How to make a detailed project report

1. DETAILED PROJECT REPORT

2. DETAILED PROJECT REPORT
 Detailed project report is a complete
document for investment , decision-
making, approval, planning.
 Detailed project report is base
document for planning the project and
implementing the project.

3. OBJECTIVES
 To understand the importance of developing a
detailed project report that assure performance
for reliable quality with in optimum cost
 To appreciate that projects are site specific
 To understand importance of optimization of the
schemes , detailed cost estimate , payback period
and return on investment.
 To describe how bankable projects can help to
achieve required performance
 To understand methodology of project appraisal

4. Brief Description of Project Area
 Name of utility
 District / town (s) village covered
 Location : latitude and longitude
 Area , population , boundaries
 Climatic conditions
 Status of development. Access to electricity
 Economic structure – socio – economic features
 urban / rural

5. Data Collection of Existing Project

6. PROJECT COST DETAILS
 Basic Equipment Cost
 Consultant charges
 Duties , Taxes & Freight
a) Excise duty / customs duty/ sales tax
 Freight and Transit Insurance
 Raw materials
 Man Power cost
 Engineering Project Management.
Supervision
 Interest During Construction

7. Major Benefits from the Project

8. Project Investment Criteria
 Basically Cost – Benefits analysis
 Investment criteria can be
 payback period
Discounted cash flow (DCF) Technique
a) Net Present Worth (NPW)
b) Benefit Cost Ratio ( B C Ratio)
c) Internal rate of return ( IRR )

9. Project Investment Criteria
Payback Period
 length of the time required by the
cumulative net cash inflows to cover up
the fixed capital Investment .
PBP = Total Capital Investment / Total
cash inflow or Net benefits per year

10. Project Investment Criteria
Payback Period
 Easy to understand
 Other methods are complicated in nature
and difficult to comprehend for technical
people
 Investment should include fixed capital
&working capital
 Net benefits to be adjusted for interest and
tax liabilities

11. Project Investment Criteria
Discounted Cash Flow ( DCF) Technique
 A technique which brings past & future
cost benefits to their Present Worth ( PW)
 Take into account “ Time Value of Money
’’

12. Project Investment Criteria
 Discounted Cash Flow ( DCF)
 Past Benefits Cost – Compounding
 Future Benefits Cost – Discounting
 Past Present Future

13. DPR Structure
Title Page , Name,affliation,date etc
Acknowledgement
Content list
Abbreviation
Executive Summary
Introduction Background
Main technical & financial analysis
chapters
Recommended action plan
Appendices

14. What DPR Should ideally
provide ?
Final cost details and benefits expected
Detailed specification of equipment &
materials.
All information to prepare tender
documents.
Probable list of equipment & material
manufacturers
Project management process

15. PARAMETERS OF PROJECT
APPRAISAL AND APPRAISAL
PROCEDURE
PROJECT ELIGILITY
Technically feasible and provide optimal cost
solution for the selected alternative
Techno – economically sound with IRR not
less than 12% (Internal Rate of Return )
Compatible with expansion plan of the utility
& region
Complies with all environmental standards
guideline.
All clearances have been obtained

16. PARAMETERS OF PROJECT
APPRAISAL AND APPRAISAL
PROCEDURE
ASCERTAIN PROJECT PROFILE
Type , Purpose , Scope
Location , Access to site
Environmental Management
Technology

17. REVIEW PROJECT
Need & Justification :
 Existing and proposed system
 Demand supply scenario
 Alternative considered
Study if any carried out by State Govt /
utility
Status & Preparedness
Procurement procedures &
competitiveness

18. REVIEW PROJECT
 status & Preparedness
Procurement procedures &
competitiveness
O & M arrangements
Market & selling arrangements
a) PPA with purchaser if applicable
(Power purchasing agreement)

19. REVIEW PROJECT
 Financing plan
a) Debt Equity
b) Phasing of expenditure

20. CHECK AVAILABILITY OF
APPROVALS & CLEARANCES
Statutory Clearances such as
Land Availability & Acquisition
Forest Clearance
Highway Clearance
Electricity clearance
Fund related clearance
Pollution control board clearance etc

21. CHECK AVAILABILITY OF
APPROVALS & CLEARANCES
APPROVALS
 Board approval
 Approval of PPA
 CERS / SERC
 State government

22. ASSESS REASONABLENESS
OF COST
 Price level
 Basis and reasonableness of cost
estimate
a) Information available for similar
projects appraised in the past
b) Budgetary offers received from
suppliers
c) Similar job done by same / other
borrowers in the past

23. ASSESS REASONABLENESS
OF COST
IDC - Price variation
Contingency – Other costs

24. PERFOM FINANCIAL & RISK
ANALYSIS
Evaluate Costs & Benefits
a) Benefits
b) Reduction in losses
c) Additional Generation in MU

25. PERFOM FINANCIAL & RISK
ANALYSIS
 Specify Assumptions of base case .
Calculate FIRR, EIRR
 Financial Internal Rate of Return
 Economic Internal Rate of Return
Assess Risks :
a) Pre implementation
b) Implementation
c) Post implementation
 Perform Sensitivity & Scenario Building

26. CASY STUDY

27. THANK YOU