KATHMANDU UNIVERSITY

Dhulikhel, Kavre

A SUMMARY
ON

PROJECT EVALUATION

Submitted By: Submitted To:

Sijan Bhandari Asst. Prof Subash Ghimire, Ph.D.
Roll No:04 Acting Head of Department
Reg-No: 020628-16 Department of Geomatics
Level: UNG Engineering
Group: GE ( IV/I)

Date of Submission: 8 May 2020

 PROJECT EVALUATION (SUMMARY)
Design, monitoring and evaluation are all part of results-based project management. The key
idea underlying project cycle management, and specifically monitoring and evaluation, is to
help those responsible for managing the resources and activities of a project to enhance
development results along a continuum, from short-term to long-term.
Project Evaluation is a crucial part of the project cycle. The evaluation has its origin in the
Latin word “Valupure” which means the value of particular thing, idea, or action. According
to the International Labour Organization (ILO) policies, Project evaluation is a “systematic
and objective assessment of an ongoing or completed project”. Project Evaluation is
designated to provide systematic, reliable and valid information on the conduct, impact and
effectiveness of the projects. It is important for improving project implementation, future
project planning, decision making for any organization. Moreover, Project evaluation may
examine the immediate outcomes or long-term impact or summarize the overall performance
of the project.

The key principles of project evaluation

are:
a. Accountability and Transparency:
Projects evaluation are supported through a
highly credible, independent and
transparent process.
b. Learning to Improve: Monitoring and
Evaluation are an integral part of the project
control that feeds the decision-making
process and supports organizational
Figure 1: Principles of Project Evaluation
learning.
Source: (Austrian Development Agency , 2009)
c. Result Based: Project Evaluation should
always focus on results and assume that projects are managed for results.
d. Efficiency and Speed: The Project should be always evaluated in the efficient and fastest
way. One cannot evaluate everything evaluation of the project should be done strategically.
e. National Ownership and Participation: A project can only achieve sustainability if the
local or national partners take ownership of the project during the design, implementation and
evaluation processes and after completion of the project.

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GEOM 401|Project Evaluation
f. Professional and Ethical Conduct: The project evaluation should be conducted in an ethical
way including the responsible handling of confidential information

The main objectives of project evaluation are to determine the relevance and level of
achievement of project objectives, development effectiveness, efficiency, impact and
sustainability. Moreover, following are the additional objectives of project evaluation:
 Verifying project implementation progress as planned
 Corrective measures for deviations, if any, in performance
 Ascertaining actual costs within the budgets
 Ensuring quality standards are being attained
 Reporting project progress status to customer as needed
 Identifying unexpected problem areas, & manage them.

The various types of Project Evaluation are discussed below:

a. On-going Project Evaluation: The evaluation which is done during the implementation
phase with the aim for correcting deficiencies as they occur to improve project performance is
called On-going Project Evaluation. It measures the activities of the project, project quality and
who it is reaching.
b. Mid-term Project Evaluation: The evaluation which is done at the mid-way with the aim
for improving the project implementation is called as Mid- term project evaluation. It measures
the immediate effect of the project and is aligned with the project activities.
c. Terminal Project Evaluation: The evaluation which is done after project completion with
the aim of lessons for future project planning is called as terminal Project Evaluation. Its
findings and recommendations are often used to decide whether or not to stop the project or
when a new phase is under consideration. It measures how well the program goal has been
achieved.
d. Ex-post Project Evaluation: The evaluation which is done some years after the project
completion with the aim of evaluating the impact of the project in individual, family, society,
or nation is called as Ex-post Project Evaluation. Governments take the lead in promoting the
project if its impacts on the nation is encouraging for the development activities of the
government. It measures the entire program cycle.

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GEOM 401|Project Evaluation
The various methods of Project Evaluation are discussed below:
a. Net Present Value (NPV) Method: The method of project evaluation which uses the net
present value of the project investment is the base for evaluating the project is called the Net
Present Value Method. Mathematically, it is expressed as;
NPV = PV of cash inflows – PV of cash outflows

b. Pay Back Period Method: Payback period is the time in which the initial outlay of
investment is expected to be recovered through the cash inflows generated by the investment.
It uses the payback period to evaluate the project. Mathematically, the payback period is
calculated as,

𝑰𝒏𝒊𝒕𝒊𝒂𝒍 𝑰𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕
Payback period = 𝑪𝒂𝒔𝒉 𝑰𝒏𝒇𝒍𝒐𝒘 𝒑𝒆𝒓 𝑷𝒆𝒓𝒊𝒐𝒅

c. Internal Rate of Return Method: The method of evaluation that used capital budgeting for
measuring the profitability of potential investments for project evaluation is called the Internal
Rate of Return. It is calculated based on IIR factor which is calculated as,

𝑵𝒆𝒕 𝒂𝒏𝒏𝒖𝒂𝒍 𝒄𝒂𝒔𝒉 𝒊𝒏𝒇𝒍𝒐𝒘

IRR-factor𝑰𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕 𝒓𝒆𝒒𝒖𝒊𝒓𝒆𝒅 𝒊𝒏 𝒑𝒓𝒐𝒋𝒆𝒄𝒕

d. Profitability Index Method: The method of project evaluation through the use of a
profitability index is called profitability Index. Mathematically, profitability index(I)is
𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑐𝑎𝑠ℎ 𝑖𝑛𝑓𝑙𝑜𝑤𝑠
calculated as, I= 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑅𝑒𝑞𝑢𝑖𝑟𝑒𝑑

A clear division of roles and responsibilities for project evaluations is an important element
in ensuring the integrity of the evaluation process to ensure the highest level of independence
and credibility of evaluations. Different organizational level staffs have various roles and
responsibilities during project evaluation. Evaluation Manager in a project is responsible for
Preparing Terms of Reference (TORs), ensures proper stakeholder involvement, circulates
draft and final report and Ensures follow-up. Similarly, Project Manager or Project Staff
support implementation of evaluation by Collecting information, provide logistical and
practical support. External evaluation consultant conducts and leads the evaluation and also
prepares evaluation report of the particular project under the evaluation phase. The team leader
of an independent evaluation is always the external evaluation consultant.

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GEOM 401|Project Evaluation
Project Evaluation undergoes through mainly three stages. They are:
a. Planning the Evaluation: Planning the evaluation is the foremost stage for evaluating the
project. The purpose of this stage is to create an evaluation plan that will serve as a reference
during the whole evaluation process, and when writing the final evaluation report. The
evaluation plan includes evaluation purpose, evaluation team members and stakeholders,
evaluation type, mechanisms, questions, tools, sources, budget, and expected results.
b. Carrying Out the Evaluation: It is the second stage for evaluating the project. The
purpose of this stage is to implement the evaluation plan created and developed in the
planning stage. It is also called mid stage for evaluating any project of an organization.
c. Analyzing and Interpreting Data: Analyzing and interpreting data is the stage of project
evaluation which comprises steps explaining how to analyze raw data collected during the
previous stages, and how to accurately interpret these data and transform them into results
and findings to include in the final evaluation report
d. Project impacts: This final or end-stage evaluation encompasses measurements of the
health, social, organizational, economic and administrative effects of the facilities on
individuals, households and communities.

Evaluation of the project depends upon various evaluation criteria. These criteria are related
to different aspects. Among various criteria key criteria for evaluating the project are given as:
a. Relevance and Strategic fit of the project: The extent to which the objectives of a
development intervention are consistent with beneficiary requirements, country needs,
global priorities and partner and donor policies.
b. Validity of Project Design: The extent to which the project design is logical and coherent.
c. Project Progress and Effectiveness: The extent to which the project’s objectives were
achieved, or are expected to be achieved, taking into account their relative importance.
d. Efficiency of resource Use: A measure of how economically resources/inputs (funds,
expertise, time, etc.) are converted into results.
e. Effectiveness of management arrangements: The extent to which management
capacities and arrangements put in place supports the achievement of results
f. Impact orientation and sustainability of the project: The strategic orientation of the
project towards making a significant contribution to broader, long-term, sustainable
development changes.

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GEOM 401|Project Evaluation
The Project Evaluation is one of the important aspect in Project Management. It provides
constant feedback on the extent to which the projects are achieving their goals. It will also
provide the evidence of why objectives and outcomes of project are or not being achieved and
addresses issues of causality. Influence sector assistance strategy and relevant analysis from
project and policy evaluation can highlight the outcomes of previous inventions, and the
strengths and weakness of their implementation through the help of project evaluation for any
project in organization. It also shows the need for mid-course corrections and reliable flow of
information during implementation enables managers to keep track of progress and adjust
operations to take account of experience. It will also help in providing guidelines for the
planning of the future projects in any organization. It will evaluate the project in terms of
measure efficiency, determine significance and determine effectiveness

On concluding the summary on project evaluation, it is considered as the important aspect of

ensuring success for any projects. It should also be noted that each project may have unique
requirements for this and that in such circumstances, project managers and developers should
attempt to develop a suitable project evaluation mechanism.

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GEOM 401|Project Evaluation