Techno Economic Viability

Like Tender analysis, Costing, Commercial & Legal aspects play a vital role in Mergers & Acquisitions, which are addressed through- Techno Economic Viability analysis.

Prime factors which need your attention are –

  1. Can you contractually & legally acquire a project?
  2. Second – Can you foresee the approval process with the Government Authority
  3. Once you are sure about these 2 aspects, the third part is documentation – for example – Are you in possession of different projects agreements, between the Stake Holders?
  4. Next comes the Financial Model– which includes broad Analysis initially and then a detailed model.
  5. Fifth factor is Liabilities & Assets detailing.
  6. This is followed by – Contents of “Substitution Agreement”.
  7. And finally, we have – Notices served on either side- like Termination, LD etc.

There are various other factors of Techno Economic Viability which need a thorough understanding of the project-

  1. The First one is – Index & brief contents of whole Correspondence
  2. Next is – The Status of Change in Scope & Variations.
  3. The third one is – The Status of Extension of Time
  4. Fourth – The Status of Claims & Counter Claims
  5. Next, Availability of Documents since Tender & Feasibility Stage
  6. Sixth, Possession of Monthly Progress & Inspection Reports including that from Lender Engineer.
  7. Followed by – Site visits to check & verify reported progress
  8. The Eight factor is – Quality issues which includes Status of Non-Confirmatory Reports.
  9. The next one is – The Cost to Complete estimates.
  10. Then comes – The Status of Land Acquisition or Right of Way for work fronts availability.
  11. Followed by – The Status of Designs & Drawings.
  12. And finally – The Status of Completion or PCOD & the status of Punch List items.

After going through these documents, you can arrive at the Cost to Complete of a project, which needs a lot of focused inputs from the Quantity Surveyors & Estimation Managers. This would be a kind of pre-bid advisory assignment so as to understand what would be the estimated amounts required to complete the project, at whatever stage the project is.
All financial decisions can be made after careful study & analysis of all these aspects.

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