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4T12 Project Feasibility Study Guideline v4-0
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4T12 PROJECT FEASIBILITY STUDY GUIDELINE
This guideline is to be used in preparing a feasibility study for major projects. This is
different to the work carried out in the Infrastructure Planning examined in Module 2 because
we are now concerned with the details of a particular project as opposed to the overall
planning of a whole multi-year infrastructure programme.
The term “feasibility study” is used as a convenient description for the output for the work
done, users of this toolkit should not apply preconceived notions of what a feasibility study
consists of. Stated as simply as possible, the work done here must show that the project:
is in accordance with predetermined needs;
is the most suitable technical solution to the needs;
can be implemented within any capacity constraints of the Institution which operates;
has been subject to a due diligence that shows it is legally, physically and socially
compliant;
is fully costed over the whole life of the project;
has taken due cognisance of the risks associated with its whole life cycle; and
is affordable to the institution responsible for the project in the context of the available
budget;
The feasibility study guideline set out below is for a comprehensive document that, in many
instances simply uses information already collected and set out as part of the steps carried
out by the Institution. That said it is necessary to create a study that creates a holistic
justification for the project and serves as a living document against which project
deliverables are measured during procurement and even after implementation of the project.
A feasibility study needs to be authentic and thorough. It is the basis for government making
an important investment decision, not just a bureaucratic requirement. Regardless of the
term and scale of a project, there is a great deal at stake when the procurement choice is
made, and long-term implications.
It provides information about costs (explicit and hidden), and gives an indication of
whether costs can be met from within institutional budgets without disruptions to
other activities.
It allows for the identification, quantification, mitigation and allocation of risks.
It prompts institutions to consider how the project will be structured.
It identifies constraints, which may cause the project to be halted.
It ensures that the project is developed around a proper business plan.
A feasibility study is an evolving, dynamic process. While it is used to justify what is
developed and at what cost (the investment decision) it is also used throughout the
procurement phase to check that the project is being developed in accordance with the
original assumptions and, where change is necessary, it is also used to manage the change.

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4T12 Project Feasibility Study Guideline v4-0
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Feasibility Study
Contents
1. THE NEEDS ANALYSIS ............................................................................................... 3
Part 1: Demonstrate that the project aligns with the institution’s strategic objectives ......... 3
Part 2: Identify and analyse the available budget(s)........................................................... 3
Part 3: Demonstrate the institution’s commitment and capacity ......................................... 4
Part 4: Specify the outputs ................................................................................................. 4
Part 5: Define the scope of the project ............................................................................... 5
2. THE OPTIONS ANALYSIS ............................................................................................ 5
3. PROJECT DUE DILIGENCE ......................................................................................... 7
4. FINANCIAL ASSESSMENT .......................................................................................... 8
Part 1: Construct the project cost model ............................................................................ 8
5. SENSITIVITY ANALYSIS ............................................................................................ 14
6. DEMONSTRATE AFFORDABILITY ............................................................................ 14
7. VERIFY INFORMATION AND SIGN-OFF ................................................................... 14
8. ECONOMIC VALUATION ........................................................................................... 15
9. PROCUREMENT AND IMPLEMENTATION PLAN ..................................................... 15
10. REVISITING THE FEASIBILITY STUDY ................................................................. 16

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4T12 Project FEASIBILITY STUDY GUIDELINE This guideline is to be used in preparing a feasibility study for major projects. This is different to the work carried out in the Infrastructure Planning examined in Module 2 because we are now concerned with the details of a particular project as opposed to the overall planning of a whole multi-year infrastructure programme. The term “feasibility study” is used as a convenient description for the output for the work done, users of this toolkit should not apply preconceived notions of what a feasibility study consists of. Stated as simply as possible, the work done here must show that the project: is in accordance with predetermined needs; is the most suitable technical solution to the needs; can be implemented within any capacity constraints of the Institution which operates; has been subject to a due diligence that shows it is legally, physically and socially compliant; is fully costed over the whole life of the project; has taken due cognisance of the risks associated with its whole life cycle; and is affordable to the institution responsible for the project in the context of the available budget; The feasibility study guideline set out below is for a comprehensive document that, in many instances simply uses information already collected and set out as part of the steps carried out by the Institution. That said it is necessary to create a study that creates a holistic justification for the project and serves as a l ...
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