|
THE PRIME MINISTER
--------
|
SOCIALIST REPUBLIC
OF VIET NAM
Independence - Freedom - Happiness
----------
|
|
No. 48/2008/QD-TTg
|
Hanoi, April 3,
2008
|
DECISION
PROMULGATING
THE GENERAL GUIDANCE ON PREPARATION OF FEASIBILITY STUDY REPORTS FOR PROJECTS
USING OFFICIAL DEVELOPMENT ASSISTANCE CAPITAL OF THE GROUP OF FIVE BANKS (ASIAN
DEVELOPMENT BANK, FRENCH AGENCY FOR DEVELOPMENT, JAPAN BANK FOR INTERNATIONAL
COOPERATION, GERMAN BANK FOR RECONSTRUCTION, AND THE WORLD BANK)
THE PRIME MINISTER
Pursuant to the December 25, 2001 Law on
Organization of the Government;
Pursuant to the Government’s Decree No. 131/2006/ND-CP of November 9, 2006,
promulgating the Regulation on management and use of official development
assistance source;
At the proposal of the Minister of Planning and Investment,
DECIDES:
Article 1.-To
promulgate together with this Decision the General Guidance on preparation of
feasibility study reports for projects using official development assistance
(ODA) capital of the group of five banks (Asian Development Bank – ADB, French
Agency for Development (Agence Francaise de Development) – AFD, Japan Bank for
International Cooperation – JBIC, German Bank for Re-construction
(Kreditanstalt fur Wiederaufbau) – KfW, and the World Bank - WB).
ODA projects using capital from other donors
may use this General Guidance to prepare their feasibility study reports.
Article 2.- This
Decision takes effect 15 days after its publication in "CONG BAO." In
case of difference with current regulations, the preparation of feasibility
study reports for projects using ODA capital of the group of five banks must
comply with this Decision.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
PRIME MINISTER
Nguyen Tan Dung
GENERAL
GUIDANCE
ON
PREPARATION OF FEABILITV STUDY REPORTS FOR PROJECTS USING OFFICIAL DEVELOPMENT
ASSISTANCE (ODA) CAPITAL OF THE GROUP OF FIVE BANKS
(ASIAN DEVELOPMENT BANK – ADB, FRENCH AGENCY FOR DEVELOPMENT – AFD, JAPAN BANK
FOR INTERNATIONAL COOPERATION – JBIC, GERMAN BANK FOR RECONSTRUCTION - KFW, AND
THE WORLD BANK - WB)
(Promulgated together with the Prime Minister's Decision No. 48/2008/QD-TTg
of April 3, 2008)
TABLE OF CONTENTS
GENERAL GUIDANCE ON
PREPARATION OF FEABILITY STUDY REPORTS FOR ODA PROJECTS
(for procedural harmonization between the Government and the group of five
development banks: Asian Development Bank - ADB, French Agency for Development
- AFD, Japan Bank for International Cooperation - JBIC, German Bank for
Reconstruction - KfW, and the World Bank - WB)
FOREWORD
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
1. Project description, proposing agency,
implementing agency, and operating agency
1.1. Project description
1.2. Agencies responsible for the project
2. Time schedule for project implementation
3. Location for project implementation
4. Financial sources for the project
II. PROJECT BACKGROUND AND BASES
1. Bases for determination of the necessity
and urgency of the project
1.1. Macro environment and development policy
of the country
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
1.3. Market: demand - supply analysis
1.4. Bases of the project
2. Project's objectives
3. The suitability and contributions to the
national strategy, especially the national socio-economic master plan, regional
or local socio-economic master plan, industry development plan
4. Relationship with other related projects
4.1. Relationship with other investment
projects and measures previously implemented by the donors
4.2. Projects of other agencies which are
directly related to the investment project under consideration
5. Proving of the necessity of the project
III. PROJECT DESCRIPTION: DESIGN, RESOURCES.
OUTCOMES
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Analysis and selection of appropriate size
and capacity
Identification of investment phase (if
necessary)
2. Region to locate the project site and
specific site
2.1. Basic factors for selection of project
site
2.2. Analysis of natural, economic and
technical conditions
2.3. Selection of site suitable to
construction planning, land use planning (for construction projects) and market
3. Technology and technique
3.1. Selection of technology
3.2. Basic design regarding technology and
equipment
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
4.1. Overview: Identification of the program
on creation of goods, services/output
4.2. Technology line for production of
products/output and creation of services
4.3. Identification of input and supply
capacity
4.4. Infrastructure and responsiveness
4.5. Research and application
5. Construction and site
5.1. Specific options on project site
suitable to construction planning
5.2. Architectural and construction solutions
5.3. Basic design of construction
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
7. Environment
7.1. Standards and norms
7.2. Solutions to environment management and
protection
IV. TOTAL INVESTMENT LEVEL, STRUCTURE OF
CAPITAL SOURCES. FINANCIAL PLAN
1. Total investment level
1.1. Elements of total investment level
1.2 Calculation of costs
1.3. Use of unit prices and ratios
1.4. Funding plan corresponding to investment
implementation progress
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2.1. Fund sources
2.2. Recommendations on structure of fund
sources
2.3. Anticipated financial plan
2.4. Working capital, operation and
maintenance costs, financial mechanism
V. PROJECT IMPLEMENTATION AND OPERATION
MANAGEMENT
1. Key data on the project-implementing
agency
1.1. Institutional aspect
1.2. Business and financial aspects
2. Project implementation management
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2.2. Project management and staffing
2.3. Roles of contractors
2.4. Roles of consultants
2.5. Roles of organizations and other actors
participating in the project implementation
2.6. Roles of donors and co-donors (if any)
2.7. Coordination mechanisms
3. The project implementation plan
4. Financial management
4.1. Financial plan preparation
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
4.3. Mechanisms for budget approval and
disbursement
4.4. Retroactive mechanism
5. Bidding management
5.1. Bidding procedures
5.2. Management and preliminary bidding plan
5.3. Contract management
6. Project operation: institutions and
management
6.1. Agencies responsible for project
operation (if not coinciding with the project implementing agency)
6.2. Procedure for transfer from the
project-implementing agency to the project-operating agency
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
VI. PROJECT OUTCOMES AND IMPACTS
1. Mechanism for monitoring and evaluation of
project outcomes and impacts
1.1. Performance indicators
1.2. Main conditions and undertakings in
loan-funded projects
1.3. Project evaluation mechanism
1.4. Monitoring mechanism and reporting
regime
2. Investment efficiency: economic and
financial efficiencies/ benefits
2.1. Financial analysis
2.2. Economic analysis
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
4. Assessment of environmental impacts
5. Main risks
6. Controversial issues
7. Project sustainability
8. Logical framework (log frame)
FOREWORD
In an effort to harmonize international
practice with Vietnam's experience, this guidance aims at:
i) Harmonizing procedures and policies on
project preparation, appraisal and evaluation between the Vietnamese Government
and international donors by introducing a general guidance on feasibility study
which complies with international standards and meets the requirements of the
Vietnamese Government and international donors.
ii) Serving as an instrument for investors,
consultants and other concerned units to improve the quality of project
dossiers, and as a basis for planning and implementing projects.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
The contents of feasibility study reports
must be based on this guidance. In case of difference and a need of-adjustment
to match with the industry's characteristics, explanations and bases for such
adjustment are required.
I. SUMMARY REPORT ON
THE PROJECT
Summary report on the project (maximum of
five pages) aims at providing necessary information in the feasibility report,
covering:
1. Project
description, proposing agency, implementing agency, and operating agency
1.1. Project description
The section of project description covers
project objectives, components, policies and main activities supported by the
project, interests and target groups, and lessons withdrawn from previous
projects.
a/ Project objectives: To state clearly and
accurately development objectives of the project (overall objective of the
project). The maximum is two objectives, which are presented in an
importance-based order. Project objectives must present the unique development
target of the project be practical, specific, measurable and able to reflect
demands of the project's beneficiaries.
b/ Project components: In order to achieve
the set objectives, it is necessary to obtain outputs. To describe each output
of the project and then specific actions (activities) to obtain expected
outputs, results and impacts of the project. A set of activities contributing
to generation of an outcome for the project can be combined to formulate a
component of the project. Project components and activities constitute methods
to achieve overall objectives of the project. Project components may be:
- Construction and installation component
(related to technology, equipment, construction and installation etc.)
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Capacity building component (e.g.,
establishment of a system for monitoring ad evaluating development plans,
re-organization of a ministry, evaluation of functions and tasks of an
organization and personnel training).
- Credit component (e.g., credit for rural
enterprises, micro-credit, etc.)
- Project management (e.g., procurement of
equipment, vehicles, training, consultancy services, monitoring and evaluation,
etc.)
- Other components.
Upon description of project activities, it is
necessary to specify the scope of definable work, input factors necessary for
execution of activities, specific time frame for execution of activities, from
project kick-off to project completion and indicators used to monitor the
project implementation progress (Section 5 -management of project
implementation and operation, provides more details on responsible agencies for
each activity of the project). For projects which comprise research activities,
it is necessary to enclose a term of reference for researches to be funded by
the projects.
1.2. Agencies responsible for the project
To state clearly names and functions of
agencies responsible for the project in each phase:
- Project-proposing agency.
- Project-implementing agency (may be project
management unit or investment owner).
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2. Time schedule for
project implementation
The contents of time schedule for project
implementation include sequence and time for implementation of main activities
of the project, from the start to the completion, and for each phase (if the project
is divided into many phases). The time schedule for project implementation must
be practical to avoid any delay and all detailed activities must be
incorporated into the project implementation plan. The time schedule must also
take into account a contingent plan in terms of time.
3. Location for
project implementation
To state clearly the location for project
implementation (enclosed with the map of the project region).
Details of natural, economic and technical
conditions for project implementation are described in Section 3.
4. Financial sources
for the project
It is necessary to state clearly financial
sources of the project to ensure sufficient budget for it. For projects using
domestic financial sources, these sources may be the central budget, local
budgets and community contributions. Financial sources of ODA projects may be
provided by international donors, state budgets (central and local) and from
community contributions. Necessary arguments for the utilization of ODA sources
must be presented.
To describe conditions for funding from
different sources (loans or non-refundable grants), modality of funding (via
projects, industry development programs etc). If the project uses on-lending
from ODA sources, it is necessary to describe terms and conditions for
on-lending (interest rates, grace period, etc).
II. PROJECT
BACKGROUND AND BASES
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
To provide brief and concise description to ensure
the following important requirements:
- To prove that there are sufficient bases
for the project to be acceptable.
- To outline fundamental issues and details
to be presented in the subsequent chapters.
To ensure the above-mentioned requirements,
the following information must be included:
- The macro environment affecting the
appearance and implementation of the investment project: economic, political,
legal and social environments related to the project.
- Natural environment, natural resources, economic
and social environment in the region.
- Explicit description of project objectives
(which issues will be handled, which potential will be promoted); the level of
contribution to the development and the suitability with the national strategy.
- The relationship with projects having been
implemented, being implemented or going to be implemented and promoted by
domestic and international organizations.
- Proving the necessity and benefits of the
project in the market context, in line with the development plan of the region
or the industry or the socio-economic development master plan.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
1.1. Macro environment and development policy
of the country
The project must be originated from the requirement
of domestic socio-economic development and in line with national development
policy. To analyze the national economy and development policies from different
aspects so as to determine impacts of the project, and, at the same time,
recognize its priority position in the national development plan. It is
necessary to take into consideration the following issues:
- Natural conditions: geographical position,
climate characteristics, etc.
- Social and cultural environment: history of
the country, social structure, population, and educational system, etc.
- Background and macro economic issues:
growth rate, GDP, financial market, prices, international trade balance,
economic system and macro regulating policies, external finance, job
opportunities, poverty and hunger situation, natural resources etc.
- The State's development policies:
+ Development policies and objectives,
priority objectives.
+ The State's public investment programs
(PIP), investment orientations for development within the country and the
industry; outcomes against the set objectives.
+ Industry's development policies: prices,
taxes and subsidies, participation of private enterprises, overall investment
plan, level of priority for the project in the State's plan.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Current situation of financing for the
country; agreements between the Government and concerned donors of the project
must be presented.
1.2. Conditions and bases of the project
a/ Industry
Current conditions and issues of the industry
that has the proposed project (project industry):
- Overall evaluation of the industry
development in recent time.
- National policy to encourage the industry
development.
- Analysis and identification of major issues
in industry policies that affect the project.
- Organization of the industry, functional
organization of the industry for management of policy execution.
- Policy and institutional issues and other
issues hindering the possibility to obtain better results within the industry
or results of hunger elimination and poverty alleviation.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Natural, economic and social conditions
that need to be considered and identified to serve as a basis to resolve the
detected obstacles.
- Measures being applied by the industry to
resolve outstanding problems and obstacles.
b/Region (locality)
- Natural, economic and social conditions
that need to be dealt with upon, formulation of the project.
- Major features reflecting characteristics
of the region and conditions related to the project (e.g., environment, public
safety conditions, ethnic minority).
- Analysis of major issues, potentials and
obstacles to the development of the region (locality).
c/ Development plan and master plan
To evaluate region/industry development plan
or master plan (if any) to clarify the project's role in the mentioned
region/industry development context. If there is no master plan, it is
necessary to describe the implementation of the region/ industry development
plan.
This section comprises description and
analysis of undertakings, master plan, plan on socio-economic development of
the industry, region or locality; clarification of the project's background in
the development process of the region and industry (with attention paid to
goals and objectives in the plan, levels of priority for all projects in the
master plan, investment plan and progress as well as time frame for obtaining
goals and objectives). This must include both description and analysis of:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
+ Industry's background and conditions.
+ The State's strategy in the areas of the
industry.
1.3. Market: demand - supply analysis
To analyze and evaluate market, specifically
demand-supply of products and services. Demand and supply analysis is a
decisive factor to prove the necessity and potential of the project, determine
the appropriate size of the project and time for investment.
The above mentioned results of analysis will
serve as a basis for analysis of the project's benefits in the section of
financial and economic evaluation; therefore, it is necessary to evaluate the
extent of reliability and accuracy. Each hypothetical element must be
well-founded and clearly described with detailed comments.
The demand-supply analysis must take into
account current demand-supply and forecast on demand-supply in the future. It
is also necessary to take into account the responsiveness of the current
quantity of supply to actual demand quantity based on analyses (e.g., macro and
micro analyses), the level of fluctuation in the past..., at the time of
analysis and the source of data which satisfy the above mentioned requirements,
specifically as follows:
- Demand factors (e.g., population, income,
activities in other areas, etc.)
- Supply factors (suppliers of products and
services within the country and project region, including import capacity).
- Database and data sources must be accurate
(study, survey, estimates etc.).
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Important analyses:
- Essential factors to determine the demand
for goods and services to be provided by the project; method to determine those
factors and forecast of demand quantity.
- The responsiveness to forecasted demand
quantity in future given the analyzed development context.
- The responsiveness to forecasted demand
quantity in future given the capacity of current premises and the set plan.
- Attention to groups of people unable to
make payment at necessary price level.
- Expected time frame to maintain selling
prices in accordance with the demand for goods and services; the fluctuation
level of actual selling prices.
Other analyses: Some projects (e.g.,
afforestation project, anti-flood projects) will not comply with normal
demand-supply analyzing method; in such cases, the expected outcomes of the
project and comparison with various solutions will be considered in qualitative
and quantitative perspectives.
1.4. Bases of the project
- Outstanding problems at current or future
time; unexploited development potentials, issues to be handled by the project.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Relationship between major issues of the
project and relevant socio-economic development policies. To take into
consideration specific outcomes brought about by the project (size, number of
beneficiaries, etc.), analyze and evaluate the project's impacts on the
people's life, economic development and the current supply capacity in the
region so as to avoid cases where the project only resolves minor issues which
exert insignificant impacts on development policies.
- Measures and extent of settlement of
identified outstanding problems, including those related to unexploited
potentials. The project's viewpoint, in principle, must meet the requirement of
making considerable contributions to resolving identified outstanding problems.
It is necessary to examine whether there exists any major reason that may
affect the project's success. To propose issues to be supplemented and replaced
upon detection of causes of obstacles.
- The project's contributions to the
improvement of economic conditions, policies, laws and institutions, as well as
contributions in terms of approaches of the industry and sector.
2. Project's
objectives
Project's objectives comprise:
- Specific objectives which the project is
aiming at.
- The quantity and quality of goods and
services which will be produced and brought to the market through construction,
expansion or improvement of capacity, taking into account unforeseen things
related to demand and supply and other issues (such as ensuring sufficient supply
and consistence with the master plan. etc.). The objectives must have specific
and quantifiable indicators (quantity, quality and respective time frame) which
reflect the project's objectives and the extent of achievement.
- The future situation compared with the
alternative without the project.
The overall objective of the project is
contribution to the attainment of the national general objective. This
objective is attained through the benefits brought about by the project to the
economy and society, the project's contributions to the overall objective of
the industry or to poverty alleviation and hunger elimination.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- The benefits brought about by the project
from the development perspective: benefits brought about by the project;
impacts of its outcome on socio-economic development and various groups of
population, organizations benefiting from the project.
- Specific indicators (quantity, quality and
time relation) to determine the project's objective
3. The suitability
and contributions to the national strategy, especially the national
socio-economic master plan, regional or local socio-economic master plan,
industry development plan
- The relationship between the project and
socio-economic development master plan.
- The relationship between the project and
industry development strategy; the project's role in the industry's context
from the market aspect and issues related to organization and policies.
- Specific development issues mentioned by
the project.
- Policies related to the project, e.g. tax.
subsidy, trade control, exchange rate and policies related to interest rates.
4. Relationship with
other related projects
4.1. Relationship with other investment
projects and measures previously implemented by donors
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- To describe projects of donors and the
Government, which have been supporting region and industry development
strategies with special attention paid to the suitability of the implemented
projects or the project under preparation with the development strategy.
- To evaluate the outcome or importance of
good and poor experiences which the project has learnt from other projects.
- To apply best experiences from lessons
withdrawn from projects which have been completed or have been implemented
domestically or internationally.
4.2. Projects of other agencies which are
directly related to the investment project under consideration
- To review related projects which have been
implemented, are being implemented or in the preparation process that may
affect the feasibility and necessity of the project. To describe the
relationship with other projects and the measures previously applied by donors;
investment project should take into account other projects being in the
preparation or implementation phase that max affect its outcome or cause
problems to it; to consider the possibility of coordination with these
projects.
- To describe the progress and plan for implementation
of the concerned projects (if any).
- Other projects that may support or hinder
the project; their impacts on the project's success; extent of coordination as
necessary.
- The relationship, especially with previous
technical assistance projects. To study the capacity of using the available
relationship to improve the effectiveness of the economic and technical
cooperation project.
- The coordination between ODA projects.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
5. Proving the necessity of the project
To provide brief description about the
necessity of the project from the industry's and region's (locality's)
perspectives, compared to the policies of the Government and donors, the
development of the market and the project's potential.
III. PROJECT
DESCRIPTION: DESIGN, RESOURCES, OUTCOMES
This Section refers to key issues of the project:
forms of investment, size, location, inputs and relationship between functional
divisions in operation and exploitation as well as issues of technique and
technology, construction and implementation of the project. This section must
present fully and specifically the following issues:
- Proposing and proving issues related to the
project's technique and technology, including comparison of potential measures.
- Providing detailed description, including
the project's location and technical solutions.
- Providing detailed description of
construction works, various items of works of the project.
- Providing basic design and analysis of the
feasibility in terms of technique and technology within the framework: material
sources and responsiveness; conditions of construction sites; infrastructure
and its responsiveness; personnel; construction solutions.
This Section requires analysis of the
feasibility of investment size; major technical solutions (including the use of
land, material sources, construction and installation, types of technology,
technical equipment with basic technical parameters, regulations, standards,
norms, and experiences from lessons withdrawn from actual activities of
domestic and international projects, etc.), basic design (including explanations
and drawings) with sufficient details to clarify the utilization of all
investment resources, which will serve as a basis to estimate the volume of
work, and demand for investment capital. The contents of this section will
serve as a basis for the following specific works:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Application for the grant of land use
rights (if necessary).
- Implementation of subsequent designing
steps; organization of bidding for procurement and construction, taking into
consideration the capacity of implementation, operation and maintenance.
The feasibility report must provide and
present sufficient information to indicate the suitability, feasibility and
readiness of each investment element and provide specific technical solutions.
The formulation of the project must reflect
lessons withdrawn from analysis reports, activities which are being carried out
or have been completed as well as the best international experiences. It is
necessary to give reasons for selection or rejection of solutions identified in
each specific section.
1. Size
The method to define "Size", a
major parameter of the project, depends on the industry and type of project,
resources and demand, technology and other organizational and social factors.
In general, most projects aim at satisfying certain type of demand. Therefore,
it can be considered as an appropriate starting point which serves as a basis
for project size (See Section 2. Item 1.3). Upon consideration of major
conditions such as resources, capacity and technology, it is necessary to
determine a reasonable size. The size must be defined given the limitation of
time frame for maximum output capacity and must be consistent with the
forecasted demand quantity in order to prevent the project from surpassing the
limitation or becoming too large, which makes it fail to use resources
effectively and even cause risks for itself.
1.1. Analysis and selection of appropriate
size and capacity
- To identify decisive factors of size and
specifically analyze development capacity in future (goods and services,
market, growth rate, other suppliers, risks).
-To identify factors hindering the project
and analyze consequences of the identification of size.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- To describe technology size (hardware) or
project output; the project size may be reflected through technology (hardware)
or project output, e.g., irrigation area of irrigation project in agriculture,
electricity generation capacity of power plants, production capacity of
manufacturing projects, etc. Input capacity and output capacity must be clearly
differentiated.
1.2. Identification of investment phase (if
necessary)
- To consider the project's size in
correlation with investment progress. Both of these factors must be identified
based on the demand forecast, development plans of the nation, the industry and
the region.
- To analyze factors that may hinder the
implementation of the project. It is necessary to lessen the complexity of the
project or phase out investment, i.e., implement the project in several phases.
2. Region to locate
the project site and specific site
The project site must be identified based on
some conditions with specific analysis and evaluation: proximity to consumption
market; proximity to customers; proximity to material sources; taking full
advantage of existing infrastructure; or favorable natural conditions, etc. It
is necessary to consider all influencing factors, which serve as a basis for
identification of project site, including the Government's decisions; analyses
must be objective and based on decisive conditions for site selection. It is
necessary to provide an overview of advantages and disadvantages of other
potential solutions and reasons for rejection.
Construction site and position must be
analyzed in detail in terms of construction planning. The construction planning
must also present all limitations (if any) at the construction site, which may
be a problem to the implementation, development or expansion in future.
2.1. Basic factors for selection of project
site:
- Decisive factors for site selection for a
specific type of project.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Evaluation of conditions and reasons for
selection.
2.2. Analysis of natural, economic and
technical conditions
The following points are taken into
consideration in relation to the project region and regions affected by the
project:
- Natural, administrative and social
conditions.
- Transport infrastructure related to the
project site.
- Potentials of materials, labor, water
supply and drainage, power supply, communication and other potential.
- Limitations and risks related to site
selection.
2.3. Selection of site suitable to
construction planning, land use planning (for construction project) and market
It is necessary to consider the project site
and type in land use planning.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
3. Technology and
technique
3.1. Selection of technology
Technology and equipment will be should be
considered and selected to match with project size and construction site from
technical and economic aspects. This section comprises the following major
contents:
- An overview of technological solutions,
alternatives, domestic or foreign; brief description of solutions for technical
selection with basic data and diagrams of technological process.
- Viewpoints, criteria and standards used as
a basis for selection of technology and production process. This issue should
cover the following contents:
+ Calculations on necessary capacity of
technological and technical facilities, including profitability, based on the
size.
+ Capacity of the project-implementing unit
in the area of construction and operation (the selected technology must match
with qualifications of users and operators; match with the strategies to settle
outstanding problems and the selection of technology should be closely linked
with patents and qualifications of users).
+ Standards, norms and technical
requirements.
+ The suitability of selected technology with
domestic management level. "Suitability" is a relative concept:
Technology is not necessarily traditional or modern, but must reflect
well-founded selection or match with conditions of the nation or the locality
where the project is located.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
+ Analysis of technological solution from
economic and financial aspects, covering both operation and maintenance
requirements
+ Selection of technology from environmental
and ecological aspects.
- Overall evaluation of selected solutions
from the aspects of size; site; major technical and material foundations and
operation skills. To present benefits and limitations of each solution and
remedies; technology transfer and technical assistance (if any) for the
solutions.
- Selection of technology and equipment. To
point out defects (if any) and reasons for acceptance.
3.2. Basic design regarding technology and
equipment
This Section only presents technological and
equipment aspects. This is necessary as it serves as a basis for subsequent
Section 3.4 related to production/output. Construction aspects are presented in
Section 3.5.3.
Contents of basic design regarding technology
and equipment in the project preparation phase must meet the following three
requirements:
- Identifying functional relationships
between technologies and steps in the production process, including the
itinerary of materials through various steps.
- Serving as a basis to determine total
investment level.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Contents of basic design in project
preparation phase comprise total space for main equipment items; planning on
major equipment items and technical solutions. The planning must specify
technical characteristics of the project as well as the relationship with other
projects.
The basic design regarding technology and
equipment mainly comprises:
- Identification of the production process,
machinery and equipment.
- Identification of the itinerary of
materials and relationships in the production process.
Planning and basic design at feasibility
study level must comprise diagrams and drawings. The specificity of functional
and overall designs depends on specific items, aimed at ensuring the basis for
calculation of overall investment level of the project (or of a scheme).
Planning and basic design must meet the following requirements:
- Arranging site for and identify positions
of basic equipment, routes of transportation, and suppliers of power, water,
steam, gas, services, and other utilities, and the area that may be expanded in
the future.
- Identifying positions of major items of
equipment: regions related to input supply and output consumption; electricity
and control equipment; positions of auxiliary equipment items, items of machine
repair, garages, depots, research and application sections, etc.
- Providing diagrams for description of the
itinerary of major raw materials, main input and output, main intermediary
products and final products, through each step.
- Providing the planning of transport works,
electricity line, water supply and drainage works; communications.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
4. Program on
creation of products, services
Normally, all projects create products. If a
project does not create goods or services, this must also be presented in this
section of the feasibility study. In that case, it is necessary to describe
output when the project is operated, and input, infrastructure as well as
necessary researches or surveys.
4.1. Overview: Identification of the program
on creation of goods, services/output
Technical items must be described in
appropriate technical and economic conditions.
- Describing technical items.
- Presenting clearly bases for selection of
various items.
- Describing major target groups and results
to be achieved for each item.
- Indicating major input and output items for
each item.
- Regarding outstanding problems in the
industry as defined in Chapter II, presenting problems which will be settled
and solutions.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
To list and describe technical criteria and
quality of products (characteristics of various groups and types of goods and
services to be created by the project).
To present diagrams illustrated with figures
to show that inputs and equipment are used to produce goods and create services.
4.3. Identification of input and supply
capacity
- Types of manpower (quantity for each type,
requirements of qualification and professional skills; responsiveness;
necessary solutions in terms of qualifications and training).
- Raw materials (type, quantity, quality,
responsiveness: risks in the purchase process; solutions and alternatives).
- Auxiliary materials and other materials.
- Materials for maintenance and repair.
4.4. Infrastructure and responsiveness
- Energy (types, quantity, responsiveness and
reliability).
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Transport (types, quantity, responsiveness
and reliability).
- Communication system (types, quantity,
responsiveness and reliability).
- Other infrastructure, e.g., waste treatment
system, labor safety system, fire prevention and fighting system (types,
quantity, responsiveness and reliability).
- Measures required to upgrade infrastructure
and/or enhance activities to provide necessary services.
4.5. Research and application
To identify and evaluate the necessity of
development research, training. To describe programs on research and
development, training to support the creation of products or services.
5. Construction and
site
5.1. Specific solutions on project site
suitable to construction planning
Survey results (geology, hydrography,
typography, etc.) and the use of these data for construction. Solutions on site
construction.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
5.3. Basic design of construction
The contents of construction design in the
period of feasibility report preparation must meet the following three
requirements:
- Proposing technical solutions, which
reflect feasibility, safety and reliability.
- Serving as a basis to identify total
investment level.
- Serving as a basis to implement the
subsequent designing steps.
Feasibility study meets the above mentioned
requirements through basic design. Explanations on basic design include the
following contents:
- Features of total space; solutions for
construction work routes for route-based works.
- Overall architectural planning for
construction works with architectural requirements.
- Sizes and area of construction works and
items (quantity, size, characteristics such as major materials and
composition). To concentrate on major construction works and basic information
on typography, ground clearance, technical infrastructure and issues related to
technique (see Section 3.3) size and architecture.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Description of loading capacity features
and their impacts on the works.
- The list of applicable criteria and norms.
- The proposed solutions must be presented on
drawings with appropriate scale, the drawings must have sufficient details to
prove that the project is feasible in technical terms and calculation of total
investment level according to basis design has an acceptable preciseness. The
drawing of basic design must be presented with main items, comprising:
+ Map on the project region, including
information on the area, typographical characteristics and geological
conditions.
+ Total space characteristics; construction
route solutions applicable to route-based construction sites: overall map on
the project site, showing construction area, traffic network, work linked to
infrastructure as well as the area of greeneries and open space.
+ Drawings showing architectural solutions
for works with architectural requirements: drawings to illustrate main
buildings with main aspects (length, width and height) and quantity;
relationship of the building with technical arrangement and diagrams (see
Section 3.3.2).
- The works must have sufficient details to
calculate costs and prepare project implementation schedule; various modules
must De applied appropriately; to clearly specify quality of construction
materials, quantity of materials.
- Other issues: Specify fixed items and items
entitled to use more appropriate econo-technical solutions (if any), in the
project implementation phase; to specify survey requirements which will be met
in the project implementation phase.
6. Plan on ground clearance
and resettlement
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- The scope of ground clearance and impacts
of resettlement.
- Policies and benefits.
- Compensation policy.
- Organization of implementation.
- Formulation of a sub-project for the purpose
of ground clearance and resettlement plan.
- Community counseling and mechanism for
resolution of claims and petitions.
- Implementation progress.
- Capital sources.
- Monitoring and evaluation.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
7. Environment
7.1. Standards and norms
To present environment-related standards and
norms used in the design to serve technological, technical and construction
contents.
To present measures applicable to minimize
impacts on environment in the detailed design and project implementation
phases.
7.2. Solutions to environmental management
and protection
To describe requirements related to
environmental protection in the operation and maintenance phases.
To clearly present management measures and
organization in order to attain the criteria specified in regulations on
environmental protection; formulate plan on environment management in
consistence with the contents specified in the environment impact assessment
report.
IV. TOTAL INVESTMENT
LEVEL, STRUCTURE OF CAPITAL SOURCES, FINANCIAL PLAN
The total investment level is formulated
based on the basic design and technical solutions which are introduced in the
previous sections. Determination of the total investment level of a project is
one of the most important contents in project formulation task and serves as a
basis for the formulation of capital plan and financial analyses. Mistakes in
calculation must be avoided such as insufficiency, inaccuracy, lack of elements
of unit prices; incorrect unit prices; lack of provision or incorrect estimates
of provision. All of these will cause lack of capital and hinder the completion
of the project.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
In this step, the project must be divided
into items, sub-items, and articles to formulate separate costs in consistence
with the type of work, quantity and unit price. Based on separate costs, to
calculate total investment level for the whole project, including foreign
currencies and domestic currency, to serve as a basis for the formulation of an
appropriate capital plan.
Upon determination of total investment
capital, attention must be paid on the following issues:
- Total investment level must comprise
working capital (in case of production and business project), interest in
construction process, as well as provision for prices and arising costs.
Project costs must be compared with those of other similar projects.
- The availability of capital sources of the
project. The adequacy of domestic capital sources. Domestic capital or donors'
capital must be carefully considered to ensure adequacy and timely allocation.
Local capital (if any) must also be carefully considered.
- The suitability of capital plan with the
project's costs according to the implementation progress.
- To identify financial sources for the part
of capital other than ODA sources, to evaluate its adequacy.
1. Total investment
level
1.1. Elements of total investment level
Total investment level comprises different
cost elements depending on each specific project. The costs of each item must
be calculated based on the respective basic design, technical characteristics,
services and unit price.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Cost items
1
Ground clearance and compensation
Costs of ground clearance and compensation
depend on project type and size. The costs of this item must be estimated in
details, especially in case of resettlement not on a voluntary basis. The
costs for infrastructure at location of resettlement, for environmental
protection measures; protection of culture and beliefs, and protection of
nature must be taken into consideration.
2
Construction and construction works
Composition of construction works and
construction activities (construction materials, construction machines, etc.)
Construction services or labor
Fuel, transportation and other costs
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Goods and services
Machines and equipment, auxiliary materials
4
Project management costs
All costs related to the management of
project implementation (costs for the project management unit, etc.),
excluding costs of consultancy services and outsourcing services.
5
Consultancy services
Costs of consultancy services must be
estimated based on the tasks assigned to consultants. These costs are divided
into costs of consultants' income; direct costs (machines, training, etc.)
6
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Costs for training beneficiaries or other
training costs not yet taken into account in consultancy services.
7
Taxes and fees
Taxes and fees directly related to project
investment
8
Interest in the construction period
Separate calculation based on actual
interest rates in consistence with domestic or foreign capital sources.
=
Total basic investment level
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
9
Provision
Physically arising: provision for the
increase in the work volume (quantity of work, quantity and type of
equipment, method and time of implementation) caused by unexpected factors
and depends on the characteristics of the project.
Arising due to prices: provision for price
increase after estimates have been prepared based on the trends of price
index. The longer the time of project implementation, the higher the
possibility of price increase in domestic and international markets.
The provision arising due to prices is
calculated by adding the basic price to physically arising price and divided
into domestic currency and foreign currency amounts.
Basis for calculation of price provision
after commencement of a contract must be based on relevant regulations of
Vietnam.
10
Working capital (production and business
project)
When the project starts operating, there
muse be a necessary quantity of materials and funding for operation of
construction works in a production cycle
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
To examine the accuracy and rationality of
technical items, clearly describe technical characteristics and quantity of
demanded goods and services. To study and select methods to make estimates for
each item.
Costs are calculated based on cash
expenditures. The calculation of project costs must take into consideration the
following aspects:
- Regulations, norms: To follow legal
documents (laws, decrees, circulars, etc.) regulating pricing method for each
type of work.
- Market price and norm price: General
estimates should reflect actual prices in a context of current economic
conditions. Market price can be applicable in case of sufficient bases. If
there is a regulation on cost levels, it is necessary to present additional
estimates based on norms. The difference in calculations must be explained, the
excess level against the norms and the necessity for its application, the
impact on the success of the project must be proved and requested for approval.
- Currency: Goods and services may be
purchased domestically or imported. Cost items should be based on actual
offers, then converted into the selected currency according to the actual
exchange rate. It is necessary to clearly specify the exchange rate for
conversion.
There should be a summary table to present
bases and methods of calculation of estimates.
General estimates:
overview of methods
Items of costs
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Market price/ norms
Basic currency
(domestic and foreign currencies)
Exchange rate
1
Ground clearance and compensation
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Construction and construction works
3
Goods and services
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
4
Project management costs
5
Consultancy service
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
6
Training costs and other costs
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Taxes and fees
8
Interest in construction process
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
9
Provision for price increase
Physical provision
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
10
Working capital (production and business
project)
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Projects are different in nature despite some
similar aspects. The following table may only introduce general comments based
on actual unit prices and for reference only:
General estimates:
some comments on unit prices and ratios
1
Ground clearance and compensation
Costs for ground clearance, long-term
lease, or norms applicable to ground clearance or compensation.
2
Construction and construction works
Composition of construction works and
construction (if the project is not a turn-key one, it will be divided into
construction materials, construction machines. There will be prices for
materials, machine renting costs, etc.; manpower: actual income, basic
salary; fuel, transportation means and others: actual prices.
3
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Market prices or unit prices according to
other similar projects; comprising costs of transportation, loading and unloading,
and insurance to construction site.
4
Project management costs
These costs must be calculated based on
actually arising costs.
5
Consultancy service
Based on regulations of the Vietnamese
Government and donors, costs are calculated as per month/week/day and
subsidy.
6
Training costs and other costs
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
7
Taxes and fees
Taxes and fees must be pointed out
according to current regulations. If the project is exempt from a tax or fee,
related arguments are required.
8
Interest in construction period
9
Provision (physical)
This provision changes mainly depending on
the industry and type of project. Therefore, the rates of addition can only
serve as preliminary orientations based on experiences:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Construction and installation works and
equipment in general: 10-15%.
- Construction and installation works in
difficult conditions, complicated construction and installation works and
equipment: 15-20%.
In some special cases, for particular
projects (e.g., construction of tunnels deep in stone mountains), the above
provision rates may be higher.
Provision for price increase
Provision for price increase aims at
offsetting the increase in domestic and international prices for items of
costs of the project and must be calculated annually and accumulated in the
whole project implementation process. In many cases, it is possible to use
estimated increases in prices corresponding to domestic and international
inflation situation, assuming that prices of the project items increase along
with inflation.
However, this issue may make the total
investment level of the project considerably different. Therefore, provisions
for price increase must clearly be calculated with clear arguments.
If contracts are awarded based on the basic
price and price increase formula, such formula will be used to calculate the
provision for price increase.
10
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Input costs for production (manpower,
materials, fuels, auxiliary materials, etc.) of a production cycle.
1.4. Capital plan corresponding to investment
implementation progress
The demand for capital is related to the
project implementation progress. It is necessary to prepare annual capital
plans, broken down into expenses in domestic currency and in foreign currency based
on detailed calculations of the implementation progress (See Chapter 5, Section
5.3).
2. Capital sources
2.1. Capital sources
Capital sources and types of financial
contribution:
Capital sources and
types
Funding item
Source/organization
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Owner's capital
Loan capital
Non-refundable
capital
Project operating unit
Government
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
ODA
Multilateral development organizations
Bilateral development organizations
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Financial sector
(International) investment banks
Commercial banks
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Investment funds
Investment organizations
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Equipment suppliers
Capital market
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
The extent to which the demand for capital is
satisfied and conditions for capital use depend on the project nature. However,
when a project is capable of recovering capital like an infrastructure project,
which was not use to attract investors but now is appealing to them, it is
necessary to create conditions for the private sector to make investment and
the Government will only allocate the state budget and ODA capital when
necessary at a limited funding level.
Regarding the use of foreign capital sources,
risks of foreign exchange rates should be taken into account.
2.2. Recommendations on structure of capital
sources
It is necessary to prepare a detailed
proposal on structure of capital sources after studying the sustainability and
financial procedures of these sources; and evaluating funding capability for
the project.
In case the project is co-financed-by a bilateral
or multilateral financial institution, it is necessary to consider the results
of negotiation with the funding parties and the (largest) capital portions they
will contribute; examine details of items.
Note: compensation expense, ground clearance
expenses, taxes, fees and charges, administrative costs, and management unit
expenses are usually covered by domestic capital.
It is necessary to clarify the necessity of
utilization of ODA sources, the reasons for not using domestic capital sources:
to clearly indicate advantages of utilizing ODA sources or non-refundable
capital sources from specific donors; major conditions for the use of
anticipated source of capital; to propose the approval or disapproval and
indicate the donor's conditions for the grant of capital.
When arranging capital sources, it is
necessary to take into consideration a plan on provision for use in case the
ODA capital is not sufficiently granted; it is necessary to consider other
alternative sources such as the central budget; local budgets; owner's capital;
borrowings from commercial organizations; or loans or non-refundable aids from
other capital-contributing organizations.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Capital sources and
conditions
Sources
Currency
Amount
Term
Grace period
Interest rate
Fees and charges
Currency risks
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
1:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
3:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
In case of ODA on-lending to companies and
organizations, it is necessary to study the on-lending mechanism, the
organization that will bear the risks of foreign exchange rate changes and
recommend regulations.
2.3. Anticipated financial plan
It is necessary to take into account the annual
demand for capital, paying attention to the suitability with the project
implementation progress, the respective forecasted demand for domestic currency
and foreign currencies for each year and provisions arranged each year.
2.4. Working capital, operation and maintenance
costs, financial mechanism
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Operation and maintenance costs are usually
used in financial analyses. When the project does not generate enough profits
to compensate for operation and maintenance costs, the project sustainability
is likely to be at risk. In this case, it is necessary to plan for
replenishment of capital from other sources, such as the central budget; local
budgets; owner's capital or donors' non-refundable aids.
V. PROJECT
IMPLEMENTATION AND OPERATION MANAGEMENT
This Section will outline detailed
information on the project implementation and operation mechanism, including
information on:
- The project implementation management
mechanism: the organizational structure and capability of management of the
project.
- Project stakeholders: those who will
participate in the project implementation and their roles in the project.
- Detailed project schedule: all activities
will be listed with starting time and completion time.
- The project financial management mechanism
to ensure adequate financial resources for the project. Descriptions of
accounting procedures, financial statements, auditing and disbursement
mechanism to be applied to the project.
- Management of project procurement and
bidding.
- Operation and operation management
mechanism of the project.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
1.1. Institutional aspect
- Legal issues: Legal bases, regulations,
legal forms and entities, autonomy, purposes of the project (for-profit or
non-profit).
- Organizational issues: Organizational
diagram, accounting system, information technology, internal control,
management unit and staffing, commendation, training.
- Experience from similar projects (number of
projects, project size, capital sources, donors).
1.2. Business and financial aspects
- Products (if any) and services: types,
revenues (if any), customers, prices and costs (if any).
- Instruments and facilities.
- Accounting form (cash accounting/
accumulative accounting, commercial/budget).
- Capital sources, annual revenues and
expenditures.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2. Project
implementation management
2.1. Organization of project implementation management
It is necessary to describe tasks, roles and
responsibilities of each agency in the project implementation specified for
each activity (enclosed with the organizational diagram of project
implementation). If the responsibilities are overlapped, it is necessary to
specify mechanisms to handle conflicts that may arise from such overlapped
responsibilities. It is necessary to consider whether the project has adequate
human and financial resources, experience and capability needed for good
implementation of anticipated activities in the project or not. If not. it is
necessary to identify remedies, (such as human resource training, technical and
management assistance etc.).
2.2. Project management and staffing
To identify which organizations/units will
participate in the project implementation and approaches to be used to mobilize
all relevant organizations/units to participate in the project. To give
preliminary description of the organizational structure of the unit that is
anticipated to take the responsibility for the project implementation under the
investor or the unit appointed to be the project management unit, functions and
responsibilities of the investor/ project management unit, purposes,
characteristics, capabilities, and managerial, technical and financial
experience as well as the operation process of the project implementing agency.
A detailed regulation on functions and tasks of the project key positions;
coordination mechanisms to be applied among the project implementing agencies
and between them and the project operating agencies is required
It is necessary to assign staff for key
positions during the project preparation phase to ensure maximum continuity
from preparation to implementation of the project, (these officers may not
necessarily work on a full-time basis during the project preparation phase
until the project is approved). To implement the project, it is necessary to
appoint officers to key positions and train them before the project starts.
2.3. Roles of contractors
To clarify the roles of contractors in
monitoring construction works and project management; supply of goods and
services, execution of construction and installation works, etc. At the same
time, it is necessary to specify mechanisms for the project-implementing agency
to monitor and evaluate contractors’ performance results.
2.4. Roles of consultants
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2.5. Roles of organizations and other persons
involved in the project implementation
To clarify the roles of related agencies such
as the administration, non-governmental organizations (NGOs) and other project
participants. To specify the open consulting process, the way to make several
types of decisions, identify levels that will implement the decisions, levels
that will evaluate the decisions and anticipate what can happen and mechanisms
to deal with different opinions.
2.6. Roles of donors and co-donors (if any)
For ODA projects related to co-financing, it
is necessary to clarify (a) the roles of co-donors, (b) type of co-financing
(common or parallel), (c) guidelines for bidding that may be applied to the
project components and (d) any differences (procedures, principles or
regulations) that may arise.
2.7. Coordination mechanisms
To describe the mechanisms, both official and
unofficial, which are anticipated to be applied for promotion of activities and
coordination among the project participants. If a project steering board is
founded to perform the coordinating function, it is necessary to specify the
structure of the steering board with all of its members (there may be no specific
names yet, but it is necessary to indicate representatives of which
organizations/ units) and the tasks assigned to each member.
3. Project
implementation plan
To prepare a detailed and realistic project
implementation plan. To do so, it is necessary to specify operational relations
among project activities, the time frame and the sequence of specific
activities as indicated in the project description, obtain opinions of
experienced and qualified officials in implementation of similar activities. To
determine major activities regardless of whether they are directly related to
the project financial expenses or not.
To use several tools to present the project
implementation plan such as a bar chart or a Gannt chart showing the sequence
of steps to identify major activities. Suitable tools are selected depending on
the project nature. To identify the time frame and order of implementing major
activities (bidding, capital disbursement, site selection, ground preparation,
approved policy actions, legal actions, technical assistance, industry
structure adjustment, dissolution, privatization, appointment of auditors,
training...). and calculate appropriately time for implementation based on
capabilities of the project participants.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
4. Financial
management
This Section provides detailed information on
the tasks that ensure the management and tracking of the project's financial
items in an efficient and accurate manner. These tasks include elaboration of a
financial plan, financial accounting reports, auditing procedures,
administrative procedures for capital disbursement; mechanisms for approval and
allocation of budget funds; cash flows and on-lending conditions: mechanisms
for loan collection and repayment; co-financing mechanism.
4.1. Financial plan preparation
The financial plan must comply with Vietnam's
current regulations on financial management and with regard to ODA projects, it
must be in compliance with the commitments between the Government and donors.
The financial plan contents cover capital volume, financing sources (from the
State Bank, from loans or donors' non-refundable aids, the state credit funds,
enterprises' funds or community contributions, etc.). Demand for funds for the
project must be specifically calculated for at least the first year of
implementation according to current regulations.
4.2. Accounting and financial reports and auditing
agreements
To describe major procedures with regards to
accounting, financial reports and detailed auditing mechanisms, including (a)
maintenance of the project's accounts and internal audit reports, (b) timely
provision of financial reports, and (c) arrangement of project auditors or
company auditors.
- Maintenance of accounts and checking: To
formulate uniform standards and forms for financial statements and reports. It
may be necessary to hire consultants for formulation of a financial management
system.
- Financial reports: including financial
statements (usually including income statements, balance sheets, and sometimes
income and expense reports or reports on funding procedures, settlement
reports) and other financial information.
- Auditing process: To present independent
auditing mechanism (not necessarily private auditors) applicable to annual
financial settlements in accordance with guidance from the donor(s) and the
Government. Major tasks related to audit include:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
4.3. Mechanisms for budget approval and disbursement
To ensure adequate and timely domestic
capital for the project, it is necessary to describe procedures and time frame
for the Government's budget approval, problems that may arise and solutions to
handle them, mechanisms for temporary borrowings or other borrowing mechanisms in
case the funds are not allocated in time.
4.4. Retroactive mechanism
A number of donors apply retroactive
financing mechanism to accelerate the project implementation progress. In this
case, it is necessary to estimate expenditure for retroactive financing so that
the participating agencies are aware of the expenditure items which are subject
to retroactive financing and the way they are financed in the pre-funding
phase. The agency responsible for providing domestic capital shall make
advances for the items that will be retroacted.
5. Bidding management
5.1. Bidding procedures
Procurement and bidding for construction,
installation, goods, equipment and services for implementation of a project
must be identified in accordance with current regulations and the donor's
requirements, including:
- Description of the regulations on bidding
to be applied and the reasons for such application.
- Bidding procedures to be applied.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Identification of major risks in bidding
that may affect the project.
Bidding process must assure the benefits from
market competition. However, the benefits from competition are normally linked
to time cost. If the benefits cannot offset the time amount to be consumed for
open competitive bidding, the restricted bidding may apply.
If the turn-key procedure is not applied and
the project is to be divided into multiple bidding packages, it is necessary to
indicate in details the criteria for division of bidding packages and the
expenses and risks that may arise upon such division.
To clearly state the difference between
bidding procedures of the donor and those of the Government, if any, and affirm
the compliance with the contents of international agreements or credit
agreements signed between the Government and the donors.
5.2. Management and preliminary bidding plan
To prepare the preliminary bidding plan, it
is necessary to analyze all types of input needed to be procured and decide
which types should be grouped into a contract (for example, to allow package
bidding). To identify which bidding methods will be applied to each contract.
Normally, a bidding plan can be identified only after the feasibility study
report is available, when there is adequate information to identify all the
biding packages. Hence, the preliminary bidding plan will be adjusted after the
project investment decision is obtained. Besides the preliminary bidding plan,
it is necessary to describe in details the bidding management methods,
including the approval procedure of the authorized level. The following
information must be presented:
- The preliminary bidding plan with contents
as stipulated in the Bidding Law (the main contents in the preliminary bidding
plan must include the items subject to competitive bidding; regarding packages
subject to competitive bidding, it is necessary to provide information on the
name of the biding package; bidding price; capital sources; bidding method;
contractor selection method; form and time of contract implementation).
- Responsibilities of each unit in the
project-implementing agency to participate in the appraisal of bid evaluation
results.
- The outside agencies whose opinions must be
obtained before the contract is awarded.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
5.3. Contract management
To describe the requirements on tracking and
monitoring of contracts and human resources for those activities.
6. Project operation:
institutions and management plan
6.1. Agencies responsible for project
operation (if not coinciding with the project-implementing agency)
To describe institutional issues related to
the project-operating agency:
- Legal aspects: legal bases, project
operation site, legal form and status, autonomy, purpose (profit/non-profit).
- Organizational aspects: organizational
structure (diagram), accounting system, information technology, internal
control, management and staff, commendation, training.
- Experience from similar projects (number of
projects, project size, capital sources, donors).
To describe operational and financial issues
related to the project-operating agency:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Facilities.
- Cost-accounting/accounting form (budget/
commercial, cash accounting/ accumulative accounting).
- Capital sources, annual revenues and
expenditures.
- Liabilities and assets, balance sheet (if
any).
6.2. Procedure for transfer from the
project-implementing agency to the project-operating agency
To describe functions and roles of the agency
responsible for the project operation. To identify human resources for
appointment to key positions in the project operation, technologies and skills
to be transferred to the project-operating people and approaches in the
transfer of technologies and skills.
The project operation management plan
includes the following information:
- Mechanism of coordination among the
project-operating agencies and between these agencies and the investors.
- Time frame for transfer of the project
products to the project-operating agencies.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- The personnel implementing the project who
will continue to participate in the project operation.
- If the personnel implementing the project
do not continue to participate in the project operation, it is necessary to
state approaches for transfer of technologies and skills to the
project-operating people.
- Roles of contractors in installation/
technology transfer and training on machine/ equipment operation for the people
who will operate the project and do the maintenance work.
6.3. Management and project operation
responsibilities
To specify the project operation management
mechanism and personnel (expectedly to be under the project operation board),
information on the officials to be appointed to key positions, (specific names
need not be mentioned but types of personnel, qualifications and working
experience must be specified). Technical information on the project operation
should also be provided, such as information on goods/services, maintenance
plan, etc. Regarding financial and commercial aspects, it is necessary to
provide information on financial and accounting management mechanism, and in
case of a commercial project, data on revenues (if any), customers, prices and
costs (if any) is required.
VI. PROJECT OUTCOMES
AND IMPACTS
To evaluate medium and long-term outcomes
expected to achieve in the project and the methods of monitoring, including:
- The project investment efficiency:
financial and economic benefits to be created in the project and expenses to be
paid;
- Social impacts of the project towards poor
people, ethnic minority people and local people. If the project is related to
resettlement, a compensation mechanism for impacted people must be specified;
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Risks and conflicts of the project.
- Mechanism for monitoring and evaluation of
the project outcomes and impacts and indicators to be used to measure the performance,
evaluation mechanism and reporting regime.
1. Mechanism for
monitoring and evaluation of the project outcomes and impacts
To state project monitoring and evaluation
methods. To conduct monitoring and evaluation, it is necessary to identify
performance indicators, major undertakings in loan-funded projects and
mechanisms for project evaluation.
1.1. Performance indicators
To identify instruments to be used to measure
the project implementation results. To describe indicators to measure
development impacts and indicators to measure progress.
- Indicators to measure development impacts:
To list key indicators to measure “development
impacts”, or longer-term targets of the project. These indicators must be
specific, measurable, feasible, appropriate and time bound.
- Reports and indicators to measure progress:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
It is necessary to clearly distinguish
between (a) "Input" measurement indicators, (b) ''Output"
measurement indicators and (c) Outcome measurement indicators.
- Mechanism for monitoring and evaluation
includes any (a) demand for signing contracts for "status survey" and
“project post-evaluation survey" with outside agencies, (b) utilization of
technical assistance or consultants, (c) strengthening of personnel capability
and training, (d) acceptance of implementation outcomes in technical terms; and
(e) related details. To consider the identification of approaches to be applied
and responsibilities for collection of data related to monitoring. Attention
should be paid to the "status survey" and "project
post-evaluation survey" designs so as to ensure good survey results.
1.2. Main conditions and undertakings in
loan-funded projects
With regards to many ODA projects, the Government
and donors may agree upon a number of undertakings that need to be done in the
loan-funded projects. In this case, a summary table of main undertakings must
be prepared. This table is usually used in quarterly reports or reports on
project implementation whenever there is a delegation to come to evaluate the
project. Since this information is very important to the Government and donors,
both sides should stipulate similar forms for monitoring convenience.
The major activities and progress time frame
committed by the Government for successful implementation of the project and
responsibility fulfillment are normally specified in legal agreements. These
commitments include measures to ensure the project's success and
sustainability. These commitments may include:
- Accounting and auditing.
- Finance and revenues from beneficiaries.
- Cash flows and fund use.
- Domestic capital.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Environmental commitments.
- Voluntary resettlement.
- Issues of local (indigenous) people.
- Monitoring, evaluation and reporting.
- Project implementation.
- Policy, regulation and institutional
issues.
1.3. Project evaluation mechanism
To describe the project evaluation mechanism.
Evaluation is usually conducted after the project is completed when benefits
from the project are obtained. However, interim evaluation may be conducted to
raise appropriate adjustments if necessary.
1.4. Monitoring mechanism and reporting
regime
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2. Investment
efficiency: economic and financial efficiencies/ benefits
Financial analysis calculates all financial
expenses in the project and revenues from the project from a specific
organization's point of view. Financial analysis allows the identification of
expenses, expense recovery, payment capability and revenues and investment
efficiency. Financial analysis is based on the actual cash flows.
Unlike financial analysis, economic analysis
take into account both costs and benefits from the national point of view
rather than only the project cash flows. To perform benefit-cost analysis, the
situations before and after the project are compared to specify the benefits
brought about by the project and the costs arising for the whole nation. This
is a complicated procedure, related to opportunity cost and shadow price as
well as other elements like taxation and subsidies.
2.1. Financial analysis
2.1.1. Profitability (applicable to profit
earning projects)
Financial analysis must be conducted as per
actual costs, i.e., based on the price of the baseline year without taking
inflation into account, including the following steps:
- Specifying related time period and segregate
it into phases (usually 10-20 years).
- Using size analysis (see Section III. Item
1) and project costs (see Section IV. Item 1) to formulate a calculation sheet
of total investment capital and allocation of these costs as per respective
phases. Determining the remaining value of capital assets at the end of the
period since this remaining value is regarded as the project revenue.
- Forecasting demand for the project outputs
(See Section II, Item 1). It may be necessary to consider the demand for the
project's goods and services, the roles of product prices and charges toward
the demand, demand elasticity upon price changes, purchasing power, demand
elasticity upon income changes, alternative solutions to satisfy demand, the
project capability to meet the demand, quantity, price and value of each
product in each year to determine the project revenue.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Identifying cash flows for all years to
specify financial capability, i.e., checking whether there is adequate cash
amount for each year to cover all respective costs or not. determine the
capital recoverability as well as the fund shortage to find out an alternative
to handle the shortage and calculate the project's financial efficiency based
on (long-term) costs to an output unit (especially, in case of a project
without revenue), the rate of revenue to expenditure or the rate of return on
investment in the form of net present value and/or financial internal rate of
return (FIRR) to serve as indicators to measure the capability of financial
return generation.
- Financial analysis is finished with
analysis of the sensitivity to define how the rates change when the assumptions
change, e.g.; when investment costs rise, demand falls, exchange rates
change...
- Comparing these figures with investment
criteria (minimum costs) of the investor, donors and the Government and
examining investment efficiency.
2.1.2. Liquidity: preliminary financial plan
Completion of the financial plan upon project
implementation with data from the operation phase since the mobilization of
resources to cover investment expenses is only a pan of the financial task. The
other part is how to arrange financial sources to enable the project to
complete financial mandates to the investors and donors. This requires loans
and interests payable in the future to be within the project's income generation
capability.
2.2. Economic analysis
Economic analysis must take into account
benefits and costs at the national level in addition to what is related to
financial analysis. However, in practice to identify the economic rate of
return, economic analysis must start from financial analysis, then calculated
results must be adjusted as follows:
- Dropping account transfers like taxes and
subsidies I since these expenditures/revenues at the level of a specific unit
are those at the national level; therefore, from the national point of view
these items will be offset and no longer exist).
- Adjusting price and unit cost: If economic
costs cannot be reflected since they are distorted in the market due to
regulation measures or monopoly, accounting prices/shadow prices may be used.
However, the need to adjust price and unit cost is decreasing since the world
is becoming more and more competitive and trade is increasingly liberalized.
Therefore, in most cases the market price more or less reflects more accurately
the economic value. Thus, only when there is a clear and substantial difference
between the market price and economic value, it is necessary to calculate and
reason about the shadow price.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
After adjustment, it is possible to calculate
the economic internal rate of return (EIRR) with the same calculation procedure
as that of financial internal rate of return (FIRR). However, economic analysis
is also related to many other factors in addition to FIRR adjustment. Economic
analysis also includes evaluation of the project's sustainability to ensure
encouragement of producers, adequate capital for the project operation to
enable the project to bring about maximum benefits to its proper beneficiaries
and assure that all social and environmental impacts (such as resettlement, issues
of indigenous people) are analyzed.
3. Evaluation of
social impacts
To summarize major social issues related to
the project and present its social development results. To describe steps of
social analysis and social analysis results and indicate that analysis results
have impacts on the project formulation. The analysis report will (a) identify
major social issues related to the project objectives; (b) identify major
groups of stakeholders in the project context and study how the project will
impact or be impacted by interactions between the groups of stakeholders; (c)
identify the project's development impacts and anticipated activities to
achieve its outcomes. If the project is divided into many phases or is an
industry project of which social impacts cannot be fully identified at the
project appraisal time, it is necessary to describe the way to complete, update
social analysis and coordinate with other parties within the project.
Major social issues include capability to
access project benefits, depending on groups of stakeholders, with regard to
the same type of resources such as land, budget capital, selection of project
stakeholders, public awareness, the risks that may arise from the project's
negative impacts.
Stakeholders are civil organizations,
enterprises and the public, social groups and individuals that may have
positive or negative impacts on the project through their participation. Social
analysis identifies poor and vulnerable groups, groups essential for the
project's success, groups impacted by the project implementation. Groups of
stakeholders may be included into or excluded from the project based on the
issues of employment, geographical location, gender, ethnic people, religion or
politics...
Social development results are the results
presumed to be achieved by the project, such as interest in all social
subjects, equality, enhancement of social organization and capital capability,
reinforcement of social unity, empowerment, transparent governance and
accountability, and mitigation of project negative impacts. To assess social
impacts, depending on the project nature, it is necessary to specify
substantial elements of the following:
- Major project stakeholders.
- Participation mechanism of major
stakeholders.
- Mechanism to attract participation.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Capability to provide resources to civil
organizations to help them cover direct expenses or to grassroots beneficiaries
through civil organizations.
- Social development outcomes.
- Institutions to ensure the achievement of
those social development outcomes.
- Official and unofficial organizations at
the local, regional and national levels related to the project.
- Institutions of proposal to ensure that
grassroots beneficiaries will have access to the project.
- Mechanism for service provision or methods
to convey the project benefits to beneficiaries.
- Indicators to measure social impacts and
social development outcomes.
- Resources to monitor the indicators for
measurement of social development outcomes.
- Impacts to promote the project caused by
monitoring with community participation.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Flexibility of the adopted mechanisms to
cope with problems found in the monitoring and evaluation process.
- Measures to ensure the compliance with
social protection policies.
- Mechanism for adoption of necessary actions
during the project implementation.
Social impact assessment will show the way of
evaluating the project from socio-economic and socio-cultural aspects. To
understand the way of evaluating the project from socio-economic aspect, it is
necessary to identify:
- The most important impacts brought about by
the project to socio-economic development, and the influence of those impacts
on poverty alleviation and hunger elimination, satisfaction of essential needs
and the community's access.
- Comparison of the project's anticipated
costs and benefits and its sustainability.
- The costs from the current approach
compared to other alternatives to improve the life of project stakeholder
groups, such as raising income.
- If it is possible to assert the project
economic efficiency and interests, it is necessary to state the methods of
evaluating the impacts of income distribution and employment creation.
- Subordinate negative social effects (such
as impacts on some groups due to mitigated competition...) that the project may
cause and the way to control these effects.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Methods to assess the project's impacts on
minority ethnic people.
- Resettlement plan, if the project is
related to resettlement.
- Satisfaction of the demand for funds for
ground clearance and resettlement.
- List of the people affected by resettlement
in the resettlement plan.
To understand the way of evaluating the
project in socio-cultural aspects, it is necessary to be aware that:
- It is difficult to change behaviors and
attitudes in a short time and this may even be contrary to the project's
traditional values.
- Participation in or acceptance of the
project by a stakeholder group or other important members may create unsolvable
risks related to the project's sustainability.
- The project may create social changes.
4. Assessment of
environmental impacts
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
With regard to projects under the list of
projects that require environmental impact assessment reports according to the
Law on Environment Protection, the following principles should be applied upon
environment impact assessment:
- Principle I: To focus not only on physical
environment impacts but also on effects on productivity (such as plantation
productivity, fishery productivity, subordinate agricultural products), health
(such as diseases and mortality rate), recreation (such as tourism), biological
diversity and other areas.
- Principle 2: To consider all environmental
impacts and related effects inside and outside the project location, and the
impacts that may arise but yet to be observed at the project location.
- Principle 3: To acknowledge that the
environment has multiple advantages and such multiple-value nature is ranging
from production values to life values. To identify which values the project can
create and assess economic values of environmental impacts.
To summarize the steps to be taken to assess
environmental impacts and prepare an environment management plan (including
consultancy and information disclosure) and important issues and methods to
handle them. The following information should be mentioned:
- Major environmental issues, including the
aspects having impacts on the natural environment (air, water and land), human
health and safety, global environment and social impacts.
- Relevant issues of interest that may create
risks to the project in the future and measures to minimize the risks.
- The possibility to reflect importance of
the issues and measures to minimize them through classification of
environmental impacts.
- Major contents of the environment management
plan and its coverage.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Mechanism to finance the measures to
minimize impacts and environmental observation as mentioned in the environment
management plan.
- The possibility to manage the
implementation of the environment management plan of environmental
institutions.
- Environmental compatibility of the
conditions and commitments stated in the loan agreement (in case of ODA
projects).
To assess environment impacts, it is
necessary to consider whether the stakeholders are consulted at the phase of
(a) preliminary assessment of environment and (b) formulation of the
environment impact assessment report and environment management plan. To do so,
it is required to describe:
- Mechanisms of consultancy used and the
groups consulted.
- The compatibility of consultancy mechanisms
and implementation mechanisms and monitoring and evaluation of the project's
impacts on environment.
- Compatibility with the government policies
of consultancy mechanisms.
- Mechanisms established to monitor and
evaluate the project's impacts on the environment.
- Linkage of measurement indicators to the
objectives and outcomes in the environment management plan.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
5. Major risks
To specify major risks of the project (like
delays in project implementation, technical, financial, political,
environmental, social and institutional issues, etc.) - the risks that may have
substantial impacts- and the risks that may affect the project's results if
arising. To evaluate possibility of each risk and specify measures to mitigate
the risk. To analyze sensitivity with such possible negative changes as:
- Increased capital costs.
- Increased operation & maintenance
costs.
- Decreased income.
- Slowness in income generation.
- Economic changes.
To analyze sensitivity with possible negative
changes, the report must mention the followings:
- Based on experience gained from similar
projects, identifying major risks related to the creation and utilization of
project products in accordance with the set objectives.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- The risks that can be and cannot be
controlled.
- Measures to be taken to mitigate the risks.
- Major elements of the project that can
cause risks to its development efficiency.
- The project sensitivity variables based on
analysis of nature of risks. The analysis of the project sensitivity will serve
as a basis for determining the vitality of the project.
- Probability that minimum requirements are
not met.
6. Controversial
issues
To identify controversial issues (e.g., in
the mass media, with non-governmental organizations, or in the local
communities), methods to monitor and control those issues. Controversial issues
may comprise:
- Social issues: projects involving sensitive
cultural and social issues like resettlement; changes in access to resources,
breach of living routine; changes in economic and social positions, unequal
distribution of interest and costs among the stakeholders; worsening of the
inequality in terms of location, income and gender; change of the behaviors in
a way unsuitable to attitudes on gender, incompatible with social standards and
cultural or religious values.
- Ecological issues: projects related to
changes to or direct or indirect destruction of the natural living environment
or ecological functions. These issues are related to the natural living
environment, biological diversity, exploitation of natural resources...
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Governance issues: projects for solving,
being affected or affecting the State's role, transparency and accountability.
The concerns here may be issues affecting the political economy, fiscal
balance/autonomy, assurance of covering all costs, tax policy, legal reforms,
privatization, administrative reforms, procurement and bidding procedures,
competitiveness in the government, decentralization, regulatory reforms,
corruption, income inequality, rights of ethnic minority people, information
access.
- Management capability: projects with weak
management and implementation apparatus.
7. Project
sustainability
Project sustainability must be analyzed to
ensure maintenance of the project's positive impacts. To analyze project
sustainability, it is necessary to indicate the followings:
- The capability to sustain the technology
used in the project after its completion.
- Level of funding for maintenance of the
project's products after its completion.
- Project management and operation capability
after project completion.
The above issues can be presented in the form
of a Risk Distribution Box similar to an example of a chart that has been
simplified with regard to infrastructure as shown below:
Type of risks
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Project-implementing
agency
Construction
unit/Contractor
Government
Creditor
(commercial banks)
ODA-providing
agencies
ECA, MIGA
Trade insurance
Other relevant
agencies
Risk mitigation
instruments
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Delays
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Excessive costs
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Construction contracts, provisions
Operation
Failure, loss
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Standard insurance
Technical operation
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Performance guarantee/ supply
Management
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Commerce
Operation costs
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Price
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Long-term public-private contracts;
government guarantee
Demand
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Long-term public-private contracts
Payment
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Accounts - agreements
Finance
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Project finance, syndication
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
On balance sheets
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Interest rate
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Exchange rate
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Loan term
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Force majeure risks
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
8. Logical framework;
(log frame)
The log frame helps policy makers identify
inputs, outputs, outcomes and impacts of the project and possible risks.
However, using a log frame has limitations such as:
- Detailed description of the projects makes
the project design inflexible.
- Precise description of the project depends
on objectively verifiable indicators. Collection of these data from “official”
sources is easier than from the people. Therefore, project designers tend to
focus on economic measurement indicators than on the people's experience, and
they tend to ignore qualitative data and focus on quantitative data. This may
make the project design less accurate.
- The log frame is normally neutral since
project designers are not encouraged to focus on opinions of all stakeholders.
Once again, this makes project design inaccurate since it omits opinions of
some stakeholders.
- Project designers tend to complete the log
frame at the last step in the project appraisal process (after the project has
been designed).
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- The boxes of Objectives and Purposes of the
project may be described far in details.
To handle the above problems, it is possible
to adopt the following solutions:
- To encourage the project consultants to use
opinions of stakeholders as assumptions to clarify the reality that the
project's success much depends on the participation of the stakeholders.
- When formulating a project, it is more
advisable to focus on procedures than on detailed descriptions. This requires
time to be spent on periodical review of the project in the project
implementation plan. This also requires that a series of log frames should be
formulated to show different contexts that may happen during the project
implementation.
Log frames should be formulated according to
the following sample and should summarize the project design. A log frame
usually consists of 16 boxes with 4 columns as below:
- Design summary: Providing basic information
on the project and presenting this information in the form of cause-effect
chain drawn from analysis of cause and effect. Anticipated inputs will lead to
outputs, based on which the project's direct objectives are to be attained.
These objectives will contribute to achievement of long-term or overall
objectives of the project. Some log frames raise the concept of activities.
Those are detailed tasks for using inputs to obtain outputs.
- Verifiable performance indicators: are the
requirements of activities for each project component. These indicators include
specific measures that can be sensed and quantified to gain the objectives at
each project design level. These indicators are very important to the project
monitoring and evaluation.
- Monitoring mechanism shows the information
source and collection approach to monitor activities at each level.
- Assumptions and risks identify other
conditions outside the project but are necessary for the project
implementation. Therefore, at the input level, the output will be realized with
assumptions that the project officers have necessary technical qualifications
(assumptions) - and the output will create expected impacts - assuming that
there would be no major natural calamities (assumption on risks).
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Verifiable
performance indicators
Monitoring
mechanism
Assumptions and
risks
Overall objectives:
(A statement on the overall long-term
objectives the project is anticipated to contribute to achieving)
These indicators show industry management
according to good practice.
This column specifies the information
source to verify the indicators and information collection procedure.
These assumptions are normally related to
conditions, actions and reactions from outside the project and industry.
Specific objectives:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
A statement on changes of behaviors from
groups or organizations benefiting from the project after the project is
completed
Specify indicators to be reached; upon the
program completion
The indicators tied to the program will be
monitored and recorded in the project reports, project evaluation reports and
reports of project monitoring delegations.
Assuming that the program's objectives will
be reached in the long run, list necessary assumptions linked to the
objective realization process. When it is necessary to collect data, the methods
of survey and responsibilities of beneficiaries must be specific.
Project outputs:
Specify potential values upon completion of
each component of the project
The output indicators are valued by quality
and time. If no time point is specified, it will be understood as upon the
project completion.
Output indicators normally comprise cost
efficiency measures.
Output indicators are monitored and
evaluated in various reports of the project: project review reports (interim,
final) and reports made by project supervision delegations:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Assuming that the outputs will be achieved
upon the project completion, list additional assumptions (conditions, policy
changes, behaviors of groups or organizations benefiting from the project)
needed to realize the objectives.
Inputs/Activities:
A project component is a group of
activities designed to attain an output/product of the project
It is necessary to list the component
inputs such as total costs for each component, including provisional costs.
- Inputs are tracked through progress
reports, (quarterly) disbursement reports.
- Inputs are evaluated through the reports
made by the project monitoring delegations (biannual) and audit reports
(annual).
Assuming that the project's activities and
components are successfully implemented, list the assumptions needed to
achieve the outlined outputs.