3. Key Issues Requiring Government Decisions
Based on the feedback we have identified the following key issues requiring government decisions. In this section each issue is analysed, with the options and their advantages and disadvantages assessed and summarised for the decision the government needs to make. The list is in approximate order of importance with the major items first.
- Stock Pricing Risk and Ownership
- Release of Stock in an Emergency
- Separate "isolated" stock versus flexibility
- Onshore/Offshore Split
- Splitting tenders between tanks and stock
- Length of Tenders
- Other Issues
3.1 Stock Pricing Risk and Ownership
Most submissions raised the issue of stock price risk and how it might be managed. Some suggested that it would be best managed by the government owning the stock itself. This section summarises the comments made and assesses options that might be used to manage or avoid that risk. We also comment on what is the real or underlying risk rather than the risk created by the tendering system.
3.1.1 Summary of Feedback on Stock Risks
The following is a summary of the comments made about stock risk in the feedback to MED's questionnaire (with the number of respondents making the comment in brackets).
| May mean that we are unlikely to tender | (1) |
| Will increase costs/ not result in minimising cost objective | (4) |
| Government could own stock to minimise risk | (2) |
| Can only own/manage stock if government takes end of tender risk | (1) |
| Government manages risk component as a centralised process | (1) |
| Have short contracts rather than reprice | (1) |
| Shorter periods better for risk management | (2) |
| Difficult to manage exposure if the Government has right to buy at any time | (4) |
| Repricing won't take away underlying risk | (3) |
| Risk can be partially managed by having different length of contracts | (2) |
We consider the feedback reasonable, with the primary point being that leaving the price exposure with the tenderer will increase the cost and is creating exposure that need not be there. This is discussed below.
3.1.2 Underlying Risk Assessment
The current requirement is to increase stocks by about 500,000 tonnes. In the base case this is expected to increase to around 650,000 tonnes over the next few years. However there are two situations which could see the target reduce relatively quickly. One is that the IEA reduces the 90-day target or changes some of the rules (e.g. counting stock-on-the-water) that would have the same effect. The other is that there is a stepwise increase in New Zealand's indigenous oil production such as might happen if for example, the Tui and Maari fields are developed. We would expect things such as demand shifts or growth of alternate fuels (e.g. biofuels) to happen over a longer timeframe.
The chance of the IEA reducing their target seems remote in the short to medium term. The IEA's main concern at the moment is that overall stocks may be falling because of the increased use of "ticketing" and inventory swaps. Given concern over forward supplies it seems very unlikely that reductions would be contemplated. Enquiries by New Zealand about counting stock on the water also indicate that rule changes are unlikely.
Production changes are likely and the Covec/Hale & Twomey report showed that the target could quickly fall by as much as 25% if Tui and Maari were both developed. Both these projects are actively being assessed and remain real possibilities for development based on press statements by some of the development participants. In addition there is currently increased exploration activity in New Zealand which could result in future developments that might increase New Zealand's indigenous production.
However even with upstream developments, it is likely New Zealand is going to need the bulk of its stock requirement (up to 75%) to be held for a reasonably long period of time (quite likely decades unless there are major changes in demand or a major oil discovery in New Zealand). In addition for any major discovery the lead-time before development and production is likely to be at least five years.
With such a long-term requirement, if the government owns the stock there is little need to hedge any exposure. The government will need to buy stock to offset any sales to meet its ongoing requirement and in the event that stock is needed, prices are likely to be high resulting in little risk of loss on sale. Over the long time period the stocks are required, the stock pricing risk becomes less significant (some might argue that the stock is likely to be an asset of increasing value as well).
Greater price exposure comes when the risk is transferred to a company tendering stock where they have an exposure at the end of the contract period. This exposure is real for the tenderer and because it is likely to be for a shorter period, far more likely to be of impact.
There are ways this risk might be mitigated without the government owning the stock and options are discussed in the following sections. This might be via very long contracts or through the requirement to buy more oil at the same time sales are made.
3.1.3 Example of the Actual Risks
If the government (or agency) owned the stock what are the actual risks involved? Oil markets can be highly volatile, varying by substantial amounts over the course of a year (both from price and exchange rate).
Assuming there is a mix of stock contract lengths, with the maximum amount coming off tender in any one year being 20% of the total stock, then the risk at the end of each year is about US$9 million (NZ$13 million) for every US$10/bbl movement in the price of oil. As there is a high probability that the oil stocks are still needed, stock will need to be purchased (new tender) for replacement. This purchase will be in the same market (same price) as any sale so will offset any difference with the initial purchase price. In effect it will be as if the same oil is held at the price initially purchased. Our assessment of the expected need to continue to hold stock reduces the actual end year risk to about US$1.5 million (NZ$2 million) per US$10/bbl movement, which in the context of the annual estimated cost of the program (NZ$60-$105 million)6 is not significant. This could be easily managed within the annual adjustment of the PFML.7
This example demonstrates that the continued need to hold oil mitigates risk and the government is hedged in effect by the need to buy replacement stock at the same time as any sales (or end of tenders). Having a mix of contracts lengths (limit volume up for tender at any one time) helps smooth the cash flow and provides a good tool for mitigating the risk of changing targets.
The key issue is that leaving price risk with the tenderer creates a risk that would not otherwise be there (e.g. if the government owned the stock).
3.1.4 Options for Stock Ownership and Risk Management
Based on the feedback and our analysis we have developed four options that might be used as the basis for stock ownership. They vary from the tenderer owning the stock and managing the risk (with the resulting issues as identified) to the government owning the stock (with the issues that creates for the government). The following table summarises the four options with variations on a couple of the options.
Table 4: Stock Ownership and Pricing Risk Options| Option | Explanation | Pros | Cons |
|---|
| 1. a) Tenderer owns stock and takes pricing risk | Tenderer owns product and decides to hedge or not. Either hedge cost or assessed risk will be built into price or tender to government | - Easier to administer as leaving everything to be priced by tenderer
- Government doesn't own oil
- Easy for offshore options
| - Some companies may not tender due to risk
- Less competition
- Higher cost option
- Creating a risk that needs to be managed
|
|---|
| b) Tenderer owns stock but pricing risk managed in contract | Tenderer owns product. All contracts are repriced annually and include the cost to hedge for one year (one company estimated this cost at US$2.50/bbl/yr) | - Risk factor taken out as a variable as it would be fixed in contract
- Government doesn't own oil
- Easy for offshore options
| - Some companies may not like RM strategy therefore not tender
- More complex
- Higher cost option
- Creating a risk to be managed
|
|---|
| 2. Investor Option. Tenderer owns stock but Government takes end of contract pricing risk. | Tenderer owns product but govt manages risk at end of contract by taking exposure between entry and exit price (positive or negative). Varying contract lengths manage cash flow exposure. Provider of stock is effectively a provider of capital.8 | - No price risk to tenderer so can concentrate on lowest cost of capital
- Government taking risk so not paying additional for it
- Still feasible for offshore options
- Removes impediment to wide participation
- Avoids creation of unnecessary risk
| - End of contract financial exposure that needs to be managed (not large as shown above)
- Requires more active management (and expertise) from govt
|
|---|
| 3. a) Agency Model. Separate agency (Government owned) that can own stock or have others provide stock | Agency can choose to own stock (be the investor) and can manage exposures. Agency still has the option to use other options (offshore, private companies) if this is more cost effective | - Keeps all options open
- Ensures lowest cost of capital
- Agency (Government) taking risk so not paying additional for it
- Offshore option feasible
- Can ensure appropriate expertise
| - Government effective guarantor of agency
- Likely higher administration cost
- More complex as more options available
|
|---|
| b) Private Company providing agency ([Withheld under section 9(2)(b)(ii) of the Official Information Act 1982]) | Rather than Government owned a private company ([Withheld under section 9(2)(b)(ii) of the Official Information Act 1982]) provides the agency. | - Keeps all options open
- Ensures lowest cost of capital (if govt guaranteed)
- Not paying additional to manage risk
- Still feasible for offshore options
- Leverage off existing company expertise
| - Still requires a govt guarantee
- Likely higher administration cost
- More complex as more options available
- Conflict issues between company running agency and other providers
|
|---|
| 4. Government owns stock | Similar to a strategic petroleum reserve where the government makes all the decisions. | - Ensures lowest cost of capital
- Government taking risk so not paying additional for it
| - Government is in oil ownership (increases public debt)
- Makes offshore options difficult
- May make cost effective commercial options more difficult
- Additional expertise required in govt
|
|---|
3.1.5 Assessment of Cost of Different Options
The following section builds up an illustrative cost for each option using a simplified single period analysis. The detailed assumptions are given in Appendix 1. While different stock ownership options may lead to different stock holding options being available for consideration (e.g. offshore options), for this analysis all four options use the same mix of stock holding options. This enables direct comparison of different costs of capital, operating, administration and management costs and risks with each option.
Cost of capital was highlighted as a key issue in some responses and it is a key driver of the overall cost of the stocks system. However there is some misunderstanding on how the cost of capital should be applied in this situation.
In an evaluation context such as this, cost of capital should reflect opportunity cost taking into account relative risks of the assets the capital is being employed to finance. In this case that is oil stocks and tanks. The cost of employing capital in these assets should reflect the risk associated with the volatility of returns relative to the risks associated with investing in other assets. These risks are present regardless of whose capital is used to finance the assets. Whether the government's capital or private sector capital is used, the risks associated with the assets remain unchanged. For efficient allocation of capital it is important that the options are evaluated on the basis of the asset risk.
This means even if the government's capital is used it should be the opportunity cost assessed, taking into account the risks, not the actual cost of raising capital9 (exactly as the private sector would do). The differences between the cost of capital for each option is thus based on the risks involved rather than who is providing the capital.
The opportunity cost of capital is also different than hurdle rates which companies use internally for assessing capital projects and allocating capital. In the case of the multinational oil companies although their ability to raise capital is substantial because of their size and financial standing their hurdle rates are high as they have many opportunities to use that capital to leverage high returns. However the hurdle rates for individual companies are not relevant in this assessment if a competitive dynamic for providing that capital is created (i.e. the competitive dynamic should provide capital at a rate the market would assess rather than an individual company). For some of the design options, there may be features which reduce competition. In these cases a cost of capital higher than the straight asset risk assessment is used.
The opportunity cost of capital (pre-tax nominal) for each option is assessed as follows:
Table 5: Cost of Capital| Option | Cost of Capital (pre-tax nominal) | Reasoning |
|---|
| Option 1 | 18% | The risks for the tenderer are higher because of price risk even if this is partially managed by hedging. Leaving tenderers with the price risk is also likely to limit competition. For this reason the rate assumed is similar to a hurdle rate for a commercial company. |
|---|
| Option 2 | 12.5% | With the government taking price risk, the risks for the tenderer are reduced. In addition, long-term contracts with the government as counterparty may attract greater competition from infrastructure type investors. The rate used is mid-range of those assessed as reasonable by financing experts. |
|---|
| Option 3 | 11.5% | In theory this should be the same as Option 2 (same risks). However we have assumed the market will still price in a bit more risk (i.e. it is not a perfect market) therefore Option 3 is marginally lower. |
|---|
| Option 4 | 11.5% | Same as Option 3. |
|---|
Note that as offshore options are assumed to be part of the mix (50%), for Options 3 & 4 we have assumed that these stocks will be commercially owned and will be at the same cost as Option 2.
Other main assumptions:
- Base crude cost US$50/bbl (WTI) but much of the crude stored may be cheaper
- 50% onshore/50% offshore
- Exchange rate US$/NZ$ of 0.7
- Price risk is only directly costed in Option 1 when taken by the tenderer
- While Options 2 to 4 have lower cost of capital it is assumed there will be a fee for management of the stock system
The risk the government takes by taking on the pricing risk could be calculated for each option although as shown in Section 3.1.3 is likely to be fairly small and arguably has as much upside as downside. Such a calculation while feasible is beyond the scope of this report. It may be worth doing some further modelling to establish the size/probability of the risk profile.
The assumptions give the following resulting costs:
Table 6: Cost of Options| | Capital cost of stocks and tanks (NZ$M) | Total Annual Cost (NZ$M) | Annual Cost per litre10 (NZc/l) |
|---|
| Option 1 | 472.7 | 104.8 | 1.53 |
|---|
| Option 2 | 472.7 | 65.6 | 0.96 |
|---|
| Option 3 | 472.7 | 63.3 | 0.92 |
|---|
| Option 4 | 472.7 | 63.1 | 0.92 |
|---|
While the above costs are estimates and the actual cost difference will depend on whether different options produce a different mix of stocks held, it does provide a useful indication. Option 1 is substantially more costly than the other options both because of the higher rate of return required and the cost of managing the stock price risk (estimated at NZ$15.5 million annually). The variation in the other cases is primarily from different rate of returns. For Option 2 to be successful the risks need to be removed so the "infrastructure type" investor will be attracted to invest.
3.1.6 Government Decision on Stock
The government needs to make a call on the stock ownership and pricing risk, deciding which option best meets its need. Our view is either Option 2 (government takes end of period risk) or Option 3 (Agency model) best meets the desires of the government while meeting the key objectives of ensuring a competitive process and minimising cost. We believe these options are also most likely to attract a wide participation resulting in a more competitive tender.
The issue with Option 1 is that risk is being created or managed when it need not be there resulting in higher cost. The issue with Option 4 is the direct involvement in oil ownership by the government, which is not desired and possibly makes some good commercial options (e.g. offshore storage) a lot more difficult.
3.2 Release of Stock in an Emergency
This issue follows on from the stock pricing risk where a decision can only be made once stock ownership is confirmed. Companies highlighted that they could not manage the unknown risk of the government having the right to buy the stock at any time at a fixed price, which potentially would create a mismatch with hedge contracts.
How stock would be released in an emergency needs to be spelt out along with the rules for release before the RFP process. Options are outlined in the following table. The options will depend on the decision made for stock ownership
Table 7: Release of Stock in an Emergency| Option | Explanation | Pros | Cons |
| 1. Government instructs stock owner to sell stock. (Tenderer owns stock) | Government doesn't purchase stock. Tenderer takes risk, which may be mitigated as price is likely to be high. Tenderer replaces stock and contract price reset. | - Simple as Government doesn't need to get involved
| - Government not getting benefit if sold when market high
- Risk remaining with tenderer which is likely to discourage tenders
|
| 2. Government has obligation to replace stock before end of contract with same quality. (Tenderer owns stock) | In this case the Government takes all the risk - they have a right to take the stock, sell it (therefore need a right to buy) and then must replace with similar stock (or cash settlement at market price) | - No risk for tenderer
- Government gets any premium if sale price is higher than replacement price
| - May be issues with "like" replacement
- Government needs to set up ability to sell oil (can tender for replacement barrels)
|
| 3. Government (or agency) owns stock (Option 3 or 4) | In this case there are no issues as the Government owns/ controls the stock | - Simple
- Government gets any risk premium in price
| - More administration and experience required
|
3.2.1 Government Decision Required
The government can't decide on the preferred option until the decision is made on stock ownership. Once that decision is made this decision may be obvious. However we think Option 1 may discourage tenderers so Option 2 may be more sensible if the tenderer owns the stock. As well as deciding on the above option the government needs to outline procedures as to how the stock would be released and the timing required (e.g. available within 14 days to be tendered to the market with possible release within 30 days).
3.3 Standalone Stock versus Flexibility
A number of respondents were concerned about the requirement outlined in the questionnaire that any IEA stock must be isolated or standalone. This was proposed due to concerns that IEA stock should not affect normal commercial stock holding requirements in any way. However some respondents thought that if the rules were too restrictive then good opportunities for stock holding would be lost, especially the effective use of spare tanks in currently used tank farms. Also stock turnover requirements require some sort of integration with current stocks. In effect having flexibility in the options that can be proposed will allow companies to pursue options they would do if they had the obligation to hold the stock (i.e. cheapest options).
The government needs to make a decision on what is going to be allowed. This needs to be done in conjunction with the development of rules for release. The following table looks at the options that the government has.
Table 8: Separate "Isolated" Stock versus Flexibility| Option | Explanation | Pros | Cons |
|---|
| 1. Ensure stock is isolated | Government ensures that the IEA stock will not affect normal commercial stocks. | - IEA stock easily identified and quantified
- No impact on normal commercial stocks
| - Will rule out some cost effective (and flexible) opportunities
- Will increase costs
|
|---|
| 2. Allow commingling with normal stock and manage separation contractually | Leave flexibility in the design to allow companies to come up with innovative options. | - Cheapest options will be allowed
- Good NZ based stock options available (i.e. good security stock)
| - Will need strict rules on release of IEA stock
- Penalty system needed
- More complex for govt
- Difficult to define and monitor normal or "acceptable" stock levels
|
|---|
3.3.1 Government Decision Required
The government needs to decide on the requirements for the isolation of the IEA stock. While commingling stock increases the complexity for government many options require some integration for them to be feasible. We think it is premature to exclude all these options when the issue of not affecting commercial stocks might be managed quite feasibly. We note that some other country's agencies allow such designs.11 At this stage we believe the rules should have some flexibility with the issue to be reconsidered once actual proposals can be assessed after the RFP. One of the requirements of the RFP could be for companies who propose commingled or non-isolated stock options, to propose how they would ensure that commercial stocks are not affected.
Certainly keeping flexibility in the system will probably require a penalty system to be developed. The government also has the right to implement a compulsory days product stock obligation if they felt there was any game playing or relying on IEA stock for normal business.
3.4 Onshore/Offshore and Crude/Product Split
Most responders thought the government should retain flexibility and see what came out from the RFP process. One company suggested the government needs to make a call on whether improved security is an issue and if so put a limit (suggested the Covec/H&T figure of 190,000 tonnes in New Zealand). Another raised a number of reasons why the stock should be held in New Zealand not offshore. Comment has also been made (verbally) that if security is an issue then product should be held in approximate proportion to the market proportion of direct imported product supply.
The following table summarises the options.
Table 9: Onshore/Offshore and Crude/Product Split| Option | Explanation | Pros | Cons |
|---|
| 1. Leave flexible until after RFP | Don't want to rule out any options and can assess after the RFP based on price. | - Keeps all options open
- Simple
- Leaves the decision to when more information is available
| - May not provide any NZ security
- Funds going offshore
- Possible political issues with not improving "perceived" security
|
|---|
| 2. Set an amount to be held in NZ to ensure security (possibly with product portion) | Government needs to decide what role security plays (as in Covec/H&T report). Based on that decision it should set a limit (minimum) for NZ based stocks (and proportion product). | - Clarity for everyone on the rules
- NZ security will be improved
- Still feasible for offshore options
- Balances two conflicting drives
| - May not be cheapest option in total
|
|---|
| 3. Hold all stock in NZ | To provide security for New Zealand all stock needs to be held in New Zealand | - Maximises security benefit
- No perception or political issues with security provision
| - Likely to be much higher cost
- Will take longer to put in place (new tanks required)
- Rules out a number of options
|
|---|
3.4.1 Government Decision Required
The government needs to decide on their preferred option for the split. In general while we think flexibility through the RFP process will ensure all options can be considered, there is value in dealing with the security question now. We think the proposal to use the Covec/H&T number has some substance as it gives justification for setting a minimum "hold in New Zealand" stock. We also think that a proportion of product stock should be included in the "hold in New Zealand" requirement. The decision on the split could be amended after the RFP if costs for different options are substantially different than expectations.12
We think requiring 100% of the stock to be held in New Zealand would be wrong at this stage. It would take away flexibility and possible low-cost options that offshore stock may provide and as shown in the Covec/H&T report is unnecessary for security.
One company was concerned that shipping would not be available to bring offshore stock to New Zealand in an emergency. However it is debatable whether shipping will be more available (less stock to carry) or less available in an emergency.
3.5 Splitting Tenders between Tanks and Stock
There were a variety of responses on this issue reflecting the options each respondent had available for additional stocks. Some companies thought they should not be split while others were only interested if they were. The ultimate decision will depend on the decision made on stock ownership as that could avoid some of these issues.
The following table looks at the that the government has.
Table 10: Splitting Tenders between Tanks and Stock| Option | Explanation | Pros | Cons |
|---|
| 1. Split tank and stock tender | Government will accept tenders for tanks and stock separately. | - Some companies have tank only options13
- Allows for different length of stock and tank contracts
| - No one likely to tender stock only options
- Standards between tank and product owner
- Mismatch in contract lengths
- More difficult to compare options
- Some companies only want to do combined
|
|---|
| 2. Allow split tenders and combined tenders | Leave it flexible to allow full range of options | - Ensures all options kept open
| - Makes comparison more difficult
- Government may have to put parties together
|
|---|
| 3. Only have combined tenders | Tenders are only accepted for stock and tanks together. Companies are expected to do JVs if they only have stock or tanks | - Easier administration
- Any risks/ standards issues sorted out commercially in JV
- Easier to assess "total cost" of proposal
| - May rule out some tank only options
- Requires commercial parties with different interests to get together
|
|---|
3.5.1 Government Decision Required
The decision on splitting the tenders can't be made until the stock ownership is decided. The difficulty indicated in the responses is there are a number of tank only options but not stock only options. The decision on stock pricing risk and ownership may correct this imbalance. In general we think that it is better if the stock owner and the tank provider can agree terms and arrangements commercially rather than the government getting involved (unless they are owner of one of the assets).
3.6 Length of Contracts
Most respondents thought the government should leave this flexible as a mix of contract lengths is likely to best meet the government's risk management objectives (meet changing target and manage price exposure as discussed in Section 3.1). However respondents also raised this issue for tank investment (refurbished or new) where longer contracts are preferred. The length of stock holding contracts will depend on the stock ownership decision so this discussion deals with tank investments.
Tank assets are long life investments and respondents raised the issue for new tanks that if the terms were short, they would need to recover their investment over a short period. For new tanks, terms of between 10 and 20 years were preferred. This issue is highlighted in the following table. Tanks are normally a forty-year investment although an investor may amortise that over a somewhat shorter period to minimise risks. The following table shows for an investment of $100 million what the annual cost is likely to be assuming a 10% return given a variable time for the recovery period.
Table 11: Annual Payment for Variable Recovery Periods| Period to Recover (years) | Annual Cost ($M) | Percentage increase |
|---|
| 40 | 9.30 | |
|---|
| 20 | 10.68 | 15% |
|---|
| 15 | 11.95 | 28% |
|---|
| 10 | 14.80 | 59% |
|---|
| 5 | 23.98 | 158% |
|---|
As the recovery period gets shorter the cost increases substantially. However countering this exposure, if the government signs up to long-term deals and gets left paying for tanks they don't need then the overall cost could be greater.
The cost increase by recovering the long-term investment over 20 years is not substantially different than 40 years (and might be what an investor would require). However 20 years is still a very long agreement for both parties. A 10-year agreement may be a more realistic contract length. However a tank owner recovering their investment over 10 years requires an annual payment 60% higher than for a 40-year recovery or 40% higher than a 20-year recovery.
One way of managing the conflicting risks (paying a lot for a long-life asset in a short period and the risk of paying for unused assets) is for the government to sign 10-year deals with the right to renew for another 10 years with the tank cost for that second 10 year period set in the original contract and reflecting payments made in the first period. In this way the benefits of paying a higher rate earlier can be recovered in the second period if the contract is rolled over.
Alternatively for a portion of the required tankage (up to 50%) the government may be prepared to do long-term (15 or 20 years) deals.
For existing/refurbished tanks we believe the government should be prepared to be flexible with terms anywhere between one and ten years.
3.6.1 Government Decision Required
The government needs to decide on the length of contracts they are prepared to accept, particularly around tank contracts. In general we believe the length of contract should be left flexible for the tenderer to propose. However it would be sensible for the government to outline the maximum period of the contract they are prepared to accept and perhaps propose a suitable structure (e.g. 10+10 roll-over) for long-term tenders.
3.7 Other Issues
There are a number of other items requiring decisions but of a lesser importance than the issues already covered. These items are listed with a discussion below.
| Exchange Rate Exposure | Because any stock is valued in US$ any stock also has an exchange rate exposure. One company suggested that payment could partially be in US$. That would then cause an exposure for the government as their income is in NZ$. The bulk of the exchange rate exposure could be handled in the same way as the oil price exposure (i.e. tenderer hedges it or government takes end of period risk). For any offshore stock options the government needs to decide how it wants to pay. If it only wants to pay in NZ$ then any tenderer needs to build the exposure (or hedge cost) into the charge. |
|---|
| Interest Rate Exposure | One company suggested interest rates could be left floating or fixed in offers. The government needs to decide if there should be any flexibility in this area. Our view is this should be left to tenderer to decide with the government interested in the net cost. |
|---|
| Payment Frequency | Companies want to know how and when payments would be made (e.g. quarterly in advance) |
|---|
| Stock Specifications | As discussed in 2.1.4 these are basically agreed and could now be defined for final agreement. The main issue is whether any particular types of crude should be specified. NZRC has proposed some categories for crude stored in New Zealand. |
|---|
| Assessment Process/ Criteria | There was little feedback on the assessment process other than it needed to be transparent and include "total system cost" (i.e. all costs over the period of the tender). The government needs to start defining the assessment criteria. |
|---|
| Government to Government agreements | One company asked about the government-to-government agreements and how they were progressing. There is concern that they may take longer than the proposed tender timetable. |
|---|
Back to Top