What is Project?

 a set of interrelated activities

 to attain certain specific
objectives
 by utilizing limited resources
 within a specified period of
time
 What is Project Cycle?
Every project during its life cycle goes
through various phases, popularly known
as project cycle
Normally a project cycle has six phases,
each phase links with the preceding one
and leads forward to the next one.
Project shows how a project is planned,
controlled, and monitored from its
inception to its completion.
 Classification of Project
Sources of financing(aided/non aided)
Timing of inclusion(ongoing/new)
According to ownership(public/private) etc.
Based on the types/nature of benefit/returns
project may be classified into the following three
types:
>Type “X”
Self financing projects, which earn revenue through sale of
output. These may be called directly productive
project(project of industry sector).
 Classification of Project

>Type “Y”
Productive but non revenue earning project i.e. projects
which give rise to tangible output, benefit of which do not
accrue directly to projects themselves but to other
parties(irrigation project).
>Type “Z”
Service sector projects, that is projects which do
not give tangible output but provide service
benefits to the society(health project)
 Project Cycle

Evaluation
Identification
& Follow-up

Implementation Preparation
& Monitoring & Analysis

Approval Appraisal
 Phase 1:Identification
Study National Plan
National Goal
Sectoral Priorities
Projects ranking in relation to plan
and sector
Defining broad goal
Select the project
 Phase 2:Preparation and Analysis
Brainstorming sessions
Set-up SMART targets through objectives
Collection of data/collect data
Conduct feasibility study, not true cost-
benefit analysis
SWOT analysis
Choose among alternative design
Phasing of cost
Phasing of benefits
Prepare Development Project Proforma
(DPP)
 Phase 3: Appraisal
Pre-Investment Analysis
 Examine Financial Soundness (Individual
point of view)
 Indicate whether sufficient profit, cover adequate
capital and operating costs, able to repay loan
installment, etc.
 Includes only direct cost and direct benefit
evaluated at market price
 Examine Economic Viability (Nation as a
whole)
 Indicate real rate of return on investment
regardless of the institutional and financial
arrangement.
 Phase 3: Appraisal(Cont…)
•Includes both direct & indirect cost &
benefits evaluated at shadow price
When NPV>0, B/C>1 or IRR> Mkt.
interest rate is acceptable. Otherwise
project is rejectable.
Examine Technical Soundness - product
specification, process, size, location,
design, utilities, etc.
 Phase 3: Appraisal(Cont…)
Organizational Strength
Managerial Soundness - experienced
management, expert supervisory staff, sincerity
and motivation of personnel, etc.
Environmental Aspects
Ecological: Fisheries, Forest, Habitat
Physio-Chemical: Soil fertility, Water logging,
Siltation, Flood control
Human Interest: Settlements, land values, Loss
of agricultural land
 Phase 4: Approval & Negotiation

Process Development Project Proforma

(DPP) through appropriate authority
Getting approval from concerned party
Giving Notification
(In case of foreign aided project)
Preparation of loan document
Organizing working committee to negotiate
Negotiate loan agreement
 Phase 5: Implementation &
Monitoring

Implementation
Procure Material
Recruit man power
Organize project office
Prepare work schedule
Clarify responsibility
Prepare work plan and use CPM
Award Contract
 Phase 5: Implementation &
Monitoring (Cont...)
Monitoring and Supervision
 Check progress of project activities
 Measures the planned budget against actual
expenditure.
 Keep the broad project picture and the
stakeholders in focus
 Suggest corrective rescuers and take necessary
action
 Uses both formal and informal data gathering
methods
 Monitors: Project unit, implementing agencies,
donors and ministries.
Phase 6: Evaluation & Follow-up Analysis

Compare project attainment with

projected targets
Reasons for discrepancy if any
Suggest method which will help for
future project of similar nature
Mid-term evaluation
Terminal evaluation
Impact evaluation