Essays on Requirement for Special Purpose Vehicle Project Financing of a Large Complex Infrastructure Project Coursework

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The paper "Requirement for Special Purpose Vehicle Project Financing of a Large Complex Infrastructure Project" is a perfect example of business coursework. Special Purpose Vehicle (SPV) is a legal entity established to facilitate a transaction (Sarkar and Singh, 2010). SPV is also referred to as a bankruptcy-remote entity whose activities are limited to the acquisition and financing of specific assets (Srivastava and Kumar, 2010). SPV is usually used for channelling funds from borrowers to lenders and carries out regulatory requirements of the funds (Wood, 2007). SPV acts as a legal buffer between the sponsor of the project and its backers.

SPV is usually created to fulfill a special specific and limited use. The SPV is usually separated from the parent or sponsoring company for legal and tax reasons and maybe under the control of several companies working together. The requirement for a robust business case A business case is a kind of advice to executive decision-makers. It presents a substantial argument for a project, program or policy proposal requiring a resource investment which often includes financial commitment. A business case can also be defined as a management tool which supports planning and decision making for investment by positioning the investment decision in the context of business objectives (Srivastava and Kumar, 2010).

It provides an analysis of all the costs, risks and benefits associated with the investment proposal and provides reasonable alternatives (Tavakoli, 2003). The reason, the cost and the expected business value to be attained by the project ought to be considered comprehensively prior to making a final decision to proceed with the project (Sarkar and Singh, 2010). The business case is a multipurpose document which generates the support and participation required to turn an idea into reality.

The document provides an explanation to the components of the idea, problem or the opportunity and how and who it will impact, what others are doing, each of the alternatives, the associated impacts, risks and cost/benefit of each alternative and thereafter makes recommendations (Srivastava and Kumar, 2010). The business case acts as a tool for supporting and planning decisions that are likely to impact on the financial results and other business consequences of projects. The audiences of the business case include decision-makers, partners and stakeholders, and the public (Tavakoli, 2008).

Decision-makers include the government, leadership, management and shareholders of public or private enterprises. Partners and stakeholders include organizations and individuals who are involved, provide input or have interests in or expectations from the proposal. A business case serves several functions (Tavakoli, 2003). First, it aims at convincing the target audience of the need, the feasibility, the cost-effectiveness, the benefits, the financial viability and the manageability of risks involved in the proposal. Second, it helps in prioritizing the proposals.

It also ensures that the strengths and weaknesses of the proposal are determined in a systematic and objective way. Furthermore, the business case acts as a tool for testing the validity of an idea prior to putting the case to others. A business case is essential for every project (Sarkar and Singh, 2010). It is required when reluctance to the proposal is foreseen and when the proposal is expected to have a significant impact on internal infrastructure arrangements or the delivery of services. It is also essential when the proposal brings a substantial change in the way things are done and will require a significant allocation or reallocation of resources.

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