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1. Project Evaluation – Importance
and types
What Is Project Evaluation?
Project evaluation is the process of measuring the success of a
project, program or portfolio. This is done by gathering data about the
project and using an evaluation method that allows evaluators to find
performance improvement opportunities. Project evaluation is also
critical to keep stakeholders updated on the project status and any
changes that might be required to the budget or schedule.

2. Project Evaluation Criteria
The specific details of the project evaluation criteria vary from one
project or one organization to another. In general terms, a project
evaluation process goes over the project constraints including time,
cost, scope, resources, risk and quality. In addition, organizations
may add their own business goals, strategic objectives and other
metrics.
Project Evaluation Methods
1. Pre-Project Evaluation
2. Ongoing Project Evaluation
3. Post-Project Evaluation

3. Project Evaluation Steps
1. Planning 2. Implementation 3. Completion 4. Reporting and Disseminating
Benefits of Project Evaluation
Project evaluation is always advisable and it can bring a wide array of benefits to your
organization. As noted above, there are many aspects that can be measured through the
project evaluation process. It’s up to you and your stakeholders to decide the most critical
factors to consider. Here are some of the main benefits of implementing a project evaluation
process.
•Better Project Management: Project evaluation helps you easily find areas of improvement
when it comes to managing your costs, tasks, resources and time.
•Improves Team performance: Project evaluation allows you to keep track of your team’s
performance and increases accountability.
•Better Project Planning: Helps you compare your project baseline against actual project
performance for better planning and estimating.
•Helps with Stakeholder Management: Having a good relationship with stakeholders is key to
success as a project manager. Creating a project evaluation report is very important to keep
them updated.

4. Project Appraisal – Definition and Steps
Project Appraisal is defined as the detailed evaluation of the
project to determine the political, social, environmental, techno-
legal, financial and economical feasibility of the project and the
managerial competence required for its successful operation.
Such appraisal is done by project promoter for identifying the
right project and by financial institutions to determine the
financial feasibility of the project.

5. Objectives
 T
o assess a project in terms of its economic, social,
and financial viability
 To decide to accept or reject a project
 To extract relevant information for determining the success or failure
of project
 To determine the expected costs & benefits of the project
 To arrive at specific conclusions about project.

6. Advantages
 It helps an organization in identifying the right project to execute by
analyzing, whether it is viable in a given situation and place
 It helps an organization taking a firm decision on acceptance of
project
 It scans the political, social, and legal conditions surrounding the
project to ascertain its future success
 It also looks at govt. policies and taxation rules towards specific
rules.
 It helps an organization to know the technical capability required by
the organization for the successful execution of the project.
 It helps an organization in knowing its financial aspects in terms of
the investment required and the rates of returns expected.

7. Types of Project Appraisal
 1. political Appraisal
 2. social Appraisal
 3. environmental Appraisal
 4. techno-legal Appraisal
 5. financial Appraisal
 6. economical Appraisal

8. 1. Political
It is concerned with appraising the govt.
policies both at the central and state levels.
In this appraisal , an organization considers
following related with a new project:
 Political stability
 Industrial Policy
 Subsidy
 Taxation Policy
 Financial and TechnicalAssistance

9. 2. Social
A social appraisal reviews the project design and the
process of project identification through
implementation and monitoring from social
perspective,
Particular attention is paid to likely impact of project
on different stakeholders, their opportunities for
participation and the project’s contribution to poverty
reduction.

10. Social Appraisal Continues…
StakeholderAnalysis & Participation
It reviews:
1. Who comprise the different stake holders?
2. What are their interests?
3. How will they be affected by proposed project?
4. What are project priorities between different
groups?
5. What is their capacity to participate in the
project?

11. 3. Environmental
It is supposed to provide the project analyst with a
good qualification of the biophysical & social
impacts from developments.
It generally refers to broader system of
environmental analysis, including project- specific
Environmental Impact Assessment (EIA).

12. 4.Techno- Legal
 It implies to mean the adequacy of proposed plant and
equipment to produce the product within the prescribed
norms.
 As regards know- how , it denotes the availability or
otherwise of a fund of knowledge to run the proposed plants
and machinery.
While assessing the technical feasibility of the project, the
following inputs covered in the project should also be
taken into consideration:

13. Techno- Legal App Continues…
o Availability of Land & Site,
o Availability of water , power, transport,
communication facilities,
o Availability of serving facilities like machine
shops, electric repair shop, etc.
o Availability of work force as per required skill &
arrangements proposed for training in plant and
outside,
o Availability of raw material as per quantity &
quality.

14. 5. Financial
Finance is one of the most important pre-
requisites to establish an enterprise.
It is finance only that facilitates an
entrepreneur to bring together the labour of
one, machine of another & raw material of yet
another to combine them to produce goods.

15. Financial Appraisal Continues…
 In order to adjudge the financial viability of
project, some of the aspects need to analyzed
are:
i. Assessment of the financial requirements,
ii. Assessing the fixed capital requirements,
iii. Assessment of Working Capital,
iv. Break EvenAnalysis.

16. 6. Economic
 Under Economic Appraisal, the project aspects highlighted
include requirements for raw material, level of capacity
utilization, anticipated sales, anticipated expenses and the
probable profits.
 It must be calculated how much sales would be necessary to
earn the targeted profit.
 The govt. offers specific incentives & concessions for setting up
industries in notified backward areas.