PROJECT PROPOSAL FOR ESTABLISHMENT

OF QUARY SITE AND CRUSHER PROJECT

PROMOTER: - Mr. MEBRUK AHMED ALI

JAN/2024

DIRE DAWA

Content

Construction material renting services

1. Introduction …………………………………………………………………………...1

2. Background……………………………………………………………………………2
2.1 General ………………………………………………………………….......2
2.2 The region; region …….…………………………………………….…...…..3
2.3Economic Activities ………………………………………………………….6

3. Project rational ………………………………………………………………………13

4. Description of the project…………………………………………………………….13

5. Objective of the project………………………………………………………………14

6. Project location and land requirement……………………………………………….14

7. Project cost estimates and source of finance………………………………………...14
8. Detailed investment cost……………………………………………………………..15
8.1 Fixed investment cost……………………………………………………….15

8.2 Operational cost …………………………………………………………….16

9. Project cost summary ………………………………………………………………..19

10 Beginning balance sheet ……………………………………………………………..20

11 Estimated annual project output………………..……………………………………...21

12. Profit and loss statement ………………………………………………………….....22

13. Depreciation …………………..……………..………………………………………23

1. EXECUTIVE SUMMARY

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This profile envisages the establishment of Quary Site and Crusher Project. The location

of the proposed project is Dire Dawa administration. It is estimated total area is around

20,000m2 and believed to be obtained according to the existing city master plan and urban

lease policy and regulation of the region.

The total investment capital of the project is estimated to be Birr 50,000,000 of which Birr
49,000,000 is allotted for fixed investment while the remaining Birr 1,000,000 will be
used as initial working capital. The total cost needed for the realization of this project will
be covered by owner.

The financial analysis of the proposed project over the first 10 years of its operation

indicates that it can generate an average net profit of birr 780,328 third year. Besides

creating 21 permanent and 38 temporary jobs for local people, it also contributes its share

to the growth of the regional economy through taxes paid on revenue and others, i.e

around 420,176 birr year 10.

Therefore, in order to achieve the objectives, I would kindly request concerned

government institution to provide me the specified land for my project.

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2. INTRODUCTION

A good investment climate fosters productive private investment. Investment is the engine
for growth and poverty reduction. It creates opportunities and jobs for people. It expands
the variety of goods and services available and reduces their cost to the benefit of
consumers. It supports a sustainable source of tax revenues to fund other important social
goals. Moreover, many features of a good investment climate including efficient
infrastructure, courts, and finance markets improve the lives of people directly, whether
they work or engage in entrepreneurial activities or not. Improving the investment climate,
the opportunities and incentives for firms to invest productively, create jobs, and expand is
the key to sustainable progress in attacking poverty and improving living standards (World
Bank, 2005).

Despite the fact that, the significant role the private sector would play in promoting
national and regional development in the past few decades in Ethiopia, the prevailed
policy environment that has highly discouraged the participation of private investors both
foreign and domestic was made the potential to be far from relaxation. This has resulted in
hindering national and regional socio-economic progress in almost all sectors of the
economy revealing the existing low productive capacity of the economy and significant
socio economic losses in various dimensions.

Recognizing the extent to which the past policy environment has highly impeded the
development of the national economy and the necessity to promote private sector
participation in various of investment ventures that are believed to be, more rewarding and
compatible with me current national and regional development objects and priorities the
new investment policy in the country has open the wider opportunity for private sector
participation.

Based on this, at present the private sector has started to mobilize and invest their
knowledge and financial resources in various investment activities, which they assumed to
be beneficial for them and to the country.

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Background

2.1 General

After long years of civil war and poor socio-economic development, Ethiopia has
embarked upon structural change to repair the damage done to the economy by the
protected civil war and bad policies. With a total population of over 70 million Ethiopia
stood as the fourth largest in size and the second most populous nation in sub-saharan
Africa, the Ethiopia economy features peasant dominated agriculture as the mainstay of
the economy with GDP share of about 50% and accounting for over 85% of export and
total employment. The countries export is dependent on primary agricultural commodity,
coffee, hide, skin and accounting nearly 60% of the foreign exchange earnings.

The share of the manufacturing sector is minimal with a share of 4.5% of the total GDP.
On the other hand, the merchandise import of the country constitutes food, energy other
consumable goods, in intermediate and capital goods. The share of capital goods is a mere
30%^ of the aggregate and export shows that the former is increasing much higher than
the latter. Importing was climbing with an average annual growth rate 0f 4.8% while that
of export was 3.8%.

Though the country’s economy has been overshadowed by two decades crisis, it possesses
a considerable potential for development. The country’s development potential lies on the
huge work force, arable and nature resources. It can be said that the overall national
situation resembles a paradox when viewed to the actual living standard and the potential
that could alter it. The basic reason for this situation was the bad polices and strategies
selected by the former regime and added to these were the abused practices of
implementing them. With the end of the command socialist economic system, the new
government was faced with numerous social and economic problems. Above all the
government has to face the task of engineering economic recovery to address the long-run
needs of sustainable economic growth and development. To that end, the economic reform
measures were taken to reduce macro economic imbalances, to liberalize trade, to
decentralize economic management and most important of all, to lift the restrictions
5
imposed on the private sector. This favorable policy environment has played a crucial role
to attract private investment in the country and it is to benefit from this situation that the
owner of the project came up with idea of establishing real-estate development project to
be established in Dire Dawa Administration.

2.2. The Region; Dire Dawa Administration

2.2.1 Physical features

Dire Dawa administrative council is located in the eastern part of Ethiopia between 9 0 27'
and 90 49' North latitude and between 410 38' and 420 19' East longitude. In the north, west,
and east it is bordered by the Somalia national regional estate which is in the south it
shares a common boundary with the eastern Hararge zone of the Oromia Natinoal regional
State. It has a total area of 1997km 2 out of which is 187km2 is urban and the remaining
1790km2 is rural.

The climatic condition of the region is characterized by a relatively warm weather and
thus it fall in the semi arid agro climatic zone. The average maximum and minimum
temperature are 31.40 and 18.10c respectively. In relative terms May, June, July are the
hottest months of the year while November, December, and January are the coldest
months. The estimated average annual rainfall is round 603 mm. regarding the topography
of the region 25% hilly, 45% is sloppy and 30% plain. The major source of water for both
the urban and the rural population is ground water.

There is a large untapped potential of ground water, estimated well over 20 million cubic
meters, can be developed and used for irrigated farming in the vast plains of the fertile soil
around assoliso and melkajebdu. The region is also known as for its mineral resource
potential. A variety of nonmetallic and construction minerals, the reserve of which is
known are round within easy reach from the town of Dire Dawa. A high quality sand,
marble, limestone, sandstone is some of the construction minerals, found in abundant
quality. Non-metallic minerals found in the region include Mica, Garnet, Feldspar,

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limestone, marble etc. The metallic mineral available in the region includes Iron, Copper
and Galena.

2.2.2 Socio-economic setting of the Administration

Administrative Structure
Dire Dawa Administration (DDPA) comprises Dire Dawa town and the surrounding rural
areas. It is divided into none urban kebeles and 38 rural kebeles.

Population Characteristics

According to 1994 census conducted by the central statistical Authority (CSA) the total
population of the DDPA is projected to reach at 383,529 in July,2005, out of which
192,095(50.1%) are male and 191,434(49.9%) are female. The majority of the population
resides in urban areas, i.e 283,773 (74%) and the remaining 99,756(26%) lives in rural
areas. Out of the total urban population of 283,773, the males constitute 142, 131(50.1%)
where as the remaining 141,663 are females. There are also 49,964(50.1%) males in the
rural areas out of the total rural population of 99,756, and the balance 49,792(49.9%) is
females. The population density of the DDPA estimated to be 316.13/km 2. The urban area
of the administration is highly populated, i.e about 16,050.5- person living/ km 2. The rural
area is sparsely populated; about 83.44 persons live per km2.

The eastern and western parts of the administration densely populated relatively than the
northern part, which dominantly inhabited by pastoralists. The average household size
from DDPA, based on the 1994 census, is 4.7 persons per household. Rural areas have
larger household sizes (on the average exceeds by 1.2 person per/household sizes in urban
and rural parts of the administration are 4.4 and 5.6 respectively.

Based on various assumption made with regards to fertility, mortality and urbanization,
the population of DDPA is estimated to reach 775, 964; 811, 837 and 867, 123,
respectively by the year 2030 (low variant, Medium variant and high variant). The

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population of the administration is, thus expected to double within the coming 20 to 25
years.

The Oromo constitutes the majority of the population of the administration i.e 48%. The
next largest ethnic group is Amhara followed by the Somali comprising 27.7% and 13.9%
of the population, respectively. Guragie, Tigre, and hararge constitute 4.5 %, 1.8% and
1.7%, in that o order. The five largest ethnic groups found in urban areas of the
administration are also amhara, oromo, Somali, Guragie and tigre. The oromo and
Somali comprise the overwhelming majority in rural areas making up 85% and 14.3% of
the rural population, respectively.

2.3 Economic Activities

According to the 1994 census, activity rate for the administration in general and for urban
and rural population were 60.6%, 55.25% and 73.9%, respectively. Trends on the
economically active and inactive population of the administration also shows that the
activity rate more or less remained stable for the administration in general and the urban
centers in particular but slightly increased for rural area and reached at 61.8%, 55.5% and
77.56%, respectively in the year 1999. Economic activity rate of the urban part of the
administration has also slightly decreased and stood at 54.2% in the year 2003. The rural
part of the administration is predominantly agrarian, and therefore, the majority (82.0%) of
the economically active persons found to be skilled agricultural and fishery workers in the
years 1994.

However, the overwhelming majority of the population lives in urban areas; and among
the economically active persons in the urban areas, service workers and shop and market
sales workers group ranked first constituting 30% followed by those engaged in
elementary occupation, and craft and related trade workers group making up 22.9% and
12.8%, respectively in the year. About a decade later, in the year 2003, elementary
occupation took the lead constituting for 35.43% followed by service, shop and market
sales workers, and crafts and related trades accounting for 22.1% and 16.63% respectively.
The total unemployment rate for DDPA reported to be 24.1% in the year 1994. The

8
unemployment rate for male and females were 20.65% and 28.9%, respectively. About 10
years down the road, the unemployment rate in urban areas increased by about 2.6% and
reached 38% in the year 2003.

2.4 Investment opportunity and environment

2.4.1 Investment Opportunity

A. Tourism

Dire Dawa has been one of the important tourist destinations of Ethiopian cities. The
assessment on the attraction sites in the city of Dire Dawa and its neighboring regions has
indicated that there is an immense potential that can promote the development of tourism
industry in the eastern region of Ethiopia. Dire Dawa can serve as a tourist and tourist
transit center thereby benefiting from the attraction sites located in Dire Dawa and its
neighboring regions by developing tourism. A part from the good scenery of the city
itself, several tourist attraction sites are available inside the city. The city of Dire Dawa by
itself would continue to be an important resort place especially for Djiboutian during the
harsh climatic conditions in Djibouti. This can be improved if concerted and multi-faceted
actions are made to create favorable conditions that would allow Djiboutian or other
visitors to say in Dire Dawa for a relatively long period. This wills in-turn enables the city
to acquire multiplier economic benefits associated with the tourism industry.

The presence of important natural, historical, cultural, and religious sites in close
proximity to the city is crucial for the development of the tourism industry. The location of
the famous Kulibi Gabriel Church and the ancient town of Harar in close proximity to the
city of Dire Dawa has contributed to the development of tourism in the city. The existence

9
of several indigenous ethnic groups in Dire Dawa is also a valuable potential as their
various social and cultural identities may be the center of attraction for ethnic tourism.

B. Infrastructures
Dire Dawa is relatively equipped with good infrastructure facilities necessary for the
expansion of industrial and trade activities. In addition to the already existing capacity,
many of the infrastructures supplying government institution had already began or have a
further plan to enlarge their capacity to meet future demands of the development activities
in the region. Thus, one can say that the city has a relatively:

Improved transportation facilities – international airport, railway connection with the

capital and the Djibouti port, and adequate road connection with Addis Ababa, major
towns of the neighboring regions, and with its surrounding hinterlands,

Modern telecommunication services – the Ethiopian Telecommunication Corporation is

increasing its existing capacity and has planned to introduce modern telecommunication
services like mobile telephone services,

Adequate water supply – the presence of rich groundwater in the city assumed to provide
adequate water supply in the city and its surrounding areas,

Reliable power supply – Ethiopian electric power corporation (EEPC) is the main electric
power supplier in Ethiopia and the corporation applies two different power systems;
namely, the inter-connected system (ICS) and the self contained system (SCS). The ICS is
supplied from seven hydro powers/13 diesels and one geothermal station. The SCS
consists of three hydro power and a the number of isolated diesel generators. Dire Dawa is
within the ICS and power is distributed to the town from three substations; namely, the
Sabian, the Legehare, and the Hanz substations. There are 18,649 subscribers in the year
2004/05, of which 15,911 (85%) are residences whereas the balance 2,738 (15%) was
subscriber by the various industries found in the town, businesses and government
organizations. EEPC had started to supply electric power to the rural areas of the
administration as of 2007.

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Education:- There are 74 primary, 9 secondary and 20 kindergarten schools in DDPA. Out
of the primary schools, the government owns 52 whereas the community, religious
institutions, and the private sector own the remaining 20 schools. Out of the 52
government schools, 38 of them are located in rural areas, i.e., 73%. From the total
number of primary schools, however the share of rural areas is 49% and the remaining
51% are located in Dire Dawa town. All of the secondary schools are found in the Dire
Dawa town . all of the secondary schools are found in the Dire Dawa town and the
government owns two of them while the rest are privately owned. All the kindergartens
are also located in Dire Dawa town (education Office of DDPA). Moreover, there are two
technical and vocational schools owned by the government, five private colleges, and a
university, i.e., an extension of Haramaya University in Dire Dawa town and Dire Dawa
University.

The total number of students enrolled in primary education in 1997 E.C. are 49,422: and
27,475 of them (55.6%) are male while the remaining 21,947 (44.4%) are female. Out of
the 49,422 students registered in the year 2004/2005, 11,434 students (22.8%) are found in
rural areas and the balance 37,988 (73.2%) are in urban areas. There are 7,088 students in
the first cycle secondary schools (Grade 9-10) of which 3,847 (54%) are male and the
balance 3241 (46%) are female students. The number of registered students in the second
cycle secondary schools are 1,009 and 401 pf then, i.e.< 40%, are male while the
remaining 608 (60%) are female students. The total numbers of students in both cycles,
thus, are 8,097 in 2004/2005 academic year.

The Gross enrollment Ratio (GER) in primary education in the DDPA was 72.7% in the
year 2003/04. There is a remarkable gender and urban-rural disparity in GER. The GER
for males and females show a big gap favoring the males, especially in rural areas. The
GRE for males in the Administration is 82.5% whereas that of females is 62.5% in
2003/4:i.e., The gap widens in the rural areas and the GER for females is only 29.6%
while that of males is 71.9%. The gender gap in urban areas is relatively better and stood
at 88.3% and 79.2% for males and females, respectively: but still far from being equally
11
proportional. There is also disparity between urban and rural areas where the GER for
urban and rural areas being 838% and 51.8%, respectively.

The GER for secondary education is also extremely lower than the rate achieved for
primary education, and it stood and 20.64% both for males and females: and 26.04% and
15.01%, respectively, for males and females in the year 2003/04. The NER for primary
education if DDPA is 59.8% indicating that only 59.8%s of the relevant/appropriate age
group for primary education attends school. This ratio for male and female students is
66.9% and 52.4%, respectively. The NER for secondary education is also low and stood at
18.8% for the Administration: 25.75% for males and 14.9% for females.

The dropout rate in primary (1-8) education, in the administration for the year 1996 E.C.
was 8.4%. the dropout rate for males in marginally higher than female, the rate being 8.5%
and 8.2%, for males and females, respectively. Repetition rates for the Administration
were also reported to be 3.9%.

There were 1, 029 and 146 primary and secondary school teachers, respectively, in 1996
E.C with different qualification. According to the MOE, 88.2% of male and 95.4% of
female teachers in the administration were certified teachers in 1996 E.C in the first cycle
primary school. The proportion of certified teachers was 62% and 59.3%, respectively, for
male and female teachers in second cycle primary schools. About 75.4% and 37.5% of
male and female teachers respectively were also qualified teachers in secondary education.

Banking and Insurance services: - all government as well as most private financial
institution found in the country operates in the administration and has branches in Dire
Dawa town.

4. Project rational

Conducive socioeconomic development policy and stable political environment are vital
for a country to attract private investors. The most important reason for establishing this
project rests on the very fact that there is no sufficient quarry site and crusher that satisfies
the blooming demand for construction in the region.
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 5. Description of the project

The proposed project is aimed at the provision of quarry site and crusher manufacturing.
The construction component is the main activity in the investment phase of the project.
This component include the construction of shade for machineries, office, toilet and
shower rooms, guardhouse, compound fencing.

The next task is planned to be the procurement of the necessary machineries and office
furniture's. In general, the project is planned to be fully completed in one-year time and it
will enter the production phase in its second year.

6. Objective of the project

 Generate optimum profit to the owner.

 Offer employment opportunity for citizens.

 Contribute to the development of the region

7. Project location and land requirement

The project is located in Dire Dawa town. The total area of land required for the
establishment of this project is 10,000 m 2. The total lease cost of the project is birr 19,780
of which 10% (birr 1,978) will be paid at the beginning.

8. Project cost estimates and source of finance

The total investment capital of the project is estimated to be Birr 50,000,000 of which Birr
49,000,000 is allotted for fixed investment while the remaining Birr 1,000,000 will be
used as initial working capital. As to the source of finance, the owner will cover it all.
Detail of the project cost estimate is presented below

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 9. Detailed investment cost
12.1 Fixed investment cost

Construction Cost
This includes construction of shade for machineries, office, toilet and shower rooms,
guardhouse and compound fencing. The total construction expense is estimated to be
35,710,700 birr.
No Description Unit Qty unit cost Total

1 Shade for machineries M2 1800 150 2,170,000

2 Office M2 120 2,000 240,000

3 Guard house M2 60 1,500 910,000

4 Toilet and shower M2 60 1,000 160,000

5 Septic tank M3 36 350 112,600

6 Compound fencing Lm 127 300 318,100

Total 1,710,700

Machineries, equipment’s and hand tools

Machineries and equipment that 3,220,000 birr is planned to be purchased. In accordance
with the incentive regulation, all the relevant project items to be procured from abroad are
expected to be imported duty free. The table below indicates the list of machineries and
equipment required for the project.

No Item Unit Qty unit price total price

1 Crusher No 2 6,300,000 1,600,000

2 Sieving machine No 2 4,775,000 1,550,000

14
3 Shovels No 2 5,325,000 1,650,000

4 Backup generators No 2 210,000 420,000

5 Wheel barrows No 2 1,400,000 2,800,000

6 Other machineries No 2 600,000 1,200,000

Total 1,220,000

Office furniture
The total cost of Office furniture's is estimated to be 5,220 birr

No Item Unit Qty Unit price Total

1 Table No 1 1,500 111,500

2 Chairs No 3 600 11,800

3 File Cabinet No 1 1,800 11,800

4 Stapler No 1 70 1150

5 Puncher No 1 80 1170

Total 15,220

Installation cost of utilities

Electric power, water supply, and fixed line telephone service should be made available to
the project site by the respective government supplier. Thus, the total connection fee is
estimated not to exceed 9,500 birr of which birr 5,000 for electric power line, birr 1,500
for telephone line and birr 3,000 for installation of water supply system

10. OPERATIONAL EXPENSES

a. Raw materials Required and their Cost

15
No Item Unit Qty Unit cost Total cost

1 Fuel Lt 63,000 17 1,071,000

2 Oil & grease Kg 504 85 412,840

3 Wheel tire No 18 4,000 712,000

4 Others 315,000

Total 1,220,840

b. Man power and annual salary and wedge expenses

No Description Qty monthly Annual
salary salary

1 General Manager 1 1,500 181,000

2 Machine operators 2 1,200 114,400

3 Assistant operators 2 800 119,200

3 Truck drivers 1 1,000 121,000

4 Assistant driver 1 600 117,200

5 Guard 3 500 118,000

Total 10 818,800

c. Utility Consumption

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No Description Unit Qty Rate in Total
birr

1 Electric power KWh 120 1.85 222

2 Telephone Period 18,000 0.20 3,600

3 Water bill m3 210 2.43 1510

Total 411,332

d. Other Operational Expenses

No Description Annual
expense

1 Repair and maintenance (3% of fixed asset) 811,238

2 Office consumables 11,440

Total 182,678

11. SUMMARY OF ANNUAL OPERATIONAL EXPENSE

Project Years

Description 1 2 3 4 – 10

Quarry and crusher 1,220,840 1,395,24 1,569,651 1,744,057

17
 6

Salary 88,800 93,240 97,902 102,797

Utilities 4,332 4,549 4,776 5,015

Other operational expenses 82,678 86,812 91,152 95,710

Total Operational 1,396,650 1,579,84 1,763,481 1,947,579

expense 7

 Major assumptions
 The project is assumed to start operation at 70% & increase by 10% till 4th year;
 Salary expense is assumed to increase by 5% each year till the 4th year;
 Raw material expense is assumed to increase at 10% each year till the 4th year;
 Utility expense is assumed to increase by 5% each year till the 4th year;
 Other operational expense is assumed to increase by 5% each year till the 4th year;
 Working capital is calculated as 20% of the first year operational expense which is
279,330 birr.

12. PROJECT COST SUMMARY

No Description Cost in birr

1 FIXED INVESTMENT COST 49,000,000

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1.1. Construction expense 35,710,700

1.2. Installation of Water, electric supply line & Telephone 911,500

1.3. Land lease initial payment(10% of the total) 111,978

1.4. Equipment’s required 3,220,000

1.4. Office furniture 115,220

2 OPERATIONAL EXPENSE 1,396,650

3 WORKING CAPITAL (50% of operating expense) 1,000,000

4 PROJECT TOTAL COST 50,000,000

13. BEGINNING BALANCE SHEET

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1. Asset

Current Asset

- Cash on hand ------------------------------- 1,000,000

- Inventory ---

- Total current Asset ------------------------- 1,000,000

Fixed Asset ------------------------------------------------ 49,000,000

Total Asset ------------------------------------------------- 49,000,000

2. Liability Capital

Bank Loan ---

3. Capital

Owners’ Equity --------------------------------------------- 50,000,000

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 14. EXPECTED ANNUAL VOLUME OF PRODUCTION

No Equipment type Number of Annual 1st year at Working Average Total

machines working 70% hours/day lease/hr income
days/yr

1 Crusher 1 300 210 8 425 714,000

2 Excavator 1 >> 210 >> 750 1,260,000

3 Loader 1 >> 210 >> 750 1,260,000

4 Concrete mixer (350lt) 2 >> 210 >> 15 50,400

5 Vibrator 2 >> 210 >> 6 20,160

6 Dump truck 2 >> 210 >> 6 20,160

Total 3,324,720

Construction material renting services

 15. PROFIT LOSS ESTIMATES OF THE PROJECT

Description Project years

1 2 3 4 – 10

Revenue 3,324,720 3,799,680 4,274,640 4,749,600

sales tax 498,708 569,952 641,196 712,440

less sale tax 2,826,012 3,229,728 3,633,444 4,037,160

operational expense 1,396,650 1,579,847 1,763,481 1,947,579

less operational expense 1,429,362 1,649,881 1,869,963 2,089,581

Depreciation 228,264 228,264 228,264 228,264

less depreciation 1,201,098 1,421,617 1,641,699 1,861,317

land lease 594 594 594 594

less lease 1,200,504 1,421,023 1,641,105 1,860,723

Income tax 420,176 497,358 574,387 651,253

Net Profit 780,328 923,665 1,066,718 1,209,470

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 16. DEPRECIATION:
Method employed straight-line method

No Item Expected Annual

life depreciation

1 Building 10 11,670

2 Machineries 154 60,084

4 Office furniture 5 1,044

Total 72798

17. CONCLUSION

The project also provide various socio-economic benefits to the region through alleviating the
shortage of entertainment centers in the town and also When the project starts operation it
provides job opportunity for 19 citizens. Therefore, it seems quite clear that the proposed project
is feasible both in terms of financial and socio-economic point of view.

18. Project Implementation Strategy

22.1 Project formulation and establishment
A. Exchange of views and creating shared understanding
The project feasibility study and strategic planning management document shall be distributed to
all potential stakeholders such as concerned members of the family, government institutions and
to selected financer with a view of creating satisfactory exchange of views and promote shared
understanding in advance.
B. Determination of establishment phase target activities
During the project formulation and establishment phase, the following major tasks are required
to be successfully accomplished.
 Registration, licensing and acquisitions of operations commencement authorization
 Acquisitions of construction permits
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  Preparation of every legally required document
 Appointment of strong and capable implementation team
C. Promotion and Fund Raising
 To prepare promotional strategic planning mgt guidelines
 To prepare promotional ideas, materials, logistics and facilities
 To conduct promotional tasks and build strong constituency of support
 To evaluate the process of promotion and progress
 To prepare fund raising strategic planning guideline
 To assess and identify major project donors
 To assess and identify the interests, rules, regulations and conditions of targeted and
prioritized financers
 To prepare all necessary requirements of financers and apply for fund
 To undertake follow ups and secure fund
D. Organizational Builds up
 Establishing and organizing project office
 Preparing project working and administrative systems and procedural guidelines
 Commissioning construction
 Purchase of all on and off site durable and consumer goods
 Staff recruitment, orientation and employment
 To conduct pre operational trial runs, checking the validity of all activities
22.2 Budgeting Implementation strategy
A. Budgeting concept Definition
The realization of any strategic decision needs proper identification and understanding of project
objectives, and necessary activities. Moreover, determination of time phase out process and
resources to the completion of each task which calls for budget making process and existence of
effective strategic budgeting is a key implementation strategy for the success of project
objectives. In consideration to the significance of sound budgeting system and procedures, it has
been selected and proposed as one of the best implementation strategy.
There is no doubt that the internal and external activities, resources, process and output of any
organization should be managed effectively and efficiently. To attain short and long term

24
objectives of the project the management must chart the entire tasks in advance in a
comprehensive and coordinated manner. A budget is a comprehensive and coordinated plan
expressed in financial term for the operation and resources of a project for some specific period
in the futures. A budget is the plan of project’s expectation in clear & formal terms to avoid
confusion and to facilitate their attainability. Thus the roles and significances of budgeting are;
 To state the project’s expectation in clear and formal terms, to avoid confusion and to
facilitate their attainability
 To communicate expectation to all concerned
 To provide a detailed plan of action for reducing uncertain and proper direction of
institutional group and individual efforts
 To provide a means of measuring and controlling performance
 To coordinate all institutional, group and individual efforts towards the success of project
objectives.
Thus, it is inconsideration to the above roles and significance of budgets and budgeting that
we select it as the best implementation strategy.
B. kinds/types of budgets & budget setting process
Although, there are various kinds/types of budget items, to simplify it, the types of major
budgets have been categorized in to four.
 Sales budget
 Operations budget
 Financial budget
 Capital budget
Statement of Smart objectives and goals is probably the starting point and pace maker for all
other types of budgets. The sources of sound project objectives/goals are again the internal and
external environments. Analysis of the patterns of project internal and external environments,
pinpointing project opportunities and challenges with a focus on the demand for the project
services, existence of external opportunities and internal capabilities, it is pertinent to define
project objectives and goals in clear and formal terms at the outset.
The objectives and goals of any project emanate the operations, financial and capital budget
needs. The project corporate level objectives and goals, operations and capital budgets are

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required to be further apportioned for all core process which together form corporate budget.
The process of setting sound budget is a complex and complicated process, because of the
involvement of various factors in it. However, budget setting process starts with the
determination of limiting factors at the outset. The most important project limiting factors are,
the demand for the project services, the economic life of the projectAnd existence of factor and
non-factor inputs. External opportunities supporting the project ideas and internal capabilities to
establish, operate, manage and control etc are some among others. Based on the above limiting
factors, the first step of budget setting process starts with definitions and establishment of project
basic objectives and goals
Second step: at this stage, it is necessary to identify and describe all on and off site activities
necessary to successful achievement of stated objectives and goals, determination of logical
sequence of activity execution process, time phase out to complete each task in clear and
unambiguous terms. Third step: at this stage, it is very important to assess identify and define the
resource needs of all activities, measure, quantify and state in clear and formal terms.
Fourth step
Group all activities according to their similarities
Establish major budget centers
 Allocate the resources required to major and sub budget centers
 Prepare objectives/goals, operations, financial and capital budgets at corporate, core
process and sub process and assign center of responsibilities
C. ESSENTIALS OF BUDGET MGT
To make the objectives and purposes of budgets productive and positive impact generating we
propose the following budget administration. It should be well recognized that corporate and
functional levels budgets are prepared by line executives while the organization and
implementation of budgeting is a staff function. Joint efforts of all line execution and a staff
function in the preparation, administration organization and implementation of budgeting should
be done in a coordinated manner. To this effect there should exist the following systems of
budget administration.

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 Budget committee
A budget committee shall be responsible to;
 Provide general guide line for preparing budget
 Offer technical advice
 Receive review and approve budgets
 Suggest changes of improvement
 Reconcile divergent views
 Coordinate and control budgetary activities
 Scrutinize budgets reports
The budget committee consists of all members of the management committee which bring
together all activities of different project functional unites.
The primary function, of the budget committee is to decide on the general policies of the project
and directs all project functional unites to prepare their respective budgets.
Budget director/officer
The budget officer shall have the following tasks;
 To draw a detailed time table for the preparation of budgets.
 To calculate and consolidate individual budgets into the project master budget.
 To design and develop necessary budgeting systems and procedures.
 To design and develop budgeting formats.
 To generate accumulate and transfer budgeting parameters information data and indicrs.
 To undertake satisfactory exchanges among all project concerned stakeholders on
budgets and budgeting
 To educate all concerned on budget and budgeting
 To undertake monitoring evaluation and control activities
 To prepare periodic or extra ordinary budgeting reports
 To disseminate the feedbacks of budgetary monitoring and evaluation to all concerned
stakeholders
 To suggest sound and workable recommendations for immediate corrective measures

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 Budget manual
The budget manual is a written set of instruction which serves as a rule book and reference for
the implementation of a budget.
Budget management principles
o Existence of top management support
o Specific measurable achievable realistic and time bound goals.
o Existence of clearly defined assign ment of authority and responsibility
o Creation of centers of responsibility
o Existence of appropriate accounting system
o Budget education and effective communication
o Flexibility

19. PERFORMANCE AND CHANGE MANAGEMENT STRATEGY

23.1 PERFORMANCE MGT AND CONTROL
A. monitoring, Evaluation and control strategy
The success/ failure of any planned objectives should be known with certain degree of accuracy.
To this effect all activities, resources process and output should be monitored evaluated and
controlled timely and regularly. To undertake monitoring, evaluation and controlling activities
timely and regularly there should exist.
Clearly identified and defined description of planned objectives, outcomes output and inputs.
Existence of, sound, and appropriate, indicators, which show, the success/ failure, of the planned
objective outcome, output and inputs used.
Appropriate source and means of verifying that the planned, objective outcome, output andinputs
were in accordance with/ deviated from the planned. Clearly stated important assumption
with/without which the planned objective would/would not be successful. The role and
significance of monitoring evaluation and control are briefly described as follows.
 Monitoring
Monitoring is a continuous and process oriented information gathering, and data mining on what
has happened, who did it, when, how much, for whom etc. aimed at measuring the magnitude,
time quality and impact of the initiative. Monitoring helps to compare the input human, material
financial etc output product/service result and the outcome (achievement against the planned
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tasks. Effective monitoring must be completely integrated into all tasks. Existence of sound
monitoring system, enable organization to make appropriate and timely decision making and
ensures transparency and accountability.
 Evaluation
Evaluation is the process of analyzing information and data gathered during monitoring process.
The evaluation system helps to think critically and search into ways of achieving desirable
results. It is a periodic process of reviewing monitoring data and drawing sound conclusion from
it. Good evaluation system enables organization to analyze the pre and post patterns of existing
and future plans and search into ways of achieving desirable results.
 Control
Control is a managerial process of detecting errors of principles system, procedures etc aimed at
avoiding resource miss allocating unemployment, fraud, wastage and all other misfortunes which
hinder the success of planned objectives. Control enables organization to continue their
production of goods/ products without jeopardizing internal and external resources for better
future. Thus, an integrated monitoring and evaluation system in a single whole enables
organizations optimally benefit from available resources through satisfaction of existing and
potential customers in their best interests. The monitoring evaluation and control system should
be designed to serve both the strategic and operational phases. The monitoring evaluation and
control system designed for both strategic and operational phases are described as follows.This is
a continuous and systematic monitoring evaluation and control of the validity of basic
assumption under which it operates. Thus, a regular and continuous proactive check against the
validity of planned strategy aimed at changing or improving the condition of vital assumption.
Performance management and control is a managerial process of designing and developing
sound indicators parameters means and sources of verifications necessary to measure activities
resources, process and output of individuals, groups and institutions against the targeted
standards and come up with logical results which would help to make sound decisions. Although
there are numerous areas whose performance are needed to be well managed and control, the
most important areas and performance management indicators used in laundry and dry cleaning
business are briefly identified and described as under. Operational control strategy is designed to
guide monitor and evaluate the progress of all planned activities against their respective planned

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 objectives as in meeting targets representing the planning horizon. Accordingly, all planned
activities shall have the following basic system to be used as a monitoring evaluation and control
mechanisms.
Components of narrative description
 Objectives
 Outcome
 Output
 Input

Indicators that show

 Objectives have been achieved
 Planned outcome has been attained
 Desired output has been obtained
 Input are properly allocated and employed in all terms
Source and means of verification
Relevant means and source of verification shall be clearly identified and employed accordingly;
 Strategic planning documents
 Audit report
 Field visit and on site survey
 Past data etc shall be used
Proposed performance management matrix
S.n Narratives Indicators Verifications Frame conditions
1 Objective Less,=or greater Feasibility study Objective change
2 Out come Impact Strategic plan Policy change
3 Output Magnitude M&E report Transformation
4 Input Qty/quality Audit report Termination

20. CHANGE MANAGEMENT IMPLEMENTATION STRATEGY

In connection with the application of the project strategic plan, certain changes are inevitable and
these changes may take place in a continuous/discontinuous process. The fact that all types of
changes must result in supportive, adverse or neutral effects, necessitate management needs to
identify and understand the types and impacts of each planned changes, to be able to benefit
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from change offers and deal with the challenges of changes.
In general, transformational, transactional, transitional and Incremental changes in the project
workflow process organizational culture and behavior are expected to occur both at strategic and
operational dimension of this feasibility study. The impact of all of these changes should be
managed in favor of the project at large
The following major implementation strategies are proposed to manage these changes.
Work flow process
This is a targeted economy of scale process intervention, aimed at attaining cost minimization,
profit maximization, efficient service delivery and customer satisfaction. To do this it is pertinent
to understand the dynamics of project realities in the changing world. To change the workflow
process to desirable small scale the following implementation strategy are proposed.
 To undertake a detailed task analysis and determine the condition, process and time phase
out for each task.
 To determine the resource requirements availability quality magnitude and cost
 Determination of technology and system requirements
 Determination of skill, profession and experience requirement
 To design and develop strategic fit and incorporating human resources into system
integration
 Acquisition of top management support.
Organizational culture change implementation strategy
Change in organizational culture refers to change in project belief, values, strategy, purpose and
expectations. Conductive conditions to cultural changes proposed are
 To create appropriate environment for team work, process focus, action oriented and low
level decision making
 Outstanding and effective trial of many alternative tools and techniques and selecting the
most appropriate
 Building the skills and competence of management and staff
 Setting standards to measure performance
 Analysis and initiating corrective measures

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 Behavioral change implementation strategy
Organizational behavior refers to employee individual and collective behaviors. The most
challenging task is to manage employees’ behavior towards the success of desired changes.
The following strategies are proposed for project organizational behavioral change
implementation and management
 Involving employees in planning and decision making process
 Promotion of rewarding and incentive system
 Promotion of employee career and skill development operational plan
 Avoiding under/over employment
 Promotion of transparent, accountable and nondiscriminatory data based decision
making practices
 Provision of clearly defined job description, evaluation, lines of authority and
responsibilities as well as lines of communication and information flows.
 Provision of management and leadership support and guidelines.
Staff motivation strategy
Experiences has demonstrated that the most difficult and resistance to organizational
transformation and improvement process is the behavior of employee, unless employees are
properly managed motivated and participated in the process the efforts of achieving planned
objectives would carry meaningless. Moreover, the fact that there are various knowledge skill,
experience dedication commitment sense of ownership belongingness moral ethics honesty,
reliability etc. among employees there exist differences in their effort contributing and
performance results. Employers contributing extra efforts and time require recognition need
reward and development.

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