Modeling System to Support the Determination of the Return on Investment (ROI) for PPP projects in Egypt

Ibrahim Abdel Rashid Nosair, Ayman Hussien Hosny, Mohamed Ahmed El-Mikawi, Hossam El-Din Mohamed Bahaa
Public authorities and governments in many nations ensure to assign the operations management of existing PPP projects and for financing new projects to the private sector. This approach adds a lot of benefits for all parties. These benefits included risks’ mitigation, cost savings regarding governmental expenditures, service enhancement, employment opportunities, and improvement in economic indices. This approach called public-private partnership (PPP) (Yescombe, 2007).
Due to their complexity, nature and their long duration, PPP projects are usually more difficult to implement than other procurement models. Previous research studies on several PPP projects indicated that a number of problems exist in the calculations of the project’ returns. Additionally, it is explicit that there is a need for an objective, reliable and practical returns’ assessment model for PPP projects with regards to the different factors that might affect theses estimated returns. The required model will help decision makers and investors to assess the revenues of PPP projects at their early stages. To apply PPP projects in Egypt successfully, one of the fundamental requirements is to perform and implement a comprehensive analysis of Return on Investment (ROI), to do such analysis; it should include the factors affecting the ROI relating the projects’ influences such as; financial, legal, political, social . . . etc.
According to the World Bank report, the private financial participation in Egypt has accounted $219,229.82 Million in the period from 1990 to 2000. This figure has increased to $998,667.36 Million in 2015 (World Bank ,2016).

References

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Organisation for Economic Co-operation and Development. (2016). Public-Private Partnerships in the Middle East and North Africa.

Schmidt, M. (2017). Return on Investment ROI Explain Defined Calculated Compared. Retrieved from https://www.business-case-analysis.com/return-on-investment.html

Shediac, R., Abouchakra, R., Hammam, M., & Najjar, M. R. (2008). Public–Private Partnerships A New Catalyst for Economic Growth. Booz & Co.

The Economist, Intelligence Unit. (2015). The 2015 Infrascope: Evaluating the environment for public private partnerships in Africa. Retrieved from https://www.eiu.com/public/topical report.aspx?campaignid=AfricaInfrascope2015

World Bank Group - International Development, Poverty, & Sustainability. (2016). Retrieved from http://www4.worldbank.org/sprojects

Yescombe, E. R. (2007). Public-private Partnerships: Principles of Policy and Finance. Oxford, United Kingdom: Elsevier Science.

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