1. Introduction Contents 3. PFS Implementation 2. PFS (Pre-Feasibility Study) Overview 5. Case Study 1: PFS on Dang-jin ~ Cheon-an Freeway Construction Project 7. Further Issues in PFS 6. Case Study 2: PFS on Light Rail Transit Project in Kang-Nam Gu, Seoul 4. PFS Methodology
Planning PFS (Pre-Feasibility Study) Draft Design Operation/ Maintenance Blueprint Design Feasibility Study Land Acquisition/ Construction Ex Ante Intermediate Ex Post Total Project Cost Management Re-inspection of Project Feasibility Performance Evaluation
2. PFS Overview(2) Submit PFS projects candidate Line Ministry Ministry of Planning & Budget KDI Select PFS Projects Request PFSs Organize Teams/ Conduct PFS Submit PFS Report Announcement Make Investment Decision Feasibility Study or Stop
2. PFS Overview(3) Comparison of PFS and Feasibility Study 300 million - 2 billion won Depending on the project 80 – 100 million won Approximately 6 months Research fund/duration Spending Agency (Line Ministries) Ministry of Planning and Budget Evaluation Ownership Various detailed analyses including soil analysis and analysis of engineering techniques. Detailed analysis is not required. Replaced by expert's consulting. Technical feasibility analysis Not applicable except for detailed environmental impact assessment and analyses of some related issues that have significant expected impacts Examination of macro aspects of the project, such as necessity of the project in a national-economy perspective, correspondence with higher level plans, and balanced regional development. Policy Analysis Precise and detailed analyses to decide whether construction should be started. Analysis focuses on a given alternative. Broad analyses to decide whether the next phase of detailed feasibility study is necessary. Finding alternative way to achieve the project goal. Economic Analysis Detailed analyses of economic and technical feasibility before beginning construction of the projects that have already met the criteria of the preceding PFS An overview survey preceding a detailed feasibility study aimed at budget planning and setting priorities Definition Feasibility Study PFS
Weights on economic analysis & policy analysis results
5. Case Study 1 (6) Economic Analysis Policy Analysis Average 0.614 0.386 Person 1 0.600 0.400 Person 2 0.700 0.300 Person 3 0.550 0.450 Person 4 0.600 0.400 Feasible Non-Feasible Average 0.779 0.221 Person 1 0.771 0.229 Person 2 0.804 0.196 Person 3 0.799 0.201 Person 4 0.757 0.243
This project is not economically feasible (B/C <1).
The major beneficiaries of this project would be local residents in Kang-Nam Gu, which is the wealthiest local government in Korea and already has a well-developed subway system. Hence, central government subsidies for this project would widen regional disparities between Kang-Nam Gu and other areas in Seoul as well as the rest of Korea.
The research team recommends ‘not to provide’ a central government subsidy for this project.