Padma Multipurpose Bridge Project

Incremental to ‘without bridge’ case(US$ million in 2009 prices) aBenefit-cost ratio 4.4Economic internal rate of return 27%Note that, benefits and costs are discounted to 2009/10 values using a 12% real discount rate and allvalues are converted to US dollars at US$1 = 70 taka Source: Detailed Economic and FinancialAnalysis Report, Padma Multipurpose Bridge Project, AECOM, 11 February 201019. Table 11-6 shows that, based on the quantified benefits, the project is economically viable, with anet present value of US$ 5,942 million, a benefit-cost ratio (BCR) of 4.4 and an economic internal rateof return (EIRR) of 27%, in excess of the economic opportunity cost of capital of 12%.11.5.2 Sensitivity Analysis20. The following sensitivity tests were undertaken to assess the robustness of the economic results.• 20% increase in project cost estimate;• 20% decrease in project benefits; and• 20% increase in project cost estimate and 20% decrease in project benefits.21. The results of the analysis are shown in Table 11-7.Table 11-7: Sensitivity analysis resultsS.No. Sensitivity Test Benefit-costratioEconomicalInternal Rate ofReturn (EIRR)1 Main Evaluation 4.4 27%2 20% increase in project cost estimate 3.7 24%3 20% decrease in project benefits 3,5 24%4 20% increase in project cost 2.9 22%estimate/20% decrease in projectbenefits5 Reduction to Wait Time multiplier to 1.5 4.2 26%Source: Detailed Economic and Financial Analysis Report, Padma Multipurpose Bridge Project, 11February 201022. Table 11-7 demonstrates the economic robustness of the project, with the EIRR remaining wellabove the threshold economic value in all the sensitivity tests undertaken. For example, the test of a20% increase in project cost and a 20% decrease in project benefits only reduces the EIRR to 22%.11-7