Most people who are working in business field are more familiar with feasibility study than

pre-feasibility study.

Actually, the principle of both study are similar. The difference is how deep the analysis will
be.

What is pre-feasibility study?

Pre-feasibility study is a preliminary study undertaken to determine, analyze, and select the
best business scenarios. In this study, we assume we have more than one business scenarios,
then we want to know which one is the best, both technically and financially. In prefeasibility
we select the best idea among several ideas. It will be hard and takes time if we explore each
scenario deeply. Therefore, shortcut method deem acceptable in this early stage and can be
used to determine minor components of investment and production cost.

If the selected scenario is considered feasible, it is recommended to continue the study to

feasibility to get deeper analysis of the selected project scenario.

What is feasibility study?

Feasibility study is an engineering study based on test work and engineering analysis, which
presents enough information to determine whether or not the project should be advanced to
be final engineering and construction stage. This is a “go/no-go” decision point, thereby
implying that sometimes the answer is NO. However, once a project is advanced to the
feasibility study stage, companies often have committed considerable capital and professional
reputation and therefore assume the answer will be that the project is feasible. That is also
the second difference between feasibility study and pre-feasibility study. We first consider to
arrange pre-feasibility study if we still don’t have idea how to get financial resource to
execute the project. Unlike pre-feasibility study, we must be ready for financial resources if
we move to feasibility study.

Sometimes, we put term bankable before feasibility study. Adding this term simply means
that the level of effort that has been incorporated into the study is sufficient for outsourcing
financing, provided the project is feasible. Typically “bankable” means an overall accuracy
level of +/- 15% on the feasibility study.

To some industry, the act of commissioning a “bankable” feasibility study has come to mean
that the project is feasible. As a result, they assume if they ask for a “bankable” feasibility
study, they will get the study which shows the project is feasible.