JOFOC_final.pdf

U.S. Agency for International Development P.O.Box: 70-840 Antelias Lebanon

Tel: +961.4.542 600 Fax +961.4.544 254 www.usaidlebanon.org.lb

ACTION MEMO

To: Stanley Canton, CO, USAID/Egypt

From: Christine Sayegh, Project Management Specialist, USAID/Lebanon

Date: June 28, 2011

Subject: Approval of the Exception to the Fair Opportunity Process to Modify Task Order No. 7 under IQC EEM-I-00-07-00003-00 with Sibley International Project for the Feasibility Study for Tripoli Special Economic Zone

Action Requested

You are requested to modify the subject Task Order by:

a. Increasing the scope of work to add a task for determining the best location of the

Tripoli Zone North site.

b. Adding LOE to compensate for more LOE needed to complete some project phase I activities.

c. Amending the scope of work to refine and/or detail some tasks based on project findings, results and Lebanese conditions.

d. Increasing the Ceiling Price by $470,463 to a new Ceiling Price Total of $1,684,761.

e. Extending the Period of Performance to October 30, 2011.

Background

To promote trade and investment capacity, the United States is assisting Lebanon in soundly planning and developing the first special economic zone in Lebanon. Within that context, USAID is providing technical assistance to the office of the Presidency of the Council of Ministers in preparing a comprehensive feasibility study for Tripoli Special Economic Zone.

Through a competition process in 2010 under SEGIR IQC, USAID solicited proposals for this assistance, and USAID technical committee reviewed the received technical proposals under the IQC. On July 6, 2010, USAID awarded a time and material Task Order in the $1,214,298 to Sibley International for implementing this technical assistance project entitled ‘Feasibility Study for Tripoli Special Economic Zone.’

The main objective of the Task Order: is to prepare a comprehensive high quality feasibility study for the Tripoli Special Economic Zone, drawing on best practices from special economic zones globally, including the Middle East, and considering particular circumstances that affect

Antelias Lebanon

Tel: +961.4.542 600 Fax +961.4.544 254 www.usaidlebanon.org.lb investors in Lebanon including North Lebanon. The feasibility study will provide a unique value plan for the short, medium, and long-term development of the zone.

The main tasks of the Task Order are:

A. Phase I (pre-feasibility study):

(1) Defining the territorial composition of the zone;

(2) Assessing off-site and onsite infrastructure;

(3) Assessing transportation infrastructure;

(4) Assessing access to and costs of power, telecommunications, water and wastewater services;

(5) Assessing and designing key administrative, legal, tax, and regulatory barriers for prospective tenants;

(6) Assess organizational model, selection of operator, and phase-in of private financing;

(7) Identifying requirements for GOL financial support for the Zone Authority;

(8) Conducting developer’s consultation workshops;

(9) Comprehensive demand forecast and market analysis;

B. Phase II (feasibility study):

(10) Preparing a complete master plan;

(11) Preparing a comprehensive economic study;

(12) Preparing analysis of financial scenarios;

(13) Preparing a request for proposal document; and

(14) Preparing a comprehensive marketing study.

Discussion and Justification

a. Increasing the scope of work to add a task for determining the best location of the Tripoli Zone North site:

One additional task is needed for phase II (feasibility study): Task (15) Site assessment for the Al Qleiat Area (North Site). The appropriate site selection for the Qleiat site (100 hectares) is essential for completing the formulation of the value proposition for the short, medium, and long-term development of the TSEZ zone per objectives of this Task Order. Tasks 1 and 2

Antelias Lebanon

Tel: +961.4.542 600 Fax +961.4.544 254 www.usaidlebanon.org.lb analyzed the Port Site, the Rachid Karame site, and the general area surrounding Qleiat airport in terms of each area’s land ownership, surroundings, and access and linkages to infrastructure and the infrastructure conditions. Task 15 will provide the needed work to identify up to three specific sites that meet the requirements of the industrial zone in the North Qleiat area. It is more efficient and economical (in terms of time and money) for USAID to provide the LOE needed to perform this task under the existing Task Order because:

i. the North site selection is a component of the TSEZ feasibility study and directly related to the overall feasibility study scope of work;

ii. Soliciting another contractor under the IQC would incur additional costs (time and material) of mobilizing a new contractor in Lebanon (office rental, accommodation, staff, transportation);

and

iii. More time and LOE would be needed to re-establish relations with relevant Lebanese public and private sector counterparts for coordinating and implementing the task.

b. Adding LOE to compensate for more LOE needed to complete some project phase I (pre-feasibility) activities and LOE needed for phase II activities:

i. More time and material than anticipated for the completion of the prefeasibility

(phase I) report: Initial project design and TO plan had not anticipated that project would need to tailor the pre-feasibility (phase I) report in more than one format for ease of review, evaluation, and feedback by both minister and Director General level GOL stakeholders, as well as their technical staff. Therefore, completion of the prefeasibility study report consumed more time and level of effort than previously anticipated due to the high level of technical detailing needed by the Office of the Presidency of Council of Ministers and other ministry technical staff. This level of detail was indispensable to provide the GOL with comprehensive and complete information necessary to undertake inter-government discussions and reach a decision on which priority site TSEZ project will proceed in completing a feasibility study.

Within the same context additional LOE will be needed to complete Phase II (feasibility study) report similar to the phase I report.

ii. More time and material than anticipated for establishing participatory public and private sector consultation: Initial USAID project design had anticipated that a developer’s consultation workshop in month 5 would be enough to establish enough public and private stakeholder ownership and support for Tripoli Special Economic Zone vision and the TSEZ feasibility study phase I results and to seek developers who will be interested in investing in the zone. However, the course of implementation revealed that one workshop targeting both developers as well as private and public stakeholders is not sufficient; there is first a need to involve public and private

Antelias Lebanon

Tel: +961.4.542 600 Fax +961.4.544 254 www.usaidlebanon.org.lb stakeholders in a participatory approach, integrate their input, and obtain their ownership of phase I (pre-feasibility) results and phase II (feasibility study) direction.

In phase II, developers can be included when a specific priority site for zone development is chosen by the GOL. This entailed investing more LOE for establishing two stakeholders consultation workshops (beginning of project, and at end of phase I) and resulted in both public and private stakeholders endorsement of TSEZ project results and vision. Obtaining this endorsement and approval on phase II direction would not have been achieved without this participatory and local ownership approach. In phase II, the team will also need LOE for conducting consultations with interested developers for the priority site chosen by the government of Lebanon as well as a final stakeholder workshop.

iii. More LOE than anticipated for maintaining coordination and support of incoming and outgoing Prime Minister’s teams under the Office of the Presidency of the Council of Ministers.

As described above, additional LOE is essential for promoting stakeholder support and ownership for the economic zone and project findings and obtaining consensus from the GOL on the findings of the feasibility study. It is more efficient and economical (in terms of time and money) for USAID to provide the needed LOE described above because: the activities are related to those already being performed within the same Task Order. The additional effort is a logical extension of work currently being performed. Soliciting another contractor under the IQC would incur additional costs related to the additional time needed (estimated to take at least one month) by the new contractor to re-establish working relations with Lebanese public and private sector counterparts and stakeholders and to assess current project results to continue the work of the current contractor; the time needed to solicit another contractor (estimated to be at least three months) and contractor mobilization would also result in loss of current project momentum.

c. Increasing the Ceiling Price by $470,463 to a new Ceiling Price Total of $1,684,761; and extending the Period of Performance to October 30, 2011:

The above described changes require an estimated increase in time and material by $470,463 and an extension of the period of performance by four months. Therefore the new TO ceiling price will become $1,684,761 and the new end date of Performance will become October 30, 2011. In order to ensure economy and efficiency interests of the USG, it is logical to amend the Task Order to increase the Total Estimated Cost by $470,463 and the Period of Performance to October 30, 2011 to be able to allow Sibley International to complete the feasibility study for the Tripoli Special Economic Zone. This extension of performance period under Sibley International’s Task Order does not conflict with the SEQIR IQC