1. Introduction

Given the massive investments in infrastructure proposed by the Government and the thrust on PPP projects, it is crucial for the Government to justify every project in technical, financial, economic, social and environmental aspects. Infrastructure projects involve long gestation periods; once developed, the projects have a lasting impact on the lives of people. Therefore, conducting feasibility studies for a project is a necessary step in the project development process. Feasibility studies include assessing the technical, financial, and legal suitability of a project.

The do-ability of a project must be determined at the early stages of the project and technical feasibility studies enable the Government to justify the do-ability of the project from technology, environment, social and market perspectives. Technical feasibility studies are generally undertaken by the public entity once a project is identified and prior to project structuring stage. It is to be remembered that at this point, the public entity need not make a decision on the mode of implementation of the project. However, the studies need to be undertaken keeping in mind the possibility of implementation under a PPP framework.

Technical Feasibility Studies answer:

• What are the various engineering/design options and the optimum option?

• What is the cost associated with and service levels expected of the various engineering/design options?

• Which of the engineering/ design options would be amenable for implementation by the private sector?

• How does each of the options affect environment and the society?

• What could be the public entity's extent of involvement in land acquisition and associated infrastructure creation, such as connectivity, water supply, power, etc.

Usually, technical feasibility studies are carried out to review the possible engineering/design options for the project and involve an assessment of the option that is most sustainable and practical. It forms the basis on which, the public entity promoting the project makes a "go/no-go" decision to implement the project.

The public entity may either carry out the study on its own or hire a technical consultant to do so. Sometimes, the scope of work of the transaction advisor hired for the project would also include carrying out technical studies for the project. Annexure 5 of this module sets out an indicative checklist of steps/ activities that ideally form part of any Technical Feasibility Study.