Design Project Procedure
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Types of Designs
Preliminary or quick estimate designs
Detailed estimate designs
Firm process designs or detailed designs
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Feasibility Study Preparation
Session Overview
Purpose of the Feasibility Study
The Feasibility Study process according to
international standards
The Feasibility Study outline
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The Feasibility Study:
something we already know
Feasibility study as project plan - assumes the project
concept is feasible and maps out the course for project
implementation
Focus on engineering aspects – low attention to social,
institutional, environmental aspects
Economic and/or financial analysis limited to
budgeting exercise and some cash flow
Feasibility analysis as part of the process is missing
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The Feasibility Study:
international standards
Feasibility study is the result of feasibility analysis
Convince the reader (financing entity) that the project
is worth funding
Document relevant information and aspects regarding
the project
Assess whether the project is relevant, viable and
implementable
Enable the project proponent to prepare financing
application and present the project to sources of
financing
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Factors considered in Feasibility
Survey
1) Raw Material
2) Thermodynamics & kinetics of reaction
3) Facility & Equipment available
4) Facility & Equipment to be purchased
5) Estimate of cost
6) Profit
7) MOC
8) Safety
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Factors considered in Feasibility
Survey
9) Markets
10)Competition
11)Properties of product
12)Sales
13)Shipping
14)Plant location
15)Patent situation & legal restriction
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Project Preparation vis-à-vis
Project Cycle
Implementation Strategic and Sectoral Considerations Design
Phase Phase
Project Pre-feasibility
Project
Identification Study, PPD
Sustainability
Project Project
Execution Preparation Feasibility
Study, EIA,
PSD
Feedback
loops Implementation
Project Start-up
Planning
Process flow PIP
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Overview of FS Contents and Outline
Executive Summary (PSD)
I. Introduction
II. Project Strategic Context
III. Technical Analysis
IV. Institutional Assessment
FEASIBILITY V. Environmental Assessment
STUDY
VI. Stakeholder Analysis
VII. Financial and Socio-
Economic Analysis
VIII. Conclusions
IX. Project Implementation Plan
IX. Appendices
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Project Strategic Context
Strategic goals; priority programs at local/regional level
National policies: National, regional or sectoral goals
which the project supports
Project environment issues: policy, legal and regulatory,
institutional framework, environmental, etc.
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Technical Assessment
Several subsequent assessment levels:
Technical assessment of existing services, physical
system, and treatment, and measures for their optimum
use
Demand (wastewater flow) analysis and forecasting
Establish gap between the current level service and
future demand
Develop technical alternatives for the project required
outputs (design, technology, process, scale)
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Aspects of Feasibility Analysis
Input to the financial and socio-economic analysis
Technical
Analysis
Financial Social and
Analysis Stakeholder
Analysis
Project
Feasibility
Economic Environmental
Analysis Analysis
Institutional Analysis
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Financial Cost-Benefit Analysis of a Project
The unit of analysis is the project, not the company
Evaluates and calculates the project’s financial:
Revenues
Costs
Net benefits (of revenues over the costs)
Project revenues, costs and net benefits are determined
on a with-project and without project basis.
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Financial Cost-Benefit Analysis
Project Costs
1. Investment costs:
Capital costs: land, civil works, equipment, studies
Education programs, lab equipment & training,
Institutional Development (consulting services,
capacity building programs, M&E of benefits)
2. Operation and maintenance costs: labor, electricity,
chemicals, materials, overheads, raw water charges,
insurance, etc.
3. Residual values (of project assets at the end of the
project life)
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Conclusions of the Financial Analysis
Selection of options and technology
Overall project profitability and sustainability
Financial impact on the utility
Final phasing of investments and priorities
Financing Plan and application requirements
Tariff setting and proposal to the municipality
Responsibility chart
Project cash flow skeleton for conducting socio-
economic analysis
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Sensitivity and Risk Analysis
A technique for investigating the impact of changes
in project variables
Identify key variables which influence project costs
and benefits
Investigate the consequences of likely adverse
changes
Identify mitigation actions
Qualitative Risk Analysis at the: project level, sector
level and national level
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Summary
The feasibility analysis is an internationally
accepted process used to evaluate various
project dimensions important for achieving the
desired project benefits.
An effective tool for appraising the project from
standpoints of all project stakeholders
It is not a waste of time. It significantly reduces
the risks in project implementation
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