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The project Life cycle:

The different stages/phases through which a project passes is called the project life cycle.

The main features and elements of this process are

 information gathering,  Decision making.


 analysis and
UNIDO project life cycle
According to the UNIDO the project development life cycle comprises three distinct phases, they
are:
1. Pre- investment phase 3. Operational phase
2. Investment phase and
1. Pre- investment phase
A. Opportunity study (identification of project ideas)
B. Pre-feasibility study (preliminary project formulation, selection of alternatives)
C. Feasibility study (techno-economical project back ground, final project formulation
stage)
D. Evaluation and appraisal report (decision making about project availability)
2. Investment phase
A. Project design stage
B. Construction stage
C. Pre-production marketing stage
D. Training
E. Start-up stage
3. Operational phase
a) Replacement of equipment
b) Development, invasion or liquidation
According to the UNIDO manual, the main stages of the pre-investment phase are as
follows:
A. Identification of investment opportunities (opportunity studies)
B. pre-feasibility:
C. Feasibility studies) and
D. Project appraisal and investment decision (appraisal report)

A. Opportunities studies
Identification of investment opportunities is the starting point in a series of investment related
activities
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An opportunity study should identify investment opportunities or project ideas by analyzing the
following factors in detail:
 Natural resources with high potential for processing and manufacture:
 The future demand for certain consumer goods or for newly developed goods:
 Imports in order to identify areas for import substitution:
 Cost and availability of production factors:
 Possible expansion of existing industrial capacity to attain economies of scale
and
 Export possibilities.
 Environmental impact
 General investment climate
 The existing agricultural pattern that serves as a basis for agro based industry
 Possible inter linkage with other industries
Opportunity studies can be general (sector approach) or specific (enterprise approach)

General opportunity studies


General opportunity studies may be divided into the following three categories:
1. Area studies designed to identify opportunities in a given area
2. Industry studies designed to identify opportunities in a delimited industrial branch such as
building materials or food processing
3. Resource-based studies designed to reveal opportunities based on the utilization of
natural, agricultural or industrial products
Specific project opportunity studies
A specific project opportunity study may be defined as the transformation of a project idea
into a broad investment proposition.
It focuses on specific projects; however, Specific project opportunity studies should follow the
initial identification of general investment opportunities.
B. Pre-feasibility studies
A Pre-feasibility study should be viewed as an intermediate stage between a project opportunity
study and a detailed feasibility study.
The main difference between the prefeasibility study and the actual feasibility study is the degree
of the detailedness of the information obtained.
The principal aims (objectives) of prefeasibility study are to determine whether:
1. All possible project alternatives have been examined;
2. The project concept justifies a detailed analysis by a feasibility study;
3. Any aspects of the project require support studies
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4. The project idea, is attractive enough for a particular investor or investor group;
5. The environmental situation is in line with national standards.
A pre-feasibility study should be viewed as an intermediate stage between a project
opportunity study and a detailed feasibility study.
C.Support (functional) studies
Support or functional studies cover specific aspects of an investment project, and are required as
prerequisites for, or in support of, prefeasibility and feasibility studies, particularly large-scale
investment proposals.
Examples of such studies are as follows:
 Market studies
 Raw material and factory supply studies,
 Laboratory and pilot-plant tests,
 Location studies,
 Environmental impact assessment,
D.Feasibility studies
A feasibility study aims at providing all data necessary for an investment decision or against it.
Before the final decision is taken to commit resources, the technical, economical, and
commercial justification has to be provided in comprehensive and authentic terms.
These should be clarity about the location, the plant size, the material and the major inputs.
Components of feasibility study are;
1. project background and history
 Name address of the promoter
 Project background
 Project objective
 Outlines of the proposed basic project strategies
 Project location
 Economic and industrial policies supporting the project
2. Summary of market analysis and marketing concept
3 .raw materials and supplies and location, site, and env’t
4 Engineering and technology
5 Organization and mgt
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6 Implementation planning and budgeting


7 Financial analysis and investment appraisal
E.Appraisal report
Project appraisal should be considered an independent stage of the pre-investment phase
marked by the final investment and financing decisions taken by the project promoters.
2. The investment phase
The investment phase can be divided into the following stages:
1) Establishing the legal, financial and organizational basis for the implementation
of the project
2) Technology acquisition and transfer, including basic engineering
3) Detailed engineering design and contracting, including tendering, evaluation of
bids and negotiations
4) Acquisition of land, construction work and installation
5) Pre-production marketing, including the securing of supplies
6) Recruitment and training of personnel
7) Plant commissioning and start-up
3. Operational Phase
 Operation phase mean the project should start operation.
 The problem of the operational phase needs to be considered from both short and long
term view points.
 The short term view relates to the initial or commencement of production.
 The long term view relates to chosen strategies and the associated production and
marketing costs as well as sales revenues.
The Baum project life cycle (World Bank procedures)
Have five stages
The phases are
1. Identification 4. negotiation
2. Preparation 5. Implementation
3. Appraisal and selection 6. Evaluation
New project cycle world bank 1994
 Emphasis on the issue of participation
 Particularly relevant to projects where beneficiary participation is critical.
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Composes four stages namely


 Listening- listen the stakeholder
 Piloting-trying it in small scale
 Demonstrating-demonstrating the pilot
 Mainstreaming – duplicating the pilot
Phases of Traditional Project Management (TPM)
There are five phases to the TPM life cycle, each of which contains five steps:
1. Scope of the Project
 State the problem/opportunity.
 Establish the project goal.
 Define the project objectives.
 Identify the success criteria.
 List assumptions, risks and obstacles.
2. Develop the Project Plan
 Identify project activities.
 Estimate activity duration.
 Determine resource requirements.
 Construct/analyze the project network.
 Prepare the project proposal.
3. Launch the Plan
 Recruit and organize the project team.
 Establish team operating rules.
 Level project resources.
 Schedule work packages.
 Document work packages.
4. Monitor/control Project Progress
 Establish progress reporting system.
 Install change control tools/process.
 Define problem-escalation process.
 Monitor project progress versus plan.
 Revise project plans.
5. Close out the Project
 Obtain client acceptance.
 Install project deliverables.
 Complete project documentation.
 Complete post-implementation audit.
 Issue final project report.
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Scope the Project


 The scoping phase plans the project.
 Every project has one goal.
 The goal is an agreement between the requestor and the project manager about the
deliverable—what is to be accomplished in the project.
 The goal tells the project developers where they are going.
 Ideally, the scoping phase begins with an exchange of information between a requestor
and a provider (usually the project manager).
 In TPM life cycle, the goal is bounded by a number of statements.
 The goal and objective statements scope the project.
 They are the frame work within which the entire project planning process can be
successfully conducted.
 Once the scope is complete, it is documented in the form of project overview statement
(POS).
 POS is brief document that describes following in the language of business:
• What problem or opportunity is addressed by the project?
• What are project’s goals and objectives?
• How will success be measured?
• What assumptions, risks, and obstacles may affect the project?
Develop the Project Plan
The deliverable from this planning session is the project proposal. This document includes the
following:
• A detailed description of each work activity
• The resources required to complete the activity
• The scheduled start and end date of each activity
• The estimated cost and completion date of the project
In some organizations there can be some number of attachments such as
 feasibility studies,
 Environmental impact statements or best of breed analysis.
The project plan is a description of the events to come.
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Launch the Plan


 In this phase, the project team is specified.
 It is important to eliminate the notion that an individual is solely responsible for the
success or failure of the project.
 In contemporary organizations, the project team is often cross-functional and can span
other organizational boundaries.
In addition to identifying the team at this time:
 The exact work schedules are determined.
 Detailed descriptions of the tasks in the project are developed.
 Team operating rules, reporting requirements, and project status meetings are established.
Monitor/Control Project Progress
As soon as project work commences, the project enters the monitoring phase.
A number of project status reports will have been defined in the previous phase and are used to
monitor the project’s progress.
Some of these reports are used only by the project team, while others are distributed to
management and the customer.
Close Out the Project
The final phase of the TPM life cycle begins when the customer says the project is finished.
The “doneness criteria” will have been specified and agreed to by the customer as part of the
project plan.
A number of activities occur to close out the project:
 Install the deliverables.
 File final reports and documentation.
 Perform a post-implementation audit.
 Celebrate!
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