ABSTRACT
Projects with greater public ownership, larger, first-of-its-kind and one-of-a-kind projects generally exhibit worse performance. Investors seek to invest in projects operating within environments where applicable policy is transparent, fair and consistent, regardless of ownership, scale of operations and the like. As evident from the case summary relating to the ice-skating rink at the beginning of this chapter, implementation of projects by the public-sector suffers generic structural flaws. As most projects are go or no-go decisions, project analysts need to establish a firm basis for the design and to rigorously verify all assumptions prior to initiating activity on the ground. A comprehensive analysis of the competitive scenario helps establish present and potent threats to the proposed project. Project analysts routinely undertake sensitivity and scenario analyses to analyze risk profiles of projects. The financial model is drawn up with reasonable and foreseeable input parameters, commonly referred to as the ‘base case’ estimation of the project.
