The Multi-Stage Feasibility Framework
Before a PPP project is approved for procurement, the sponsoring government agency must conduct a comprehensive, multi-disciplinary feasibility study. This study confirms that the project aligns with national strategic goals and is viable across several dimensions:
  1. Technical Feasibility: Engineering assessments confirming the physical viability of the design and site conditions.
  2. Commercial and Financial Viability: Financial modeling to prove the project generates a sustainable internal rate of return (IRR) for investors while remaining affordable for end-users.
  3. Environmental and Social Impact Assessment (ESIA): Measuring and mitigating ecological disruption and displacement of local populations.

The Public Comparator (Psc) Benchmark
Value for Money (VfM) in PPPs means that executing a project through a partnership yields a lower lifetime cost or higher quality of service compared to traditional public procurement. Governments measure this using a quantitative tool called the Public Sector Comparator (PSC).
                      [ Value for Money (VfM) Testing ]
     
     +-----------------------------------+     +-----------------------------------+

     |   Public Sector Comparator (PSC)  |     |         Proposed PPP Model        |
     |                                   |     |                                   |
     |   Base Public Construction Cost   |     |   Private Construction Cost       |
     |                +                  |     |                +                  |
     |   Public Operating & Maint. Cost  |  >  |   Private Operating & Maint. Cost |
     |                +                  |     |                +                  |
     |   Retained Risks Value            |     |   Transferred Risks Value         |
     +-----------------------------------+     +-----------------------------------+

If the total discounted lifetime cost of the PPP model is lower than the PSC benchmark, the project is approved for PPP procurement.
 
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