PROJECT FEASIBILITY

By Dr. Ali Sajid

By Dr. Ali Sajid

Education & Training
A person who

"

graduated,
yesterday and stops
studying today is
uneducated
tomorrow."
 Fear & Wisdom
"To conquer fear
is the beginning
of wisdom."
(Bertrand Russell)
 Feasibility
1.Viability of Idea

2. Analyzing Feasibility ( Possibility) of Proj-

Possibility of Completion ?
Will it be Successful
3.Reasonable likelihood - constraints
Will Not prevent a proj from meeting key obj
4.Synonym: Achievability
5.Plng & Orgzg Procedure
-To Ensure Proj is Effective
-It will work.
Feasibility
Reasonable likelihood that
Constraints on
Time & Other Resources
will not
Prevent a Project from
meeting its
Key Objectives
 What is Feasibility?
Capable of being done,
with means at Hand &
Circumstances, as they are.

Purpose of a FS
To help assess
Viability of a business idea-
Technically, Operationally & Economically

Feasibility Assessment?

Is the disciplined & documented process of thinking

through
an idea from its Logical beginning
to its Logical End.

This is to determine its Potential

to be a viable business
given realities of the Economic
& Social environment
in which it will operate
 Provide Client with a solid foundation upon
which a project is built.

FS Provides
Concept identification,
Estimates of supportable market,
Design parameters,
Estimates,
Revenue projections
Net warranted investment.

Essentially Road map of proj

 Process of Analysis

Identify Set up Define scope

problem or feasibility and
opportunity study objectives

Carry out
Recommend Evaluate
different
proceed alternatives
aspects
/shelve develop/buy
of the study
Scope Statement

A written statement includes:

Project Justification

Project Objectives

Major Deliverables

Criteria: Project/ or Phase

Successfully Completed
 Project Charter
Formally Recognizes Existence of a Proj
Gives PMgr Authy to Apply Resources to
Proj, Univ Charter
Product to be Delivered ?
Refers to Business Need Proj is
Addressings
 Types of Feasibility
Technical Feasibility
Managerial Feasibility
Economic Feasibility
Financial Feasibility
Cultural Feasibility
Social Feasibility
Safety Feasibility
Political Feasibility
Environmental Feasibility
Market Feasibility
 Tech Feasibility- First systematic

investigation of Proj Design Viability.
Foundation of all other FS .
- Assessment of a Proj Capabilities.
-Investigation of Technical & Physical Para/mtr
TF Reviews:
-Technical Capability of HR
-Capability of Available at Technical side

Foreign consultants Role -LDCs

-Too rigid, & Advanced Tech Spec
- Cannot be met by Country.

Question is Can it be built?

 Technical Feasibility (TF)
Anticipate Broader Problems with Questions:
1. Adequate Choice of Available Technologies for
Alternative Design purposes, considering:
a. Physical layout
b. Engineering design

c. Availability of raw materials?

2. Costs of Constructing & Operating P-Facilities - Svc

a) Machinery, b ) Equipment, c) Spare Parts?

3. Manpower Req:
a) From professional to labor
b) locally available?
c) Responses vary sector to sector
Technical Feasibility (TF) Contd..
Primary task of TF is Blueprinting:
a) Manpower Needs
b) Resources, and Design

c) Provide Design Alternatives

d) A Choice of Available Technologies,
& Cost estimates for each alternative.
 Admin/Managerial Study (AM S)
Evaluates Strategy of company in C/ Out Proj
Activities.
Providing info & Guidelines-
Used to improve overall Proj Admn.

Project mgr in investigating team.

Examines 4 Components:

A. External linkages,
b. Internal organization,
c. Personnel, and
d. Mgt plan
Economic Study (Econ S)
Examines a Proposed P-in terms of:
Net Contribution to Industry /Economy
& To society.

Address 3 Related Questions:

P-Responsive to Urgent Present or Anticipated
Econ/Social need?
2. P-Planned Econ o/p Serve Intended Purpose?
3. Svc Proposed to be Performed by P-
4. Benefits - Justify P - Cost?
Economic Study (Ec S)
Reqs: Study of all of Econ Implications of P:
a) Demand & Supply of All P- O/P.
b) P- Ability to Inc employment
c)P- Multiplier" Effects (-Inc Purchase of
goods Effect

d) Effect on inc PS Revenue (income tax, sales),

e) use of Locally Available resources.
Assess P- Net Contribution to Econ/social welfare of
community.
Comparison of Econ & Social Benefits-genrtd
From P-Vs Costs of Construction & Ops.
B > C Proj- Economically feasible. Profitability analysis
is conducted.
Economic Feasibility (Econ F)
1. Summary of Economic B/C of Proj
2. Extent to which savings Passed on

4. Optimum timing of Proj

5. Sensitivity Analysis
1. Considering influence of variations of critical P/M
2. discount rates,renergy cost, Construction costs, Tfc forecasts.

6. Conclusions as to Econ F or not

Financial Feasibility-
Capability of Proj Org -Raise Funds to implement
proposed proj
(different from economic feasibility
Cultural Feasibility-
Compatibility of Proposed Proj vs cultural setup
of Proj environment
Social Feasibility-
Addresses influences of P-on Social System in
Proj Environment
Safety Feasibility
Considered in Proj Plang.
Analysis if Proj Capable of Implementation
& Oprtd Safely -Minimal Adverse effects on
masses.
Environmental Feasibility-
-Concern must be shown
-Action must be taken to address any &
all environmental concerns raised or anticipated
-Mega Dams issues (Aswan Dam)
- New Murree Proj

Political Feasibility
Referred - Politically Correct Proj."
Political considerations often dictate
direction for a proposed proj
More common in LDC
 Proj Feasibility

Market Feasibility-
Market Variability & impact on Proj
.
Not confused with Econ/ F
Mket needs analysis to view:
a) Potential Impacts of Market Demand
B) Competitive Activities, etc.
c) Divertible" Mkt Share -Available