Lesson No. 5 -Concepts used in Appraisal.

1) Technical Feasibility - To satisfy that the the project to be undertaken has taken care of avaiblity, suitability and sufficiency of land,its location ,building, raw materials,power, water, labour( both skilled and unskilled), technology,know how, transportation and other infracture. Also whether conform to the quality necessary for manufacture of the concerned goods.
2) Economic viability - To study in the context of the current situation, the existing demand, price level, controls, idle/installed capacity, bottlenecks in production, labour situation, changes in the pattern of supply and demand. Details of similar other units in the industry in future trend of prices and income and how far the project contributes to the growth of other business units.
3) Financial viability - It is the examination of estimates of
- Cost of the project i.e. it covers all items of expenditure and that the costs are fairly realistic.
- Means of finance: The projected amount of finance can be raised from the given sources,it is adequate and can be raised at requisite time and costs.
It also includes the study of likely impact of the project on level of production, sales,net earning, borrowings,costs etc. So that the break even can be worked out and stage when the project will start yielding profits and service the Interest and EMIs.
+++++++++++++++++++++++++++++++ Ex of Technical Viability Report:-
Suyog Trauma and Accident Hospital is a project by 3eminent doctors along with Shri Jain ,who is in pharmacy business for several years.The land for bulding the hospital is provided by Sh Praveen Kumar Jain as his capital(25%).The other doctors will contribute. 25% each from their resources.Dr Kirti Jain son of Shri Jain has recently obtained MS degree and will be a pivotal person.The other two doctors are well experienced,one being an M D and other Physio therapist.They have tide up with Dr Sinha a reputed Neuron Surgeon from nearby district place. The hospital will have an ICU facilities and 1 general ward 6 bedded, 3 semi special rooms with 2beds,and 2 special rooms with 1 bed each.There will be an OPD facilities to serve 20 to 25 patients daily.All requisite sanctions for building hospital are in place.The hospital will be equipped with Radiology department,small lab etc.They will employ around 12 technical/semi technical staff and 10 persons as serving staff.An Ambulance is also a part of the project. The proposed hospital is 30 meters from the newly built Highway and there are no hospitals on a streach of 25 Kms on either side.There are 20 villages around the periphery of 30 Kms and such
facilities are not available. Such hospital was the necessity as patients have to be taken to a distance of app.40 to 50 Kms for treatment. Besides this Jain family are reputed for their contribution to the Society. Considering all these aspects the proposal for the hospital is technically viable.

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Waman Gokhale