Session7-8 Technical Analysis | Appropriate Technology | Labour Economics

Project Appraisal

Technical Analysis

Mona Iyer Asst. Professor, School of Planning CEPT University Ahmedabad

Project Issues - Technical
• What is the expected level of users? • How much would the users be willing to pay for use facility? • How much would the users save (in terms of operating costs and time saved) by using the facility? • What should be the alignment , layout? • Should all the phases of project implemented simultaneously? • What should be the design of the facility taking into consideration the traffic characteristics (loading etc.)? • What would be the construction cost and subsequent operating cost for the facility?

What should the process achieve?
• Reduce “unknowns” and “assumptions” • Identify and address all technical risks that can affect the project • Set out obligations, payments, rewards and penalties • Project development is more than just preparing a Feasibility Report and conducting a bidding process to select a concessionaire
– Any issue that can derail a project should be identified and addressed - including land, R&R…

The Process
• Finalise desirable technical configuration
– Alignment and road geometrics – Design Requirements – Lane configuration and composition
• 4 lane/6 lane • Service roads • Junction improvements, bridges, ROB/RUB

– Toll plaza – optimal location, numbers, design – Additional facilities – bus and truck lay-bys, highway amenity areas

The Process
• Estimate inputs for project viability assessment
– Traffic – volume, composition and growth – Operations and maintenance cost – Construction Cost and Project Cost
• Input for financial viability – impacts structuring decision • Reflected in the Concession Agreement

• Assess project viability and finalise project structure • Compile data pre-requisites necessary for bidding • Preparation of bidding documents

Technical Assessment
• Important aspects
– Choice of Appropriate technology/Design – Location and Site

Key Steps
• Selection of Appropriate technology
– Technology Transfer Agreements

• Selection of Location and Site
– Preparation of project layout / Charts – Broad Schedule for project implementation

Technical Analysis
Demand Assessment Selection of Appropriate tech Tech Transfer agreement/Collaboration Selection of Location and Site Site Development Issues Land, Cost, Rehab,construction Project Layouts/Charts Broad Schedule for Project Implementation Financial Assessment

Selection of Appropriate Technology
Selection of Appropriate Technology Capacity/User Demand (size) Principal inputs available
(eg. Raw material,equipments, expertise)
Demand/Market condition certain/uncertain Technology v/s suitable size, Input constraints Cost/unit capacity (variation wrt cost), Incentives, financial and manegerial resources of firm Equipments/Material/Utilities Availability and Supply Programme Ease of transporting (raw/processed/auxilliary material) Utilities-Fuel, Power,Water etc…)

Proven technology Product Mix (Product /Byproduct) Latest Developments
(does not req updation very soon)
Variations in Size/Capacity Variations in quality/service level (defined user market- profits) Flexibility to change with demands (additional cost)

Ease of Operation/Absorption Ecological balance Harmonious with social and cultural conditions
Type of pollutants Means to mitigate Ease of getting clearances

Arrangements for Technology Transfer/Collaboration
Duration of agreement, termination, force majeure Nature of support during design, construction, operation, training Performance Guarantee – Capacity and Quality of products One time Licensing Fee + Royalty Benefits of continuing R & D if any Restrictions on export/distribution Management control - if technical collaboration backed by financial Preferred payment terms

Selection of Location and Site
Selection of Appropriate Location Proximity to materials, markets Availability of Infrastructure Availability of Labour – skill levels, rates, labour unions Govt. policies, restrictions and priorities Climatic conditions, cost of env. Miti measures Selection of Appropriate Site Cost of land, Availability of Land Cost of site prep/dev/shifting of utilities Cost of rehabilitatio

Project layout /Charts
Preparation of project layouts/charts Functional preliminary layout/alignment Material flow diagram Utility/communication/org chart Proper utilization of space Smooth operations Minimization of costs Safety of personnel

Broad Schedule for Implementation
Preparation of Broad schedule for implementation Possible activities – resources and time contingencies Work schedule for plng of material , capacity and investments

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