Project Appraisal

Swagat Kishore Mishra

Department of Economics and Finance
WILP: Project Appraisal
Lecture 5

Email: swagat@goa.bits-pilani.ac.in
Tel. 0832-2580207 (O) 08879506995 (M)


1 Course No. ETZC414 Project Appraisal August 30, 2014
Outline
Introduction to Technical Analysis
Significance: Case Study from Road Construction
Choice of Technology
Material Inputs & Utilities, Machineries &
Equipment, Alternatives for Concrete Project
Making
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For manufacturing a product more than one technology are
available.
Factors: plant capacity, principal units, investment outlay,
production cost, product mix etc.
Technical know-how

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Introduction to Technical Analysis
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General Project Analysis
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Projects Technical Analysis
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An example: River Dam Project
Technical Analysis
Significance: Case Study
Road Transport
With greater emphasis on ensuring equality and fairness and
addressing socio-economic inequalities, it is good practice to
consider the impacts of transport interventions on different
groups of people within society, both to enable negative
impacts to be 'designed out' or mitigated and to develop
interventions that deliver more positive benefits for particular
groups.
These impacts should be addressed prior to formal appraisal
in support of a funding approval; this should ensure that
potential impacts are properly addressed, with potential costs
of mitigation also being taken into account.
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People in communities suffering from the effects of high flows
of traffic are often not the people who are benefiting from high
levels of mobility. In some cases, these people might be living in
a deprived community, who have low levels of access to a car,
and are suffering from the impacts of other people's mobility
but not experiencing higher levels of mobility themselves.

Most transport interventions are based on generating user
benefits, which are usually experienced by people located
beyond the immediate location of the transport intervention. It
is important to understand the distributional effects of user
benefits, by area and social group.

Impacts on in-work trips are experienced by businesses and
not individuals and are not applicable for SDI analysis.
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Social and Distributional Impacts (SDI)
http://www.dft.gov.uk/webtag/documents/pr
oject-manager/unit2.13.php#013
The term 'Social and/or Distributional Impacts' (SDIs) was first
introduced within transport appraisal frameworks through the
Department's Guidance for the Transport Innovation Fund,
which stipulated a requirement to assess SDIs within the full
appraisal of road pricing interventions.


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Prior to undertaking the actual SDI
appraisal, there are a set of steps that
the SDI analyst should undertake,
which are:
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Step 0
Initial screening:
consideration of whether
the nature of the proposal
will increase potential for
SDIs (positive or negative).
Identification of likely
impacts that will require
further SDI screening.
Justification required for
any decision not to pursue
individual impacts further.
Step 1
Confirm the areas impacted
by intervention.
There is a need to select
spatial levels appropriate to
each impact.
Step 2
Identify social groups in
areas affected by the
intervention.
This will involve research to
build a detailed profile of
each area.
Step 3 Full screening.
This will include a check on
the initial screening.
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'Social' impacts lend themselves to assessing the social
change processes invoked by the introduction of a transport
intervention.
These impacts include the effects on communities such as
cohesion, stability and services, people's way of life (how they
live, work and play), the environment such as the quality of the
air and landscape, health and well-being and personal fears
and sense of security.
There are points of overlap between social, economic and
environmental impacts, because economic and environmental
impacts can have social consequences and vice versa. Social
research provides one of the toolkits, alongside economics and
physical science, which can be used to measure and explain
these impacts.
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'Distributional' impacts relate to the extent to which there are
differences in the impacts of interventions across different
groups in society.
For example, the noise impacts of an intervention will affect
different groups of households, with some experiencing increases
in noise, and others experiencing decreases. Impacts such as
noise and air quality arising from a transport intervention tend to
be geographically concentrated, for example affecting some
particular residential areas, and the impacts on households will
therefore depend on which households are present at the
affected geographical locations.
Households can be characterized in different ways, including
income levels, and the distribution of impacts can therefore be
assessed using alternative ways of characterizing the affected
groups.
Other impacts may be less spatially concentrated and people
affected may come from a variety of groups.
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The evidence on the social and distributional impacts of
transport interventions is described in Assessing Social and
Distributional Impacts in Transport Appraisal
High levels of noise are experienced adjacent
to busy transport corridors.
Similarly, poor air quality is also experienced in
areas adjacent to busy and congested road
corridors, which often pass through deprived
urban areas.
Children and older people are at particular risk
from accidents on the road network (as
pedestrians), whilst young male drivers and
motorcyclists are also high risk groups.
The affordability of transport
(both in terms of public transport
fares and the costs of running a
car) is often a problem for young
people and low-income
households, particularly for travel
to employment and education.
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Choice of Technology


Material Inputs & Utilities

Raw materials
Processed industrial material
Auxiliary material
Factory supplies
utilities
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Requirement of machinery and equipment is dependent upon
plant capacity and production technology.

Alternatives for transforming an idea into a concrete project:
nature of the project, production process, quality of products,
scale of operation and time phasing and location.

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Key Words
Technical analysis
Social and distributional impacts
Choice of technology
Material inputs
Utilities



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THANK
YOU
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