The procurement of a PPP project represents Value for Money when — compared to a public sector procurement option — it delivers higher net economic benefits to society, taking into consideration the whole-life costs of the project.

The main output of the legal feasibility analysis should be a detailed recommendation for the approval of the project based upon:

The existence of legal obstacles for the future development of the project, or In case any obstacle exists, the strategy to be followed to overcome it as well as the estimation of time and resources necessary to do it.

The due diligence process should ensure that the project is procured in accordance with current legal requirements, both in domestic and international terms, and that key aspects of the project have been analyzed from a legal perspective. In order to assess the legal feasibility of the project, legal due diligence should include at least three important steps, as described below.

The project team have to make a thorough analysis of the legal issues surrounding the project, across several dimensions. A detailed legal due diligence should be done to ensure that all foreseeable legal requirements, which have not or will not be dealt with in other appraisal exercises, are met for the development of the project.

The main objectives of the legal feasibility analysis are as follows.

The social impact assessment should identify the impacts of the project in the community and classify them in terms of significance. It also provides recommendations for actions that can avoid, minimize, or compensate the adverse social impacts of the project.

The process of conducting the assessment also promotes consultations that play an important role in creating legitimacy of the project among the communities in which it directly engages.

The process of analyzing social impacts is regulated in many countries as part of the appraisal of infrastructure projects. The project team must therefore follow any applicable legal or regulatory rules. Several jurisdictions name the process of evaluating the social feasibility as a social impact assessment, sometimes integrated with the Environmental Impact Assessments, and sometimes separated as an independent evaluation.

The social impact analysis can address a very broad set of issues related to changes in the social, economic, and cultural condition in which the surrounding community live and work. Specific types of social issues and possible impacts associated with a project can vary considerably depending on the nature of the project, its size and location.

An appraisal exercise intimately connected with the evaluation of environmental feasibility is the assessment of the project’s impact on the lives of people that live and work in the project’s area of influence.

The social impact analysis (or social feasibility assessment) can be a very important part of the general appraisal of PPP projects, since many infrastructure initiatives cause severe adverse impacts on communities surrounding the site on which they are implemented.

The environmental feasibility analysis needs to provide a sound recommendation about the environmental viability of the project, that is, if it can obtain the necessary approvals and, if so, at a reasonable cost.

This exercise also allows for a reduced environmental footprint of the project, offering input to the design of the technical requirements, greatly contributing to the sustainability of the initiative.

The project team, typically with specialized consultants, must address a fundamental question during the environmental feasibility analysis: is there any specific aspect of the project that makes environmental approvals impossible or the costs to obtain them prohibitive?[43]

To approach the question adequately, four steps are necessary. They allow an effective assessment of the environmental aspects of a PPP project.