Feasibility Study Investment Project by wxh16939


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       By   Dr. Ali Sajid

                   By       Dr. Ali Sajid
Education & Training
    A person who
       "

 yesterday and stops
  studying today is
  Fear & Wisdom
 fear is the
beginning of
      (Bertrand Russell)
1.Viability of Idea

2. Analyzing Feasibility ( Possibility) of Proj-
 Possibility of Completion ?
 Will it be Successful
3.Reasonable likelihood - constraints
Will Not prevent a proj from meeting key obj
4.Synonym: Achievability
5.“Plng & Orgzg Procedure”
-To Ensure Proj is Effective
-It will work”.
     Reasonable likelihood that
          Constraints on
   “Time” & Other “Resources”
              will not
      Prevent a Project from
           meeting its
         Key Objectives
          What is Feasibility?
         Capable of being done,
          with means at Hand &
       Circumstances, as they are.

           Purpose of a FS –
              To help assess
      “Viability of a business idea-
Technically, Operationally & Economically”
             Feasibility Assessment?

Is the disciplined & documented process of
               thinking through
    an idea from its “Logical beginning
            to its Logical End”.

      This is to determine its Potential
           to be a viable business
       given realities of the Economic
            & Social environment
           in which it will operate
   Provide Client with a solid foundation upon
                 which a project is built.

                        FS Provides
    –   Concept identification,
    –   Estimates of supportable market,
    –   Design parameters,
    –   Estimates,
    –   Revenue projections
    –   Net warranted investment.

   Essentially Road map of proj
         Process of Analysis

 Identify         Set up       Define scope
problem or      feasibility        and
opportunity        study        objectives

                                 Carry out
Recommend –      Evaluate
  proceed     alternatives –
   /shelve    develop/buy
                                of the study
Scope Statement

  A written statement includes:
   • Project Justification

   • Project Objectives

   • Major Deliverables

   • Criteria: Project/ or Phase
     Successfully Completed
    Project Charter
•   Formally Recognizes Existence of a Proj
•   Gives PMgr Authy to Apply Resources to
              Proj, Univ Charter
•   Product to be Delivered ?
•   Refers to Business Need Proj is
           Types of Feasibility
Technical Feasibility
Managerial Feasibility
Economic Feasibility
Financial Feasibility
Cultural Feasibility
Social Feasibility
Safety Feasibility
Political Feasibility
Environmental Feasibility
Market Feasibility
           Tech Feasibility- First systematic
         investigation of Proj Design Viability.
                   Foundation of all other FS .
- Assessment of a Proj Capabilities.
-Investigation of Technical & Physical Para/mtr
TF Reviews:
    -Technical Capability of HR
    -Capability of Available at Technical side

Foreign consultants Role -LDCs
-Too rigid, & Advanced Tech Spec
- Cannot be met by Country.

   Question is “Can it be built?”
          Technical Feasibility (TF)
Anticipate Broader Problems with Questions:
 1.   Adequate “Choice of Available Technologies
for   Alternative Design” purposes, considering:
      a.    Physical layout
      b.    Engineering design

      c.     Availability of raw materials?
2. Costs of Constructing & Operating P-Facilities - Svc
a) Machinery, b ) Equipment, c) Spare Parts?
 3.   Manpower Req:
a)     From professional to labor
b)     locally available?
c)     Responses vary – sector to sector
Technical Feasibility (TF) Contd..
Primary task of TF is Blueprinting:
a)   Manpower Needs
b)   Resources, and Design

c)   Provide Design Alternatives
d)   A Choice of Available Technologies,
     & Cost estimates for each alternative.
 Admin/Managerial Study (AM S)
Evaluates Strategy of company in C/ Out Proj
Providing info & Guidelines-
Used to improve overall Proj Admn.

Project mgr in investigating team.

Examines 4 Components:

A.   External linkages,
b.   Internal organization,
c.   Personnel, and
d.   Mgt plan
Economic Study (Econ S)
Examines a Proposed P-in terms of:
Net Contribution to Industry /Economy
& To society”.

Address 3 Related Questions:
  P-Responsive to “Urgent Present or Anticipated
Econ/Social” need?
2. P-Planned Econ o/p Serve Intended Purpose?
3. Svc Proposed to be Performed by P-
4. Benefits - Justify P - Cost?
Economic Study (Ec S)
Reqs: Study of all of Econ Implications of P:
 a) Demand & Supply of All P- O/P.
b) P- Ability to Inc employment
c)P- “Multiplier" Effects (-Inc Purchase of
goods Effect

d) Effect on inc PS Revenue (income tax, sales),
e) use of Locally Available resources.
Assess P- Net Contribution to Econ/social welfare of
Comparison of Econ & Social Benefits-genrtd
From P-Vs Costs of Construction & Ops.
B > C Proj- Economically feasible. Profitability analysis
is conducted.
Economic Feasibility (Econ F)
1.        Summary of Economic B/C of Proj
2.        Extent to which savings Passed on

4.        Optimum timing of Proj
5.        Sensitivity Analysis
     1.    Considering influence of variations of critical P/M
     2.    discount rates,renergy cost, Construction costs, Tfc forecasts.

6.        Conclusions as to Econ F or not
Financial Feasibility-
Capability of Proj Org -Raise Funds to implement
     proposed proj
(different from economic feasibility
Cultural Feasibility-
Compatibility of Proposed Proj vs cultural setup
     of Proj environment
Social Feasibility-
Addresses influences – of P-on Social System in
     Proj Environment
Safety Feasibility
Considered in Proj Plang.
Analysis if Proj Capable of Implementation
& Oprtd Safely -Minimal Adverse effects on
Environmental Feasibility-
-Concern must be shown
-Action must be taken to address any &
all environmental concerns raised or anticipated
-Mega Dams issues (Aswan Dam)
- New Murree Proj

Political Feasibility
Referred - “Politically Correct Proj."
Political considerations often dictate
direction for a proposed proj
More common in LDC
           Proj Feasibility …

           Market Feasibility-
    Market Variability & impact on Proj
    Not confused with Econ/ F
    Mket needs analysis to view:
     a) Potential Impacts of Market Demand
     B) Competitive Activities, etc.
     c) “Divertible" Mkt Share -Available

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