Sensitivity Analysis of the Impact of Critical Risks on Financial Feasibility in Public-Private Partnership Projects

چکیده مقاله

Delivering successful and sustainable projects is of utmost importance for societies. While there are several traditional project procurement methods, Public-Private Partnership is known to be an efficient method to deliver urban projects. However, it is crucial to evaluate financial feasibility of such projects in different economic situations, especially because these projects typically have a long-term contract associated with several uncertainties and risks. In this research, a framework has been developed that, first, performs financial evaluation and then analyzes the sensitivity of project economics (e.g., Net Present Value and Internal Rate of Return) with respect to major country risks, such as inflation and exchange rate. The proposed framework was then employed to evaluate the financial attractiveness of a water desalination and transmission project in Iran. Because of the project revenue adjustment model, by changing the inflation rate between 5% and 45%, the project is still viable. In addition, since the water unit price is also a function of exchange rate, the volatility of such rate does not negatively impact the financial feasibility of the project. To summarize, the results confirm the importance of sensitivity analysis for proposing a reliable and successful project procurement method.

دریافت لینک دانلود مقاله