A. Financing the project by the state is less costly

The State is able to borrow at a cost lower than the cost incurred by the private sector, as the cost incurred by the State is the sovereign debt rate, while the cost of the private sector is the money cost average, including the debt cost and the capital cost. This idea is incorrect for the following reasons:

First: Assuming that the cost of the project is same in both cases.

Second: Not evaluating or considering the project risks (such as cost increase and implementation delay) which are not included in the sovereign debt costs and borne by the State.

Third: Not including the additional cost to be borne by the State as a result of increasing the size of its sovereign debt.

Fourth: Not taking into account the benefits and positives at the level of the whole economy, which are resulted from not waiting the availability of funds for the investment spending in the State public budget.