Implementing wastewater treatment projects through build–operate–transfer contracts

Abstract

This paper focuses on the initial assessment of wastewater treatment (WT) projects through Public Private Partnerships (PPPs). Due to the fact that the initial investment of a PPP-type WT project is too high and can be fi nanced by both the public and private sectors, crucial during the project’s feasibility stage is to estimate the partners’ funding rates. Herein, the fi nancial analysis that is included in the cost benefi t analysis methodology as well as the quantitative value for money assessment method are used, in order to introduce a new process that estimates the funding ratios of the partners. Specifi cally, the process calculates the upper and lower boundaries of the public and private sectors’ funding ratios in the initial investment, which include all the funding scenarios that are profi table for both partners. It applies mostly in the WT projects that are considered to be implemented through the build–operate–transfer contract type, which is probably the most commonly used type in PPPs. The new process is used in a WT project case study, in which alternative funding scenarios of the initial investment are examined and two specifi c funding scenarios are distinguished, which include all the possible funding ratio values by the public and the private parts. The process that is presented here can be a useful tool to decision makers, because it helps them to evaluate different funding scenarios of the initial investment and to select the most suitable in each case option, that will be profi table for both partners.