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Sector: State Highway  |  Module 2: Work through the PPP process

Full feasibility study and PPP due diligence

Feasibility Study Report

The outputs of the full feasibility analysis should be drawn together into a Feasibility Study Report (FSR), which provides the PPP business case. If the feasibility study is supportive of the investment and procurement by PPP the FSR can then be presented to the relevant Appraisal / Clearance Authority for in-principle clearance.

The FSR summarises the results of the project feasibility analysis and PPP due diligence. It provides all the information that will be needed for a decision by the appraisal and clearance committees.

See Tools & Resources for standard FSR tables of contents.

At a minimum the FSR should contain summaries of the outputs of each component of the feasibility study described above. The contents in this list have been separated into two parts to emphasise the point that there should be a particular focus on the PPP aspects of the project. However, the contents of the actual FSR may be arranged differently.

The FSR should include the following:

  • Support and justification for the project – Results of the feasibility study providing justification for the investment:
    • Need for the project – gaps identified in the market analysis that would be filled by the project, policy objectives met by the project, alternatives considered
    • Description of the project, including definition of services / outputs it would provide, location, target user group, technologies to be employed, agencies involved and their responsibilities, project timeline, etc
    • Social and environmental assessments and planned impact mitigations
    • Technical description of infrastructure additions required for the project
    • Benefits and costs of the project and their distribution among key stakeholders, including social and environmental impacts
    • Summary of the financial viability of the project
    • Summary of economic appraisal (benefit / cost analysis)
    • Project implementation schedule
  • Support for procuring the project as a PPP – In addition to the general project feasibility results, the FSR should include results of the specific PPP due diligence analysis:
    • Identification of major project risks and their allocation between the public and private partners
    • Type of PPP proposed including description of likely finance structure
    • Requirement for government assistance to the project (eg VGF)
    • Value-for-money (VFM) analysis and result
    • Other due diligence assessments (legal, market sounding)
    • Capacity of sponsor to implement the PPP, plan for implementation and PPP management including capacity building and use of advisors, plan for meeting project development costs
  • A section summarising the justification for the PPP project

Projects that are applying for JnNURM funding are required to prepare a Detailed Project Report (DPR), which has similarities to the contents of a FSR. More information on JnNURM is available here.

 

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