The Inverted Bid Model
Industry Super Australia in conjunction with Complex Program Group, and IFM Investors has developed a new procurement process to support investment in Australian infrastructure by long-term equity investors such as Australian superannuation funds. The process is known as the ‘inverted bid model’.
IFM Investors and Industry Super Australia presented the breakthrough solution to a key G20/OECD forum in Singapore that will enable pension funds to play a lead role in financing major infrastructure projects. The report could cut bid costs in half by eliminating fee leakage, and accelerate the delivery of greenfield infrastructure projects by 30 per cent.
It achieves this via a two stage bid process where equity finance is secured first before separate tenders for construction, operation and management and debt. In other words, a long-term equity owner is appointed prior to competitive tenders for other project partners.