Calculation methodology
The complete logic behind comparable selection, cost normalization, PPP structure scoring, annual cash flows and contract-duration recommendations.
No probabilistic or AI-generated output
Every result is reproducible from stored configuration, source-backed facts and explicit user assumptions.
01 · evidence model
Data provenance is part of the result.
Published project facts
Source-backed cost, capacity, term, technology, procurement and party data. Missing fields remain null.
User assumptions
Financing, inflation, contingency, OPEX, tax, scope and other values entered or accepted by the user.
Calculated outputs
Normalized cost, CAPEX, IRR, NPV, DSCR, payment, tariff and fixed-rule recommendations.
02 · cost benchmarking
Compatible evidence before statistical weighting.
1. Eligibility
Same asset class, compatible unit and reasonably comparable technology and scope.
2. Normalize
Convert currency, normalize price year where a valid index exists and preserve scope warnings.
3. Weight
Apply configured similarity and source-confidence weights to every eligible record.
| Dimension | Weight | Treatment |
|---|---|---|
| Asset-type match | 25% | Exact match required |
| Technology match | 15% | Exact, compatible or mismatch |
| Country match | 15% | Same country, GCC fallback or outside scope |
| Capacity similarity | 20% | Ratio proximity within configured bounds |
| Scope similarity | 15% | Overlap in included CAPEX components |
| Price-year proximity | 5% | Decay by year distance |
| Source confidence | 5% | Published confidence score |
Σ(normalized unit cost × similarity weight × confidence weight) ÷ Σ(similarity weight × confidence weight)Comparable cost × (target capacity ÷ comparable capacity) ^ scaling exponentHistoric cost × target-year index ÷ historic-year index03 · PPP rules
A scored decision matrix, not a narrative opinion.
0–100
score for each structure
75–100 · high suitability
55–74 · moderate suitability
0–54 · low suitability
No user revenue reduces user-pay concession scores.
Measurable performance plus lifecycle value increases DBOM and DBFOM.
Credible payment security plus private finance increases DBFM and DBFOM.
Unmanageable demand risk reduces demand-risk concessions.
Small project size reduces privately financed structures and can trigger bundling.
Public ownership requirements reduce BOO.
04 · annual financial model
Construction drawdown through final operating year.
Construction period
Annual CAPEX, equity contributions, debt drawdowns, financing fees, interest during construction and capitalized interest.
Operating period
Revenue, OPEX, lifecycle CAPEX, tax, CFADS, principal, interest, DSCR, equity distributions and free cash flow.
Maximum debt service = CFADS ÷ target DSCR; principal = debt service − interestIRR and XIRR use internally implemented iterative solvers. If cash flows have no valid sign change or convergence fails, the result is reported as not calculable.
05 · duration optimizer
Recommend the shortest efficient, bankable term.
- 1Achieve target equity IRR.
- 2Maintain minimum DSCR.
- 3Repay all debt by maturity.
- 4Remain within economic life.
- 5Meet the affordability constraint.
- 6Minimize government-payment NPV.
- 7Avoid low-value term extension.
06 · validation controls
Calculations fail closed when integrity is at risk.
Apply the methodology
Create a transparent project scenario.