Project Feasibility Study
Feasibility literally means whether some idea will work or not. It knows beforehandwhether there exists a sizeable market for the proposed product/service, what would bethe investment requirements and where to get the funding from, whether andwherefrom the necessary technical know-how to convert the idea into a tangible product may be available, and so on. In other words, feasibility study involves anexamination of the operations, financial, HR and marketing aspects of a business on exante (Before the venture comes into existence) basis. Thus, you may simultaneouslyread this lesson and the lessons on marketing, finance etc. to have a better idea of theissues involved. What we present hereunder is a brief outline of the issues impingingupon the various aspects of the feasibility of the proposed project.By now, you would have understood that feasibility is a multivariate concept; that is, a project has to be viable not only in technical terms but also in economic andcommercial terms too. Moreover, there always is a possibility that a project that istechnically possible may not be economically viable. For instance, you can construct adust free factory in Rajasthan, but it is more economically sensible to do so inChandigarh/ Bangalore. As even as we take up the various aspects of feasibility one by-one, it must not mislead into believing that there is a sequence and that there are nointerdependencies.Examination of the feasibility requires skills that you may fall short of. You may takethe help of the Technical Consultancy Organisations (TCOs) such as HARDICON(Haryana-Delhi Industrial Consultancy Organisation) towards this purpose. There aredistrict-wise industrial potential surveys available with the SISIs and DICs that mayserve as a good starting point. You may also make use of the Project Reports published by the directorate of industries and private consulting firms. Obviously, asyou use these off-the- shelf project reports, you need to re-validate their assumptionsand findings and resist the temptation of jump-starting. Whether you use the already published project reports or wish to start afresh, you need to examine all the facets of the feasibility of the proposed project idea, viz. marketing, technical, financial,economic and legal.
Technical Feasibility is primarily appraised for any project. Technical appraisal is mainlyundertaken to ensure that the project is technically viable no possible gaps or gray areas intechnology know-how, equipment, input supply, organization of production facilities etc.exists. Technical appraisal is key to assess the financial viability of the project. Thecomputation of projects’ ability to earn satisfactory return on investment made and ability toservice equity and debt depend on the project technical viability. Technical appraisal is basically concerned with aspects like technology, design, layout of the plant, infrastructure