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PPP TOOLKIT for Improving PPP
Decision-Making Processes
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Sector: State Highway  |  Module 2: Work through the PPP process

Preliminary analysis and checks of the selected project

Individual projects can be selected for further analysis from the set of possible projects identified in the strategic plan. The PPP process for individual projects begins from this stage.

Selected projects that might become PPPs should be analysed for their quality as a project and checked for their suitability to being developed as a PPP:

Pre-feasibility analysis is a necessary stage in the evaluation of an individual PPP project.

The PPP suitability analysis checks for the presence of certain conditions in the supporting environment (such as legal, institutional and market capacity) that should be in place for a PPP to be successful. The purpose is to weed out poorly suited projects early, before more resources are used on developing them as PPPs. The main tool for this is the Suitability Filter. If a project achieves a satisfactory result in the Suitability Filter then it can proceed to a standard pre-feasibility analysis of the project itself.

The Suitability Filter is a crucial gateway to the PPP pipeline. If the outcome of the Suitability Filter is that the project is unlikely to be well suited to development as a PPP then the project should exit the PPP process. The project might be redesigned on the basis of the findings and re-appraised for its PPP suitability. Alternatively, the project may still be developed through the public-sector route but it would not be appropriate to use any more of the limited resources available for PPP development. The Project Officer might then take another potential project from the strategic plan and test that one for its PPP suitability.

If either public or private options are available for procurement then it will often make sense to carry out the pre-feasibility analysis first, as some of the information discovered in the study may be useful for answering questions in the Suitability Filter.

Once the pre-feasibility and PPP suitability analysis have been done the results are summarised in a Pre-feasibility Report <link>.

In cases where pre-feasibility analysis and the Suitability Filter support a decision to proceed with PPP development the project would continue to   Readiness Check 1. If the Readiness Check shows the project is ready and suited to development as a PPP it would proceed to the more detailed analysis in Phase 2, beginning with the Full Feasibility Study.

 

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