Czech Republic launches tender for US$1 billion road PPP

The Ministry of Transport of the government of the Czech Republichas launched the tender for the completion of the D4 highway, which runs from the outer ring-road of Prague, the capital city, to Písek, a town to the south-west. The estimated value of the PPP contract is CZK24.9 billion (US$1.15 billion).

The successful bidder will design, construct, finance, operate and maintain the unfinished section of the highway between the Háje interchange and Mirotice widening, and operate and maintain the existing road infrastructure from the Skalka-Příbram interchange to Háje and from Mirotice to the Krašovice Interchange outside the town of Písek. The section connecting Prague to Skalka will not be covered by the PPP contract.

The greenfield section of the project spans about 32km in total. The two brownfield sections together span about 16km.

The Ministry are inviting interested parties to submit requests to participate and have set a vague deadline of July 2018. In October 2018, selected proponents will be invited to participate in «competitive dialogue». The Ministry envisages this being concluded in April 2019, to be followed by an invitation to submit proposals. Bids will be due in May 2019, with a concessionaire being selected and the contract being awarded in July.

The Ministry aims to use the competitive dialogue is  to identify a solution in regards to the structure and nature of the public-private partnership that best meets its needs. It will be based on a draft concession agreement, which the participants will receive together with the invitation to participate.

For example, the competitive dialogue will establish the mechanism by which the concessionaire will be compensated. The Ministry plans to use availability payments, but has not fixed specific parameters.

The competitive dialogue is not a process of selection — the Ministry will not gradually reduce the number of submitted designs within the dialogue period. All of the participants will be invited to submit proposalsfor the project.

In order to be eligible, bidders must have had a minimum annual turnover of CZK2 billion (US$92.5 million) for the last three financial years.

The project has been in development for over three years. The government began seeking advisory services in June 2015; contracts were not awarded until November last year. Česká spořitelna, the largest bank in the Czech Republic, is advising the Ministry on financial matters; White & Case is providing legal advice and Obermeyer is serving as technical consultant.