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Appraising PPP Projects

423 Summary of Outcomes of this Phase

As the interplay between the several feasibility assessments evolves, including the legal due diligence and the social and environmental assessments, the government will be able to ensure that the project can be done. It will understand what the main obstacles ahead are, and, whenever relevant, what the main actions to overcome them are. Thus, the Appraisal Phase provides a central contribution to the preparation of the PPP project.

The Appraisal Phase also allows for a deeper understanding of the costs and benefits of the project as well as its broader consequences. This enables the government to decide if the project is worth implementing, considering its economic, fiscal, environmental, and social consequences, among other impacts it can yield. This represent an investment decision that is made, or confirmed, during appraisal.

In fact, as the several analyses interact with each other, the Value for Money assessment verifies if the PPP route is the most appropriate delivery model. The commercial feasibility and affordability assessments demonstrate that the project can be effectively implemented, attracting investors and promoting a responsible use of fiscal resources. This is a procurement decision which indicates if the PPP alternative makes sense.

During the appraisal process, the procuring authority will have developed its procurement strategy, defined the future project team, and developed communications plans. If the project is approved, the government is now ready to move on to final structuring; this is when the project team will need to operate the financial model, translate the technical requirements into contractual obligations, and refine the contract pre-structure, among several other exercises.

During structuring, the tender process will be set out in detail and, more importantly, the value that the project adds to all stakeholders will be incorporated into the documents that will regulate the relationship between the public and the private partner for the duration of the contract.


Name of Document

Authors/Editors and Year


htpp link (when available)

PPP Reference Guide V2.0

World Bank Group (2013).

This is a comprehensive description of the PPP process.

PPP: Principles of Policy and Finance

E. R. Yescombe (2007).

The book presents the private sector’s perspective on PPP financial issues, including detailed analysis about several value drivers for investors (chapters 7, 8 and 9).


PPP: Principles of Policy and Finance

E. R. Yescombe (2007).

The book has a detailed description of how to structure financial models, with a focus on PPP deals (chapter 10).


Feasibility Study Guideline for Public Private Partnership Projects


University Transportation Centre for Alabama (2010).

The report presents a discussion of scenario analysis to test the commercial feasibility of projects, with practical and numerical examples (item 6.3).

P3 Business Case Development Guide

PPP Canada.

The report provides a very comprehensive, country-specific approach to the Appraisal Phase.

Budgeting and Reporting for Public-Private Partnerships

International Transport Forum (2013).

The paper presents recommendations for adequate public financial management of PPP contracts.

Risk Distribution and Balance Sheet Treatment: Practical Guide

European PPP Expertise Centre (EPEC) (2011).

The paper presents a summary of the approach adopted in the European System of Accounts (ESA)95 for accounting treatment of PPP contracts.

Operational Note:

Implementing a Framework for Managing Fiscal Commitments from Public-Private Partnerships

World Bank Group (2013).

The operational note presents the use of some fiscal feasibility tests and discusses experiences of healthy public financial management regarding PPPs


Appraisal and Evaluation in Central Government

United Kingdom (2011).

This is a reference of a policy to analyze alternatives of implementing infrastructure.

The Guide to Guidance

How to Prepare, Procure and Deliver PPP Projects

EPEC (2012).

This is a comprehensive description of the PPP process, including several references to guidance and academic material.

Investment Lifecycle and High Value/High Risk Guidelines: Prove

State of Victoria (Australia) (2010).

The text presents a comprehensive description of the appraising exercises required for the approval of PPP projects in the Australian state of Victoria.

National Treasury PPP Manual

Module 4: PPP Feasibility Study

South Africa (2004).

The text presents a comprehensive description of the appraising exercises required for the approval of PPP projects in South Africa.

Value-for-Money Analysis- Practices and Challenges:

How Governments Choose When to Use PPP to Deliver Public Infrastructure and Services

World Bank Group (2012).

This paper presents the conclusion of a conference on Value for Money (VfM) practices, presenting the international perspective on the subject.

The National Public Private Partnership Guidelines

Infrastructure Australia (2013).

Volumes 5 and 8 present and discuss the main methodological issues regarding the adjustments of cash flows to risk in the context of PPPs.

Principles and Guidelines for Social Impact Assessment in the USA


The Inter-organizational Committee on Principles and Guidelines for Social Impact Assessment (2003).

The report presents the theory and examples of the process of assessing social impacts of programs in the federal level of the United States government.

Good Practice Note: Addressing the Social Dimensions of Private Sector Projects

International Finance Corporation (IFC) (2003).

The Note presents the IFC’s approach to evaluating social impacts in projects they finance. It is a comprehensive and detailed guide of how to conduct social impact assessment.

Social Impact Assessment Guideline

Government of Queensland (2011).

This is a policy paper about internal processes necessary to conduct a social impact assessment.

Project Financing: 7th. Edition


Peter K Nevitt and Frank J Fabozzi. (2000)

This is a book on project finance. It presents several issues and a diverse set of case studies of private and public projects.


Disclosure of Project and Contract Information in Public-Private Partnerships

World Bank Group (2013).

This report compares practices of disclosure of PPP information in several stages of the PPP process in Australia, Brazil, Canada, Chile, Peru, South Africa, and the United Kingdom.

Project Preparation/Feasibility Guidelines for PPP Projects

Ministry of Finance. Government of Pakistan. 2007.

This guideline presents the PPP process for the government of Pakistan, focusing on project screening, pre-feasibility studies and feasibility exercises.


Guidance for Public Private Partnerships in New Zealand.

National Infrastructure Unit of the Treasury (2009).


The guide presents a general description of the PPP process in New Zealand. It establishes the requirements for the construction of a Business case of a project, and defines basic decision criteria for the approval of PPP initiatives.


Principles of Corporate Finance (10th edition)

Brealey, Mayers and Allen, published by McGraw-Hill Irvin, 2011

This is a comprehensive text book on corporate finance with an interesting chapter on Capital Asset Pricing Model


The Municipality of Rio PPP guide: Screening, Appraisal and Auctioning of PPPs (Volume 2, Section III)

The Municipality of Rio (2012)

The guidelines indicate the process of PPP projects in the city of Rio de Janeiro, in Brazil, defining formal requirement for projects in the appraisal phase.



How to Engage with the Private Sector in Public-Private Partnerships in Emerging Markets,

Farquharson and others, (2011)


The book presents a comprehensive view of issues and challenges for the development of PPP programs and projects in Emerging Markets. Chapter 6 addresses several issues of the appraisal phase.


Manual on Government Deficit and Debt – implementation of ESA 2010 Eurostat 2014:

Manual on Government Deficit and Debt – implementation of ESA 2010 Eurostat 2014:

This is a detailed presentation of rules and procedures for the implementation of the European System of Accounts. It presents statistical methodologies and practices that allow EU member countries to estimate their debt and deficit, among other fiscal aggregates.


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