Thoughts on a methodology to analyse viability of private-sector participation in new infrastructure projects in developing countries

Abstract

A model has been developed for investment analysis of all types of infrastructure projects: it addresses some of the key issues for developing countries regarding private-sector participation in infrastructure projects. As an illustration, financial analyses of a bulk water supply project and a water distribution project in Sri Lanka are carried out to estimate subsidy percentages required to make the projects viable. To reap maximum benefits from private-sector participation in water supply, the Government should review its policy on water pricing and institute a reasonable increase in tariffs.