PROJECT PLANNING &

MANAGEMENT
CE 407, CH = 2
PREPARED BY
ENGR. ZIA UR RAHMAN

Engr. Zia ur Rahman. CED, UET, Bannu

9/24/2017 1
campus
 LECTURE-03

Project Appraisal

Engr. Zia ur Rahman. CED, UET, Bannu

9/24/2017 2
campus
 Definition
• Project appraisal is the analysis of costs
and benefits of a proposed project.
• The goal is the allocation of limited
financial resources amongst several
alternative investment opportunities.
• The information come from feasibility
studies and they are transformed into
comprehensive form in project appraisal.
Engr. Zia ur Rahman. CED, UET, Bannu
9/24/2017
campus 3
 Definition
This enables the decision makers
to carry out a sound appraisal of
various projects and embark on a
specific project for allocation of
resources.

Engr. Zia ur Rahman. CED, UET, Bannu

9/24/2017 4
campus
 Need of Project Appraisal
• As Pakistan is a developing country and the
resources are very scarce.
• On the other hand the needs are multiple
such as
1. The development of physical and social
infrastructure
2. Investment in primary and secondary sectors

Engr. Zia ur Rahman. CED, UET, Bannu

9/24/2017 5
campus
 Need of project Appraisal
It is imperative that such projects are
selected which contribute most to the
achievement of national income and
social welfare.
Our plans must comprise of a set of
projects whether national, regional or
local.
Engr. Zia ur Rahman. CED, UET, Bannu
9/24/2017 6
campus
 Need of project Appraisal
• The projects arise as a result of

Identification Analysis
NEEDS
&
PROBLEMS

Definition
9/24/2017 Engr. Zia ur Rahman. CED, UET, Bannu 7
campus
 Types
It is carried out from different point of views
such as
1. Technical
2. Sociological
3. Economical
4. Financial
5. Ecological
Engr. Zia ur Rahman. CED, UET, Bannu
9/24/2017 8
campus
 Technical Appraisal
• Technical evaluation is based upon the
technical data provided in the form of PC-I.
• The experience from the previous
projects is more helpful in this regard.
• The criteria changes from project to
project and sector to sector.

Engr. Zia ur Rahman. CED, UET, Bannu

9/24/2017
campus 9
 Technical Appraisal
• Whether the prerequisites for the success of
the project are considered or not?
• Whether good choices regarding the location,
capacity, technological processes are made or
not?
• The following issues are addressed on priority
basis
1) Preliminary tests and results.
Engr. Zia ur Rahman. CED, UET, Bannu
9/24/2017 10
campus
 Technical Appraisal
2) Availability of materials and resources
3) Optimal level of operation
4) Proper arrangement of waste and effluent
disposal.
5) Proper layout of plant and buildings
6)Realistic work schedules
7) Acceptable social technology

Engr. Zia ur Rahman. CED, UET, Bannu

9/24/2017 11
campus
 Technical Appraisal

Example
Construction of Kala-bagh dam and Munda
dam are the two projects under consideration.
Technically speaking what could be the
deciding factors?
Answer: (1) Elevation of site
(2) Storage capacity of the reservoir
(3) Seismological condition
Engr. Zia ur Rahman. CED, UET, Bannu
9/24/2017 12
campus
 Social Appraisal
• This is directly linked with the effects
produced on the lifestyle of the
community. Such as
• Employment opportunities
• Distribution of income in the society
• Response of various groups
Engr. Zia ur Rahman. CED, UET, Bannu
9/24/2017 13
campus
 Financial Appraisal
• Assessment of financial impact
• Judgment of efficient resource
utilization
• Servicing debt capabilty
• Financing plan
• Co-ordination of financial
contribution Engr. Zia ur Rahman. CED, UET, Bannu
9/24/2017 14
campus
 Financial Appraisal
Major aim
Determination of requirement and timing of
funds, At the same time the expected returns
on the investments from the point of view of
various parties involved in the financing of the
project.
Cost and benefits are calculated using the
current market prices without the interest rates
and repayment of loans.

Engr. Zia ur Rahman. CED, UET, Bannu

9/24/2017 15
campus
 Economic appraisal
• It is the assessment of impact on the overall
economy of the country
• The following questions should be addressed
(1) What is the contribution of the investment
proposal to the developmental objectives of
the country such as self sufficiency,
employment rate?
(2) Whether it is enough to justify the use of
scarce resources of the country?
Engr. Zia ur Rahman. CED, UET, Bannu
9/24/2017 16
campus
 Methods of project appraisal

Engr. Zia ur Rahman. CED, UET, Bannu

9/24/2017 17
campus
 ECOLOGICAL APPRAISAL
• This issue is becoming more and more
predominant with the passage of time and
assuming importance as the world is
becoming aware of the adverse effects on the
environment as a result of the developmental
projects.
• It deals with the impact produced on the
quality of

Engr. Zia ur Rahman. CED, UET, Bannu

9/24/2017 18
campus
 ECOLOGICAL APPRAISAL
1) Air
2) Water
3) Noise
4) Wildlife and forestation
5) Aesthetics of the surroundings
Projects causing environmental damage may be
1) Large hydro power plants

Engr. Zia ur Rahman. CED, UET, Bannu

9/24/2017 19
campus
 ECOLOGICAL APPRAISAL
2) Major irrigation schemes
3) Industries like medicine, leather processing
and chemicals.
In short words it can be stated that ecological
appraisal means to evaluate the likely damage
and cost of restoration for the environment.

Engr. Zia ur Rahman. CED, UET, Bannu

9/24/2017 20
campus
 Objectives
• To extract the relevant information
predicting the success or failure of the
project.
• To develop standard yardstick for the
determination of rate of success/failure.
• To determine the expected cost and benefit
of the project.
• To draw some conclusion regarding the
project.
Engr. Zia ur Rahman. CED, UET, Bannu
9/24/2017 21
campus
 Significance
• It helps beforehand to select only those
projects which are capable of producing
benefits instead of loss.
• The chances of wastage of limited
resource been minimized up to some
extent.

Engr. Zia ur Rahman. CED, UET, Bannu

9/24/2017 22
campus
 Thank you

Engr. Zia ur Rahman. CED, UET, Bannu

9/24/2017 23
campus