Details of the process
1. Opportunity study
This is the first step in the process of project development. It deals with the identification of investment and export opportunities. It is sketchy in nature and it relies more on aggregate estimates than on detailed analysis (project idea). Further more first contacts with latent customers are made. A first market survey should be included in this stage.
2. Pre-feasibility study
The project idea must be elaborated in a more detailed study. Such a study is prepared, in order to assign larger funds for further study. Bench marking and scenario analyses are subject. Support studies Support or functional studies cover specific aspects of an investment project, and are required as prerequisites for, or in support of, pre-feasibility and feasibility studies.
3. Feasibility study
This type of study should provide all data necessary for investment decision making. A feasibility study is the first benchmark used to evaluate a project in a more detailed way. Evaluations are based on criteria like debt cover ratio, project life cover ratio, Loan life covers ratio, the net present value and the internal rate of return.
4. Investment appraisal
When the different types of feasibility studies are completed the various parties Involved in the project will carry out their own appraisal of the investment project In accordance with their own individual objectives and evaluation of expected risks, Costs and gains.
5. Negotiations and contracting
This stage concerns the legal obligations arising from the acquisition of technology, the construction of buildings, the purchase and installation of machinery and equipment, and financing. This stage covers also the signing of contracts between the investor or Entrepreneur, on the one hand, and the financing institutions, consultants, architects and suppliers of raw materials and required inputs, on the other.
6. Engineering design
Detailed engineering design comprises preparatory work for site preparation, the final selection of technology and equipment, the whole range of construction planning and time-scheduling of factory construction, as well as the preparation of flow charts, scale drawings and a wide variety of layouts.
7. Construction and supply of goods
The construction and supply stage involves site preparation,
Construction of buildings and other civil works, together with supply,
erection and installation of equipment in accordance with proper programming and scheduling.
This stage can also be seen as the solely delivery of goods.
In case of export of goods, machinery, or equipment one could assess if it is viable to contract an agent, start a representative office, establish a joint venture, or invest in a wholly foreign owned company.
8. Training
The personnel recruitment and training stage, which should proceed simultaneously with the construction stage, may prove very crucial for expected growth of productivity and efficiency in plant operations.
9. Start-up and after-sales service
Plant commissioning and start-up is usually brief but technically critical span in project implementation. It links the preceding construction phase and the following operational (production) phase. The facility will be tested and adjusted in this stage. Operating phase This is the operating phase of a project. Most of the time, it starts with the earning of revenues.