project formulation chapter 2
TRANSCRIPT
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 1/28
Project identification formulation
and implementation
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 2/28
� Government the regulator- projects generallyselected within the overall framework laid by thegovernment ±
Fiscal policy ± Monetary policy
± Other regulatory measures� Licensing
� Control over capital issues
� Control on foreign exchange� Export promotion and import controls
� MRTP
� Pricing and distribution controls
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 3/28
Project Identification
� Performance of existing industries
� Availability of raw material
� Availability of skilled labour� Import/export statistics
� Price trend
� Data from various sources
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 4/28
� Research laboratories
� Consumption abroad
� Identifying unfulfilled psychological needs� Plan outlays and government guidelines
� Analysis of economic and social trends
� Possibility of reviving sick units
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 5/28
Project preparation/formulation
� Pre-feasibility study
� Functional or support studies
� Feasibility studies� Detailed project analysis
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 6/28
Prefeasibility Studies
� Plant location
� Plant capacity
�
Man-power requirement, availability and cost� Investment required, return, financing, cost
and commercial profitability
� Availability, cost and sources of raw material
� Technologies availability
� Market potential
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 7/28
Support Studies
� Market study(fierce competition)
� Raw material input study(wide variability)
� Project location study� Plant size study
� Equipment selection study
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 8/28
Feasibility Study
� Technical feasibility
± Is it latest
±
Is there a likelihood of it becoming obsolete in thenear future
± Proven technology
± Indigenously available
± If imported, is it permitted
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 9/28
� Economic viability; return to economy
� Commercial viability
�Financial viability: sources of finance andreturns from the project
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 10/28
Detailed Project Report(DPR)
� General information about the project
� Background and work experience of the project promoters
� Details of already owned business
� Details of proposed project
± Plant capacity ± Manufacturing process
± Technical know-how
± Management team
± Details of land, and other fixed assets
± Details of infrastructural facilities
± Raw material requirement/availability
± Effluents of the project
± Labour requirements/availability
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 11/28
� Schedule of implementation
� Project cost
� Means of financing project
� Working capital requirements� Marketing and selling arrangements
� Profitability and cash flow estimates
� Mode of repayment of term loan
� Government approvals, local bodies and otherstatutory permissions
� Details of collateral security that can be offered
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 12/28
Tax incentives and project investment
decisions
� Fiscal policy
� Monetary policy
�Commercial policy
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 13/28
Fiscal policy
� Depreciation
� Tax holiday
�Investment allowance
� Amortization of preliminary expenses
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 14/28
Monetary Policy
� Interest rate concession
� Repayment moratorium
�Participation in risk capital
� Reduced safety margin
� Refinancing facilities
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 15/28
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 16/28
Establishing the
Project/Implementation
� Initiating
� Planning
�Organizing
� Executing
� Directing
� Controlling� Closing
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 17/28
Initiating
� Identification of project
� Generation and development of project ideas
�Formulating project proposal
� Appraisal of the project proposal
� Getting organizations commitment
� Authorization of the project
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 18/28
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 19/28
Organizing
Organizing is a process of defining and analyzingactivities, grouping activities into departmentsand establishing authority and responsibility
� Arranging for financial resources� Building up a project organization
� Team formation
�
Tying up of material resources, service providers,contractors
� Dissemination of information
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 20/28
Executing
� Process of carrying out the project activities as
per plans.
�
Changes, modifications required to beincorporated
� Execution should be dynamic and flexible
�
Overall objective should be achieved
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 21/28
Directing
� Guiding, issuing orders, instructions,
directives, commands
�
Helps subordinates know what they aresupposed to do
� Motivate them to move towards the
organizational objectives
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 22/28
Controlling
� Comparing the actual performance with the
plans
�
Check the progress for any deviations� Analyze the causes for deviations
� Take suitable remedial measures
�
Control involves time, cost and resourcequality
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 23/28
Closing
� When the objectives are fulfilled
� Formal process of closing
�Closure of contracts, settlement of dues andoutstanding issues
� Passing the information to all stakeholders,
employees, executives and all others involvedin the project
� Reallocating the resources to other project
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 24/28
Process of Project Management
1 Initiating
2 Planning
3 Organizing
4 Executing
5 Directing
6 Controlling
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 25/28
Organizing human resource
� Special skills and wisdom
� Project manager
�Personnel of project office
� Functional managers
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 26/28
Project manager
� Key person
� Selection of the right person
± Personality traits
± Internal candidate always better than external one
± Leadership, commitment, honesty, sincerity etc.
± Negotiation skills
±Responsibility with authority
± On-the-job training in finance, production,purchase, planning dept is a must
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 27/28
Staff requirements and plan
� How many full time people, skills required
� When will the people be required
� Sourcing-internal or external
� How long will they be attached
� Manpower planning
� Recruitment
� Selection
� Training
8/6/2019 Project Formulation Chapter 2
http://slidepdf.com/reader/full/project-formulation-chapter-2 28/28
Project office
� Dedicated to the project exclusively
� Gather data and disseminate
� Collect project related information
� Monitoring progress, controlling time, cost,performance, quality etc.
� Follow contract guidelines
� Documentation
� Obtain authorization