11.3 - Stages of analysis
- 11.1 - Evaluation of private sector financing and road tolling
- 11.2 - Method of evaluation
- 11.3 - Stages of analysis
- 11.4 - Do minimum
- 11.5 - Travel impacts
- 11.6 - Costs
- 11.7 - Benefits
- 11.8 - Period of analysis
- 11.9 - Financial evaluation
- 11.10 - Cost benefit evaluation
- 11.11 - Alternatives and options
- 11.12 - Sensitivity and risk analysis
- 11.13 - References
11.3 - Stages of analysis
Stages
The following are essential steps for consideration of a road tolling project:
- ensure that the need for the project and the benefits to the community have been identified and maximised
- explore alternative solutions, including non-capital options
- identify risks and returns and determine appropriate allocation among relevant parties
- establish the nature and extent of community support likely to be required.
Concession agreements
The purpose of private sector projects is to involve private sector funds in community projects. When considering private sector financing of a project, a concession agreement, the following steps should be taken:
- ensure that any private sector involvement is commercially feasible and offers a more cost-effective solution that the traditional public sector approach
- only private sector options that reduce public sector costs should remain in the final set of options under consideration
- ensure that any commercial arrangement with the private sector is appropriate and that any probity and accountability requirements have been met
- identify the degree to which risks can be shared with, or assumed by, private sector participants.
Options with private sector financing can lead to an earlier start date, depending on the ability of the private sector to raise funds. Also, there is usually an incentive for early completion of privately financed projects since revenue starts to accrue upon completion of work.
Concessionaries may propose arrangements where the government provides substantial initial funding for which repayments are made over time, generally from the project income. This type of arrangement is, in effect, a loan and should be identified.
