LESSON 1: PROJECT DEFINATION

3.0 MAIN CONTENT

3.1 Meaning of Project planning

Project planning definition is a process which seeks to describe a project from the idea stage to the stage when the project has been completed. All information about the project is usually embodied in the definition of the project. Usually, before a project starts, it must be properly defined so that the parties involved properly understand their clear roles.

Discussion Case: NIGERIA Rehabilitation of Lagos-Ibadan Expressway Let us use a familiar case as a discussion case. In 2015, the federal government decided to rehabilitate the Lagos-Ibadan expressway which was in a terrible state. The engineering firm of Julius Berger Nigeria PLC was chosen as the competent firm to carry out the rehabilitation work. We can describe the project by considering the various processes involved before the project was commissioned.

Fig. 1: The Process of Project Definition for the Rehabilitation of the Lagos-Ibadan Expressway

STEP 1

STEP 2

STEP 3

STEP 4

We have looked at a simple case of a road rehabilitation project. We will now deepen our knowledge by discussing the project cycle.

SELF-ASSESSMENT EXERCISE 1

Explain project definition?

3.2 The Project Cycle

The project cycle tries to describe the various stages that are involved from the conception of a project idea to when the project is executed or Discussions between Federal Government of Nigeria and Julius Berger Plc

– Engineering designs – Engineering calculations – Purchase schedules – Purchase orders – Material receipts

Actual Construction

Commissioning and Handover actually takes off. Understanding of a project cycle is really very important as it enables us to get the total picture of a project. Let us now examine the various stages of a project cycle.

Fig. 2: The Project Cycle

CYCLE 1 -Project idea stage

CYCLE 2 -Project identification stage

CYCLE 3 -Project evaluation stage

CYCLE 4 -Project selection stage

CYCLE 5 -Project execution stage

3.2.1 The Project Idea Stage

The project idea stage is the first stage of a project cycle. The idea about a project arises from a variety of sources within the market place or macroeconomic environment. New project ideas could originate from within an organisation or from outside it. In a public sector organization, it emanates mainly from the assigned roles of the relevant body. For example, a rural farmers‘ fertilizer distribution project is most likely to emanate from a state ministry of agriculture.

The idea of a rural medical clinic is also likely to emanate from a health ministry. In the private sector, project ideas could emanate from within an organisation or from outside. From within, it could arise out of contacts between salesmen and customers. It could also arise from outside if customers specifically request for possible bigger or better products.

• Project idea stage.
• Project identification stage.
• Project evaluation stage.
• Project selection stage
• Project execution stage

New project ideas may fall into any of the following categories:

1. A proposal to build a community health centre in a very remote village in Makueni County in Kenya.
2. A proposal to upgrade a rural medical clinic to a general hospital.
3. A proposal to conduct a population census in Nigeria prior to an election.
4. A proposal to build a mega railway line that will link the western part of Kenya with Nairobi city.

3.2.2 Project Identification Stage

After the project idea stage, the next stage is the project identification stage. The project identification stage consolidates the project idea stage. Project ideas are not actually useful except if they are clearly identified and put down in a systematic manner for further processing.

A government agency may conceive the idea of poverty alleviation in a particular local area. But you will realise that the concept of poverty alleviation covers a very vast area of possible interventions. So apart from simply coming up with the poverty alleviation, the government agency should go ahead to identify the mode of intervention. The poverty alleviation project could be any of the following:

A. A rural women GROUP making seminar/workshop.

B. A rural women micro-credit scheme.

C. A millet planting project.

3.2.3 Project Evaluation Stage

When a project has been identified, the next step is to evaluate the project. Project evaluation involves the estimation of the costs and benefits of a project. Costs and benefits should be measured in terms of cash flows. It will be important here for us to understand that the estimation of cash flows of a project is a very difficult task. It is difficult in the sense that cash flows which are likely to arise in the future may be difficult to estimate.

In a public sector set up, other factors come into play when evaluating a project. For example, the employment generation potentials of a project may be taken into consideration when estimating the benefits of a project. Besides, political considerations may also come into play.

3.2.4 Project Selection Stage

After the project evaluation stage, the next stage is the project selection stage. Faced with an array of projects with different values and worth, there is need to select which projects will be embarked upon. Besides, budgetary considerations will also come into play since the resources for projects are limited. Project selection is a top management responsibility. In the selection of projects, top management usually considers the financial cost outlays involved and match them with the benefits to be derived from a project. Projects that add positive benefits to the community should be selected.