A project is a proposal for investment to create, expand and/or develop certain facilities in order to increase the production of goods and/or services in a community during a certain period of time.
Characteristics of a Project
Investment Pattern Benefits or Gains Time Limit and Location
The project is an economic activity with well defined objectives and having a specific beginning and end.
Project work takes place at three levels:
National level Sector level Project level
TYPES OF PROJECTS
Projects have been classified in various ways
Quantifiable and Non-Quantifiable Projects
y y y y y
Agriculture and allied sector Irrigation and Power Industry and Mining Transport Social Service
y y y
Factor Intensity Oriented: Capital/Labor intensive Causation Oriented: Demand or raw materials based Magnitude oriented: Large.
Financial Institutions Classification:
New Projects y Expansion Projects y Modernization Projects y Diversification Projects.
Welfare y Service y R &D y Educational Project
have long-term consequences
.Dimensions of Project
the catalytic agents of economic development initiate the process of development. employment.production. provide the framework of the future activities of the enterprises. income generation and so on.
. also initiate development of basic infrastructure and environment. brings the necessary changes in society in course of time. accelerate the process of socio-cultural development.
Project commitments cannot be easily reversed.
Aspects of Project
Analyzing Product / service Marketing
Financial viability Profitability Financial Projections Socio-economic desirability
PROJECT PLANNING CYCLE
Project Identification Project Preparation
realistic and attainable established within resource bounds consistent with resources available or anticipated consistent with organizational plans. tangible and verifiable. not general not overly complex measurable.The essential requirements for project objectives are:
specific. policies and procedures.
Maximization of net present value. Maximization of return. Increase in the internal rate of return (IRR) at low risk.The objectives of a project can be for:
Maximization of the market value of equity. Increase in the net present value of monetary flows.
Planning should justify. Results in the desired benefits. Within the budgetary provisions of a financing institution.
Planning would help to optimize the use of scarce resources. Optimization and better utilization of the existing resources.
Sub-sector or product approach Functional approach Regional approach
credit. especially those of input supply. Compatibility of the project within the existing administrative mix
. Integration of basic production services. marketing and extension. Availability of attractive technology to promote the project.Project Features
Simplicity and clarity.
PHASES OF A PROJECT
Identification Formulation Appraisal Selection Implementation Management
Execute the project.THE BASIC TENETS OF MANAGING
Define the objective of the project.
. Identify important milestones. Allocate resources to each task. Re-evaluate task relationships and scheduling. Determine the constituent tasks. pinpointing resource conflicts.