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AEC 418: Project Appraisal and Evaluation - Introduction to Project Appraisal Notes

Institution: Maseno University

Course: Bachelor of Science in Mathematics and Economics

Content Category: Lecture Notes

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Summary

Content: This is an introduction to project appraisal and evaluation.

1. Introduction
A project appraisal should entail the following:
1) A presentation and discussion of the socio-economic context and the objectives. The first
logical step for the appraisal is a qualitative discussion of the socio-economic context and
the objectives that are expected to be attained through the investment, both directly and
indirectly.
2) The clear identification of the project Identification means that the object is a selfsufficient unit of analysis, i.e. no essential feature or component is left out of the scope of
the appraisal (half a bridge is not a bridge); indirect and network effects are going to be
adequately covered (e.g. changes in urban patterns, changes in the use of other transport
modes) and whose costs and benefits are going to be considered („who has standing??).
3) The study of the feasibility of the project and of alternative options. A typical feasibility
analysis should ascertain that the local context is favourable to the project (e.g. there are
no physical, social or institutional binding constraints), the demand for services in the
future will be adequate (long run forecasts), appropriate technology is available, the
utilisation rate of the infrastructure or the plant will not reveal excessive spare capacity,
personnel skills and management will be available, justification of the project design
(scale, location, etc.) against alternative scenarios („business as usual?, „do-minimum?,
„do-something? and „do-something else?).
....................................


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