PNAAR479
PNAAR479
PNAAR479
ACKNOWLEDGEMENT
The Project Planning and Management Series
consists of a set of manuals and associated
modules presenting practical approaches, tools
and techniques for project planning and
management. (See list on back cover). A product
of the Government of Jamaica/USAID
National Planning Project (1976-1980), the series
was developed by the Project Develop
ment Resource Team (PDRT) of PAMCO for
use in .action-training"
workshops and
reflects exlensive experience in training and
project development. All present PDRT
members are contributing authors and have
worked together in writing, revising and
publishing the series. Special credits are due
to Dr. Merlyn Kettering for design and
development of the series; Dr. Bruce Brooks for
writing final versions of many nodules;
Mrs. Marjorie Humphreys for assuming primary
editing and production responsib;lity and
for organizing draft papers into more useful materials;
since 1979, for designing the cover and improving Mr. Lascelles Dixon, head of PDRT
many of the illustrations; and Mrs.
Christine Hinds and Miss Linette Johnson for
typing the drafts and final manuscripts.
Any comments on the series and its usefulness
are welcome.
Marcel Knight
Managing Director
PAMCO
March, 1980
Contributing Authors:
Merlyn Kettering
Bruce Brooks
Conrad Smikle Published by:
Lascelles Dixon
The Project Analysis & Monitoring Co. Ltd. (PAMCO)
Michael Farr
Inter-Continental Hotel, 4th Floor
Marjorie Humphreys
Kingston, Jamaica, W.I.
39.1 PAMCO, PDRT
Resource
Material
MODULE 39
A. PREREQUISITES:
C. PURPOSE:
The primary purpose of the Pre-feasibility Study Stage is to screen
alternatives for the project to determine the optimum alternative(s)
which will be recommended for the Feasibility Study. There are no
clear rules for choosing among alternatives. It is a difficult process
requiring the weighing of the merits of one proposal against another.
The process invariably involves making choices related to product
quality and quantity, production processes, technology, scale,
location, costs and returns, times of completion, etc.
V. USE:
Pre-feasibility studies rank project alternatives to help select the
one which, on balance, is likely to prove favourable. (SEE MODULE 29 -
PROJECT NEED ANALYSIS FOR MORE DETAILS OF THE PROCESS OF
DEVELOPING ALTERNATIVE SOLUTIONS.)
The Pre-feasibility Study is normally expected to achieve a degree of
precisicn which accurately estimates costs and benefits within 20 - 25
percent. Timeliness of the preparation and data processing is more
critical than precise accuracy of estimates. Precision will be
demanded during the Feasibility Study Stage.
Step 1. Analyse and state the problems and needs which have initiated
the project. The project objectives and goals should be
re-stated especially if these have been modified or adjusted
by prior appraisals (the Project Brief) or by recent events.
Step 3. Identify the market for the project output, whether goods or
servicesand determine its characteristics. An assessment
of past and present demand, as well as supply conditions and
characteristics, with probably future behavior should be
made. The demand-supply gap should be identified. The
timing of the project alternatives should be evaluated here.
1. To verify:
a. that the project solution reached at the Pre-feasibility
Study Stage is technologically appropriate and technically
sound;
b. that satisfactory financial and economic returns will
accrue to the project and all relevant beneficiaries;
c. that project objectives and goals are realistic and that
they cannot be met in some more effective or efficient
manner;
d. that the project benefits are supportive of national
and sectoral objectives and priorities.
2. To ,verifythat the project will be successful within the
environment (social, cultural, political, institutional,
administrative, and ecological) in which the project will be
carried out and expected to function;
3. To provide a detailed guide to all actions, such as organizational,
managerial and legal, which are required tu implement the project
and to oprate the project output system;
4. To provide all data and analysis required by potential financing
agencies fdcr appraisal of the project; and
5. To provide a complete project document for submission to Cabinet
to authorize the allocation of resources for the implementation
of that project.
D. USE:
The feasibility study and analysis provides the basis on which appro
priate government authorities and financing agencies will make final
decisions to approve, amend or reject the project.
C. Feasibility Study
APPENDIX 39.1
B. Introduction
1. Sector overview
2. Existing development, existing infrastructure
3. Topographical, physical, climatological, geological,
hydrological aspects as required
4. Social, economic, political aspects as applicable.
D. Demand Analysis
1. Definition of market(s)
2. Total demand
3. Characteristics of past and future demand
4. Supply gap
5. Demand-supply consolidations
4. Technical flexibility
5. Civil works requirements
6. Support infrasturctur? requirements
7. Maintenance requiremeits
8. Costs (works, materials, equipment, engineering, land,
recurrent).
F. Ecoeogica/Socia Anasixys (each alternative)
1. Capital requirements
2. Operating costs
3. Revenues, expenses: cash flows
4. Receipts, expenditures: cash flows
5. Profitability criteria.
H. Economic Anaiysiz (for each alternative)
Alternative ScoLeboard
L. OutstandiZng Issues
1. Terms of reference
2. Methodology
3. Performing agency/participating agencies
4. Key personnel/Project Manager
5. Schedules
6. Budget.
APPENDIX 39.2
3. Supply Characteristics
a) Current types and locations of supply facilities
b) Sizes, physical conditions, outputs and prices
c) Supply projections with and without the project
4. Plan for meeting effective demand
a) Demand-supply gap
b) Plan to narrow the gap
c) Project contribution to narrowing of gap
5. Data
a) Statistical series of production, consumption,
population, income, etc.
b) Maps and charts.
E. TECHNICAL AND ENGINEERING ANALVS.S
3. Location
a) Raw material availability
b) Utilities
c) Transportation facilities
d) Production cost factors
e) Manpower availability
f) Site selected: reasons
4. Description and justification of project size/
installed capacity
5. Site plan
Material
7. Input requirements/costs
a) Engineering and administration
b) Construction/installation
c) Production/operation
d) Land acquisition
e) Equipment and machinery
f) Availability and sources of inputs
8. Construction/installation program
a) Stages of construction/installation
b) Operations turnover
9. Schedules
a) Schedule of utilization of resources
b) Construction/installation schedule: major
components.
c) Operations schedule: major components
10. Further technical studies
a) Extent of surveys and investigations
b) Additional surveys, tests required
c) Plan for final engineering.
1. Conclusions
2. Existing conditions at project site
a) Water resources
b) Land use:
c) Natural resources
d) Social/cultural characteristics
e) Institutional characteristics.
3. Analysis of impacts
a) Natural resources
b) Land use
c) Water
d) Social/cultural/institutional
4. Actions taken
a) Project adjustments made
b) Adverse impacts acceptable
c) Costs of minimizing adverse impacts
1. Capital Cost
a) Total investment requirements broken down into:
- design and research
- land and natural resources
- site preparation
- equipment
- buildings and other civil works
- auxiliary facilities
- organization of firm
- engineering and administration during
construction
- running-in
- preparatory installation
- contingencies
- interests during construction and
working capital
- profit
b) Breakdown of costs into kinds of physical resources:
- labour
- materials and supplies
- energy and fuels
- equipment
c) Breakdown of costs into foreign exchange and local
currency components, and into financial and
economic costs.
d) Investment schedule
2. Operating and Maintenance Cost
a) Estimates of operating and maintenance
expenditures broken down into:
- labour
- materials
- energy and fuels
- equipment
b) Breakdown of costs into foreign exchange and local
c~rrency components, and into financial and economic
costs
c) Cost stream over project life
1. Sources of Financing
a) Sources and adequacy of funds for:
- construction
- operation and maintenance
Arrangements for securing financing
2. Program and Budget
Schedule of fund utilization according to source
Budgetary provisions
3. Annexes
Details of financing schemes, funding program, etc.
I. ECONOMIC ASPECTS
1. Capital Cost
a) Estimates of economic investment cost with
breakdowns into work items/physical resources
as in Section D-1
3. Benefits
a) Savings in resource costs
b) Value added
c) Non-quantifiable benefits
d) Benefits stream over project lifetime
5. Sensitivity Analysis
a) Changes in feasibility indicators with
variations in major parameters
6. Conclusions as to Project's Economic Soundness
7. Annexes
a) Detailed calculations of benefits and costs
b) Feasibility computations
c) Others
J. IMPLEMENTATION ANALYSIS
1. Implementation schedules
a) Master phasing
b) Project schedule: CPM or PERT
2. Organization and Management
a) Description of implementing organization:
5. Manpower requirements
a) Manpower projections
b) Recruitment strategy
c) Personnel development and training
6. Project control
a) Information required
b) Project management information system
c) Overall project control
7. Project logistics
8. Facility support
9. Institutional arrangements
K. OPERATIONAL ANALVSIS
L. PROJECT DIVESTMENT
1. Equipment/machinery/materials
2. Labour
a) Skilled workers
b) Project personnel
M. OUTSTANDING ISSUES AND CONDITIONS
N. APPENDICES AND SUPPORTING DATA
MODULES
I. Defining Project Objectives
(Objective Trees)
2. The Logical Framework
3. Work Breakdown Structure
4. Activity Description Sheets
3. Project Organization
6. Linear Responsibility Charts
7. Project Scheduling - Bar
8. Bar Charting for Project Charts
Control/Scheduling
9. Project Scheduling - Network
Analysis
10. Milestones Descriotion Charts
II. Resource Planning & Budgeting
12. The Role of PAMCO
13. Project Technology Analysis
14. Demand Analysis
15. Market Strategy Analysis
16. Project Area Analysis
17. Project Costs & Benefits
18. Project Profile
19. Financial Analysis
20. Cash Flow Analysis
21. Discounting
22. Net Present Worth Analysis
23. Cost-Benefit Analysis
21.. Benefit-Cost Ratio Analysis
25. Internal Rate of Return
26. Social Analysis of a Project
27. Economic Analysis of Projects
(including Border Pricing)
28. Financial Statements & Ratios
29. Project Selection & Ratios Analysis
30. Brainstorming
31. Decision-making System for
32. Project Institutional Projects
Environmental Analysis
33. Ecological Analysis for
34. Projects
Introduction to Contracts,
Jamaican Contract
Documents & Tendering Procedures
35. Selection & Use of Consultants
36. Project Documents for
Planning & implementation
37. Report Writing for Projects
38. Project Files
39. Formats for Pre-Feasibility
& Feasibility Studies
40. Motivation of Employees
and Personnel Evaluation
41. Design of a Project Management
Control System
42. Evaluating & Forecasting
Project Progress & Performance
43. Project Termination
44. Introduction to Lending
45. Organizing and Condu-ccingAgencies
Conference :!Letings
46. Withdrawal of and Accounting
for Loan Funds in the
Financing of Projects
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