Financial Risk Assessment of Public Private Partnership Project

10 Pages Posted: 25 Apr 2019

See all articles by Aanand Singh

Aanand Singh

University of Mumbai, Sardar Patel College of Engineering, Students

Prabhat Shrivastava

Padeco India Pvt Ltd

A. R. Kambekar

SPCE

Date Written: April 10, 2019

Abstract

Public Private Partnership (PPP) is one of the significant ways of financing infrastructure development in countries. Financial feasibility is a prerequisite for any financial assistance. Financial feasibility is required for an assessment of financial viability and profitability. The major risk associated with PPP Projects are debt repayment risks and revenue risks. The author presents a pragmatic sensitivity analysis for an assessment of financial feasibility for any PPP project, as affected by toll structure, traffic, inflation rate, debt-equity, interest rate on debt, concession period, maintenance and operation costs and government grants. This approach considers the cost of construction, maintenance and operation to run a sensitivity analysis for financial risk assessment. Financial viability factors have been considered for developing a risk profile, which in turn gives a detailed result. A realistic case study of Thane-Borivali highway tunnel project has been considered for showing the approach more precisely.

Keywords: Public Private Partnership (PPP), Scenario analysis, Sensitivity analysis and DSCR (Debt Service Coverage Ratio)

Suggested Citation

Singh, Aanand and Shrivastava, Prabhat and Kambekar, A. R., Financial Risk Assessment of Public Private Partnership Project (April 10, 2019). Proceedings of Sustainable Infrastructure Development & Management (SIDM) 2019, Available at SSRN: https://ssrn.com/abstract=3369415 or http://dx.doi.org/10.2139/ssrn.3369415

Aanand Singh (Contact Author)

University of Mumbai, Sardar Patel College of Engineering, Students ( email )

Mumbai
India

Prabhat Shrivastava

Padeco India Pvt Ltd ( email )

India

A. R. Kambekar

SPCE ( email )

MUMBAI
MUMBAI
MUMBAI, 400058
India

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