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...
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,...
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...
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 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...
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...
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...
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,...
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...
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 purpose of a Value for Money (VfM) assessment is to indicate if...
The assessment of the Value for Money (VfM) of the project can be revisited in the Structuring Phase. Until then, the risk allocation mechanisms may still be altered with potential consequences for the VfM conclusions.
However, it is good practice to produce a confident evaluation of VfM during the...
The VfM analysis compares the relative merits of PPP procurement against one or more other procurement routes, usually traditional public finance. This can be done using quantitative analysis, qualitative analysis, or both. Some frameworks focus on quantitative analysis, requiring a comparison of...
The Value for Money (VfM) analysis indicates how the PPP alternative compares to traditionally procured infrastructure, not only in terms of the associated fiscal costs but also in terms of the net economic benefit of the project. The assessment also incorporates qualitative aspects of this...
The procurement strategy determines how the private sector partner will be selected, and it focuses on developing an approach to procurement that helps obtain the best VfM. So, when actual alternatives are legally feasible, the project team should search for a strategy capable of creating the...
Chapter 2 (section 1.7.5) introduced some of the key points generally considered as decision drivers for governmental departments responsible for making the procurement decision. These decision drivers are often translated into national PPP frameworks. As introduced in chapter 1, having policy...
The next phases of the PPP process can be as demanding and challenging as the Appraisal Phase. They are multidisciplinary and profoundly interactive, and the natural interests surrounding large infrastructure projects tend to create a difficult decision environment. Thus, as the Appraisal Phase...
The report must present the assumptions, discussions, and conclusions of the whole feasibility exercise presented in this chapter. Therefore, a typical table of contents for the appraisal report will include the following:
Executive summary of the conclusions;
Need and options analysis, policy...
The appraisal exercise, reflected in the appraisal report, should recommend one of the following four decisions to be made by the governmental body charged with making the final green light decision or procurement decision.
The project should be procured as a PPP;
The project creates economic...
At the end of the Appraisal Phase, a considerable amount of the technical work required for a thorough preparation of a PPP project will have been done. In fact, this work sets the stage for the structuring of the project and, indeed, for several aspects of the procurement process and contract...
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,...
