Along with the technical feasibility study, the legislative and regulatory framework of a project may require the public entity/private partner to undertake Environment Impact Assessment (EIA) and Social Impact Assessment studies prior to according approvals. Approvals may pertain to project development/approvals for sanction of funds. For instance, multi-lateral agencies that lend to infrastructure projects usually review the impact of the project on the environment and society. Hence, it may be required to conduct Environment Impact Assessment (EIA) & Social Impact Assessment (SIA) studies simultaneously with or immediately after the technical feasibility study in accordance with the prevailing statutes.
| Impact Assessments • Environment Impact Assessment (EIA): EIA studies are primarily based on the procedures stipulated by Ministry of Environment and Forests, Government of India (as per the EIA Notification No. S.O.1533dated September 14, 2006). It involves screening of projects, scoping of environmental impact assessment, environmental clearance, and environmental monitoring and compliance during the construction and operation phases of the project. At the same time, EIA should be consistent with the environmental safeguard policies of funding agencies such as the World Bank and the Asian Development Bank (if lending from these agencies is envisaged). For instance, the screening criteria for infrastructure projects defined by GoI do not entail environmental clearance for water supply and sanitation projects. Such projects, therefore, do not require preparation of environmental impact assessment. However, the environmental safeguard procedures of funding agencies like the World Bank require 'Environmental Due Diligence' or 'Environmental Assessment/Analysis' based on the nature, magnitude and significance of the project's environmental impact. Stakeholder consultations and review of legislations pertaining to environmental safeguards should be carried out as part of an EIA study. • Social Impact Assessment: SIA includes the processes of analysing, monitoring and managing the intended and unintended social consequences, both positive and negative, of planned interventions (policies, programmes, plans, projects) and any social change processes invoked by those interventions. Its primary purpose is to bring about a more sustainable and equitable biophysical and human environment' - International Principles for Social Impact Assessment |
| Technical Feasibility Report - Bidders' & Lenders' Perspective • Lenders' Perspective: The validation of the technical feasibility report is critical to assessing the commercial viability of a project, for a lender. The costs and revenue estimates provided in the technical feasibility report serve as inputs to carry out the financial feasibility analysis. When a project is awarded to any bidder, lenders are not interested merely in scrutinising the future cash flows of the project, but also the findings of the technical feasibility study, which details the cost/revenue streams and many other underlying assumptions in the financial model. • Bidders' Perspective: The validation of the technical feasibility report is also critical to assessing the returns that a bidder can expect from the project. Despite the availability of a technical feasibility report prepared by the public entity, bidders usually carry out their own technical feasibility for the project to assess the correctness of project costs, assumptions made, technology options recommended, designs prescribed and the projections/estimates arrived at with respect to the project. |
Sometimes, the public entity may not have the required expertise on its own, to carry out the technical studies which are required for project development. In such cases, it may be useful to select an expert consultant/advisor to carry them out. The public entity needs to exercise due diligence while drafting the Terms of Reference (TOR) and scope of work section of the bidding documents. The TOR of the consultant need to clearly set out the roles and responsibilities, the type, extent and tenure of services required to be performed.