Project Design & MGT
Project Design & MGT
Management
By Amaha Kiros
COURSE CONTENTS
• Introduction
• Project Development
• Project Appraisal Techniques
• Project Finance
• Project Information Management System
• Project Implémentation
• Project Monitoring and Evaluation
• Project Proposal Writing
CHAPTER 1
INTRODUCTION
The Concept of Project and Development
What is a Project?
The concept of project has no clear cut definition
It has been defined by:
• different scholars,
• development practitioners,
• NGOs
differently in diverse arenas
All too often people call any work they have to do a “project.”
To put projects into perspective, you need a common starting point
Projects actually have a very specific definition.
A project:
• Is defined as a directed work that is aimed at achieving specific goals
within a defined budget and schedule,
• Involves making plans for the future and describing them to others or to
the community as a whole,
• Is any work that happens only once,
• Has a clear beginning and end,
• Is intended to create a unique product or knowledge.
• May involve only a person, or thousands of individuals.
• May last for several days or many years.
• May be undertaken by a single organization, or by an alliance of several
stakeholders.
• May be as simple as organizing a one day event or as complex as
• Can also be defined as a “temporally endeavor undertaken to
create a unique product or service”.
• Can be viewed as a set of tasks or activities involving the use
of resources to obtain benefit.
• Is a specific activity, with a specific starting point and ending
that intended to accomplish the specific objectives
• Is the investment of capital in a time-bound intervention to
create productive assets,
• Is “a unique endeavor to produce a set of deliveries within
clearly specified time, cost, and quality constraints”.
• Is an assignment /task/job that has to be undertaken and
completed within a:
• set time,
• budget,
• resources and performance specification designed to meet the
needs of stakeholders and beneficiaries’.
Characteristics of Projects
Projects:
o Involve the investment of scarce resources in the expectation of future
benefits,
o Have measurable objectives,
o Have specific beneficiaries or clientele group,
o Are conceptually bounded,
o Are geographically bounded,
o Are organizationally bounded,
o Are temporally-bounded,
o
Relationship between Policies, Programs, and Projects
Policy sets out a statement of intent or a vision of what
development should bring.
Programs implement development policy
1. New Investment
• New investments are designed to establish a new productive
process independent of previous lines of production.
• They often include a new organization, financially independent of
existing organizations.
2. Expansion Projects
• These are projects which involve extending an existing project with
the same output, technology and organization.
3. Updating Projects
• These are projects which involve replacing or changing
some elements in an existing activity without major
change of output.
Based on project costs and benefits, a distinction can be drawn
between directly productive & indirectly productive projects.
Directly productive projects are those where the immediate costs &
benefits accrue to a single organization; a consequence is that this
organization is able to calculate & commit any resulting surplus to
new activities.
Indirectly productive projects broadly speaking are those where the
benefits received from new resources do not accrue to the
organization responsible for carrying the costs.
In these circumstances, any resulting surplus is not concentrated in
the hands of a single organization.
Most infrastructure projects, such as roads are indirectly productive;
the benefits accrue to users & producers whilst costs are met by
government.
Project Parameters
Whatever the type of project, three issues invariably arise:
• It tells not only what will be done but also what will not be done.
project completion;
Identifying the requirements and risks
Making plans and organizing the effort
Qualifying and possibly selecting project team, vendors, and other participants
Stakeholder support
CHAPTER TWO
PROJECT DEVELOPMENT
Concept of Project Cycle Management
A cycle is a sequence of events which a project follows.
The way in which projects are planned and carried out follows a
sequence that becomes known as the project cycle.
The cycle starts with the identification of an idea and develops that
idea into a working plan that can be implemented and evaluated.
Any kind of project passes through the following stages:
• Identification
• Preparation (pre-feasibility and feasibility studies)
• Appraisal
• Implementation
• Evaluation
Project Life Cycle (figure)
Identification of Project Ideas
The search for promising project ideas is the first step
towards establishing a successful venture.
Identification of potential project ideas is such a
difficult task that it requires:
Imagination,
sensitivity to environmental changes, and
Realistic assessment of what the project owners can
do.
Good project ideas are elusive. So a wide range of
sources should be tapped to identify them.
To identify promising project ideas, one must:
Assess the Inputs and Outputs of Various Industries
Analyze the Performance of Existing Industries
Study Governmental Guidelines
Look at the Suggestions of Financial Institutions and
Developmental Agencies
Investigate Local Materials and Resources
Analyze Economic and Social Trends
Identify unfulfilled psychological needs etc.
Preliminary Screening of Project Idea
By using the aforementioned suggestions, it is possible to
develop a long list of project ideas.
Some kind of preliminary screening is required to eliminate ideas
which are less promising.
For this purpose, it is important to look into:
o Compatibility With the Promoter
o Consistency With Governmental Priorities
o Availability of Inputs
o Adequacy of the Market
o Reasonableness of Cost
o Acceptability of Risk Level
Project Preparation
Project preparation is about identifying and comparing technical and
institutional alternatives for achieving the project’s objectives.
It covers the full range of analysis of:
Technical,
Institutional,
Financial, and
Economic conditions necessary to achieve the project’s objective.
Preparation thus require feasibility studies that:
Identify and prepare preliminary designs of technical and
institutional alternatives,
Compare their costs and benefits, and
Investigate in more details the more promising alternatives until the
most satisfactory solution is finally worked out.
It involves generally two steps:
Pre-feasibility studies, and
Feasibility studies
1. Pre-feasibility Study
This provides background information for defining the basic
concept of the project, which leads to the feasibility study stage.
Once a concept proposal is developed to conduct a project, it
needs to be examined. To begin with, a preliminary project
analysis is done.
As an introduction to the full range of feasibility study, this
exercise is meant to assess:
• Whether the project is important to justify a feasibility study, and
• What aspects of the project are critical to its variability and
hence deserve an in-depth investigation.
At this stage the analyst obtains approximate estimation of the
major components of the project’s costs and benefits.
Some of the main components which must be examined
during the pre-feasibility study include:
• Availability of adequate market,
• Project growth potential,
• Investment costs, operational cost and distribution costs,
• Demand and supply factors; and
• Social and environmental considerations
Using these preliminary data, a preliminary financial and
economic analysis will be conducted.
If the project idea appear workable after this preliminary
assessment, the analysis will be continued to the feasibly
stage.
2. Feasibility Study
A feasibility study is part of the process of project identification,
preparation and selection.
This process involves further evaluation of projects or groups of
projects and then choosing to implement some of them.
This process is very important for projects that are
implemented by governments and big organizations.
At this stage a team of specialists:
• Scientists,
• Geographers,
• Engineers,
• Economists,
• Sociologists, and others will need to work together and more
accurate data need to be obtained.
A feasibility study should:
Provide all data necessary for an investment decision
• The commercial,
• Technical,
• Financial,
• Economic, and
• Environmental
prerequisites for an investment project should therefore be
defined and critically examined on the basis of alternative
solutions already reviewed in the pre-feasibility study.
Form the core of the proposal preparation process.
• Its purpose is to provide stakeholders with the basis for deciding
whether or not to proceed with the project and for choosing the
The feasibility study must provide answers to the following basic
questions:
• Does the project conform to the development and environmental
objectives and priorities of the specific country or region?
• Is the project technically and scientifically sound?
• Is the methodology the best among the available alternatives?
• Is the project administratively manageable?
• Is there adequate demand for the project’s outputs?
• Is the project financially justifiable and feasible?
• Is the project compatible with the customs and traditions of the
beneficiaries?
• Is the project likely to be sustained beyond the intervention
period?
In developing countries, it is common to find a situation where only a few projects
are sufficiently prepared and carefully selected.
This happens because of several reasons. Some of these could be:
• lack of enough skilled people to perform this task;
• Unwillingness to spend money on this process.
The major difference between the pre-feasibility and feasibility studies is the
amount of work required in order to determine whether a project is likely to be
viable or not.
If the preliminary screening suggests that the project is reliable, a detailed analysis
of the:
• Marketing,
• Technical,
• Financial,
• Economic, and
• Ecological
The final product of this stage is a feasibility report.
The feasibility report should contain the following elements:
Market analysis,
Technical analysis,
Institutional and organizational analysis,
Financial analysis,
Economic analysis, and
Social and Environmental analysis
1. Market Analysis
Market analysis is basically concerned with two questions:
1. What would be the aggregate demand of the proposed product/service in
the future?
2. What would be the market share of the project under study?
To answer the above two questions, the project analyst requires a wide variety
of information and need to use appropriate forecasting methods. These include:
• Consumption trends in the past and the present consumption level
• Past and present supply positions
• Production possibilities and constraints
• Imports and exports
• Elasticity of demand
• Consumer behavior, intentions, attitudes, preferences, and requirements
• Distribution channels and marketing policies in use
• Administrative, technical, and legal constraints
2. Technical Feasibility
The technical analysis is concerned with the project’s
inputs and the technology of production and processing.
It is about the analysis of the technical and engineering
aspects of a project when a project is formulated.
Technical analysis seeks to determine whether the
prerequisites for the successful commissioning of the
project have been considered and reasonably good choices
have been made with respect to location, size, process etc.
Poor technical analysis will result in under or over-
estimation of quantities related to inputs required by and
outputs of the project.
Further analysis based on these estimates would
eventually lead to false cost and benefit estimates.
Care must also be taken in assessing alternative
designs and techniques.
The project’s expected life time must also be
determined carefully for it has greater implication on
its overall analysis and preparation.
All these require creative, committed and competent
specialists from different fields.
It also requires coordination among these specialists,
as every technical aspect is interrelated and
In general the technical analysis is primarily concerned with:
• Work schedule,
• Plant capacity,
Stakeholders are:
• Stakeholders are people affected by the impact of an activity &
people who can influence the impact of an activity.
• People affected by the impact of an activity
• People who can influence the impact of an activity
Why Stakeholder Analysis?
To identify stakeholders’ interests in, importance to, & influence over the
operation,
To identify local institutions and processes upon which to build,
To prepare a useful starting point for problem analysis,
Identify potential winners and losers as a result of the project,
Reduce, or hopefully remove, potential negative project impacts,
To reveal how little we know as outsiders and to encourages public participation,
Identify those who have the rights, interests, resources, skills and abilities to take
part in, or influence the course of, the project,
Identify who should be encouraged to take part in the project planning and
implementation,
Identify and reduce risks which might involve identifying possible conflicts of
interest and expectation among stakeholders so that conflict is avoided
Problem/Situation Tree Analysis
Before we can start to design the project, we need to analyze the problem
identified during project identification.
Problem analysis identifies the negative aspects of an existing situation and
establishes the ‘cause and effect’ relationships between the problems that
exist.
It involves three steps:
Step 2: Identify the causes of the main problem by asking ‘But why?’
Step 3: Identify the effects of the main problem by asking ‘so what?’
Step 4: Draw horizontal lines to show where there re- joint causes and
combined effects.
Structure of Problem/Situation Tree Analysis
econdary
Secondary Effects
Secondary Secondary
Effects Effects Effects
FOCAL
PROBLEM
It is the positive mirror image of the problem tree, and describes the
The level of detail required is a judgment that must be made by
those developing the problem tree.
In general, it is the amount of detail that permits a clear
understanding of the problem and its environment.
If the analysis is too superficial, the solution chosen could itself
cause a whole series of additional problems because the cause-and-
effect relationships of the first analysis were not well-defined.
The objectives tree provides the basis for determining the project’s
hierarchy of objectives, which will eventually be used to build the
project’s logical framework.
As with the problem analysis described above, the objectives
analysis process should be conducted as a participatory exercise
with all stakeholders concerned.
If we try to address all of the objectives we have identified, we will
find we have a very expensive and lengthy project.
It is therefore necessary to focus on one or a few areas of the
objectives tree.
If more than one objectives tree has been drawn, we will need to
decide which of these to focus on for the project.
Structure of Objective/Solution Tree Analysis
in Axum Town, Tigrai Regional State, Ethiopia
Logical Framework Approach/Log Frame to Project Analysis and
Implementation
Now that the project has been identified and detailed information has
been collected, we can start to plan exactly how the project will function.
A useful way of doing this may be to use a logical framework (log frame).
Goal
It is a desired state where a need or problem no longer exists or is
significantly improved.
The goal may be beyond the reach of this project on its own.
What ultimate objective is the project contributing to? This should be a brief
Purpose
• Refers to the specific change we want the project to
contribute to the achievement of the goal.
• It is sometimes called the immediate project objective.
Result/Deliverables/Outputs
• Is what the project team has control over.
• These are what we want to see as a result of our activities, in
Activities/Inputs
• This part of the project log frame lists the activities,
which are needed to achieve these outputs.
• There may be several for each output.
• Statements should be brief and with an emphasis
on action words.
Indicators
Source of verification/Evidence
Ensure key indicators are identified from the start of the project so that
monitoring and evaluation are easier.
Ensure that people involved in the project use the same terminology
Help people to summarize a project plan on a few sides of paper. This helps them
to communicate their plan simply with others, although a log frame is no
However, the log frame approach does have limitations:
Project management can become rigid unless the log frame is continually
checked and adjusted.
As the approach involves participation by a number of different
stakeholders, good leadership and facilitation skills are needed to ensure
stakeholders understand the approach and actively participate in it.
Since the approach builds on analysis of a problem, it might not be
viewed as appropriate in cultures where people do not openly discuss
problems.
Chapter 3
Project Appraisal Techniques
Concept of Project Appraisal
Project appraisal involves a further analysis of the proposed project.
Average Cost of I
Principles of Cost Benefit Analysis
Cost-Benefit Analysis estimates and totals up the equivalent
money value of the benefits and costs of projects to establish
whether they are worthwhile.
In order to reach a conclusion as to the desirability of a project all
aspects of the project, positive and negative, must be expressed
in terms of a common unit; i.e., there must be a "bottom line."
Cost and benefit analysis valuations should represent consumers
or producers valuations as revealed by their actual behavior.
2.2 Discounted Project Appraisal Criteria
Concept of Time Value of Money
The undiscounted measures discussed so far share a common
weakness.
They fail to take into account adequately the timing of benefits and
costs.
It is an accepted principle in economics that inter-temporal
variations of costs and benefits influence their values and a time
adjustment is necessary before aggregation.
Before the above criterion can be used to decide which projects should be
selected, it is necessary to address the problem of the difference in the
timing of a projects costs and benefits.
If these occur over a number of years, they will not be directly comparable.
Every input item (cost item) and every output item (benefit item) must be
weighed up using the same unit.
If the total value of benefits is greater than the total value of costs, the
project is said to be an efficient scheme.
The process of providing a monetary value to cost and benefit items has to
take account of one important factor: time.
Indeed, when assessing projects one has to be aware that after the
initial investment for a project is made, the project starts, at some
point, to yield a stream of benefits which last over a period of time.
On the other hand, a stream of costs will be generated over a
period of time in order to sustain the project.
Since the value of the measure unit (i.e., money) varies with time,
costs and benefits must be adjusted by applying a discount factor
to their nominal values.
Why a dollar today worth more to you than a dollar a year from now?
A monetary unit received in the future is worth less than a monetary
unit received at the present for four primary reasons:
1. The presence of positive rates of inflation reduces the purchasing
power of money through time;
2. The opportunity cost of lost earnings as the money could have been
invested and earned a return between now and certain time point in
the future;
3. The uncertainty of future values due to the risk of default or non-
performance of investments; and
4. Human preference typically involves impatience or the preference to
consume goods and services now rather than in the future.
For all these reasons, tomorrow’s income available from a project cannot be
treated as if it were equally valuable to today’s income.
The concept of TVM is used as a method of standardizing the value of the
benefits and the costs that occur in different periods over the project’s life, so
that they can be compared and added together.
For the reasons outlined above, income available now is more valuable than
future income even if there is no inflation.
The accepted method for this adjustment amounts to bringing them to a
common time denominator. This principle is called discounting.
The process of going to future values (FVs) from present values (PVs) is called
compounding.
The most important discounted cash flow measures include:
The net present value,
The internal rate of return and
The benefit cost ratio.
A. The Net Present Value (NPV)
The most widely used and straightforward discounted measure of project
worth is the net present worth or the net present value (NPV).
It is the difference between the present value of cash inflows and the cash
outflows.
It estimates the amount of wealth that the project creates.
A proposal’s net present value (NPV) is obtained by discounting the future
net cash earnings at a rate which reflects the value of the alternative use
of the funds, summing them over the life of the proposal and deducting
the initial outlay.
Practical application for the present value method
The practical application of the present value criterion as a means of evaluating
investment proposals for project planning implies the following assumptions:
Annual outlays and receipts from each investment are known for the entire life of the
project.
the project life span is known.
there is a rate of discount, which can be applied to every proposal and for every tie
period.
However, the assumptions made above is not always available for every project.
That means the NPV criterion may be applicable only to a limited number of project
proposals on which relevant data as indicated above could be computed or imputed. In
Advantages of NPV Approach
It is simple to use and does not rely on complex conventions
It is the only selection criteria that can correctly be used to choose
between mutually exclusive projects, without further manipulation.
This technique is based on discounted values of the future streams
of the cash flows
Limitations of the Net Present Value
The use of the net present value criterion relies on the prior
selection of an appropriate discount rate
This method is not the simplest method for a large and complex
investment budget
Some projects could be deferred from implementation although
they show positive NPVs, due to scarcity of funds. Thus passing the
NPV test may be a necessary condition but not a sufficient
condition.
Some projects could be deferred from implementation although they show
positive NPVs, due to scarcity of funds. Thus passing the NPV test may be a
necessary condition but not a sufficient condition.
If some projects are mutually exclusive then the implementation of one
would naturally exclude the execution of the other. This will lead both the
central authorities and the sponsoring agency into a dilemma which
project should be implemented. If funds are unlimited then both could be
implemented, but this is not always the case.
The selection of an appropriate discount rate is another limitation.
NPV does not show the exact profitability rate of the project.
For some projects the required information/data/ for
Method.
The IRR of a project is probably the most commonly used assessment
Hence, IRR is the discount rate for which the NPV equals zero.
The element that is unknown is the rate of return (IRR) which will
(1 r ) t
t 0
BCR n
Ct
(1 r ) t
t 0
Where,
B= the sum of the project’s discounted benefits;
C= the sum of the project’s discounted costs;
r = projected discount rate of the project;
n = the number of periods of cash flows for the project being evaluated
The Decision rule for BCR
A project should be accepted if its BCR is greater than or equal to 1
(i.e. if its discounted benefits exceed its discounted costs).
But if BCR is less than 1, the project should be rejected. The BCR will
be less than, equal to, and greater than one when the discount rate
used is greater, equal to, and less than the IRR.
BCR is easy to show the impact of a percentage change in cost or
benefits on the projects viability.
D. Profitability Index (PI)
The Profitability Index (PI), also known as value investment ratio
(VIR), is the ratio of payoff to investment of a proposed project.
It is the ratio of the present value of an investment’s future cash flows
to the project’s initial cost.
The ratio is calculated as follows:
A profitability index of 1 indicates breakeven.
Any value lower than one would indicate that the project's PV is less
than the initial investment.
As the value of the profitability index increases, so does the financial
attractiveness of the proposed project.
Rules for selection or rejection of a project:
If PI > 1 then accept the project;
If PI < 1 then reject the project.
CHAPTER FOUR: PROJECT FINANCE
• The concept of Financial Management
• The Concept of Project Finance
• Development of Project Finance
• Features of Project Finance
• Difference between Project Finance and Traditional Finance
• Participants and their Respective Roles in Project Finance
• Financing Mechanisms Under Project Finance
• Risks Associated With Project Finance and Ways of Mitigation
• Mitigating Risk with Guarantees
• Principal Advantages and Disadvantages of Project Financing
• Benefits of Project Finance
• Common Misconceptions about Project Finance
The concept of Financial Management
Financial management is about ensuring funds available whenever it
is needed and they are obtained and used in the most efficient and
effective way to the benefit of an organization.
The primary objective of the financial management process is to
optimize financial and economic benefits from an investment.
Financial management optimizes output from the given input of
funds.
The Concept of Project Finance
At its core, project finance is a method of financing where the lender
accepts future revenues from a project as a guarantee on a loan.
Project financing is an innovative and timely financing technique that
has been used on many high-profile corporate projects.
Increasingly, project financing is emerging as the preferred alternative
to conventional methods of financing infrastructure and other large-
scale projects worldwide.
Project financing discipline includes:
Understanding the rationale for project financing,
How to prepare the financial plan,
Assess the risks,
Design the financing mix, and
Raise funds
Project finance is finance for a particular project which is repaid from the cash-
flow of that project.
Project finance is different from traditional forms of finance because the
financier principally looks to the assets and revenue of the project in order to
secure and service the loan.
In contrast to an ordinary borrowing situation, in a project financing the
financier usually has little or no recourse to the non-project assets of the
borrower or the sponsors of the project.
In this situation, the credit risk associated with the borrower is not as important
as in an ordinary loan transaction; the most important issue is the identification,
Project finance is a method of raising long-term debt financing for
major projects through “financial engineering,” based on lending
against the cash flow generated by the project alone;
It depends on a detailed evaluation of a project’s:
• Construction,
• Operating and revenue risks, and
• Their allocation between investors, lenders, and other parties
through contractual and other arrangements.
Development of Project Finance
The growth of project finance over the last years has been driven mainly by the
worldwide process of deregulation of utilities and privatization of public-sector
capital investment.
This has taken place both in the developed world as well as developing countries.
It has also been promoted by the internationalization of investment in major
projects.
Today, various sectors employ project finance, including power, transportation,
oil and gas, leisure and property, telecommunications, petrochemicals, mining,
industry, water and sewerage, waste and recycling, and agriculture and forestry.
Features of Project Finance
Project finance structures differ between these various industry sectors and from deal to
deal: there is no such thing as “standard” project finance, since each deal has its own unique
characteristics.
But there are common principles underlying the project finance approach.
Some typical characteristics of project finance are:
It is provided for a “ring-fenced” project (i.e., one which is legally and economically self-
contained) through a special purpose legal entity (usually a company) whose only business is
the project (the “Project Company”).
It is usually raised for a new project rather than an established business (although project
finance loans may be refinanced).
There is a high ratio of debt to equity (“leverage” or “gearing”)—roughly speaking, project
There are no guarantees from the investors in the Project Company (“nonrecourse”
finance), or only limited guarantees (“limited-recourse” finance), for the project finance
debt.
Lenders rely on the future cash flow projected to be generated by the project for
interest and debt repayment (debt service), rather than the value of its assets or
analysis of historical financial results.
The main security for lenders is the project company’s contracts, licenses, or ownership
of rights to natural resources; the project company’s physical assets are likely to be
worth much less than the debt if they are sold off after a default on the financing.
The project has a finite life, based on such factors as the length of the contracts or
licenses or the reserves of natural resources, and therefore the project finance debt
Participants and their Respective Roles in Project Finance
tep 2
he sponsor company assesses project viability (technical, legal, environmental, etc). Sometimes this is the first step, before a sponsor company bids on a project.
tep 3
he sponsor company establish an entity that will conduct the project, the Special Purpose Vehicle (SPV).
tep 4
he sponsor company assembles financing for the project and arranges the offtake agreement (predetermined agreements with the buyer to purchase some amount
of the goods or services produced).
tep 5
he sponsoring company works out agreement with contractors, sub-contractors, equipment providers, etc.
tep 6
he sponsoring company will oversee construction and upon completion will either handback the project to the host country, operate the site itself, or transfer
Finance Risks Associated With Project Finance and Ways of Mitigation
• Commercial Risks
• Political Risks
• Legal Risks
• Construction, Operation, and Technical Risks
Mitigating Risk with Guarantees
Principal Advantages and Disadvantages of Project Financing
Benefits of Project Finance to Investors
• Investors use project finance for the following variety of reasons:
• Non-Recourse
• High Leverage
• Tax Benefits
• Off-balance-sheet financing
• Borrowing Capacity
• Risk Limitation
• Risk Spreading / Joint Ventures
• Long-Term Finance
• Enhanced Credit
The Benefits of Project Finance to Third Parties
Lower Product or Service Cost
Risk Transfer
Transparency
• Lender Supervision
• Information, on the other hand, is processed data which is directly used in the
nformation Needed by Various Managers
• Not only should this information be made available, but it must be made
available quickly.
• The right information at the right time reduces the risk of wrong decisions.
• Lower level managers and supervisors need information and feedback about daily, weekly
and monthly activities.
• Middle level managers or divisional heads are concerned with the current and future
performance of their units.
• They require summarized versions of the activities and problems in their respective
departments.
• Such information may be generated from within the organization or from outside sources
for comparison purposes.
• Especially, financial managers need timely information about financial statements, budgets,
Information Need at Top Level Management
Top level management is primarily concerned with strategic planning and much
of the information that top level managers need comes from outside sources.
For strategic planning, information regarding:
• Timeliness
• Accuracy
• Consistency
• Completeness, and
• Relevance.
A small project with little information needs will not benefit from a
complex integrated system. On the contrary, managing the system
can be less efficient than a simple solution.
It is important for the project to identify and develop a PIMS that
satisfies its critical requirements to manage information and avoid
the creation of complex systems that are too expensive, take more
time to develop and require additional resources to manage it
properly.
Define the Information Needs
Locate the Information Sources
Select the Information Needed
Collect the Information
Organize and Store Information
Analyze and Report the Information
Share and Use on the Information
Current Problem with Project Information Management System (PMIS)
There are real challenges in developing and implementing a MIS.
Project managers can reshape and re-plan the parts of the project.
Project managers review the products and its costs continually to ensure
Unplanned changes that require additional money might occur.
c. Beneficiary participation
e. Financial management
f. Reporting system
g. Sustainability
Time control and remedial action
Time taken to implement project activities is one measure of successfulness of
supervision or monitoring of project implementation.
Supervisor pays particular attention to:
Time control measures,
Time scheduling and its supervision,
Time extension and postponement,
Damages for non-completion and defect or warranty period.
Management Problems
Technical Problems
Political Problems
Other Problems
Pre-Requisites for Successful Project Implementation
• Adequate Formulation
• Political Commitment
• Simplicity of Design
• Careful Preparation
• Good Management
• Advance Action
• Timely Availability of Funds
• Judicious Equipment Tendering and Procurement
• Better Contract Management
• Effective Monitoring
• Other Factors
CHAPTER 7
PROJECT
MONITORING AND
Contents In Brief
The Concept of Monitoring and Evaluation
Reporting
The Concept of Monitoring and Evaluation
Monitoring
Is the process of routinely:
• Collecting,
• Storing,
• Analyzing, and
• Reporting project information used to make decisions for project
management.
Monitoring provides project management and project stakeholders the
information needed to:
• Evaluate the progress of the project,
• Identify trends,
• Patterns or deviations,
• Keep project schedule and measure progress towards the expected goals.
Monitoring information allows decisions regarding the use of project
resources:
Human,
Material, and
financial to enhance its effectiveness.
When the right information is available at the right time and to the
right people it can support decisions.
Project monitoring is the continuous assessment of project
implementation in relation to the agreed plans and the agreed
provision of services to project beneficiaries.
Monitoring can be carried out by the:
• Beneficiaries,
• Managing staff
• Supervisory staff, and
• Project management staff.
The aim should be to ensure that the activities of the project are
being undertaken on schedule to facilitate implementation as
specified in the project design.
Any constraints in implementing the design can quickly be detected
and corrective action taken
Monitoring is an internal project activity, an essential part of good
management practice, and, therefore, an integral part of the day-to-
day management.
The term has a close meaning with control and supervision.
Key questions in project monitoring include:
environment).
With no free hand, the feedback mechanism will be stifled and
information be “held-back” instead of being “fed-back”.
The aim of evaluation is largely to determine the extent to which the
objectives are being realized.
Evaluation, an essential ingredient of project management, is concerned
with the following critical questions:
realistic?
conditions?
flexible?
Common Features of Monitoring and Evaluation
In many cases;
• Both M&E use the same data collection and analysis system;
Monitoring Evaluation
Objective To determine the efficiency To determine whether the
& legitimacy of the objectives set were
application and use of realistic, given the
inputs as well as their capacities with which & the
conversion into outputs circumstances in which they
To facilitate an adjustment had to be fulfilled
of To undertake review of
activity plans, time things done i.e. to assess the
schedules or budgets impact of the project
(focuses on inputs, process, activities (Focus on
Complementary Features of Monitoring & Evaluation
Monitoring Evaluation
Implementation oriented Policy oriented
Tracks results Explain results
Assess intermediate
Assess attributes
results
Focus in thoroughness
Focus on timeliness
Emphasis on final
Emphasis on multi-level
results results
Usefulness of Monitoring & Evaluation
M&E studies can be of direct use to policy makers, planners and
managers in four different ways:
It can help a country to improve its methods of identifying and
selecting projects and programs
M&E studies can determine whether the project:
• Is being implemented efficiently,
• Is responsive to the concerns of the intended beneficiaries and
• Will have its potential problems detected and corrected as quickly as possible.
They measure whether projects and programs that are underway are
achieving their intended social and economic objectives as well as
contributing to sectorial and national development objectives.
Evaluation studies can be used to assess the impact of projects on
wider developmental objectives such as:
• Protecting the environmental and managing the natural resources,
• Alleviating poverty and
• Giving women full economic, social and political participation in all aspects of
development.
Prerequisites for a Successful Monitoring & Evaluation System
its outputs.
Evaluation report, on the other hand, deals with what we got from
needs.
Features of Good Reports
Inadequate or lack of monitoring and evaluation unit and staff both at the
Poor accountability for failures and inadequate reward for special efforts made
of new projects.
evaluation functions.
CHAPTER 8
PROJECT PROPOSAL
WRITING
BRIEF CONTENTS
An Overview
This is a general aim that should explain what the core problem is
This describes what the long-term benefits to the target group are.
to the vision.
6.2 Project Objectives/Project Purpose/Project Immediate Objectives
This is a more:
Refined,
Specific,
Measurable,
Achievable,
Real, and
Time bounded
activities that contribute to the overall achievement of a project
goal.
7. Project Implementation and Management Plan
It is a kind of framework within which the project’s specific
objectives and the necessary project activities are stated in a:
• Clear,
• Precise, and
• Meaningful manner along with the responsible
bodies/organizations.
Project Activities Format
Objectives Activities Responsibility Remark
Start End
No Activity 1
Activity-2
8. Project Implementation Management Strategy
8.1 Implementation Strategies
Implementation strategies refer to the basic mechanisms the project
manager devises to actually carry out the project.
These include:
• Distribution of leaflets,
• Preparation of symposiums and trainings,
• Meetings with community groups and conducting focus group
discussions, etc.
Implementation strategies of projects can vary from one to other
depending on the:
Nature and characteristics of the discipline (project);
Methodological approach of project planners;
Actual context of the problem under consideration, and
many other possible reasons.
8.2 Sustainability
the key mechanisms that can likely sustain the impact of the project
1.Organizational Sustainability
and implementation?
Project personnel,
Clear: the proposal should convey one and only one meaning.