The financial viability of a project could be optimised by analysing various options such as change of scope, type of PPP structure adopted, duration of the PPP arrangement, increased tariff, provision of Government support in terms of Viability Gap Funding or other grants, unbundling a project, Government guarantees for transferred risk, risk transfer to the Government, Government inputs in operations at subsidised rates etc.
More on optimising financial viability through funding arrangements is discussed in the Module 12 on pre-procurement activities.
Financial outcome indicators in each of the identified cases need to be calculated and compared. Value Proposition of Projects under each of the identified options may be calculated. The option that provides the highest value proposition and best financial outcomes may be the optimal structure for the project.
A few innovative options that may be considered to optimise the financial viability of the project are:
2. Transfer of development rights
3. Development of non-project specific infrastructure to support the main project like tourism, commercial development, etc.