Discussion Aide-Memoire

This section lists some items to discuss and questions to consider during market sounding exercises. This is meant as a guide, the actual discussion may include a range of items outside the list below.

Scope of project including range of services

It is important to explain and discuss the scope of the project including what kind of services are involved; what are the core services and non-core services generated by this project?

The Government's expectation and role in the project (including local Government)

Explain and discuss the goal of the project and the intended benefit to the public, the role of agencies/ministries take in the project and the interests and role played by Local Government.

Technical aspect and cost of the project

Show the proposed technical requirements (capacity, service level, architectural aesthetics etc.) and the main features of the project's technical design and their costs:

• Indicate components of financial feasibility
• Explain the basis for demand projection, the project's projected financial indicators and their assumptions

Business scheme or partnership model

Explain the PPP modality and focus discussions on:

• Will any potential private partners be interested?
• Comments and concerns about the scheme?
• If there are serious concerns, what changes might be necessary to make it work?
• Will a consortium be needed to build and operate the infrastructure?

Risk allocation

Explain the main risks and how they could be allocated based on preliminary government thinking:

• Any comments on changing the risk allocation
• Future commercial development opportunities (other than those already included in the financial revenue projection)
• What are possible additional commercial opportunities available to private partner?
• Explain the rules of the game for non-core business development and commercial exploitation?

Procurement procedures

A subject of major interest to the private sector, the Contracting Agency should present a description of the proposed procurement procedure:

• What are the main concerns about the procedure?
• Are there specific requirements?

Conducting Discussions with Private Party

The essential activity of market sounding is having meaningful discussions with private sectors, in a group or one to one. Thus it is important to give some serious thought and manage this process.

Meetings should be conducted on a formal and professional basis and recorded appropriately. To avoid subjective interpretation and difference of opinion over the content of meeting, it is a good practice to conduct the meeting by at least two staff present, to avoid one-to-one meeting.

The meeting started with presentation by the Contracting Authority (with support from consultants if necessary) describing the project, stressing investment merits and proposed business scheme. After the presentation a discussion followed. This discussion should be open (free speech and equal opportunity to everyone present) but well organized (good moderator) and recorded.

Beside general discussion (section 7 above), there will be discussion on business scheme and service requirements and private party's thought about it. The market sounding team should try to elicit important information such as:

• The likely level of interest in the project
• The technical as well as business feasibility of what is proposed
• Timescale
• Indicated Value for Money

Important Considerations

• Discussion on costs: at this early stage figures are a rough estimation especially at Market Sounding Phase 1, intended to establish reality in a general sense. This point should be clearly stated to the private party.
• At Market Sounding Phase 2, which would be conducted toward the end of the full-scale Project Feasibility Study, a better idea of project cost would be already established.
• Specialization: each potentially suited partner has a specialization. Market sounding team must understand specializations of each company involved in the market sounding discussion.
• Impartiality and fairness: no advantage should be given to any group or company who get involved in market sounding.