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Request for Proposal - Business Consultancy for preparation of Business Plan

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Basha Kraja Law
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REQUEST FOR PROPOSAL

ACTIVITY TITLE: Business Consultancy for preparation of Business Plan for Deposit Return Scheme (DRS) in Kosovo. 

FROM: Consortium Members for the Administrator of Deposit Return Scheme (DRS) in Kosovo.

SUBJECT: REQUEST FOR PROPOSALS 

ADVERTISMENT DATE: 07/06/2024

QUESTIONS DUE: 16/06/2024

CLOSING DATE: 24/06/2024

Term of Reference: Supporting Consortium Members in Developing Business Plan for Second Phase of Deposit Return Scheme (DRS) in Kosovo.

Contracting party: Consortium members through Basha and Kraja Law 

Location and working language: online, in English (some input data will be available in the local language as well in the cases that are necessary for the purposes of providing documents for official bodies).

Background: As part of the Kosovo Integrated Waste Strategy, the government of Kosovo has introduced Administrative Instruction mandating a Deposit Return Scheme (DRS) to manage packaging and packaging waste effectively. Following approval of the Administrative Instructions No. 07/2023 “On Packaging and Waste Packaging” effective September ’23 the ministry has published a guideline documentation outlining the project timeline for the appointment of the Administrator for Deposit Refund System. 

Based on the Notification for Application for Accreditation of the Administrator for Deposit Refund System promulgated by the Ministry of Environment, Spatial Planning and Infrastructure and Guidelines for Establishment of the Administrator for Deposit Refund System, has authorized our Consortium consisting of procedures, retailers and importers to begin with second phase of accreditation in capacity of the Administrator if Deposit Refund System, which is responsible for functioning, administration and overseeing the deposit refund system, which is also known as the procedure responsibility organization. 

Following successful completion of first phase, the consortium has been chosen, and the second phase will commence May 10th and conclude on August 28th. In this context the consortium is looking for a company to support us develop a comprehensive -business plan aimed at facilitating the successful execution of the DRS.

Objectives: The consortium primary objective is to collaboratively develop a robust business plan that addresses the following key aspects:

  • DRS Robust Business Plan: Define essential elements and processes for the establishment successful Business and Operational Plan, Indicative time plan and Financial plan, including logistical setup, operational frameworks, and compliance mechanisms on realistic timeframe.
  • DRS Roadmap: Outline a clear roadmap for the phased implementation of the DRS, considering regulatory requirements and stakeholder engagement.
  • Assess the implications and potential lack of target achievement if a 2025 deadline is considered instead of the optimized business plan that indicates a need for a 2027 deadline. Specifically, the company would be seeking insights into how setting up a DRS for 2025 would impact the overall goal achievement compared to following the original timeline.
  • Consortium Strategic Vision: Support the consortium on setting up a strategic vision for the consortium's role in establishing, managing, and optimizing the DRS Administrator, with a focus on extending the implementation timeline (currently set for January 2025). The strategic vision shall be based on assessment of current infrastructure and public/private sector capacities to launch a successful DRS and meet environmental targets.

Key assumptions to be included in the Business Plan 

  1. Current AI states an implementation date of January 2025, given the complexity of the project, the consultant will support the industry to draft a Business Plan on a realistic timeframe objective, preferably DRS to be introduced in Kosovo based on realistic business case assessment, preferably January 2027.
  2. Materials in DRS: PET bottles, cans and one-way glass
  3. Scope of products: bottled water, all soft drinks, beer (dairy and strong alcoholic beverages are excluded)
  4. Industry-led system, not for-profit,
  5. There is an existing study that may be used where assessed as useful.
  6. Proposal for legislation change where required, including emphasizing key DRS principles supported by UNESDA. A successful DRS model effectively delivering targets and objectives in the most effective manner should be built in these 8 fundamental principles:
    1. DRS should offer environmental benefits
    2. DRS should be on the national scheme with a high degree of focus on consumer
    3. DRS should have a clear product and packaging scope
    4. DRS should be owned and operated by the obliged industry on a non-for-profit basis
    5. The DRS should have a strong governance supported by a well-defined legal framework
    6. The DRS must have functional revenue management and retain all unredeemed deposits, ownership, and income from collected material based on ABC cost and no cross-subsidization of materials.
    7. DRS requires strong cost control
  7. Ensure priority access to clean feedstock.
  8. Consumer awareness and understanding is key for a DRS to achieve its collection targets
  9. Role of the retail in setting the process and placement of machineries and take back obligations.

Ways of working

  • Collect up-to-date data from public and private sectors, in line with competition rules (NDA should be signed with all consortium member companies).
  • Use existing publicly available data and documents, where appropriate purchase market specific data
  • Interview key stakeholders, where necessary
  • Hold regular (min bi-weekly) check-ins with the consortium members and align on process and findings. Participate in meetings with the ministry to present outcomes and support consortium objectives, as well as include the ministry’s feedback where necessary. 
  • When required, participate in meetings with additional stakeholders from the public and private sectors to present the results of the modeling, and collect inputs 
  • In part of legislation change, use a local legal advisor if applicable (agree with consortium members)

Main deliverables

  • DRS model and business plan for Kosovo, including organizational, managerial, financial, legislation and operational aspects, with country specific step-by-step implementation roadmap. Clear and communicable strategy, action plan and timeline to meet collection targets in the most convenient way for consumers and the lowest possible costs for industry.
  • Written proposal and presentation, highlighting the most important arguments, risks, and solutions, including relevant operational and financial details.
  • Strategic and hands-on advisory role to the consortium members during DRS regulatory and negotiation process

Key deliveries for DRS model as per ministerial guidelines should include (but not be limited to):

Timeframe: first draft deliveries mid-July, second draft deliveries mid-August, final Business Plan mid August ( with the timeline varying  depending on the timeline set by the Ministry)

  1. DRS Roadmap for Kosovo, step by step – legislative / implementation steps, with go live
    based on the business plan assumption and outcome, with precise Stakeholder mapping and
    clear role sorting for all stakeholder groups
  2. 2. DRS governance and overall setup, including:
    2.1. Introduction to the Business and Operational Plan: Provides an overview of the DRS and its operational framework.
    2.2. Organization: Details the administrative structure, operational management, staffing plan, and facilities.
    2.3. Market Analysis: Offers insights into the beverage container market, stakeholder profiles, consumer behaviour, geographical analysis, and market trends.
    2.4. Legal and Compliance Framework: Outlines legal obligations, rights, responsibilities, and stakeholder engagement requirements.
    2.5. Stakeholder Engagement and Communication in DRS: Discusses communication channels, training, feedback mechanisms, and support systems.
    2.6. Producer Registration and Accountability Services: Covers registration processes, reporting, compliance, and audits for producers.
    2.7. Beverage Container Labelling Compliance: Addresses labelling strategy, compliance monitoring, processes, and adaptation strategies.
    2.8. Waste Management Services: Details collection, sorting, recycling, transportation, counting services, and customer support.
    2.9. Data, Technology, and Continuous Improvement: Discusses technological components, data collection, KPIs, and continuous improvement strategies.
    2.10. Financial Management: Covers fiduciary responsibility, deposit collection, management of unredeemed deposits, handling and producer fees, tax exemptions, financial transparency, risk management, and stakeholder communication.
    2.11. Risk Management: Introduces risk management principles, identifies, assesses, mitigates risks, and emphasizes monitoring and review.
  3. Financial Plan Guideline this part serves as an outline the two main components of the Capital and Financial Requirements Plan, detailing their respective purposes in capturing one-time setup costs and ongoing operational expenses including but not limited to financial flows, material flows, CAPEX, and 10 year OPEX estimates, as per ministerial guideline the financial plan should include:
  1. Investment Plan: Provides guidance on identifying and categorizing one-time costs associated with establishing the DRS Administrator, such as initial setup, infrastructure development, equipment procurement, and technology acquisition.
  2. Operating Expense Plan: Offers an outline of regular, ongoing expenses for managing and maintaining the DRS Administrator once operational. Categories include staff costs, facility rent and maintenance, subcontracting, utilities, outreach, vehicle expenses, communication costs, office supplies, equipment maintenance, insurance, professional fees, stakeholder engagement, operational software, miscellaneous expenses, and debt servicing if applicable.
  3. Data Entry Instructions: Advises the use of a software for data entry and creation of both the Investment Plan and Operating Expense Plan, ensuring accurate financial projections.
  4. Automatic Calculations: Highlights automatic calculation features for total cost estimation and amortization details.
  5. Provision of Supporting Documents: Specifies the types of documents required to substantiate funding details, including loan agreements, grant letters, and overall cost overview.
  6. Revenue Forecast: Provides guidance on analyzing income streams in the first three years of DRS operations, focusing on unredeemed deposits, producer's fees, and revenues from selling recyclables. Instructions cover data entry for income sources, forecasting methodologies, supplementary documents, and the Revenue Forecast table.
  7. Final Result - Financial Net Present Value (FNPV): Describes the pre-programmed FNPV sheet, which presents yearly performance results and overall project value over a 15-year period. Key indicators such as net cash flow, cumulative cash flow, financial rate of return, and financial net present value are highlighted. Additionally, instructions for testing variables for risk analysis, such as investment value, income fluctuations, and cost increases, are provided

    4. Take-back infrastructure and management, based on local specificities (retail universe, regionality, rural locations, consumer awareness, etc), with criteria for retail inclusion or exclusion.
   5. Sensitivity analysis for take back through RVMs, manual collection, outside-of-retail collection infrastructure (public locations, etc.) in case of voluntary/mandatory take-back.
   6. Proposal for legislative targets, including transition period and collection targets for a 3-year period.
   7. Obliged industry –change management key steps, reflecting proposed DRS requirements.
   8. Role of the State – the role of the consultant is to propose legislative changes/amendments based on the outcome, including other legal acts that include current AI (i.e. labelling and trade law) inter-ministerial alignment, DRS organization certification, and other prerequisites for a successful DRS launch & delivery.

To ensure the selection of a capable and experienced company for the development of a comprehensive business plan for the second phase of the Deposit Return Scheme (DRS) in Kosovo, the following eligibility/selective criteria are proposed:

Eligibility Criteria of the Consultant

  1. Legal Status and Capacity
    1.  Evidence or a copy of the business certificate or trade extract (or any equivalent document that proves registration of the company); 
    2. A copy of authorization/ license/ evidence of membership or a declaration under oath that no such requirement exists in their country.
    • The company must be legally registered in its country of establishment and it must evidence registration in the commercial, professional, and corporate registers, namely it must provide: 
    • The company must provide the certificate of good standing issued by the competent body. 
    • All taxes paid or an arrangement with the relevant tax authority in the country of origin to pay tax debts. The company must provide the tax certificate issued by the relevant tax authority in the country of origin that the company has paid taxes or an arrangement with the relevant tax authority in the country of origin to pay tax debts.   
  2. Experience and Expertise
    • Minimum of 7 years of experience in developing business plans within the waste management or environmental sector (preferably packaging and packaging waste).
    • Demonstrated experience in managing similar projects, particularly in DRS or similar schemes in other countries by providing two (2) letters of reference from clients for demonstration of experience in managing similar projects.
    • Proven track record in advising or consulting on large-scale environmental projects or public-private partnerships.
    • At least 3 professional staff working currently full-time for the company.
  3. Technical and Managerial Capacity
    • Availability of a skilled and experienced team, including project managers, financial analysts, legal advisors, and technical experts in waste management.
    • Access to relevant tools, software, and methodologies for developing comprehensive business and financial plans.
    • Capability to collect and analyze market data, conduct stakeholder interviews, and provide detailed market analysis.
  4. Financial Stability
    • Demonstrated financial stability with audited financial statements for the past three years.
    • Proof of sufficient financial resources to complete the project without delays or financial constraints.

Selective Criteria

  1. Technical Proposal
    • Clear and detailed methodology for developing the business plan, including steps for data collection, stakeholder engagement, and timeline management.
    • Innovative approaches to addressing the unique challenges of the Kosovo market, including local legal and regulatory considerations.
    • Quality of proposed team members, including their qualifications, experience, and roles in the project.
  2. Past Performance and References
    • Positive references from at least three previous clients, preferably from similar projects.
    • Case studies or examples of previous work demonstrating successful project outcomes and client satisfaction.
    • Evidence of successful collaboration with government bodies and other stakeholders in past projects.
  3. Financial Proposal
    • Detailed and competitive pricing structure, including a breakdown of costs for each phase of the project.
    • Value for money, considering both the quality of the proposal and the total cost.
  4. Compliance and Risk Management
    • Comprehensive risk management plan addressing potential challenges and mitigation strategies.
    • Commitment to compliance with local and international regulations, including environmental standards and data protection laws.
    • Evidence of a robust governance structure to ensure transparency and accountability throughout the project.
  5. Sustainability and Innovation
    • Demonstrated commitment to sustainability principles and innovative solutions that align with the environmental goals of the DRS.
    • Proposals for leveraging technology and data analytics to enhance the efficiency and effectiveness of the DRS.

Submission of Required Documents 

  • Cover Letter: A cover letter signed by an authorized representative of the company, summarizing the company’s qualifications and commitment to the project.
  • Technical Proposal: A detailed technical proposal outlining the approach, methodology, timeline, and team structure.
  • Financial Proposal: A comprehensive financial proposal, including a detailed cost breakdown.
  • Supporting Documents: Copies of legal registration, financial statements, resumes of key team members, and references proving the eligible criteria indicated above.

Evaluation Process

  • Proposals will be evaluated based on a scoring system that considers the above criteria.
  • A selection committee comprising representatives from the consortium and relevant stakeholders will review and score each proposal.
  • Shortlisted companies may be invited for an interview or presentation to further elaborate on their proposals and address any questions from the selection committee.

By adhering to these eligibility and selective criteria, the consortium can ensure the selection of a qualified and capable company to support the successful development and implementation of the second phase of the Deposit Return Scheme in Kosovo.

Negotiations 

The Consortium reserves the right to enter into negotiations with all or part of pre-selected bidders in order to amend and/or complete their original offers. Negotiations may concern the technical, financial, legal, and other aspects of the contract. 

Costs for preparing offers 

No costs incurred by the bidder in preparing and submitting the offers are reimbursable. All such costs must be borne by the bidder, including the cost incurred during negotiations and possible interviewing of proposed experts.

Proposal Format 

In order for the Consortium to conduct the most efficient and thorough bid analysis, firms/consultants interested must submit in separate parts: Cover Letter, Technical Proposal, Financial Proposal, and Supporting Documents.  Each part must be a separate electronic files. The technical proposal must not make reference to pricing data so that the technical evaluation may be made strictly based on technical merit.  Both proposals must be submitted in English.  The technical proposal must be submitted in the acceptable file formats of Microsoft Word (.docx) and Adobe Acrobat (.pdf).  The acceptable file formats for the cost proposal are Microsoft Excel (.xlsx) and Adobe Acrobat (.pdf).  

Timetable for the submission of documents: 

Application format and details to be provided

Offers must be submitted in the English language exclusively to the following address:

valon.basha@basha-law.com

Proposals must be sent simultaneously via e-mail only to: valon.basha@bashalaw.com No hard copy proposals are accepted. 

Validity of offers

Bidders are bound by their tenders for 40 days after the deadline for submitting offers. In exceptional cases, before the period of validity expires, the Consortium may ask bidders to extend the period of validity for a specific number of days, which may not exceed 20.

Award

A written notice of award or acceptance of an offer will be sent to the successful offeror. Following the written notice of awarding contract or an acceptance of the letter the Consortium or its representatives will sign the contract in relation to the provision of requested services.  

The Consortium is under no obligation to award a contract and will not reimburse offerors for any costs incurred in preparing proposals.

Additional information

The Consortium reserves the right to annul this tender procedure at any time, without any liability on its side.

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