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3AProject Identification and PPP Screening - Appendix A: Screening Report Example of Outline

I. Executive Summary and Recommendation

This item will include the final conclusion concerning the project’s adequacy as well as a description of the appropriateness of moving forward to the next stage (full appraisal). Alternatively, in the case of insufficient available information, a list of further investigations and reports should be clearly stated and recommended.

II. Project Description

This item includes a description of the project that should cover aspects such as the sector, technical/physical conditions (for example, distance involved for transport, type of surface for buildings, and so on), site, geographical area, affected/benefited population, and so on.

III. Need/Benefits of the Project and Suitability of the Proposed Solution. Economic Feasibility.

The following aspects and questions should be covered;

  • Description of the need that the project helps address;
  • The contribution of the project to the government’s general goals and policy;
  • Description of how optimal the proposed solution is when there are various technical alternatives/solutions for the need, or a description of the reasons for making that assessment if it is the case;
  • Description of benefits, including some objective indicators of benefits (demand in transport, number of homes served with water supply, and so on;
  • Description of any relevant indirect costs; and
  • If a cost-benefit analysis (CBA) and/or multi-criteria analysis has been conducted, this should be clearly stated. If such analyses were not conducted and are considered relevant, this should be advised in this report and/or in the “readiness” section.

IV. PPP Suitability

The following questions should be included;

  • Brief description of the PPP, that is, the basic concept of who would be assigned to which functions, what the payment mechanism would look like, and so on;
  • Affordability: Can the project be self-financed under a user-paid PPP model or is there a need for public contributions?
  • Does the project have any significant risks or uncertainties that are not manageable by a partner? If this is the case, does it make sense for the public sector to assume those risks?
  • Can the project be accommodated within the “legal” framework?
  • Is the project large enough to justify the implicit transaction costs?
  • Would there be investor market appetite for the project? Does the private sector have the necessary capabilities to face these challenges?
  • Does the investment make sense for a single operator to assume the responsibilities and risk (unitary project)? and
  • Are the stakeholders and their interests well surveyed and understood?

V. Affordability

This should include the following aspects;

  • The estimated capital expenditures (Capex) and operational expenditures (Opex);
  • The estimated revenues, if applicable;
  • If it is necessary to allocate public resources, are they enough to afford the compensations/contributions?
  • Are there any cost savings/redundancies? and
  • Are any proposed user fees affordable by users? Are any government payments, or support, affordable by the government?

VI. Project Readiness and Status

It is not necessary to describe these aspects in depth since many of them may be solved through the Appraisal or Structuring and Construction Phases. It is important to highlight any aspects that imply significant challenges or which may significantly postpone the project’s delivery (as identified in the preliminary risk assessment).

In any case, all relevant legal issues should be included in a “legal due diligence” report to be developed in the full Appraisal Phase unless due diligence is to be carried out before the full appraisal is recommended.

Examples of uncertainty regarding constraints and dependencies include (this is not an exhaustive list):

  • Land availability;
  • Level of demand (mainly in greenfield projects);
  • Environmental permits;
  • Other permits;
  • Availability of information for the project’s appraisal;
  • Political interference;
  • Stakeholder negative aspects (if applicable); and
  • Other legal or regulatory uncertainties.

VII. Sufficient Information

  • The report should briefly describe the information and data analyzed;
  • If information is insufficient or results and conclusions are not clear, a description of any information and data weakness should be provided. This should include recommendations, if necessary, for further analysis or corrections by the promoting department as well as expert insight or further research and time for the public sector to finish the screening; and
  • Whether the documents and supporting information are satisfactory and the conclusions are positive with respect to the screening test.

VIII. Next Steps: Project Management Plan

In the case of recommending moving forward to the next stage (appraisal), a list of tasks to be carried out and a schedule that provides an estimated timetable should be put forward. Internal capabilities for further developing the project should be analyzed in order to design the project team and set up the governance strategy. Section 2.11 describes this analysis.

If approval is given to move forward with the appraisal, the first step will be to select advisors or to establish the project team and the project governance.