Appraisal, proposal contents, input analysis

Concept of project appraisal

Project appraisal is the critical, systematic assessment of a proposed project, before commitment of funds, to judge whether it is technically sound, economically and financially viable, environmentally and socially acceptable, and worth undertaking.

Contents of the proposals

Technical proposal contents

1. Introduction and understanding of the project and terms of reference.
2. Objectives and scope of work.
3. Methodology and approach.
4. Work plan and schedule (bar chart, milestones).
5. Organisation and staffing: key personnel with CVs, roles and man-months.
6. Equipment, materials and facilities proposed.
7. Past experience and similar works.
8. Quality assurance, safety and environmental plan.
9. Risk assessment and mitigation.
10. Deliverables and reports.

Financial proposal contents

1. Cost estimate and summary of total price.
2. Breakdown: remuneration, direct costs, reimbursables, taxes (VAT).
3. Bill of quantities and unit rates for construction works.
4. Payment schedule and terms.
5. Sources of finance and cash flow (for the owner's financial proposal).
6. Financial indicators such as NPV, IRR, B/C ratio and payback period.
7. Validity of the offer, bid security and conditions.

Input analysis in project formulation

Input analysis studies all the resources required to construct and operate the project and checks their availability, quality, source and cost.

Steps: list inputs from the design, estimate quantities, identify sources and suppliers, forecast prices, check reliability and alternatives, then cost them. The result feeds the cost estimate and risk analysis.