Tài liệu PROJECT APPRAISAL AND RISK MANAGEMENT FOR THE PUBLIC SECTOR pdf

Fulbright Economics Teaching Program, 2004-2005 The Appraisal of Development Expenditures -
Project appraisal and risk management for the
public sector
Cao Hao Thi 1
PROJECT APPRAISAL
AND
RISK MANAGEMENT
FOR THE PUBLIC SECTOR
CAO HAO THI
I. THE ROLE OF PROJECT APPRAISAL
z
To stop bad projects
z
To prevent good projects from being
destroyed
z
To determine if components of project are
consistent
z
To assess the sources and magnitudes of the
risks
z
To determine how to reduce risks and
efficiently share risks
Fulbright Economics Teaching Program, 2004-2005 The Appraisal of Development Expenditures -
Project appraisal and risk management for the
public sector
Cao Hao Thi 2
II. STAGES IN PROJECT APPRAISAL
AND APPROVAL
z

Why should a project evaluation be done
in stages?
a. Idea and project definition
b. Pre-feasibility study.
c. Feasibility
d. Detailed design
e. Project implementation
B. PRE-FEASIBILITY STUDY
z
Example overall potential of project
z
Should maintain same quality of information
across all variables
z
Whenever possible should use secondary
information
z
Biased information better than mean values
KEY QUESTION
a. Is this project financially and economically feasible
throughout the project’s life?
b. What are the key variables?
c. What are the sources of RISK?
d. How can the RISK be reduced
Fulbright Economics Teaching Program, 2004-2005 The Appraisal of Development Expenditures -
Project appraisal and risk management for the
public sector
Cao Hao Thi 3
C. FEASIBILITY STUDY
z

Focus is on improving accuracy of the key
Variables
z
Alternatives for reducing risk are examined in
detail
z
Some primary data may be needed
KEY QUESTION
–
Is project financially attractive to all
interested parties in activity?
–
What is level of uncertainty of key variables?
–
Can final decision for approval be taken?
III. MODULES OF PRE-FEASIBILITY AND
FEASIBILITY STUDIES
Why break study into Modules?
BUILDING BLOCKS
a. Marketing or demand module
b. Technical or engineering module
c. Management and manpower module
analysis
d. Financial/budget module
e. Economic module
f. Social module
Fulbright Economics Teaching Program, 2004-2005 The Appraisal of Development Expenditures -
Project appraisal and risk management for the
public sector
Cao Hao Thi 4

BASIC NEEDS ANALYSIS
SOCIAL ANALYSIS
ECONOMIC ANALYSIS
FINANCIAL ANALYSIS
MARKET
ANALYSIS
TECHNICAL
ANALYSIS
RESOURCES
ANALYSIS
?
ACCEPT
REJECT
?
ECONOMIC ANALYSIS
FINANCIAL ANALYSIS
+
-
-+
Fulbright Economics Teaching Program, 2004-2005 The Appraisal of Development Expenditures -
Project appraisal and risk management for the
public sector
Cao Hao Thi 5
A. IDEA AND PROJECT DEFINITION
KEY QUESTIONS:
a. Where is the demand?
b. is this project consistent with
company's expertise and strategy?
A. MARKETING OR DEMAND MODULE
z

Study of sources of demand, nature of market,
prices and quantities
z
Major distinction between domestic versus
internationally traded goods and services
z
For internationally traded goods secondary
information most important
z
For domestic market, primary research more
important