REQUEST FOR PROPOSALS

link as well as for the Project Road.
2. The values of input parameters and the rationale for their selection for the
economic and commercial analyses shall be clearly brought out and got
approved by NHIDCL.
3. For models to be used for the economic and the commercial analyses, the
calibration methodology and the basic parameters adapted to the local
conditions shall be clearly brought out and got approved by NHIDCL.
4. The economic and commercial analyses should bring out the priority of the
different homogenous links in terms of project implementation.
6.1. Economic Analysis
1. The Consultants shall carry out economic analysis for the project. The analysis
should be for each of the sections covered under this TOR. The benefit and cost
streams should be worked out for the project using HDM-IV or other
internationally recognized life-cycle costing model.
2. The economic analysis shall cover but be not limited to be following aspects:
i. assess the capacity of existing roads and the effects of capacity constraints on
vehicle operating costs (VOC);
ii. calculate VOCs for the existing road situation and those for the project;
iii. quantify all economic benefits, including those from reduced congestion, travel
distance, road maintenance cost savings and reduced incidence of road
accidents; and,
iv. estimate the economic internal rate of return (EIRR) for the project over a 30-
year period. In calculating the EIRRs, identify the tradable and non-tradable
components of projects costs and the border price value of the tradable
components.
v. Saving in time value.
3. Economic Internal Rate of Return (EIRR) and Net Present Value (NPV), “with”
and “without time and accident savings” should be worked out based on this
cost-benefit stream. Furthermore, sensitivity of EIRR and NPV worked out for
the different scenarios as given under:
Scenario – I Base Costs and Base Benefits
Scenario - II Base Costs plus 15% and Base Benefits
Scenario - III Base Costs and Base Benefits minus 15%
Scenario - IV Base Costs plus 15% and Base Benefits minus 15%
The sensitivity scenarios given above are only indicative. The Consultants shall
select the sensitivity scenarios taking into account possible construction delays,
construction costs overrun, traffic volume, revenue shortfalls, operating costs,
exchange rate variations, convertibility of foreign exchange, interest rate
volatility, non-compliance or default by contractors, political risks and force
majeure.
4. The economic analysis shall take into account all on-going and future road and
transport infrastructure projects and future development plans in the project
area.
6.2. Financial Analysis