Concessioning authorities, concessionaires (SPCs), investors, lenders, and guarantors involved in port reform use a wide variety of economic and financial analytical tools and performance measures to evaluate the feasibility of prospective projects. Each party has a different perspective on what makes a proposed project a success and, consequently, may use somewhat different tools and measures. All measures, however, are designed to capture the economic value of the proposed project to the interested party, including an assessment of the likelihood that the full economic value will materialize (that is, taking uncertainty and risk into account).
Part B of this module provides a tour of the most commonly used analytical tools and measures of economic performance and risk to familiarize interested parties with the types of tools and measures that are used by their potential partners in port reform projects so they can better understand what motivates and concerns each of them. It will especially help government decision makers without a private sector finance background to appreciate the private sector’s perspective on port reform and will permit them to “speak the language” of their private sector counterparts. This, in turn, should help governments and concessioning authorities design port reform projects to be more attractive to the private sector.