- 2079 Bhadra · 2+4 marks
Why appraisal; technical vs financial proposal
Short answer
Project appraisal is a systematic pre-investment assessment of technical soundness, financial viability, and environmental/social acceptability. It is necessary to avoid investing in unviable projects, identify weaknesses, choose among alternatives, and satisfy lenders. Technical proposal covers methodology, work plan, team, equipment, experience; financial proposal covers prices, rates, bill of quantities, cost, payment terms.
Why is project appraisal necessary? Distinguish between the technical and financial proposal of a project.
Why appraisal is necessary
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.
It is necessary to avoid investing limited funds in unviable projects, to find technical, financial and environmental weaknesses before commitment, to choose among alternatives, and to satisfy lenders and donors.
Technical vs financial proposal
| Basis | Technical proposal | Financial proposal |
|---|---|---|
| Content | Understanding of the work, methodology, work plan, team, equipment, experience | Prices, rates, bill of quantities, total cost, payment terms |
| Question answered | How will the work be done and can the bidder do it? | How much will it cost? |
| Evaluation | Scored on technical merit | Compared on price |
| Submission | Usually sealed separately and opened first | Opened only for bidders who pass the technical stage |
| Prepared by | Engineers and experts | Estimators and accountants |
✓ Answer checked by Claude Opus 5.5 (high effort)
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