Project Analysis and Management

By Dr.Tadesse D.
Email: [email protected]

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Issue to be discussed in this course:

• Chapter 1: The Concept of project

• Chapter 2: Project cycle

• Chapter 3: Project Identification /idea generation

• Chapter 4: Technical Analysis of Project

• Chapter 5: Financial Analysis of Project

• Chapter 6: Economic Analysis of Project

• Chapter 7: Project Planning, Organizing, and Implementation

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 Chapter One

Introduction to Project

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Outline:
1. Definition of a Project

2. Characteristics/Features of a Project

3. Importance/Objectives of a Project

4. Plans, Programs and Projects

5. Classification of a Project

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 1.1 Definition of a Project

 It is very difficult to find a single comprehensive

definition of project because projects are different in terms
of their nature and objectives. Some of its definitions are:

 Project is an investment activity in which specific

resources are committed within a given time frame, to
create capital assets over an extended period of time in
expectation of benefits that exceed the committed
resources.

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 Cont…
 Project is a unique set of coordinated and controlled
activities, with definite starting and finishing points,
undertaken by an individual or organization to meet
specific objectives within defined schedule, cost and
performance parameters.

 A project is a problem scheduled for solution.

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 1.2. Primary Features of a Project

 Projects from mega international projects to small domestic

projects. To mention few examples:

 Designing and constructing a building, a house or a yacht.

 Going on holiday (a domestic project).
 Building a bridge, road, runway, or other structure
 Writing a software
 Obtaining an MBA degree
 Planting a garden
 A wedding plan
 Constructing a house, etc;

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 Cont…

a. A start and finish.

b. Involve an element of risk.
c. A life cycle (are multifunctional).
d. Achieve beneficial change.
e. Create capital assets:
f. A budget.
g. Non-repetitive (are Unique in nature).
h. Use of resources.
i. A Single Point of Responsibility.
j. Team Roles.

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 1.3. Benefits of Projects
Why projects are undertaken?
• Development or growth of a nation, region, city, etc.

• To increased welfare of employees

• Improvement of income distribution

• Solving immediate problems

• Providing employment and transport facilities

• Other social benefits like elimination of poverty, etc.

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 1.4. Plans, Programs and Projects

1.4.1. Plans and Projects

 Planning is a means (guide) to an end.
 Plans are designed as a means to accomplish development
strategies (project).

• Planning is necessary because:

 it helps an organization to think ahead and anticipate future
events
 it gives clear picture of future events to measure and control
actual activities, etc.

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 Cont…
• Most commonly, for the purpose of easy understanding, project
plan can be portrayed by the way of visual form (two visual forms):

1. Bar chart/Gantt chart

2. Network model

1. Bar chart/Gantt chart

• Developed by Henry Gantt (1861 – 1919).
• Time scale = Horizontal time scale
• Activities = Vertical

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 Cont…

2. Network model
Shows the activities and events of the project and their logical
relationships. A simplified network diagram for a dinner project:

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 Cont…

1.4.2. Programs and Projects

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 1.5. Classification of Projects

 Project can be classified based on several criteria. Some of them

are:
1. Based on Ownership
a. Private Sector- Mostly projects undertaken by business
enterprises .

b. Public Sector- project undertaken by national and local

government

c. NGO’s- development projects are most often undertaken by

non-government and non-profit organizations.

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 Cont…
2. Based on the Sources of finance
a. Government treasury-projects may be entirely financed by
government budget. For example: construction of regional
airport.

b. Government treasury and external sources- most projects are

financed by the joint partnership of the government and donor
groups

c. External Sources of finance- projects may be financed totally by

parties other than the government.

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 Cont…
3. Based on purpose
a. New projects- New investment is designed to establish a new
productive process independent of previous lines of production.

b. Expansion projects – They involve repeating or expanding an

existing activity.

c. Updating projects – They involves replacing or changing some

elements in an existing activity without a major change of
output.

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 Cont…
4. Based on time horizon
a. Long term projects: Involve higher risk and require large
amounts of resources. Their major impact is over long period of
time. Example: power construction

b. Medium term projects – Involve moderate risk and require fair

amounts of resources. Example: Factory construction.

c. Short term projects – are completed within one year. They are
less rigorous require fewer resources and involves less or no risk.
Example: exhibitions and bazaars.

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 Cont…
5. Based on locality
a. Regional – Projects undertaken in particular region and benefit
only that region. E.g. construction of elementary schools.

b. National – projects undertaken by federal government and all or

many states/regions will get benefits from them. E.g.
Construction of universities, dams for electric power, etc.

c. International – projects that involve many countries. E.g.

Development projects under taken by world bank.

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 Cont…
6. Based on resource use
a. Capital intensive projects- projects which largely use machinery
in the manufacturing process. E.g. Beer factory

b. Labor intensive projects – projects which largely use human

labor in the production of output. E.g. Salt production.

c. Energy intensive projects – project which consume large amount

of energy (e.g. electricity power) in the manufacturing process.
E.g. Marble factory.

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 Exercise
1. The Canadian International Donor Agency (CIDA) has donated
$7.5 million to provide Condominium houses to 50 families living
in the Merketo informal settlement. On 6 February 2013, the
agency signed a contract with the Department of Housing to
implement the project. The following requirements, amongst
others were set in the contract:

a. The Condo houses must meet specifications in line with

government policy.

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 Exercise
b. In order to ensure sustainability and affordability for the 50
families, the head of each of the 50 families must be given skills
development training in small business development and small
business start-up. This is to ensure that the families will be able to
afford rentals, maintenance of the homes and to expand their
homes to accommodate the growth of the families in the future.
c. The project must be completed within three years and the
handover of the homes to the 50 families must be a high profile
public event.
Required: Identify the following elements in the project:
• Task, Project time, Project budget, performance specifications,
Beneficiaries, and stakeholders.

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 Thank You!!!
Last, but not Least about
Chapter-1

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