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Technical Appraisal

The document discusses the technical appraisal process for evaluating projects. It outlines key areas that are analyzed including choice of technology, material and utility requirements, capacity decisions, site selection, and environmental impacts. The technical appraisal ensures the project is technically feasible and helps determine the optimal design in terms of technology, scale, and location to maximize profitability. Key outputs of the appraisal include production process details, machinery and equipment lists, facility layouts, and implementation schedules. Alternatives are also considered for aspects that impact costs and viability.

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Radhakrishna Mishra
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1K views18 pages

Technical Appraisal

The document discusses the technical appraisal process for evaluating projects. It outlines key areas that are analyzed including choice of technology, material and utility requirements, capacity decisions, site selection, and environmental impacts. The technical appraisal ensures the project is technically feasible and helps determine the optimal design in terms of technology, scale, and location to maximize profitability. Key outputs of the appraisal include production process details, machinery and equipment lists, facility layouts, and implementation schedules. Alternatives are also considered for aspects that impact costs and viability.

Uploaded by

Radhakrishna Mishra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Project Appraisal

TECHNICAL APPRAISAL
Objective

 What is technical analysis?


 Choice of technology
 Material inputs and utilities required
 Capacity decision
 Layout design that define scope of project
 Importance of technical analysis
 Summary
Introduction
 Continually done when the project is
being evaluated and formulated
Purpose :
 To ensure technical feasibility and all the
inputs required are available
 Most optimal formulation in terms of
technology, size, location etc.
 The financial expert should raise issues
using common sense and economic logic
Process/Technology
 Steel (Bessemer or
Open Hearth)
 Cement (Dry or wet)
 Soda (Electrolysis
and Chemical)
 Paper
 Vinyl Chloride
 Soap (Semi boiled or
fully boiled)
Choice of Technology

 Plant capacity
 Principal inputs
 Investment outlay and production cost
 Use by other units
 Product mix
 Latest developments
 Ease of absorption
Appropriateness of Technology

 Methods which are suitable to local economic, social


and cultural conditions.
 The technology should be evaluated in terms of:
 Local raw materials
 Local man-power
 Cater to the basic needs
 Protects ecological balance
 Harmonious with social and cultural conditions
Technical Arrangements
 Obtain technical know how for manufacturing process.
 When collaboration is needed (agreement)
 Nature of support
 Process and performance guarantee
 Fees and Royalty
 R & D required
 The period of collaboration
 Level of equity participation and management control
 Termination time
 Uncertainties approaches
Material Inputs and Utilities

 Types of materials required, supply programme etc.


 Raw materials – Agri, Mineral, Live stock & Forest,
and marine product
 Industrial materials and components – processed or
semi processed etc.
 Auxiliary materials and Factory supplies –
Chemicals, additives, pkg etc.
 Utilities – Power, water, steam, fuel etc.
Product Mix

 The product mix is decided by studying


the market carefully
 Size, quality and price
 To satisfy a broad range of customers
 Flexibility of the product mix enables the
firm to cope with the changing market
conditions
 Flexibility – Cost
Plant Capacity
 Feasible Normal capacity and Nominal Maximum
capacity
Factors for FNC:
 Technological requirement (Cement – Rotary kiln or
Vertical shaft for low)
 Input constraints
 Investment cost
 Market conditions
 Resources of the firm
 Government policy
Location and Site
 Proximity of raw material and markets
 Availability of infrastructure
 Labour situation
 Government Policies
 Climatic condition
 General living condition
 Proximity to ancillary units
 Ease of coping with pollution
 Site selection
Machineries and Equipments
 Kinds of machineries required
 May be classified:
 Plant equipment
 Mechanical equipments
 Electrical equipment
 Instruments
 Controls
 Internal transportation system
 Others
Structures and Civil works

 Site preparation and development –


power, water, road etc.
 Buildings and Structure – Factory,
process, ancillary, stores, warehouse, R &
D lab, Admin, cafeteria etc.
 Outdoor works – supplies etc.
Environmental Aspects

 Pollution control
 Heat, vibration, noise etc.
 Chemical industries
 Types of emissions
 Disposal of effluents and treatment of
emissions
 Environmental clearances and statutory
requirements
Project charts and layouts

 General functional layout


 Material flow diagram
 Production line diagrams
 Transport layout
 Utility consumption layout
 Communication layout
 Organisational layout
 Plant layout
Schedule of project implementation

 List of all possible activities


 The sequence of activities
 Time required to perform
 Resources required
 Implication of putting more or less resources
 Work schedule
Need for Considering Alternatives

 Nature of project –
 Production process – RM required, types etc.
 Product Quality – Standards
 Scale of operation and Time Phasing –
depends on the resources available
 Location
Key Project Inter-linkages
Product / Service

Demand

Size Technology

Location

Selling Price Production Costs

Financial
Requirements

Investment outlay
Profitability

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