Multi-criteria analysis applied to feasibility studies

The increasing lack of available resources impels public administrations and private organizations to manage wisely their capitals in order to minimise the risk of making wrong choices. We may list countless examples of works announced and never realised or works finished but which bring little if any advantage to the community. It is necessary to deal with a wide range of often-conflicting criteria in our daily lives or in professional settings in order to make the right decisions. A rigorous and transparent analysis of the benefits helps to identify in advance technical, procedural, and economics obstacles. In this way, one can undertake a project in the most rational, efficient, and economically sustainable way. Feasibility studies are the main methods to enlighten possible drawbacks through technical and economic analysis: they also allow the optimisation of investment choices and enable to efficiently reallocate public resources that have scarce values, as previously mentioned. Potential investors and lending institutions have to objectively assess the credibility of a study and therefore need reliable feasibility studies in order to evaluate the project potential. Thus, it is necessary to find ways to compare different design assumptions to define which of them has the smallest impact. Multi-criteria analysis is a tool that was developed in order to analyse in the most possible objective way the impact of a work. The main goal of this method is to help in the decision-making process and to make it more transparent, especially when different criteria (which might not be purely economic) influence the decision. Therefore, multi-criteria analysis allows the comparison of different design hypothesis in order to determine the one with the lowest impact and, as a consequence, to determine the best choice. The main aim of this research is to use the multi-criteria analysis as an additional tool applied to traditional feasibility studies. The differences between a typical feasibility study and a feasibility study executed with multi-criteria analysis will be explained in the thesis. Furthermore, a real case study will clarify the advantages and the disadvantages of the multi-criteria analysis applied to feasibility studies.