The proposal is clearly justified without the disbenefits, since PI > 1.0. The private project
perspective predicts that every investment dollar will return an equivalent of $1.95 over
30 years at a 4% per year discount rate.
Comment
The obvious question that arises concerns the correct measure to use. When PI is used in the private
project setting, there is no problem, since disbenefits are virtually never considered in the
economic analysis. The public project setting will commonly use some form of the B/C ratio with
the disbenefit considered. When a public-private partnership is initiated, there should be some
agreement beforehand that establishes the economic measure acceptable for analysis and decision
making throughout the project. Then the numerical dilemma presented above should not occur.