IR to change its bid assessment pattern

IR is planning to switch from a pure financial return-based assessment of bids for new projects to a more comprehensive approach, which in­clu­des social and developmental impact. Reportedly, the modified economic internal rate of return (MEIRR) will enable IR to gauge the economic, social and developmental aspect of a project, and take up more projects in far-flung or low-density areas. The change was encouraged by the government’s stance that an assessment based purely on the financial rate of return was inadequate and social and developmental ne­eds of a region and its people also needed to be considered. The MEIRR will focus on the financial, economic and network approaches for assessing projects. These approaches will rely on the conversion of the financial cost to economic cost by excluding taxes, subsidies and interest payments, among other factors. The new financial approach will consider only the actual cost of the project, operations and maintenance, and capital replacement.