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Project Management Ch3

The document discusses project identification and screening. It begins by explaining that project identification involves surveying, reviewing strategies and policies, and analyzing natural resources and socio-economic data. It then describes how project ideas can emerge from both the macro-level, such as national plans and policies, and the micro-level, such as identifying unsatisfied demand. The document concludes by explaining that once project ideas are identified, the most promising ones are selected through an initial screening process to evaluate their compatibility, costs, risks, and market viability.

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17 views4 pages

Project Management Ch3

The document discusses project identification and screening. It begins by explaining that project identification involves surveying, reviewing strategies and policies, and analyzing natural resources and socio-economic data. It then describes how project ideas can emerge from both the macro-level, such as national plans and policies, and the micro-level, such as identifying unsatisfied demand. The document concludes by explaining that once project ideas are identified, the most promising ones are selected through an initial screening process to evaluate their compatibility, costs, risks, and market viability.

Uploaded by

okongaonak
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CHAPTER -3

3.1. PROJECT IDENTIFICATION


Pre – Identification
“Pre – Identification” is an important introduction to project identification. This pre –
identification stage involves;
 Surveying
 reviewing,
 inventorying and analysis of strategies and policies,
 natural resources data and
 Socio – economic information.

It is a very important phase in project planning.

Unfortunately, it is an aspect of planning, which is either almost totally ignored or for which
inadequate resources are provided in most developing countries.
Nowadays, modern technology is revolutionizing the survey methods and the means for
carrying out:
• synthesis and analysis
• speeding up some processes,
• reducing the costs of others and
• Providing new ways of looking at things.
Project identification must be carried out also within a framework of national, regional and
sectoral development, otherwise much time and effort might be wasted in identifying and
preparing projects which would be reflected on policy grounds or which might turn out to
be unfeasible because of, for example, a tax and subsidy policy. Thus, those who are
responsible for identifying projects need to be aware of accepted strategies and policies and
also be in a position to feedback information to those who are responsible for formulating
policies.

Project Identification

1
The search for promising project ideas is the first step towards establishing a successful
venture.
The key to success lies in getting into the right business at the right time. The objective is
to identify investment opportunities, which are feasible and promising.

Project identification consists of finding projects, which could contribute towards achieving
specified development objectives. In principle, project identification should be an
integral part of the macro – planning exercise, with sectoral information and
strategies as the main source of project ideas.
In practice, however, projects do not always derive from national and sectoral plans.
Instead, they may originate from several sources.
Project ideas should, in general, aim at overcoming constraints on the national
development effort, be they material, human or institutional constraints, or at meeting
unsatisfied needs, and demand for goods and services.

Constraints, needs and demand should be interpreted broadly to include,for example,


foreign exchange constraints that might indicate the need to undertake projects for export
promotion or import substitution.

The variety of projects makes it impossible to prepare an exhaustive list of sources from
where project ideas emanate; much depend on the experience and imagination of those
entrusted with the task of initiating development projects.

In general, one can differentiate two levels where project ideas are born: The macro –
level and the micro – level.
3.2. At the macro – level, project ideas emerge from;
• National policies, strategies and priorities as may be voiced by government from time to
time;
• National, sectoral, sub – sectoral or regional plans and strategies supplemented by
special studies, sometimes called opportunity studies, conducted with the explicit aim of
translation national and sectoral, sub– sectoral and regional programs into specific
projects;

2
• General surveys, resource potential surveys, regional studies, master plan and statistical
publications, which indicate directly or indirectly investment opportunities.
• Constraints on the development process due to shortage of essential infrastructure
facilities, problems in the balance of payments, etc.
• Government decision to correct social and regional inequalities or to satisfy basic needs
of the people through development projects.
• A possible external threat that necessitates projects aiming at achieving, for example,
self – sufficiency in basic material, energy, transportation, etc.
• Unusual events such as droughts, floods, earth – quakes, hostilities, etc.,
• Government decisions to create project-implementing capacity in such areas as
construction, etc.
• At the macro – level, project ideas can also originate from multilateral or bilateral
development agencies and as a result of regional or international agreements in which
the country participate.
• In addition, individual inspiration, institutions, workshops, and development
experiences of other countries may point to some interesting project ideas.
3.3. At the micro – level

Project ideas emanate from:


• The identification of unsatisfied demand or needs.
• The existence of unused or underutilized natural or human resources and the
perception of opportunities for their efficient use.
• The need to remove shortages in essential materials, services or facilities that constrain
development efforts.
• The initiative of private or public enterprises in response to incentives provided by the
government;
• The necessity to complement or expand investments previously undertaken.
• The desire of local groups or organization to enhance their economic status and
improve their welfare.
• Analyze the performance of existing industries
• Examine the inputs and outputs of various industries

3
• Review imports and exports
• Look at the suggestions of financial institutions and development agencies
• Investigate local materials and resources
• Analyze Economic and Social Trends
• Study new Technological Development
• Draw clues from consumption abroad
• Explore the possibility of stimulating sick units
• Attend Trade fairs

3.4. Screening potentially promising ideas


Once a list of project ideas has been put forward, the first step is to select one or more of
them as potentially promising. This, calls for a quick preliminary screening by experienced
professionals who could also modify some of the proposals. At this stage, the screening
criteria are vague and rough, that becomes specific and refined as project planning
advances.
During the preliminary screening to eliminate ideas, which are not promising, it is required
to look into the aspects such as:
• Compatibility with the promoter
• Consistency with government priorities
• Availability of inputs
• Adequacy of market
• Reasonableness of costs
• Acceptability of risk level

During preliminary selection, the analyst should eliminate project proposals that:
• Are technically unsound and risky;
• Have no market for the output;
• Have inadequate supply of inputs;
• Are very costly in relation to benefits
• Assume over – ambitious sales and profitability.

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