Guideline for the revisal of economic feasibility studies of PPP-projects

Project name:

Development of a guideline for the revisal of economic feasibility studies of PPP-projects in the public real estate sector

Initiator:

Ministry of Finance and Ministry of the Interior NRW, PPP Task Force NRW

Time period:

2005 – 2007

Project description:

The PPP Task Force North Rhine Westphalia (NRW) is the central unit of the Federal State NRW concerning Public Private Partnership (PPP) and responsible for mandate experts with the development of guidelines and studies in important fields of interest. The aim is to bring transparency in the process of PPP as a procurement alternative.

PPP-Projects in general are loan like legal transactions and therefore an approval is required. Economic feasibility studies are complex contractual arrangements and implicate a long-term contractual relation. Therefore revisal of them is a challenge for supervision of local authorities by the state.

Results:

In 2005 the Bauhaus-University Weimar, the PPP Task Force NRW and the Ministry of the Interior NRW assisted the local authorities with developing a guideline for the revisal of economic feasibility studies of PPP-projects. The guideline raised the chance to complete the revisal fast, efficient and appropriate as well.

The so called 'Plausibility check' is defining the general framework for the implementation of PPP-projects on the municipally level. It includes standards for the procedure and revisal of economic feasibility studies of PPP-projects.

Therefore checklists in step with actual practice were created, which allow plausibility checks of the calculations. Furthermore an explanation of the concerned elements of PPP economic feasibility studies and a description of effects on different project scenarios is included.

Content:

  • Basic principles and legal setting of PPP
    • Tasks of the local authorities (revisal responsibility)
      • Integration of the local authorities within the framework of economic feasibility studies
        • Checklists for informative discussions in the context of temporary economic feasibility studies and plausibility checks of the final economic feasibility study
          • General requirements for the approval of economic feasibility study
            • Revisal of the calculation methods of economic feasibility study
              • Consideration of risks
                • Comparison between safety structures of Project Finance and Forfeiting Model as the both established PPP finance structures in Germany

                The guideline for the revisal of economic feasibility studies is downloadable at this link.

                Contact: Prof. Dr. Hans Wilhelm Alfen, Dirk Daube