1. Investment Appraisal and Management Chapter 1 The Role of Project Evaluation

2. 1. Introduction  The need for financial and economic cost-benefit analysis. - Technical Literature - Governments (Social and economic developments) - Evaluation procedures has increased (universities. international agencies)

3. The Role and Components of Project Evaluation 1. The Role of Project Appraisal  To stop bad projects  To prevent good projects from being destroyed  To determine if components of the projects are consistent

4. The Role and Components of Project Evaluation (con’t)  To assess the sources and magnitudes of risks  To determine how to reduce risks and efficiently share risks

5. Impact of Analysis  Quality of analysis has been shown by the World Bank to be a key determinant of the success of a project’s performance  A proper analysis will cause the project to be redesigned so that it is likely to fail  World bank experience shows that the probability of failure for poorly prepared projects within 3 years of a project’s life is 7 times that of well-prepared projects  Poorly prepared projects have 16 times as high a probability of failure within 5 years as compared to well-prepared projects

6. The Environment for Project Selection National economic development plans Political forces Private-Public Enterprises Interest of small groups

7. Project Evaluation Need for checking and auditing function Initial data used needs to be adequate Information is time and money The projects needs to be tailored to meet the objectives of the country Stock of information Assessment of financial. Economic. And social aspects of a project/