Project Unit 2 (PDF)

UNIT 2 :PROJECT CYCLE  UNIT OUTLINE  Definition of project life cycle  World Bank Project Cycle  UNIDO Project Cycle  European commission-project cycle PROJECT CYCLE  A project life cycle represents the linear progression of a project, from defining the project...

UNIT 2 :PROJECT CYCLE  UNIT OUTLINE  Definition of project life cycle  World Bank Project Cycle  UNIDO Project Cycle  European commission-project cycle PROJECT CYCLE  A project life cycle represents the linear progression of a project, from defining the project through making a plan, executing the work, and closing out the project  Project cycle is the various stages through which project initiation and planning process proceeds from identification to execution and then to monitoring and controlling and finally closing.  It considers a various separable stages of activity which can be thought of as constituting a definite sequence in which each stage not only grown out of the preceding ones, but leads into the subsequent ones. Definition of project cycle Is the stages through which the project passes from initiation to its closing.  Is a continuous process made up of separate stages each with its own characteristics and complementary stages (phases) and each setting a ground for the next one. PROJECT LIFE CYCLE  There are various models that deal with the project cycle  World Bank Project Cycle  Identification Preparation and analysis Appraisal Implementation Evaluation  IDNTIFI CATION PREPAR ATION EVALUT & ION ANALYS IS IMPLEN APPRIS TATION AL  Identification  Potential projects suggestions emerge from specialists, local leaders and  national development strategies.  Identification of potential stakeholders, particularly primary stakeholders.  Carry out problem assessment and decide upon key objectives.  Assess alternative strategies for meeting objective  Preparation and analysis  The technical, institutional, economic, environmental, and financial issues facing the project studied and addressed — including whether there are alternative methods for achieving the same objectives.  Assessing feasibility as to whether and determining whether to carry out more advanced planning. Project plan developed which can be appraised Appraisal  Critical review or independent appraisal of project plan.  Evaluation is a time-bound exercise that attempts to assess the relevance, performance and success of current or completed projects, systematically and objectively. Evaluation determines to what extent the intervention has been successful in terms of its impact, effectiveness, sustainability of results, and contribution to capacity development. Evaluation, more than monitoring, asks fundamental questions on the how and why of the overall progress and results of an UNIDO Project Cycle  United Nations Industrial Development Organization  The pre investment phase, Project identification Project preparation Appraisal & investment decision  Investment phase, and Acquisition phase Commissioning phase Test production & marketing phase  Operational phase. pre-investment studies (project identification)  Opportunity  Availability of natural resources  Existing agricultural pattern Future demand for goods, increasing population, purchasing power Exports and import substitution Environmental impact assessment Functioning similar project of other countries  Possible linkages with other industries Extension by backward and forward linkage # Industrial policies  General input climate of economy  # Expansions to an existing project to have large scale of economy  # Export potential  # Availability and cost of production factors  opprtunity Studies/Project Identification b. Pre-feasibility studies/pre- selection:  To analyse that: ◦ All possible alternatives examined ◦ The project concept justifies detailed analysis ◦ A critical area necessitates in-depth investigation ◦ Project idea is either attractive for investment or non-viable ◦ The environment situation at the site in line with national ◦ standards  Support functional studies to convert specific areas such as: ◦ marketing ◦ Raw material and factory supplies ◦ laboratory and Oliphant testing ◦ location ◦ Environmental impact assessment ◦ Economics of scale and  Equipment selection C. Feasibility study/preparation  # Feasibility study should provide all data, define and critically examine the commercial, technical, financial, economic and environmental aspects for each alternative.  # The data should be based on investigated efforts rather than on guess.  # A window dressing approach should be avoided. d. Appraisal report/Appr.aisal  The appraisal report will prove whether the pre- production expenditures were well spent, project appraisal as carried out by financial institutions concentrates on the health of the company to be financed, the returns obtained by equity holders and the protection of its creditors.  Appraisal reports as a rule deal with the industries in which it will be carried out and its implications for the economy as a whole. Investment phase  The investment phase can be divided in to the following stages. ◦ Establishing the legal, Financial and organization basis ◦ Technology acquiring and transfer ◦ Detailed engineering design and contracting ◦ Pre-production marketing, including the securing of supplies and setting up the administration of the firm. ◦ Recruitment and training of personnel  Plant commissioning and start- up Operating phase  The problems of the operational phase need to be considered from both a short and a long term view point.  The short term view relates to initial period after commencement of production.  Most of the problems have their origin in the implementation phase.  The long-term view relates to chosen strategies and the associated production and marketing costs as well as sales reviews. Phase-to-Phase Relationships ◦ There are three basic types of phase – to – phase relationships : ◦ A Sequential relationship : where a phase can only start once the previous phase is complete ◦ An Overlapping relationship : where the phase starts prior to completion of the previous one ( Fast tracking ). Overlapping phase may increase risk and can result in rework. ◦ An Iterative relationship : where only one phase is planned at any given time and the planning for the next is carried out as work progresses on the current phase and deliverables European commission-project cycle  Programming  The programming phase establishes the link between the individual project and the overall strategy of the organisation  Identification  As a result of this phase, an initial draft of the project is elaborated which contains all elements of the intervention logic:  What activities do we want to do?  To achieve what tangible results (outputs)?  To remedy what situation? Why do we do this project? In other words what is the purpose of our project?  How will our project contribute to improving the overall situation in the intervention area? What will the impact be in the long run?  Formulation  The narrative proposal, which gives an overview of the project and explains in detail: What the situation is of the target groups in the area of intervention/country; ◦ Who the partners are; ◦ What the objectives are; ◦ How the objectives fit in the donor’s policy/the country development strategy; ◦ What activities will be executed; ◦ What the risks are and how they will be dealt with; ◦ How the partners will collaborate with local authorities and other stakeholders  The budget proposal, detailing every expense and sometimes regrouping them per activity or output  The logical framework of the project  A detailed planning of the activities  At this step, we can start with the practical preparations of our project: recruiting additional staff; organising the project team at different levels and locations; setting up logistics and purchasing new equipment; introducing ourselves and the project to the people, the media, the local authorities, the representatives of international organisations and so on.  Monitoring  is about checking whether your project is going as planned, meaning that:  You’re doing the activities according to plan  You’re getting the outputs that you want  You’re spending the budget according to plan  Monitoring is not about the fundamentals of your project, i.e. the question whether you’re doing the right things in the first place Evaluation  Evaluations can be:  Internal evaluations: conducted by the organisation itself.  External evaluations: conducted by an external evaluator, either an individual or a (specialised) organisation or firm.