9. Project Benefits Assessment (Social Cost-Benefit Assessment)
The DPR is to provide the following:
9.1 A list of benefits from societal perspective (both social and economic) supported by:
(i) Explanation or description in qualitative terms
(ii) Quantification of these benefits to the extent possible (or wherever possible) along with underlying assumptions
Benefits are to be focused on project outcomes (in the context of the project outlays made) and specially on their impact on citizens/user segments covering elements such as:
- access - supply continuity -time savings
- coverage - safety -environment improvement
- service quality - cost savings -employment
- improved efficiency - improved efficiency - improved quality of life, etc.
The above are illustrative only with type of benefits being specific to a
project/sector/region.etc.
9.2 A list of “negative externalities” (ie adverse impacts) from a societal perspective ( both social and economic) supported by:
(i) Explanation or description in qualitative terms
(ii) Quantification of these negative/adverse impacts to the extent possible (or wherever possible) along with underlying assumptions
Examples of negative/adverse impacts include:
- pollution; environmental distortions
- reduced green cover
- reduced access to any specific user segments
- supply interruptions (especially during project construction phases) etc
- displacement of inhabitants
- disruption in livelihood /reduced employment/ labour redundancy
- possible haphazard development around/adjacent project site areas ( eg resulting In slums)
The listing or identification of adverse impacts facilitates planning for possible countermeasures and also recognizes possible trade-offs in taking up the project
Note for (9.1) and (9.2)
(1) The Project Benefit/”dis-benefit” assessments should be carried out for the project life or at least consider a 20 year time frame
(2) For convenience, the following format may be considered (this is optional and is given for reference)
The societal benefits and “disbenifits”(adverse impacts) streams should be projected for the time period specified ( entire project life cycle or for a minimum of 20 years; it should not be restricted to the construction period or for the Mission period only).
(3) Benefits and adverse impacts identified must be specific and not generic/general statements.
Examples:
• if certain specific wards are benefiting from increased access, they should be identified
• if some specific sections of slum area or some specific slums are benefiting, these should be specifically identified.
(4) Both direct and indirect societal impacts and assessments are to be considered ( for benefits/ adverse impacts). This constitutes the “with project scenario” which has to be compared to the prior status or “without project scenario”.
(4) Impact on the poor (including poor households & settlements) may be specifically highlighted/documented
9.3 Economic Internal Rate of Return (EIRR) (for projects above Rs. 100 crores or otherwise designated as considerably complex by the State Level Nodal Agency)
For projects above Rs 100 crores (or otherwise designated as considerably complex by the State Level Nodal Agency), structured estimation of the Economic Internal Rate of Return (EIRR) would be prescribed as a part of the Social Cost-Benefit Assessment. The EIRR would incorporate monetization of the identified (quantifiable) social benefits and adverse impacts and additionally provide for social perspective corrections to the costs and benefits considered for financial viability assessments. For projects where the EIRR is found to be less attractive or is a borderline case, and at the same time the project planners deem that there are substantial benefits which are intangible, then the project EIRR analysis is to be supported by detailed descriptive statements and assessments on such benefits.
For projects of less than Rs. 100 crore cost, the Benefits Assessment are to be as per 9.1 and 9.2 given above; with EIRR being optional.
