Screening Methodologies for PPP Projects

How to Screen PPP Projects

Screening PPP projects is an early-stage “filter” to identify which infrastructure proposals are feasible and valuable as PPPs. In practice, governments tailor screening criteria to their national policies, but common factors emerge globally.. For example, projects are typically screened for strategic fit (alignment with development objectives), technical feasibility (preliminary design and site readiness), economic and financial viability (demand, costs, revenues, public affordability), risk profile (construction, operation, demand risks), market interest (investor appetite and capacity), and legal/regulatory permissibility. Many PPP units therefore use some combination of quantitative and qualitative criteria. Purely numerical screens alone are often insufficient – successful PPP screening frameworks “combine these with qualitative aspects”, reflecting that PPP success hinges on a mix of policy, technical, and financial drivers.

Common approaches to PPP screening include:

• Checklist or Scorecard Frameworks: Many PPP centers adopt structured checklists or scoring models. These often include mandatory “go/no-go” filters (e.g. sector eligibility, legal authority to privatize/charge users, basic viability) plus scored factors (e.g. expected benefits, cost estimates, stakeholder support). For instance, Bangladesh’s PPP Authority requires projects to pass mandatory criteria (within ministry remit, legal permissibility) before assessing scored criteria (financial viability, timelines, etc.). Such frameworks ensure only projects meeting fundamental conditions proceed.

• Multi-Criteria Analysis (MCA): When projects have multiple conflicting goals, PPP units may use MCA to rank alternatives. MCA assigns weights to economic, social, technical or risk criteria and scores each project. The APMG PPP Guide notes MCA “establishes preferences between options by reference to an explicit set of objectives” and combines qualitative and quantitative measures. For example, a PPP unit might score projects on a 1–5 scale for indicators like service impact, financial return, and risk, then compute a composite score.

• Customized Screening Tools: Some international organizations have developed spreadsheet-based tools that formalize multi-criteria screening. The World Bank’s PPP Screening and Analytics Tool (PSAT) is a notable example. PSAT (and its earlier “PPP Screening Tool” version) guides users through structured questions and decision trees. It evaluates projects on multiple parameters – e.g. Strategic Suitability, Preliminary Feasibility, Risk, PPP Suitability, Fiscal Affordability, Institutional Capacity (and, in PSAT 2.0, climate resilience factors. The PSAT generates scores and “highlight[s] key criteria and questions relevant to assessing the viability of delivering a project using a PPP approach”. Similarly, the Global Infrastructure Hub notes that the World Bank’s spreadsheet tool uses a mix of qualitative and quantitative inputs to identify “deficiencies, roadblocks, and areas for improvement” in potential PPP projects. These tools help PPP units systematically compare pipelines of projects and ensure consistency.

• Preliminary Feasibility and Prioritization: In many countries, the PPP unit or ministry conducts an initial technical/financial feasibility check. This may be less formal (e.g. a short “concept note” or prefeasibility study) but screens for viability. Criteria examined can include estimated project IRR or net present value (from a quick cost–benefit calculation), preliminary construction readiness, and fiscal affordability (e.g. budget impact or need for subsidies). Often, this work feeds into the formal screening. For example, the World Bank guidance notes that a favorable PSAT score should be “followed up with detailed studies” and that PSAT itself is not a substitute for full feasibility.

In sum, screening frameworks vary by country but share core elements: they combine mandatory filters and weighted criteria, often through decision-support tools like PSAT or checklists, to decide whether a project merits full development as a PPP. PPP units use these methods to produce a shortlist of candidate projects. The outcome of screening is typically one of three: advance the project to detailed appraisal (if criteria are met), reject it as unsuitable for PPP, or delay action until information gaps are resolved.

Table 1. Common PPP screening methodologies and tools (examples from global practice):

Typical Structure of a PPP Screening Report

Once projects pass the initial screen, PPP units produce a Screening Report (sometimes called a project “concept note” or pre-feasibility report). Best practices define a consistent report format to document analysis and decisions. The report is concise but should cover all key issues before full appraisal. In global guidance, the report typically contains at least the following sections:

• Executive Summary and Recommendation: A brief overview of the project and the screening outcome. This includes the final recommendation (e.g. “proceed to appraisal”, “not a PPP”, or “hold pending further study”), key reasons, and any required next steps. If information is incomplete, the summary should note critical gaps and what additional analysis is needed.

• Project Description: A clear description of the project scope and technical solution. This covers the sector, main components, location/geography, and physical characteristics (e.g. route length for roads, plant capacity for utilities). The report outlines the proposed infrastructure delivery (e.g. build-operate-transfer airport), including any alternatives considered.

• Needs/Benefits and Technical Feasibility: Analysis of the problem or demand the project addresses, and the suitability of the proposed solution. This should document the project’s expected benefits (e.g. passenger volumes, coverage of service), how it advances government policy objectives, and why the chosen technical approach is reasonable. If other technical alternatives exist, the report should explain why the selected design is preferred. Any preliminary economic assessment is presented: for example, a high-level cost–benefit or demand forecast if available. If full cost–benefit analysis was not done at this stage, note whether it is needed later.

• PPP Suitability (Justification for PPP): Explanation of why a PPP is an appropriate delivery method for the project. The report should outline the basic PPP model (which entity does design/build/finance, who provides service, how revenue or payments work) and discuss risk allocation. Key questions include: Can the project be self-financing through user fees, or will government subsidies be needed? What risks (construction, demand, etc.) will the private party assume, and are these manageable? The screening should justify a PPP in terms of potential value-for-money (e.g. private expertise or efficiency) while flagging any deal-breakers.

• Affordability and Financials: A preliminary economic and financial analysis to test affordability. This section summarizes rough estimates of capital expenditures (Capex) and operating costs (Opex), anticipated revenue or funding sources, and any fiscal support or guarantees required. It assesses whether the projected user charges or government payments are within likely market and budget constraints. For example, the report might include basic numbers or ranges for investment size and public contribution. All significant costs and revenue streams should be identified to check if the project is financially viable.

• Legal and Regulatory Issues: Identification of key legal, environmental, or regulatory factors. This covers whether existing laws permit the PPP structure (e.g. land ownership, tariff approval, contracting authority powers) and what approvals or policy changes are needed. If there are legal uncertainties or new legislation required, the report flags these constraints. In practice, any legal concerns are often marked for further due diligence in the appraisal phase, but must be noted in screening.

• Project Readiness and Stakeholders: Assessment of project readiness and major dependencies. This includes the project’s development stage (e.g. site control, permits obtained) and a summary of stakeholder support or concerns. For example, issues like land acquisition status, environmental permitting, and community acceptance are highlighted. The report lists any significant uncertainties that could delay the project (land availability, demand forecasts, regulatory approvals, etc.). Stakeholder analysis identifies the main affected parties (government agencies, users, local communities) and any known opposition or coordination needs. Information gaps – areas lacking data – are also noted so they can be addressed before full appraisal.

• Information and Data Availability: A brief note on the sources of information used and any limitations. The report should explicitly state what studies or data were consulted (e.g. prefeasibility reports, traffic studies) and where information is incomplete. If key studies (such as demand surveys) are pending, this must be listed as a follow-up task.

• Project Plan/Next Steps: An outline of the project management plan for the pipeline stage. This can include an estimated timeline and the major tasks to prepare the project for tender (e.g. completing feasibility studies, securing land, arranging funding). The roles and responsibilities (government units or PPP cell leads) may be noted, along with a high-level schedule.

All these components can be organized into a final screening report. The table below summarizes common sections and their contents:

Table 2. Common components of a PPP Screening Report

Throughout the report, presenting data in tables or bullet points is common (for example, listing costs or criteria), but the emphasis is on clear narrative explaining each aspect. The World Bank/APMG certification appendix notes that an example screening report “will include the final conclusion concerning the project’s adequacy” and should clearly describe the project need, benefits, alternatives, and whether analyses (like CBA or multi-criteria evaluation) have been done. In practice, the screening report remains high-level: it does not replace a full feasibility study or detailed financial model, but it ensures decision‑makers have a documented basis (and recommendation) before committing resources to structuring and procurement.

Sources

Global PPP guidance and case studies (World Bank PPP tools and manuals, Asian Development Bank PPP Handbook, APMG certification materials, country PPP manuals) emphasize these common elements. The section list above closely follows the recommended outline from multilateral PPP experts