualifications are:
(i) Desalination Expertise and Experience
design and types of equipment being offered, with unit production capacities not less than 5,000 m3/day if a Sea Water Reverse Osmosis (SWRO) plant is offered and not
less than 10,000 m3/day if a sea water distillation plant is offered. At least one of the said desalination plant(s) will have to be still in operation and have a record of successful performance for at least two (2) years.
(ii) BOO and O&M Capabilities and Experience
At least one member of any Bidding Team will have to have financed, managed, operated and maintained successfully, for at least 5 years, within long-term BOO, BOOT and/or
O&M contracts, large water treatment and desalination facilities. Same member of the Bidding team will have to have on its permanent payroll and commit specifically and firmly to the Project at least three identified senior personnel with at least 15 years of experience in the management, administration, operation and maintenance of such facilities.
(iii) Financial Strength and Resources
The Bidder or the lead member or partner of any Bidding Team will have to:
1. Demonstrate that its annual sales turnover (gross revenue) for each of the last 3 consecutive years has been not less than United States $ 100,000,000.
2. Demonstrate that its average net worth during the same three year period has been not less than U.S.$ 30,000,000.
3. Provide documentation that a first class bank has indicated that it will be ready to finance the Project in an amount of not less than 80% of the bid Initial Residual Value of the Facility for a period of not less than 15 years, should the Bidding Team gain the order to execute the Project, and that it will agree to provide also all the financial bonds and guarantees called for in the Tender Documents.
4. Provide documentation that the bank or financial institution financing the project will not require and\or receive a first degree mortgage on the Facility as security to its loans and that it will agrees that such a first degree mortgage be written in favor of the Water Commission as security for the proper performance of the Agreement. (iv) Managerial and Organizational Strength
personnel each with at least 10 years of experience in the management, supervision and execution of such large infrastructure projects.
(v) Israeli Partner Minimal Required Competence and Qualifications
The Bidding Teams’ Israeli members or partners will have to have the technical capabilities and financial stability and resources to operate and maintain the Facility independently, if required, including, where applicable and if necessary, after its personnel receive suitable training by the foreign desalination specialist member or partner.
The Bidders’ competence, qualifications, capabilities, strengths and levels of Israeli participation will be judged initially, by the Bids Evaluation and Adjudication Committee. Those Bidding Teams that will be deemed to have failed to meet any one of the minimal, thresh-hold requirements and/or to be adequate in any one of the specified criteria will be disqualified and their Bids rejected and not evaluated further.
5.2 Key Bidding Conditions and Requirements
All Bids will have to be valid for 6 months, conform to all the requirements, conditions and terms of the Tender Documents, cover the full scopes of supply, works and services called for therein and provide all the requested prices, data and information. The Tender Documents will specify the minimum information to be submitted and will include Forms listing and/or stating specifically the details and data required from all Bids.
Bidders will be required, inter alia, to: (i) confirm in advance their intention to bid;
(ii) participate in a Site Inspection Tour (during which questions regarding the Tender Documents will be answered);
(iii) properly sign and initial all Bid Documents and include in their Bids written powers of attorney, authorizing all the signatories;
(iv) provide joint venture, consortia and partnership association documents; (v) submit Bid Bonds, valid for 6 months;
(vi) include confirmation that an identified lead partner has been appointed, that he is authorized to incur liabilities and to receive instructions for and on behalf of any and all the partners, and that all the partners are liable jointly and severally for the execution of the Project and the performance of the Agreement;
(viii) include signed industrial cooperation agreements with the Israel Industrial Cooperation Authority (ICA).
5.3 Alternative Bids
Bidders will be allowed to submit alternative Bids which differ and/or deviate from the requirements, terms and/or conditions of the Tender Documents, if they deem that they may be of interest and/or benefit to the Water Commission. This providing that they submit also a basic Bid which fully conforms to these requirements, terms and conditions, and providing that such alternative Bids are also complete and detailed, as called for in the Tender Documents.
Such deviations may include alternative and better choices of Facility Sites, technologies (albeit with shorter reference records), facility modernization procedures, guaranteed water supply qualities, water price adjustment formulae and/or periods, Project Buyout procedures and/or terms, etc.
5.4 Initial Bids Evaluation and Adjudication Procedures
The Water Commission has selected to apply Clause 7 of the Regulations, allowing post-bid negotiations with the top-ranked bidders and their submission of “Best and Final” bids.
The Bids will be examined, evaluated, scored and ranked by a Bids Evaluation and Adjudication Committee (“the Committee”) to be appointed by the Israeli Government. The Committee may utilize the services of consultant experts.
Upon opening the Bid Box, all Bids not complying with the requirements noted in Item 4.2 will be rejected.
Bids conforming to the requirements in Item 4.2 will then be examined to determine whether their Bidders meet the required eligibility and minimum, threshold competence and qualifications criteria set out in the Tender Documents. Bids that will not meet these minimum pre-qualifications will be rejected.
Bids whose Bidders will have met the minimum thresh-hold competence and qualification requirements will then be examined for their responsiveness, without material deviation, to the Tenders requirements.
Bidders with responsive Bids may be then approached for a more detailed examination and clarification of their Bids. The Bids’ clarification process will be directed solely to achieving the following objectives:
(i) to identify and request completion of missing data and/or information, so that all evaluated Bids will be as complete and detailed as required;
(iii) to eliminate conditional terms, if attached by Bidders, so that all evaluated Bids will correspond to the same terms and conditions;
(iv) to equalize the basis of the Bids, so that a fair comparison can be made; and
(v) to request additional data and information (beyond the minimum requested in the Tender Documents), as the Bids Evaluation and Adjudication Committee members will see fit.
The completed and clarified Bids will then be evaluated, compared, scored and ranked.
5.5 Bids Evaluation and Comparison Criteria
The evaluation and scoring of the Bids will be as follows: Economic Offer
The Economic Offer will be evaluated according to the following criteria and sub-criteria: 1. The initial Water Sale Prices for the Contracted Minimum Purchase Capacities.
2. The Residual Values of the Facility and Project, as a measure of the Water Commission’s exposure in case it decides to purchase the Facility on a turnkey supply basis or to buy out the Project.
3. The relative weights of the fixed monthly payments obligations within initial water sale prices for the Contracted Minimum Purchase Capacities.
4. The initial Water Sale Prices for Excess Water Capacities.
5. The Water Sale Prices cost and indices linkage formulae, as a measure of their sensitivity (or insensitivity) to inflationary cost escalations.
6. The Water Sale Prices foreign currency linkage percentage, as a measure of their sensitivity (or insensitivity) to I.S.-US$ exchange rate variations.
7. The extent of Israeli participation in the Project and of the Israeli manufactured content and works within total investment.
8. Level of Bidders’ equity participation, type and terms of institutional project financing, terms of Facility turnkey supply financing.
Technical Offer
The Technical Offer will be evaluated according to the following criteria and sub-criteria: 1. Quality of design, materials and equipment (process design, including feed pretreatment
2. Plant characteristics and guaranteed and expected performance figures at design and off-design levels of output (excess water capacities offered, product water quality, specific energy and chemicals consumptions, special operational and other features, etc.).
3. Work plan, organization and delivery schedule (logic, methodology, completeness, level of detail, guaranteed schedules, etc.).
4. O&M program (logic, completeness, level of detail, technical and administrative staff size, qualifications and training, etc.)
5. Environmental and aesthetics aspects (environmental impact studies and mitigation measures proposed, Facility landscaping, if any, etc.).
Bidders’ Qualifications and Records
This element will be analyzed according to the following criteria and sub-criteria:
1. Desalination and other specialized engineering and contracting expertise and experience. 2. BOO and O&M experience.
3. Financial strength.
4. Management and organizational strength.
5. Equity companies and main sub-contractor companies records (past company project and/or contract failures, contractual litigation history, etc.).
5.6 Negotiations, “Best and Final” Bidding and Selection of Wining Bidder
The Committee will conduct negotiations with the Bidder or two or three Bidders whose Bid(s) have been determined by the Bids Evaluation and Adjudication Committee to be the most favorable based on their overall scores.
During this phase of the tendering process options and alternatives will be narrowed and the Project’s size, term, scopes of supply and works, guaranteed product water quality, etc., will be established.
The selected top-ranked Bidder(s) will then be invited to submit their "Best and Final" Bids, on this common final basis.
The Bids Evaluation and Adjudication Committee will select the Winning Bidder based on the top ranking of its “Best and Final” Bid.
Discussion following the presentation of Daniel Hoffman:
Nissim Nadav (Mekorot Water Co., Israel)
Does the tender limit the energy source?
There will be no limitation on any kind of energy supply, as long as it is a proven efficient technology.
Tom Pankratz (Vivendi Water, France)
Are the electric and the steam supply generators considered part of the tender demands?
Daniel Hoffman:
The cheapest solution is preferred. The bidders may offer a cheaper solution than offered by the Israel Electric Corporation.
