Feasibility Study – The critical success factor in project management pot

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University of Economics and Finance
University of Economics and Finance
Feasibility Study – The critical success factor
in project management
Lê Quốc Thành - Engineer, BA, MA
PhD Student in CFVG
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Lý lịch giảng viên
Lý lịch giảng viên
+ Học vấn :
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PhD Student in CFVG - 2010
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Thạc sỹ kinh tế phát triển Việt Nam –Hà Lan (ĐH KTHCM &
Viện ISS Hà Lan - www.iss.nl) năm 2003.
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Cử nhân Kinh tế - ĐH Ngoại thương – 1999.
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Đào tạo Quản lý chuyên ngành Hàng Hải tại Nhật Bản
1996, và ĐH Chalmer –Goteborg - Thụy điển 1997.
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Kỹ sư hàng hải – ĐH Hàng hải - 1994.
+ Kinh nghiệm làm việc :
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1994-1998: Cục hàng hải Việt Nam, Ban quản lý DA đường
thuỷ -Bộ GTVT.
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1999-2000 : Chuyên viên kinh doanh – Tập đoàn Sumitomo
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2003 - đến nay : Phó phòng Dự án Hạ Tầng - Tập đoàn

Mitsui Nhật Bản tại Việt Nam.
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Lý lịch giảng viên (Tt.)
Lý lịch giảng viên (Tt.)
+ Các dự án đã & đang tham gia :
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Nghiên cứu Tiền khả thi Dự án Phục hồi vận tải ven biển Việt Nam
1994-1996 ( JICA - Nhật Bản).
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Dự án 2 tuyến đường thuỷ phía Nam 1995-2002 (World Bank, 80mil
USD).
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Dự án Thuỷ điện Đại Ninh – Lâm Đồng (300 Mil USD, 2004)
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Dự án khí Cà Mau (đường ống khí 240 Mil USD, 2005).
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Dự án lắp đặt thiết bị điều khiển phần RFCC ( 2,8 Mil USD, Nhà máy
lọc dầu Dung Quất, 2007).
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Nghiên cứu khả thi dự án đường sắt Bình Thuận Tây Nguyên, 2008
(TEDI-PCI).
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Dự án Mua bán-Sáp nhập Cảng khu vực Thị Vải-Cái Mép ( M&A), 30
mil USD ( 2008-2009).
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Trưởng điều phối Nghiên cứu tiền khả thi Dự án Cảng trung
chuyển Than ( 100,000 DWT, 2009).
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Country Coordinator, Long An Desalination Water Plant (Mitsui-GS)
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Country Coordinator, LNG Regasification Plant ( PVN and others)
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Một số nguyên tắc nghiên cứu
Một số nguyên tắc nghiên cứu
trên lớp
trên lớp
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Không chỉ là lớp học : mà
là lớp Thảo Luận.
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Có ý kiến – Nêu ra ngay.
Có ý tưởng - Viết ra ngay.
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Khuyến khích tranh luận
 Có kết luận.
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Kết luận chưa hẳn là kết
quả cuối cùng, mà có thể
là một bước tiến tới kết
quả mong muốn.
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Chúng ta sẽ học được của
Nhau Nhiều qua thảo luận.
What is matter?
What we are going to do? How?
What is the next step?
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Main Content
Main Content
I. Basic concepts of project and project

management
II. Project life cycle in reality.
III. What is Feasibility Study?
IV. Outline of Feasibility Study. How to
develop a Feasibility Study?
V. Case Study of Feasibility Study
VI. Free Discussion : Q & A
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I. Basic concepts of project
I. Basic concepts of project
management
management
1. Non-profit project :
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Run by NGO or International Organizations for
purposes of charity, international relationship or
politics
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Focus in the field of agriculture (technology
transfer), education, public health improvement,
fighting poverty, social study or culture, etc.
2. Investment project :
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Mainly invested by private sectors and public
sector (state-owned companies)
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Financial purpose is the most important criteria
to invest
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Investment project can be divided

Investment project can be divided
(1) Non-facility project (non-physical project):
Merger and Acquisition project, Biz Improvement
Project, Enterprise restructuring project, etc 
No equipment is installed ( Paper work only)
(2) Facility project (Physical project):
- Most important projects in economy.
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Requires large capital, manpower, equipment
and construction works.
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Take several years for preparation and
implementation
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Project life is 20, 30 years or more
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Play most important role in economic growth of
country
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Facility project
Facility project
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All projects that we could see by our EYE is
facility project
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Road, railway, bridge, high building, power
plant, factory, new car model design : facility
project.
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Can be divided : (1) infrastructure & basic

industry projects that its product ( or result)
will mainly be input for other industries :
electricity plant, water supply, (2) Consumer
project that supply products to people,
households.
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Infrastructure project
Infrastructure project
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The fields : Oil and Gas sector, Power,
Transportation, steel, chemical,
construction materials, water supply, etc.
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Provide the basic need for economy
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Strong country need Perfect Infrastructure
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In 2009, VN would spend around 39% of
GDP for facility project.
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Dungquat Refinery : would be 3 bil USD.
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Benthanh-Suoitien metro line : 1.2 bil USD
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II. Project life cycle in reality.
II. Project life cycle in reality.
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Generally, project life can be (1) concept (2) development,
(3)implementation , (4) termination and hand-over for
operation

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In reality of Vietnam, project can be divided into 4 groups
(Decree 12/2009)
(1) National Project such as Assembly House, investment
decision made by National assembly
(2) Group A : decided by Prime Minister
(3) Group B : usually decided by Minister or Chairman of
Province or CEO of National Economic Group such as
PetroVietnam, EVN, Vinacomin, VNPT, etc.
(4) Group C : usually decided by medium enterprises
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Each kind of project have different stages in development
and implementation.


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Project life cycle in Reality
Project life cycle in Reality
Concept Report
Pre FS
FS
FEED
Total Cost Estimate
Tender
Documents
Bidding
Contracts signing

Supervision
Payment
Hand-over
Operation
Preparation for investment
Implementation of investment
Operation
Investment
license
Contractors
2 Years 2 Years 2-4 Years
F/S Consultant
PMC Consultant
Master Plan
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III. What is the Feasibility Study
III. What is the Feasibility Study
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F/S is final study of project  most important study
in preparation period of investment.
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Hitachi confirm that 75% of total cost of their project
is decided in design period ( Design is one phase in
F/S).
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Mazda confirmed that 50% of product quality is
decided by design.
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Until the time of F/S completion, project owner just
spent around 5% of total project cost.

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If F/S confirm that the project is feasible, project
owner may invest and they shall spend 95% of total
project cost.  It means that F/S is very important
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Other name of F/S
Other name of F/S
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Preliminary Feasibility Study (Pre-F/S) 
Detailed Feasibility Study ( F/S).
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Business Plan : for short term
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F/S is for long term including engineering
design.
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F/S includes Project Execution Plan
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III. Outline of F/S
III. Outline of F/S
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Cover sheet
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Content
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Executive Summary : general description of project/its products or
services, results of F/S.
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Project Introduction : Detailed description about project, legal
framework for project, project owners, etc.

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Description of products or Services :
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Demand analysis of products.
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Which segment (quality) and which price could be accepted at
such quality.
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Current and future competitors.
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Technology and services to launch the products into market :
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Technology flow chart to manufacture the products : typical
criteria
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How to build such plant :  total cost estimate cost to build
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Environmental issues, how to manage?
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III. Outline of F/S (Cont.)
III. Outline of F/S (Cont.)
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Business administration model : production
management, marketing and sale management,
maintenance  operation management 
operational cost of project in operational phase.
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Other issues : copy right, social issues, trade
name, ( if any)  cost to manage these issues?
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Training requirements/cost to make sure the
operation.
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Risk factor  risk management  risk cost and
risk response plan.
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III. Outline of F/S (Cont.)
III. Outline of F/S (Cont.)
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Financial analysis :
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Projected balance sheet
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Income statement
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Projected cash flow
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NPV, IRR, B/C, PP, etc.
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How to arrange the finance for project
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Financial risk and how to manage
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Conclusion and suggestion
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IV. How to proceed the F/S
IV. How to proceed the F/S
+ Pre-Condition to proceed F/S :
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We should have business idea. Or

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We are requested to follow an business idea.
+ We have two main ways to have F/S :
(1) We employ the professional consultant to proceed F/S and we
need one or two good experts to carry out double check.
(2) We have good experts as project team and proceed the F/S by
ourselves
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Who is good consultant ?
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Operated in many years or had many consultant contracts
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Professional in consultant ( mainly doing consultant work)
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Having good experts in various fields : market analysis,
engineer, financial experts, production manager, sale manager,
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How to proceed the F/S by ourselves
How to proceed the F/S by ourselves
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We do by ourselves when :
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The project is small or medium scale.
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Not complicated engineering requirement
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What should we do first ?
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Selection of Project Manager and leave all
the rest to him.

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Project manager will select and manage the
project team including many kind of experts :
legal, market, technical, finance, sale,
operation, etc.
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Who is project manager?
Who is project manager?
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Must be good at both technical and
economic background.
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Must be experienced in similar or nearby
project before.
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Well knowledge and good senses in Human
Resource Management
And the soft skills should be obtained:
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Organizing , problem solving, conflict
management
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Communication skill and leadership.
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Presentation skill
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V. Case Study
V. Case Study
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International project invested by foreign

investor in Vietnam : The water supply
project near HCM City.
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Project Information shall be presented ( not
provided)
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VI. Discussion
VI. Discussion
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General and clarification questions
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Topic questions :
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Feasibility Study and others
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Suggestion of reading documents
Suggestion of reading documents
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For those who pursue professional career in
project management :
www.pmi.org, PMBOK 4
th
Edition
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For those who pursue professional career in
project finance : accounting, project
management in general, financial risk,
contract management, project finance

www.vietproject.org

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