Financial feasibility studies seen needed in Sri Lanka infrastructure projects
ECONOMYNEXT – Financial feasibility studies are needed apart from technical feasibility assessments in some of the Public-Private Partnerships projects under consideration in Sri Lanka, an official said.
Thilan Wijesinghe, chairman and acting chief executive of the newly created National Agency for Public-Private Partnerships, attached to the Ministry of Finance, said financial planning was important from the outset of a project.
Every Public-Private Partnership project has a cost to the state and must be subject to financial feasibility, he told a forum held by the Chartered Institute of Logistics and Transport on PPP opportunities in transport and logistics.
“Detailed financial feasibility studies are needed,” Wijesinghe said.
Many of the projects under the planned ‘Megapolis’ urban agglomeration scheme covering the capital Colombo and suburbs have had feasibility studies done, he noted.
It was also important to ensure equitable allocation of risk between the private sector and government, he said.
The finance ministry should also closely monitor the performance of projects, Wijesinghe said.
Some projects which may not be commercially viable by themselves may need various types of subsidies or viability gap funding by government.
Wijesinghe said Sri Lanka has a successful track record of implementing PPPs with no failed transactions.
Over US$ 5 billion in PPP transactions had been done in the last 20 years and are operating successfully.
(COLOMBO, 11 December 2018)