Project Feasibility & Time Value of Money Anjum Asim Shahid Rahman Chartered Accountants. Member firm of Grant Thornton International

Project Concept Scope of work Market AssessmentInvestors Benefit SWOT AnalysisFinancial AnalysisWay Forward Project Feasibility A decision making toll to do or forgo a project. It includes:  Justification of Project Need  Viability/do ability of a project  Financial & Economic Analysis  Risks identification and mitigation  Option Analysis

Anjum Asim Shahid Rahman Chartered Accountants. Member firm of Grant Thornton International Project Concept Scope of work Market AssessmentInvestors Benefit SWOT AnalysisFinancial AnalysisWay Forward Project Feasibility - Justification of Project Need  Demand & Supply Gap  Better Quality or increased efficiency  Cost Reduction  Strategic objective  Regulatory Requirement

Anjum Asim Shahid Rahman Chartered Accountants. Member firm of Grant Thornton International Project Concept Scope of work Market AssessmentInvestors Benefit SWOT AnalysisFinancial AnalysisWay Forward Project Feasibility - Viability/do ability of a Project Project feasibility access project viability from following perspectives :  Legal  Technical  Financial  Environmental  Social

Anjum Asim Shahid Rahman Chartered Accountants. Member firm of Grant Thornton International Project Concept Scope of work Market AssessmentInvestors Benefit SWOT AnalysisFinancial AnalysisWay Forward Project Feasibility - Financial & Economic Analysis Financial Analysis is investors perspective and includes  Determining Investment Requirement  Bankability of Project  Opportunity Cost  Estimation of Required Return  Projections of Expected Return Economic analysis measures overall benefit to economy and is normally from government perspective for prioritizing a project.

Anjum Asim Shahid Rahman Chartered Accountants. Member firm of Grant Thornton International Project Concept Scope of work Market AssessmentInvestors Benefit SWOT AnalysisFinancial AnalysisWay Forward Project Feasibility-Risk Identification & Mitigation Plan Normal Project Risks  Cost overrun  Time overrun  Performance Risk  Natural Hazards  Demand Risk  Economic Risks  Government Support Mitigation plan involves structuring project so as to pass through maximum possible risks

Anjum Asim Shahid Rahman Chartered Accountants. Member firm of Grant Thornton International Project Concept Scope of work Market AssessmentInvestors Benefit SWOT AnalysisFinancial AnalysisWay Forward Infrastructure Projects & Feasibility  High Capital Costs  Long duration of projects  No easy exits

Anjum Asim Shahid Rahman Chartered Accountants. Member firm of Grant Thornton International Project Concept Scope of work Market AssessmentInvestors Benefit SWOT AnalysisFinancial AnalysisWay Forward Time Value of Money This is about perceived value of time and is so different for different people /groups It is based on concept of equal purchasing parity over different time periods. Normally it is defined as “Interest Cost”

Anjum Asim Shahid Rahman Chartered Accountants. Member firm of Grant Thornton International Project Concept Scope of work Market AssessmentInvestors Benefit SWOT AnalysisFinancial AnalysisWay Forward Time Value of Money- Infrastructure Projects Cost of delaying a project 100 Billion > 150 Billion (50 Billion) In addition there are other costs including Poor quality of life for delayed period and other economic losses.

Anjum Asim Shahid Rahman Chartered Accountants. Member firm of Grant Thornton International Project Concept Scope of work Market AssessmentInvestors Benefit SWOT AnalysisFinancial AnalysisWay Forward TVM – Project Prioritization Toll limited availability of capital requires prioritization of projects. Different projects may have different cash flow patterns over the project life. TVM equates cash flows of each project in present value terms.All else equal, the project with highest NPV should be taken first

Anjum Asim Shahid Rahman Chartered Accountants. Member firm of Grant Thornton International Project Concept Scope of work Market AssessmentInvestors Benefit SWOT AnalysisFinancial AnalysisWay Forward Thank you