PROJECT FEASIBILITY ByDr. Ali Sajid

Education & Training " A person who graduated, yesterday and stops studying today is uneducated tomorrow."

Fear & Wisdom "To conquer fear is the beginning of wisdom." (Bertrand Russell)

Feasibility 1.Viability of Idea 2. Analyzing Feasibility ( Possibility) of Proj- Possibility of Completion ? Will it be Successful 3.Reasonable likelihood - constraints Will Not prevent a proj from meeting key obj 4.Synonym: Achievability 5.“Plng & Orgzg Procedure” -To Ensure Proj is Effective -It will work”.

Feasibility Reasonable likelihood that Constraints on “Time” & Other “Resources” will not Prevent a Project from meeting its Key Objectives

What is Feasibility? Capable of being done, with means at Hand & Circumstances, as they are. Purpose of a FS – To help assess “Viability of a business idea- Technically, Operationally & Economically”

Feasibility Assessment? Is the disciplined & documented process of thinking through an idea from its “Logical beginning to its Logical End”. This is to determine its Potential to be a viable business given realities of the Economic & Social environment in which it will operate

P rovide Client with a solid foundation upon which a project is built. FS Provides –Concept identification, –Estimates of supportable market, –Design parameters, –Estimates, –Revenue projections –Net warranted investment. Essentially Road map of proj

Process of Analysis Identify problem or opportunity Set up feasibility study Define scope and objectives Carry out different aspects of the study Recommend – proceed /shelve Evaluate alternatives – develop/buy

Scope Statement A written statement includes: Project Justification Project Objectives Major Deliverables Criteria: Project/ or Phase Successfully Completed A written statement includes: Project Justification Project Objectives Major Deliverables Criteria: Project/ or Phase Successfully Completed

Project Charter Formally Recognizes Existence of a Proj Gives PMgr Authy to Apply Resources to Proj, Univ Charter Product to be Delivered ? Refers to Business Need Proj is Addressings

Types of Feasibility Technical Feasibility Managerial Feasibility Economic Feasibility Financial Feasibility Cultural Feasibility Social Feasibility Safety Feasibility Political Feasibility Environmental Feasibility Market Feasibility

… Tech Feasibility- First systematic investigation of Proj Design Viability. Foundation of all other FS. - Assessment of a Proj Capabilities. -Investigation of Technical & Physical Para/mtr TF Reviews: -Technical Capability of HR -Capability of Available at Technical side Foreign consultants Role -LDCs -Too rigid, & Advanced Tech Spec - Cannot be met by Country. Question is “Can it be built?”

Technical Feasibility (TF) Anticipate Broader Problems with Questions: 1.Adequate “Choice of Available Technologies for Alternative Design” purposes, considering: a. Physical layout b. Engineering design c. Availability of raw materials? 2. Costs of Constructing & Operating P-Facilities - Svc a) Machinery, b ) Equipment, c) Spare Parts? 3. Manpower Req: a) From professional to labor b) locally available? c) Responses vary – sector to sector

Technical Feasibility (TF) Contd.. Primary task of TF is Blueprinting: a) Manpower Needs b) Resources, and Design c) Provide Design Alternatives d) A Choice of Available Technologies, & Cost estimates for each alternative.

Admin/Managerial Study (AM S) Evaluates Strategy of company in C/ Out Proj Activities. Providing info & Guidelines- Used to improve overall Proj Admn. Project mgr in investigating team. Examines 4 Components: A. External linkages, b. Internal organization, c. Personnel, and d. Mgt plan

Economic Study (Econ S) Examines a Proposed P-in terms of: Net Contribution to Industry /Economy & To society”. Address 3 Related Questions: P-Responsive to “Urgent Present or Anticipated Econ/Social” need? 2. P-Planned Econ o/p Serve Intended Purpose? 3. Svc Proposed to be Performed by P- 4. Benefits - Justify P - Cost?

Economic Study (Ec S) Reqs: Study of all of Econ Implications of P: a) Demand & Supply of All P- O/P. b) P- Ability to Inc employment c)P- “Multiplier" Effects (-Inc Purchase of goods Effect d) Effect on inc PS Revenue (income tax, sales), e) use of Locally Available resources. Assess P- Net Contribution to Econ/social welfare of community. Comparison of Econ & Social Benefits-genrtd From P-Vs Costs of Construction & Ops. B > C Proj- Economically feasible. Profitability analysis is conducted.

Economic Feasibility (Econ F) 1. Summary of Economic B/C of Proj 2. Extent to which savings Passed on 4. Optimum timing of Proj 5. Sensitivity Analysis 1.Considering influence of variations of critical P/M 2. discount rates,renergy cost, Construction costs, Tfc forecasts. 6. Conclusions as to Econ F or not

… Financial Feasibility- Capability of Proj Org -Raise Funds to implement proposed proj (different from economic feasibility Cultural Feasibility- Compatibility of Proposed Proj vs cultural setup of Proj environment Social Feasibility- Addresses influences – of P-on Social System in Proj Environment Safety Feasibility Considered in Proj Plang. Analysis if Proj Capable of Implementation & Oprtd Safely -Minimal Adverse effects on masses.

Environmental Feasibility- -Concern must be shown -Action must be taken to address any & all environmental concerns raised or anticipated -Mega Dams issues (Aswan Dam) - New Murree Proj Political Feasibility Referred - “Politically Correct Proj." Political considerations often dictate direction for a proposed proj More common in LDC

Proj Feasibility … Market Feasibility- Market Variability & impact on Proj. Not confused with Econ/ F Mket needs analysis to view: a) Potential Impacts of Market Demand B) Competitive Activities, etc. c) “Divertible" Mkt Share -Available