Feasibility Report

Project appraisal is a process of detailed examination of several aspects of a given project before recommending the same. The project promoter/sponsor has to ensure that the investment on proposal will generate sufficient returns and loan amount disbursed will be recovered along with interest within reasonable period of time. Appraisal is the analysis of a proposed project to determine its merit and acceptability in accordance with established criteria. This is the final step before a project is agreed for financing. It checks that the project is feasible against the situation on the ground, that the objectives set remain appropriate and that costs are reasonable.

Various criteria of project appraisal (TELOS)

Technical: will the project work? Has due attention been paid to technical factors affecting the project design? The assessment is based on an outline design of system requirements, to determine whether the company has the technical expertise to handle completion of the project.

Economic: will the nation and society at large be better off as a result of the project? Will the project benefits be greater than the project costs over the life of the investment when account is taken of time (namely, is the Net Present Value of the project positive at the test discount rate)? can the project be financed? Will there be sufficient funds to cover the expenditure requirements during the life of the project?

Legal: Determines whether the proposed system conflicts with legal requirements. will the project be compatible with government policy, at both central and regional levels?

Operational: The operational feasibility assessment focuses on the degree to which the proposed development projects fits in with the existing business environment and objectives with regard to development schedule, delivery date, corporate culture, and existing business processes.

To ensure success, desired operational outcomes must be imparted during design and development. These include such design-dependent parameters such as reliability, maintainability, supportability, usability, producibility, disposability, sustainability, affordability and others.

Scheduling A project will fail if it takes too long to be completed before it is useful. Typically this means estimating how long the system will take to develop, and if it can be completed in a given time period using some methods like payback period. Schedule feasibility is a measure of how reasonable the project timetable is. Given our technical expertise, are the project deadlines reasonable? Some projects are initiated with specific deadlines. It is necessary to determine whether the deadlines are mandatory or desirable. Given the human and material resources identified, can the project activities be undertaken and outputs achieved within the time available and to the required standards?

Other factors

Social and gender: what will be the effect of the project on different groups, at individual, household and community levels? How will the project impact on women and men? How will they participate in various stages of the project cycle? Will the social benefits of the project be greater than the social costs over the life of the investment when account is taken of time?

Institutional: are the supporting institutions in place? Can they operate effectively within the existing legislative and policy environment? Has the project identified opportunities for institutional strengthening and capacity building?

Environmental: will the project have any adverse effects on the environment? Have remedial measures been included in the project design?

Sustainability and risk: will the project be exposed to any undue risks? Will the project benefits be sustainable beyond the life of the project?

Schematic Diagram of Feasibility study