Detailed Feasibility Report (DFR)

Introduction :

"Feasibility Study" means a preliminary study made for investment decision making, to assess the technical, social, economic and financial viability and the social and environmental impact of a Project including the demand for the services, appropriate technology to be adopted, capital cost, time required for implementation, and such other information as may be prescribed in the regulations;

Description:

1. Content of Feasibility Report:

a. Market assessment Study
b. technical feasibility analysis
c. Legal Analysis
d. Preliminary social and environmental feasibility analysis
e. Project structuring in terms of the recommended mode of implementation
f. Financial analysis
g. Cost benefit analysis to capture the financial costs and an Economic Rate of Return (ERR) analysis to capture the Socio-Economic benefits and costs.
h. Risk identification, assessment and allocation for the Project
i. An assessment of the suitability of the project to be undertaken as a PPP
j. A Value for Money assessment as per Regulation 9 of TNID Regulations 2013;
k. The project implementation schedule

The Feasibility Study shall be in the format prescribed in Appendix II.

Link for online submission of Detailed Feasibility Report

Relevant Clauses:

TNID Rules 2012
Rule 15(2)	(2) Any public agency will be eligible to apply for support from the Project Preparation Fund for hiring of expertsand consultants, preparation of feasibility studies, detailed project studies and the activities specified in clauses (a), (b),(c) and (d) of sub-rule (1) intended for a specific project, whether already recommended by the Board under sub-section (4) of Section 14 of the Act or not.

TNID Regulations 2013
Regulations 8	Feasibility Study (1) In addition to the information specified in clause (f) of section 2 of the Act, the feasibility study shall include the following information: (a) A market assessment to establish the need for and define the geographical, technical economic and social scope of the project including an options analysis and a demand and supply projection. (b) A technical feasibility analysis containing technical parameters based on the market analysis, including specifications of required facilities and detailed project costing: - Provided that for projects proposed for Public Private Partnership mode of implementation, technological input sand key performance indicators would be specified, and an indicative project cost shall be provided. (c)A legal analysis to assess the impact of the applicable laws and regulations; (d) A preliminary social and environmental feasibility analysis, including the environmental and social impact assessments and associated mitigations; (e) Project structuring in terms of the recommended mode of implementation and, in case the Public Private Partnership mode is proposed, the appropriate form of concession agreement under Schedule II of the Act; (f) A financial analysis incorporating the projected revenue structure, financial viability and affordability of the Project for the Public Agency, the Government and the end users, and assessing the need for public financial support; (g) An analysis of the costs and benefits of the project with a calculation of financial Internal Rate of Return (IRR) to capture the financial costs and benefits and an Economic Rate of Return (ERR) to capture the Socio-Economic benefits and costs. (h) A risk assessment of the Project, involving the identification of risks and in case of Public PrivatePartnership mode of implementation, the allocation of risks to the party that is best able to manage each risk. The Feasibility Study may also include a quantification of the potential Contingent Liabilities that the public agency or Government or both may have to incur over the project cycle; (i) An assessment of the suitability of the project to be undertaken as a Public Private Partnership; (j) A Value for Money assessment, for evaluating the suitability for implementing a project on a public Private Partnership basis; (k) The project implementation schedule, including an outline of the proposed procurement and award process through to technical and financial close, an outline of the construction schedule and target operating date. (2) The Feasibility Study shall be in the format prescribed in Appendix II.
Regulations 11	Factors to be considered by the Board in determining whether to recommend Public Private Partnership implementation (1) The Board shall examine the Project Concept Note and the Feasibility Study and recommend implementation through the Public Private Partnership on a consideration of the following factors:- (a) The project is of sufficient scale and with major capital investment over a long-term and the lifecycle costs and revenues of the Project establish the sustainability of the Public Private Partnership mode throughout the concession period. (b) The value for money assessment at the pre-tender stage indicates that the Public Private Partnership mode of implementation is likely to achieve a net present value higher than public sector comparator. (c) The risk profile of the project is appropriate for transfer of some risks to a potential private partner. (d) The allocation of risks between the public agency and the private party implementing the project is appropriate and implementation through the Public Private Partnership mode does not pass on abnormally high risk to the public agency either in terms of direct financial commitments or indirect or contingent liabilities. (e) An independent assessment of the market demand, including a comprehensive justification of major assumptions and key findings, has been made and the project revenues are considered realistic and viable for the potential private partner; (f) The project has measurable outputs which can be specified and a performance based agreement can be entered into; (g) Managerial efficiency can be achieved through better asset utilization or through more efficient design to meet performance specifications; (h) A competitive market exists and the use of a competitive process would encourage private entities to develop innovative means of service delivery while meeting the Public Agency’s cost objectives. (i) User charges projected, if any, are affordable and acceptable to users and would be socially and economically acceptable. (j) The tariffs setting and revision framework is predictable and transparent. (k) The direct financial commitments of the public agency or the Government or both have been quantified and reasonably estimated for the entire contract duration and are within the budgetary limits of the Government or the Public Agency, as the case may be. (l) The Contingent Liabilities, including guarantees (Corporate or Government) legal obligations and commitments and implicit obligations including the need to continuously provide a public service, if any, have been assessed and are acceptable to the Public Agency.

TNID Regulations 2013

Regulations 8

Feasibility Study

(1) In addition to the information specified in clause (f) of section 2 of the Act, the feasibility study shall include the following information:

(a) A market assessment to establish the need for and define the geographical, technical economic and social scope of the project including an options analysis and a demand and supply projection.
(b) A technical feasibility analysis containing technical parameters based on the market analysis, including specifications of required facilities and detailed project costing:
- Provided that for projects proposed for Public Private Partnership mode of implementation, technological input sand key performance indicators would be specified, and an indicative project cost shall be provided.
(c)A legal analysis to assess the impact of the applicable laws and regulations;
(d) A preliminary social and environmental feasibility analysis, including the environmental and social impact assessments and associated mitigations;
(e) Project structuring in terms of the recommended mode of implementation and, in case the Public Private Partnership mode is proposed, the appropriate form of concession agreement under Schedule II of the Act;
(f) A financial analysis incorporating the projected revenue structure, financial viability and affordability of the Project for the Public Agency, the Government and the end users, and assessing the need for public financial support;
(g) An analysis of the costs and benefits of the project with a calculation of financial Internal Rate of Return (IRR) to capture the financial costs and benefits and an Economic Rate of Return (ERR) to capture the Socio-Economic benefits and costs.
(h) A risk assessment of the Project, involving the identification of risks and in case of Public PrivatePartnership mode of implementation, the allocation of risks to the party that is best able to manage each risk. The Feasibility Study may also include a quantification of the potential Contingent Liabilities that the public agency or Government or both may have to incur over the project cycle;
(i) An assessment of the suitability of the project to be undertaken as a Public Private Partnership;
(j) A Value for Money assessment, for evaluating the suitability for implementing a project on a public Private Partnership basis;
(k) The project implementation schedule, including an outline of the proposed procurement and award process through to technical and financial close, an outline of the construction schedule and target operating date.

(2) The Feasibility Study shall be in the format prescribed in Appendix II.

Regulations 11

Factors to be considered by the Board in determining whether to recommend Public Private Partnership implementation

(1) The Board shall examine the Project Concept Note and the Feasibility Study and recommend implementation through the Public Private Partnership on a consideration of the following factors:-

(a) The project is of sufficient scale and with major capital investment over a long-term and the lifecycle costs and revenues of the Project establish the sustainability of the Public Private Partnership mode throughout the concession period.
(b) The value for money assessment at the pre-tender stage indicates that the Public Private Partnership mode of implementation is likely to achieve a net present value higher than public sector comparator.
(c) The risk profile of the project is appropriate for transfer of some risks to a potential private partner.
(d) The allocation of risks between the public agency and the private party implementing the project is appropriate and implementation through the Public Private Partnership mode does not pass on abnormally high risk to the public agency either in terms of direct financial commitments or indirect or contingent liabilities.
(e) An independent assessment of the market demand, including a comprehensive justification of major assumptions and key findings, has been made and the project revenues are considered realistic and viable for the potential private partner;
(f) The project has measurable outputs which can be specified and a performance based agreement can be entered into;
(g) Managerial efficiency can be achieved through better asset utilization or through more efficient design to meet performance specifications;
(h) A competitive market exists and the use of a competitive process would encourage private entities to develop innovative means of service delivery while meeting the Public Agency’s cost objectives.
(i) User charges projected, if any, are affordable and acceptable to users and would be socially and economically acceptable.
(j) The tariffs setting and revision framework is predictable and transparent.
(k) The direct financial commitments of the public agency or the Government or both have been quantified and reasonably estimated for the entire contract duration and are within the budgetary limits of the Government or the Public Agency, as the case may be.
(l) The Contingent Liabilities, including guarantees (Corporate or Government) legal obligations and commitments and implicit obligations including the need to continuously provide a public service, if any, have been assessed and are acceptable to the Public Agency.

TNTIT(PPP)Rules, 2012
Rule 37(3)	(3) The Request for Technical Proposals (RTP) shall specify the Minimum Technical Requirements (MTR), formulated based on the Feasibility Study or detailed project study or such other study.
Rule 42	(3) The Request for Proposal (RFP) shall contain the following. (a) Feasibility Report or Project Information Memorandum or both which will provide such information to tenderers as is required to evaluate the Project and estimate their Final Offer including: (i) Project objectives and rationale; (ii) Site details; (iii) Role of the public agency and stakeholders; (iv) Project scope in accordance with rule 43; and (v) Output specifications;

TNTIT(PPP)Rules, 2012

Rule 37(3)

(3) The Request for Technical Proposals (RTP) shall specify the Minimum Technical Requirements (MTR), formulated based on the Feasibility Study or detailed project study or such other study.

Rule 42

(3) The Request for Proposal (RFP) shall contain the following.

(a) Feasibility Report or Project Information Memorandum or both which will provide such information to tenderers as is required to evaluate the Project and estimate their Final Offer including:

(i) Project objectives and rationale;
(ii) Site details;
(iii) Role of the public agency and stakeholders;
(iv) Project scope in accordance with rule 43; and
(v) Output specifications;