INFOLINK COLLEGE

Project Analysis & Management

Instructor: Sewunet T.
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 CHAPTER ONE
General Introduction
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OBJECTIVE

After studying this chapter, you should be able to:

 Define project and project Management

 State the features of a project
S

 Differentiate Projects and Plans

LEARNIN
G
What is a
Project?
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 In order to understand project management, it is essential to first

define the term project. In fact, there is no universally accepted
definition for the word project that can serve for all situations.

 In this chapter, however, a project is defined as

 “… a temporary endeavor involving a connected

sequence of activities and a range of resources, which is
designed to achieve a specific and unique outcome,
which operates within time, cost and quality constraints
and which is often used to introduce change (Lake).
Conti
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 Turner defines a project as “…. An endeavor in which human,

(or machine) material and financial resources are organized in
a novel way, to undertake a unique scope of work, of given
specification, within constraints of cost and time, so as to deliver
beneficial change defined by qualitative and quantitative
objects.
Conti
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 Accordingto Kerzner, a project can be considered

to be any series of activities and tasks that:

 Have a specific objective to be completed within

certain specifications
 Have defined start and end dates
 Have funding limits (if applicable)
 Consume human and non-human resources (i.e.,
money, people, equipment)
 Are multifunctional (i.e., cut across several functional lines)
Conti
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 Successful project management can then be defined

as having achieved the project objectives:

 Within time
 Within cost
 At the desired performance/technology level/
 While utilizing the assigned resources effectively
efficiently and
 Accepted by the customer
Conti
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 According to Maylor Harvey, a project can be defined as a non-

repetitive activity. This needs to be augmented by other
characteristics:

 It is goal oriented.
 It is being pursued with a practical end or goal in mind.

 It hasa practical set of constraints-usually centered

around time and resource
 The output of the project is measurable

 Something has been changed through the project being

carried out
Conti
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 The purpose of a project is to meet the stakeholders’ needs

and expectations.

 It is therefore a fundamental requirement for the project

manager to establish

 Who are the stakeholders and analyze their needs

expectations to define, at the outset, the project’s scope of
work and objectives.
Features of a project
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 A project is a sequence of unique, complex, and connected

activities having one goal or purpose and that must be
completed by a specific time, within budget, and according to
specification.

 Sequence of activities: A project comprises a number of activities

that must be completed in some specified order, or sequence.

 Unique activities: The activities in a project must be unique. A

project has never happened before, and it will never happen
again under the same conditions.
Conti
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 Complex activities: The activities that make up the project are

not simple, repetitive acts, such as painting the house, washing
the car, or loading the delivery truck. They are complex. For
example, designing an intuitive user interface to an application
system is a complex activity.

 Connected Activities: Connectedness implies that there is a

logical or technical relationship between pairs of activities.
There is an order to the sequence in which the activities that
make up the project must be completed. They are considered
connected because the output from one activity is the input to
another.
Conti
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 One goal: Projects must have a single goal. Very large or

complex projects may be divided into several subprojects, each
of which is a project in its own right. This division makes for
better management control.

 Specified Time: Projects have a specified completion date. This

date can be self-imposed by management or externally specified
by a customer or government agency. The deadline is beyond
the control of anyone working on the project. The project is
over whether or not the project work has been completed.
Conti
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 Within Budget: Projects also have resource limits, such as a

limited amount of people, money, or machines that are
dedicated to the project. Senior management can change the
number of resources, but that luxury is not available to the
project manager.

 According to Specification: The customer, or the recipient of the

project's deliverables, expects a certain level of functionality
and quality from the project. These expectations can be self-
imposed, such as the specification of the project completion
date, or customer-specified, such as producing the sales report
on a weekly basis.
Project Parameters
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 During a project's life, management focuses on three basic

parameters: quality, cost, and time. Traditionally, it is said that
a successfully managed project is the one that is completed at
the specified level of quality, on or before the deadline, and
within the budget.

 Depicted in the next power point is the interrelationship among

the traditional parameters measuring project success.
Conti
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Project Vs. Program
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 A project is normally originatedfrom a plan which

can be a national plan or corporate plan.

 In many cases the term project is used for what should be

termed as program or work package.

 Some people use the term ‘project’ and ‘program’

interchangeably. However, there is a quite difference between
the two.
Conti
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 Program in general is a groups of related projects that are

managed in a coordinated ways to achieve certain objective.
Any development plan can be considered as a program

 A program is thus,

 larger in scope,
 activity oriented
 not necessarily time bound and
 its objectives are broader
Conti
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 Example,
 The national goal: Poverty Eradication
 Strategy: Increase productivity (in all sectors)
 Development program: Increase agricultural
productivity

 This may result in a number of projects like,

 Constructionof dams (irrigation infrastructure)
 Upgrading the skill of agricultural practices
 Construction of training centers
 Health program may have a number of projects like,
 Construction of hospitals
 Training of health officers
 Program and Projects hierarchy
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Plan : National, Regional or company plan with development target

Program: Specific program within the frame of national or

regional plan (health, education)

Project: School project, Power plant or housing project

Work Package : Water supply and distribution package, Power

supply and distribution package

Task: Award of water supply contract, Construction of foundation

Activity
Classification of
Project
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 Project can come in many size and form. They may be

very simple or complex. Major project types are two.
These are,

 Revenue project: Are those which can be carried out

within the normal organizational structure and normally
will be completed within the a single accounting period.

 Capital Project: Are those which can not be carried

out within the normal organizational structure and are
normally stretched over a number of accounting
periods.

 In practice many projects fall between these two

broad categories
Conti
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 Capital project always require considerablecapital

investment. The main feature of capital projects are,

 They usually occupy considerable time

 They usually employ huge capital investment

 As a result they do not fit readily into conventional

organizational structure but cut across functional and
time boundaries and thus, require an
organizational structure particular to themselves.

 When we say project we are mainly referring to the

capital projects.
Conti
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 In general projects be it revenue or capital can be

classified from different perspectives.

a) On the basis of time horizon project

can be Long term projects: Power

plant project
Medium term projects: Construction of a factory Short
term project: Exhibition,trade fair
Conti
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b) On the basis of the type of output:

Project producing tangible Products: Oil mill
Project providing services: Telecom project,
Education etc.
c) On the basis of the scope of the
project: International project: Euro tunnel
project National Project: Eth Hydro power
project Regional Project: Elementary school
project
d) Based on the economic sector:
Agricultural project: Irrigation project
Industry project: Cement Project
Service sector project: Bank projects
Conti
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e) On the basis of technology:

Capital intensive project: Brewery project
Labour intensive project: Textile industry project
f) Based on location:
Rural Projects
Urban
project
g) On the basis
of the nature of
the project
Independent
project:
Hospital,
 CHAPTER TWO
PROJECT CYCLE
36

After pursuing this chapter, you should be able to:

OBJECTIVE

 Define Project Cycle

 Describe the World Bank Project Cycle
 Explain European Aid Project Cycle Approach
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LEARNIN
G
An Overview of Project cycle
 A project passes through a number of life cycles called project
cycle.
 What is project cycle?
 Project Cycle: Is the various stage through which project proceed
from inception to implementation. It is a stage which project
advance from inception to maturity stage.
 A project cycle is a self-renewing cycle in that new projects may grow
out of the old ones in a continuous process and self-sustaining cycle
of activity.
 These processes can usefully be considered as a comprehensive
sequence in the sense that for the project that is implemented, each
stage naturally follows the proceeding one and leads on to the next.
 Actually, the division into stages is artificial; but it helps to
understand project planning, though a continuous process, has distinct
phases and stages.
 And therefore, throughout the project cycle, the primary
preoccupation of the analyst is to consider alternatives, evaluate them,
and to make decisions as to which of them should be advanced to the
next stage in the planning process.
 Conti
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…

 Some authors (Choudhury 2005) presents the projects life cycle

in to the life cycle curve
 Inception (concept, definition, organizing etc.)
 Maturity ( implementation )
 Decay (clean up)

Decay (Clean
Level Inception
up )
of
effort Maturity or
Implementation

Time
Conti
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 A project cycle covers all the steps necessary to bring a project to

the point where

its technical,
economic and
financial feasibilities have been established and it is ready for
appraisal.

 Each stage follows the proceeding one and leads to the next

 These different phases are identified by different institutions and

authors. Some of the phases as identified by different authors
are:
The Baum Cycle (World Bank Procedures)
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 Baum (1970) model is the first basic model of a project

cycle which has been adopted by the World Bank.

 According to this model a project cycle consists of the

following
five stages

 Identification
 Preparation
 Appraisal and Selection
 Implementation
 Evaluation

 Later in 1978, the author has added additional two stages called
The European Commission/Europe Aid Approach
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 This approach consists of six phases and has been

considered as the most recent approach developed as
guidelines for development projects

 Identification
 Preparation
 Appraisal & Selection
 Negotiation and Financing
 Implementation
 Evaluation
The UNIDO Project Cycle
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 The UNIDO has established a project cycle

comprising the following three distinct phases:
 1. The pre - investment phase
 2. The investment phase, and
 3. The operating phase
2. Project life cycles

Pre- Investment
investment

Operation

UNIDO Project life cycle

6/9/23 Project Financing and Management-Introduction 31

 2. Project life cycles…
1.Pre-investment Phase
 Opportunity study/identification
 Pre-feasibility study/pre-selection
 Feasibility study/preparation
 Appraisal/appraisal report

6/9/23 Project Financing and Management-Introduction 32

2. Project life cycles…
2. Investment
Negotiation and contracting
Engineering design
Construction
Pre-production marketing
Training

6/9/23 Project Financing and Management-Introduction 33

 2. Project life cycles…

3. Operation
Commissioning and start-up
Replacement & rehabilitation
Expansion and Innovation

6/9/23 Project Financing and Management-Introduction 34

Conti
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 However, in most literature and guide books the stages or phases

of projects are divided into six phases and this approach are
preferred in this discussion:

 Identification
 Pre-feasibilitystudy
 Feasibility study
 Selection and project design
 Implementation
 Ex-post evaluation
I. Identification
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 Project starts by generating potential idea that can be converted

into a meaningful project. It involves finding project’s idea, which
could contribute towards achieving specified
business/development objectives.

 In many cases many projects start as a simple idea and later on it

may grown up into a full-fledged project.

 Identification of promising investment (projects) opportunities

requires
 imagination,
 sensitivity to environmental changes,
 And a realistic assessment of what the firm can do
 Conti
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…
 If the project is a private project the initiating entity will define
the
 concept,
 expectation and
 objectives of the project.

 But, if the project is a public project, scrotal information is an

important source to define the concept, expectation and
objective of the project.
 Conti
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 Generally,the idea for project may come from the

following sources

 From the need to make profitable use of available resources (

this is for resources based projects)

 Market based projects arise from an identified demand in

home or overseas market

 Need based project may arise from the need of community

(company) to make available some basic materials (services)
requirements.
 Conti
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Project ideas can also from government

emanate and plans policy

From technical specialists like, entrepreneurs and

local leaders are also common sources of projects.

 Technical specialists and entrepreneurs can identify

many areas where they feel new investment might be
profitable.
 Conti
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 In general, thesources of project ideas can be

broadly classified into,

1. Macro-level

 National policies, strategies, sectoral, sub-sectoral or regional

plans
 General surveys which includes resource potential surveys,
regional studies, master plan and statistical publications,
which indicate directly or indirectly investment
opportunities.
 Conti
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 Constraints on the development process due to shortage of

essential infrastructure facilities

 Unusual events such as,

 droughts,
 floods,
 earth – quakes, hostilities, etc.

 From multilateral or bilateral development agencies and as

a result of regional or international agreements in which
the country participate.
 Conti
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…
2. Micro Level:

 The identification of unsatisfied demand or needs

 The need to remove shortages in
 essential materials,
 services or
 facilities that constrain development efforts;

 The initiative of private or public enterprises in response to

incentives provided by the government;

 The necessity to complement or expand investments previously

undertaken. And the suggestions of financial institutions and
development agencies Study of new Technological Development
II. Pre feasibility
study
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 After we have identified project ideas the next step

is project preparation and analysis.

Project preparation includes both Pre-

feasibility and
Feasibility studies

Once a project idea is identified a

preliminary project analysis will be done ( i.e., pre-
feasibility study).

Which means the project idea must be elaborated in sort of

study.
 Conti
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 Some of the main components examined during the pre-

feasibility study include:

 Availabilityof adequate market (or beneficiaries)

 project growth potential
 investment costs, operational cost and distribution costs
 demand and supply factors; and
 social and environmental considerations

 If the project is appeared to be sound the next stage

is a feasibility stage
 III. Feasibility
study
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 Pre – feasibility study should be viewed as an intermediate stage.

 A feasibility study should provide all data necessary for an investment

decision

 The commercial,
 Technical,
 Financial,
 Economic and
 Environment

 for an investment project should be defined and critically examined.

Conti
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 Therefore, the structure of a pre – feasibility study should be the

same as that of a detailed feasibility study.

 The major difference between them lies on the amount of work

required in order to determine whether a project is likely to be
viable or not.

 Once the project is decided as viable using pre-feasibility study, a

detailed analysis of issues like, marketing, technical, financial,
economic, and ecological aspects is undertaken in the feasibility
stage.
Conti
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 Finally, the feasibility report should include (but not limited)

the following analysis:

 Market analysis
 Technical analysis
 Organizational analysis
 Financial analysis
 Social – economic analysis, and
 Environmental analysis
IV. Selection (project
appraisal)
58

 The feasibility study would enable the project analyst to select the
most likely project out of several alternative projects. Selection
follows, and often overlaps with the feasibility analysis.

 It addresses the question

 is the project worthwhile?

 A wide range of appraisal criteria have been developed to judge

the benefits of a project. The criteria are divided into two broad
categories.
 non-discounting criteria and
 discounting criteria.
Conti
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 After a project has been prepared, it is appropriate to forward for

a critical review (external review)

 This provides an opportunity to re-examine every aspect of the

project plan to assess whether the proposal is appropriate and
sound before large sums are committed

 Projects, appraisals cover the following aspects,

a) Technical – here the appraisal concentrate in
verifying whether the proposal will work in the way suggested
or not.
Conti
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 b) Financial – this will try to see

 if money needed for the project have been

calculated property,
 their sources are all identified,
 and reasonable plans for their repayment are
made where necessary.

 c) Commercial –

 the way the necessary inputs for the project are supplied
 and the arrangementsfor the supply of the products are
verified
Conti
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 d) Incentive – whether things are arranged in such a way that all

those whose participation is required will find it in their interest
to take part in the project, at least to the extent envisaged in the
plan.

 e) Economic – the appraisal here tries to see whether what is

proposed is good from the perspective of the national economic
development.

 The effects (positive and negative) are taken into account and
check if all are correctly valued
Conti
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 f) Managerial – this aspect of the appraisal examines if the

capacity exists for operating the project and see if those
responsible ones can operate it satisfactorily.

 Moreover, it tries to see if the responsible are given sufficient

power and scope to do what is required.

 g) Organizational – the appraisal examines the project how it is

organized internally and externally .
Conti
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 This helps to see if arrangement and its organization allow the

proposals to be carried out properly and to allow for change as
the project develops.

 These issues are the subjects of specialized appraisal report. And

on the basis of this report, financial decisions are made –
whether to go ahead with the project or not.
V.
Implementation
64

 The objective of any effort in project planning and analysis is to

have a project that can be implemented to the benefit of the
society.

 After the project prepared and evaluated the next step is

implementing the project. Implementation is the most important
part of the project cycle.

 In this stage,
 funds areactually disbursed to start the project and
keep running
 contracts are signed
Conti
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 A major priority during this stage is to ensure that the project is

carried out in the way and within the period that was planned.

 During the project implementation stage, the following

important points should be considered:

 All the stages of implementation should be completed with in

the time schedule allotted.
Conti
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 The output streamshould be the same as contemplated.

The physical targets are to be realized with in the financial
allocation.

 Project analysts (manager) must keep an eye over changes in

 technology,
 taste,
 price,
 profitability etc.

 In the case of private investments, profitability is to be so insured

that investment funds are expected from within.
Conti
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 However, problems frequently occur when the economic and

financial environment at implementation differs from the
situation expected during appraisal.

 For example, price or political environment may change.

 Due to these facts, project implementation must be flexible and

original proposals are modified frequently to capture these
changes.
Conti
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 Generally, project analysts divide the implementation phase

into three time periods

 The investment phase, where the major investments are made.

This may extend from three to five years.

 The development phase which may also extend from three to

five years.

 The project life.

 Conti
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69

 The implementation phase for an industrial project

consists of several stages:

(i) project and engineering designs,

(ii) negotiations and contracting,
(iii) construction
(iv) training, and
(v) plant commissioning.
 VI. Ex-post
evaluation
70

 The final phase in the project cycle is evaluation.

 Once a project has been carried out the actual progress with the
plans should be evaluated in order to judge whether the
decisions and actions taken were responsible and useful.

 However, evaluation is not limited only to completed projects.

 Conti
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71

 Ongoing projects could also be evaluated to find

solutions for problems when the project is in trouble.

 The evaluation may be done by,

 the project management,

 the sponsoring agency,
 or other bodies.

 Moreover,evaluationshould be undertaken when a project

is terminated or is well into routine operation.
 Conti
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 Some of thebenefits which can be obtained

evaluation are, from

 The reality of the assumptions that were made will

be evaluated;
 It provides an experience that is highly valuable in
future
decision making
 It suggests corrective action to be taken in the light of
actual performance;
 It helps in uncovering judgment biases;
 It induces a desired caution among project sponsors.
 Conti
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 Generally, weakness and strengths should carefully be

noted so as to serve as important lessons for future project
analysis undertaking.
 CHAPTER THREE
PROJECT IDENTIFICATION
76
OBJECTIVE

After completing this chapter, you should be able to:

 Explain the Project Idea

 Describe the sources of Project Ideas:
S

 Macro and Micro sources

LEARNIN
G
 Conti
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77

 The searchfor promising project is the first

idea towards establishing a successful step
venture.
 As traditional saying goes
 “ the key to success lies in getting into the right
business at the right time”
 Identification of meaningful project idea requires,
 Imagination
 Sensitivity to environmental changes
 Realistic assessment of what a firm or organization
can do
Conti
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78

 Identification is often the outcome of a triggering

(iterative) process rather than an analytical exercise

 While thenotionof identification is simple it is

difficult to develop methods or procedure for
accomplishing it

 However,there are certain broad guidelines which

are helpful in the generation and screening of project ideas
 Conti
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79

 Project identification commonly follows the

following procedure

 1. Generation of ideas
 2. Monitoring the environment
 3. Corporate appraisal (self-assessment)
 4. Preliminary screening
 5. Project rating index
3.1. Generation of ideas
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 Most of the new projects ideas are a result of

 Once specialized technical

knowledge or
 Marketing expertise or
 Some other competence
 Conti
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81

 To stimulate theflow of project idea thefollowing are

helpful

i. Analysis of Strength, Weaknesses, Opportunities

and Threats (SWOT):

 SWOT analysis represents a conscious and

deliberate , and dynamic effort by an organization
to identify opportunities that can be exploited
 Periodic SWOT analysis facilitates the generation of
new idea
Conti
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ii. Clear articulation of objectives

 The operational objectives of the organization may help

to generate ideas

 The operational objective of business firm for example,

 Cost reduction
 Productivity improvement
 Increase in capacity
 Expansion and growth

Can be helpful in generating the project idea

3.2. Monitoring the environment
83

 The organization must systematically monitor the

environment in which it will operate

 In other words the organization is expected to monitor the

following key environmental factors in relation to each of
identified ideas

 1. Economic aspects
 State of the economy

 Possible fluctuation in the economy

 The degree of integration with the world economy

 Conti
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84

2. National policy

 Sectoral policy
 Government program
 Tax policy
 Government support
 Financial policy

3. Technological factor
Availability of technology
Accessibility of the available
technology
Conti
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4. Socio demographic factor

Population size and
distribution Education level

5. The nature of competition (for business

firms) Number of firms in the industry
Nature of entry

6. Nature of input
supply Availability
Cost of raw material
3.3. Self assessment and scouting the project
idea
86

 A realistic appraisal of the organization’s strength and

weakness is essential to select the best idea that can be
realized as a successful venture.

 To screen the project idea in terms of this aspect the

following suggestions are helpful
 Conti
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87

 A. Analyze theindustry (sector) and theorganization

in terms of,

 Its capacity (i.e., whether the organization has the capacity to

implement or to put into practice the proposed idea)

 Analyze the project in term ofthe benefit (profit) that it

will
provide to the society (firm)
 Conti
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88

 B. Examine the input or resources requirement and firms

ability to make it available

 C. Review its innovativeness

 D. Study government plan, outlays, and guidelines: This

analysis is important because;

 It will help to see if the idea is in line with the government

priority area
 To check if there are guideline that need to be followed if the
project idea is acceptable.
 E. Suggestion of financial institutions and development
agencies. (that is investigating priority area of development
agencies)
 3.4. Preliminary
screening
89

 In some case it is possible to have a long list of project ideas.

 In such cases some kind of preliminary screening is required

to eliminate ideas which are not promising.

 For that purpose the following aspects could be looked into

 A. Compatibility with thepromoter: The idea

should be compatible with
 thevision,
 mission,
 and goal of the promoter
 Conti
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90

In business venture, it should be compatible with the

owner’s objective. In other words,

It has to fit with the personality of the owner

Acceptable to the firm’s owner
It offers the prospect of rapid growth and high return

 B. Consistence with government priority: Evaluate the

project idea in terms of the government priority. Here we ask
questions like,

Is the project consistent with the national goal and priority?

Are there any environmental effect?
Will there be any difficulty to obtain permission?
Conti
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91

 C. Availability of inputs
 D. Adequacy of the market
 E. Cost of the project
 F. Acceptability of risk level: The desirability of the
project idea depends upon the level of risk associated with
it

 When a large number of project ideas are evaluated, it may

be helpful to streamline the process of preliminary
screening.
 3.4. Project rating
index
92

 For that purpose a preliminary evaluation may be

translated into a project rating index.

 Steps involved in the process of the project rating index

are,

 Identify factors relevant for project rating

 Assign weight to those factors (the weight are
suppose to
reflect their relative importance)
 Rate the proposed idea on various factors using a suitable
rating scale (typically a 5-7 point scale is used)
 For each factor, multiply the factor rating with the
factor
weight to get the factor score
 Factor VG G A P VP Factor
weight 5 4 3 2 1 score
Factors
93 Input availability 0.25 X 0.75
Technical know how 0.1 X 0.40

Reasonableness of cost 0.05 X 0.20

Adequacy of market 0.15 X 0.30

Complementary relationship 0.05 X 0.20

Stability 0.1 X 0.5

Dependency on firm’s 0.2 X 0.2
strength
Consistency with government 0.1 X 0.1
policy

Total 1.00 3.15

 3.2. MACRO AND MICRO
SOURCES
94

 Projects are expected to contribute towards the attainment of

specified development objectives.

 Project identifications endeavors should be seen as an integral

part of the macro-planning exercise.
 Project identifications need to be carried out within national,
regional, and sectoral development framework and existing
policies including pricing, taxation, and subsidy.

 Sectoral information and strategies often are important sources

of project ideas. Project ideas often are not derived from
national and/or sectoral plans in practice - may originate from
several sources.
 Conti
…
95

 Impossible to prepare an exhaustive list of sources – much

depends on the experience and imagination of those entrusted
with the task of initiating development projects.

 We can distinguish two levels where project ideas are born:

macro sources and micro sources.

 Project ideas generally should aim at overcoming constraints on

national development efforts or meeting unsatisfied
needs/demand.
 Conti
…
96

 Prevailing constraints, needs, and demands should be

interpreted broadly to include, for instance, foreign exchange
constraints that might indicate the need to undertake projects
for export promotion and/or import substitution.
 MACRO
SOURCES
97

 Major Macro Sources:

 Federal/Central or Regional
Governments
 Bilateral and Multilateral Agreements

 International Development Agencies

 Conti
…
98

 Government is the major source of project ideas in

developing countries. Reasons:

 Has the necessary resources for undertaking

opportunity studies (conduct survey, studies, and reviews);

 Better access to data and information; and familiar with

the development objectives,priorities, and strategy
 Conti
…
99

Other Macro Sources:

 National policies, strategies, and priorities articulated

government from time to time. by

 National, sectoral, sub-sectoral, or regional plans

and
strategies (supplemented by special opportunity studies).

 General surveys, resource potential surveys, regional studies,

master plan and statistical publications, which indicate
directly or indirectly investment opportunities.
 Conti
…
100

 Constraints on the development process due to shortage of

essential infrastructure facilities, problems in the balance of
payment, etc.

 Government decisions to correct social and regional

inequalities or to satisfy basic needs of the people through
development projects.

 A possible external threat that necessitates projects aiming at

achieving, for example, self-sufficiency in the supply of basic
materials, energy, transportation, etc.
 Conti
…
101

 Unusual events such as droughts, floods, earthquake,

hostilities, etc.

 Government decisions to create project implementing

capacity in such areas as construction, etc.
 MICRO
SOURCES
102

 Micro sources of project ideas includes

 Privateand Public Enterprises;

 Local Groups or Organizations;

 Consumer Groups and Associations;

 Financial Institutions/Credit Associations;

 Cooperatives, Farmers’ Unions, etc;

 New Technology Suppliers, and even individuals.

 Conti
…
103

Driving forces behind:

 Identification of unsatisfied demand or needs;
 Existence of unused or underutilized natural or human
resources and the perception of opportunities for their
efficient use;
 Need to remove shortages in essential materials, services, or
facilities that constrain development efforts;
 Initiatives in response to incentives provided by the
government;
 Necessity to complement or expand investments
previously undertaken;
 Desire of local groups(or organizations) to enhance
their economic status and improve their welfare.
 Techniques (or mechanisms)
adopted:
104

 Analyze the performance of existing industries;

 Examine the inputs and outputs of various industries;

 Review imports and exports;

 Look at the suggestions of financial and development

agencies;
 Investigate local materials and resources;

 Analyze economic and social trends;

 Study new technological developments;

 Draw clues from consumptions abroad;

 Explore the possibility of reviving sick units; and

 Attend trade-fairs (trade promotions or bazaars), etc.

Reflections