*4.1. Feasibility and Sustainability of Projects*

According to some authors [23], project feasibility depends on the conditions for effective cooperation between the actors called to implement it.

A project feasibility is ensured when all the subjects involved reach their goals. In particular:


With reference to Table 4, in the case of projects for the enhancement, in private–public partnership, of unused public buildings, it is possible to find substantially three cases:


In the first two cases the economic evaluation of the project aims at verifying:


To clarify, by now, the term "feasibility" will be used when the need arises to verify the profitability of an investment; instead, the term "sustainability" will be used (referring to its economic dimension), when it will be necessary to verify the balance during the project management phase.


**Table 4.** Criteria for selecting the type of managing subject.

*4.2. Profitability in the Hypotheses of Re-Use of Unused Public Buildings*

Considering the asset capacity to generate revenue, six different conditions of profitability can be assumed [24]:

Band A Band A.1 High profitability Band A.2 Medium to high profitability

Band B Band B.1 Average profitability Band B.2 Lower-middle profitability Band B.3 Low profitability

Band C Band C.1 Insufficient or nothing profitability

The case of insufficient or zero profitability, implies the absence of the minimum conditions for any form of public-private partnership and entrusts the public bodies exclusively, as responsible for making a specific case of asset available. This assumption, however, is quite difficult to be, due essentially to the public sector progressive decline in the delivery of resources [25,26].

Each of the first five of profitability conditions can be associated with five different public-private partnerships procedures, with the related management models (Table 5).


**Table 5.** Distribution of investment and managing costs between public and private entities.

## *4.3. The Choice of the Evaluation Technique*

For each of the profitability bands referred to in Table 5, different techniques for verifying the feasibility and economic sustainability of the projects respond to the different purposes of the assessment.

*Band A (high and medium high profitability)*: In this case, the assessment of the economic feasibility aims at verifying whether the incoming cash flows generated over time by the project, in addition to fully covering the operating costs, also manage to adequately remunerate the risk-sharing of the invested capital In this case, the financial analysis will be developed for a reasonable period of time, equal to the life cycle of the project; the technique to be used is the Discounted Cash Flow Analysis—DCFA or Discounted Cash Flow Analysis. If the project fails to generate such cash flows, remunerating the initial investment entirely, it is possible to reiterate the evaluation, hypothesizing alternative scenarios, characterized by different relationships between risk capital and public contribution, in order to identify the minimum threshold for the public contribution, for which the project is still economically feasible.

*Band B (average, medium-low and low profitability)*: In this case, the evaluation aims to verify the mere economic sustainability referred to a time period equal to the life cycle of the project. Therefore, the incoming cash flows generated annually by the project must cover the relative management costs [27]. The most suitable valuation technique, in this case, is the Cash Flow Analysis—CFA or Cash Flow Analysis: It differs from DCFA for the time horizon, which, in this case, is equal to 1 and refers to a full year of the project; further differences concern some of the items that are taken into consideration by the two techniques, as will be seen better below. The technique uses a particular form of an income statement, referring to the specific project, whose result must be equal to or greater than zero. It can also be applied repeatedly to alternative scenarios, characterized by subjects of different nature (profit, non-profit) according to the scheme illustrated below.

*Band C (Insu*ffi*cient or no profitability)*: The evaluation must provide the public decision maker with features to understand the social utility of the project. Frequently, the most used technique is the Cost Benefit Analysis—CBA or Cost Benefit Analysis [28]: The evaluation verifies if the direct and indirect benefits, internal and external, deriving from the project, are higher than the related costs, and therefore, the community benefits from its implementation. One of this technique limits, particularly relevant in this historical phase lacking of public resources, is that, even if the utility of a project is demonstrated, the uncertainty about its economic feasibility: A compared analysis between alternative projects, for instance, could help understanding which of them has the best relationship between the reachable benefits and the costs to be incurred (efficiency measure) or which project could maximizes the benefits (measure of effectiveness) [29]. This case can be considered beyond the public-private partnership ratio, and therefore, it will not be further investigated, referring to the copious scientific production on the subject for possible further investigations, including Florio et al., 2003; Pennisi and Scandizzo, 2003 [30,31].

Summary (Table 6):



Whatever the question, the evaluation process is often repeated, in order to evaluate both alternative solutions and scenarios starting from a single solution. The technique to be used is chosen by the evaluator based on his experience, linked to the specific case.
