The Feasibility Study of Alternatives for the Public Private Partnership for the New Bang Pakong Service Area

Abstract

This research aims to study the feasibility of the public private partnerships (PPP) models for the New Bang Pakong Service Area (new site). The study period is divided into two phases: an investment period of 2 years and a project management period of 30 years. From the income analysis throughout the project, the total revenue amounted to 4,941 million baht. The project management is undertaken PPP Net Cost which is separated into two models. Model 1 involves the government sector investing in the main construction, while the private sector is responsible for operating and maintaining the project. All income from project operation belongs to the private sector. The private sector, however, must pay remuneration back to the public sector. In Model 2, the private sector is responsible for all investment in construction, operation, and management of the project. Additionally, the government needs to pay compensation to the private sector. The feasibility study shows that Model 2 is the most feasible PPP model, as its costs and operation expenses amount to 2,529 million Baht. If the private sector receives compensation from the government, the project has a NPV of 583.69 million Baht, a B/C ratio of 1.43 and a payback period of 9.29 years, reaching acceptable criteria. Moreover, the financial sensitivity analysis and scenario analysis under various project situations show that this project could attract private companies interested in PPP investment. Therefore, allowing the private sector to invest in Model 2 is the most appropriate form for investment.