Design Project Procedure

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Types of Designs

Preliminary or quick estimate designs

Detailed estimate designs

Firm process designs or detailed designs

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Feasibility Study Preparation
Session Overview

 Purpose of the Feasibility Study

 The Feasibility Study process according to

international standards

 The Feasibility Study outline

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 The Feasibility Study:
something we already know
 Feasibility study as project plan - assumes the project
concept is feasible and maps out the course for project
implementation
 Focus on engineering aspects – low attention to social,
institutional, environmental aspects
 Economic and/or financial analysis limited to
budgeting exercise and some cash flow
 Feasibility analysis as part of the process is missing

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 The Feasibility Study:
international standards
 Feasibility study is the result of feasibility analysis
 Convince the reader (financing entity) that the project
is worth funding
 Document relevant information and aspects regarding
the project
 Assess whether the project is relevant, viable and
implementable
 Enable the project proponent to prepare financing
application and present the project to sources of
financing
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Factors considered in Feasibility
Survey
1) Raw Material
2) Thermodynamics & kinetics of reaction
3) Facility & Equipment available
4) Facility & Equipment to be purchased
5) Estimate of cost
6) Profit
7) MOC
8) Safety

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Factors considered in Feasibility
Survey
9) Markets
10)Competition
11)Properties of product
12)Sales
13)Shipping
14)Plant location
15)Patent situation & legal restriction

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 Project Preparation vis-à-vis
Project Cycle
Implementation Strategic and Sectoral Considerations Design
Phase Phase

Project Pre-feasibility
Project
Identification Study, PPD
Sustainability

Project Project
Execution Preparation Feasibility
Study, EIA,
PSD
Feedback
loops Implementation
Project Start-up
Planning
Process flow PIP

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Overview of FS Contents and Outline
Executive Summary (PSD)
I. Introduction
II. Project Strategic Context
III. Technical Analysis
IV. Institutional Assessment
FEASIBILITY V. Environmental Assessment
STUDY
VI. Stakeholder Analysis
VII. Financial and Socio-
Economic Analysis
VIII. Conclusions
IX. Project Implementation Plan
IX. Appendices
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Project Strategic Context

 Strategic goals; priority programs at local/regional level

 National policies: National, regional or sectoral goals
which the project supports
 Project environment issues: policy, legal and regulatory,
institutional framework, environmental, etc.

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Technical Assessment
 Several subsequent assessment levels:
 Technical assessment of existing services, physical
system, and treatment, and measures for their optimum
use
 Demand (wastewater flow) analysis and forecasting
 Establish gap between the current level service and
future demand
 Develop technical alternatives for the project required
outputs (design, technology, process, scale)

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Aspects of Feasibility Analysis
Input to the financial and socio-economic analysis

Technical
Analysis
Financial Social and
Analysis Stakeholder
Analysis
Project
Feasibility
Economic Environmental
Analysis Analysis

Institutional Analysis

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Financial Cost-Benefit Analysis of a Project

 The unit of analysis is the project, not the company

 Evaluates and calculates the project’s financial:
 Revenues
 Costs
 Net benefits (of revenues over the costs)
 Project revenues, costs and net benefits are determined
on a with-project and without project basis.

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 Financial Cost-Benefit Analysis
Project Costs
1. Investment costs:
 Capital costs: land, civil works, equipment, studies
 Education programs, lab equipment & training,
 Institutional Development (consulting services,
capacity building programs, M&E of benefits)
2. Operation and maintenance costs: labor, electricity,
chemicals, materials, overheads, raw water charges,
insurance, etc.
3. Residual values (of project assets at the end of the
project life)

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Conclusions of the Financial Analysis

 Selection of options and technology

 Overall project profitability and sustainability
 Financial impact on the utility
 Final phasing of investments and priorities
 Financing Plan and application requirements
 Tariff setting and proposal to the municipality
 Responsibility chart
 Project cash flow skeleton for conducting socio-
economic analysis

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Sensitivity and Risk Analysis

 A technique for investigating the impact of changes

in project variables
 Identify key variables which influence project costs
and benefits
 Investigate the consequences of likely adverse
changes
 Identify mitigation actions
 Qualitative Risk Analysis at the: project level, sector
level and national level

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 Summary

The feasibility analysis is an internationally

accepted process used to evaluate various
project dimensions important for achieving the
desired project benefits.
An effective tool for appraising the project from
standpoints of all project stakeholders
It is not a waste of time. It significantly reduces
the risks in project implementation

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