The main problem in the most public projects appraisal is their uneconomic nature and impossibility to measure such data, like as turnover and current costs, necessary for NPV or IRR calculation. An appraisal of economic efficiency, as a measure of the net contribution of a project to overall social welfare, should be conducted to each single case. Standard appraisal methods based on projected profits and investment expenditures are not applicable because of intangible nature of pure public projects. In such cases Cost - Benefit Analysis (CBA) has been applied. The purpose of CBA is to ensure that the public sector allocates scarce resources efficiently to competing public sector projects. A basic assumptions of CBA is an identification the crucial benefits effected from a project and their valuation to conduct project appraisal in terms of its effectiveness. A mixture of benefits and costs will be differentiated, because of project purpose and designing. The cost of a project should be somehow related to the benefit expected from it. The rule that has evolved over many years is that benefits must exceed the costs from a project. CBA estimates and totals up the equivalent money value of the benefits and costs to the community of projects to establish whether they are worthwhile. This means that all benefits and costs of a project should be measured in terms of their equivalent money value and in particular time. The most useful financial results in a CBA appear in a time-based cash flow summary. The basic rule of CBA is that project should be performed only then, when discounted benefits would be higher than discounted investment expenditures. As the investment expenditures are treated exact cost of investment and operation costs after project putting into life. After some years of CBA exercising such analysis has still prompted some doubts connected mainly to choice of appropriate discount rate, externalities, risk and irreversibility. Their override is a subject of research of many economists. Despite of critical remarks and some simplifications CBA has still been treated as a simple tool with numerous applications in various spheres, especially in environmental and other pure public projects, used commonly by banks and investors, more rarely by state agendas and local governments - especially in less developed countries. The aim of a paper is to present problems and controversies with Cost - Benefit Analysis application to public project appraisal. The paper consists of five parts, in which there are distinguished public goods, key assumptions to public project appraisal, the main rules of Cost-Benefit Analysis, discount rate issues, and a background of project choice.
