AIR CARGO SERVICES

AIR CARGO SERVICES For IRAQI MINISTRY OF TRANSPORTATION (Baghdad International Airport) Request for Information (RFI) Note: This is a Request for Information only. Do not respond with quotes, proposals or offers. This RFI does not represent a commitment by the CPA to issue an RFP or RFQ. Submissions should not be in .ZIP format. EXECUTIVE SUMMARY I) INTRODUCTION / OVERALL OBJECTIVES The Iraqi Ministry of Transportation (MoTran) considers the current air cargo activities in Iraq to be a complex essential service that must be provided on a priority basis. This service must be operational in all major airports to include initially Baghdad, Mosul and Basra. Air cargo services are considered to be strategic in nature and will require near-term development as well as the involvement of MoTran in its planning, design and oversight The primary objective of this program is to ensure that the air cargo services for Baghdad International Airport (BIAP) and other major airports are operational with sufficient resources and technical capacities to handle the current level of air cargo as well as the increased levels anticipated over the next 3-5 years. MoTran has declared that it is important to commercialize this essential service, as well as others over time, to the extent possible. An additional key objective of this project will be to develop an economic framework for identifying, qualifying and mobilize private sector solutions and resources for government issues. The air cargo activity and other essential services are not currently positioned for full privatization but require equipment, systems, capital and management expertise. However, it is still considered feasible to bring international expertise and investment capital to bear on the issue through the application of internationally proven economic models such as Public-Private Partnerships (PPP). In developing and mobilizing a medium / long-term solution, it is desirable to use an economic model that will attract qualified operators and/or investors that have a medium / long-term interest in Iraq. Additionally, it is desirable to consider a consortium approach that would allow for local participation. Additionally, it is important that there be a local component for the technical, administrative and supervisory staff to the extent possible. Overall, it is desirable that related activities, in addition to air cargo services, are secured and developed. These related activities may include, but are not limited to, baggage handling, warehousing, “break-bulk” services, trucking and intermodal services are strategically linked and provide an efficient “value chain” for all operators and/or investors. MoTran is seeking a “best practice” solution for the air cargo services but recognizes that the current economic circumstances may require modifications. However, the state of air cargo services provides an opportunity for Iraq to put in place a global class capacity that will serve the strategic requirements of Iraq and the region. Any air cargo solution must be reasonably competitive and not result in a monopolistic activity. II) ASSUMPTIONS The Iraqi national airways company is a not a viable near-term solution for air cargo services Air cargo is a critical service that must be secured and will require participation of international operators and/or investors The requirement for air cargo will increase dramatically over the next months due to the mobilization of development and humanitarian programs from the previous Coalition Provisional Authority (CPA) and Project Management Office (PMO) as well under the new Iraqi Reconstruction Management Office (IRMO) and Project and Contract Office (PCO). Additionally, there will be some increased demand for air cargo related to new levels of economic activity in the industrial, energy and other sectors. (See Attachment A - Unofficial Economic Projections) Commercial and regulatory activities of the aviation sector should be segregated and planned and managed through distinct and specialized authorities There are “market relevant” economic models such as PPP’s that can be used for developing and mobilizing medium-term solutions to national issues III) GENERAL PROPOSAL To establish a Public-Private Partnership (PPP) between with the appropriate Iraqi aviation authority (IAA) under the Ministry of transportation (MoTrans) and the private sector for the purpose of jointly operating and developing the air cargo services. (See Attachment B - “Consortium” model) This PPP will ideally be a consortium of local and international operators and/or investors working through a local special purpose commercial corporation and a specific operating contract for services. Initially, this will be for essential air cargo services at Baghdad International Air Port (BIAP) but may include these essential services at other major airports such as Mosul and Basra. Generally this will involve civilian air cargo but may also include cargo delivered on military aircraft. IV) DEFINITIONS Public Private Partnership (PPP) – A cooperative venture between the public and private sectors, built on the expertise of each partner, which best meets the public need through the appropriate allocation and sharing of resources, risks and revenues. Generally, an appropriate legal entity from the public and private sectors establish a legal partnership and jointly operate, under a services contract, an activity previously operated entirely by the government sector. These activities are generally strategic activities that are not positioned for privatization. Within the legal partnership, it is normal for there to be a revenue sharing schedule that reflects the contribution of both parties. In the case of the private sector, the contribution generally includes capital, equipment, systems and management expertise. PPP benefits: Leverage strengths and assets, reduce capital investments, and reduce costs. Receive a stream of revenue to sustain the activity and upgrade the essential service. Increases the value of the activity and can lead to a commercial restructuring and possible privatization. Introduce new management systems, technologies and equipment at a lower cost to the government. Airport Authority – A government agency established by law, government ordinance, or other appropriate instrument, that is responsible for all commercial airport activities. The overall mission of this government entity includes the planning, coordination and oversight of all commercial activities of MoTran including essential services and assets (land, building and roads) of the civilian airports. These commercial responsibilities may include, but are not limited to, the following essential services and activities: Power, water, sewage and environmental services Air cargo Baggage handling and screening Catering Aircraft fueling Airport transportation including passenger and crew Warehousing Aircraft cleaning Runway, roadway and perimeter fence cleaning and maintenance Terminal facility repair, maintenance, HVAC, lighting and cleaning services Public transportation, parking and conveyances on airport property Airport vendor stores and kiosks (including duty free), restaurants and public advertising licenses and contracts Private security and passenger assistance services. The Airport Authority operates under a corporate governance arrangement that oversees the planning and approval of the development and use of: Airport land and facilities Adjacent warehousing (including bonded and cold storage) facilities Roadways and parking facilities Industrial parks “Free Zone” operations OVERALL MISSION To develop and mobilize a medium-term (3-5 years), commercial collaboration between the public and private sector to delivery air cargo services initially for BIAP, Mosul and Basra airports. OVERALL APPROACH AND METHODOLOGY Establish an Airport Authority under MoTrans to be responsible for all commercial activities and essential services of airports throughout Iraq. Establish a local, special purpose commercial company for the purpose of establishing and operating a PPP jointly with a qualified international air cargo operator and/or investor. Identify and qualify an international air cargo operator and/or investor to enter into the proposed PPP. The MoTran would encourage the international partner to establish a consortium to include a local partner and other international investors. The PPP would be responsible for operating an air cargo services at Biap, Mosul and Basra under a negotiated contract for services with the Airport Authority. The consortium would be required to bring the necessary (1) start-up and operating capital, (2) operational equipment, (3) technical and management systems for the operation and development of the PPP air cargo services. Additionally, the Consortium will be required to identify risks and capacity restraints and design and develop solutions for any such risks and restraints to the mission. The Airport Authority/MoTrans would be required to provide the necessary licenses and government authorities. Additionally, MoTrans would make available for hire, select key staff from Iraqi Airways Company that are determined by the Consortium to have important experience and capabilities for setting up and operating air cargo operations at BIAP and then Mosul and Basra. Furthermore, Motrans and other regional authorities and Ministries of the Iraqi Government will act in good faith and provide reasonable assistance to the Consortium in the setup and operation of air cargo service at any authorized location. Develop an economic model that can be used to develop and operate other essential airport services. VII) CURRENT SITUATION Air cargo services are being provided by DHL on a gratis basis. Other aviation operators under contract are available to provide interim services but not on a long-term basis and not in cooperation with MoTran. There are approximately 800 -1000 commercial flights into BIAP per month for pax and cargo. The requirement for air cargo services will come from aircraft arrivals and departures for (1) civilian commercial, (2) humanitarian, (3) government (Coalition and Iraqi) and in some cases (4) military flights. The Iraqi Airways Company is not considered a viable framework for delivering these services due to the legal and financial circumstances of the company. There is limited ramp space currently available at BIAP (See Attachment C – Cargo/Flight Estimates) and less capacity at other major airports. However, derelict aircraft will be removed from the Iraqi Airway ramp that will immediately increase the current space by nearly 150%. Additional overflow ramp space is also available. VIII) REQUEST FOR INFORMATION On behalf of the Iraqi Ministry of Transportation, the CPA sends this Request for Information (RFI) to the international operator/investor marketplace. This is directed at operators/ investors that have financial capacity for and experience in the start-up and operation of international air cargo services in complex environments. (See Attachment D – Draft SOW) Responses to this RFI are requested within 10 working days from publication on the internet. The CPA requests that respondents provide to MoTrans a core of information necessary to develop a final RFP/RFQ as appropriate. The responses should include, but not be limited to an expert opinion on: The PPP and consortium concept/approach and their usefulness in achieving the overall objectives and missions of MoTrans. The proposed corporate structure and elements of the PPP consortium. The practicality of a revenue sharing scheme that is characteristic of a PPP. The ability to establish these services for all major airports using a single PPP without resulting in a monopolistic activity. The extent to which local partners and/or international investors can participate in this program. The extent to which local staffing can be achieved. The types of responsibilities resources should be provided by the Airport Authority. Additionally, responses to the RFI should include, but not be limited to: Pre-feasibility type information regarding the overall project to include: General operations information General approach and methodology that would be practical for the set-up and operation of an air cargo service in the Iraqi environment. General Financial, technical, HR and management resource that would be required for the operation at Baghdad, Mosul and Basra airports. General time frames and critical path for mobilizing operations in these 3 major airports. Indication of critical success factors for such operations. Indication of other services and infrastructure that might be linked to provide for an efficient air cargo operation such as warehousing, etc. Other information the respondent may determine is important in the design and successful operation of an air cargo service in Iraq. ATTACHMENTS Attachment A - IRAQ ECONOMIC DATA EMBED Excel.Sheet.8 Attachment B - MODEL CONSORTIUM EMBED Excel.Sheet.8 Attachment C - CARGO / FLIGHT ESTIMATES EMBED Excel.Sheet.8 Attachment D - DRAFT SOW EMBED Word.Document.8 \s The purpose of this RFI is to gather information about those requirements enumerated above. To the extent simplifying assumptions are needed, respondents are encouraged to make and document such assumptions in their responses. – Corporate Expertise Briefly describe your company, your products and services, history, ownership, financial information, and other information you deem relevant. In particular, please describe any projects you have been involved in that are similar in concept to what is described in this RFI. Any relevant lessons learned. DISCLAIMER This RFI is issued solely for information and planning purposes only constitutes neither a solicitation nor a guarantee of a future solicitation. All information received in response to this RFI that is marked Proprietary will be handled accordingly. Responses to the RFI will not be returned. Responses to this notice are not offers and cannot be accepted by the Government to form a binding contract. Responders are solely responsible for all expenses associated with responding to this RFI. Responses should not be sent in .ZIP format. Email all correspondence to: Office of the Senior Advisor to the Ministry of Transportation c/o Christopher S. Walker Civil Aviation Reintegration Advisor HYPERLINK "mailto:walkerc@orha.centcom.mil" walkerc@orha.centcom.mil Note: This is a Request for Information only. Do not respond with quotes, proposals or offers. This RFI does not represent a commitment by the CPA to issue an RFP or RFQ. Submissions should not be in .ZIP format.