Economic and financial aspects of drinking water supply: a project development guideline

Abstract

Water is one of the most important elements of life, and there is no alternative for human beings. Faced with limited water and financial resources, public policymakers are trying to find new ways of providing society with an appropriate quality of water by attracting private investors. This paper attempts to answer the question of how water sector projects can be developed with private investments to deliver desired economic and social benefits to society. From this perspective, the paper sets the objective of designing a cost–benefit analysis framework that compares the possible deployment models and analyses the optimal solutions that achieve both optimal economic and financial outcomes and can be instrumental in decision making for water sector projects. As a result, the levels of the economic internal rate of return for public decision makers and financial internal rate of return for private investors are examined.