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WorksheetsChap4. Appraisal
Total questions: 24
Worksheet time: 24mins
Name
Class
Date
1.
Which is an objective of the Appraisal Phase in the PPP Process?
a)
a. Determine a public need for a service
b)
b. Determine if a project should be procured through a PPP
c)
c. Prioritize projects through a preliminary economic analysis
d)
d. Structure and draft the request for qualifications and proposals
2.
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
a)
a. 1, 2, 3
b)
b. 1, 2, 4
c)
c. 1, 3, 4
d)
d. 2, 3, 4
3.
Which statement about the technical requirements produced during the Appraisal Phase is NOT true?
a)
a. Includes project design and construction requirements
b)
b. Focused on outputs
c)
c. Includes performance requirements
d)
d. Detailed construction specifications should be included for complex technical projects
4.
Which is generated by incorporating risk allowances into estimated costs?
a)
a. Expected value of costs
b)
b. Most likely costs
c)
c. Best case costs
d)
d. Base line costs
5.
What element of the preliminarily PPP contract structure defines whether a project is a user-pays or government-pays PPP?
a)
a. Payment mechanism
b)
b. Revenue regime
c)
c. Risk allocation matrix
d)
d. Project design
6.
Which financial assessment shows the public sector cash flows for a project under PPP delivery in comparison to traditional delivery?
a)
a. Commercial feasibility
b)
b. Economic feasibility
c)
c. Value for Money
d)
d. Fiscal feasibility
7.
Which macroeconomic assumption in the financial model data can be used to estimate the minimum expected return required by equity investors?
a)
a. General inflation
b)
b. Relative inflation
c)
c. Risk-free interest rate
d)
d. Exchange rate
8.
Which is used to assess commercial feasibility from the investors’ perspective?
a)
a. Net present value of the equity cash flows and internal rate of return of the equity cash flow
b)
b. Stability of project revenues
c)
c. Ability of shareholders to provide collateral security
d)
d. Ratio between the cash resources generated by the project and the total amounts required to service debt
9.
Which describes a ‘over-feasible’ project?
a)
a. Projected revenue is expected to be sufficient to meet the commercial feasibility criteria
b)
b. Expected revenue is insufficient to verify that the project is feasible from a commercial perspective
c)
c. Able to generate inflows much higher than those required to be commercially feasible
d)
d. Proposed structure of government payments exceeds cover ratio requirements
10.
Which is an appropriate output of the commercial feasibility assessment for an over-feasible User-pays PPP?
a)
a. An estimate of the increase in contract term or user charges required to take advantage of the over-feasibility
b)
b. An estimate of the level of financial support required to achieve a bankable project
c)
c. An estimate of grant financing or supplementary service payments required
d)
d. An estimate of potential payments to the procuring authority
11.
Which statement about market sounding is true?
a)
a. Participation in the process should offer advantages in the subsequent procurement process
b)
b. The process should leave a clear audit trail of all the feedback provided by the private sector
c)
c. Sounding should happen at the start of the Appraisal Phase
d)
d. Only certain aspects of the project should be sounded
12.
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
a)
a. 1, 2, 3
b)
b. 1, 2, 4
c)
c. 1, 3, 4
d)
d. 2, 3, 4
13.
Which aspect of PPP feasibility is examined by comparing the contract liabilities and the total projected tax revenue per year of the contracting government?
a)
a. Fiscal
b)
b. Economic
c)
c. Commercial
d)
d. Social
14.
For accounting purposes, which statement is true under International Public Sector Accounting Standard (IPSAS) 32?
a)
a. User-pays PPP are not regarded as public assets
b)
b. When more than 50% of revenue comes from users, a user-pays PPP would not be regarded as a public asset
c)
c. When a majority of risks are born by the public partner, the asset will be regarded as a public asset
d)
d. When the public party controls the asset it will be regarded as a public asset
15.
What is the first step in the process of assessing environmental feasibility?
a)
a. Thorough due diligence effort to identify, describe and quantify environmental impacts of the project
b)
b. Obtain the environmental permits and approvals needed for construction
c)
c. Identification of all relevant legal and regulatory aspects
d)
d. Definition of a strategy to mitigate the most significant effects of the project
16.
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?
a)
a. Economic
b)
b. Commercial
c)
c. Social
d)
d. Environmental
17.
Which feasibility exercise should address the availability of the land or any existing asset?
a)
a. Environmental
b)
b. Legal
c)
c. Social
d)
d. Financial
18.
What is the purpose of a Value for Money assessment?
a)
a. To examine the ability of the government to accommodate a project within current and future budget constraints
b)
b. To assess whether expected revenues, under a reasonable scenario, are considered sufficient to cover all expected costs
c)
c. To indicate if a project would be more efficiently implemented under a PPP scheme or under some other procurement method
d)
d. 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
19.
In a quantitative Value for Money analysis, which is NOT an appropriate adjustment to the raw Public Sector Comparator?
a)
a. Incorporate the costs of risks that the government retains in a traditional procurement
b)
b. Incorporate differences in socio economic benefits
c)
c. Incorporate all non-fiscal revenues
d)
d. Incorporate tax differences
20.
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
a)
a. Only 1 is true
b)
b. Only 2 is true
c)
c. Both 1 and 2 are true
d)
d. Neither 1 or 2 is true
21.
Which procurement process does NOT require short-listing?
a)
a. Restricted procedure
b)
b. Negotiated process
c)
c. Dialogue process
d)
d. Open tender
22.
Which statement about the project management plan is true?
a)
a. Preliminarily designed at the end of the Appraisal Phase
b)
b. Incorporates a realistic schedule only up until the end of the Structuring Phase
c)
c. Provides an input to the green light decision at the end of the Appraisal Phase
d)
d. Only identifies government resources required
23.
Which element of an Appraisal Report should present a summary of the Cost-Benefit analysis?
a)
a. Value for Money assessment
b)
b. Commercial feasibility
c)
c. Economic analysis
d)
d. Affordability
24.
Which decision is made, or confirmed, at the end of the appraisal phase?
a)
a. To launch the tender
b)
b. To procure as a PPP
c)
c. To enter into a contract
d)
d. To select a bidder
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