Project definition  National Planning

 Sectoral Planning
• A proposal to invest money in certain activities  Project Planning
• Investment activity in which resources are
expended Approaches to Project Appraisal
• “A project is an instrument of change. • Traditional Approach:
Key concepts in the definition: Growth objectives and distribution is the duty of
• Purpose-the basic reason - to solve a problem,. government taxation =
• Temporary: that a project has a specific start • New Approaches:
date and a specific end date. Considers the distributional aspects of cost and
• Sequences of Activities: the works and steps , benefits of a project i.e., between rich and poor
methods and knowledge we use and regional equality s
• Resources: [human, financial, material, Data Needed in Planning Projects
information, etc.] a) Physical data:
• Unique outcome: A project brings about a • Pedolog
unique product or service -. ical data – soils
• Scope- the extent problem or opportunity that • Hydrolo
project needs to address. gical data– Surface / underground water
• Organization: is vital to coordinate resources to • Climatic
achieve the project objectives- al data – Environment or Condition
• Time: any project time bounded-it has a start • Topogra
and end time phical data – flat, undulated and/or hilly
• Cost: activities consume human, financial and b) Technical data- Available technology (internet,
material resources. other technological inputs).
• Quality: quality products to maximize the c) Demographic data
satisfaction of the users. • Target population
• Introduce change: A project is often used as an • Household characteristics
instrument change for betterment of society. • Gender issue
Characteristics of Projects • Age group and dependency ratio
• Projects are unique and non-repetitive • Cross-cutting issues (population,
• Projects are composed of interdependent gender and HIV/AIDS issues)
activities d) Institutional factors
• Projects have a clear start and finish time • Tradition, culture and taboos
• projects have a life cycle [a beginning and an • Religion
end, with a number of distinct phases in • Class structure
between] • Ethnicity
• Projects create a quality deliverables • Administration
• Projects are bound in terms of resources (both e) Economic data
human and non-human) • Farm and Non-farm data
• A project involves risk and uncertainty • Input and output coefficient
• A project requires team-work. • Sectoral, regional, national &
Types of Projects interna prices
– New, updating f) Political Stability, good govern and democracy
and expansion g) Other related factors
– Market based,
Resource based, Felt need Project Vs program
– Private, NGOs,
Project Program
and/or government
– Industrial, Differences
Agricultural and Service Narrow in scope Wide in scope; comprise
Development Planning ; Determining developm’t many projects component
goals What ?goals, When? time, How ? Method Specific and detail Comprehensive and
Three stages of Planning: general
More precise and Broader goal related to
accurate sectoral policy
Possible to calculate Difficult to calculate costs
the costs and returns and returns
Similarities
• Have purpose/ objectives
• Require input (financial, manpower, material)
• Generate output (goods and/or services)
• Operate over space and time
Projects in general need to be SMART: – Sequential and
systematic reporting
• Specific (benefi, activities,
– Easy assignment
object, & sequences)
of authority and responsibility
• Measurable (implicit and
– encourage
explicit costs) linkages
systematic examination of alternatives.
• Area bounded (benefici,
Limitations
location, operation )
– Output depends
• Reliable (fitness society,
on quality of data used (garbage in garbage out)
economy and political)
– Independent
• Time specific – start and
project analysis i.e., less effort to see
end, year by year quantified (grace period
interdependency among projects or ignore
(gestation),
coordination & coexistence.
Project Analysis
A choice therefore has to be made among
The Project Life Cycle;- the project passes from
competing uses of resources based on the extent to
inception to its completion, continuous process
which they help the country achieve its fundamental
made up of separate and complementary stages
objectives.
There are several models of project cycle but the
project analysis assesses the benefits and costs of a
most important ones are:
project and reduces them to a common
• Baum Project Cycle Model (1978)
denominator
 Identification
Project Analysis and Management is beyond the
 Preparation- Proposal development
traditional cost benefit analysis. It includes social,
 Appraisal – financing decision
economical, environmental and cross-cutting issues
 Implementation
as well.
 Evaluation
Project analysis and management is essentially a
• The Process Approach (Piccto &weaving
process of “seeking alternative choices” to reach an
1994)
agreed upon set of objectives in the most efficient
 Listening
manner.
 Piloting
Project Objective
Project objectives would include financial, economic  Demonstrating
efficiency and societal considerations  Mainstreaming
Project objectives and the relation of such objectives • UNIDO’s Approach (1991)
to a particular government or states’ overall policy Pre investment phase
and strategies; a) Identification /opportunity study
b) Pre feasibility study
Project Format/Procedure c) Support study
This format provides an analytical framework for a d) Feasibility study
proposed investment in cost and benefit accounts e) Appraisal
are prepared year by year in the form of a project Investment phase
cost and benefit stream a) Negotiating and contracting
Advantage b) Engineering design
– Information from c) Construction
a wide sources d) Pre production marketing
– Involve many e) Human resource training
specialists Operational phase
– Estimate effects a) Commission start up
on participants b) Post project evaluation
c) Replacement/ rehabilitation
d) Expansion and innovation
Project Identification • Stakeholder’s could be targeted groups/
The first stage in the project cycle is to find potential beneficiaries, negatively affected groups,
projects, It is the identification of investment decision makers, funding agencies…
opportunities. The three necessary conditions implementation
of a project:
Sources of project ideas
• Awareness/Commitment:-that stake/h
The macro level and the micro level. understand and believe in the project.
MACRO LEVEL • Capability: believe they can cope with
• National policies, strategies and priorities and benefit from the project is intended
• National or sectoral or regional opportunity to bring.
studies, the aim of translating programs • Inclusion: feel they are valued,
• Multilateral or bilateral agreements consulted and change process which the
• Surveys, studies, publications which indicate project represents.
investment opportunities; b) SWOT analysis :- is a tool for institutional
• Constraints develop’t process due to shortage appraisal and a brainstorming exercise
of essential infrastructure facilities, etc.;
• Government decisions to correct social and
SWOT stands for:
regional inequalities or to satisfy basic needs
of people through the projects; • Strengths - the positive internal of the organ.
• A possible external threat that necessitates for • Weaknesses - the negative internal the organ.
example, self-sufficiency in basic materials, • Opportunities - external factors which could
energy, transportation, etc.; improve the organisation’s prospects.
• Unusual events such as draughts, floods, Threats - external factors which could undermine
earth-quake, hostilities, etc.; the organisation’s prospects
• Government decision to create project- c) Problem analysis:-
implementing capacity in such areas as problem- is an obstacle, impediment, difficulty
construction, etc. or challenge, gap or any situation that needs
MICRO-LEVEL solution
• The identification of unsatisfied demand Problem Tree Analysis
• The existence of unused or underutilized Steps in Undertaking Problem Tree
natural resources opportunities efficient use; 1. Identify a “core” or central problem
• The need to remove shortages in essential 2. List all problems related to core problem
material services, 3. Determine problems causes and effects of the
• The initiative of private or public enterprises core problem
in response to incentives 4. Arrange problems cause-effect core problem
• The necessity to complement or expand Problem tree = Effect - The focal problem – Causes
investments previously undertaken; and
• The desire of local groups or organizations to d) Objective analysis:- is a technique for
enhance their economic status and improve identifying a result of solving the problems cited
their welfare in the problem tree
The objectives are also displayed means and
Steps in Project identification and selection ends relationships.
a) Stakeholders analysis:- to identify, assess and The ‘negative situations’ of the problem tree
develop an idea/opportunity are converted into solutions, expressed as
• Stakeholder is any individual, group or ‘positive situations’.
organization, community, with an interest
e) Alternative Tree Analysis :- is a technique for
in the outcome of a program/project.
identifying alternative solutions or course of
action
 The aim of alternative strategy analysis is • Inputs : financial, human , material and
division of the objectives tree into more information resources available to implement
consistent smaller sub-units the project
• Sector is the largest system of which a
Criteria for selecting the alternative
project apart, e.g. building a dam is a project in
• Relevance corresponds needs of the the agriculture sector,
stakeholders. • OVI: demonstrate the desired results ( in
• Effectiveness: the lower level objectives of terms of quality, quantity, cost and time)
the strategy of the project purpose. • Means of verification: sources of
• Efficiency: cost-effectiveness strategy in information for
transforming the means into results. • The logic: A vertical and horizontal logic.
• Consistent with development policies • A vertical logic clarifies why a project is
• Sustainability of the project being undertaken. It specifies goal, purposes,
• Assumptions and risks outputs and inputs.
• A Horizontal logic identifies what is to be
produced and the evidence that will signal
f) Logical framework :- success .OVI, MOV and assumptions.
LFA is a tool for planning, monitoring and evaluating The Role of Assumptions in Vertical and Zigzag
projects. Logic
This is also a useful approach to link projects - Once activities carried out, results will be achieved
LFA is essentially used as a tool to clarify cause- - Once results achieved, purpose will be achieved
effect relationships - Once the purpose has been achieved, overall
LFA is therefore a systematic planning process based objectives will have been made
on logical deductions Project Preparation
LFA Is a four by four matrix, which enables the It involves generally three steps:
decision maker to identify project purposes and a) Pre-feasibility studies
goals and plan for project outputs and inputs A preliminary selection stage on the basis of
LFA is useful in planning, analysis, follow up and • Availability of an adequate market
evaluation of the project • Project growth potential
LFA is used as a tool to: • Investment, operational and distribu costs
• Demand and supply factors and
• Identify problems and needs in a certain • Social and environmental considerations
sector of society Pre-feasibility is an intermediate stage
• Facilitate selecting and setting priorities between opportunity/problem identification
b/n projects and feasibility study
• Plan and implement development projects b) Support studies
effectively Support or functional studies cover specific
• Follow-up and evaluate development aspects of an investment project
projects. Examples of these studies are:
• Communicate and report the project • Market studies
outcomes • Raw material and factory supply studies
Important Terms in LFA • Laboratory and pilot-plant tests
• Goal is broader objective a project • Location studies
contributes. • Economies-of-scale studies
• Purpose is primary intention or aim of the • Equipment selection studies
project • Environment impact assessment
• Outputs are the services or products c) Feasibility studies
delivers to a target population
 Feasibility study provides a comprehensive • Avoid delay which leads to substantial cost
review of all aspects of the project and lays the overrun.
foundation A project is successfully implemented if it:
Feasibility study components • Comes in on-schedule (time criterion).
• Technical Study • Comes in on-budget (monetary criterion).
• Market Study • Achieves basically all the goals originally set
• Organisation & Management for it (effectiveness criterion).
• Financial Analysis • Is accepted and used the project is intended
• Economic Analysis (client satisfaction criterion).
• Environmental Analysis Major causes of delay in project implementation
• Social analysis • Quality and caliber of staff and staff incentives.
• Cross-cutting Analysis • Termination of job before completion of project
• Sensitivity Analysis • Implementation, planning & scheduling
• Risk Analysis + Other consideration capacity.
Project Appraisal • Budgetary practices.
Is a second look by a team of professionals • Consultant selection practices
Appraisal is the comprehensive and systematic • award practices.
assessment of all aspects of a project study, • Construct supervision practices.
• Specificity of objectives; The common constrains (limits) in implementation
• Clarity of problems; • Over optimistic estimate at inception
• Methodology: type and source and (economic policy and social environment).
appropriateness; • Inappropriate technology choice.
• Project specific factors. • Shortage of qualified & experienced personnel.
• They divided into two, viz., non-discounting • Lack of prompt decisions on certain issues, like
criteria and discounting criteria. selection of sites for carrying out project
• Non-discounting criteria are the Payback activities.
Period and the Accounting Rate of Return. • High cost of input (feed shortage for livestock
• The key discounting criteria are the Net projects).
Present Value, Internal Rate of Return, and • Lack of proper communication facilities
Benefit Cost Ratio. between the field units, project headquarters
Implementation and the creditor/s.
Project implementation is a phenomenon by which • Unhealthy atmosphere created by political
project studies are translated into reality within their upheaval in the project area, (labor strike,
specified time and budget change in government etc.).
This stage could be divided into, among others, • Corruption.
scheduling, financing, negotiation and contracting, Follow-up, Monitoring & Evaluation
discussing, constructor training, erection, a) Follow-up:
installation and commissioning. Follow-up is a method by which a project
• It is the most important part of project cycle promoter keeps a watch on the progress
where project fails in most developing b) Monitoring
countries. The essential first steps of feedback are the
• Examine sources of fund (Own, borrowing, and processes of monitoring and evaluation
grant). Negotiate with external sources (amount Monitoring system: input, process and output
of fund, terms and conditions). • Inputs— resources going into conducting.
• Implementation is irrevocable without damage. include staff, finance, materials, and time.
• Attention in concluding contracts (with • Process— set of activities (e.g., number of
constructors, monopolists of factors, etc.). workshops or number of training sessions).
• Establish allowance to absorb any shocks/ • Outputs— immediate results (e.g., number
changes (physical and financial contingencies)… of commodities distributed, number of staff
 trained, number of people reached, or
number of people served).
Primary questions of monitoring
• Are the right inputs being
supplied/delivered at the right time?
• Are the planned inputs producing the
planned outputs?
• Are the outputs leading to the achievement
of the planned objectives?
• Is the policy environment consistent with
the design assumptions?
• Are the project objectives still valid?
The Steps of Project Monitoring
• Setting standards: based on cost, schedule,
and performances.
• Monitoring progress: Monitoring is the
measurement through time that indicates.
• Evaluating progress: Evaluation is the
process of comparing the actual cost, time
and performance
• Taking actions: there are three options of
decisions:
• Maintain the existing performance.
• Modify the standards.
• Increase momentum
c) Evaluation
Evaluation is an assessment that refers to design, Chapter 3
implementation and results of completed or on-
going projects.
Evaluation is not something that happens at the end
1. Technical aspects
of a project Its objective is to evaluate:
Evaluation is the use of social research methods to
systematically investigate a program’s effectiveness
• The type of
Purpose of Evaluation technology and its capacity,
• To identify the constraints or bottlenecks • degree of integration
• To assess the benefits and costs that accrue (flexibility of manufacturing system),
• To draw lessons from the project • the production
implementation..
• To provide a clear picture of the extent to
processes involved,
which the intended objectives • the inputs and
• To provide feedback on project outcomes and infrastructure facilities
successes Technical analysis is primarily concerned:
The Process of Evaluation a) Material inputs and
a) Before project implementation
b) During project implementation
utilities
c) After project implementation: • Raw Materials
• Processed industrial materials
and components
 • Auxiliary materials and factory
supplies
• Utilities
b) Production
technology
• Whether the technology utilizes
the local raw materials?
• utilizes local manpower?
• Whether the goods and services
produced cater to the basic
needs?
• Whether protects ecological
balance?
• Whether harmonious with the
social and cultural conditions?
c) Product mix
Taking decision regarding whether
 Adding new product line or not,
 Lengthen exist product line or not,
 Analysis of product line is useful.
d) Plant capacity
e) Location and site
f) Machines and
equipment
g) Structure and civil
works
h) Project charts and
layouts
i) Work schedule

2. Institutional aspects
3. Market or demand aspects
4. Financial aspects
5. Economic aspects
6. Political-legal aspects
7. Social aspects
8. Environmental aspects
9. Cross-cutting issues
10. Sensitivity and risk assessment