1. Dr. R Bista Ms Gyan Laxmi Shrestha Basic Administration Project 2017
Feasibility Study
Dr. R Bista
Ms Gyan Laxmi Shrestha
Basic Administration Project
2017

2. China's Three George Hydro Electric Dam
Begun in 1994, the dam is massive in scale. It stretches 1.5 mile and rise to a height of over 600 feet. It is expected to store 51.4 billion cubic yards of water and raise the current level of the Yangtze River above the dam site over 570 feet. The Three Gorges Dam is the world's largest with installed capacity of 22,500 MW ( Construction cost is US$26 billion. It is the world's largest hydroelectric dam.

3. Feasibility Study
Feasibility study is related to analyse the viability of the identified project to support decision making of investment.
As its name implies, it is a study to decide whether the identified project is attractive enough to go for implementation
The study needs inputs from many professional disciplines for various areas of the study

4. Feasibility Analysis: A Schematic Diagram (P Chandra (2003) Projects: Planning………, Tata McGraw –Hill, New Delhi. page 13).
Preliminary work Analysis
Generation of ideas
Initial Screening
Is the Idea Prima Facie Promising?
Yes No
Plan Feasibility Analysis
Terminate
Conduct
Market Analysis
Conduct
Technical Analysis
Conduct Financial Analysis
Evaluation
Conduct Economic and Ecological analysis
Is the project Worthwhile? No
Yes
Terminate
Prepare Funding Proposal

5. Why Feasibility Study?
- To find if there is adequate demand for the project’s output.
To find if there is availability of suitable technology and inputs
To find the best options
To answer if the project meets the environmental regulations and priority of the nations
To examine the project’s financial and economic viability

6. Areas of Analysis in Feasibility study
Demand/ Need and Market Analysis
Technical Analysis
Management Analysis
Financial Analysis
Economic Analysis
Environmental Analysis
Social Analysis

7. Demands Should government made six lane fast track road?
Should proposed cement factory plant be able to produce 100 metric ton of cement per day?
How many rooms to build in Sheration Hotel?

8. Market and Demand Analysis
Market and demand analysis look at the need of the project and help to estimate demand
It is the key activity for determining the scope of an investment, the possible production programs, the technology required and often the choice of location.

9. Market and Demand Analysis
The analysis cover mainly: Aggregate demand for the product/service The share of unfulfilled demand Demand forecasting Market price of product/service Analysis of competitors, their strength weakness Distribution mechanism

10. Technical Analysis Every project must be technically feasible.
Technical analysis is related to examine whether the project under study is technically feasible to setup and operate to produce service/product. For example, in agriculture project of Apple farming, types of field, soil test, temperature required in selected location, location selection, plantation distance of between plants, variety etc needs to be analyzed.

11. Technical Aspects to be Considered
Technology:
Choice of technological process and/ or appropriate technology,
Is the technology proven or tested?
Does the technology/ process/ equipment technically fit with the facility’s existing technology/process/ equipment & machinery?
Equipment capacity & whether it is as per requirement
List of recommended equipment suppliers.
Reputation of the suppliers and performance guarantees

12. Technical Aspects to be considered Cont.
Investment cost and operational cost of different technology/process
Environmental aspects of different technology
Location aspects of the project and availability of infrastructural facilities with probable alternative locations
Inputs: Availability of electricity, water, fuel, raw materials
Size and scale of operations: based on the demand, capital requirement, and technology, inputs available

13. Management Analysis
- If the management is incompetent, even a good project may fail. So it looks at:
Types of organisation
Academic qualification, and experience of key persons
Availability of personnel required for project execution.
Assessment of other specific skills required for the project
User’s role in case of development projects etc.

14. Financial Analysis
The scope of financial appraisal varies considerably with the nature of project and whether it is revenue producing (e.g. industry, agriculture) or not (e.g. roads, public schools). Financial analysis covers: - Investment Cost Estimation - Operating Cost Estimation - Benefits Estimation - Cost Benefits Comparison - Project Selection Decision

15. Economic Analysis
Economic analysis estimate and analyze the project’s net contribution to the whole economy of the region or country.
It helps determine whether the project increases the net wealth of a region or country as a whole or not.
Estimation of Economic Costs of Projects
Estimation of Economic Benefits of Projects
Comparing Costs and Benefits

16. Economic Analysis
Calculation of Economic Net Present Value (ENPV), Economic Internal Rate of Return (EIRR) and Economic Benefit Cost Ratio (EB/C Ratio)
Decision:
- If ENPV > 0, accept, if ENPV < 0, reject
- If EIRR > discount rate (cost of capital), accept project
- If EB/C ratio > 1 accept, < 1 reject project

17. Environmental Analysis
A project may causes environmental impacts in many ways
Identification and analysis of adverse effects on the environment
Identification of positive impacts
Required Mitigation measures
Designing environmental management plan
Provision of fund for environment management plan

18. Environmental Analysis
Main acts/guidelines in Nepal are Environment Protection Act 1996, the Environment Protection Regulation 1997, National Environmental Impact Assessment Guidelines, The analysis should meet the requirements mentioned by these acts and regulations

19. Social Analysis A project may causes social impacts in many ways
Will the project have any adverse effects on the society?
What are positive and negative impacts
Viable measures to address negative impacts
Estimating cost for addressing social impacts

20. Initiating the Feasibility Study
Appointment of an experienced manager and Selection of study team members
Scope of the study
External Advisers to support study team
Plan and Schedule the Study
Starting study as per plan and schedule
Controlling study to complete as per per plan and schedule

21. Completing the Feasibility study
The feasibility study should act as a springboard for the next phase in the project life cycle. – design and appraisal –ensuring that it is able to commence in a focused way. The end product of Feasibility Study should therefore comprise a clear, concise report, called Feasibility Study Report

22. Thank You