The purpose of the economic analysis is to assess which project delivery option will create the largest net economic benefit to the state. This assessment involves the measurement of the costs and benefits of a project delivery option to the state economy as a whole and comparison of the net economic benefit of each project delivery option.
A financial analysis is used to determine the commercial viability (profitability) of a project delivery option. In particular, the financial analysis will indicate, inter alia, the level of cost recovery, the ability to repay borrowings and the ability to make a return on the investment.
The financial and economic analyses undertaken during this preliminary assessment stage will be further developed in the public private partnership business case development stage (section 3 refers).
Agencies should refer to the Queensland Government Project Assurance Framework, the Queensland Treasury Draft Cost-Benefit Analysis Guidelines10 and the Draft Queensland Treasury Business Case Guidelines for guidance on economic and financial analyses. Queensland Treasury can provide technical assistance to agencies in undertaking economic and financial analyses.
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10 http://www.treasury.qld.gov.au/office/knowledge/docs/project-eval/index.shtml