Economic-financial feasibility study for public concessions (LCSP)
The feasibility study of a concession is the document, required by Spain’s Public Sector Contracts Law (Law 9/2017, LCSP), that proves the economic sustainability of operating a public asset or service before tendering.
We support public bodies and bidders with the document the LCSP requires before tendering a concession, designed to withstand legal and audit scrutiny.
What is it?
It is the economic-financial feasibility study that Spain’s Public Sector Contracts Law (Law 9/2017, LCSP) requires prior to tendering a works or service concession. It proves the sustainability of operating a public asset or service and underpins the economic balance of the concession.
What is it for?
It helps administrations comply with the law and protect the procedure against challenges, and bidders to assess the economic balance of their offer. A well-prepared study prevents a flawed tender.
Legal framework
Law 9/2017 requires, prior to tendering works and service concession contracts, a feasibility study justifying the sustainability of the investment and the economic balance of the concession.
Who it is for
- Town councils, provincial bodies, regional departments and public agencies tendering a concession.
- Concessionaires and bidders that need to assess the economic balance of their bid.
- Public asset managers (sports, cultural, health, transport facilities, car parks…).
What we deliver
- Demand analysis and expected revenue.
- Investment and operating cost structure.
- Financial projection of the concession period and economic-balance calculation.
- Term determination and, where applicable, fee or public contribution.
- Risk and sensitivity analysis; feasibility conclusion.
Which contracts the LCSP requires to be studied
Law 9/2017 requires feasibility to be proven prior to tendering concessions, where the operating risk lies with the concessionaire.
- Works concessions (build and operate an infrastructure).
- Service concessions (manage and operate a public service).
- Sports, cultural, health and transport facilities.
- Car parks, installations and other publicly owned assets.
What the feasibility study contains
The study analyses foreseeable demand and expected operating revenue, investment and operating costs, and builds the financial projection for the whole concession period. From there it determines the term, the fee or, where applicable, the public contribution needed to maintain the economic balance of the concession. It also includes a risk and sensitivity analysis demonstrating the robustness of the conclusions.
Economic balance and rebalancing
The economic-financial balance is the heart of any concession: expected revenue must cover investment and operation with a reasonable return over the term. We model that balance rigorously and, when needed, analyse rebalancing scenarios in the face of unforeseen changes, an increasingly relevant issue in administrative practice.
Why chartered economists before audit
A concession feasibility study must withstand legal and audit scrutiny. The signature of chartered economists (CEMAD) provides the technical validity expected by the audit office and control bodies, and reduces the risk of the procedure being challenged for flaws in the economic reasoning.
When to engage it
- Before tendering a works or service concession.
- When structuring the term, fee or public contribution.
- When a company is going to bid for a concession.
- To review the economic balance of an ongoing concession.
Which questions it answers
- ? Is the concession economically sustainable?
- ? What term and fee balance the operation?
- ? What revenue and costs can the asset be expected to generate?
- ? Does the study meet the LCSP and audit requirements?
Why ENET Consulting
Real experience with public administration, chartered economists (CEMAD) signing the reports, and an audit-oriented approach. We have produced studies for residences and schools.
Frequently asked questions
When does the LCSP require a feasibility study?+
Law 9/2017 requires it prior to tendering works and service concession contracts, to prove the sustainability of the operation.
Feasibility study vs. economic-financial plan?+
The feasibility study analyses whether the concession is sustainable before tendering; the economic-financial plan sets the figures governing the concession. We prepare both.
Who can sign this study?+
It is advisable to have it signed by chartered economists, which adds technical validity before audit and control bodies. Ours are CEMAD members.
Feasibility study vs. economic-financial plan?+
The feasibility study proves, before tendering, that the concession is sustainable; the economic-financial plan sets the figures (investment, revenue, balance) governing the concession. We prepare both and keep them consistent.
Can you also work for the bidding company?+
Yes. We help both the tendering administration and the company preparing its bid to assess the economic balance and substantiate its proposal.
Do you tailor the report to the specific specifications?+
Always. Each concession has its particularities; we adjust the scope and format to the specifications and the contracting body.
Tendering a concession? We prepare the feasibility study the LCSP requires.
First consultation free and with no obligation.