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WorksheetsChapter 3. IP Session
Total questions: 25
Worksheet time: 13mins
Why is a preliminary analysis performed before the Appraisal Phase in the PPP Process?
There may not be time to complete a full analysis in the Appraisal Phase
To avoid the risk of sinking resources into the analysis of non-feasible projects
To convert weak projects into valuable or optimal solutions
To confirm that a PPP will deliver the best Value for Money
Which is NOT a task within the Project Identification and Screening Phase of the PPP Process?
Determine if a project is practical to procure as a PPP
Use a Cost Benefit Analysis to ensure a project has sufficient economic merit to proceed
Determine if a project is suitable for delivery as a PPP
Select the preferred technical solution
Which of the following statements about a government’s project pipeline is true?
1) A government’s project pipeline should only contain its major PPP projects.
2) Unsolicited proposals, regardless of procurement method, should not be included in the project pipeline.
Only 1 is true
Only 2 is true
Both 1 and 2 are true
Neither 1 or 2 is true
Which statement about the prioritization and selection of projects is true?
An individual user-pays PPP project that is economically and technically feasible should be prioritized
Government-pays PPP projects should be prioritized before user-pays PPP projects
Projects that produce the highest benefit for society should be prioritized
User-pays PPP projects should be prioritized before government-pays PPP projects
Using the Cost-Benefit Analysis technique, which is the best technical solution for a project?
Lowest Net Present Value in economic terms or lowest economic Internal Rate of Return
Highest Net Present Value in economic terms or highest economic Internal Rate of Return
Lowest Net Present Value in economic terms or highest economic Internal Rate of Return
Highest Net Present Value in economic terms or lowest economic Internal Rate of Return
Which is a true statement about the Cost-Effectiveness Analysis technique used for option analysis and selection?
It uses monetary terms as the denominator
It is the most appropriate technique for the economic feasibility assessment
It divides the total cost of a project by the total expenditure to produce a cost effectiveness ratio
The output is a non-valued ratio which leaves a subjective judgement
Identify the missing words in the following sentence:
Multi-Criteria Analysis uses [ ? ] criteria in the evaluation of an alternative
only quantitative
only qualitative
both quantitative and qualitative
monetary values for all
What is the purpose of the technical outline of a project?
Analyse technical options to enable selection of the most appropriate solution for a project
Provide a detailed description and set of requirements for the most important aspects of a project to clarify the technical scope
Enable a government to choose the right alternatives when there are numerous economically and technically feasible projects to address public needs
Confirm that the project solution selected provides Value for Money to society in socio-economic terms
Why are constraints and dependencies part of the information requirements in the Project Identification and PPP Screening Phase?
Legal and regulatory issues must be resolved before a project moves forward to appraisal
A project containing constraints should not move forward to appraisal
A project containing dependencies is not suitable as a PPP
Potential difficulties or obstacles may influence a project moving forward to appraisal
Which of the following statements about Cost-Benefit Analysis are true?
1) CBA measures the relationship between the value of resources used by a project, and the value of resources produced by a project
2) CBA should be applied to all projects, regardless of the procurement method
Only 1 is true
Only 2 is true
Both 1 and 2 are true
Neither 1 or 2 is true
Which describes “opportunity costs” in a Cost-Benefit Analysis?
The value of benefits or costs where no competitive or explicit market prices exist
The best alternative use of assets or capital
Those that affect third parties beyond the population to which the project is addressed in the first instance
The cost of the investment itself
Why are benefits particularly challenging to deal with in a Cost-Benefit Analysis?
All benefits must be tangible
All benefits must be discounted for the effect of taxes
Only direct benefits are considered
All benefits have to be quantified
In which circumstance may the eNPV NOT be the most appropriate performance indicator?
The project may become a PPP and therefore require a different discount rate
The best technical solution has already been identified
Alternatives have significant differences in terms of resource consumption
The project generates or is capable of producing higher benefits than costs
Which describes a ‘sunk cost” in socio-economic analysis?
An estimated value as no competitive or market price exists
A previously made investment that cannot be recouped
An adjustment made for an externality
An adjustment made to reflect taxes as public revenue
What is the expected value of a risk?
The financial impact of a risk occurring
The cost of mitigation measures put in place to reduce the likelihood of a risk occurring
The cost of mitigation if a risk occurs
The product of the likelihood of the risk occurring by the size or amount of the outcome
What does ‘Scoping the PPP project’ mean?
Screen the project for PPP suitability
Test the project for economic sense and soundness
Define the work that must be done by the future private partner to deliver the project
Conduct a preliminary financial analysis to pre-test affordability
Which question must be answered before a project can be screened for PPP potential?
Are there constraints on government financing?
Can the project be funded?
Are innovative structures available that can make the project affordable if delivered as a PPP?
Is it a User-pays PPP or a Government-pays PPP?
What should the project management plan, produced at the end of the Screening Phase, cover?
1) The PPP pipeline in which the project will be included
2) Target dates, estimated intermediate dates and the duration of the next phase
3) First draft of the overall work program for the whole process
4) Strategy to deal with identified constraints and dependencies
1, 2, 3
1, 2, 4
1, 3, 4
2, 3, 4
Which is an external stakeholder in the PPP Process?
Government legal staff
PPP Unit
Potential investor
Consultant hired by the public sector
Which audience should be targeted by the communication strategy during the Screening Phase?
General public
All stakeholders
The press
Potential proponents
Which of the following statements about the role of the Project Leader during the Appraisal Phase are true?
1) An experienced external advisor should be appointed as Project Leader to lead the appraisal.
2) The Project Leader is responsible for managing the decision-making processes between the procuring authority and its private partners.
Only 1 is true
Only 2 is true
Both 1 and 2 are true
Neither 1 or 2 is true
Which is an appropriate reason for hiring advisors as part of the project team?
The procuring authority or PPP Unit requires expertise in screening a project for PPP suitability
The public sector may not have resources with the necessary skills of a Project Leader
There are insufficient internal capacities within the procuring authority to perform the full appraisal
The procuring authority requires third party approval of advisers’ invoices
For a PPP with tight time constraints, which would be the BEST approach to the procurement and selection of advisors?
Separate procurement and contracts
A single advisory contract to cover all areas of work
Contract only for the Appraisal Phase
Do not appoint advisors
Which is NOT required in a Screening Report?
Outline of the project management plan
Affordability: Economic and financial pre-analysis
Needs/benefits of the project and suitability of the solution proposed
Committed staff and appointed advisors
Which is an appropriate recommendation at the end of the Project Identification and Screening Phase if there are uncertainties remaining about a PPP project?
Move on and resolve any uncertainties in the Appraisal Phase
Appraise the project for traditional procurement methods
Further analysis by the procuring authority before moving to the next Phase
Remove the project from the project pipeline
