STUDY MATERIAL 15

DETAILED PROJECT REPORTS (DPR)
Detailed Project Reports (DPRs) are the outputs of planning and design phase of a project.
DPR is a very detailed and elaborate plan for a project indicating overall programme,
different roles and responsibilities, activities and resources required for the project. To be
more precise,
A DPR is a final, detailed appraisal report on the project and a blue print for its execution and
eventual operation. It provides details of the basic programme the roles and responsibilities,
all the activities to be carried out and the resources required and possible risk with
recommended measure to counter them.
The success of project is measured on the basis of: -
 Whether the project was completed on time.
 Whether actual cost of project was within reasonable limits of escalation.
 Whether after completion of the project it was able to deliver the products of desired
quality and in adequate quantity to client’s satisfaction at profitable costs.
 Whether the project gestation period was within planned duration.
The design stage is a blue print which on paper gives a great length and detail what has to be
done to convert the corporate investment in a feasible project idea and ultimately a profit-
making enterprise. The top management policy guidelines, its impact on the project life,
appraisal in terms of financial viability are dealt in great detail. The DPR is the basic of
specification, contract drawings, detailed technical feasibility, financial feasibility, execution
of project from practical point of view. The DPR should also highlight the nature of inherent
risks in the project & potential external risks that will influence the outcome of the project.
Also the DPR should give the measures for risk management and risk mitigation.
The main sub-division in a DPR is: -

General Information of the project.
Background and the experience of the project promoters.
Details and working result of industrial concerns already owned and promoted by the project
promoters.
Details of the proposed project: -
1. Plant capacity
2. Manufacturing procedure adopted
3. Technical knowhow/ tie-ups.
4. Management teams for the project.
5. Details of land, buildings and plant and machinery.
6. Details of infrastructural facilities (power, water supply, transport facilities etc.)
7. Raw material requirement/ availability.
8. Effluents produced by the project & treatment procedures adopted.
9. Labour requirement and availability.
 Schedule of implement of the project.
 Project cost.
 Means of financial projects.
 Working capital requirement/arrangements made.
 Marketing and selling arrangement made.
 Profitability and cash flow estimates.
 Mode of repayment of loans.
 Government approvals. Local body consents and statutory permissions.
 Details of collaterals security that can offered to the financial institutions.
Preparation of DPR
The preparation of DPR requires wide variety of expertise. A number of decisions are
mutually related. For example: requirement and training plan is dependent on the nature of
the technology, availability in the general employment market in the region, need for foreign
collaboration and training, extent of specialised plant and equipments supplied from abroad
etc.
Financials requirements are dependent on the time schedule for the implementation of the
project. The nature of issue to be included in the commercial terms and conditions depend on
the extent of the spread of the contractors. If only local and regional parties are in picture, the
scope and jurisdiction for disputes gets restricted.
A number of issues largely depend upon managerial perceptions and top management
policies. On the whole preparation of DPR is a complete task. Therefore highly specialised
agencies have come up in different areas, who undertake such task for the clients.
Steps of preparation of DPR:

1. Client interacts with consultant.
2. Consultant takes all required inputs from client & do necessary first phase studies.
 Client evaluates it & makes all necessary changes & requests consultant to do the
necessary modifications.
1. Consultant submits the revised draft for approval.
2. Consultant submits the final DPR after getting approval from client.
Evaluation of DPR:
The final responsibility of the project lies with the owners. Therefore, the owner’s
organisation must have an appropriate mechanism for project evaluation of a DPR submitted
by the consultant. Apart from care in selecting the most suitable consultant in the first place
the owners must pose the following questions.
 What are the sources of critical data & information that have form the basic premises
of the DPR, like demand, capital cost, input cost etc?
 The extent to which the strategic plan of top management has been reflected in the
design and the repair?
 What were the various alternative considered, and the methodology followed for
choosing one among them?
 The extent to which the design fulfils all applicable statutory requirements and
regulations, both currently in force and those may be foreseen?
 Identification of potential problems, bottlenecks and/or major risks involved in the
project.
 Degree of detailing.
 Influence of complementary/ completing projects.
 Scope for future expansion/modification/adaptation to new technologies and so on.
Financial Aspects: -
The DPR incorporates a much-detailed projection of the costs and revenues expected during
the projected lifespan of the operation phase. The principal input to this comes from
operational costs.
Also, the other financing cost like depreciation, interest on long term loans and short-term
working capital loans, writing off of pre-operative & preliminary expenses, guarantee
commission etc. Income tax calculation are also included.
The DPR provides projections for the following statements:
1. Profit and loss statement.
2. The balance sheets.
3. The fund flow statement.
For the project phase, the DPR provides an estimate of the phase requirement of capital. This
plan forms the basis of a strategic plan for raising the funds from external sources like terms
lending institutions and through public issue of stocks and/or bonds.
The DPR would include a recommendation schedule for ensuring adequate flow of funds for
the timely completion of the project with adequate provision for normal contingencies.
Commercial aspects: -
DPR is related to general guidelines and conditions that should govern all types of contractual
relationships likely to be entered into during the project.
DPR will also contain guidelines for vendor short-listing and networking. Some points
related to vender detailing that are highlighted in the DPR are as cited below:
 Commitment with respect to delivery period & penalty conditions, in case of failure to
fulfil the commitment.
 General terms of payment including progress payment.
 Inspection and testing procedure and customer hold points.
 Network plan for the contract and monitoring and control system.
 Guarantee test, schedule, procedure, criteria for success and accompanying bank
guarantee.
 Responsibility for damage in transit or during erection and/ or commissioning.
 Condition of admissibility of any increase in the price of the contract.
 Contract variations and the manner of handling them.
 Mobilisation advance to be paid initially.
 Responsibility to supply the equipment’s and necessary accessories and spare parts.

STUDY MATERIAL 15

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DETAILED PROJECT REPORTS (DPR)

The main sub-division in a DPR is: -

Steps of preparation of DPR:

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