Discuss different aspect of project appraisal

 Project Appraisal: Project appraisal is the process of analyzing the technical feasibility and economic viability of a project proposal their costs. Project appraisal enables to take a decision on with long term effects. During the appraisal stage, measurement of costs and benefits are difficult as these are spread over a long term with high degree of uncertainty. Different aspects of project appraisal are discussed as follows:

Technical Aspects:

Determines whether the technical parameters are soundly conceived, realistic and technically feasible. Technical feasibility analysis is the systematic gathering and analysis of the data pertaining to the technical inputs required and formation of conclusion there from. The availability of the raw materials, equipment, hard/software, power, sanitary and sewerage services, transportation facility, skilled man power, engineering facilities, maintenance, local people etc., depending on the type of project are coming under technical analysis. This feasibility analysis is very important since its significance lies in planning the exercises, documentation process, and risk minimization process and to get approval.

Checklist

- Physical scale

- Technology used & Type of equipment’s & Suitability conditions

- How realistic is the implementation schedule

- Labor intensive method or others

- Cost estimates of Engineering Data

- Escalation are taken care of or not

- Procurement arrangement

- Cost of operation & Maintenance

- Necessary raw material & Inputs

- Potential impact of project on human & physical Environment

-Location

-Size

-Process.

-Machines

-effluents and waste management

-availability of raw materials, power and other necessary inputs.

 

Financial Aspects:

 To determine whether the financial costs and returns are properly estimated and whether the project is financially viable? Whether prerequisites for the success of the project considered?    Following minimum details are determined in the financial appraisal;

1.      Total Cost

2.      O & M Expenditure

3.      Opportunity costs

4.      Other costs

5.      Returns on Investment over project life

6.      Net Present Value, Pay Back Period

7.      CBR 8. IRR

8.      Cash flows in the project

9.      Break Even Point. Level of risk

10.  Marketing Return expectation

 

 

Organizational Aspects:

To determine whether the implementing agencies as identified in the report are capable for effective implementation, monitoring, and evaluation of the scheme. Managerial competence, integrity, knowledge of the project, the promoters should have the knowledge and ability to plan, implement and operate the entire project effectively. The past record of the promoters is to be appraised to clarify their ability in handling the projects.

 

Checklist

·         Whether the entity is properly organized do the job

·         Strength to use capability and take initiatives to reach the objectives

·         Openness to new ideas and willingness to adopt long term approach to extend over several projects

 

Marketing Aspects:

It is one of the major areas of introducing of any product in market In that case must be considered this things before launching the product in the market.

·         What would be the aggregate demand of the proposed product of service?

·         What would be the market share of the project under appraisal?

 

Some popular issues in marketing appraisal are

·         Past and current demand trends

·         Past and current supply position

·         Production possibilities and constraints

·         Imports and exports

·         Nature of competition

·         Cost structure

·         Elasticity of demand

·         Consumer behavior such as motivation, attitudes, preferences, requirements etc.

·         Distribution channel

·         Marketing Policies

 

 

Environmental Aspects:

To see any detrimental environmental impacts and how to minimize the impacts. Environmental appraisal concerns with the impact of environment on the project. The factors include the water, air, land, sound, geographical location etc. Economic Appraisal How far the project contributes to the development of the sector, industrial development, social development, maximizing the growth of employment, etc. are kept in view while evaluating the economic feasibility of the project. Impact on quality of air, Water, Noise, Vegetation, human life etc. should be considered.

 

Legal Aspects:

To determine whether the project satisfies the legal issues related to land acquisition, title deed, environmental clearance etc.

 

Socio-Economic Aspects:

The economic feasibility basically deals with the marketability of the product. Basic data regarding demand and supply of a product in the domestic market so also marginal and also artificial.

Checklist

Socially acceptable technology.

Socio cost benefit analysis

Impact on level of savings and investment in society.

Impact of fulfillment of national goals such as Self-sufficiency, employment, social order etc.