Financial evaluation of feasibility studies of waste-water treatment projects

Abstract

This paper was written with two major purposes. First, I intended to analyze the results of the financial evaluations of the latest waste water treatment projects. Secondly, I wished to draw a conclusion from the analysis and propose a new method for a working process. I dealt with 56 projects in 65 individual evaluations. A solution to the issue of environmental protection is essential for the Hungarian government, as the EU regulatory body has set a specific and rather tight deadline. The topic is interesting and significant, as the total applied budget was over HUF 150 billion; it is also quite relevant today: the first observed project documentation submitted to the Managing Authority was due by the end of October 2010. I carried out my analysis based on the documentation of the project evaluation. The investigated issues were in accordance with the official data sheet used in the evaluation process, such as: Mechanism and level of the collected fees, affordability; Compliance with the replacement policy; Financial sustainability of the projects; Verification of the economical analysis; Verification of the financial analysis; Compliance with social cost-benefit standards; Availability and reliability of own financial resources. According to the results of the analysis, the preparation of the projects is not satisfactory. To improve the quality of the project preparation and enhance the absorption of EU funds, the preparation processes must be amended, and urgently. At the end of my paper I recommend an alternative procedure for preparing the feasibility documentation and the cost-benefit analysis. Keywords: Waste water treatment projects, financial evaluation, preparatory methodology