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WorksheetsChapter 4. AP Session
Total questions: 25
Worksheet time: 13mins
Which is an objective of the Appraisal Phase in the PPP Process?
Determine a public need for a service
Determine if a project should be procured through a PPP
Prioritize projects through a preliminary economic analysis
Structure and draft the request for qualifications and proposals
Which key elements are progressively detailed through feasibility assessments in the Appraisal Phase?
1) Technical requirements
2) Contract pre-structure
3) Qualification criteria
4) Financial model
1, 2, 3
1, 2, 4
1, 3, 4
2, 3, 4
Which statement about the technical requirements produced during the Appraisal Phase is NOT true?
Typically composed of a project design and construction requirements
Focused on outputs
Typically composed of performance requirements
Detailed construction specifications should be included for complex technical projects
Which is generated by incorporating risk allowances into estimated costs?
Expected value of costs
Most likely costs
Best case costs
Base line costs
What element of the preliminarily PPP contract structure defines whether a project is a user-pays or government-pays PPP?
Payment mechanism
Revenue regime
Risk allocation matrix
Project design
Which financial assessment shows the public sector cash flows for a project under PPP delivery in comparison to traditional delivery?
Commercial feasibility
Economic feasibility
Value for Money
Fiscal feasibility
Which macroeconomic assumption in the financial model data can be used to estimate the minimum expected return required by equity investors?
General inflation
Relative inflation
Risk-free interest rate
Exchange rate
Which of the following statements about the technical feasibility assessment are true?
1) Future prospective bidders should be relied upon to do their own assessment of the technical risks associated with a project.
2) If technical risks can be adequately described, quantified and addressed they should be allocated to the government in the contract structure to incentivize performance of the private partner.
Only 1 is true
Only 2 is true
Both 1 and 2 are true
Neither 1 or 2 is true
Which is used to assess commercial feasibility from the investors’ perspective?
Net present value based on the discounted cash flow and internal rate of return of the equity cash flow
Stability of project revenues
Ability of shareholders to provide collateral security
Ratio between the cash resources generated by the project and the total amounts required to service debt
Which describes a ‘over-feasible’ project?
Projected revenue is expected to be sufficient to meet the commercial feasibility criteria
Expected revenue is insufficient to verify that the project is feasible from a commercial perspective
Able to generate inflows much higher than those required to be commercially feasible
Proposed structure of government payments exceeds cover ratio requirements
Which is an appropriate output of the commercial feasibility assessment for an over-feasible User-pays PPP?
An estimate of the increase in contract term or user charges required to take advantage of the over-feasibility
An estimate of the level of financial support required to achieve a bankable project
An estimate of grant financing or supplementary service payments required
An estimate of potential payments to the procuring authority
Which statement about market sounding is true?
Participation in the process should offer advantages in the subsequent procurement process
The process should leave a clear audit trail of all the feedback provided by the private sector
Sounding should happen at the start of the Appraisal Phase
Only certain aspects of the project should be sounded
Which of the following represent the minimum aspects that must be input to the Cost-Benefit Analysis during the Appraisal Phase?
1) Detailed description of the project scope
2) Evaluation of the users’ ‘willingness to pay’
3) The technical specifications
4) Current and future budget constraints
1, 2, 3
1, 2, 4
1, 3, 4
2, 3, 4
Which aspect of PPP feasibility is examined by comparing the contract liabilities and the total projected tax revenue per year of the contracting government?
Fiscal
Economic
Commercial
Social
For accounting purposes, which statement is true under International Public Sector Accounting Standard (IPSAS) 32?
User-pays PPP are not regarded as public assets
When more than 50% of revenue comes from users, a user-pays PPP would not be regarded as a public asset
When a majority of risks are born by the public partner, the asset will be regarded as a public asset
When the public party owns the asset it will be regarded as a public asset
What is the first step in the process of assessing environmental feasibility?
Thorough due diligence effort to identify, describe and quantify environmental impacts of the project
Obtain the environmental permits and approvals needed for construction
Identification of all relevant legal and regulatory aspects
Definition of a strategy to mitigate the most significant effects of the project
Which feasibility exercise should address the question of whether a project will significantly alter the economic structure of the local economy or generate any significant change in relative prices?
Economic
Commercial
Social
Environmental
Which feasibility exercise should address the availability of the land or any existing asset?
Environmental
Legal
Social
Financial
What is the purpose of a Value for Money assessment?
To examine the ability of the government to accommodate a project within current and future budget constraints
To assess whether expected revenues, under a reasonable scenario, are considered sufficient to cover all expected costs
To indicate if a project would be more efficiently implemented under a PPP scheme or under some other procurement method
To assess the social cost-benefit equation, in which the benefits for society have to be higher than the costs to the public for a project to be worthy of proceeding
In a quantitative Value for Money analysis, which is an appropriate adjustment to the raw Public Sector Comparator?
Incorporate the costs of risks that the government retains in a traditional procurement
Incorporate efficiency gains generated by private sector involvement
Remove all non-fiscal revenues
Remove the tax effect
Which of the following statements about qualitative Value for Money analysis are true?
1) Conventional procurement delivers greater non-financial benefits than PPP procurement
2) Problems associated with involving a private sector player in a PPP contract should be highlighted
Only 1 is true
Only 2 is true
Both 1 and 2 are true
Neither 1 or 2 is true
Which procurement process does NOT require short-listing?
Restricted procedure
Negotiated process
Dialogue process
Open tender
Which statement about the project management plan is true?
Preliminarily designed at the end of the Appraisal Phase
Incorporates a realistic schedule only up until the end of the Structuring Phase
Provides an input to the green light decision at the end of the Appraisal Phase
Only identifies government resources required
Which element of an Appraisal Report should present a summary of the Cost-Benefit analysis?
Value for Money assessment
Commercial feasibility
Economic analysis
Affordability
Which decision is made, or confirmed, at the end of the appraisal phase?
To launch a tender
To procure as a PPP
To enter into a contract
To select a bidder
