1. Republic of Iraq
Ministry of Higher Education & Scientific Research
University of Kerbala
College of Engineering
Civil Engineering Department
Appraisal and Selection of Projects
Prepared by
Ali Enwan Haider Samarah Razaq
Supervisor
Prof. Ghafel Karim Aswad
2. any resources to it. The stakeholders or the interested parties are investors,
financiers, guarantors, licensors, etc.
Purposes of project appraisal
The main purposes of project appraisal are as follows:
• To define the project objectives and examine the options to attain these objectives;
•To ascertain the likely consequences of an investment by examining the available
resources and their projected performance criteria. The appraisal indicates whether or
not to invest in the project, considering different aspects;
• To identify the risk elements and probability of any unfavorable consequence.
appraisal process
Appraisal process consists of five steps. These are as follows:
• Initial assessment;
• Problem definition and preparation of a long list;
• Reviewing the long list and preparation of a short list;
• Developing options;
3. These include:
• Market analysis;
• Technical analysis;
• Economic analysis;
• Financial evaluation;
• Environmental appraisal;
• Uncertainty and risk analysis.
Early
Appraisal
Market
Analysis
Technical
Analysis
Uncertainty
And Risk
Analysis
4. Considerations for site selection
Selection of a particular site from several alternatives calls for a systematic analysis.
The analysis should be carried in the following sequence.
a. Size and Shape of the Site
It must be ensured that layout of buildings, structures, plants and equipment storage
areas, parking facilities, etc. are satisfactorily accommodated within the size and shape
of the available site.
b. Environmental Sensitivity
A site may be situated in an environmentally sensitive area such as wetland or in a
natural habitat for endangered species where industrial development is prohibited.
Such a site has to be rejected from reckoning forthwith.
c. Future Expansion
There should be scope for additional space for future development, viz., plant
extensions, and other add-on facilities.
d. Soil Condition
5. Difference Between financial analysis and economic analysis
Financial analysis deals primarily with the means of financing a project (by levying
toll or floating bonds etc.), and its monetary profitability. Financial analysis is thus
concerned with the source of financing, availability and allocation of funds.
For example, in a toll road bridge, the costs and expected toll collection will decide
whether the project will be viable from financial considerations and management has
Considerations for site selection
Size and Shape of the Site
Environmental Sensitivity
Future Expansion
Soil Condition
Layout Plan
6. The main purposes of economic analysis of a project are as follows:
a. Ensuring efficient allocation of the resources towards the economy of the
community at the national, regional and local level within the overall
development plan. Consequently, the efficiency with which the resources are
used can have an impact on the performance of the economy and prosperity of
the country;
b. Ranking of different options considering scarce resources in order of priority;
c. Assisting in phasing the development program over a period of time
considering availability of resources;
d. Comparing the different options and selecting the most attractive one;
e. Evaluating alternative strategies in respect of specifications, design standards
and other parameters.
f. Determining whether the option is worth the investment at all.
Distinctive features of economic strategies for public sector and
privately owned projects
Public sector projects are approved, named and operated by the government or its
agencies (public utilities), unlike privately owned projects where investment decisions
7. to the public or by subsidies or loans from financial institutions;
c. It is common to have multipurpose projects in the public sector, such as flood
control, irrigation and power generation. This is seldom the case in a private
project;
d. Life span of private projects is generally shorter (say 5–10 years), while a
public sector project may run for longer period (20–50 years);
e. Political pressure in public projects may be much more than that in a
privately owned project.
In view of the foregoing, economic analysis of projects in the public sector may not
always be possible to be done exactly in the same manner as is done in the case of
privately owned projects. This creates problems for the public in general, as well as
for the decision makers and managers in the public works.
SOCIAL AND FINANCIAL COSTS AND BENEFITS
Appraisal technique in private sector is primarily concerned with maximization of
profit and consequently private wealth. Thus, only private costs and returns of
investment which occur directly to the investor are taken into account. However,
private monetary costs and benefits of a project do not necessarily reflect its true
social costs and benefits. For example, while undertaking appraisal of an industrial
8. costs and benefits are quite often inclined to differ from financial costs and benefits.
Environmental Appraisal
Environmental appraisal of a project is a process for identifying and evaluating the
potential benefits as well as adverse impacts of a project on the surrounding
environment. It provides a clear, well-structured and rational analysis of the
consequences of proposed actions, and assists in selecting the most environment-
friendly option. It also helps in reducing the project cost associated with avoidable
subsequent delays.
In the 1980s, World Bank and other international agencies introduced environmental
requirements for compliance in all projects. Gradually in most countries (including
less developed countries), these became important considerations while evaluating
the feasibility of a project along with technical and financial viability.
Currently, environmental analysis is an accepted procedure for utilizing the natural
resources available within the system. It is now a prerequisite for funding by
international agencies like World Bank, United Nations Industrial Development
Organization and Asian Development Bank. It is normally carried out if a project is
likely to have a significant impact on environment because of its prima facie nature.
9. inorganic.
First, the organic setting consists of animate elements such as human beings, animals,
plants and also other living organisms like bacteria and viruses.
The second category comprises inorganic elements like land, water and atmosphere.
The environment boundary stretches beyond the legal boundary of a project and
covers the areas which are likely to be ‘environmentally’ affected by various natural
factors such as direction and speed of wind and elevation. Thus, it varies from project
to project as well as from location to location.
MAIN ENVIRONMENTAL ISSUES
The aspects concerning impact of a project on the environment which should be
considered prior to discussion of the main issues may be broadly identified as
follows:
• The existing environmental and socioeconomic conditions of the site;
• Effects of the proposed project on these conditions;
•Examination of the impact of the proposed project vis-à-vis the
existing environmental regulations. Any impact that exceeds the regulations
10. crowding and congestion. demand for food is expected to increase because of earth’s
population growth. Simultaneously demand for goods and services will also rise
enormously. Also, the increase of waste material will be an added burden to the waste
disposal system.
2 global atmospheric changes
During the past two decades of the 20th century, there have been instances of
atmospheric changes in many parts of the world, such as depletion of ozone
concentration and increase in carbon dioxide emission causing global warming
(greenhouse effect).
Carbon dioxide and other greenhouse gases increase the atmospheric temperature
considerably. Global warming is likely to affect low-lying coastal properties adversely
(by flooding), agricultural productivity, water supply, electricity requirements, etc.
Other examples of damage are disruption in marine food chain, threat to biodiversity
and ecological impacts.
3 pollution
Pollution is the environmental degradation caused by the introduction of harmful
substances into the natural environment beyond a level that causes instability, harm
11. following:
•Thermal pollution: temperature change in natural water bodies for
mainly industrial purpose, e.g., use of water as cooling agent in power plants (cooling
towers).
•Visual pollution: highway advertisement boards, overhead cable lines, open
storage of trash, municipal solid waste, etc.
• Light pollution: highway luminal advertisements etc.
•Plastic pollution: stock piling of plastic products in the neighborhood that
adversely affects wildlife, as well as human society.
Evaluating infrastructure projects success
1. Availability and reliability
One of the most important aspects of infrastructure management is ensuring that your
infrastructure is available and reliable for your users, customers, and stakeholders.
Availability measures the percentage of time that your infrastructure is operational and
accessible, while reliability measures the frequency and duration of failures or
interruptions. You can use tools like uptime monitors, service level agreements
(SLAs), and incident reports to track and report on these metrics.
12. measures how well you safeguard your infrastructure from unauthorized access, data
breaches, malware, or cyberattacks. Compliance measures how well you adhere to the
policies and requirements of your industry, customers, or partners, such as data
privacy, quality assurance, or environmental impact. You can use tools like
firewalls, encryption, audits, and certifications to track and report on these metrics.
4. Cost and value
A fourth aspect of infrastructure management is managing the financial aspects of your
infrastructure and demonstrating the value it delivers to your project and business. Cost
measures how much you spend on acquiring, operating, and maintaining your
infrastructure, such as hardware, software, licenses, or services. Value measures how
much you gain from using your infrastructure, such as revenue, productivity, customer
satisfaction, or innovation. You can use tools like budgeting, accounting, and analytics
to track and report on these metrics.
5. Feedback and improvement
A fifth aspect of infrastructure management is collecting and analyzing feedback from
your users, customers, and stakeholders and using it to improve your infrastructure
performance and quality. Feedback measures how well you communicate with your
13. planning, design, implementation, and operation. Integration measures how well
you connect your infrastructure with other components of your project, such as
applications, data, workflows, or teams. You can use tools like roadmaps, diagrams,
documentation, and collaboration tools to track and report on these metrics.
References :
1. Appraisal and Selection of Projects. A Multi-faceted Approach, Utpal K.
Ghosh, First edition published 2022, ISBN: 978-1-003-19103-2 (ebk)
2. https://www.linkedin.com/advice/0/how-do-you-measure-success-
