PROJECT FORMULATION

What is a Project?

A project is a temporary endeavor (set of activities)

undertaken to create a unique product, service, or result.
It has a certain start and definite end.
Examples:
 Developing a new product or service
 Constructing a building or infrastructure
 Implementing a new business process or procedure
 Developing or acquiring a new or modified information system
 Project Formulation

It is an investigational procedure of developing a

project idea to take an investment decision
It considers the project related facts to take the decision
Decisions taken on:
 Investment
 Government regulations
 Workforce
 Technology
 Aspects of project formulation

Feasibility analysis
 It is done to know whether the project idea can be developed further
or not.
 It checks the scope of the project
Techno economic analysis
 It is done to choose the type of technology to be adopted and check
the cost needed for it.
Project design and Network analysis
 It defines the individual activities and flow of events
Input analysis:
 It concerns about the various inputs to the project (men, material,
labour etc,.)
Financial analysis:
 Financial aspects such as cost estimation, profit analysis has to be
done.
Social cost benefit analysis:
 It is to evaluate project on the societal point of view.
 It checks whether the cost invested is worthy for the society
Market appraisal
 It anticipates the demand for the product in the market.
Environmental analysis:
 It refers to environmental planning and protection.
PROJECT APPRAISAL
 What is Project appraisal?
Project appraisal is the process of evaluation of the project by
the decision makers in order to decide whether to accept or
reject the project.
The formulated project proposal is submitted for the evaluation.
The appraising people will make a log frame from the proposal
submitted.
 Log frame and its importance

Log frame is like a check list where the decision

makers will check every information needed to make
the decision.
Some of the points that they will look for are:
 Target group description
 Establishment of relationship
 Completeness &coherence of project objectives
 Sustainability mechanism
 Appraisal

Once the log frame is made, evaluation will be done

under three headings:
Relevance
Feasibility
Sustainability
 Relevance

Consistent with the policy and programming framework.

Within the institutional capacity of the project sponsor
Addressing key problems of the sector or stakeholders,
and consider other issues in the environment.
Complements or consistency with other ongoing and
planned projects.
 Feasibility

Strategy adopted by the project is realistic.

The “hierarchy of objectives” make sense and are
logical.
Cost estimates are practical.
The project implementing agency has the
management, coordination and financing
arrangements to implement the project.
 Sustainability

There is adequate ownership of the project by

project beneficiaries.
Technology is appropriate.
Environmental concerns have been addressed.
The implementing agency is able to provide follow-
up once the project has ended.
 Evaluation of a Housing project

Consider the project is started and following are the

factors that we need to look to evaluate the project:
 Materials used as per specification
 Suitable usage of skilled & unskilled labours
 Completion within scheduled cost & time
 Quality control