PED guidebook main sxn rev6. FINAL.pdf - LGRC DILG 10

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Strengthening Provincial/LocalPlanning and Expenditure ManagementProject Evaluationand DevelopmentPart IIIPROJECT PROPOSAL DEVELOPMENTA. INTRODUCTIONYou will need to develop a full-blown project proposal for projects that have been identifiedfor external funding and those that require high investment costs. As mentioned in II.C.3,detailed engineering and design are usually done only for approved projects. However,some description of the project design is already required in the proposal.Developing the project design early on ensures the efficient implementation of projectsbecause of the following:1. It takes off from results of the PED where we get the following inputs:1.1 necessary components to enhance the effectiveness of the project to achievethe desired outcomes1.2 project cost and potential revenues, if any1.3 forecast schedule of required subsidy, if any1.4 possible risks to the environment, personal life, property, etc.1.5 impact of under-estimation of costs, over-estimation of benefits and both2. It specifies the following to ensure that the project will be successfully implemented:2.1 Implementation arrangements, including institutional arrangements, to includeamong others, protocol for:a. Financial managementb. procurement of inputsc. project administrationd. operations and maintenancee. collection of fees, if any2.2 Plans for monitoring and evaluation of accomplishmentFor projects with approved external funding, a detailed operations manual covering 2 aboveis usually required.B. PLAN OF THE SECTIONThis section discusses tips on how to develop a project proposal. Developing the projectproposal is easier once you have conducted a comprehensive evaluation of the project.We begin the next part of this section by discussing the need for a more in-depth feasibilitystudy. Next, we enumerate the information you will need to package the project proposal.We then proceed to describe the usual format of project proposals.C. NEED FOR A FEASIBILITY STUDYIn Part II, we discussed the procedures involved in conducting a pre-feasibility study. Theprinciples and concepts are discussed in the Technical Appendix. The same procedures,RGEdillon January 200660
Strengthening Provincial/LocalPlanning and Expenditure ManagementProject Evaluationand Developmentprinciples and concepts apply to the conduct of a feasibility study. The only difference is therigor applied.1. A pre-feasibility study relies only on secondary data to forecast demand and supply.A feasibility study may conduct a beneficiary survey to estimate a demand andsupply model. Alternatively, it may make use of reputable studies to forecastdemand and supply.2. A pre-feasibility study needs a simple financial table, like Table 5, to demonstratefinancial viability. A feasibility study requires a financial flow analysis.3. A pre-feasibility study can make use of rough estimates of the costs of investment,operations and maintenance. A feasibility study requires more detailed engineeringspecifications to arrive at more accurate estimates.4. A pre-feasibility study may make use of secondary data to estimate willingness-topayfor the project’s output. A feasibility study may conduct a beneficiary survey orestimate a more sophisticated model to capture willingness-to-pay (based onsecondary data).Obviously, conducting a feasibility study requires more resources, both in terms of timeand technical skills. A consulting firm is usually engaged to conduct the feasibility studysince they have the technical manpower and more comprehensive data in stock. For“big-ticket” projects being proposed to international funding agencies, it may be wise tocontract a reputable firm to conduct the feasibility study for two reasons:1. It increases the chances of approval of the project proposal. Remember that theprospective funder will conduct his own appraisal of the project. This time, theinterest is in validating the assumptions used in the feasibility study. An independentfeasibility study provides you this comfort zone, knowing that the project will standthe test to be done by independent technical experts.2. It ensures that the project being proposed, which will entail huge public investments,is indeed economically viable.If you have conducted the pre-feasibility study comprehensively, you should not besurprised if the results and even estimates of the feasibility study turn out to be the same.This should be taken as an affirmation of the earlier study.D. REQUIREMENTS IN PACKAGING A PROJECT PROPOSALYou will need two sets of inputs – one concerns the project and the other, the prospectivefunder.1. Inputs about the projectYou will need the tables you filled up in Part II. These are:Table 1 Project’s Log FrameTable 2 Situational profile - Without and With ProjectTable 3 Estimates of Demand for and Supply of Project’s OutputRGEdillon January 200661
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PED guidebook main sxn rev6. FINAL.pdf - LGRC DILG 10

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