ASPECTS OF PROJECT DEVELOPMENT CYCLE

PROJECT DEVELOPMENT CYCLE

Projects are undertaken for the purpose of developing systems, either to create new ones or improve
existing ones. The natural life of systems gives rise to a similar life cycle in projects called project life
cycle.

3 PROJECT DEVELOPMENT CYCLE

1. Pre – Investment
2. Investment Phase
3. Operational Phase

 PRE- INVESTMENT
The adequacy of the pre-investment and analysis largely determine the success or failure of
an industrial. If the pre- investment study is ill-based, the techno-economic rectification or
correction of the project will be difficult.

STAGES OF PRE- INVESTMENT PHASE

1. Identification of Investment Opportunities (Opportunity Studies) - Identification of
investment opportunities should be made at the beginning of
investment-related activities. Information on the newly identified and
viable investment opportunities should be obtained.
Characteristics: Sketchy, based more on rough aggregate estimates
than on detailed analysis.
Objectives: Refinement of business idea, preliminary evaluation of
alternative approaches, preliminary assessment of strengths and
weaknesses of concepts.
2. Preliminary Project Selection (Pre-Feasibility Studies) - A pre-feasibility
study should be viewed as an intermediate stage between a project
opportunity study and a detailed feasibility study (FS); the difference
being in the degree of detail of the information obtained and the
intensity with which project alternatives are discussed.
Characteristics: Intermediate level of detail based primarily on
secondary data.
Objectives: Preliminary project assessment, identify project
alternatives, identify critical aspect that requires special support
studies.
3. Project Formulation (Feasibility Studies) - A feasibility study should provide all
data necessary for an investment decision. The commercial, technical,
financial, economic and environmental prerequisites for an investment
project should therefore be defined and critically examined based on
pre-feasibility study.
Characteristics: Clear project concepts and criteria, comprehensive
project design, reliable information often primary data, quantified
 prediction or performance, detailed analysis with high confidence level,
consistent and defensible conclusion
Objectives: Provide commercial, technical financial ad economic
information needed of investment decision-making.
4. The Final Evaluation and Investment Decision –
Characteristics: Limited score, performed by technical experts, answer key questions,
degree of rigor commensurate with stage of project development.
Objectives: Provide detailed technical analysis of critical design features.

 INVESTMENT PHASE (IMPLEMENTATION PHASE)