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feasibility studies

cost-benefit studies

Cost-benefit analyses constitute perhaps the broadest class of evaluative studies that can be undertaken in connection with a project, in that they typically seek to evaluate all benefits and costs associated with the project – potentially including benefit and cost streams that will flow or be charged to the project’s owner(s) and those which will flow to or be charged to other project stakeholders, including those which do not arise in cash terms (for example positive or negative environmental impacts). Cost-benefit analyses (also known as benefit-cost analyses) are typically performed for public sector clients to inform their decision-making processes around public infrastructure investments such as roads, but can also be carried out for private sector clients, who may – for example – be required to provide such analyses in support of their proposals and applications to local or national authorities for permission to proceed with major infrastructure projects.

DCS advisors provide cost-benefit studies and reports to our public and private sector clients across the cores sectors that we focus on, including infrastructure, energy & utilities, and oil & gas.  Our clients who are considering a major capital project investment, generally undertake cost-benefit studies, value-for-money (VfM) analyses and options analyses as the early steps when deciding to proceed with a project.  Within this set of studies and analyses a project cost-benefit analysis is an economic analysis that is used to confirm that the overall direct and indirect benefits are materially greater than the total direct and indirect costs of developing, building, operating and maintaining the project (demonstrating that the project has a positive net benefit).  The scenario of pursuing a project (the "build scenario") is also compared to the scenario of not pursuing the project (the "no build scenario").  The net benefits of the build scenario should also be materially greater than the "no build scenario".  The cost-benefit study used a net present value (NPV) approach for discounting the benefits (positive) and the costs (negative), using an appropriate social discount rate. In some cases, other alternatives, such as partial-build, phased build and other scenarios are also included.

When we develop our cost-benefit studies for clients, we first consult with our client to gain a strong understanding of the proposed projects direct and indirect benefits and cost categories (whereas, ideally we will also be involved in other project feasibility and financial modeling workstreams).  Examples of indirect benefits may be quantifiable growth in employment and incomes, economic development, tax revenue, tourism revenue and taxes, etc. that may be driven by a project's development but may not be received by the project developer.  Some examples of these – and also of analogous indirect costs – may also be intangible in the sense of not being immediately quantifiable in monetary terms e.g. reduction in carbon emissions, etc.

DCS advisors are able to cost-benefit studies and reports on a stand-alone basis or as an element of the services we offer to a public and private sector clients who also have mandated us to provide transaction advisory services, capital fundraising services, M&A or privatization advisory services or strategic planning services.  In most cases, as cost-benefit studies and reporting will be only one element of a larger project delivery program, DCS will also be providing other complementary analytical services in relation to other transaction elements.  Our preference is always to provide such comprehensive advisory services and coordinate all elements of the transaction, including cost-benefit studies and reporting services on behalf of our clients.

Under any cost-benefit study and reporting mandate, DCS will draw from our global network of veteran industry expert advisor affiliates and our relationship consultants in order to assemble the most appropriate team to match the specific needs of the transaction at hand.  This will always include leadership of DCS affiliate experts who possess decades of global transactional experience related to the specific sector and project type.  In any cost-benefit study and reporting mandate, our preferred role is always to serve as the lead project/program manager.  Within this role we are also able to assist in the selection and procurement (or subcontracting) and management of other advisors, including local and international technical, economics and other specialized advisors or other specialized advisors, as the specific transaction may require.  To the extent that other third-party advisors are required, there are many value added advantages of allowing DCS to assist in the procurement of these advisors.  First, DCS expert affiliates themselves possess many of required technical, economics and managerial skill sets and we are best positioned to determine which additional outside third-party skill sets are required and which firms or individuals should be hired in these roles.  Secondly, cost-benefit analysis is a very complex undertaking, requiring the management and coordination of many simultaneous workstreams.  DCS advisors are experts inproject and program management services and are ideally suited to manage and coordinate a multi-dimensional advisory team most efficiently and effectively.

Complementing our cost-benefit studies and reporting services, DCS advisors offer the following complementary advisory services that may be applicable, dependent on the specific needs of our client.

• Project Economic and Market Reports
• Value-for-Money Analyses
• Bankable Feasibility Studies
• Transaction Advisory
• Capital Fundraising
• Tender Management: RFEI/RFQ/RFP
• Mergers & Acquisitions Advisory
• Project/Program Management
• Contract Drafting & Negotiation
• Strategic Planning
• Business and Asset Valuation
• Workouts and Restructuring
• Corporate Governance
• Training and Capacity Building Workshops

DCS experts provide comprehensive cost-benefit studies and reporting services in the following sectors that we specialize in.  Please click on the below links to learn more about the sectors that we cover:

• Infrastructure
  • Transportation
  • Water & Wastewater
  • ​​​Solid Waste
  • Social Infrastructure
  • Telecommunications

• Energy & Utilities
  • Generation
  • Sales & Supply and Trading​

• Industrials
  • Engineering & Construction
  • Technology
  • Logistics, Cargo & Freight
  • Heavy Industries

• Oil & Gas
  • Upstream
  • Downstream
  • Midstream

• Real Estate
  • Warehousing and Logistical
  • Commercial and Mixed-Use

DCS experts provide comprehensive cost-benefit studies and reporting services to the following categories of clients:

• Developers/Sponsors/Concessionaires
• Investors
• Corporations
• Governments/Governmental Entities
• Utilities
• Lenders
• Regulators
• Investment Banks
• International Financing Institutions
• International Agencies